Thursday, April 28, 2011

Class Warfare

by Keith Cooper

From Broader View Weekly, April 28, 2011

A couple of weeks ago, my brother Gordon sent me an email that asked a specific question. The headline read “How high should we tax the rich?” In the message he implied that I saw all wealthy as “evil” and sought to punish them for their prosperity. That is an unfair characterization of me and of the large plurality of Americans who poll in favor of requiring the wealthy to pay their fair share.

Gordon’s premise was that no matter how high we set the tax rate for the rich, the increased revenue would fall short of addressing the deficit and national debt. His claim was that it would only meet 10 percent of the federal deficit. Well, his math is a bit skewed because it uses IRS “earnings” figures, which fail to allow for all the sources of wealth the wealthy enjoy. It also wasn’t the first time that I had come across this particular mathematical argument. It has been making the talk radio rounds for the past few weeks as conservatives are attacking President Obama and calling speeches defending his budgetary strategy a “Soak the Rich” tour. Rush Limbaugh laid out the scenario that even if you “confiscated” 100% of the wealthy’s income (a one-time deal, in his mind, because then it’s gone), it would fall short of resolving the deficit of the current year. Well, nobody is proposing a 100% tax rate for the wealthy, but all of this detracts from the real forces at play here.

At the core of our nation’s economic problems (at least for the 99 percent of Americans profoundly impacted by the recession), is a class war that has been going on for decades, nearly unchecked by those in power (regardless of their political party affiliation). There is a systemic agenda to distribute wealth from the bottom to the top, which is intended to maintain and grow an enormous gap between the wealthiest among us and the poor. Through legislative policy, tax codes and funding for services like education and job creation the middle class has been shrunk to near extinction and the poor have been devastated.

Corporate influence in Washington (and even at the state and local levels) has gotten so out of control that every politician from the freshman congressman, to the senior senator, to the President of the United States is beholden to corporate interests. During the debate, which resulted in the current crippled health care plan, conservatives adamantly opposed the proposal out of selfish motivation (“I’m not paying for your coverage”). However, an enemy just as big was the fact that health care represents a third of the U.S. economy. Private insurance companies, pharmaceuticals and other health industry powers exerted enormous influence over the process and the imperfect product that emerged. Of course, conservatives and Tea Partiers are intent on repealing the law and stripping from it any benefits that still exist.

I am not interested in punishing the wealthy with taxation. I don’t even demonize CEOs and executives who receive obscene bonuses and salaries at a time when the rest of us are struggling to put food on our tables and gas in our cars. But I absolutely don’t subscribe to the theory that tax cuts at the top stimulate the economy in a way that benefits everyone. The trickle-down lie upon which Reaganomics was based is still doing its damages to our economy (except to the economic growth of the top earners who have had positive growth even in the midst of deep recession). If we could somehow tie tax breaks as an incentive to create jobs, I would lend my support. But no one from either major party is “seriously” pursuing this.

What I believe is ridiculous is the conservative claim that the deficit is chief among the nation’s problems. If Paul Ryan and the Republicans in Congress were really serious about addressing deficit spending, why are they still fighting for the tax cuts for the wealthiest two percent? And why is Congressman Ryan seeking even greater tax giveaways to the wealthy while asking the middle class and the poor to make sacrifices? The answer is clearer than it appears. Corporate corruption of the democratic process in the United States feeds itself.

Budgets are increasingly being used to feed the rich and starve the poor. Ryan’s plan to privatize Medicare (among other dastardly provisions of his “Path to Prosperity” – for the prosperous) will benefit private insurance on the backs of seniors and others who will end up paying out-of-pocket money they can’t afford for substandard coverage. State budgets across the country are being used to wage war on public workers and other working class individuals, while refusing to even ask corporations to share sacrifice.

Voucher programs like the Ryan Medicare proposal have been used for years to dress cuts in programs in seemingly innocuous terms. Vouchers for education have been used to drain money from public school systems and funnel it into the private sector. As education is increasingly under fire, vouchers, charter schools and funding cuts will be commonly used as tools to bankrupt public education and further disadvantage the poor. All of this is part of the systemic shift currently building the abysmal U.S. wealth gap.

There is no attack on the nation’s rich, but there is undeniably an attack on the working poor. One only need listen to conservative punditry to get a sense of the disdain the conservative movement holds for the poor. Limbaugh, last week, expressed his extreme dismay that 47% of Americans pay no taxes. The premise of that show’s bloviation was that the nanny state had created half a nation of lazy citizens, happy to rest on their laurels and have the wealthy pay their way. The sneering tone was nauseating, but not nearly as sickening as his disregard for the corporate bias and systemic corruption that has created the ranks of poor who don’t earn enough to pay taxes.

I am not interested in punishing the “evil” rich, but I will stand proudly in defense of the middle class and poor against an unfair vilification and despicable attack.

We’re all in this together

by Gordon Cooper

From Broader View Weekly, April 28, 2011

It is a curious thing to behold when one follows the current debate being waged in Washington over the 2012 budget and the need to address the ballooning U.S. debt and our ever-increasing deficit spending. It is no surprise that we have differing views about how we should meet this challenge. After all, our system of two-party representative government assures that we will have disparate views on economic policies and almost every other topic. It is also no surprise that neither side will admit or disclose weaknesses or fallacies within their respective position.

The most curious aspect about the debate centers around certain words and ideologies that have been co-opted and/or misappropriated.

For example, if you listen carefully or read carefully, you will notice certain words are almost always grouped together. Take the words “fair share” and “wealthy” – it seems the common misconception being presented here is that the wealthy take a disproportionate amount of government services and return a less than equitable amount back into the treasury. This is the policy being promoted in the current presidential campaign by Barack Obama. He suggests that if we confiscated just a bit more from the top earners in our nation, we could bring down the debt and lower the deficit.

The idea of increasing taxes will not fulfill the purpose of lowering the deficit – even if we could take 100% of all earnings from the top 1% of earners, we would only garner the cost of last year’s health care legislation cost ($968 Billion). Despite what Keith says to the contrary in his article, the figures used represented the net worth of the top 1% and are legitimate. Therefore we must look elsewhere if we really want to stimulate the economy and lower our deficit – and the debt and deficit is a serious inhibitory influence upon our economy, as well as a threat to the future security of our nation’s sovereignty.

At the risk of losing some readers who find statistics and studies to be too much like going to class, I feel I must spend some time explaining why tax cuts will do more to enhance our economic growth and lower our dependence on foreign investors (China) for our operating capital.

There is valid proof that lowering tax rates for all taxpayers does more to stimulate the economy than raising taxes.

First of all, all we have to do is look at the recent news story about how GE (you know, that tiny, multi-national corporation that is run by Obama’s Jobs Czar and buddy, Jeffrey Immelt) paid no corporate taxes this year on its profits of over $14 billion – $5.1 billion from U.S. operations – because they were able to, with the help of over 975 tax experts (cheats) in their tax evasion department, find enough loopholes to squeeze all their profits through the tax code and into the pockets of executives and shareholders. (

We see here that increasing tax rates serve to stimulate the economy of the lobbyists and tax lawyers while doing very little to stimulate the general economy,
Conversely, there is much evidence that lowering tax rates across the board – while also sewing up those leaky loopholes (hmmm…sounds like that Paul Ryan “Path to Prosperity”, doesn’t it?) does indeed stimulate the national economy and raise the standard of living for the general populace.

For example, an article written by Alan Reynolds on The Concise Encyclopedia of Economics, cites a book, Economic Growth by Robert J. Barro and Xavier Sala-i-Martin (MIT Press) which demonstrates how decreasing the marginal tax rates has stimulated the economies of several nations including Taiwan, Singapore, South Korea, Hong Kong, Botswana, Thailand, Ireland, Malayasia, Portugal, Mauritius, and Indonesia. All these countries either had low marginal tax rates to begin with (Hong Kong) or cut their highest marginal tax rates in half between 1979 and 2002. (

Now, we have two clear choices before us as this debate goes forward and the 2012 presidential campaign begins in earnest. We can either choose the status quo, represented by President Obama’s rehashing of failed policies (raise taxes and maintain or increase spending levels) or we can “man up”, face the adult facts of life – like the fact that we cannot sustain an economy in which over 41 cents of every government dollar spent goes to entitlement programs such as Medicaid, Medicare and Social Security – and make serious reforms in the system.

In conclusion, listen carefully and skeptically to those who try to separate us into camps according to the Adjusted Gross Income on our 1040’s. In other words, a person’s private property is still private property whether it is measured in hundreds or hundreds of millions. We should realize that we are all Americans and we all benefit from a healthy economy and likewise, we all suffer from a poor economy. History proves that a higher tax rate stifles and inhibits an economy while a lower tax rate puts more capital into the system.

Saturday, April 23, 2011

Notes from the Battlefield

by Gordon Cooper

From Broader View Weekly, April 14, 2011

In spite of my opposition to the overuse of militaristic terms to describe things that have no real comparison to the bloody, noisy, messy, pain-filled, stink-of-death reality of genuine warfare, I hope you will indulge me this time as I try to put a perspective on the current debate centered around our federal budget.

It was 150 years ago this week (April 12, 1861) that shots were fired at Fort Sumter, South Carolina. As we all know (or should know) those shots were followed by many fierce battles that left thousands of bodies of fellow citizens strewn across farm fields and family lawns for four long, brutal years.

As we look back upon that terrible and divisive time we can gain some lessons about what took place recently in our nation’s capital. As with the Civil War, first shots do not determine the final outcome and advances and retreats must be made by each side before victory or defeat is finally registered.

I believe the deal struck between Messrs. Reid, Obama and Boehner late Friday night represents the first shots fired in what will definitely be a long, brutal conflict between two ideological encampments.

On the one side we see those who seem reluctant to acknowledge the danger faced by stifling debts and deficit spending. On the other side we see those who feel compelled to limit the reach of government and to bring spending under control.

The agreement reached late Friday evening represents a historical shift in fiscal direction. For once we are talking about cutting spending rather than increasing spending. The final agreement set the budget of the 2011 fiscal year, which ends Sept. 30, at $1.049 trillion. That is $39 billion less than was budgeted for 2010 and $79 billion less than President Obama had requested. These figures are less than what I would want in an ideal world, but I recognize the advantage of gaining objectives by incremental steps and I can see larger and more significant battlefields ahead.

It should go without saying that our national debt is a serious threat to our national security and the continued deficit spending cannot be sustained, but if one were to listen to many of the critics of Boehner and his proposal, one would think the lesson needs to be taught over and over again. Any serious attempt to cut back on spending is met with howls of protest from those who somehow believe the problem can be shoved down the road to future generations.

That is why I believe the real budget battles lie ahead as Paul Ryan’s Path to Prosperity is introduced as the model for the 2012 fiscal year. The serious spending cuts and revolutionary reforms contained in that document may not all make it to the light of day, but at the very least it will spur open debate and any progress it makes toward lowering our deficit will be worthwhile.
While time and space do not allow me to go into detail about his plan, some of the highlights are the following:

_ The plan would cut spending over the next decade by $6.2 trillion from Obama’s budget. This would return Washington’s slice of the economy to its historical average, below 20 percent, rather than Obama’s 23 percent spending floor.
_ Ryan would also eliminate $2.3 trillion in tax hikes, including $800 billion avoided by repealing the unpopular healthcare bill.
_ The “Path to Prosperity” would also combine hundreds of overlapping programs, scrap others, and reform some, such as Medicare. While leaving beneficiaries over age 55 untouched, Ryan’s plan would give future retirees funds to help them purchase their choice of health coverage, rather than one Washington-dictated plan. Similarly, instead of a single federal Medicaid model, governors and state legislators would use federal block grants to serve the diverse needs of poor people in, say, Arizona and Vermont.

“The U.S. government is not running sustained deficits because Americans are taxed too little. The government is running deficits because it spends too much,” Ryan’s plan continues. It adds, “Over the past 40 years, government revenue has averaged between 18 percent and 19 percent of GDP. This level has generally been compatible with prosperity, even though there is broad agreement that the structure of the tax code should be simplified and made more conducive to economic growth, high wages, and entrepreneurship.”

Hence, the Path closes deductions and loopholes and lowers top individual and corporate taxes to 25 percent. This outright tax relief would end America’s 35 percent business levy, the industrial world’s highest. (

In conclusion, do not be quick to claim victory or defeat for either side at this point. The consequences of last November’s “shellacking” of President Obama and his policies will be forthcoming in several minor skirmishes and we can only hope our nation will come out the better for it just like she came out the better for going through that long, bitter conflict 150 years ago this week.

The Casualties of the Budget Battle

by Keith Cooper

From Broader View Weekly, April 14, 2011

I agree with my brother Gordon that the fight that ended with a last minute agreement on the April 8th deadline is just the beginning of a long struggle that will only get nastier and more politically charged as the process goes forward.

Even as time and the funding of the government was running out last week; even as the threat of a shutdown that would be most painful for those least able to withstand its effect loomed ominously, negotiations were hijacked by politicians pushing ideological issues like abortion, and climate change. And after the shutdown was averted, Republicans in Congress beholden to conservative Tea Partiers still vowed to withdraw their support for the budget (even though the amount of cuts won through negotiation exceeded the amount originally sought by the GOP).

As the wrangling dragged on and the Republicans held the nation hostage (acting as if they had won both Houses of Congress and the White House in November), it became clearer that the debate over the budget was not about the national debt or reducing the deficit. It was all about posturing for 2012. Not the 2012 Fiscal Year Budget that Paul Ryan’s joke of a plan would make a pretense to address, but the 2012 Presidential election that began last week with Obama’s official campaign kickoff.

The Republican line-up of serious candidates is a bleak showing indeed. One need only note that Donald Trump, whose outrageous “birther” platform is decried by his own party, is second on the 2012 GOP leader board to judge the lackluster pack of presidential hopefuls on the Republican side. The party’s only hope against Obama (who is still scoring high on polls, despite a drop in approval rating) is to rally the existing base without alienating the swing-voters who often decide elections.

More problematic is the fact that Republicans are facing the inevitability of raising the debt ceiling. The Tea Party has already expressed its extreme displeasure at this likelihood. The reality of economics and processes of governing are not likely to appease the disgruntled masses.

Another complication facing Paul Ryan, and those conservatives currently worshiping him with puppydog drooling and heaping praise on him, is the fact that he must now defend the details of his plan.

I have completely lost count of the scores of times that I have heard the Ryan proposal characterized as “serious”. But how can anyone take a deficit reduction plan seriously when it refuses to rein in the tax giveaways to the wealthiest Americans? Not only does Ryan’s plan fail to do that, it heaps even more tax cuts on those who least need them, while forcing painful cuts on the poorest among us. It’s little wonder that Republicans are seen as lacking compassion.

There are some serious aspects of the proposed Path to Prosperity (for those already prospering). There are serious flaws in the numbers that Ryan presents in his proposal. Apparently, he turned to the conservative think tank Heritage Foundation for some fuzzy math, that turned out to be funny math. Part of Ryan’s figures rely on an unprecedented and unsubstantiated 2.8 percent unemployment rate. After Ryan had already presented his plan, the Foundation adjusted its figures on unemployment. Among other math errors currently being disputed are tax revenues and housing numbers.

The plan also poses serious impacts to the livelihoods of many Americans. The voucher system that is part of the plan to privatize Medicare would limit the benefits available to seniors as well as threaten them with dramatic reductions in coverage over time that would put strain especially on those with limited fixed incomes. Fixed maximum dollar amounts for coverage of procedures for Medicaid members will prevent many patients from receiving much-needed treatments.

As I look at current and future budget debates in Washington and around the country I am alarmed. I see the casualties that will fall as a result of the brutal battling of politicians seeking public favor above favorable public policy. I see the stark adjectives of human toil reduced to cold numbers as real consequences are discounted. And I see the tangled discourse dwarf all other important news and issues.

In a time when the nation is continuing its long struggle toward economic recovery, the focus is misplaced on the deficit. Of course, we should strive to be fiscally responsible and limit the generational impact of our national debt. But the dearth of jobs nationwide and the trends that continue to exchange good jobs for Walmart jobs is a dire prospect worthy of our attention.

The attack on the middle class is lost in the nightly news graphics of all-caps “SHUTDOWN” and “SHOWDOWN”. One of the most appalling stories last week that registered merely a blip on the media radar was the Wisconsin Supreme Court Justice election. This race, between union-busting Governor Scott Walker’s man David Prosser and Democrat JoAnne Kloppenburg, smacks of election fraud. The late-Thursday night announcement that enough votes to reverse Kloppenburg’s declared Tuesday win smelled like corruption. While the tomfoolery evident in this case is a threat to the democratic process, it was overshadowed by the coverage of Boehner, Reid and Obama negotiations.

Debate and discourse is vital to democracy, but it should not overpower real issues.