Time to Retake Politics from the One Percent in Both Political Parties
from Dean Baker
The country is still celebrating the inability of the supercommittee to cut Social Security and Medicare, but it is important to move on from this victory to retake control of the political debate from the 1 percent. As it stands, the 1 percent are insisting that the country genuflect over the non-problem of the budget deficit, at a time when tens of millions of workers are unemployed or underemployed, millions of people are facing the loss of their homes and tens of millions of baby boomers are approaching retirement with little other than their Social Security to support them. The deficit is the agenda of the 1 percent. There is no reason that the rest of us should be concerned about budget deficits when the rest of the country is struggling with the economic disaster created by the greed and incompetence of the 1 percent.
This is not a statement of morality, it is a statement based on economic reality. Budget deficits can be a problem when an economy is near full employment and the deficit can be pulling resources away from private investment, thereby slowing growth. However it is not a problem with large numbers of unemployed workers and vast amounts of excess capacity.
This is what the financial markets are telling us every day as interest rates on long-term government bonds hover near 2.0 percent. If deficits were really crimping the economy we would be seeing interest rates of 6 or 7 percent, or even higher. The deficit hawks do not have an economic case to support their argument, just money and influence.
In the longer term the deficit hawks can point to projections of outsized deficits, which they invariably attribute to Social Security and Medicare. The first part of this story is completely untrue.
Under the law, Social Security is financed from its designated tax. It therefore cannot contribute to the deficit unless Congress changes the law. (The payroll tax credit in 2011, which was replaced with general revenue, is an exception to this rule.)
According to the most recent projections from the Congressional Budget Office, Social Security benefits will be fully funded through the year 2038. After that date, if Congress does nothing to increase revenue, then the program would pay a bit more than 80 percent of scheduled benefits. (This would still be about 10 percent more than current retirees receive since benefits are projected to rise by approximately 1 percent a year.)
The real story of the soaring long-term deficits is exploding Medicare costs, which are in turn driven by our broken health care system. We already pay more than twice as much per person for our health care as the average for other wealthy countries, with little to show in the way of outcomes. This gap is projected to continue to grow in the years ahead.
To anyone who looks at the facts, the obvious answer to our deficit problem is fixing the health care system. This is difficult to do given the enormous political power of the pharmaceutical industry, the insurance industry, highly paid medical specialists and the other members of the 1 percent who profit from the waste in the system as it exists now.
If we can’t immediately change the system then why not take advantage of the gains from trade? If we change rules to make it possible for Medicare beneficiaries to buy into the health care systems in other countries or make it easier for patients to have medical procedures done at far lower cost elsewhere, it should be an enormous win-win offering gains that could be in the trillions of dollars. And what free-market fundamentalist can argue against the principle of giving people a choice?
In fact, conservatives and self-described free traders run screaming from the idea of opening medical care to trade. They want trade that will lower the wages of auto workers and textile workers by putting them in direct competition with low-paid workers in the developing world; they hate trade when it threatens to reduce the income of the pharmaceutical industry, the insurance industry and others in the 1 percent.
It’s time to expose the lies for what they are. The 1 percent has rigged the deck over the last three decades to accomplish the most massive upward redistribution in the history of the world. These are not people who care about budget deficits or free trade or free markets. They care about making themselves richer at the expense of everyone else.
They have been fighting this class war for 30 years. It is long past time that the rest of us started fighting back.
Agreed, and the points you raise are important. But I don’t think that we shall begin to come to terms with the redistribution problem unless we take into consideration the proprietary conception of the firm and director primacy in firm governance — unless we take a good look at firm goverance. This is something economists are reluctant to do. They just seem to take both the proprietary firm and director primacy as givens in capitalism. But they are not. The constitution of the firm is one of the major reasons income distributions are skewed..
Federalize all election campaign funding.
Duh. The only reason things are the way they are is because our democracy is owned (via campaign funding) by those who want it that way. Period.
John Rawls suggested that elections should be publicly funded in entirety circa 1970. It was a very good idea then and it remains, in my mind, the only solution to the mess made that we see now in many (once advanced) nations, by the plutocrats who benefitted ie the very same people that can afford to parachute their candidates in to politics, lobbhy and pressure get what they want and to hell with everyone else.
The US wouldnt be in the mess it is now (and Greece and Italy and Spain and Ireland and Portugal and France…..need I go on?) were it not for this tainted circus like voting process which ever so elegantly seeds and fertilises corruption into the very heart of democracy and the political process.
John Rawls was so right but greed and power dont often want to hear what is right.
“Buy into the health care systems in other countries” ??? What makes you think that “other” countries are going to welcome this intrusion given that their own systems are already under stress for various reasons.
It is well past time for the USA (and Europe) to grow a couple and fix their domestic problems in house.
Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America’s credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class. Series: “UC Berkeley Graduate Council Lectures” [6/2007] [Public Affairs] [Business] [Show ID: 12620]
Education:
The Coming Collapse of the Middle Class
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Occupy LA Teach In William K Black
OccupyLAMedia
Dear Friends, The post & comments are wonderful, especially the insights into the problem of commercial politics, i.e., rampant misrule by corruption. Yet, where is the MOST Formula for implementing nonprofit politics?
I almost hate to say this again, it’s at > mm-greenbook.blogspot.com
What is a MOST Formula?
It’s the prerequisite of any successful military campaign, political campaign, PR campaign, business startup (like Apple), or reform movement. MOST is an acronym for:
1) Mission, 2) Objectives, 3) Strategy, and 4) Tactics (methods & logistics)
Every successful entrepreneur and right wing radical knows that instinctively and uses it to win over the sane but befuddled, dazed & confused.
FYI: The essential fact is that there will be know nonprofit politics until there is a nonprofit socioeconomic system with nonprofit money/credit based on a valid, viable, biocentric, humane socioeconomic paradigm. Establishing that, then must be our prime objective.
If I’m wrong about that, please provide an effective MOST Formula for implementing your proposed alternative (for a sustainable solution).
There is not a chance in hades that we are going to get money out of the politics games.
Even if we fully funded candidates and allowed NO private funding of campaigns OR parties, nothing would prevent cash rich players from bombarding the public with propaganda/misinformation.
All that needs be done is to posit their claims without mentioning by name any candidate or party and they get to call this dreck public service advertising.
Using key words and phrases that mirror their favorite son candidates talking points, they in effect cam blanket the public discussion with their toxic mind-goo, and no change in campaign financing laws is going to prevent it