Thursday, March 1, 2012

Austerity for You, Bonuses for Me (Plucking the Money Tree)

The ruling elites like to use the analogy of the home budget to put the financial crisis into perspective.  Chris Christie, governor of New Jersey, said that his state couldn't pull any more money off the "money tree." So he rejected money for a commuter rail that would have put thousands of people to work and improved the infrastructure and economy of his state. He vetoed a number of federal stimulus infrastructure improvements because it was time for everyone to "tighten their belts" and start to learn "personal responsibility."

This metaphor is an interesting one, but inaccurate.  Trying to take something as highly complex and diverse as a nation-state economy and simplify it down to the limited mindset of a six year old fantasy has no correlation to reality.  But, since we seem to like overly simplified answers to difficult questions, let's see what we can do...

Ronnie Reagan liked to talk about the Cadillac driving, lazy, (impliedly black) moocher-based welfare queens who lived off everyone else while self-righteous, hard working whites supported them.  Never mind how this was actually a myth never supported by any kind of real evidence, other than a few minor cases of fraud that occurred here and there.

But finally, we found out there are real, actual, Cadillac driving, welfare queens--Mitt Romney's wife is one of them.  It turns out the welfare queens were hiding amongst us all along, under a Caucasian veil.  Mrs. Romney and her husband receive a direct welfare subsidy from the government--they get free government services like military protection, roads, and other services provided at a discount rate of tax less than what the middle class pays.  Mrs. Romney uses her extra money (to the tune of millions per year), to drive "a couple of Cadillacs."  It turns out the welfare queens are doing much better off than we anticipated.  Meanwhile, the hard working whites and blacks and everyone else must incur more public debt to pay for these extra Cadillacs.  Instead of making Mrs. Romney go without, we must impose austerity on everyone else because she cannot be made to suffer.  This means the equivalent of tax increases for federal workers (aka pay freezes), teacher layoffs, defunding of schools, cuts to Social Security, and the like.  No personal responsibility or austerity for her, thank you very much.  The same year that teachers and firemen were being laid off, Lloyd Blankenfein, the head of Goldman Sachs, the investment banking firm which masterminded the financial meltdown, received a bonus in excess of 12 million dollars.  Goldman Sachs was also paid by the Greek government to hide their mounting debt until the situation got out of control.  Now the people of Greece are forced to pay the costs while the rich get bonuses for masterminding the meltdown.

Getting back to Mr. Christie's example, the current situation is like a family.  Mom and Dad like buying things for themselves, things they don't need, so they start borrowing from their children's college funds (provided by grandma and grandpa) to pay for it.   This means the kids won't have an education in the future, but since we are one big family, that's "their" problem.  They don't want to work any more than they have to, and when they do work, they don't want to pay for the things they actually purchase.  So after the college funds are totally exhausted, they start borrowing on their credit cards and spending their children's inheritance.  After reading Ayn Rand books and learning about the value of selfishness, they get pissed when the children ask for food or expect an education or reasonable health care.  "You are trying to steal from me" they say, when questioned.  "I don't owe you anything, find your own happiness" is their response.  This shouldn't be surprising, given the onslaught of commercials and marketing telling us for a generation that what we buy makes us individuals and unique.  The TV has told us how special we are.  After all, we deserve to "have it our way."  Because they are borrowing on their home and speculating on it as well, their children stand to become homeless and the family is indebted.  This goes on until the children get older.  By now, they have huge college tuition debts and must start working.  But Mom and Dad still refuse to pay their fair share, because, after all, "money doesn't grow on trees."  The children still haven't learned "personal responsibility."  By now, Mom and Dad are up to their eyeballs in personal debt and their home is about to be foreclosed upon.  Using guilt manipulation, they remind their children that they are the "life creators" (aka job creators), and that their children owe everything to them.  Their children need to start giving them a portion of their paychecks.  But instead of paying down the family debt, they go out and buy a new iPad instead.  In this case, Mom and Dad represent the ruling elites of America and the children are everyone else.

Language has real consequences.  In reality, the government ultimately must take from some and give to others if we expect to have roads, bridges, and other public goods.  These things must be paid for, one way or another.  But the language used by politicians to describe these taxes is indicative of how they feel about them.  So, for example, "tax relief" implies that one is already paying too much tax and is being relieved by not paying more.  But in the U.S., there can be no such thing as "tax relief" for the rich because they have already been underpaying on taxes while politicians have been overspending.  The top 1/10 of 1% like Mitt Romney and Warren Buffett pay much less taxes as a percentage of their income than do the secretaries who work for them.  That's why there is a large national debt.  "Entitlements for the rich" would be a better description, but "entitlement" is only a word we use to describe it when poor and working people receive public benefits.  The poor and working class are, it is implied, spoiled brats who expect to get something for nothing after working for 50 years and paying into the system.  The poor, disabled widow who would starve except for Social Security payments has a sense of entitlement.  She needs to learn "personal responsibility" and "market discipline."

 Meanwhile, Mrs. Romney drives by, honks her horn, laughs, and peals out.

No comments:

Post a Comment