Over the past 30 years the Republican Party has become dominated by a spirit of greed and selfishness. They have consistently worked for three policies which favor the Super Rich over the rest of us: cut taxes for the rich, cut regulations on business, cut programs that help people in need.
These three policies have been major contributors to most of our current problem. The explosive growth of our deficit and debt began when Reagan cut taxes for the rich, it got worse when George W. thought he could fight two wars and cut taxes at the same time. We lost jobs to 3rd world countries while other industrial countries did not because our tax laws made it profitable to do so and theirs penalized it. Deregulating the banks was a major cause of the recession.
Over the past four year Mr. Obama did not completely get us out of the hole it took 30 years to get into but he did a lot to stimulate the economy, save or create millions of jobs, and help people who were in trouble. As a result our economy is recovering while the economies of countries that adopted �austerity budgets� are still declining. During these four years the Republicans did only two things: defend the tax cuts for the rich and try to block everything Obama did.
It is impossible to know what Mr. Romney really stands for because he has been very vague on details and he has flip-flopped on almost every issue.
To think that going back to the same policies that caused this mess will fix it is folly. If you want a fuller discussion of these issues, read on.
The Longer Version.The period of the post WWII boom, 1945-1975, was the most vibrant period in our economic history. It was a time of: high taxes, strong unions, good government regulation of business, and good government programs like the GI bill to help people improve their lives. The middle class prospered, workers prospered, the country prospered, and millions of people achieved the American Dream of economic security earned by their own hard work.
During that time we cleaned up our polluted environments, ended legalized segregation, founded the Peace Corps and similar programs, developed communications and weather satellites and walked on the moon.
During the period of the Conservative Resurgence, 1980 to 2008, we Lowered taxes on the rich, weakened the unions, gutted the regulatory agencies and cut back on programs to help ordinary citizens. The Super Rich prospered. And the rest of us lost out.
What was the difference?It might be summed up in two famous statements. In 1961 John F. Kennedy said, �Ask not what your country can do for you; ask what you can do for your country.� In 1989 Gilbert Gecko said, �Greed is good.�
It might also be summed up in the teachings of two people: Jesus said, �Love your neighbor as yourself� and �The greatest among you must be the servant of all.� The French author Ayn Rand said that altruism is a vice and everyone should pursue his own self-interest. Of course greed and selfishness had been around for a long time but since the 1980s they have run wild.
How did it happen?Ronald Reagan cut taxes for the rich by a lot and raised them slightly for the middle class. The explosive growth of our deficit and debt dates from that time. After 39 presidents and 200 years our national debt was just under one trillion dollars. 4 presidents and 28 years later it was $10T. 82% of that growth was under �borrow and spend� Republican presidents.
More importantly, that tax cut triggered the biggest and fastest redistribution of wealth in our history. Do the math. When Ronald Reagan cut the maximum tax rate from 70% of income over $200,000 to 28% of income over $30,000 the take home pay of anyone making over $200,000 doubled without them doing an extra lick of extra work.
Figure 1 � National Debt and Maximum Tax Rate
Figure 2 � Whose Debt Is It Anyway?What did the rich do with the extra money? Some set up charitable foundations to do good. Some of them, however:
- Hired lobbyists and influenced politicians to change the laws so they could make even more money.
- Pushed their tame politicians to repeal sensible regulations so that they could get even richer while crashing the economy down on the heads of the rest of us.
- Engaged in a well-funded campaign of propaganda pointing the blame for our troubles anywhere but at themselves.
Point 1 � The 1% hired lobbyists and influenced politicians to change the laws so they could make even more money.Note: The expression �the 1%� does not apply to everyone with an income over $1M but to those who use their wealth in ways that hurt the rest of us.
Working through well paid lobbyists and politicians beholden to them, they had tax shelters and loopholes written into the tax code and they pushed for free trade laws that made it profitable to move their factories overseas where they could get rich exploiting non-unionized, uninsured, desperate people living in third world poverty.
During the Progressive era from 1945-1975 our Gross Domestic Product doubled and average income of every group of Americans doubled. During the Conservative Resurgence from 1980-2008 our GDP doubled again. The income of the top 1% more than doubled while average Middle Class income went up only 20%.
As a result of that the percentage of wealth owned by the top 1% quickly went back to where it was just before the Depression. Take a look at the following four graphs. Does this situation look good to you?
Figure 3 - The Picket Fance and the Staircase.
Figure 4 � How Rich are The Super Rich?
Figure 5 � Wealth of the Top 1%.
Figure 6 If US Land Were Divided Like US WealthWe are all paying for this great disparity of wealth and may pay even more in the future. Consider one example: the four members of the Walton family, owners of Walmart, now hold as much wealth as the bottom 40 percent of Americans combined: Between 2007 and 2010, while median family wealth fell by 38.8 percent, the wealth of the Walton family members rose from $73.3 billion to $89.5 billion. Click for article. At the same time, almost half of the people who work for Wal-Mart earn so little that they qualify for Food Stamps and Medicare. Instead of raising their salary scale, Wal-Mart hires case workers to help them apply for this federal aid. The American taxpayers are spending $2.6 billion every year to subsidize Wal-Mart�s payroll. Click for article. And the same is true for other business that pay minimum wage.
In 1970 it was possible to live above the poverty line on minimum wage. Today at $7.25/hr x 40 hr/wk x 52 wk/yr = $15,080/yr it is not. As the cost of living rose, instead of insisting that employers pay a living wage we set up programs by which the taxpayers subsidize big businesses.
In 1916, when Congress was debating the Inheritance Tax, Louis Brandeis, later to be a Supreme Court Justice, said, �We can have great wealth concentrated in the hands of a few, or we can have democracy but we can�t have both.� Since the 2010 Supreme Court Decision Citizens United v FEC struck down a 100 year history of Campaign Finance Legislation, wealthy individuals and businesses have poured hundreds of millions into political campaigns in order to elect candidates that will do what the 1% want.
Point 2 � The 1% pushed their tame politicians to repeal sensible regulations so that they could get even richer while crashing the economy down on the heads of the rest of us.During the 19th century the US economy went through a series of boom and bust cycles, the Panic of 1819, the Panic of 1837, the Panic of 1857, the Panic of 1893, the Panic of 1907 and, the granddaddy of them all, the Stock Market Crash of 1929. The McFadden Act of 1927 prevented banks from operating across state lines. Most banks were relatively small with close ties to their community. When McFadden was repealed in 1994 it opened the way to the formation of the banks that were �too big to fail� and had no commitment except to maximizing short term profit.
A major cause of the Stock Market Crash of 1929 was banks gambling on the stock market with their depositor�s money. The Glass-Steagall Act of 1933 separated banking from investing. If you wanted to put money in a high-yield, high-risk stock, go right ahead; no one was stopping you. But if you put your money in a bank it was supposed to be safe. Glass-Steagall was repealed in 1999 and 8 years later those big banks needed a $700,000,000,000 bailout.
Big business would also like to roll back most of our environmental legislation. I remember when you could not walk along the Hudson River because of the smell of raw sewage, when the Cuyahoga River in Cleveland was so polluted that the river caught fire and did a million dollars of damage to boats and piers; and when the smog over Los Angeles was so thick that people with asthma were advised to stay indoors 100 days out of a single year. There is certainly room to simplify many regulations but to say we can trust others to do the right thing without some regulation is folly.
Point 3 � The 1% engaged in a well-funded campaign of propaganda pointing the blame for our troubles anywhere but at themselves.They launched a propaganda campaign to focus people�s anger on �illegal aliens� and �welfare cheats.� Propaganda is information designed to bypass the brain and go directly to the gut. Using ethnic slurs and loaded words like �welfare queens� and �wetbacks,� right wing talk-radio pundits goaded people into believing that poor people were responsible for the loss of jobs and for money disappearing from the middle and working classes. They used slogans like �No redistribution of wealth� and �class warfare� to hide the fact that this redistribution of wealth and class warfare have been going on for 30 years and that 99% of us have been losing.
At the same time anonymous hate filled circular letters go viral on the Internet even though a quick check at snopes.com will show that they are Mostly False and sometime rate a �pants on fire� award.
What Does This Have to Do with Election 2012?In his first four years Mr. Obama has:
- Passed a stimulus bill that stopped the free fall of the American Economy and saved or created 3 million jobs.
- Saved 1.4 million jobs in the auto Industry and its supplier
- Three times sent an American Jobs Act to congress only to be blocked by the Republicans.
- Fought for lower taxes for ordinary Americans while asking the richest Americans to pay a fairer share of the tax burden.
- Passed a health care bill that extends care to 32 million Americans who were without it.
- Passed a law that gives women equal pay for equal work.
- Provided help to Americans who lost their jobs in the recession.
- Promoted educational reforms.
- Kept student interest rates low so more of our students can stay in college.
- Passed financial industry reform laws to help prevent a future recession.
- Invested in clean energy jobs.
- Called for a constitutional amendment to overturn Citizens United. And
- Called for closing the tax loopholes that allow people like Mitt Romney to make millions while paying a lower tax rate than Americans who earn a salary.
- To prevent raising taxes on the very rich
- To get rid of Mr. Obama so they could return to the same policies that caused the recession.
- Three times passed Mr. Ryan�s budget that would:
- Change Medicare into a voucher programs that would raise costs for elderly people.
- Change Social Security into a system that would provide less security for the people who need it most.
- Lower taxes on the wealthy from 35% to 28%
- Cut Medicaid and food stamps.
- Cuts funding to education, employment training programs, Pell grants, agriculture, and transportation
- Twice brought us to the brink of closing down the government in order to defend the Bush tax cuts for people making over $250,000.
- Recommended letting Detroit go bankrupt.
- Promised to repeal Obamacare.
- Promised to repeal the Repatriation tax, a move which would send even more jobs offshore.
- Opposed financial regulations designed to prevent another meltdown of the banks.
- Opposed extending unemployment benefits to people out of work because of the recession.
- Tried to block almost everything Mr. Obama has tried to do.
Mr. Romney�s five-point �economic plan� is very nearly substance-free. It vaguely suggests that he will pursue the same goals Republicans always pursue � weaker environmental protection, lower taxes on the wealthy. But it offers neither specifics nor any indication why returning to George W. Bush�s policies would cure a slump that began on Mr. Bush�s watch.I am convinced that a Romney/Ryan victory would be an economic disaster for our country.
What about our huge National Debt?In 2008 when recession hit worldwide most countries found themselves dealing with large deficits and high unemployment. Conservatives said we had to deal with the deficit first. Most of Europe went the way of austerity and their economies continue to get deeper in trouble while ours is recovering.
Fortunately for the US, President Obama insisted on dealing with unemployment first. The conservatives limited the stimulus package to half of what progressive economists recommended so it did not pull us out of recession quickly but many prominent economists have said that the stimulus package kept us from sliding into depression. And now there are definite signs of improvement.
This should not be surprising. Dealing with the deficit first means putting more people out of work, reducing tax revenues, adding to the cost of the social safety net and thus adding to the deficit. Dealing with unemployment first means getting people off the welfare rolls and back onto the tax rolls, giving us more money to eventually reduce the deficit.
Our economy was in free-fall for the last two years of W�s term. Immediately after the Stimulus Bill went into effect we pulled out of the free fall and started recovering. Check out these graphs and the five minute video at Did the Stimulus Work?
Figure 7 - Employment Figure 8 - US Gross Domestic Product
But What About Abortion?As a Catholic I have to consider the abortion issue. Some Catholics and even some priests and bishops would have us be �one issue voters� because Abortion trumps all other issues. Fortunately that is not the official position of the US Catholic Church.
Forming Consciences for Faithful Citizenship is a booklet first published by the United States Conference of Catholic Bishops (USCCB) 30 years ago and revised every four years since then. The last revision was in 2011. It is not the work of some self-appointed group of lay people, nor of one or two way-out bishops. It has been discussed by, voted on, and approved by the entire body of the USCCB. This along with the Catechism of the Catholic Church is the definitive statement of what the US Catholic Bishops teach. You can download your own copy from the Internet .
Faithful Citizenship does not offer a voter's guide, scorecard of issues, or direction on how to vote. It applies Catholic moral principles to a range of important issues and warns against misguided appeals to 'conscience' to ignore fundamental moral claims, or to reduce Catholic moral concerns to one or two matters. Paragraph 42 explicitly says that "As Catholics we are not single-issue voters." It is the militant "Right to Life" groups that would reduce the Catholic position to a single issue.
I would love to be able to vote for a candidate who supports Catholic morality across the board but there is no such candidate. Conservatives support our position on abortion and euthanasia. But Catholic moral teaching on the "Right to Life" also opposes capital punishment and war. Liberals are much closer to us on these issues.
Our US Catholic bishops have spoken frequently and strongly about the need for comprehensive reform of our broken immigration system, about the need to maintain a strong social safety net to help those impoverished by the current recession, and about the need to support economic justice for all. On these issues as well, the liberal position in this country is much closer to ours then is the conservative position.
Why are so many Catholics and other right wing Christians so ready to jump on the anti-abortion bandwagon and ignore these other issues? Could it be because abortion is a simple black and white issue that does not require us to do anything, only oppose what others are doing, while fixing our immigration and economic problems would require many of our leading parishioners to make significant changes in their actions?
Faithful Citizenship does put a very strong emphasis on abortion as a major moral evil of our day but paragraph 35 notes that
There may be times when a Catholic who rejects a candidate�s unacceptable position may decide to vote for that candidate for other morally grave reasons. Voting in this way would be permissible only for truly grave moral reasons, not to advance narrow interests or partisan preferences or to ignore a fundamental moral evil.�This paragraph has an interesting history. During the 2004 election cycle Archbishop Burke of St. Louis wrote a pastoral letter saying that any Catholic who votes for any candidate who supports a "woman's right to abortion" cooperates in that mortal sin. Cardinal Joseph Ratzinger, then head of the Congregation for the Doctrine of the Faith and now Pope Benedict XVI, wrote to the USCCB saying that Burke was wrong. Ratzinger made this distinction: If a catholic votes for a candidate who supports abortion because the candidate supports abortion the Catholic cooperates in serious sin. If, however a Catholic votes for a candidate because he is the best candidate in spite of his position on abortion that is not a serious sin.
I, along with many other Catholics, believe that we are in such a situation. The 30 years since Ronald Reagan was elected have been disastrous for our country. We have lost jobs, we have exported our great manufacturing base, we have amassed a huge National Debt, we have seen the concentration of wealth in the hands of the richest 1% of our country grow back to where it was just before the Great Depression, and we have seen a small group of those very wealthy people exercise an inordinate influence on our political system by hiring armies of lobbyists and buying influence with politicians on both sides of the aisle. We have watched the wealthy giants of the financial world bring on the Great Recession by foolishly dismantling the financial control laws put in place after the Depression.
The conservative policies of cutting taxes for the rich and deregulating everything got us into our current mess. Why should we think that returning to those same policies will do anything other than make it worse?
Does this constitute a �morally grave situation?� Please consider the following:
Abortion is wrong. Every year thousands of children are aborted which is a great tragedy. But where are the souls of those children? They are in the hands of God, along with the souls of the stillborn, and miscarried.
On the other hand every year thousands of children are born into poverty, into situations where they will be surrounded by the near occasions of sin. Many of them will become involved with drugs, gangs, prostitution and violence. Many will die young with mortal sins on their souls after destroying other lives as well.Which of these is the greater tragedy?
You might also consider this: In the New Testament, what did Jesus say about abortion? What did he say about homosexuality? What did he say about contraception? Nothing. What did he talk about? He talked about loving your neighbor, about helping those less well off, about the dangers of being rich, about the hypocrisy of leaders who do not help carry the burdens of their people.
I am not saying that we should not work to reduce or end abortion, but as our Catholic Bishops say in Faithful Citizenship we need to work on both sets of issues.
To my mind it is the Christians who get all exercised about abortion, homosexuality, and religious freedom but ignore Jesus�s command to �love your neighbor as yourself;� who week after week listen to gospel passages about Jesus helping the poor, the sick, the outcasts and ignore his �new commandment� to love one another as I have loved you;� who ignore the passage from St. James read at Mass recently railing against people who made themselves rich by impoverishing their employees; and the people who ignore Jesus�s warnings about being rich; they are the ones who are �Christian�s In Name Only.� And they are the ones who may find themselves on the wrong side if the description of the last judgment in Matthew 25 turns out to be anywhere near correct.
I failed to keep this paper short. My apologies. If you are still with me and would like to read more about these issues you might check out the Social Justice section of my web page:
http://spccis.spc.edu/dstump/SocialJustice/> Especially the article Conservative Economic Theories Just Dont Work