Here is the problem! Nobel Prize winning economist Paul Krugman has been on the forefront of isolating the inequality of wealth and income in our country as the fundamental issue with our economic woes. Forget about the deficit, forget about unemployment, forget about abortion, forget about contraception, forget about satan, forget about NAFTA, Obamacare, the National Defense Authorization Act, forget about religion, gay marriage, DOMA and trans-vaginal ultrasounds….just for a second and look at this chart.
Across the bottom of this chart you’ll notice the timeline that starts in 1947 and ends roughly about 2006. Then look at the black line and the red line. The black line indicates the median family income for the middle class. The red line indicates the median family income for the top .01% of earners. The vertical axis indicates the level of increase in income over the given period of time.
Notice that, from the end of WWII until roughly 1980, the income of both groups grew slowly, but at roughly the same levels. If your remember, that was the period of the middle class. That was the period when a family could live comfortably with one income. That was the period when a middle class family could afford to buy a home and make the payments. A middle class family during that time could afford to send their children to college without taking out a second mortgage on their home. And a middle class family could look forward to retiring at a reasonable age with enough income to live the rest of their years in relative comfort. That was the period when manufacturing was thriving and productivity was at the highest. That was a golden time in America….that was “Camelot” as Kennedy described it.
Now look at the period beginning approximately in 1980 that continued unabated until….well, until now. This was a period that was marked by a dramatic increase in the income (and wealth) levels of the top .01% and the simultaneous flatline level of income for the rest of the country. If you recall, that period of time was also a period of rapid and dramatic inflation of the economic balloon that culminated in the BURSTING of the balloon in 2008.
What happened in 1980? It’s simple. Ronald Reagan was elected and “trickle down economics” was born. I was 30 years old at the time and I remember Reagan describing his economic plan as one in which “the rich would benefit and profits would rise, and then, those profits would “trickle down” to the rest of society”. He even used the phrase, “a rising tide lifts all boats”.
Now look carefully at the chart. How did “trickle down” work? The rich got MUCH richer and the “trickle down” part…not so much. Today families must have two incomes to just get by. Sending your child to college means going deeply into debt that will take years to pay off. Retirement for most Americans seems like an impossibility. People are losing their homes, their cars, their jobs and their dignity. The combination of decreased taxes for the wealthy and unpaid for wars have blown up the deficit. Legislation such as the infamous “Part D Prescription Drug Plan for Medicaid/Medicare” was DESIGNED to increase the deficit and to funnel more money to Big Pharma. And now, our deficit is at ridiculous levels, and Republicans are touting that deficit to push for dramatic and draconian cuts in spending (Grover Norquist insists NO tax increases of course) so cutting essential government services is the only answer remaining.
In truth, today’s piece is not just about the radical ideas of Rick Santorum, it’s also about the rest of the remaining field of Republican candidates for president because they ALL want to continue conservative economic policies and actually DOUBLE DOWN by turning up the volume. The fundamental elements of “trickle down” economics are: lowered tax rates on corporations, lower tax rates on capital gains (unearned income for the wealthy), a sharp reduction in regulations on corporations and investment banks, a dismantling of labor unions, tax codes that favor corporations, and tax codes that favor the wealthy. ALL of the Republican candidates for president want to continue with this, but on steroids! All Republican candidates are on record as wanting to cut the capital gains tax to ZERO! (When Mitt Romney released his tax returns and was publicly castigated for paying 15% in taxes, that was because his income was almost completely in capital gains. Under the tax changes favored by Republicans, Romney would have paid ZERO taxes.) All Republican candidates for president want to continue to shift the burden of maintaining a healthy society onto the backs of the middle class, and the poor.
Income and wealth inequality is the underlying problem that is causing the deterioration of the American society today. Unless we stop this trend of tax codes that favor the wealthy, we are on road to disaster. Until we improve opportunities for the middle class we will continue to deteriorate.
In a nutshell then, Rick Santorum, Newt Gingrich, Mitt Romney and even Ron Paul, want to put more resoures into the pockets of the big corporations and the ultra-wealthy (their base), kill the rest of government, and hope for a miracle.
And finally, let’s take a look at Republican views on the basic role of government.
Rick Santorum and most members of the Conservative movement, think that government is basically a bad thing. It doesn’t work and private enterprise (the free market) can do everything better than government. Of course, when they DO get elected to public office, they do their best to PROVE that government doesn’t work, but I digress. Their solution? Grocer Norquist famously summarized that when he said he wanted to “shrink government until it was small enough to drown in a bathtub”.
To the slate of Repubican candidates, that means closing the Department of Education not only at the Federal level, but even at the State level. In other words, end public schools. Santorum is actually on record as preferring instead, an increase in home schooling. (Yet again, a way to reduce the number of women in the workforce by the way.) They’ve also recommended closing the Department of Commerce, the Environmental Protection Agency, and the Department of Energy at a time when energy policies are the most important elements of our economic success. They passed an onerous law that placed an unprecedented financial burden on the Post Office in an attempt to force the Post Office out of business and that one seems to be working.
We’ve already talked about Santorum’s desire to see a reduction in the use of contraceptives, including legislative bans on contraception. He’s on record as wanting women to stay out of the military, stay barefoot and pregnant, and basically get back to the kitchen where they belong. I’ve yet to hear any of the Republican candidates say they disagree with that.
We know Santorum and his fellow Republicans thinks that social safety net programs like welfare, food stamps, and medicaid should not be within the role of government. We know Conservatives would like to get rid of Social Security and Medicare as we know it through privatization. And we know they want to reduce the role of government across the board, and to pass those areas of responsibility to the private sector where profits can be made.
Private corporations exist for one reason and one reason only, to make profits. They don’t care about the general economy of the United States, they don’t care about the welfare of the poor, the elderly, the sick, and the handicapped. They aren’t concerned with costs to consumers or the general quality of life in the society,
Governments on the other hand, are not supposed to make a profit. Governments are instituted to regulate the general economy. They are charged with improving the welfare of the poor, the elderly, the sick, and the handicapped because doing that improves the quality of life for all of us.
And so, the choice we have to make in November is clear. Do we want to continue with “trickle down” economics? Do we want to continue to push profits to big corporations? Do we want to decimate our government by closing all public schools, ending food stamp programs, ending welfare programs, privatizing Social Security and Medicare? Or do we want to elect a majority Democratic US Senate, House of Representatives and do we want to have a Democrat in the oval office? Einstein famously said: “The denition of insanity is doing the same thing over and over again, and expecting a different result”. We’ve had 30 years of “trickle down”. Do we really believe it’s going to suddenly start working? And do we really want to “shrink government until we can drown it in a bathtub”? Who then, would represent the people?