Conservatives' Never Ending War Against The Middle Class

Earlier today we talked with Rep. Raúl Grijalva about the Republicans' determination to wage class war against middle class Americans on behalf of their millionaire and billionaire patrons. One of the few Members of the Senate willing to man the barricades against the forces of reaction with Grijalva is Bernie Sanders (I-VT) and, like Grijalva, he voted against the continuing resolution that seeks to balance the budget on the backs of working people while Big Oil and other donors to the political Establishment get billions in tax subsidies. “At a time when the gap between the rich and everyone else is wider than it has been in decades, it would be wrong to balance the budget on the backs of people already suffering from the recession who are receiving Social Security, enrolled in Head Start or depend on home heating assistance... “It is time," added Sanders, "to ask the wealthy to start paying their fair share." And unlike Republicans, who try to shift the blame for the deficits to teachers, nurses, firemen and garbage collectors struggling for a modest living, Sanders points out that today's $14 trillion national debt was driven up by tax breaks for the wealthy, wars in Iraq and Afghanistan, a Wall Street bailout and a prescription drug program drafted by pharmaceutical companies.

House Republicans, overreaching as usual, rammed through a bill that would cut this year's budget by more than $60 billion. That bill would:

• Cut $1.1 billion from Head Start depriving services for 218,000 children.

• Cut $1.3 billion for Social Security delaying benefits for 500,000 Americans. 

• Slash $1.3 billion from community health centers taking primary health care from 11 million patients.

• Reduce or eliminate Pell Grants for 9.4 million low-income college students.

• Cut $405 million from Community Services Block Grants affecting 20 million seniors, families with children and the disabled.

• End job training and other employment services for 8 million Americans.

Blue America urges whomever can afford to to donate to Bernie election campaign, whether it goes towards his reelection as senator or to challenge a conventional status quo type candidate for the presidency. You can do that here. Richard Wolff wrote an analysis for the Guardian earlier in the week about how the rich have soaked the rest of us and it sounds like he and Bernie (and Grijalva) are all seeing things through the same clear eyes. It started with getting Republicans and corporate Democrats to shift the tax burden dramatically away from the wealthy on onto the middle class. "[F]rom the end of the Second World War into the early 1960s, the highest income earners paid a tax rate over 90% for many years. Today, the top earners pay a rate of only 35%," drastically narrowing gap between the rates paid by the richest and the poorest. This is all about the very successful class war the richest are waging against the rest of us-- and about how few-- and how ineffectively-- our political class stands up for us.

In simplest terms, the richest Americans have done by far the best over the last 30 years, they are more able to pay taxes today than they have been in many decades, and they are more able to pay than other Americans by a far wider margin. At a time of national economic crisis, especially, they can and should contribute far more in taxes.

Instead, a rather vicious cycle has been at work for years. Reduced taxes on the rich leave them with more money to influence politicians and politics. Their influence wins them further tax reductions, which gives them still more money to put to political use. When the loss of tax revenue from the rich worsens already strained government budgets, the rich press politicians to cut public services and government jobs and not even debate a return to the higher taxes the rich used to pay. So it goes-- from Washington, to Wisconsin, to New York City.

How do the rich justify and excuse this record? They claim that they can invest the money they save from taxes and thereby create jobs, etc. But do they? In fact, cutting rich people's taxes is often very bad for the rest of us (beyond the worsening inequality and hobbled government it produces).

Several examples show this. First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People's Republic of China.

Third, the richest Americans take the money they don't pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans, and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps-- you guessed it-- the richest Americans who own most of the stocks.

The one kind of significant wealth average Americans own, if they own any, is their individual home. And home values remain deeply depressed: no recovery there.

Cutting the taxes on the rich in no way guarantees social benefits from what they may choose to do with their money. Indeed, their choices can worsen economic conditions for the mass of people. These days, that is exactly what they are doing.

The hypocritical thing to say is that this is all the Republicans' fault. But that would be false. There are plenty of Democrats just as guilty of catering to the wealthy. Bernie Sanders and Raúl Grijalva aren't among them. The Blue Dogs, for example, are.

Instead of doing their jobs-- making sure society is protected from predatory banksters, for example, whose greed and unrestrained avarice nearly drove us into a Depression-- Congress just passes more taxcuts for the wealthy and tax subsidies for their corporate donors. This week we saw most Democrats in the House vote to end billions in tax subsidies for Big Oil, most but not all. Although every single Republican voted to protect taxpayer subsidies for Big Oil, 13 right-wing Democrats, all of whom get gigantic, if legalistic, bribes from the oil companies, voted with the GOP. And yet when the DCCC pleads and begs grassroots Democrats for money to help them prevent the Republicans from doing this kind of thing, it's with a cynical and evil smile, knowing full well that this money will be used to prop up exactly these kinds of conservative, corrupt and reactionary Democrats that the left-leaning base detests so much. These and the Republican-light millionaire candidates DCCC Chair Steve Israel and his Blue Dog pal Heath Shuler are recruiting to run in 2012. They try to work up the base over GOP outrages and then filter the contributions to the very "Democrats" who see thing exactly the way Republicans do. Bernie Sanders was smart to refuse to become a Democrat but to run as an Independent instead. There aren't, alas, many Democrats-- not these days-- who would make a speech like this: