David Stockman: "We've Learned No Lessons"

Liberals like and admire Bill Moyers-- a lot. But this episode with Stockman (above) isn't going to offer comfort or solace to Democratic Beltway Insiders any more than it will please Republican Beltway Insiders. It's all about how crony capitalism is eating the country from the inside. As every Republican running for office continues to pledge undying fealty to Ronald Reagan, they are willfully forgetting the uncomfortable lesson Reagan found out when he tried the trickle down economics being pushed again today by Paul Ryan and the rest of the GOP hierarchy-- charlatans and flimflam men whose electoral careers are being underwritten by the banksters, the oil companies, the Military Industrial Complex and the insurance companies.

When Reagan's budget director, David Stockman, talks about the financialization of the economy-- and how that produces nothing of value at all-- he sounds almost like David Korten, the economist who most represents the ideas behind the Occupy/99% Movement. Listen to disillusioned Republican Stockman above with Moyers. Here's disillusioned Democrat Korten from his book Agenda For A New Economy:

Wall Street is a world of pure finance in the business of using money to make money by whatever means for people who have money. Any involvement in the production of real good and services is purely an incidental byproduct. Maximizing financial return is the game. To that end, Wall Street institutions have perfected the arts of financial speculation, corporate-asset stripping, predatory lending, risk shifting, leveraging, and debt-pyramid creation. Successful players are rewarded with celebrity, extravagant perks, and vast financial fortunes.

Wall Street players justify their actions with the claim that they are creating wealth for the benefit of society, a convenient bit of self-delusion...

The term free market is a code word for an unregulated market that allows the rich to consume and monopolize resources for personal gain free from accountability for the broader social and environmental consequences. A free market rewards financial rogues and speculators [think Romney and Bain, in fact keep them in mind for the rest of this post] who profit from government, social, and environmental subsidies, speculation, the abuse of monopoly power, and financial fraud, creating an open and often irresistible invitation to externalize costs and increase inequality.

Last week Moyers and Stockman explored the tight connection between Wall Street and our governing elites in DC, particularly in the White House-- although Stockman, a former congressman from Michigan, also gets into the problem inherent in a Congress financed by special interests. He advocates banning corporate contributions entirely-- and putting a $100 cap on individual contributions. A different kind of Republican than the kind we're hearing about these days, huh? He's very candid with Moyers about how money dominates politics, distorting free markets and endangering democracy: “As a result we have neither capitalism nor democracy. We have crony capitalism.” He shares details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who’s really in charge. “We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” Stockman tells Moyers. Watch it all the way through. It's riveting stuff.

Former Secretary of Labor Robert Reich takes a more direct approach to the lessons we haven't learned-- a surtax on the super wealthy.

Let Santorum and Romney duke it out for who will cut taxes on the wealthy the most and shred the public services everyone else depends on.

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth-- not just incomes.

The Fed just reported that household wealth increased from October through December. That’s the first gain in three quarters.

Good news? Take closer look. The entire gain came from increases in stock prices. Those increases in stock values more than made up for continued losses in home values.

But the vast majority of Americans don’t have their wealth in the stock market. Over 90 percent of the nation’s financial assets-- including stocks and pension-fund holdings-- are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.

Most Americans have their wealth in their homes-- whose prices continue to drop. Housing prices are down by a third from their 2006 peak.

So as the value of financial assets held by American households increased by $1.46 trillion in the fourth quarter, the wealthiest 10 percent of Americans became $1.3 trillion richer, and the wealthiest 1 percent became $554.8 billion richer.

But at the same time, as the value of household real estate fell by $367.4 billion in the fourth quarter, homeowners – mostly middle class-- lost over $141 billion (owners’ equity is 38.4 percent of total household real estate).

Presto. America’s wealth gap-- already wider than the nation’s income gap-– has become even wider. The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth-- and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit-- shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.

There probably isn't a more dedicated progressive running for Congress anywhere in the country than Norman Solomon. I know that sounds like quite the statement. But I mean it. Earlier today I talked with him about what Stockman and Reich had to say about crony capitalism and how these policies are effecting our democracy. His response will help you understand why Blue America endorsed him and why we're so enthusiastic about his race against a bunch of garden variety Democratic hacks (nice ones, I'm sure). Please help us get Norman to the $10,000 mark with as small or large a contribution as you can afford for someone who will actually be able to replace Lynn Woolsey and Dennis Kucinich in Congress.

What's at stake is democracy-- rule by the people, as opposed to rule by big money. But I will be blunt here: Progressives must take much more seriously the necessity of gaining electoral power for the 99 percent. While we may often say and write very perceptive things, government continues to largely function in the service of large corporate interests. As an antidote to the poison of "corporate personhood," we've got to nurture genuine grassroots campaigns that are infused with progressive values.

That's what my campaign for Congress is about. We already have 850 volunteers, 3,800 individual donors and tremendous momentum, while I refuse to take a dime of corporate PAC money. In this "grassroots vs. AstroTurf campaign," voting begins in less than 60 days for an open seat in the new coastal district north of the Golden Gate Bridge. Right now, time is of the essence. How many lawn signs and brochures will our campaign be able to afford as we go to the printer later this month? In a significant way, that's up to you.