All Guns and No Butter; Economy, Taxes and Deficit

I start this piece from the position that our economy is based on the guiding principle of “all guns and no butter.” It’s a testament to the class war being waged in this country. And like Warren Buffett said, his side of the class war is winning. The “guns” can be literal but are often metaphorical – i.e. spending or taxing in favor of the rich are the metaphorical guns for our class war. The “butter” follows a similar vein. We in the working class are getting less and less butter and are being told to eat cake instead.


I would also like to say it is unbelievable that the GOP wants to make the economy, taxes and the deficit their platform in upcoming elections considering the fact they have no legs to stand on. And the reason I would like to say that it is "unbelievable" is because apparently there is some residue of liberal partisan politics in me that foolishly thinks the Democratic Party has the will or the desire to stand up for the working class. (If I would have fully internalized how our political and economic systems really work – the latter are the Lords of Capital and the former hooks for them –then this should not only be believable but predictable and expected.)


Let’s be clear: they don’t. The Democrats rely on campaign funds from particular blocs of investors so they can wage PR stunts to hoodwink voters into voting for them just like the GOP does. It’s Tom Ferguson’s Investment Theory of Politics. The political parties will hire PR firms to craft empty slogans and brand themselves as something they’re not. They will saturate the media with their advertisements so that any third party candidate is virtually unknown (see the Ellsberg paradox for a better understanding of how people have a natural aversion to ambiguity or just consider the old wisdom that a devil we know is better than the devil we don’t know).


The only reason Obama didn’t annihilate McCain in 2008 by a historical landslide and the only reason the GOP can have a likely chance of a revival that focuses on the above three issues is because the Democrats are on their side. There’s a class war going on and both parties consist of gunslingers but that isn’t to say the Democrats sling iron for the working poor – this is often the fatal mistake liberals make; the naïvely assume the Democrats are on their side. The Democrats will not bother standing up for truth and decency because they don’t want to trap themselves in a corner. You see, that’s what the general population is to a political party that represents the only true political interests (the Lords of Capital): a corner to get trapped in. Sure, they like to play with populism, for PR reasons, but they won’t go too far unless they’re pressured to because that might alarm their campaign financiers. When Obama spoke out too loudly on CEO bonuses Chase Bank told him to chill out or they would take their campaign donations elsewhere. Obama responded with apologies. George W Bush did something similar during his reign. His second term was noticeably different than the first and it was obvious that the reason is because he was upsetting the ruling class. We are not the voice of this country. Lawyers, oil companies, bankers and so on. They, the ones who control our economy, are the political voice of this country. A last example, President Obama is in my hometown today for a private dinner at some lawyer’s house. He wants to raise money for the upcoming elections. He is not here for the public so they can participate in determining policy. He is here to kiss the asses of some rich mafahs and to get their blessings.


You will not see the Democratic Party line up behind a platform that says the economy is tanking because we are catering to the rich and we need to cut the corporate welfare and fix the tax code so the burden of paying for necessities is no longer pushed off on to the working class (not to mention the threat of their elimination). No, their economic stimulus packages were too weak and ineffective because to beef them up and to make them effective would require putting some pressure on the business community and that’s unacceptable. The mantra of our politicians is “Bail out Wall Street, bail on Main Street.” Same with their healthcare and financial reform. The private institutions were left in place and in power. We can just eat cake.


You will not see the Democratic Party close ranks and say the deficit is a direct link to nine years of war and decades of class war (i.e. rigging the tax code in favor of the rich). When Obama came into office the Pentagon’s own business advisory board advised him that he needs to reduce the Pentagon budget and he responded by increasing it. Again, we can just eat cake. He has escalated the War in Afghanistan and moved it deeper into Pakistan and into Yemen and has obstructed ending the Iraq War (not only did he say the war would end this year but last year he pressured the Iraqi president to not hold a referendum calling for an early withdrawal and this year in a classic case of Orwellian tactics he announced ending the war is “on schedule” and that the “combat” forces would be removed by end of 2011 – he might as well have added a “P.S.” and say that, “Chocolate rations have been increased. Love, Big Brother”). That’s the change we can believe in: increased war spending, escalated wars and continuation of the rigged tax system (including Bush’s tax cuts for the rich). Obama is precisely what author Paul Street depicts him as: the Empire’s New Clothes.


I don’t know about you but my belly is aching to say, “Please, no more cake.”


So don’t hold your breath in expectation for the Democrats to point out these simple truths. They may make allusions to them but their prescriptions are all the same: repackage the old and call it new. You would think such scams and betrayals (again I am thinking of the recent healthcare and financial reform that was presented as something they’re not and how liberals took the bait hook, line and sinker) would teach voters a lesson and get them to leave the electoral process in favor of building a revolutionary movement but I guess the power of manipulation is that strong.


Liberals like to point out that when Bill Clinton left office in 2001 we had a surplus and while we can and should look closer to how that was done (was he raiding Social Security to balance annual budgets leaving the national debt to continue to increase?) we should ask: What happened? What accounts for the budget deficits? We should point to the three main reasons the annual budgets are no longer balanced and why we have such a high deficit: (1) tax cuts for the rich has removed an important source of funding; (2) foreign wars of aggression have radically increased spending; and (3) a growing trade deficit has weakened our labor force, and reduced our wages (which means less tax revenue). When you relieve the wealthy of their obligation of financing our wars and social programs (the wars should be cut out on principle alone) and when we greatly reduce our manufacturing base by outsourcing our jobs then it’s no wonder we are in deep economic doo-doo.


The strongest our economy has ever been was during the “Golden Age of Capitalism.” (Anytime you hear a phrase like this you should immediately interpret it as the opposite. Kind of like when the War Department changed its name to the Defense Department or when Congress dubbed the health care bill “Patient Protection and Affordable Care Act” and the financial bill as “Wall Street Reform and Consumer Protection Act.” It should be expected that with we aren’t be involved in defense, or protecting patients and consumers.) Rather than unduly give credit to “capitalism” we should call it the “Golden Age of State Intervention” because markets and private enterprise didn’t have much to do with it at all. It was the Military Industrial Complex coupled with a considerably more progressive tax code that was the backbone of the “age.” In the US the top income bracket had a tax rate of 91% and it was during the Reagan years that it was greatly reduced. It doesn’t take a genius to understand that if you cut the taxes for the rich that this puts more of a burden on the poor to either pay for it or to see their programs cut.


Let’s look at another example: Social Security. On both sides of the isle there is a tendency to say the program has problems and need to be “fixed.” The GOP and Democrats want to see some privatization. That is, they want to see the rich profit off of our retirements and they want us to take risks for them. The Democrats also want to increase the retirement age to 70. What makes this so disturbing is that Americans want to retire early. There is a clear disconnect between what the working class wants and what the government will allow: cake eating.


And regardless of the fact that Social Security is solid through 2037 with no changes, the government sees a problem and there first thought is to put the burden off on those of us who are most vulnerable as opposed to, say, removing the goddamn cap! When Warren Buffett sees less than half of one percent of his annual income taxed for Social Security but a single-mom working double shifts at IHOP sees 100% of hers taxed then the obvious “fix” for any decent human being is not to cut the program, reduce its benefits or increase the retirement age but to fix the tax code so that those who are better off are paying their fair share.


The deficit is a problem but in an economic recession teetering on depression it makes no sense to suggest a reduction in spending. An analogy I like to give is that if you’re having a heart attack due to a bad diet the immediate prescription isn’t to change your diet but to seek medical attention. As your lying on the floor grasping your chest you need a medic with a defibrillator and an ambulance to take you to the hospital. Once your ass is saved from death then you should change your diet and start exercising regularly. Where the analogy differs from reality is that we are capable of getting treatment and fixing the problem simultaneously. That is, we can increase spending in certain areas that compliment our change in diet: social welfare, not corporate welfare.


And considering the deficits connection to two wars (imperialist wars in Iraq, Afghanistan, etc. and the class war being waged right here at home) another problem is that the GOP can campaign on it from the opposite side and stand to gain from it. The reason, as already stated, for their ability to do so is the fact that the Democrats are also a ruling class political party. The GOP has no real opposition. The Republicans and the Democrats are free to warp reality and escalate the class war against the working class in the name of the working class because there is no working class party or self-organized labor force to stand up and say, “You’re so full of shit that you’re defecating out your ears!”


Just think of what shape our economy would be in if we weren’t bogged down with a permanent war economy. We are 5% of the world’s population and yet we account for nearly 50% of the world’s military expenditures! What if the rich had a fair tax rate on earned income, investments and derivatives? What if there was no cap on Social Security for individuals and big businesses (I say this because I think there could be a case made for small businesses)? What if we weren’t destroying our manufacturing base? What if we were investing as heavily into education, healthcare and green technology as we are on wars and bankers? Of course we can’t do both so the next question would be: What if we were given the democratic option to plan our economy? What do you think we would choose? Do you think we would choose a sustainable economy built on wage-led growth with high employment or stealth bombers and foreign military bases dotting the planet?


If we want a democratically planned economy, or the income tax rate for the rich to be put back to 91%, or if we want investment income to be taxed as earned income, or if we want the cap on Social Security to be removed for individuals and big businesses, or if we want to constrain how the Lords of Capital can dominate our electoral system, or if we want to end the wars at home and abroad, or if we want a stimulus package that actually improves the economy and creates jobs and so on and so forth then clearly we cannot look to the political system. It’s rigged. When the game is fixed you can’t play the game and expect different results. If you’re a conservative who thinks Sarah Palin is a Godsend or if you’re a liberal who thinks Obama is a welcoming breath of fresh air then you’re simply deluding yourself. You are a victim to the PR stunts of our political system. You’re not looking at the man behind the curtain but are like a deer stuck in headlights gazing at the great and powerful Oz. You’re not in Kansas anymore.


If we are going to challenge private and state power to the betterment of the working class or to get us into the economy as democratic planners then we will have to build popular movements that we control and that compel the powers that be to relent. Until then we should not be surprised at the depravity of political thugs, from both parties, who have the audacity to campaign on issues like the economy, taxes and deficit when their program is to hook for the Lords of Capital and make things worse for us.



Leave a comment