MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
It began before the Bush tax cuts for the top 1%, but it has accelerated exponentially since then: the top 1% keep accumulating more capital. You could raise their taxes – let's pick a number out of a hat -- by 5% (remember taxes are graduated and only increase for amounts above certain thresholds) and tax their capital gains and they would likely still be accumulating money at a faster rate.
They've crossed the threshold.
We ran across a column Mark Shields wrote on February 22 of 2001 about Bush's tax cuts that catapulted the national debt (in conjunction with the administration's wars) to the stratosphere and found his comments prescient, to say the least:
Now that President Bush's tax bill has been sent to Congress, at least two conclusions can be fairly drawn: 1) Bush is desperately seeking to close the widening and socially dangerous gap between the Rich and the Super-rich; 2) Class warfare is now over – the richest won.
Now, we have inherited that legacy of a soaring debt under Bush that the super-wealthy were glad to ignore in return for lavish and gluttonous tax cuts. In part, the oligarchy that backed Bush – and of which his family has been a member of and upholder of enriching the already wealthy for decades – knew that the day would come when they could reduce Bush's debt on the backs of the working class.
That day has arrived and its slogan is "austerity." Except what is implicit in that one word is that austerity for the middle class and poor will reduce the debt, while the stock market soars to new heights and the US plutocrats not only aren't subject to "austerity"; instead, they accumulate even greater assets and a higher percentage of the nation's wealth.
As Shields concluded in his 2001 column:
Just maybe Bush will find time to explain to that single mom of who he speaks – the one who earns $22,000 a year and has two children – just why the U.S. government cannot assure that her kids will learn in a safe…?
Or why there are almost no jobs in her neighborhood except for drug dealing, which can only exist if higher-ups are paid off – and why do the young men have no future as capitalists except for advancing in the ultimate entrepreneurial enterprise of the gang corporation. Or why the cops, the judges, the prison guards, the for-profit prison companies and the whole neo-plantation prison-industrial complex makes money off of incarcerating and branding as ex-cons a significant percentage of poor – and mostly black and Latino – men who can't find work for "illicit" drug violations. Or why poverty doesn't just still exist in Appalachia; it has accelerated. Or why formerly union workers are now wearing Walmart smocks and relying on Medicaid for insurance.
Yes, Bush might answer that except he's got a rock for a brain and he's been missing in action these past few years – except for speeches he gets paid at least a hundred grand to make – just like he was for at least a year or more of his National Guard "service" (which his father got him into so he would not have to go to Vietnam).
The ruling elite built up the deficit under Bush and now, with the assistance of President Obama, are going to try to reduce it by imposing austerity on those who can least afford the financial pain. Obama is making no systemic changes. Forget about the promise of "change." Maybe you can say of him, he is less worse than the worst would be.
Obama is signaling to the Republicans that he's willing to let the rich off easy, while cutting the lunch of a senior citizen down to half a tuna fish sandwich a day.
Heck, Obama is even saving – contrary to his campaign promises – the military budget while sticking austerity to the stiffs who punch a time card everyday. As reported in an article that appeared in Bloomberg BusinessWeek "Obama’s Budget Rescues the Pentagon":
Although the White House doesn’t advertise this fact in the six-page budget overview it put out this morning, the new budget eliminates nearly all of the cuts that sequestration imposes on the Pentagon. Instead of $500 billion in cuts, Obama proposes only $100 billion, and you have to look closely to spot it (“$200 billion in additional discretionary savings, with equal amounts from defense and nondefense programs”).
Along with the well-advertised cuts to Medicare and Social Security benefits, this is something that should appeal to the GOP. “It’s another one of the peace offerings in Obama’s package to Republicans,” Robert Litan, the director of research for Bloomberg Government and a former official of the Office of Management and Budget, told me. Indeed, when you cut through all the numbers, Obama and House Republicans are only $100 billion apart (the GOP budget restores the full $500 billion).
Supposedly, the White House says the proposed budget is a tradeoff for more revenue, but the budget reflects serious cuts in social programs (including for Veterans), with token increases in revenue. (And this, as usual, is Obama's starting negotiating position. If past is prologue, the GOP "austerity" express will get virtually all it wants as it whittles down Obama's "offer.")
And remember this, reducing the debt will drive up the stock market even more, meaning more wealth for the wealthiest, with reduced taxes due to the capital gains loophole; champagne baths for all those who rotate through the DC/Wall Street revolving door! And another Cadillac for Ann Romney; make that two more Caddies. (No make that two more Cadillacs and a real caddy to carry Mitt's golf bags tossed in to the deal.)
In an interview with Bill Moyers last year before the presidential election, Sen. Bernie Sanders (I-Vermont) minced no words about how the US has become a nation with an appallingly intolerable distribution of wealth:
SENATOR BERNIE SANDERS: Bill, look, I don't think any sane person believes that this economy or the middle class is really going to recover until we deal with the greed, the recklessness, and the illegal behavior on Wall Street, in my humble opinion. Fraud is the business model for Wall Street. Right now, to answer your question, of course, the answer is no. We made some modest, modest little steps, which the moneyed interests are now trying to push aside.
We now have in this country six financial institutions led by J.P. Morgan Chase, which collectively have assets equivalent to two-thirds of the G.D.P. of the United States of America. Over $9 trillion. They write half of the mortgages in this country and two-thirds of the credit cards, okay? Three out of the four large financial institutions that we bailed out because they were too big to fail are today bigger than they were before we bailed them out….
Bill, among all of the other issues out there, what really drives me a little bit nuts, and we don't talk about it, is distribution of wealth and income in this country. Distribution of wealth, I want people to listen up on this one. You got one family, the Walton Family of Walmart, that now own more wealth than the bottom 40 percent of the American people. One family, top one percent owns 41 percent of the wealth in America. The bottom 60 percent, you want to take a guess? …
It's less than two percent. Can you believe that? One percent owns 41 percent. Bottom 60 percent owns less than two percent. And with that grotesquely immoral and unfair distribution of wealth and income, these billionaire guys putting this money under their mattresses. They are saying, “I’m the Koch brothers, I got $50 billion. Hey, that’s not enough, I need to invest $400 million in this campaign so I get more tax breaks on whatever it may be.” So they’re using their money and their power to create an even more unfair America.
That's the way it was before last year's presidential election, and with Obama's budget tilted heavily toward the "austerity" strategy of the oligarchy, the economic inequality will become worse.
That's what President Obama has signed off on, whatever his lofty "change" rhetoric.
He is reinforcing an inequitable, undemocratic system, not altering it.