The Disease Model of republican Ideology

The last essay closed with a quote to ponder. It was spoken by the Pig in George Orwell's novel Animal Farm: “All animals are created equal, but some animals are more equal than others.”

Rich republicans have taken a demented series of steps during and since the last election cycle. Given their genetic disinclination to introspection, we have to point out to them, in rather blunt language laced with financial terminology (classical conditioning; I promise, you'll see them salivate.), how their actions, which in their warped psyches appear cohesive, are actually the products of unexamined, irrational motivations.

But your neighbor, though republican in thought, word, and donation habit, is not rich. You two have begun an over-the-fence conversation in which you've shown that, while soil conditions in your lawn tend to promote the growth of Democratic campaign signs, you are not a card-carrying, flag-burning Marxist, socialist, communist, or Adventist.

Without much premeditation on your part, just a sharing of perspectives, you two have made inroads. Bridge-building has begun. A dialogue has opened up, in no small measure because you both want it. However much a republican perspective has provided your neighbor certainty, comfort, clarity, and simplicity of worldview, nagging doubt remains. He can see that the economy is shaky, that his 401K took a body blow and is reeling, that foreclosed homes pepper the neighborhood, that numerous financial and political scandals have trickled down from the money and power centers and tainted the lives of more honest, earnest, sober and grounded Americans. (This is the dark side of trickle-down economic theory. Of course, even mere trickles can rock and collapse the livelihoods and living standards of ordinary Americans far more than they affect the wealthy.) He knows that you or your relatives and friends work in the public sector and belong to a union, so he's curious to learn if you've ever met Fidel, or happen to be fluent in Russian. The media he consumes has planted such questions in his mind.

Yet you quickly find that you can commiserate over the BP Gulf oil spill, deadly mine collapses and explosions, and the pain experienced by families with members serving in the military in Iraq and Afghanistan.

You've mentioned union contributions to better living standards such as the five day, forty-hour work week, workplace safety standards, the fact that unions and union members played no part in the panics, recessions and depressions that have plagued this country since before the Constitution was ratified. Your neighbor will be impressed and interested to hear that the culprits were greedy speculators and wealthy, would-be monopolists, who indulged in short-term thinking and investing with only their own wealth-enhancement in mind, national security be damned. He is not getting this information through his preferred media outlets. And if your neighbor inclines to Tea-Party talking points, you've just scored big by mentioning the Constitution, albeit in a different context than the ones they gravitate to.

Credit your neighbor where due. He is concerned about the growing deficit and government waste. You can agree that the complexity of the tax code and the ridiculous amount of time that you both waste preparing tax forms is a prime example of government failure. Pork barrel spending is another example. Government is in need of reform. You and your neighbor do have some shared concerns.

On the former topic, you mention to your neighbor that federal government spending during the Great Depression did lead to large budget deficits. Key to understanding why such deficits did not collapse the economy, bring the great Republic to an end and lead to anarchy is that equitable taxation rates (meaning the rich paid their fair share, without myriad tax loopholes) during WWII, through the 1950s (under Ike, a republican) until 1964. This provided the government with revenue needed to manage the deficits and the debt, yet allowed the rich to live comfortably, the economy to prosper and weather three recessions, and the middle class to flourish. Union membership peaked around 1956, and subsequent studies showed that business productivity increased as more companies employed unionized workers. Conventional conservative thinking (it certainly wasn't wisdom) held that productivity would stagnate and profits would decline as the union workforce drove up wages and closed ranks to protect substandard employees.

What management failed to realize was that union battles to secure living wages and workplace safety standards encouraged workers to be productive. As the opportunity to participate in the free market and purchase consumer goods became less a dream and more a reality, workers, driven by the same self-interest as the entrepreneurs who started the company, saw the means to securing a more desirable living standard and jumped at it. Workers, stated bluntly, are not an unruly mob who need to be controlled by anti-union, right-to-work laws in order to suppress their socialist tendencies. They are every bit as capitalist as the owner. They do often differ from most owners, management-types, and top level entrepreneurs though, in their innate level of sympathy, empathy and humanity. They understand such elementary concepts as shared responsibility, collaboration, and negotiation. Possession of these qualities has been shown to have an inverse relationship to income level.

Every bit as important was the existence of a shared set of values that prevailed over political differences. The United States had to devote monumental amounts of resources, i.e., land, labor, capital and entrepreneurial ability (An economist would frame it so.) to recover from the Great Depression (Who caused that?), then to fighting Fascist, National Socialist and militarist regimes in Europe and the Pacific. Soon after, the nation had to promote and fund an ideological argument, and a real offensive and defensive struggle, against faux-socialist (in reality, expansionist, totalitarian and oligarchic) regimes in the USSR, China and their satellite nations. How ironic it is then that corporate influence in the republican party has reached oligarchic levels, with the result that the internal security of the nation is in peril. The U.S. government has been hobbled by deregulation and underfunded by regressive tax rates (rich-republican political victories), and cannot protect its citizens from corporate malfeasance. Well, actually, the government has been “fine-tuned” by wealthy and corporate America to protect a select few citizens: you guessed it, the monied elite.

That shared set of values also once functioned to shame and muzzle those wealthy Americans who complained about the tax rates, who showed remarkable ignorance that it was the regulated free market economy in the United States that allowed them to acquire affluence, and that a strong Federal government protected their ownership of said affluence, through the legal system and due process. Public intolerance of scandalous greed and avarice found its voice in the derisive names for selfish capitalists: “War Profiteers!” was an insult. Arthur Miller excoriated them in his play, All My Sons. Disgust for narcissistic greed is also voiced by the characters in David O'Selznick's movie, Since You Went Away. Public shaming of raw greed is one of the few virtues of our Puritan heritage. Had those wealthy Americans been citizens of the USSR or China and dared to complain about tax rates, imprisonment, torture and execution were probable results. Then too, their assets would simply have been seized by those totalitarian governments and misused to enrich the ruling elite. (In a frightening twist, the American middle class has for decades been robbed by the rich, our de facto ruling elite!)

That shared set of values helped us win World War II. It helped us weather decades of Cold War. Americans have talked to each other since that time and recognized their blindness in realms such as social justice, their racial and gender prejudices, their lack of environmental stewardship, even the injustices and crimes they have committed against each other, or those they have witnessed and remained silent about. Americans have chosen a Civil Rights Act, Medicare and Medicaid, The Americans With Disabilities Act, a Clean Water Act, a Clean Air Act, an Endangered Species Act. They have fought and continue to fight to end segregation, end employment and housing discrimination, they fight for the rights of more and more overlooked and ignored citizens to participate in the free market economy and to live above mere poverty, but they redefine more fully and equitably what it means to be American only when they talk to each other. In the United States, the power to listen is undervalued.

It must be pointed out that these post war changes, be they a raising of social consciousness, be they legislative, be they a broadening of liberty and justice, be they an expansion of equity to include a larger number of citizens, have all failed to collapse the economy. Increased equity for U.S. citizens has not precipitated any kind of Communist overthrow and the seizure of all private property. Unionizing has also failed to end free-marketeering in the United States, despite the exaggerated blatherings of conservative, fact-free demagogues.

Here it can prove timely to mention to your neighbor the paradigm shift that happened under Reagan. Deregulation and regressive tax policies led to growing Federal budget deficits, with no coherent plan advanced to address them, and also to speculation, bubble markets and scandals in the financial world. The economy acted strong through most of the nineties, then its true fragility was revealed. Advocates of supply-side economics disingenuously held their tongues when questioned about the durability of the economy. This is when government budget deficits can threaten the Democratic Republic. The current rich-republican plan has the middle class funding state government out of deficit through a policy of disenfranchisement. Republican-dominated state legislatures will simply steal the money. Oh, to be sure, it will be disguised budget cutting through such absurd and irrational methods as busting public sector unions, those greedy state employees who have the gall to bargain collectively and live in the middle class. The cowardly republican legislator-puppets will cut tax rates to big business and force local and municipal governments to do the dirty work of cutting services to balance their own budgets. Smell something rotten? That's the corpse of the Wisconsin economy, putrefying. They can smell it in Washington, DC when the prevailing political wind blows.

Your neighbor might interrupt here to ask, “Wait a minute. What evidence do you have that this shift happened with Reagan, and that supply-side economics is dysfunctional?”

Time to pull out the Lorenz Curve.

Conservative economists and ideologues hate facts and data that refute the ideology they attempt to support with supply-side-biased data. Disingenuously, they begin with an irrational, unquestioned, infantile belief, then cherry-pick data to support it. The Lorenz Curve throws a monkey wrench into such efforts. When used as a graph of income distribution in the United States, what it shows will make your republican neighbor angry. Not at you; at supply-side economic theory.

If every household in the U.S. earned the same amount of income, the graph would show only the blue line. It is not, however, a desirable state in a regulated free-market economy. If every worker earned the same amount of money, more strenuous jobs would go unfilled. Adam Smith's notion of the entrepreneur acting in self interest would no longer apply. Keep in mind that a worker/wage earner is motivated by self-interest. They are taking a risk by trading their skills, labor and time for wages and benefits in a regulated free market.

The red line represents more accurately the distribution of income in the U.S. economy. More skilled workers, more highly educated workers with specialized skills, and entrepreneurs whose income is derived more from capital gains than from salaries and benefits will garner a higher percentage of total available income than other wage earners. Some bowing of the red line is normal in a regulated free market economy. A close look at it confirms that income distribution is in fact biased toward a small group of economically privileged Americans. Some have earned their affluence through hard work, applied education, talent and merit. Others have instead earned it through despicable means such as tilting the playing field in their favor. The criminally low capital gains tax rate is an example. The farther that red line bows away from the blue line, the greater the disparity in income distribution.

Guess what: When you graph income distribution since supply-side economics got a choke hold on the economy, the successive Lorenz curves bow farther and farther away from the line of equality. A Lorenz Curve derived from 2006 Bureau of the Census data reveals that households in the top fifth took home 50.5% of total income. By comparison, households in the bottom fifth took home just 3.4% of total income.

The disparity in income distribution was less shocking in 1968, where the top fifth took home 40.5% of total income and the bottom fifth took home 5.6%.

Here your neighbor may be especially interested to know what powered this trend toward increasing income disparity. Reagan dramatically slashed income tax rates and, critically, capital gains tax rates for a special class of U.S. Citizen: the ones who are “more equal than others,” to quote a notable pig. To add insult to injury, payroll tax rates were increased, effectively slashing the the incomes of the middle class, the working class and the working poor.

At this time, the Park Avenue playboys and their trophy wives began to complain. Looking out their picture windows into Central Park, they saw a warren of “cardboard condos” spoiling the view: the homeless were moving in.

With the capital gains tax rate hacked, wealthy Pig-citizens reaped huge capital gains through the 1980s and 1990s. Meanwhile, about 75% of Americans pay more in payroll taxes than they do in personal income taxes. The capital gains tax rate stands at a paltry 15%. Many middle class taxpayers pay a higher percentage in income tax than the wealthy pay in capital gains tax!!

You and your neighbor nod: this tax system is corrupt. You both suffer under it.
 

But we're not finished: through those same two decades in which the elite Pig-citizens wallowed in a money-filled sty, the average hourly wage fell by more than ten percent. Corporations involved in manufacturing laid off hundreds of thousands of fairly-paid workers (These were family-supporting jobs.) and moved their jobs overseas into cheaper, more desperate labor markets. Most dislocated U.S. workers could only find lower paying, non-union jobs in the service sector.

Your neighbor now has a new target on which to vent his justifiable anger. There's more.

Corporate apologists whine that unions drove up labor costs to the point at which American companies were forced to move production facilities overseas to remain competitive in an increasingly global economy. At first flush, this seems a valid argument. It also appears to reinforce the view fostered by Big Money that unions, which are in effect a competing power center, were to blame for rising income disparity and a shrinking middle class. Federal Government agencies and the Legislative and Executive branches did little to protect the worker from the corporate relocation of manufacturing facilities.

If the public sector had tried to outsource labor overseas, the cries of treason would have triggered a political earthquake. Somehow, unpatriotic behavior among corporate executives escapes public condemnation these days. It was not always so.

The Corporation-as-hands-tied-victim-had-no-choice-in-this-cutthroat-Free-Market-Global-Economy argument falls apart when you discover the monumental short-sightedness and blissful ignorance that American corporate executives displayed in understanding the very free market forces they were supposedly expected to exploit. Chrysler management will now please step into the shooting gallery.

Left unquestioned by most economists, economic policy analysts, auto industry watchdogs and the public is the existence of the big three. Only three, is the point. Americans know this phrase means the big three auto makers, Ford, GM and Chrysler, companies that once exemplified American industrial muscle. Big, yes, but clumsy, slow and dull-witted, which is also an apt description of their management. All three were caught flat footed by the oil embargo of the early 1970s, and painfully slow to respond with vehicles that acknowledged a quiet, new, creeping reality: The U.S. had an addiction to imported oil. In the late 1970s, Chrysler bungled itself into insolvency rushing the Dodge Aspen and Plymouth Volare to dealers, with the result that early buyers were de facto product testers. Recalls crippled Chrysler financially, and Chairman Iacoca approached Congress to ask for a loan guarantee. Ah, the public sector to the rescue, again. That much maligned, can't-do-anything-right, country-comes-first public sector. Corporate America loves to hate it, even when the public sector bails out their sorry, pompous asses.

 Had there been a big six, seven or eight, these smaller, more nimble companies could have reconquered domestic markets dominated by the Japanese and German automakers. VW, Opel, Datsun and Toyota would've had real competition from domestic auto producers, and a regulated free market would've brought benefits to the nation as a whole.

In the U.S., no such discussion on the merits of an auto industry oligarchy ever ensued, save among economic theorists. At a casual glance, the big three looked to be a long-term money train. Climb aboard! Had our country been run more like some of the European Social-Democracies, a more fiscally sound auto industry, integrated into the needs of the country yet still privately held and properly regulated (In Germany, VW stands as an impressive example.), would have been globally competitive, and never come remotely near collapse, TWICE, mind you, in the case of Chrysler. Citizens in said European country would have, individually, collectively and through their representatives in government, weighed in on the merits of the near oligarchy. The debate would have been publicized and held, the questions asked. Corporate-types would not have had veto power over public good, and their competence would have been questioned for putting shareholders above the economic and political system that allowed them to prosper.

Note that by this time though, American CEOs had carved out a new role for themselves: celebrity entrepreneur. No longer truly tied to the fortunes of the monolithic companies they ran, their huge salaries, stock options, bonuses and golden parachutes insulated them from the need to forecast future trends, pay attention to developments in related industries, hawk genuine product innovation or engage in deep thinking and planning. In short, they no longer had to be dedicated, loyal, capable leaders. These are the habits of a long-term employee, one dedicated to the well-being of the organization. American CEOs had taken a page from the rule book used by professional athletes and entertainers. They marketed themselves to the highest bidder.

Not loyal to any entity other than their own bottom line, CEOs now hop from corporation to corporation. Madly enough, corporations outbid each other vying for these narcissists; companies now flaunt these peacock-figureheads as status symbols in a bizarre twist on the mutual admiration society.

Your neighbor agrees: there are loonies at the helm. The rich are very poor judges of how the nation's resources are best allocated.

Annoyed that the public sector does not cater to their whims, the monied elite have purchased political control in the U.S. House of Representatives and in many state legislatures. Their puppets have moved to destroy the power of public sector unions, though this act has no positive effect on the state budget deficits. Republican power-puppets have no clue how to balance their government budgets, but they have been spoon fed supply-side kool-aid and told that expanding corporate welfare is key to fiscal solvency. And like puppets, their mouths move and they burp any incoherent oink the Pig-citizens want to broadcast.

Pogo once intoned, “We have met the enemy, and he is us.” Apathetic citizens must own the blame for electing the clowns, buffoons, narcissists, sociopaths and megalomaniacs who pass for the vast majority of the current republican legislators. But you and your neighbor have the power of recall, the power of activism, the recognition of a common threat to the security of our nation, and the courage to talk to each other. The Pig-citizen and the puppet-legislator he purchased are the common enemy.

There is more to reveal about the idiocies of corporatocracy. The lunacy of private sector health insurance is on the spit.

In the next blog, we'll dissect a corporate lobbyist and search for evidence of...well...something...anything!

Lorenz Curve graphic copyright Robert Schenk from his article at http://ingrimayne.com/econ/AllocatingRationing/MeasuringIncomeDist.html

Neighbor to Neighbor

“He who controls the narrative wins the Field.” Might just be the 21^st century take on The Art of War.

Behind the republican legislative victories in state and national government is a power grab by elite corporations and ultra-right-wing wealthy businessmen. State governments have become their latest play toy. Having schemed for decades to destroy public sector unions, whose members favor effective government, living wages, the continued existence of a middle class and an economic and social environment in which businesses and wealthy Americans carry a fair share of the financial cost of infrastructure and equity, the elite sensed a time of union vulnerability. Forty years of deregulation, corporate welfare, tax cuts for the wealthy, i.e., supply-side economics, had left the economy teetering on collapse.

The supply-siders had a profound advantage. New generations of citizen-consumers came of age in an economic and social climate that was blindly, unthinkingly anti-union, that indulged in the bubble markets of the nineties and the new century, that left government largely to ideological specialists, narcissists, sociopaths (and one notable alcoholic), that lived in social and ideological bubbles of their own, remarkably enured, with few exceptions, to the revelations inherent in foreign travel and foreign study.

Generations of ethnocentric, a-historical, anti-intellectual, me-first, democracy-means-laissez-faire-business-practice Americans, raised at the tit of cheap oil and moving about in climes increasingly proscribed by corporate avarice, co-dependent on corporations if viewed in the best light, can fully be expected to spout the corporate line, believing it to be both their own, and in their own best interest.

The very well-paid corporate strategists recommended a knockout blow: strip the nation's public sector unions of their collective bargaining rights and they cease to have any real purpose. Unions would simply fade away, or be reduced to waging symbolic (and losing) battles over wages, dismissed by the public as toothless dinosaurs and by governors who overrule and who ignore their cries of “Shame, shame!”

The public was certainly receptive: corporate, financial and speculatory malfeasance had caused the the Great Recession, but the public memory for this fact was shockingly short. Public anger and subsequent push for regulatory reform dissipated as more immediate and pressing concerns loomed. Family concerns, entertainment consumption and attention to the family's financial solvency took time and energy away from the need to help the country begin a return to accountability, responsibility and long-term thinking. This is not the same thing as the pretense to fiscal responsibility being foisted by the republicans of late. Indeed, the republican citizens' normative thinking and planning habits are overwhelmingly short-term, (even in regards to retirement planning; more on this topic in a future blog), a perfect match with supply-side economic theory. Long-term sustainability is noticeably absent from the formula.

Besides, corporate chess-moves remain remote, most often far beyond the horizons of mere wage earners. The effects are calculated to creep slowly into the lives of ordinary citizens, often going unnoticed. But consider the frog in the experiment where the water in which he floats is slowly brought to a boil. The creature alters its metabolism, adjusting itself for far too long. Only when the water has grown too hot, long past survivable, does it attempt to flee.

Mainstream media is “reporting” (repeating) the republican talking points with precious little analysis. It would take time (cut to commercial) and space (no room for the ad about selling your gold jewelry) and comprehension. Reporters would have to consult with tax law experts, economists, pension fund managers and political scientists, and synthesize the mass of data. Skip the politicians. (With precious few exceptions, most are looking past the reporter to the next election.) Maybe even pre-empt the TV-land demagogues and their information-starved, hour-long rants and put the nation ahead of ratings.

On-the-scene reporters are busy ambulance-chasing the standoff in Madison, WI. The latest tiff is magnified all out of proportion by the very act of covering it and becomes the tone-setting lens through which the casual and half-interested viewer sees this larger and more subtle war.

But Scott Walker's handlers are happy. Coaching and cash from ultra-right wing Koch-funded groups like Americans for Prosperity (Prosperity for a select few, that is) has helped the ideologically-blinded republican governor and knee-jerk republican majorities in the legislature frame the showdown as one between greedy Public Sector unions and "fiscally responsible" republicans.

Walker and the republican legislators are just the kinds of “citizens” and “legislators” that wealthy and corporate America want.

You find your neighbors, who work in the private sector and who know that you work in the public sector, putting out feelers to see how you view this economic and social crisis. What do you tell them?

What follows is part one of an argument. It is not the blueprint for any screaming match with an agitated, ill-informed neighbor. That advances nothing and stalls insight, reflection, and collaborative change. And the United States must change: change course economically, socially, legally. Now we must describe the tilted economic playing field that corporate America has graded and seeded in the past forty-odd years, and recall the history of organized labor and its place alongside organized business in this democratic republic. Share this information in the first of hopefully many conversations with well-meaning, fear-driven neighbors, some of whom paint the world in apocalyptic colors.

So the first false premise to attack is that unions are greedy. Saturday is the perfect day to have an over- the-fence discussion on this fallacy. Since your neighbor may say one thing among private sector friends and yet have a modicum of empathy in your presence, he or she is curious about how public sector workers think. What a perfect time to ask them why they are not at work.

The conception of Saturday as a day off from work is recent, as is the 8 hour work day and forty hour work week. Until the late 1930s, a six day, 10 hour-a-day work week was more the norm for the blue collar worker. Unions battled with greedy managers and businessmen for the worker's right to have a life outside of work, for the recognition that humans do not exist to be dehumanized cogs in a giant corporate combine.

Workplace safety standards could be construed as greedy, if you think a worker's right to keep all of his limbs is an unreasonable constraint on corporate productivity. Unions won many battles with the-bottom-line-is-all-that-matters management drones and money-mad businessmen over working conditions, and safety features now taken as commonplace and logical were once only dreams. We realize more fully now that if an injured worker is no longer efficient and is fired, the loss of income devastates him, but also his family. They become a drain on private and public charity and adversely affect the producers and retailers who sold goods to the worker and his family. Workmen's compensation, rehabilitation and retraining were haphazard to nonexistent until mid-century, and only became normative when the productivity and well-being of the worker was recognized as a component of the well-being of the economy and the nation, not merely the company.

To put unions squarely back in the mainstream of American life, remind your neighbor about the “Miracle on the Hudson,” the US Airways Airbus A320 passenger liner that lost power to both engines shortly after takeoff and made an emergency landing in the Hudson River. All of the 155 people aboard survived. The cool-as-a-cucumber pilot and co-pilot followed established procedures to try and restart the engines, and when those steps failed, followed established procedures to properly land the plane, upright and intact, on the river.

Those pilots belonged to a union, the Airline Pilots Association.

The cabin crew, who followed established, rehearsed evacuation procedures, and manifested calm efficiency to worried passengers, also belong to a union, the Association of Flight Attendants.

The Air Traffic Controllers, who followed established, rehearsed emergency procedures and thus could quickly allocate flight corridors, re-route other air traffic and offer landing options, belong to a union, the National Air traffic Controllers Association.

The crew aboard the ferry boats that plucked the passengers from the wings and life rafts were trained and rehearsed in established water rescue procedures, and belong to the Seafarers International Union.

Management, concerned with profit and loss in free-market competition, pays little attention to “external costs” such as safety and pollution, until disaster and loss of life and limb make it bad public relations to ignore the worker and the consumer. Witness the spate of mine-tunnel explosions, mine-tunnel collapses, and the resulting injuries and deaths among miners worldwide. Strong unions alert the public and the government to work-related dangers and push for safety-first working conditions and effective oversight and regulation. Corporatania, a provincial mind-set unto itself, blasts these changes as job-killing and impossible to implement because they will eliminate profit. (Stop hyperventilating Big-Money, you're catastrophizing.) But in supply-side economics, the absence of these reforms eliminates lives. More importantly (This will make the bean counters' and CFOs' ears perk up, providing they want to hear it.), operating without safety equipment and procedures costs the corporation more than having them in place and functional. Let's ask BP, in the wake of the Gulf Oil Spill Disaster, to weigh the cost of multiple and redundent blow-out prevention technology, properly maintained and regularly tested, against the cost of cleanup operations. And let's assign a value to the loss of species-abundance and diversity and all the similar costs which BP will insist are not quantifiable and should not even be footnoted. While we're at it, what cost to the gulf economy did the spill incur?

 

Corporate lapdogs argue that unions have done what needed to be done to secure workers' rights and safety, but now their time has passed and they are no longer needed.

This statement is never made by a union member, someone who has been on the receiving end of management guile. It is the fox insisting he is perfectly trustworthy and will guard the hen house with his life.

The untruth is evident when you examine Maternity Leave, Paternity Leave, and associated Parental Leave. The U.S. is the only industrialized nation that offers no national paid leave benefit. Ten weeks was the norm for shared Parental Leave in Canada (“shared” meaning the mother might take, say, seven weeks, and the father would take the balance, three) but his was recently raised to 35 weeks. American parents will be astonished to know that this Canadian Parental Leave is in addition to 15 weeks of Maternity Leave.

European nations, too, also show greater awareness of the benefit to productivity that is associated with respecting workers' rights to a life outside of work. France offers 16 weeks at 100% pay for the first child, Denmark and Lithuania offer 52 weeks, Norway 56 weeks, Sweden even more.

Even impoverished, relatively non-industrialized African nations show more long-term thinking: 14 weeks at 100% pay for the Malagasy, the citizens of Madagascar whose gross national income is $911.00 per wage earner per year.

“Ahh,” say the corporate apologists, “You said National Paid Leave Benefit! That's Socialism!” As if this label, intended disparagingly and hinting vaguely at Soviet-style governance, was clear evidence of a liberal plot to overthrow our government.

Excuse me a moment....

I'm back, though I'm still bursting into fitful laughter. Corporate apologists are such cut-ups! They did it again: they conflated the corporate welfare state we're stuck in with the ideals of the democratic republic we live in. This calculated ploy deters true-believer Republicans and more moderate Republican-leaning citizens from looking at the Social-Democratic forms of governance common in Europe, swallowing a monumental amount of pride (the kind with nationalist overtones), bursting those “America-First!” egos (That exclamation, by the way, is usually accompanied by a raised fist and can look remarkably socialist.) and seeing the production efficiencies inherent in respecting, rather than merely exploiting, a labor force.

Corporate lobbyists have diverted monumental sums to their own bank accounts lobbying against Maternity and Paternity leave, and obfuscate the production efficiencies of adopting these types of leave. But why? Why would corporate America work against its own best interests? And what does this have to do with the Corporate-underwriting of the Republican attack against public sector unions, and my over-the-fence chat with that neighbor?

The essay concludes in the next blog. Here's a teaser:

The monied class believe themselves blessed, special. To quote the Pig in George Orwell's Animal Farm, “All animals are created equal, but some animals are more equal than others.”

Dick Cheney: "Deficits Don't Matter."

Did I lose you at “Dick?” Keep reading anyway. Even the notorious veep can let slip a half-truth.

Astute journalists should have pressed the deeply flawed ideologue by asking “When is that statement true? When exactly is it that deficits don't matter?

Now in Cheneyland – (I should explain the purported existence of a capitalist shangri-la. In this unregulated Eden, the powerful cherry-pick data to support economic policies that eliminate the pesky middle class, that voting bloc of citizens that rudely withholds income from speculators. Oh, the audacity. Worse yet, they have the nerve to try and prosper. Transfer a quanta of pure Cheneyland policies to our universe, however, and the economy collapses in nanoseconds.)

The full text of the quote was, “You know, Paul, Reagan proved deficits don't matter.” Cheney was interrupting Treasury Secretary Paul O'Neill, who in December of 2002 was concerned that budget deficits expected to top 500 billion would pose a threat to the economy.

O'Neill clearly didn't believe that Reagan had “proved” anything of the kind, and for having the gall to be a doubting Thomas (the psychodynamics of Reagan-worship is byzantine and paranoid), was fired a month later.

O'Neill had watched the accounting scandals (remember those?) unfolding in Underregulatedland, a colony of Corporatania, and decided to risk his job by suggesting that re-regulation (blasphemy!) would curb the white collar and corporate crime spree. But Bush and Cheney chose their corporate bully-friends over O'Neill, and though he failed the ideological-purity litmus test, O'Neill gained credibility outside the cult.

Cheney was arguing from several premises. He believed that deficit spending (specifically military/defense spending) under Reagan helped topple the Soviet Union. In 1983, Reagan overreacted to Soviet foreign policy (Among other things, the idiots occupied Afghanistan) by proposing SDI, the Strategic Defense Initiative, quickly dubbed the “Star Wars” program because its goal, a satellite-based anti-ICBM missile system to protect the United States, was far beyond the technological and financial means available. Naysayers at the time also dubbed it “The Dungeons and Dragons Defense.” Current readers may imagine some Harry Potter analogies.

Had Cheney been a better student of economics (He was “invited” to leave Yale when a student there, owing to remarkably indifferent scholasticism), or had better, more open-minded listening skills and a higher threshhold for paranoic ramblings spouted by anticommunist doomsayers, aka: Reagan and his handlers, he would have seen how close to collapse the Soviet economy already stood.

A Soviet-style command economy, lacking the imposed discipline of supply and demand in a regulated free market, could never operate as efficiently as a capitalist economy. The Soviets' military spending likely accounted for at least 18% of their GDP (The Bear was never very forthcoming with economic data that might puncture the aura of invincibility.), while the United States spent about 6% of national output on defense and the military. In America, real competition among defense industry companies, acting in self-interest and well capitalized, spurred innovation and fueled efficiencies of production not known in the U.S.S.R. Innovators there were sometimes labeled subversive, and promoted to august accommodations in Siberia. Left to its own devices, the Soviet economy was already close to falling on its own sword.

In response to the Star Wars Program, however, the Soviets did not try to develop a comparable, high-cost, high-risk-to-implement missile shield. They adopted a more economically and strategically efficient program of upgrading existing ICBMs to make them more capable of penetrating U.S. Defense systems, in effect, an asymmetrical response. Economists now agree that elevated U.S. Defense spending had, perhaps, at best, a marginal influence on the collapse of the U.S.S.R., despite inflated claims made by Reagan-worshipers. This is the first of many Cheney premises to be shattered by evidence.

It is important to note the qualifier regulated when discussing a free market, capitalist economy. This is not the kind of economy, or the kind of capitalism, Cheney espoused. The kind of market he wanted to see and was pushing to create is not stable, sustainable, and certainly not equitable. It is the kind of economy we have now. (Any conservative with an ounce of integrity just flinched.)

To Cheney, deficits don't matter if we have what appears to be a booming economy. Appears is the operative word here. Using a supply-side argument that giving tax cuts to businesses and wealthy Americans will spur investment, encourage production, reduce unemployment and promote spending, is to speak a conditional truth. It can marginally improve a regulated free market. But there is a Trojan horse in the bargain. The sucker punch in his sales pitch is the extension of his argument, that this supply-side meddling must include deregulation of the free market, and the concurrent reduction of pesky government oversight of that market.

Deregulate, reduce oversight and, as economists would argue, you reduce market barriers. Some of the more high-minded practitioners of the dismal science will now fall out of their chairs and say, “Wait a minute! We didn't mean nor did we ever intend to imply that less regulation and oversight fosters a market that is superior and more efficient in every aspect!” (They really talk that way.) But, it is easier to enter and exit the market (and, fatally, to misuse the market for purposes it was never intended to serve). More people can play Wall Street investor. But, that's good....right?

No. Not when you see the vermin that crawled out of the Wall Street woodwork. Regulation and oversight had controlled them, but a relaxation of regulatory spraying and the reduction in the quantity and quality of government oversight led to a plague of speculation in various markets. The vermin quickly exploited ways to make a quick buck, ways which had nothing to do with real growth or real innovation or real investment. They made money off of money in increasingly complex and risky ways that resemble nothing so much as a casino, and a mafia-run casino at that.

Soon disciples of Reaganomics were climbing over one another to place their bets, er, I mean invest, in the under-regulated market and economy, the one we were sold at the conservative carnival that was the 1980s. They argued the economic boom would provide the federal government with sufficient revenue to stay ahead of debt obligations, and perhaps chip away at them. Make the economic pie bigger, and even if the government gets a smaller percentage of that pie, a smaller slice as it were, the quantity of revenue in that slice is still higher than it was in the regulated economy. Win-win, goes the theory.

Vital to their plan was the effort to shrink the government. Well, you see, it would then “cost” less to taxpayers. Correction: it would cost less to wealthy taxpayers. Tax cuts under Reagan overwhelmingly favored the wealthy and big business. Corporations would also see a savings: a smaller federal government wasn't up to the task of protecting the environment, or consumers, or of mediating between corporations and unions, or moderating dangerous trends in the growth of complex financial instruments. Income disparity, that difference between what the wealthiest and poorest Americans earn, began climbing. And more of the middle class on that graph was being pushed downward, not upward.

Smaller government also wouldn't be so prone to that tendency which especially irks conservatives: redistributing wealth through entitlement programs. If there's one thing Ebenezer Incorporated can't stand, it's government waste. Not to worry, the wealthy say. Our booming economy will create new jobs and unemployment will shrink to incredible lows. Only the laziest freeloaders will refuse to participate. The elderly and disabled will have their pick of countless private charities when they need assistance. Public sector spending on services and wealth redistribution is wasteful, unproductive, duplicates and competes with private sector entities.

Unemployment during the Reagan years reached almost 11% (1982), and while it did fall to near 6%, this number is still considered high, even by conservative economists. Foreign trade deficits were climbing year after year, and those federal government budget deficits Cheney was emphatically not worried about were leaping higher. A few sages watched the American Dream drift further out of reach of ordinary citizens and spoke out.

So, was this supply-side economics working? Well, for a select group of Americans, it was. Corporate profits soared, Wall Street blossomed, then boomed after the 1990-1992 recession, and the country experienced a ten year long economic expansion. If you didn't look too closely, things seemed to be doing well.

Still, wages for most American workers were not keeping pace with inflation. Deregulation encouraged an easing of credit terms, making it easy for citizens who appeared to be middle class to borrow and preserve the illusion that they were middle class. Financially, too many of them were on shaky ground. Speculators encouraged bubbles in the market, driving up prices but adding no real value to the commodities they hawked at high speed. Think: housing. Retirement investments were exposed to a market that appeared to prosper but was in reality precarious. Only a few economists, financial planners and market analysts had the courage to warn of impending collapse. Their audience was every American citizen who could contact their legislators and voice concern (too few of them were paying attention, distracted by the boom and lured into short-term thinking), but it included those few investors, financiers and speculators who really understood the risks, who knew the warnings were prescient, and decided to gamble anyway. Their strategy: hedge the bets and spread the risk. In Public, they oozed confidence and styled themselves geniuses. At private gatherings they schmoozed and wrangled new sources of gambling money. Among themselves they said, “This Market-Titanic is going to sink soon: grab the passengers and shake'em down for every penny you can get.” The most risk-addicted junkies gambled that they could time the market and flee in advance of any downturn.

Thanks to Reagan and the ideologues who spoon-fed him, the wealthy garnered more of the nation's GDP, more of its disposable income, and had greater ability to push and pull the administration's economic policies to benefit themselves. The resulting economic climate and the widening income disparity began to strongly resemble that found in the U.S. just before the Wall Street crash of 1929.

Cheney benefited from Reaganomics, becoming a millionaire as CEO of Halliburton. The other half of the half-truth he spoke, “Deficits don't matter,” is that if you insulate yourself with sufficient wealth, then yes, government budget deficits, recessions, depressions and market collapse don't matter. He should've said, “Deficits don't matter to the wealthy.” To this, the new republican governor of Wisconsin would add, “We'll blame the budget deficit on public sector unions, call them greedy, and get the private sector to fight our battle against them for us while we stand at the sidelines.”

But this new-found republican obsession with balancing budgets, state and federal, flies in the face of the supply-side economic policies that caused the Great Recession most of us are mired in. Seems the GOP wants to have it both ways.

Cheney half-truth aside, there is a time when deficits don't matter, but you won't hear the GOP admitting this anytime soon. It would cripple their re-election hopes and expose their policies as absurd. Below is a correction of the Cheney half-truth. It happens to fly in the face of the faulty premises he held about deficits.

Government budget deficits don't matter in times of great economic crisis. When unregulated capitalism causes market failure and the economy grinds to a halt, the avaricious entrepreneurs, gamblers and hedge fund managers are nowhere to be found. In their place are identical-looking, wide-eyed clones who sputter, “Wha-wha-wha-what? We didn't see this coming!” as their fortunes pad them from any of the real suffering and dislocation that affects honest American workers and their families.

So while the culprits stand around pointing fingers and having their attorneys craft carefully worded denials, that Federal government they always moan about steps in to rebuild from the rubble. That Federal government, that public sector part of our mixed economy, charged with providing equity for all citizens by regulating the economy, with protecting the environment from corporate avarice, with redistributing wealth in the form of payments and services, that Federal government, the soil from which the legal system springs, that entity which does not exist and act for profit but for public good, that creation which is not a business and not intended to be a business because it can't do the tasks it is charged to do if it is a business, that Federal government steps in to right the wrongs committed by the sociopathic, personality-disordered, ethically and morally disabled cabal of “entrepreneurs” who despite their monumental misdeeds are not summarily lined up and shot, beheaded, hung or electrocuted. Before, during and after their trials they are allowed to spew their economic rot and sanitize the timelines and intents of their actions.

That Federal government steps in and does the grunt work to protect ordinary citizens. It closes banks when necessary, creates public work programs, implements massive infrastructure improvements, re-regulates the market and the economy to prevent creative gambling and speculation, passes new legislation to guard against any repeat of the abuses that caused recession and depression, taxes the wealthy fairly to garner a pool of revenue that is re-injected into the economy. It spends money, even creating government budget deficits, because it has long-term goals and makes long-term investments in the nation. It was called the New Deal, it was Keynsian-style economics, and it worked.

Cheney, Walker, and their corporate supporters hate that Federal government. These neo-conservatives (Too nice a term for weasels) want the power and freedom to jump into speculation without restriction, make a quick buck, and get out. They think and act in the short-term. That Federal government, the one that promotes long-term thinking and investment and looks out for the well being of the nation is the one they want to bribe or cripple. When it is populated with citizens who remember where they came from, who respect themselves and see their service as an act of gratitude to a great country, who serve their constituencies and talk about public good because they are working in the public sector and recognize that Adam Smith's notion of acting in self interest applies to private sector entrepreneurship and not public sector service, when that Federal government resorts to deficit spending to ensure the survival of the nation, then a government budget deficit doesn't matter.

From the low point of the Depression, 1933, the U.S. economy began a steady upward recovery. By May of 1937 it looked like the end of the Depression was near. Despite the government budget deficits, money was circulating in the economy as production of goods resumed, employers acquired revenue which they reinvested in plants and equipment, and workers again earned income to purchase goods. 

Then recovery stumbled. The reasons why are telling. The Federal Reserve Board of Governors somehow forgot that the nation was in the grip of a Depression, though it was clearly climbing out, and decided to tighten credit. Borrowing money became more difficult. The FRBG did so because it had an odd fixation on inflation, a fixation all out of proportion to the larger economic picture.

On top of this the Roosevelt administration came down with an untimely and irrational case of balance-the-budget fever, a malady that has lately caused similar irrationality among republican legislators. In economic boom times the attention to deficit is well-placed, as is the tightening of credit. The two work, in boom periods, to stop prices from rising too rapidly. But during economic crisis (and the unemployment rate still stood near 12% in 1937), it compounds the difficulty of recovery.

So began a short, sharp dip back into depression. Industrial production dropped 30%, and five million workers returned to the unemployment line. Thankfully, Roosevelt reversed course in April of 1938 and the economy turned around in June of that year.

In sum, the stumble in May, 1937 came about when an ill-timed obsession with budget deficit during economic crisis, compounded by irrational concern over inflation, which is a dominant trait common in the republican gene pool, proved to be exactly the wrong mix needed to restore economic growth. Too many people in power were thinking the way current republicans think.

Now fast forward to today. What are republicans acting worried about? What are they speaking about with calculated fear in their voices? Why are they in a hurry to act and unwilling to discuss, openly and deliberately, the problems that affect the middle class, the working class and the poor? Why are they trying so hard to focus attention on the budget deficit and so vague and squirrelly about any aspect of economic recovery, other than tax cuts and incentives for big business? This same avoidance of any discussion about real economic stability and growth is a trademark of Walker's tenure as Milwaukee County Executive.

You guessed it. When open deliberation of the alleged problems happens in real time, the republican talking points are refuted with evidence, and their “economic policy” and “fiscal responsibility” are unmasked as political maneuvering. The real goal Walker and the republican majorities want is to cripple public sector unions, the largest organized supporters of, and contributors to, the Democratic Party. And here's what makes Cheney gnash his teeth: the Democrats are the advocates of economic equity. He, Walker and the like just hate to share any of that economic pie.