There is a famous story about pre-revolutionary France. Most of the people were very poor, but the rich, and the royalty lived in unimaginable luxury, and stole most of the resources of their countries for themselves. The people, on the other hand, had no way to earn a decent living, and many of them were starving because they were so poor.
One day Marie Antoinette (soon to be fondly remembered as "Headless Mary") heard the impoverished citizens crying out: "We're hungry, we have no bread." And Marie turned to one of her rich useless friends and said "Let them eat cake." In other words, as the story goes, Marie thought there was a bread shortage for some reason, and people should simply eat cake until more loaves of bread were available. But of course the truth was that people had no money, and they could not afford to buy bread. Remember Jean Valjean stole a loaf of bread in Victor Hugo's famous Les Miserables. And was pursued by the police for all eternity for that "sin."
The people, the working people, the average people in this country have no bread and no cake. They cannot afford to live. They sink further into debt every day. Housing is too expensive, healthcare, transportation. Everything has gone up in cost, but the citizens' wages have been frozen at 1970s levels.
The people who run Wall Street, the banks, the financiers, have manipulated our economy and stolen much of the nation's wealth, which they have paid out to themselves in billions of dollars of "bonuses."
Each time a business announces that it is shutting down a U.S. manufacturing facility and opening up a substitute in a third world country, the criminals on Wall Street would bid up that company's stock so the corporate insiders would get big bonuses for themselves.
They were rewarded for throwing Americans out of work. Those manufacturing workers who had jobs earning $60,000/year with full healthcare and pensions found themselves unable to find comparable replacement work. Many of them ended up working at 1/3 the salary with no healthcare or pensions. Of course peoples' lives have been ruined.
These financial policies were put into place by Bill Clinton, who pretended to be a Democrat but actually followed neocon Republican policies. After he left office, Bill Clinton was given hundreds of millions of dollars by corporations and by foreign governments, as "gifts." Some might argue he, like Judas, was well-compensated for selling out the America people.
George W. Bush continued these policies, continued the destruction of our country by cutting taxes for rich people and businesses, passing laws to encourage businesses to take more jobs out of the country, firing border patrol agents and making deals with Vincent Fox, Mexico's then-president, to bring tens of millions of illegal immigrants from Mexico to the U.S. to throw even more Americans out of work and force down wages and working conditions, eliminate job security, bust the unions.
We're on the ropes. But along comes Barack Obama, who acts as outraged as we feel, who promises he is one of us, he stands by our side against the Wall Street interests, he will right the ship, he will save us.
One year later, Barack Obama is looking more and more like Bill Clinton: claims to be a Democrat but rules like a Republican.
So far, Obama has given hundreds of billions of taxpayer money to the same Wall Street criminals who have plunged our country into a depression. Despite "real" unemployment and underemployment of over 20%, Obama has no jobs programs for the people. Despite foreclosures at unprecedented levels, Obama has a tiny program which helps a small percentage of the people who cannot afford shelter.
Despite committing to enact real healthcare reform, to make healthcare affordable, Obama's big legislative proposal consists mostly of ordering all Americans to buy health insurance, which will provide an additional $100 Billion or more in revenue to the health insurance industry. For the people, this bill does nothing. It does nothing to hold down premiums or charges by doctors and hospitals and drug companies. It's just another corporate give-away.
Now, as of yesterday, White House insiders have been engaged in advanced leaking of a section from Obama's planned state of the union speech. Reportedly Obama is going to order a freeze on spending on all programs that help the people. No limit on the wars or military spending. No limit on "Homeland Security" spending. But for all the rest of us, cutbacks. Less for the people. Let them eat cake.
What should he do? All the economic analysis available about the U.S. economy shows that during the past 30 years, working people (the bottom 70% of the population) have gotten a smaller share of the pie, while the richest people have accumulated more and more wealth for themselves. In fact, the rich have so much money now that they can buy politicians, dictate what laws will be passed, and destroy our democracy.
How can we save our democracy and help our country? Raise taxes on the rich. If we tax their excess earnings at a high level, they can't accumulate such massive amounts of wealth.
For example, any compensation of any type, including pensions, healthcare, and stock options, with a value in excess of $250,000 in a year, should be taxed at 90%, and the business should not be allowed to write that excess compensation off of their tax returns. Corporation pays CEO $10 million? Corporation will be taxed on $9.75 million, which will be deemed profits, at a tax rate of 90%. CEO should also be taxed on $9.75 million at a tax rate of 90%. The effect of this would be to stop corporations from paying out these obscene salaries since, by law, it would be considered wasteful if they can't write it off. CEO would be taxed so much that the incentive to arrange for these obscene payouts and bonuses would be less compelling.
Of course the taxes would increase revenues, would properly punish the people who have caused our economic calamity, and could be used to provide fully-funded healthcare for all Americans as well as pay for other programs, and pay down the debt.
There may well be many options available to Obama. 1) Raise taxes on the rich. Good idea. 2) Cut services for the public. Bad idea. This is the one Obama has chosen. He will cut medical services for poor children. Heck of a job. 3) End the wars! Hey, there's an idea. Cut wasteful military spending. Shut down the bases we have all over the world. 4) Create good paying jobs for Americans so they can work, make a decent living, and pay taxes. There's an idea. That's what FDR did, the beloved Franklin D. Roosevelt. A real Democrat. The guy that Obama supposedly made such a fuss about in the election, how he was so inspired by him, was reading all these books about him.
I will go out on a limb here and say I think Obama is a closet Reagan fan: death squads around the world, secret prisons, secret wars, protect the rich and cut their taxes, eliminate all social programs and screw the public.
What happened to Barack Obama that within one year of taking office he could become such a complete corporate sell-out? Is he just so enticed by the wealth given to Bill Clinton that he figures he wants it too? What difference does it make if the people abandon him, as long as he ends up rich beyond our ability to imagine. Just think: a few years from now he could be at Davos, rubbing elbows with the rich, looking down his nose at the rest of us, drinking fine wine and buying palaces around the world.
Is Obama just another sell-out? Or is he well-intended but mistakenly following exceedingly bad advice? Paul Krugman thinks Obama's "spending freeze" is a lousy idea. I do too.
Paul Krugman titles his New York Times column today: "Obama Liquidates Himself." Oh dear. Excerpt below:
"A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback?"
"It’s appalling on every level."
"It’s bad economics, depressing demand when the economy is still suffering from mass unemployment. Jonathan Zasloff writes that Obama seems to have decided to fire Tim Geithner and replace him with 'the rotting corpse of Andrew Mellon' (Mellon was Herbert Hoover’s Treasury Secretary, who according to Hoover told him to 'liquidate the workers, liquidate the farmers, purge the rottenness'.)"
"And it’s a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view — and more specifically, he has embraced the policy ideas of the man he defeated in 2008. A correspondent writes, 'I feel like an idiot for supporting this guy.'”