2013 ended in a bad financial way for many people in our nation.
In November, food stamp benefits were slashed for an estimated 48 million people, including 22 million children, by an average of 7 percent. On Dec. 28 Congress allowed the Emergency Unemployment Compensation Program to expire. This program was of crucial help to 1.3 million unemployed Americans after their state-offered jobless benefits, restricted to 26 weeks, had run out. Republicans had opposed its renewal, quoting a Cato Institute report that claims "the current welfare system provides such a high level of benefits that it acts as a disincentive for work." The Economic Policy Institute, however, called the notion of a welfare/work tradeoff "wildly misleading." "The notion that people would rather get unemployment compensation than a job ignores how low weekly benefits actually are. ... We have a temporary federal program because unemployment is so high and jobs so hard to find." Many people today don't realize that unemployment benefits are one of the more effective forms of stimulus because money is badly needed and thus spent right away.
At the high end of the financial scale, the picture has been quite different. 2013 was another good year for rich people who were able to take advantage of special tax cuts. When they get extra money from tax cuts, they don't spend it since they have pretty much everything they may want or need. Instead, like Romney, they may open tax-free bank accounts in the Cayman Islands or Switzerland or invest it in cheap labor companies overseas. Romney was reported to have paid no taxes for years on hundreds of millions in income. The Koch Brothers have invested millions in supporting conservative political candidates in the U.S.
There's an interesting correlation between the tax rate for the wealthy and financial crises that's worth pondering. In 1922 when Republican Warren Harding reduced the top tax rate from 73 percent to 25 percent, it resulted in a real estate and stock market bubble that burst in 1929. Franklin Roosevelt raised the top tax rate to over 90 percent, leading to forty years of stability and prosperity. Ronald Reagan, however, reduced the top tax rate to 28 percent, resulting in a depression and the Savings and Loans crisis. Bill Clinton raised the top income tax rate back to 39 percent, and the economy boomed, but then George Bush Jr. cut it back down, resulting in another crash and a high rate of unemployment.
The major economic crisis we are experiencing in our nation at present is both a financial one and, even more serious, a moral one. Inequality has been deliberately increased through a whole range of policies intended to redistribute income upward. And this redistribution process has often involved intentional fraudulent practices such as portraying dubious mortgages as sound risks. The failure to prosecute those responsible, both corporate and individual, must be judged one of the most serious failures of our criminal justice system.
Journalist Chris Hedges catches the critical seriousness of our nation's economic situation at the present time: "Money, as Karl Marx lamented, plays the largest part in determining the course of history. Once speculators are able to concentrate wealth into their hands they have, throughout history, emasculated government, turned the press into lap dogs and courtiers, corrupted the courts and hollowed out public institutions, including universities, to justify their looting and greed. Today's speculators have created grotesque financial mechanisms from usurious interest rates on loans to legalized accounting fraud, to plunge the masses into crippling forms of debt peonage. They steal staggering sums of public funds, such as the $85 billion of mortgage-backed securities and bonds, many of them toxic, that they unload each month on the Federal Reserve in return for cash. And when the public attempts to finance public works projects they extract billions of dollars through wildly inflated interest rates.
"Speculators at megabanks or investment firms such as Goldman Sachs are not, in a strict sense, capitalists. They do not make money from the means of production. Rather, they ignore or rewrite the law—ostensibly put into place to protect the vulnerable from the powerful--to steal from everyone, including the shareholders. They feed off the carcass of industrial capitalism. They produce nothing. They make nothing. They just manipulate money. Speculation in the 17th century was a crime. Speculators were hanged."
It will be interesting to see what happens during this new year.
2013 ended in a bad financial way for many people in our nation.
LION AND THE LAMB: A time for earth-empathy
This past winter with its snow, freezing rain, and bone-chilling low temperatures has been a brutal one for many parts of our country. Although our county escaped the worst of it, the words “polar vortex” jumped out of the news reports into our consciousness here. It was still hard, however, to understand that all this cold had something to do with climate change and global warming.
WE THE PEOPLE: Reforming education? (Part II)
Last month, I promised to enlarge upon the forces that are attempting to overthrow our locally-controlled public education system. “Following the money” helps, as it does with almost all issues of political importance.
TIDBITS: The trouble with springing forward
This weekend, we will dutifully spring forward at 2 a.m. Sunday morning and begin daylight saving time.
STUMPTALK: History continues to repeat itself
Propaganda was the key to victory for the communists in the Russian Revolution of 1917. Less than ten percent of the population was communist, but that ten percent controlled the media of the day.
Lion and the Lamb: Sticks, stones, and hurting words
Most of us have grown up knowing some version of that children's proverb "Sticks and stones may break my bones, but words (names) will never hurt me."
We the People: Black focusing on false facts
I would like to take exception to Rep. Diane Black's recent newsletter about President Obama and the Democrats. I have had concerns for some time that Rep. Black does not represent the majority of the constituents in her district. Like many others in her party, she continues to put forth the same stale talking points that are not borne out by the facts. Instead, she picks and chooses to support false talking points.
Tidbits: A walk down memory lane
What an absolutely wonderful weekend! After months of dark, dreary weather, and bitter cold that has kept many people inside, huddled under blankets chasing away the chill, we were blessed with highs near 70 degrees and sunshine — lots and lots of sunshine.
Stumptalk: The secret party unmasked
Recently a doctor-friend asked, “Why would the American people elect a completely unknown street organizer, president of the United States?”
LION AND THE LAMB: Birth pangs in North Carolina
A remarkable event happened in Raleigh, NC, on Saturday, Feb. 8. Nearly 100,000 people gathered for a Moral March on the State Capital in support of a “fusion agenda” focusing on democratic rights, economic justice, and the “soul and future of the state.”
WE THE PEOPLE: Happiness requires a good income
The saying “money doesn’t buy happiness” is usually told to us by those who have it! What does it take to be happy? The working class knows part of the answer is money... enough income to buy happy “stuff” for the family, put food on the table, have a decent home, good health care and savings for higher education for their children. We need to feel safe to be happy! For this, everyone (that isn’t living off of Daddy’s trust fund) has always needed a decent paying job, a job with livable incomes that allows for paying bills and giving our fair share to taxes that support our government.
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- LION AND THE LAMB: A time for earth-empathy