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 promised land?
Back in biblical times there was a group of people who believed that God had promised them a segment of land on this planet that would be theirs forever. Who could have known back then that this ancient promise and territorial justification would be used by their descendants today to claim the same segment of land?
We the People: Bring back the American dream
Our economy continues to expand. The stock market is at record levels, yet many ask why so many of us are struggling? Barely half of us believe the American dream is attainable.
Tidbits: Taking a low-tech break
Feeling increasingly strangled by my electronic leash, with phone, text messages, email, social media and a variety of other forms of communication always at my side, I took the weekend off.
Stumptalk: Governing before and after mass corruption
Laws in America were originally written simply. Every citizen could read them quickly and understand their meaning. The founders wrote the Declaration of Independence, the Articles of Confederation, the Northwest Ordinance and the Constitution of the United States, none of which was longer than 4,500 words.
We the People: The last dance
Charlie Hayden’s last recording session with his early partner, Keith Jarrett, was in 2007. The songs they played were mostly melancholy. The second album coming from that session includes Weil’s “My Ship” and Porter’s “Every Time We Say Goodbye.” The dark ballad “Goodbye,” by Gordon Jenkins, was the final track.
Lion and the Lamb: Living in a pressure cooker
The Gaza Strip, a small Palestinian territory about the size of Washington, D.C., has been in the news almost every day. Its key location at the eastern end of the Mediterranean Sea has attracted a number of occupying powers over the years, and it has been at the center of much Middle East history.
Tidbits: The excitement of election day
On March 12, 1996, there were 427,183 votes cast in the presidential primary election. Among those votes was mine, the first vote I cast in an election, just two days after my 18th birthday.
Raising the minimum wage
My first job from which FICA was withheld was a minimum wage job, seventy-five cents an hour. And yes, even then no one could live on that little money. However, I was a high schooler living at home where my father provided room and board. The job gave me pocket money to buy gasoline, to take my girlfriend out for movies and burgers, and to buy tickets for baseball games.
Lion and the Lamb: Children on the move
The news this past week has focused on the humanitarian crisis developing on our southern border. Thousands of unaccompanied children from El Salvador, Guatemala and Honduras seeking to escape from the violence, human trafficking and extreme poverty in their countries have been entering the United States.
We the People: Memo to gun rights groups
The recent incident in California helps us understand why we cannot rely on mental health services alone to solve the problem of gun violence.
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- Lion and the Lamb: A promised land?