Tag Archives: Rich

How Capitalism Deals with Inequality

President Obama and the Democrats have finally decided, five years after his election, to begin talking about the issue of income inequality, which has been increasing since the early 1970s. But their rhetoric makes it sound like inequality is a weird byproduct of capitalism when, in fact, it is a key feature of an economic system that relies on poverty and exploitation. This is the best system ever conceived?

The First Step

After their defeat in the 2012 presidential race, the Republican Party reassesses its history of anti-Latino rhetoric, as well as racism, sexism and homophobia. They seem ready to be quiet about their beliefs, not to change them.

SYNDICATED COLUMN: Our Politicians Need an Education

Why Both Democrats and Republicans Miss the Big Picture

Public education is mirroring American society overall: a tiny island of haves surrounded by a vast ocean of have-nots.

For worried parents and students, the good news is that spending on public education has become a campaign issue. Mitt Romney is pushing a warmed-over version of the old GOP school voucher scheme, “school choice.” The trouble with vouchers, experts say (and common sense supports), is that allowing parents to vote with their feet by withdrawing their kids from “failing schools” deprives cash-starved schools of more funds, leading to a death cycle—a “winner takes all” sweepstakes that widens the gap between the best and worst schools. Critics—liberals and libertarians—also dislike vouchers because they allow the transfer of public tax dollars into the coffers of private schools, many of which have religious, non-secular curricula unaccountable to regulators.

Romney recently attacked President Obama: “He says we need more firemen, more policemen, more teachers. Did he not get the message of [the failed recall of the union-busting governor of] Wisconsin?”

“I would suggest [Romney is] living on a different planet if he thinks that’s a prescription for a better planet,” shot back Obama strategist David Axelrod.

Both parties are missing the mark, the Republicans more than the Democrats. Republicans want to gut public schools by slashing budgets that will lead to bigger class sizes, which will reduce the individual attention dedicated to teaching each student. Democrats rightly oppose educational austerity, but are running a lame defense rather than aggressively promoting positive ideas to improve the system. Both parties are too interested in weakening unions and grading teacher performance with endless tests, and not enough in raising salaries so teaching attracts the brightest college graduates. Not even the Democrats are calling for big spending increases on education.

Is the system really in crisis? Yes, said respondents to a 2011 Gallup-Phi Delta Kappa poll, which found that only 22 percent approved of the state of public education in the U.S. The number one problem? Not enough funding, say voters.

Millions of parents whose opinion of their local public system is so dim that they spend tens of thousands of dollars a year on private school tuition and—in competitive cities like New York City, force their kids to endure a grueling application process.

According to one of the world’s leading experts on comparing public school systems, Andreas Schleicher of the Organization for Economic Cooperation and Development, the U.S. is falling rapidly behind other countries. In Canada, he told a 2010 Congressional inquiry, an average 15-year-old ahead is a full year ahead his or her American counterpart. The U.S. high-school completion rate is ranked 25th out of the 30 OECD countries.

The elephant in the room, the idea neither party is willing to consider, is to replace localized control of education—funding, administration and curricula—with centralized federal control, as is common in Europe and around the world.

“America’s system of standards, curriculums and testing controlled by states and local districts with a heavy overlay of federal rules is a ‘quite unique’ mix of decentralization and central control,” The New York Times paraphrased Schleicher’s testimony. “More successful nations, he said, maintain central control over standards and curriculum, but give local schools more freedom from regulation, he said.”

Why run public schools out of Washington? The advantages are obvious. When schools in rich districts get the same resource allocation per student as those in poor ones, influential voters among the upper and middle classes tend to push for increased spending of education. Centralized control also eliminates embarrassing situations like when the Kansas School Board eliminated teaching evolution in its schools, effectively reducing standards.

A streamlined curriculum creates smarter students. It’s easier for Americans, who live in a highly mobile society, to transfer their children midyear from school to school, when a school in Peoria teaches the same math lesson the same week as one in Honolulu. Many students, especially among the working poor, suffer lower grades due to transiency.

Of course, true education reform would need to abolish the ability of wealthier parents to opt out of the public school system. That means banning private education and the “separate but equal” class segregation we see today, particularly in big cities, and integrating the 5.3 million kids (just under 10 percent of the total) in private primary and secondary schools into their local public systems. Decades after forced bussing, many students attend schools as racially separated as those of the Jim Crow era. The New York Times found that 650 out of New York’s 1700 public schools have student bodies composed at least 70 percent of one race—this in a city with extremely diverse demographics.

If we’re to live in a true democracy, all of our kids have to attend the same schools.

(Ted Rall’s new book is “The Book of Obama: How We Went From Hope and Change to the Age of Revolt.” His website is tedrall.com. This column originally appeared at MSNBC.com)

(C) 2012 TED RALL, ALL RIGHTS RESERVED.

SYNDICATED COLUMN: The Phony Budget Crisis

Forget Austerity. Tax the Rich.

Everywhere you look, from the federal government to the states to your hometown, budget crises abound. Services are being slashed. Politicians and pundits from both parties tell us that the good times are over, that we’ve got to start living within our means.

It’s a lie.

Two case studies have made news lately: California, where new/old governor Jerry Brown is trying to close a $25 billion shortfall with a combination of draconian cuts in public services and a series of regressive tax increases, and Wisconsin, where right-winger Scott Walker says getting rid of unions would eliminate the state’s $137 million deficit.

Never mind the economists, most of whom say an economic death spiral is exactly the worst possible time for government to cut spending. Pro-austerity propaganda has won the day with the American public. A new Rasmussen poll funds that 58 percent of likely voters would approve of a shutdown until Democrats and Republicans can agree on what spending to cut.

The budget “crisis” is a phony construction, the result of right-wing “starve the beast” ideology. There is plenty of money out there—but the pols don’t want it.

There is no need to lay off a single teacher, close a single library for an extra hour, or raise a single fee by one red cent.

Every government can not only balance its budget, but wind up with a surplus.

The solution is simple: tax the rich.

Over the last 50 years tax rates for the bottom 80 percent of wage earners have remained almost static. Meanwhile the rich have received tax cut after tax cut after tax cut. For example, the rate paid by the top 0.01 percent—people who currently get more than $6.5 million a year—fell by half (from 70 to 35 percent).

Times are tough. Someone has to pay. Why not start with those who can most afford it?

Europe has the world’s best food, its best healthcare system and its best vacation policy. It also has one of the fairest ways to generate revenue for government: a wealth tax. In Norway, for example, you pay one percent of your net worth in addition to income tax.

What if we imposed a Norwegian-style wealth tax on the top one percent of U.S. households? We’re not talking upper middle class here: the poorest among them is worth a mere $8.3 million. This top one percent owns 35 percent of all wealth in the United States.

“Such a wealth tax…would raise $191.1 billion each year (one percent of $19.1 trillion), a significant attack on the deficit,” Leon Friedman writes in The Nation. “If we extended the tax to the top 5 percent, we could raise $338.5 billion a year (one percent of 62 percent of $54.6 trillion).”

But that’s just the beginning. Wealthy individuals are nothing next to America’s money-sucking corporations.

Business shills whine that America’s corporate tax rate—35 percent—is one of the world’s highest. But that’s pure theory. Our real corporate rate—the rate companies actually pay after taking advantages of loopholes and deductions—is among the world’s lowest. According to The New York Times, Boeing paid a total tax rate of 4.5 percent over the last five years. (This includes federal, state, local and foreign taxes.) Yahoo paid seven percent. GE paid 14.3 percent. Southwest Airlines paid 6.3 percent. “GE is so good at avoiding taxes that some people consider its tax department to be the best in the world, even better than any law firm’s,” reports the Times‘ David Leonhardt. “One common strategy is maximizing the amount of profit that is officially earned in countries with low tax rates.”

America’s low effective corporate tax rates have left big business swimming in cash while the country goes bust. As of March 2010 non-financial corporations in the U.S. had $26.2 trillion in assets. Seven percent of that was in cash.

The national debt is $14.1 trillion.

Which is a lot. And, you see, entirely by choice.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

SYNDICATED COLUMN: Hope and Change? Not for Americans

Turmoil from Mideast to Midwest

If irony were money we’d be rich.

“You’ve got to get out ahead of change,” President Obama lectured a week ago. “You can’t be behind the curve.” He was, of course, referring to the Middle East. During the last few weeks there has been a new popular uprising every few days: Tunisia, Egypt, Yemen, Jordan, Bahrain, Libya.

And now, Wisconsin.

In Madison, where a new Republican governor wants to gut the rights of state workers to form unions and negotiate for higher wages, tens of thousands of protesters have filled the streets and sat in the State Capitol for days. “It’s like Cairo has moved to Madison these days,” said Congressman Paul Ryan (R-WI).

Revolutionary foment is on the march around the globe, but Mr. Hopey Changey is nowhere to be found now that it’s here in the U.S. Whatever happened to “get ahead of change?” What’s good for the Hosni isn’t good for the Barry.

Deploying his customary technocratic aloofness in the service of the usual screw-the-workers narrative, President Obama sided with the union-busters: “Everybody has to make some adjustments to the new fiscal realities,” he scolds.

“Everybody,” naturally, does not include ultrarich dudes like our multi-millionaire president. Obama, who declared a whopping $5.5 million in annual income for 2009 (the last year available), has neither reduced his salary nor donated a penny of his $7.7 million fortune to the Treasury to help adjust to those “new fiscal realities.”

Hard times, doncha know, are for the little people. “We had to [my italics] impose a freeze on pay increases for federal workers in the next two years as part of my overall budget freeze,” said Obama. “I think those kinds of adjustments are the right thing to do [in Wisconsin].”

“Had to.” Interesting pair of words. They imply that there was no other choice. What a brazen lie.

Three more words: Tax. The. Rich. Rich people and corporations are making out like bandits. If they paid their fair share, there’d be no need to cut budgets.

“Adjustments.” How bloodless. For normal people, Herr President, losing two percent of one’s pay is not a mere adjustment. It hurts.

Obama’s grandstanding had-to freeze on federal pay will save $5 billion over two years. Which is nothing. That’s what the Pentagon chucks down the Iraq and Afghanistan ratholes in a single week.

The federal deficit is $14 trillion. That’s $14,000 billion. Obama’s federal pay freeze, which amounts to a piddling four hundredths of one percent, is empty symbolism.

As the striking members of the PATCO air traffic controllers union learned in 1981, higher wages and working conditions are for foreigners, not Americans. Ronald Reagan had nothing but praise for Solidarity in Poland (declaring that “the right to belong to a free trade union” was “one of the most elemental human rights”).

At the same time he was defending Polish workers Reagan fired all of America’s 11,345 striking air traffic controllers and ordered their union decertified.

All political systems are built on contradictions that eventually lead to their downfall. The U.S. relies on a whopping chasm between soaring rhetoric (freedom, democracy, individual rights) and brutish reality (preemptive war, supporting dictators, torture, spying on citizens)—a gap that is so wide and so glaring that it is amazing anyone ever takes the propaganda seriously.

A recent report in The New York Times slathers on a rich quadruple serving of syrupy irony. The Obama Administration asked the CIA to prepare a secret memo about the revolutions in the Middle East, specifically analyzing “how to balance American strategic interests and the desire to avert broader instability against the democratic demands of the protesters.”

What, exactly, are those “strategic interests”? Business. Dictators cut sweetheart deals with big corporations that donate to the Democratic and the Republican parties.

Democracy—real democracy, the kind people are fighting for in Bahrain and Madison, is incompatible with free-market capitalism.

Which is what union members in Wisconsin, as well as those of us who don’t belong to unions but understand that we would be working 100-hour weeks in death-trap factories without them, see clearly. The American Dream is just that— a dream. And it’s not for Americans.

Obama’s statement about the Arab autarchies is astonishingly tone deaf to realities here at home. “I think that the thing that will actually achieve stability in that region is if young people, if ordinary folks, end up feeling that there are pathways for them to feed their families, get a decent job, get an education, aspire to a better life,” he said. “And the more steps these governments are taking to provide these avenues for mobility and opportunity, the more stable these countries are.”

Well, yes.

According to a recent Bloomberg National poll, most American adults believe that their children will have worse lives than they do.

That’s true even about those who have all the so-called advantages.

At this writing the unemployment rate for recent college graduates is 80.3 percent.

How will they pay their loans?

The rate is even higher for other young adults.

In a way, the unemployed and underemployed should thank Obama and the plutocrats he helps protect. The ruling classes’ shortsighted refusal to give up some of the loot they’ve stolen will soon bring about the real changes Americans require and deserve.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL