Friday, April 27, 2007

Returning to the Gilded Age: Wealth, Corruption, Cronyism, Institutionalized Privilege

The wealthy are different than the rest of us. Or so many of them believe. The wealthy are entitled to a different set of rules. Or so many of them believe. The wealthy are entitled to more wealth simply because they are already wealthy. Or so many of them believe. Paris the heiress certainly believes she's entitled to more wealth and a different set of rules. Poppa Bush and Junior never got it through their heads that they were born on third base. They have little idea what the rest of us live like. Some of Bush's wealthy Saudi friends even have a term for the rest of us: they call us 'donkeys,' though the term is usually applied to laborers and domestic workers. But it's not intended to be an endearing term (I worked for a sarcastic man once who liked to call his workers, 'you peons,' to their faces; he was clueless that his attitude and vocabulary were major factors in a strike that was more about respect than wages).

The wealthy these days have a large number of wannabes among right wing Republicans. One only has to look to Tom DeLay, Duke Cunningham, Jack Abramoff and the horde of neocons profiting off of Bush's war in Iraq. They are entitled. Simply for knowing people. Or so they believe. The Gilded Age has very much returned and it's getting worse. The corruption is becoming more obvious and unlike the Gilded Age, America is not the cutting edge of manufacturing and new ideas like it once was. Look at Toyota. It's now the world's biggest auto company. America is slipping and it's slipping because Republicans are out of ideas and are coddling wealthy people who no longer have anything to offer.

Truthout has a column by Paul Krugman of The New York Times on the new Gilded Age:
One of the distinctive features of the modern American right has been nostalgia for the late 19th century, with its minimal taxation, absence of regulation and reliance on faith-based charity rather than government social programs. Conservatives from Milton Friedman to Grover Norquist have portrayed the Gilded Age as a golden age, dismissing talk of the era's injustice and cruelty as a left-wing myth.

Well, in at least one respect, everything old is new again. Income inequality — which began rising at the same time that modern conservatism began gaining political power — is now fully back to Gilded Age levels.


...according to estimates by the economists Thomas Piketty and Emmanuel Saez, average tax rates on the richest 0.01 percent of Americans have been cut in half since 1970, while taxes on the middle class have risen. In particular, the unearned income of the wealthy - dividends and capital gains - is now taxed at a lower rate than the earned income of most middle-class families.

I don't have a problem with people making money with their capital but I do have a problem with unearned income being taxed less than earned income. Earned income is a reflection of our national strength; it is a reflection of our ideas and hard work. There are many people living off of unearned income who contribute very little to our society. I don't mind a tax break for the elderly and disabled who have unearned income but perpetuating such a system for generations turn us into something that has little to do with our democracy: a society for the benefit of aristocrats rather than the benefit of hardworking Americans.

We have a problem. Children without health insurance is not a myth. Seasonal workers like teachers who have no insurance in the summer is not a myth. Stagnant wages is not a myth. A lack of a real energy program is not a myth. Rising energy prices is not a myth. An economy shifting its jobs overseas is not a myth. The right wingers have nothing to offer and as long as the Republican Party allows itself to be dominated by right wingers and voters keep voting for them because of the irrelevant noise they make and games they play, the strength of America will continue to wane. John Edwards talks about these things with much clarity and thought. The mainstream media, of course, is stark raving mad as they argue about why Edwards hesitated to think, to actually think about his answer to the question about who he looks to for moral authority while a corrupt, incompetent and lying president in the White House drives our nation into the ditch. The Gilded Age too had its fools.

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Anonymous S.W. Anderson said...

It could be seen coming, couldn't it? Back in the late 1970's and 1980's, when Fidelity Magellan became the fund to end all funds, reflecting a new mania for making money not from providing goods and services, but for making money on money, for quick riches gained on speculation; when a large cadre of tent-revival "motivational" preachers like Jack Kemp traveled the land, giving "You Can Get Rich, Too" presentations to fresh converts to the free-market faith; when "Dianetics" was a bestseller; when Bible-thumping promoters parlayed Savings and Loan debt liabilities into ill-gotten gains, until it all collapsed — at taxpayers, consumers and shareholders' expense; when people bought into Reaganomics, which was so asinine even Reagan's budget guru, (the now-indicted) David Stockman, blew the whistle on it; when people were so very willing to buy into stories about welfare queens whose existence defied verification?

Thanks for an excellent, and excellently written, post about an important root cause of our current bad situation.

2:36 PM  
Anonymous Anonymous said...

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7:42 AM  

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