Capitalism's Defenders

It's sad that Michigan Gov. Jennifer Granholm's butt-spanking that occurred on Fox News Sunday is reported on Drudge through... Rush Limbaugh's site. Not a newspaper, not a news magazine, but via a controversial right-wing talk show host's web site. God bless him for that. (As much as the left tries to vilify Rush and Beck, beating them at their game is real easy: report the damn news, instead of trying to prop up favored politicians. But I digress...)

Gov. Granholm was on the show with Steve Wynn, who employs 20,000 people in Las Vegas. Nevada currently has an unemployment rate of 13.2%. He said this:

I think that the priorities of the administration should have been more directly focused on job creation. From the day of the inauguration forward, the priority should have been job creation. And the most powerful weapon and the tool that the government has for that is its tax policy. If the government had used its power to restrain its tax collection they would have given everybody who runs small businesses, large businesses, a chance to hire more people and that could have been done an entirely different way. With eight or $900 billion we could have created four or five million jobs, which would have made a big difference.

Government has never increased the standard of living of one single human being in civilization's history. For some reason that simple truth has evaded everybody. The only thing that creates an increased standard of living is giving someone a job, the demand for their labor - whether it's you and I, Chris, or anybody else. The people that are paying the price for this juggernaut of federal spending are the middle class and the working class of America.

And soaring rhetoric and great speeches with or without a teleprompter aren't going to change the truth, and the truth is: The biggest enemy, the biggest obstacle that working middle-class America has is government spending.

Then Granholm's response:

It's just so simplistic to say that! With all due respect, I mean, to say that government has never created a job or increased the standard of living. You know, I mean there - there are a lot of people who are grateful that in this country we have a minimum wage. There are a lot of people who are grateful that they have access to Medicare and Medicaid. And I hope that we get access further to additional health care for those who are un- right now uninsured. I mean, there is a balance here. To say that government is all evil... This is a democracy. It's the greatest country in the world.

WYNN: I didn't say that at all. I'm saying that the source of government revenue, the source of well-being in this country is employment. That allows companies to pay taxes, employees to pay taxes. That's the source here and it's gotten out of focus.

GRANHOLM: I... I agree.

WYNN: There's no --

GRANHOLM: I agree with you.

WYNN: Okay. That's my point, Governor. I'm not making any other point. And, believe me, ma'am, I've got 20,000 employees. I've had as many as 150,000 families that I've been self-insuring. There's nothing "simplistic" about my approach to this problem.

How many private sector jobs has Jennifer Granholm created? Just last week, we had the most amazing story. It was a two-page story that took me 30 minutes to fully digest and react to. Do you remember it? In her two terms of governor, which will expire next year, I believe, the state of Michigan has lost 630,000 jobs. In the next 14 months it is expected that the state of Michigan will lose another 370,000 jobs for a grand total of one million jobs lost under Jennifer Granholm's governorship. The story was in the Washington Post, and it was a puff piece pushing the obviously false premise that she has created hundreds of thousands of jobs. But the green jobs are to come, and then she's going to really fix the state because she's gonna convert the state into an all-green technology sector jobs state. And get this. By 2020, 40,000 new jobs will be created. We ought to be creating 40,000 jobs a day in this country. And in Michigan she is bragging in the Washington Post about 40,000 new jobs in 11 years.

Here's the way to look at this. In 14 months, 370,000 more jobs projected to be lost in Michigan. That's a little over a year and yet on the other side of that in the next 11 years, 40,000 green jobs will be created. I know she went to have lunch with laid-off employees, she went home to her husband, "Oh, my God, what can I do for these people?" The real question here is how many private sector jobs has Jennifer Granholm created, how many has Steve Wynn created? That little side by side answer is the difference between statism and capitalism. So here we have a failed governor with a state in a near depression, holding firm to her policies, learning nothing from a man who created a multibillion-dollar enterprise that hires tens of thousands of people and could hire more but for government tax-and-spend policies and whose own city is in the tank right now because the president of the United States, inasmuch has told people the days of getting on your jet and going to Las Vegas are over.

Steve Wynn, multibillion-dollar enterprise, hires tens of thousands of people, could hire more and would love to be able to hire more, but because of government tax-and-spend policies, he can't. And on the other side, a failed governor, who's telling him that he's simplistic.

But there are many examples in history of returning the people's money to them by reducing taxes and increasing the economy. It worked when JFK did it. It worked when Reagan did it. It doesn't matter what political party with which you belong - money doesn't care. Journalists today ignore the lessons of history, and so we get our news from alternative sources.

Thank god for Rush Limbaugh, who has the easiest job in the world: he defends capitalism and common sense, all the way to the bank. The Washington Post? CNN? Newsweek? Not so much.

by Brett Rogers, 10/13/2009 8:18:08 AM
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Intriguing piece RWr. Like many Americans, I despair over tax policy. However, my anguish stems from a perspective that the tax policy of this country is quite unbalanced, i.e., favors business owners and investors over the rest.

Before addressing that, let me state that I have no problem paying my fair share of taxes to live in a country as great as this, with relatively good roads, parks, schools, military, social services,etc. Also, my values are such that I don't mind contributing taxes toward the benefit of the greater good, to help others less well off such as the ill, those with substance abuse, victims of domestic abuse, veterans, the elderly, etc. Nor do I begrudge my government for establishing and managing programs to benefit those populations! I also give what I can as a private citizen to the Red Cross, United Way and other worthy organizations. I also understand that the need is greater than the public and private resources combined.

However, I have noticed there are many, many more tax incentives for businesses than there are for me. Tax breaks for wealthy indivuduals abound, both laden with opportunity and rife for abuse. They exist for everything from historic preservation to engaging in work on public projects to mineral exploration to the new/expanded industry credit, and the Primary Sector Business Workforce Training Act, the latter of which incetivize businesses for employment creation.

Tax incentives for ordinary citizens are relatively scarce, despite the consumer-based side of the economic equation being equally important. This isn't fair...and I fon't buy the argument that there must be less tax or more incentives for the rich. It's a hoax on the public.

Clearly, there are multiple perspectives toward the answer to the question of whether trickle down economics has worked in the past and whether it is applicaple to the present or the future. Things change, ideas run their course, history moves on, and the new realities of the moment often compel new approaches to problems or issues rooted in the past. The implications and results of trickle down ecomonics (which is ultimately what the argument is about) are not universal, nor are they static from era to era. But to simplify this matter as Rush and others have done as a premise for "job creation" is silly and dishonest. It works, however, because the dynamics of economic processes are complex and ripe for the punchy soundbyte that uninformed people can seize upon, and thereby pretend to gain understanding. Simplified half-truths breed an ignorance among the masses that is then exploited by those in power. You fell for it.

I'm all for a tax policy that supports the creation of jobs, and it is apparent that this is a critical need of the moment. However, let us not forget that the existing laundry list of tax concessions for businesses is a mile long, all of which seems to have resulted in the mass migration of capital to the wealthy and a concomitant emaciation of the middle working class.

Ultimately, the impact--negative or positive--of tax concessions for businesses rests on whether owners and investors seek to grow business and employ people, OR whether they are pretenders and evaders who simply wish to manipulate the tax code and abuse the system for personal profit or greed. What seems to be absent in the present environment is an ethical sense of social responsibility rooted in morality.

Economic theory fails to address ethics within capitalism relative to the profit motive. As we see, people aren't fair--and neither is the tax code. Those conditions are tradeoffs withing a mixed economy (Which, by the way, is what we have...but which is not acknowledged by those who focus their arguments within the frameworks of hypothetical free markets or socialist economies).

What then, is the role of tax policy and public revenues in a mixed economy? That's the question we should be asking.

Posted by M. Schaeffer, 10/13/2009 9:13:41 PM

What I think we could all agree on is that the tax code needs to be FAIRER and SIMPLER. It would be preferable if businesses who create jobs, regardless of motive, could be credited for that instead of being bogged down in the web of crackerjack lawyers and accountants that is currently necessary to wade through the code.

Posted by M. Schaeffer, 10/13/2009 9:33:33 PM

on another matter, as we face our common problems it might be prudent to refrain from sweeping generalities such as Wynn's comment that "Government has never increased the standard of living of one single human being in civilization's history."

He, of all people, has likely benefitted handsomely from tax breaks that are advantageous to his interests--and fine capitalist that he is, he likely has a host of bidders doing his bidding (not least of which is the embattled and corrupt Senator from Nevada, John Ensign). I'm sure his standard of living has benefitted handsomely from government concessions at all levels. So much for his argument. On the other end of the spectrum, it is through government-subsidized student loans that many who otherwise would not have had the means were able to attend college, achieve social mobility, and attain a higher standard of living.

Of course, in each case government has only been an agent of our success--but to categorically say that it has never increased the living standard of one human being in civilization's history" is not only dishonest, self-serving, and deceptive---it is ignorant. And it's arrogant. Above all, it's a lie.

This is the sort of rubbish the angry right feeds the masses who cannot think beyond the mere slogan or summon the cerebral energy necessary to penetrate issues to the core. This is the rubbish they feed the empty heads of those whose ears are pressed to radios at 1:00 every day to hear the gospel of Rush. And this is what Al Grayson means by the "Republican Lie Machine" and "Neanderthals." I can't imagine what it's like to actually possess the sort of mind that identifies with a political party that preys upon ignorance and fear by spreading lies.

In its self-defense, the GOP will likely blame the media for everything. It always does. But facts do not lie, and there are plenty of facts that call you out. In fact, the GOP is a large part of the reason why Media Matters and Snopes exist! It's laughable that entire businesses exist to fight and debunk the the lies propagated by the right wing lie machine. It's become somewhat of a laughing matter, epitomized in myrightwingdad.com.

For a party that attempts to capitalize on ignorance, is it any wonder that Republicans are generally opposed to education spending? As Kozol pointed out in the 90s, Republican discourse reveals much about the mindset, e.g., they are keen to ALLOCATE money to the Pentagon, but loathe to THROW it at education.

If Obama taught us anything, it's that the same old fearmongering, lies, and mistruths from the Republican playbook will no longer work. We are wise to those tactics and we will CALL YOU OUT on it. We will--and we are. You betcha.

Don't you get it? The bulk of America is on to it. In the psyche of an increasing number of Americans, the GOP is becoming the party of angry people and lies. For one who understands the benefit of a two party system relative to the interplay of ideas and formation of policy, not only is this is a serious problem for the GOP, it's a problem for our nation.

It's time for the GOP to break with the loonies, if it can, and set the tactics of division aside and work in unity to achieve common solutions to our common problems. Can the party do so? Or is the vocal fringe truly the "base" of the party? If the GOP cannot extricate itself from the offensive faces and rhetoric of Limbaugh, Beck, Palin, and other ingenuous miscreants whose absurdities weigh the party down, then it will recede into meaninglessness and become an artifact for the history books our grandchildren will read in their schools. Such was the fate of the Know Nothing Party, too.

At this time I am, affectionately and with pride,
"Ruby"

Posted by M Schaeffer, 10/13/2009 10:39:33 PM

Rather than the oppositional construct, perhaps folks need to begin contemplating reality more in terms of private-public partnership. The fact of the matter is that we have a MIXED economy, and this has been the case in our nation since its inception.

Arguments that ignore or otherwise reject the federal role in the economy are clearly not grounded in history. Whether capitalists like it or not, the federal government has an expressed constitutional power under Article I to collect and levy taxes and to regulate commerce among the states. Clearly the readers of this blog are smart enough to know that.

Why ignore the fact that the federal interest in and power over the economy was established at the outset. No number of Gadsden flags or red-faced yellers and screamers can change that fact. That means that your business and mine--and anyone else doing business here--is subject to regulation. If you don't like it, think it's excessive, or don't wish to abide by taxes and labor or environmental regulations, then you are certainly free to go elsewhere in the world and do business there. China or Indonesia beckons, and you can bank your profits in offshore tax havens. Or perhaps you can rewrite the Constitution to suit your personal business interests and circumvent the intent of the Founders.

Many so-called "defenders of capitalism" have a tendency to conveniently disregard those sections of the Constitution that don't conform to their singular interest in the pursuit of profit or those that create the potential for a portion of their taxes to be put to some broader public use that might ostensibly be at odds with their selfish self-interest--such as reproductive planning and service. The public welfare be damned! Such folks readily adopt and cling to the Second Amendment (gotta have those guns!) while rallying against the Sixteenth Amendment (don't wanna pay those income taxes) They loathe Section 2 of Article I, or provisions 2 and 3 of Section 8 of Article I...and when it comes to matters of social justice or legal protection of civil rights they thumb their nose at the equal protection clause. These are the fine folks who are so quick to criticize the patriotism of the left.

What a paradox. The self-serving greed and hypocrisy nearly makes me and millions more vomit. We wonder .... how do such people reconcile their alleged patriotism with actions and positions that are clearly so inconsistent with the basic principles of our Constitution that they verge on anti-Americanism--or sedition?

Despicable.

Posted by M. Schaeffer, 10/14/2009 12:04:06 AM

Ruby

You say:

"My anguish stems from a perspective that the tax policy of this country is quite unbalanced, i.e., favors business owners and investors over the rest.

What's worse, America's corporate tax rate is the second highest in the world, following Japan. That stifles job creation. How dumb is that? I mean, jobs provide the means for taxation - exactly like Steve Wynn says.

And what's even more bizarre and unbalanced: ours is an income tax, and not a wealth (property) tax. Those earning an income are engines of productivity. But how many, such as the Rockefellers, the Kennedys, the Kerrys, and so on have their lazy money sitting on the sidelines? Is it fairness - to tax only the working and not the rich who no longer work? We tax real estate, but not wealth. Imagine the amount of money untouched by any tax policy whatsoever simply because it's not income. What a great bias that is against the working.

Regarding tax breaks, well, taxes are collected from the people. Therefore, any reduction in taxation should return to those who pay them. That only makes sense. Otherwise, the untaxed are allowed to pilfer the property of the taxed, with Washington acting as the money launderer in between. Certainly, you're no proponent of theft - right? So "tax breaks" - as they're called - shouldn't a break in taxation go to those subject to taxation?

Me, if I were king for a moment, I would flatten the tax rate, tax all property, and offer no tax incentives whatsoever. That way, everyone pays in the most even-handed system you can imagine. In such a system, there are no loopholes. It's a straightforward accounting of one's assets. You could write that tax law on a single sheet of paper. How easy to understand!

And you know, the system I just described looks an awful lot like the first tax system instituted in this country - the ones who crafted the Constitution. But since then, it's gone all progressive and shell-gamed and complicated.

Ruby, if you're gonna go talking about the principles of the Constitution, you should probably model your tax system on the system devised by the guys who wrote the Constitution. And what I don't see in their model is any hint of wealth redistribution. So being all Constitutionally principled and all, you certainly despise wealth redistribution just as the founders did, right?

Because any embrace of unfairness in the tax code would be discrimination - and that would be despicable indeed.

Posted by Brett Rogers (http://www.beatcanvas.com), 10/14/2009 12:50:53 AM