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Wednesday, October 15, 2008

Turning Palaces into Museums

If you talk a walk around Valencia's historic district you will notice how people used to live back in the era of aristocracy. However, the opulent palaces of the former monarchs now serve mostly as museums for the citizens of Spain. Between Spanish local and state taxes, rates reach 43% for people earning 53,000€ or more annually. Maintaining a palace with those kind of tax rates would be a bit of a challenge. One the other side of those high taxes, Spain's socialist policies over the past 30 years (along with joining the European Union) have raised living standards for almost all of its citizens. It's not quite the old adage, “a chicken in every pot but two in none,” but it's something like that.

Middle class Americans who have been under the delusion that the American conservative movement has their best interests at heart may finally be coming to their senses. All it took was an almost complete failure of every tenet conservatives have been preaching for the past generation. The conservative movement has been polluting the minds of middle class Americans with myths such as: the private sector is always more efficient than government, therefore we should privatize as many functions of the government as we possibly can; government regulation is bad and hinders industry; taxes suck the lifeblood out of an economy; we should allow people to amass incredible riches because this just demonstrates how well capitalism is working; and Ronald Reagan's moronic credo, “Government isn't the solution, government is the problem.”

Along with these myths, Republicans have controlled through outright lies, like when they say that they are more fiscally responsible than Democrats. The pendulum is about to make an abrupt change in direction and it can't happen too soon. In my opinion, America's ever-growing income disparity between rich and poor is the single most disturbing aspect about our culture and the one that presents the greatest risk to our democracy. It is also a direct result of Republican policies since Reagan. When I say “rich” I don't mean someone who is comfortably well off, I am talking about multi-billionaires, or the hyper-rich. The average income for the top 0.1 percent was $3 million in 2002, that's two and a half times the $1.2 million, adjusted for inflation, that America's new aristocracy reported in 1980.

Most middle-class Americans have seen their incomes actually shrink. All citizens still have the right to vote but the privileged few have direct access to the corridors of politics that you and I will never see. An individual voice is considerably stronger if they have the funds to sell their agenda to lawmakers. Once again as with wealthy people, influence will always be a product which and be bought, but America's hyper-rich are seriously distorting our version of democracy—what should be our prized possession as Americans.

Conservatives seem to suffer from an acute case of amnesia when it comes to the kind of world they want to construct. In fact, we have already seen the society they are planning. It is remarkably similar to the America of 100 years ago, a time before income taxes, social security, unemployment insurance, worker safety and environmental laws, and federally insured savings deposits. Do we really want to return to the Gilded Age? We spent most of the last century literally fighting in the streets to change our society for the better and now conservatives want us to return without so much as raising our voices? Do we really want to return to the way we were in America a century ago or like modern day Brazil, do we want to continue on our path of ever-increasing income inequalities? Or do we want to return to the path out country was on before we were derailed by conservative ideology, a path which was followed by European social democracies who have continued leveling their societies and providing for their citizens.

Pick just about any measurement you want and we are probably trailing most Western European countries. Don't we as citizens of such a wealthy nation deserve more? I don't believe for a second that the Republican Party leadership cares at all about abortion, as this is just a wedge they have used to divide American and to help them sucker middle and lower income religious people into believing that they share common ground. People who want to criminalize abortion don't seem to realize that not too long ago this was the way it was in America and we didn't like it. As much as you may hate the idea of abortion, only a total fool or an idiot could believe that criminalizing it again is going to make abortion disappear. It will only make it much less safe. If anti-abortion activists have their way, America can expect to return to a country where illegal abortion was the biggest killer of women of childbearing age. You don't even have to go back in time, you only have to look to our Latin American neighbors to see how things will look if we decide to follow their policies concerning a woman's right to her own reproductive decisions.

It is tragic that so many middle-class Americans defend the hyper-rich but what these people don't realize is that the economic pie is only so big. If one percent of the population is taking home 20% of national income, a lot of people are going to come up short on payday. People say that we shouldn't use our tax policies to redistribute income. I couldn't disagree more. We did it before when we first instituted the national income tax system and it immediately brought about a cataclysmic drop in the living standards of the hyper-rich at that time.

A lot of mansions on Long Island and in Providence had to close their doors because it just got too expensive to be stinking rich. Reagan lowered the top tax bracket for the wealthy and since then the mansions have returned with a vengeance. This new breed of hyper-rich make the old families look like squatters. We have baseball players making $25 million a year. Does that sound like how a healthy society should allocate its resources? How about a CEO who makes $20 million a year in a company that loses money for its share holders? Why have CEO salaries in America gone completely through the roof? Where in 1980 CEO salaries were about 42 times those of their workers, they have risen exponentially to 364 in 2006.

In 2007, the CEO of a Standard & Poor’s 500 company received, on average, $14.2 million in total compensation, according to preliminary numbers from The Corporate Library, a corporate governance research firm. The median compensation package received was $8.8 million.*

I can't imagine how these bloated salaries for top corporate officers are not watering down the value of the companies' stocks. And we wonder why corporate America is in such bad trouble. I think that the increasing disparity in the incomes of Americans since Reagan's “revolution” is harmful to our country for many reasons. It has damaged our reputation as being a society relatively free of class division. When I was growing up there weren't really any rich people in my town. There were some who had more than others but kids all went to the same public high school (besides the few who attended the shitty Catholic high). Universal public education is probably the single most important idea that has defined everything good about our country. That idea is in serious jeopardy when many wealthy families are abandoning public education.

There have always been private schools for a few select rich families but that trend has been growing rapidly. College education is becoming alarmingly expensive and is more and more becoming the domain of the rich. If we are looking for places to spend vast amounts of taxpayers' money, I can't think of a better place to start than revitalizing our public school system and making college more affordable to low-income Americans. I think that this war in Iraq has shown that we have the resources to pay for any sort of foolishness imaginable, so to say to citizens that we can't afford necessary things like education and health care is ludicrous.

We are the richest nation on earth yet we have been told that supporting education or providing national health care is out of our reach. These are pipe dreams; most European countries provide great health care to their citizens as well as providing free education to the university level. Of course, we can afford it; it's simply a matter of choice. It's like someone telling me they can't afford to go on vacation yet they drive around in an expensive new car. They could afford a vacation but they made another choice. America's choice seems to be fighting two pointless wars at the same time. America is either a country of equal opportunity for all or it isn't. A good way to ensure that we have equal opportunity is to provide excellent public education to everyone.

*Trends in CEO Pay AFL-CIO 1)Once at 90%, the top marginal tax rate was lowered to 50% in 1982 and eventually to 28% in 1988. However, in the intervening years Congress subsequently increased the top marginal tax rate to 35% (the top marginal tax rate as of 2007).

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