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President Obama Largely Inherited Today’s Huge Deficits
Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers

By Kathy Ruffing and James R. Horney

December 16, 2009

Some critics charge that the new policies pursued by President Obama and the 111th Congress generated the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years (see Figure 1).

The deficit for fiscal 2009 was $1.4 trillion and, at an estimated 10 percent of Gross Domestic Product (GDP), was the largest deficit relative to the size of the economy since the end of World War II. Under current policies, deficits will likely exceed $1 trillion in 2010 and 2011 and remain near that figure thereafter.

The events and policies that have pushed deficits to astronomical levels in the near term, however, were largely outside the new Administration’s control. If not for the tax cuts enacted during the Presidency of George W. Bush that Congress did not pay for, the cost of the wars in Iraq and Afghanistan that began during that period, and the effects of the worst economic slump since the Great Depression (including the cost of steps necessary to combat it), we would not be facing these huge deficits in the near term.

While President Obama inherited a bad fiscal legacy, that does not diminish his responsibility to propose policies to address our fiscal imbalance and put the weight of his office behind them. Although policymakers should not tighten fiscal policy in the near term while the economy remains fragile, they and the nation at large must come to grips with the nation’s deficit problem. But we should all recognize how we got where we are today.

Here is an interesting essay, written by Edward Harrison, and published on his blog, Credit Writedowns, on March 23, 2008. Yes, 2008! In it, he explains what every Tea Party attendee should, but doesn’t, know about economics.

A populist interpretation of the latest Boom-Bust cycle

by Edward Harrison

In an earlier post, I said that populism was the problem, not the solution. I reject populist methods of tariffs and protectionism because they are self-defeating economic poison. However, in this brief post, I do want to give voice to a populist interpretation of the last 35 years of U.S. economic history. This is a story of unequal re-distribution of wealth from the less fortunate to the more fortunate. This is a story of the United States in which the rich get richer at the expense of everybody else. At the conclusion, ask yourself: is this true and, if so, what should we do about it?

The Theory of Kleptocracy

First, let’s use a theory from Guns, Germs, and Steel , by Jared Diamond, as the center-piece for this little theory. In Chapter 14, entitled “From Egalitarianism to Kleptocracy,” Diamond postulates that more stratified societies are by definition less egalitarian, but more efficient and are, thus, able to eradicate or conquer more egalitarian, less stratified societies. Thus, all ‘advanced’ societies with high levels of GDP are complex and hierarchical.

The problem is: these more stratified, more complex societies are in essence Kleptocracies, where those in power re-distribute societal wealth to themselves. Those at the bottom of the society’s pyramid accept this unequal, non-egalitarian state of affairs because they too benefit from their society’s relative advancement. It’s a case of a rising tide lifting all boats.

Diamond says the Kleptocrats maintain power using 4 different methods:

1. Disarm the populace, and arm the elite.

2. Make the masses happy by redistributing much of the tribute received in popular ways.

3. Use the monopoly of force to promote happiness by maintaining public order and curbing violence. This is potentially a big and underappreciated advantage of centralized societies over noncentralized ones.

4. The remaining way for kleptocrats to gain public support is to construct an ideology or religion justifying kleptocracy.

Kleptocracy in America?

The obvious corollary of this theory is that most successful modern societies are, in fact, kleptocracies. The key is to use the four methods to gain popular support in order to re-distribute as much wealth to the ruling class as the populace will support. If the ruling class takes too much, it will be overthrown and replaced by a new ruling class (which in turn will re-distribute wealth to itself using the same four methods).

While this angle seems cynical, it is a line of argument that has great internal consistency.

So, is the United States a kleptocracy? Of course it is! Is that bad? Well, it obviously depends on who you are in society. But, it also depends on whether the kleptocracy is efficient and fair over the long term. Let me explain this last statement a bit more.

Efficiency and Fairness

Because any heavily stratified society is by its very nature non-egalitarian, there always exists the potential for disenchantment amongst the masses. The U.S. is no exception. In order to prevent this disenchantment from leading to revolt, the ruling class must appear to strive for efficiency and fairness.

According to dictionary.com, efficiency means “accomplishment of or ability to accomplish a job with a minimum expenditure of time and effort.” So, for the US, it means the ability to increase productivity at a rate which makes the U.S. wealthier on a per capita basis now and in the future. And remember, it is the perception of efficiency, not actual efficiency which is important.

To be fair is to be “free from bias, dishonesty, or injustice.” For the United States, this means maintaining the perception that most every person has the opportunity to succeed while few, if any, have unobstructed paths to guaranteed success.

Is the U.S. efficient and fair?

That’s the $64,000 question, isn’t it? My populist take: no, the United States is neither efficient nor fair.

The United States has been living beyond its means for some time. Since the 1960s, we have run up a massive federal debt and current account deficit, while debt levels have doubled on a percentage of GDP basis. Our present levels of consumption are simply not justified by our current levels of productivity, if we want to maintain our present standard of living in the future.

Were we not the world’s major military superpower with the world’s reserve currency and the world’s largest economy, we would have succumbed to our profligacy years ago. Paul Kennedy has a great book on “The Rise and Fall of the Great Powers.” By contrast, many developing countries have gone bankrupt in the last 30 years from Argentina to Zimbabwe. Yet, we are in worse shape than they were, if one looks at the signposts which represent our macroeconomic health: debt-to-GDP levels, current account deficit as a percent of GDP, Government budget deficit, savings rate, etc.

The fact is our day of reckoning is upon us. We will soon realize that our massive debt and an outsized credit bubble have not only saddled us with debt, but it has also misallocated capital so that we are less productive than we believed. We have built miles and miles of telecom dark fiber when we could have invested in schools. We have built massive numbers of new homes, when we could have repaired our bridges and roads. The last 35 years have been an illusion of extreme productivity and wealth because we have artificially pulled forward demand by misallocating resources in order to consume today, what could have been consumed tomorrow. In essence, we are consuming today, while unwittingly making it more difficult to consume tomorrow because we believe we are wealthier than we truly are.

And as for fairness, Real Weekly Earnings peaked over 35 years ago in September 1972! Using the CPI to adjust wages to today’s dollars, the average worker made $738.48 per week in September 1972. In January 2008, that figure was $598.18.

(Note: these figures are expressed in Jan 2008 dollars. I use the CPI Index to calculate real dollars, which is based on 1982-1984 dollars. But, I then multiply this figure by 2.1108, which represents the BLS’s index factor for Jan 2008).

So, we are getting poorer. And we have been for over 35 years. Only during the end of the Clinton Administration was there an appreciable upswing in real weekly wages over this time period. Don’t believe me? See the raw data yourself, here, and run the numbers.

In the meantime, CEOs are earning hundreds of millions of dollars, even when they are forced to leave because of poor management which cost their firms billions. In 2005, the average CEO earned 262 times what an average worker gets. In 1965, that figure was 24 times (see story).

Conclusions

There it is: the U.S. ruling class is not living up to its role in either efficiency or fairness. We are getting poorer.

That is why people are so angry. That is why the poll numbers for the President and Congress are so low [remember, I wrote this in March 2008]. And that is why so many people are suffering from the housing bubble.

The question you should ask yourself is this: Why has it taken the citizens of the U.S. so long to figure all this out? Answer: Even though the gulf between rich and poor was widening and the rich were getting richer, we thought we too were getting richer as well. We thought that we too were profiting from all of this “productivity.” In the 1980s, we came out of a steep double dip recession and stagflation and we won the cold war. This inflated our sense of well-being. In the 1990s, there was the tech bubble to inflate our assets. In this decade, there was the housing bubble. So, we thought we were getting rich too. We didn’t mind that the ruling class was benefiting disproportionately as long as we too appeared to be benefiting.

But, what was really happening is we were loading up on debt. We were not benefiting at all.

And now that there are no more cold wars we can win quickly, no more tech stocks, no more double digit house price increases, and no more asset bubbles to hide the naked truth — now we realize that we were getting poorer all the time — just as it felt to us. The ruling class have used the four methods to maintain popular support that I enumerated before in order to give the appearance of equity and efficiency. All the while, the rich were milking the system for all they could.

I advise anyone who finds this populist line of argument compelling to read Jared Diamond’s Pulitzer Prize-winning book. Chapter 14 is especially rich. Once you realize that we the American people have been duped for the last generation, you will be angry. And this is why we need a major change in Washington. The politics and policies of the past just will not do.

Years ago, during the Vietnam war, in response to LBJ’s arguments touting the “domino theory“, my father predicted that this country would never fall to the communists. Rather, he said, it would slowly evolve into a fascist state. Sadly, it appears that he was correct.

For another voice from the progressive wilderness about what happened to Obama, here is David Michael Green, who posts his articles on his website, The Regressive Antidote. Mr. Green is articulate, reasoned, and outraged, in a way that every progressive should be. It appears to me that we progressives are just going to stand by, idly, while our once-great country slides down the road to fascism.

Who Won the Ideology Wars?

This week we said goodbye to Teddy Kennedy, the last of a breed.

There are other progressives in the government of the United States, and even some in the Senate with voting records further left of Kennedy’s. But none are as iconic as Teddy. With high admiration and sincere apologies to the likes of Bernie Sanders or Russ Feingold, Lloyd Bentsen would have been the first to admit, I’m sure, that he knew Teddy Kennedy, and these good folks are no Teddy Kennedy.

Does the death of the last great liberal voice in America also coincide with the end of an era? Happy Barack, the nice kid now playing president with his buddies in the big house that’s white, would probably like to think so, as he continues to extend the remaining parts of his hand that haven’t already been chewed off by Republicans, hoping to create a kinder, gentler bipartisan America, where we all just get along.

If that was ever going to happen, Obama would have all his fingers still intact, and his job approval rating would not be rapidly sinking under fifty percent. Not a single Republican in the United States Congress voted for Bill Clinton’s economic package in 1993, and since then they’ve essentially never looked back.

But Teddy’s death gives me cause to consider a bigger question I think about a fair bit, namely: Who won the war of ideology? There has been a struggle inside Western democracies for arguably two centuries now, certainly intensifying in the nineteenth century with the rise of industrialization, and then again in the mid-twentieth century with battles over the welfare state, and yet again in our time with America’s culture wars.

Do we have a winner? Have we achieved the ‘end of history’ as Francis Fukuyama once claimed? Is there any reason to believe that the struggles won’t continue into the future? These are all difficult questions, and my sense is that the answers are fairly nuanced, requiring some analytical complexity to do them any justice.

To begin with, I’ve always thought that it’s a mistake to think of ideology as existing along a single dimension. Consider, for example, Paul Wolfowitz (sorry), who was about as hawkish on foreign policy questions as one could imagine, but has claimed (perhaps disingenuously) to be a liberal on domestic issues. Or, consider the proverbial so-called “fiscal conservative”. Why don’t we simply call this person a plain old vanilla conservative? Because he or she is liberal or even libertarian on social issues like abortion, drug use, or gay rights, while conservative on economic issues. What these folks and many others like them have in common is an absence of ideological conformity across issue domains, thus strongly suggesting that there is not one but several ideological dimensions, over which individuals may mix or match in forging their own particular basket of political commitments.

By my count, there are four main dimensions – or separate sets of meanings – of ideology, though one could surely aggregate the pieces in other ways. The first, and oldest of these, concerns the question of change – how much one favors rearranging society, generally speaking, and how rapidly. The second is the economic dimension, which basically boils down to the question of how much government intervention in the economy – in the form of redistribution policies, government ownership of industry, regulation and taxation – is considered appropriate. On the social dimension, the same question applies with respect to government intercession on questions of personal and social behavior, such as religious practice, sexual orientation, drug use, reproductive matters, euthanasia issues, and so on. Finally, there is the security dimension, which has both a domestic aspect with respect to crime, and a foreign aspect with respect to relations with other countries and sundry international actors.

Each of these dimensions of ideology has moved to its own separate rhythms, and in some cases even in opposing directions at given moments in time. American society assimilated substantially large volumes of political, social and cultural change beginning in 1950s, peaking in the late 1960s, and ending in exhaustion by the middle of the 1970s, leaving in its wake powerful reactionary attitudes seeking to re-invert a society that appeared to disoriented conservatives to have been turned on its head. This regressive element seems, if anything, even more powerful today. While its ranks are probably shrinking, the sheer hostility and volume of the dispossessed – what might be called the Limbaugh cohort – still makes it a force to be reckoned with, as the current healthcare nightmare masquerading as a policy debate well attests.

Economic liberalism peaked at roughly the same time, albeit for mostly different reasons. By the end of the 1970s both American hegemony abroad and the economic growth of the middle class and its prosperity at home were beginning a long period of erosion, though the signs were not always clear at the time. Among other things, this set of events produced a new hostility to taxation and anti-poverty programs that was sometimes ripe for regressive politicians to exploit, and was at other times created by their exploits. This greed-encouraging focus was always the core of Reaganism-Bushism, and remains so to this day. Bolted on to it was a set of predations masked as principles – such as economic globalization, union busting and regulatory slashing – that were never anywhere near as popular with the public, but which could be attached to the more basic tax and spending expressions of naked greed by a set of clever marketing gunslingers hired by elites for the sole purpose of reconfiguring the distribution of wealth in the country. To, that is, launch what regressives accuse anyone else of doing who catches them in the act of actually practicing it themselves: engaging in class warfare.

Along the social dimension of ideology, however, constant attempts at blocking or rolling back the equality agenda have largely failed, and the liberal project of opening society further and wider to guarantee the participation and dignity of all has not only been among the greatest successes of the ideology, but continues its march up through and including this very day. America is hugely imperfect in this regard, and countless lives have been lost and tears shed just to bring us where we are now. But anyone who doubts the efficacy of this agenda should compare the place and especially the societal claim of minority groups today with fifty years ago, let alone in the late eighteenth century. Only a generation or two ago, African Americans could barely vote, women were at home, barefoot and pregnant, and gays were never even spoken of in polite company, let alone legally protected from discrimination. There is, of course, much to be done, and the continual set of regressive rearguard harassment actions continually to be countered, but the very moral standing of these questions makes clear the achievement realized. Whatever they may say in private, and however they may act with respect to legislative particulars, no national political figure – no matter how paleolithic in disposition – argues that it is morally correct for these groups to be subjected to discrimination. That’s a big leap from where we were not so long ago.

Attitudes along the security dimension are to some degree subject to real events on the ground, such as actual foreign threats or the rise in violent crime at home. That said, history is littered with cases of politicians exploiting and often fabricating just such threats in order to advance their careers. Unfortunately, it works all too well, and such shamelessly nefarious techniques are not going away anytime soon. And yet one has the sense that regressives have jumped the shark – in the currently all too ubiquitous parlance – by advocating one too many failed and bogus wars. Even public support for the US presence in Afghanistan – supposedly the good war of the last decade – shows signs of weakening substantially. Regressives still love to play the national security card, but increasingly they get less and less traction from doing so, especially when the wolves baying at the front doors of middle American homes are economic in nature, rather than national security oriented. Americans may even be showing signs these days of fatigue in the fame we’ve achieved as the undisputed incarceration capital of the world, if only because the costs are strangling the country.

Altogether, we find ourselves today in a moment of the Two Hundred Years’ War of ideology which might best be described as a period of precarious stasis. The stability aspect seems to derive as much from exhaustion on both sides as from any sort of broad consensus or victory. With the exception – astonishingly enough – of George W. Bush’s prescription drug legislation (which, truth be told, was actually pharmaceutical corporation enrichment legislation) and the quiet revolution integrating gays into full status in the society, American liberalism has achieved little since hitting its high-water mark in the early 1970s.

Meanwhile, the regressive movement of the last three decades has had fantastic success in accomplishing what it really came to Washington for – the upward redistribution of wealth from the middle class to elites. At the same time, however, this achievement has come with some serious costs attached. The Bush administration was the absolute apotheosis of regressive politics. It was also so disastrous that the right is forced today to virtually pretend it never existed. All that was needed during the last five years was a moderately bold set of progressive politicians to condemn regressive ideology in overtly ideological terms in order for it to have had to face the same fate it did in the 1930s, namely, a total repudiation of its policy failures, ironically driven almost entirely by the success of its politics.

But no such cohort is on the horizon, largely because the Democratic Party has become coopted by the same corporate forces that own the Republicans. A Bill Clinton or a Barack Obama will surely put on a kinder and gentler face than a Bush or a Cheney, but Wall Street could nevertheless hardly ask for more from what was once the party of the people. The most astounding thing about the moment we live in is that progressive politics could beg all day and almost not possibly be dealt a more winning hand to play, and yet no one is picking up the cards. The utter and absolutely complete vacuousness of the right, on the other hand, is revealed daily in the desperation of its current daily diet of inanities, which are shocking precisely for how inane they truly are. Obama’s a “socialist”. No, wait, he’s a “fascist”. He’s a socialist and a fascist! He wasn’t born in the United States. His healthcare plan (which the hapless president, ever deferential to Congress and the GOP, didn’t realize he even had) will kill grandmas and Sarah Palin’s children. And so on. What will be left for next week? He’s a cannibal? He’s going to sell his daughters into a Muslim slavery ring in exchange for Gaddafi allowing him the privilege of apologizing for America’s sins, live in Tripoli?

The only two things more astonishing than watching this nonsense being purveyed are that so many people believe it, and that so many people get furiously worked up about it. I had a seeming out-of-body experience this last week, observing Senator Tom Coburn of Oklahoma at work, talking about healthcare at a town hall meeting. Some poor old lady stood up and utterly fell apart into hysterical sobbing pieces, asking the senator how she was going to be able to care for her sick husband now that their healthcare plan was refusing to do so. Though I’m sure this sort of thing happens thousands of times a day in households across America, we’re not often exposed to it, and it was one of the most heart-wrenching and searing displays one might be unlucky enough to witness. Coburn’s response was astonishing. To begin with, he displayed all the compassion and emotion of a slab of solid granite. Then he vaguely volunteered how his office would try to be of assistance, followed by a lecture to the crowd on the false hope of reliance on government. Both he and his appreciative audience seemed completely unaware of the profoundly incongruous irony entailed in the senator – as big a part of government as anybody short of the president could be – offering to help this lady out while simultaneously warning people of the perils of reliance on government service to the public.

As if that weren’t sick enough, Coburn then lectured the audience on the importance of communities pitching in together to solve problems, rather than turning to government for solutions. I felt the need to be violent well up within me, along with the need to be violently ill. Let’s assume that this family’s medical expenses run into the hundreds of thousands of dollars, a very reasonable assumption because it happens so commonly. How the hell is this poor elderly woman going to get that kind of money scrounging around in the neighborhood? By holding bake sales? Tea parties? Passing the hat at church? And even if she could actually pull it off – while simultaneously caring for her husband ‘round the clock, of course – who would pay for the next person in the area to get sick, and the next one after that, once the cookie jars had all been emptied? And how much would Good Neighbor Coburn himself like to contribute to the woes of this member of his community? Does he have $10,000 lying around with which he’d like to back his regressive principles? How about $100,000 of his personal money for this neighbor, and every other one who finds themselves in similar circumstances? What a sickening display, literally and figuratively. This is what so-called conservatism looks like today.

Meanwhile, there went Teddy during the same week. I can’t say I ever felt particularly moved by the Kennedy brothers. Perhaps it was their sense of entitlement and their opportunistic tendencies, their ability to be vicious to get what they wanted, or my general aversion to celebrity worship in America and the vicarious living it seems to engender among millions who would do so much better to live their own lives rather than living through others’. And yet, nevertheless, the contrast between this man, who had everything and yet devoted so much of his personal and professional life to assisting those who had less than nothing, versus the heartless grinding destruction of ordinary Americans in pursuit of the further enrichment of the already wealthy, so vividly on display courtesy of Tom Coburn, says everything about the American political condition in late 2009.

And thus too the stasis in the ideological wars at the moment. The right is utterly bereft of ideas for governing, in no small part because it never really had any other than those that were used as covering fire for the looting of the country. Liberals, on the other hand, maintain a stock of public policy responses that have weathered well across the decades and remain every bit as relevant today as they were in the middle of the twentieth century, yet these folks utterly lack the courage of their convictions, even on the rare occasions when they actually have convictions. In short, the right has all the passion now and none of the ideas, while the left has all of the ideas and none of the passion.

But the current stasis feels all too reminiscent of that found in trench warfare. The levels of violence remain high, though the battle lines don’t move much over time. More importantly, though, when there ultimately is a surge, it breaks through powerfully, and the war is over in a rout. This is why the stalemate of the moment feels precarious. American society is under considerable pressures – economic, environmental, demographic and more – and these pressures are unlikely to relent anytime soon. Meanwhile, the utterly inept and thoroughly conservative Obama administration is every day more ruthlessly savaged from the right as some sort of alien predatory pretender to the throne, even while it continues to serve the interests of economic elites in a fashion that could make George Bush proud of the achievements of his third term.

Obama could never have hoped to have sustained the support of regressives in America (good god, surely he isn’t that deluded?), who suffer today from a mental illness that is broad and deep, such that perhaps 100 million Americans are more or less completely impervious to persuasion based on fact and logic. Centrists, on the other hand, seem basically interested in voting for whoever will lower their taxes the most. Since Obama is spending gobs of money – in part to save the country from the plunge over the cliff brought on by the Bush administration – the president is rapidly losing their support. And, because he has literally not done a single thing to satisfy those in his progressive base, while continuing to pursue policies indistinguishable from the hated Bush administration, Obama is rapidly losing popularity on the left as well. Moreover, if there are any personality characteristics that are most discernible at this stage of his presidency, they seem to be, first, always choosing the least bold course of action, and second, always empowering everyone else and then negotiating with them, including those trying to destroy him.

The upshot is that a year from now United States could find itself in a scenario reminiscent of 1994 – in which a failing presidency resulted in the loss of control of both houses of Congress to the Republicans – only worse. Obama doesn’t even have the luxury of turning to the right, as Bill Clinton did, because he’s already there, and because those policies don’t solve the problems increasingly bedeviling the American public, however much temporary satisfaction they might bring to those who crave a good foreign war, the occasional execution of a condemned inmate, or a bit of racist violence, in order to feel better about themselves. Meanwhile, regressives are having a field day trashing yet another Democratic president who refuses to stand for anything, even if that just means fighting back to preserve his own presidency.

Who could have imagined, six months ago, that the ideology of George W. Bush and Dick Cheney would be poised for a comeback, perhaps in an even more toxic form than what we suffered through these last eight years? But that is, indeed, precisely where we find ourselves. The danger in America for some sort of radical ideology to take control of the government and society – yes, I guess I’m inevitably talking about fascism here, despite trying to avoid that overused term – seems all too potent to me now, even in this moment of stasis. Americans are already angry, and they’re all too often shockingly stupid about where they direct that anger. Imagine the sort of sentiments that might be coursing through the veins of the body politic twelve or twenty-four months from now, should the economy continue its downhill slide or sustain only a tepid jobless recovery, should the right maintain its relentless drumbeat of vitriolic and escalating deceit, and should the so-called left of Reid, Pelosi and Obama continue to offer in response its porridge-bland menu of non-solutions, pulled from the fridge and served piping cool at room temperature.

That’s a lot of ‘ifs’, but do any of them seem far-fetched? I think not.

My gut tells me that, however ludicrously inflamed is the current political discourse, relatively speaking, it’s probably pretty quiet.

Relative, that is, to what comes next.

Quiet, that is, as in the quiet before the storm.

For a different perspective on the power of the financial elite, you could do worse than to read this article in the current issue of The Atlantic.

Simon formerly worked for the International Monetary Fund and has written an article that should serve as a wake-up call to those who think that the economy is improving. As long as the financial oligarchy remains intact, the “recession” will not end.

Now, if the Tea Party protesters would take to the streets and demand the breakup of the banks that are “too big to fail”, I’ll take back all my unkind words. But I don’t expect that either of those scenarios will happen.

Now, what does this documentary have to do with the Fair Tax and Tea Parties? Everything. The prominent themes in the video center around individual freedom, liberty, and a rejection of the idea that government has a role in society. Government and liberals are evil and the enemy. And that is the whole thrust of the Tea Party movement. It is about straying from what Tea Party participants believe to be the “founding principles” of this country: a free, capitalist society where the government’s only job is to protect individual rights. I write this with considerable restraint, for any reasonably informed person knows that the Boston Tea Party was not about taxation without representation but about the efforts of a rising capitalist class in the colonies to secede from the British Empire. The Boston Tea Party was organized and led by Samuel Adams, a professional politician, and John Hancock, a wealthy businessman. Both were signers of the Declaration of Independence. For more information on the origins of the Boston Tea Party, consult the website of the Boston Tea Party Historical Society.

The main supporters of the Tax Day Tea Parties were FreedomWorks, don’tGo, and Americans for Prosperity. The Tea Parties were far from a “grass-roots” protest – they were organized and funded by corporate America, though tracing those connections is difficult. But SourceWatch is doing an admirable job of exposing the truth.

The Fair Tax, as I’ve noted in a previous post, is opposed by many Libertarian groups, who have never met a tax that they liked, and by many mainstream conservative groups, who support the present tax system because of the support it gives to Corporate America. O.K., so you can understand why the Fair Tax would be opposed by Libertarian groups, but why would conservatives, who benefit from the present system, also be opposed to the Fair Tax? Fair question. The answer, at least as far as I can determine, is that the conservatives are pragmatic, if nothing else, and see no possibility that the Fair Tax will ever be enacted. More importantly, they support the larger agenda of the Tax Day Tea Party movement, because by doing so, they are strengthening the regressive, anti-government movement in this country. A government that supports deregulation, such as we have experienced for the last 30 years, plays right into the hands of Corporate America and the financial manipulators on Wall Street that have ruined the financial futures of hundreds of millions of people across the world.

At the beginning of this post, I asked you to pay attention to the words of Paul Weyrich in the video. If you will read Corporate America’s Trojan Horse, from ALECWatch, which provides information about the American Legislative Exchange Council, you will understand better how Paul Weyrich and others harnessed the religious right to support the agenda of corporate America. It was a cynical ploy but it was wildly successful. Only now, after the events of last fall, has the alliance between the religious right and corporate America come into question. But never fear, corporate America is not done with us. They haven’t finished running this once great country into the ground for their benefit. The Tax Day Tea Parties are only the latest manifestation of their continuing agenda to enrich themselves at the expense of everyone else in this country.

So march right out there and shoot yourselves in the feet a few more times, Tax Day Tea Partiers! Call the liberals the evil menace, the very people who are trying to re-establish a modicum of balance in American society. Call President Obama a socialist, when he is far from one and when you don’t even know the meaning of the word socialist. Confuse Hitler’s National Socialism with democratic socialism and continue to support social Darwinism. Go ahead. Continue to spend 37 cents out of each tax dollar murdering innocents across the world in support of the agenda of the multi-national corporations. Suffer because the health system in the United States is broken. Be proud of the fact that the United States, with 5% of the world’s population, has 25% of the world’s prisoners. Endorse torture. Call for an end to the Federal Reserve System and demand that the IRS be abolished. Call for the enactment of a Fair Tax that is anything but fair. Focus on everything but closing the loopholes awarded to the wealthy by the current tax system. Rail against the re-distribution of wealth. Listen to every word that Joe the Plumber has to say. After all, he is vastly more educated than all those elitist holders of Ph.D degrees, right? While you are at it, keep undermining the educational system in this country. We don’t need no stinkin’ education! We learn everything we need to know from Joe the Plumber and Rush Limbaugh, right? Do everything except focus on the agenda of the power elite and corporate America. Keep those guns blazing and accuse immigrants, homosexuals, liberals, scientists, environmentalists, Muslims, atheists, secular humanists and anyone else you perceive as elitists of being your enemies. Do not, under any circumstances, question anything that your leaders tell you.

Am I bitter? Yes, and rightfully so. I just cannot, for the life of me, understand how so many Americans are so blind to the ways that they are manipulated by the power elite. Why do you continue to support those who are screwing you??

From the Bill Moyers Journal:

“William K. Black suspects that it was more than greed and incompetence that brought down the U.S. financial sector and plunged the economy in recession — it was fraud. And he would know. When it comes to financial shenanigans, William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s, has seen pretty much everything.

Now an Associate Professor of Economics and Law at the University of Missouri, William K. Black tells Bill Moyers on the JOURNAL that the tool at the very center of mortgage collapse, creating triple-A rated bonds out of “liars’ loans” — loans issued without verifying income, assets or employment — was a fraud, and the banks knew it.

And while there is no law against liars’ loans, Black points out that there are, “many laws against fraud, and liars’ loans are fraudulent. [...] They involve deceit, which is the essence of fraud.”

Only the scale of the scandal is new. A single bank, IndyMac, lost more money than the entire Savings and Loan Crisis. The difference between now and then, explains Black, is a drastic reduction in regulation and oversight, “We now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.”

Very watchable. Easily understood. Highly recommended. Watch it.

In an interesting essay, Van Jones outlines the challenges that progressive populists face in averting this scenario. This essay originally appeared in the Spring 2005 issue of the magazine Social Policy.

Kill Chicken Little: Use Smart Media to Build a Progressive Community

Sick and tired of being negatively defined by FOX TV and right-wing radio, pissed-off progressives have decided to fight fire with fire. Different groups are laying plans to build a giant, partisan media apparatus of their own.

Pundits, intellectuals, activists, investors and donors all have high hopes. They want Air America to go toe-to-toe with Rush Limbaugh and Sean Hannity. They want Al Gore’s forthcoming Current TV will take down FOX-TV. They hope progressive media will attract large audiences, undercut right-wing dominance and win many new converts. And they hope to succeed, mainly by “hitting back” at the conservatives’ on-air attack machine.

I hope their plans pan out. But I doubt they will. Of course, I believe that progressives can use media much more intelligently—and thereby dramatically expand left-wing power and influence. But progressives will not succeed merely by aping the Right’s tone and tactics. A copy-cat, me-too strategy will fall flat. We should not assume that the most powerful (or commercially viable) model will be a counter-attack apparatus that directly mirrors the Right.

To strengthen and expand our media capacity in the future, we progressives first need to conduct a sober analysis of the present: WHY has right-wing media captured so much of the market—and why have progressives failed to do so, thus far?

Don’t Blame The Ad Dollars

The cheap and easy answer is that corporate advertisers are more willing to monetarily support conservative content and programs. Therefore, the conservative programs have an easier time attracting the big ad dollars. That may be true.

But that kind of explanation dodges a deeper question. After all, at the end of the day, only the most ideologically committed sponsors will fail to go where the biggest audience is. And the biggest audience will generally flock to programming that is compelling, regardless of the underlying politics. The average media consumer could enjoy both conservative Bill O’Reilly and liberal Jon Stewart.

Conservative Media Rocks

So the deeper question is this: when it comes to building market share, what makes conservative programming so compelling? And what are progressives doing wrong?

Well, we don’t like to admit this. But right-wing media is sticky, fun and addictive. Their “news and opinion” media give conservative consumers a consistent, exciting, coherent world-view. Rush Limbaugh and Sean Hannity provide an exciting “good versus evil” storyline, updated daily. Meanwhile, religious conservative media feeds the audience’s hunger for meaning, inspiration and moral clarity. These twin offerings keep conservative media consumers hooked.

Progressive Media Bites

But progressive broadcasters offer neither a coherent storyline nor spiritual sustenance. Instead, progressive radio serves up a daily litany of complaint and disjointed critique. Most of our websites and publications are dumping grounds for depressing facts, helpless anger and conspiracy theories.

Innumerable angry books, bashing Bush, now choke landfills across America. The 2004 election cycle saw a veritable cottage industry of such screeds. But most were devoid of any positive ideas about how to improve people’s lives or fix the country. Our bad news mantra actually increases our audience’s overall pain and despair. The exceptions (like The Daily Show) just prove the rule. Too much “progressive media” has become “depressive media.”

The ugly truth is that conservative media magnetizes eyeballs and eardrums. But we progressives are practically DESIGNING our media offerings to repel the average viewer, reader or listener. Until we change that, any money that investors give to support a “new” progressive media machine will just be dollars going down a rat-hole.

Three Steps To Progressive Media That’s HOT!

So rather than blaming the bias of corporate advertisers, we should listen to what the market is trying to tell us.

To succeed, progressive media needs more than increased investments. We need more compelling programming. We need shows that people want to watch and listen to, every day. We need resonant messengers who can elevate the tone, quality and purpose of progressive media. We need to deliver real entertainment value. We need to respect the aesthetic sensibilities of a broader audience.

It all boils down to three things. First of all, we need to kill Chicken Little. … Second, investors should fund media that speaks to the heart, not just the head. … Third, we should use media to help people find real-world community with each other.

Kill Chicken Little

Okay, enough already with hectoring everyone about how bad everything is. We sound like the storybook Chicken Little, screeching to everyone about how “the sky is falling!” If reporting more bad news were the key to attaining power, leftists would already hold every office in the country. We have won over every vote we will ever get by weeping and wailing and gnashing our teeth.

Now, America is waiting to hear from progressives who can INSPIRE the country – and not just critique it.

Progressive media should be a beacon, illuminating real solutions for tough problems. Let’s make media that is uplifting, engaging and emotionally resonant—encouraging our hopes and sustaining our dreams. Imagine a new 80/20 rule: 80 percent of all “news and analysis” content must be uplifting and solution-oriented. Only 20 percent should depress people by pointing out what jerks the bad guys are. We can still speak to the ills of the world—but mainly as a springboard toward promoting our solutions to them.

And let’s not ape the Right’s sneering negativity. Yes, our pundits should be entertaining polemicists and great story-tellers. But progressives sound shrill and childish when we attempt the divisive, name-calling that works for Bill O’Reilly. We have to stand strong, anchored in a different ethos and sensibility. We can still be enteraining. But as we develop our authentic voices, Oprah Winfrey may have more to teach us than Rush Limbaugh. (Besides, she’s always had the higher ratings, anyway.)

Let Art Touch The Heart

Also let’s not limit our media efforts solely to the “news and analysis” format. Let’s support creative media that touches the heart, soul and funny bone—including novels, sit-coms, films, songs, theatrical productions. Such media can reach a vastly wider audience than any pundit program. Twice the funding should therefore go towards these efforts.

Powerful fiction can change facts. For instance, on the conservative side, the LaHaye’s Left Behind series has helped to turn Christian “rapture” politics into a social force, even inside the Pentagon. Pro-democracy fiction could pull society in a different direction.

Additionally, we can go beyond traditional artistic forms, altogether. New media technologies offer many new platforms: podcasting (creating content especially for MP3 players), flash animation, motion media to web-phone.

Imagine people with our values creating new anthems, downloadable as MP3’s or ringtones. Imagine a new “mash-up” musical genre—blending the spoken word and percussive elements of hip-hop, with the swelling choruses of gospel and the social content of folk. The possibilities are endless. Music and fiction can do the lion’s share of our outreach—if we support them.

From On-Line To Real-World Community

Perhaps the biggest unmet need in the country—and not just among progressives—is for a deeper sense of connection and community. People long to hear individual success stories, see workable community solutions and feel a deeper sense of belonging.

Millions of people are not immobilized because they don’t care or don’t have enough facts. They do care. Thanks to the internet, many are informed than ever. But they feel too isolated to believe they can make a difference. They know the problems, but not the solutions. They can name their political enemies. But they have yet to cohere a critical mass of political friends.

These are the people whom progressive media must engage. Not so much to inform them, as to inspire them. Not so much to help them find the facts, as to help them find each other.

The best and highest use of progressive media will be to help move ordinary people away from the isolation of their earbuds and computer screens—and into face-to-face, real-world gatherings with other human beings.

Our media can deliberately support face-to-face community – promoting reading groups, discussion groups, fan clubs, workshops and revivals. A main goal of all progressive media should be to aid their audience members in knowing which neighbors (within the same zip code) share their views.

Progressive media can drive people off their couches, out of their cars—and into each other’s arms. We know that the Right uses conservative churches for this purpose. We will have to get more creative.

Fortunately, new media can help. We can create the “digital breadcrumbs” that will lead people from computer screen isolation to real-world community. For instance, imagine getting regular installments of a funny, progressive, cartoon serial—delivered either through email or even directly to your cell-phone. The cartoon would feature a character as compelling as Bart Simpson or Huey from the Boondocks. Then imagine going to a “meet-up” fan event at a stranger’s home, to meet all your neighbors who love the cartoon. Imagine doubling the number of progressives in your life, right then and there.

Over time, imagine a whole “movement culture” built around new icons and parables—promoting a can-do, optimistic, “little engine that could” kind of culture—completely displacing the old, “chicken little,” defeatist, we’re-the-victims culture that currently saps all our efforts.

That would be a media system worthy of our efforts. And NONE of these ideas would primarily involve us launching histrionic attacks our adversaries.

An effective progressive media apparatus won’t be designed primarily to knock the Right down, but to lift our spirits up—and to bring us together, at last.

“Politicos and pundits on the right have resurrected an old bugaboo to hurl at Barack Obama’s economic recovery efforts: Class War!

“Even New York Times columnist David Brooks, the soft-spoken but steadfast defender of America’s corporate powers, has recently reached for this political cudgel to pound Obama’s budget. He wails that the tax burden to finance such big initiatives as universal health care and energy independence ‘is predicated on a class divide.’ Brooks expresses despair that ‘no new burdens will fall on 95 percent of the American people,’ adding with a cluck of the tongue that ‘all of the cost will be borne by the rich and all benefits redistributed downward.’

“Let us all now give a collective hug to the poor, put-upon rich, who for the past 30 years have been grabbing practically all of the financial gains generated in our economy, while the vast majority of folks have seen their real incomes decline. Then let us point out to Brother Brooks that such things as health care for all and a booming green economy actually will be of great benefit to everyone, including the rich.

“Yet, the Times columnist condemns ‘promiscuous’ redistributionists who want to spread the wealth. With a straight face, he cries out for a conservative vision of ‘a nation in which we’re all in it together – in which burdens are all shared broadly, rather than simply inflicted on a small minority.’

“What planet has this guy been on the last couple of decades? This ’small minority’ he weeps for is the same bunch of elites who’ve created tax dodges, trade scams, deregulation fantasies, de-unionization schemes, financial hustles, and other mechanisms to redistribute wealth from workaday families to them.

“It’s about time the burden shifts upward – and the benefits of our economy become broadly shared.”