Hillary's Middle Class Tax Cut Plan Is A Non-Starter

In Europe, citizens of high benefits nations (Germany, France, Denmark, Norway, Sweden, Finland)  understand one doesn't get something for nothing and that higher taxes are the price paid for state social support. Thus, citizens need not worry about health care, higher education debt and daycare - like those in the U.S. 

However, in this country, people are baited again and again by "tax cuts"  when they ought to know by now they don't work and will only force cuts to their most desired social benefits later, e.g. Social Security, Medicare and VA health benefits.  That tax cuts, including middle class, don't work has already been proven by a detailed (Sept. 15, 2010) analysis appearing in the Financial Times.

That analysis (p. 24) showed the earlier Bush tax cuts engendered "the weakest decade in U.S. postwar history for real, non-residential capital investment".

The FT analysis also observed that “during each decade from the 1950s to the 1990s, growth in real gross non-residential investment averaged between 3.5 percent and 7.4 percent a decade. During the 2000s it averaged a mere 1%”

This is evidence enough that the Democrats have to stop playing politics with these god damned tax cuts!

Yet on reading The Wall Street Journal (Nov. 21-22, 'Clinton Proposes Middle Class Tax Cuts', p. A4) one sees Hillary is ready to pander again, hoping enough Americans are stupid enough to bite in order to give her their votes.

A Clinton campaign aide quoted in the piece insists her plan:

"would inject hundreds of billions of dollars into middle class households enabling them to better cope with expenses."

But this is total snake oil. As we've seen with the Bush tax cuts, later unwisely extended by Obama and Co., a huge push was initiated in 2010  to also cut Social Security under Obama's "Debt Commission". This was no coincidence. Obama's advisors knew something would have to give because the extension of those cuts - especially to the middle class (since on the rich alone they don't pay the freight) would otherwise create $1.2 trillion in deficits over the total time employed. The only way to offset them would be to cut "entitlements" - and the 'Chained CPI" was proposed  before Democratic forces inveighed against it forcing Obama-ites to back down.

Now, Hillary wants to resurrect this baloney, not telling Americans that if they accept these tax cuts they will pay the piper later - likely in future cuts to much more valuable Social Security and Medicare benefits. But Hillary is determined realizing that Bernie Sanders' plan for REAL benefits to the middle class, including free college, expansion of Social Security and single payer health care, can only be paid for by at least a nine percent increase in taxes (though at this level defense cuts will also have to be considered).

So, in order to further separate herself from Sanders, she proposes middle class tax cuts  The outfit behind this scurvy plan is likely the Third Way bunch which we (on the Left) like to call "Republican Lite".    This is because instead of pushing progressive values and populist economics, they call for welfare "reform," talk about how cutting Social Security, and support awful trade deals like NAFTA and the TPP. And if that wasn't bad enough, they also take in millions of dollars in donations from the fat cats on Wall Street, big Pharma and the so-called "defense" industry.

According to the WSJ piece "Third Way, a centrist think tank said Mrs. Clinton is outlining an approach that should lift sagging middle class fortunes".

But they don't say it would only be for a time. Then the hammer of other benefits cuts would fall on these middle class folks to avoid deficits busting the nation.

Anyone who can do math would instantly see, as Clive Cook pointed out some 6 years ago in an article in the Financial Times, that middle class tax cuts are insanity. You simply can't get enough revenue with tax on the wealthiest alone, even the upper one percent. He argued it needs to go as low as the upper 40 percent which includes the upper middle class and the "middle middle class".

Obama didn't heed the repeated warning, not just from the FT but elsewhere, so no surprise barely two years after extending the Bush cuts for the middle class he began proposing Social Security cuts.

Ultimately the backlash and outcry forced Obama to take stock and realize he was batting on a losing wicket, see e.g.

http://www.smirkingchimp.com/thread/richard-eskow/54446/yes-the-left-killed-the-chained-cpi

Excerpt:

“As for the president and his supporters, it is clear that the chained CPI is well-liked by both the White House's key economic players -- and by many of the commentators who support them. That's unfortunate, because it is inaccurate, unjust, and economically unwise. But like it, they do.

It appears that both the Republicans and the White House like it, but neither wants such a politically unpopular measure hung around their neck -- especially in an election year.”

Hillary, should she get elected next year and try to push her misbegotten tax cuts through,  will also get the same reaction if she subsequently tries to cut "entitlement" programs to offset the cost of  the tax cuts.

Hillary's middle class tax cut plan is bad for another reason. As reported in The Economist (Nov 24), such "expensive" tax cuts "would require a squeeze on public investment. That would sap productivity, especially given the shoddy state of America's infrastructure."

The article adds that the "burden of shoddy roads, airports and energy infrastructure will cost every household $3,100 a year according to the American Society of Civil Engineers".

That, along with later Social Security and Medicare cuts, ought to convince any sensible American not to bite on Hillary's tax cut snake oil. Bernie Sanders' proposed increase in taxes -including on the middle class- is the only one that makes mathematical or policy sense - if salvaging the middle class is a priority.

Bottom line: You can't get something for nothing!

Progressives Have A “Wimp Problem”? NO – Only the Neoliberal Faction!

Salon.com columnist Michael Lind recently put out a provocative column entitled, Progressives Have A “Wimp" Problem. According to Lind:

"You can say one thing for conservatives—they know what they want and they fight to get it. Unfortunately, you can’t say the same thing for American progressives. They are wimps. When they are not reacting to conservative initiatives, they are hardly acting at all. If it were any more anemic, today’s “progressive movement” would cease to deserve the name, for lack of movement.

I use the term “progressive” in today’s sense, to refer to the mainstream center-left in American politics, which overlaps almost completely with the Democratic party. Within this mainstream, there is a spectrum from centrists like Barack Obama and Hilary Clinton, many of whose views would have put them on the Rockefeller Republican center-right a generation ago, to more liberal Democrats (if that is not an oxymoron) like Elizabeth Warren. But just as nearly all Republicans now insist that they are conservatives, so nearly all Democrats today insist they are progressive. Thus we can rephrase the question—why are Democrats so wimpy, while Republicans are so combative?"

Lind goes on to suggest that the reason has to do with the "class composition" of the parties, with Dems mainly pulling in the poor and lower middle class, underclass while the Reepos grab the richest voters, who also are the party of the white middle and upper classes and can exert the most influence on their politicos to do what they demand. The Dems can't, because first, their politicos basically ignore the poor working class - they don't even call them by name any more, all you hear is "Middle class, middle class". And second, the Democrat professional rich class often sides with the Reepos in pursuing similar economic goals. As Lind observes:

"wealthy Democrats would take a major financial hit, if capital gains taxes were taxed at the same rate as wage income, instead of the present privileged lower rate. That is why many Democratic politicians who look to Wall Street for campaign donations and in some cases perhaps future private employment have opposed this reform."

In other words, we see the Neoliberal imperative at work, weakening the party - destroying the bond between the lower class activist base and the upper echelon Wall St. schmoozers. As Lind also points out, which shouldn't be news to anyone: Unlike most Americans, rich and gentry-class progressives would benefit little from all but a radical expansion of Social Security. This is why they'd side with something like Obama's lame Chained CPI proposal. It's the perfect Neoliberal bromide for the 'wine and brie' Dems - and it's also one more reason I left the Democratic party over 15 years ago (and joined the Democratic Socialists), after Clinton and the weasly Dems passed the 'Welfare to Work' Reform' legislation. (I do vote with the Dems when it's the choice between 'cholera' and 'dysentery').

But the point Lind misses is that the class bifurcation is only part of the progressive wimp dynamic. It is also because the Dems contaminated their whole brand back in the Reagan-dominated 80s when they adopted the "Third Way"- DLC - Repub Lite shtick. This undermined their forceful protection and fight for the true Liberal values of Roosevelt and the New Deal and mutated them into aliens - with more in common with moderate Reeps. It also paved the way for their frenzied embrace of the "market" as arbiter of economic reality and eschewing FDR's legacy. In other words, it inspired them to betray that legacy to serve the "free" market idiom.

A more valid take on the emergence of progressive wimps is provided by Michael Tomasky in his (Aug., 2002) article 'Dems Fightin' Words' in The American Prospect. Tomasky observes, accurately I believe - from what I have witnessed - that the Dems (on account of adopting 'Third Way'- triangulation pussyfooting) eschewed political point-making and "hard nosed", no-holds barred political partisanship and replaced it with discussions of fact-based policy points, which appeal to "reason" and "temperance" but do little or nothing for core partisans. These are the very people Dems need to get out to the polls each mid-term election. This is why, again, few will turn out for next year's mid -terms. Why should they? The Dems as a party haven't offered any reasons to go to the polls other than scare-mongering of the bad things that'll happen if their followers don't rise to the occasion.

This gets old after a time. People need to see more, say like fighting like feral dogs to protect Social Security and Medicare from cuts in the next debt deal bargaining. Also, fighting to reinstate those food stamps - the SNAP program - and cease protecting military spending so much just to appear "tough" to repel the Repups continual refrain "not strong on national Defense". Please.

Tomasky attributes this substitution of "rational" policy talk (for good, old-style politicking) to a loss of identity that particularly accelerated with the onset of the Reagan plague years. The problem was that, in making this conscious switch of emphasis, the Dems lost the ability to really fight - verbally. No wonder they are constantly one-upped by Repub PR and spin machines. Worse, they don't even have the balls or the will to formulate a coherent narrative - say to energetically defend higher taxes to pay for what we need, or to aggressively defend expanding Social Security instead of cutting it with some cheesy backdoor dealing. And they sure as shit lack the balls to talk of cutting back seriously on defense and national security spending!

The end product is wimphood. Factored into this is the diminution and loss of an overarching and motivating Dem vision which keeps all the Rs energized and going to the polls- though they may differ on various platform matters and how to implement them (like 'faith-based' charities). As Tomasky notes, the Rs are "unified around a central idea which can be expressed in both positive and negative language: that they are the conservators of liberty and morality, and that liberals are sending the country to hell in overdrive. Whatever Republicans do or don't believe they believe in those two hypotheses. This unity gives them their passion."

Technically, the role of the rich Reepos is simply this: to feed campaign donations into any 'engine' that reinforces and amplifies the memes of their "central idea" - to keep their minions pouring to the polls in droves to teach them godless libs a lesson. There is no way, none at all - the Reeps would win any election with only their one percenters voting. No, the mass of their lower class voters have to be blinded enough to their own economic interests to cooperate.

In effect, the Repubs KNOW what they are fighting for, the Democrats do not. (Else they wouldn't so often splinter in their voting - as with extending the Bush tax cuts,initiating payroll tax cuts and more recently reining in the NAS.) Tomasky argues that the Dems have paid a huge price in lost voters for their turning to "reason and balanced" talk, rather than appealing to emotions (at least some of the time) like the Rs do. In addition, their lack of aggression at critical points during the past 20 years - when they had the opportunity to define themselves- has left many others yawning and not too impressed- hence the conscious choice to be independents - like me.

Tomasky concludes by saying that no, it isn't necessary to "ape the Repubs" or be partisan ALL the time. But it is some of the time, especially when particularly egregious legislation is on offer - and ONE party ought to stand up and be the moral backbone, as opposed to being enablers. A perfect example was a few years back when weak-willed Dems joined the Reeps in legalizing ex post facto the illegal Bush wiretaps. Hence, now proclaiming the invasive NSA surveillance is not a problem because "the new Fisa laws allow it". Yes, after you legalized what was once criminal! This is the sort of thing that drives true partisans (and true liberals) bats, and to seek other political affiliations.

At root, we are screwed by having two parties that endorse the same Neoliberal market paradigm. The only difference is one is a bit crazier than the other, and has more frenzied zealot followers. As Robert McChesney quotes Bill Moyers, in the former's book 'The Problem of the Media':

"Because they coveted the same corporate money, Democrats practically walked away from the politics of struggle"

Sadly, when you're not engaged in the politics of struggle, including vociferously defending the interests of the working poor as much as the middle class, you cannot be anything other than a wimp. Progressives, take note!

A Coming Schism in The Democratic Party? About time!

Those of us who are old school Kennedy (as in JFK) liberals, have watched for decades as the party of FDR and JFK has degenerated into corporatist pussies before our very eyes. We pretty well knew the writing was on the wall after Jimmy Carter became a one termer, and a new mutant breed of Dem emerged that sucked on the corporate teats and longed to be more like the new "king on the block",  Ronnie Raygun. Never mind Reagan single- handedly converted this nation into a massive debtor with his reckless armaments spending even as his ruthless social brutality increased the number of homeless by five-fold merely by tossing all the mentally ill out of their hospital beds.

How ANY Dem, president or other, could in any way hold up Reagan as an exemplar is beyond me and shows how far this country's political duopoly has gone into the crapper. But for a lot of that we can thank two corporate arms of the Democratic Party that shill for the Corporatocracy: the DLC or "Democratic Leadership Council" and "The Third Way". These mutants can call themselves whatever the hell they want but what they really are is Neoliberal puppets. And if Neoliberal at all, they are degenerates of mind and outlook.

Because of their entrenched position and now even directing all future vision, I predict that within ten years - maybe sooner- we will see a political schism within the Democratic Party into a corporate breed of DINO Dems, and a new breed of truly Progressive Democrats. At that point, I may well rejoin the Dems via the latter.

My ire now is directed at some of these D-corporate ass-suckers who are trying to make the REAL liberals-progressives look like "hair on fire" freaks in a frenzy because we have called out Barack on going back on his campaign promises. We've also called out the corporate poseur "Dems" for trying to ply us with utter bullshit that the Chained CPI is "not a real cut". I refer to tools such as a character calling himself "Deaniac 83" who scribbled this blog post entitled Dear Liberals, Chained CPI is NOT a “Cut” to Social Security. Get Over It

No fucking way will I "get over it", buddy boy! Not now or ever. And no amount of soft-soaping PR from a shill (maybe on hire by the Third Way or DLC) will cause me to! You little bastards are responsible for wrecking the party, either driving people out of it like you did me, or simply causing others to cease voting entirely - understanding that corporate hegemony trumps votes every time.

It's those like Deaniac 83, DINOS for sure, that give all Dems a bad name. One heholds this smug, self-described  “progressive” sneering that the chained-CPI benefit cut has “set off more alarm bells on the Left’s media than Pearl Harbor.”  Well, maybe because this could well be the Democrats' "Pearl Harbor". Because if Obama goes through with the Chained CPI, while he has the Reepos' backs against the wall, he will damage the Dem brand forever. 

As blogger Richard Eskow describes the effluent from this fool.......errrrrrr.....TOOL:

"The piece’s blend of arrogance and misinformation typifies the new style of the corporate-Democratic loyalist, with rhetorical ploys straight out of the Pete Peterson playbook: Benefit-cut opponents are “zealous liberals” and “ideologues” who speak with “hair-on-fire” hysteria. And this is not a cut in benefits."

But as I noted in a previous blog the chained CPI would lower benefits for the typical Social Security recipient (who retires at age 65)  by $653 a year at age 75 and by $1,139 a year at age 85    If this isn't a CUT what the hell is? The bottom line is that the affected senior has less and less to live on each year, even as costs will likely shoot through the roof (especially when the roof collapses on oil, and Peak Oil rears its full brunt).  As Eskow notes:

"The “chained CPI" .... lowers the rate at which benefits are increased by factoring in the reduced consumption of certain items – reductions that would be driven by cuts in benefits!"

In other words, those like my 90-year old mom, whose income will fall to $915 per month if she reaches 95, will barely be able to afford kibbles and low grade cat food.  But see, these Chained CPI Scrooges insist that there's never any cutting because the sensible senior just ratchets down his diet and expectations as the costs go up! So s/he ain't really losing! So, if beef soars, you go to pork chops. If pork soars you go down to chicken. If chicken soars you then ratchet down to tuna. If tuna soars you go down to sardines. If sardines soar, you go to the giant bag of kibbles. If kibbles soar.....well, I guess the senior has to eat shit.

Or as Richard Eskow puts it:

"This would quickly become a death spiral to the financial security of the elderly and disabled financial: They can’t afford beef so they buy chicken. They can’t afford chicken so they buy cereal. Then they go from cereal to Fancy Feast. From Fancy Feast to Purina. And so on and so on, ad infinitum, Ad nauseum."

Meanwhile, economists Kathy Ruffing and Paul Van de Water (not Pareto-based economists), who compared the U.S. Social Security benefits with those of similar programs in other countries noted that:


"Social Security benefits in the United States are low compared with other advanced countries.  Future retirees already face lower benefits (relative to their past earnings) than current retirees as a result of a rising Social Security retirement age and escalating Medicare premiums."

Ruffing and Van de Water found that Social Security benefits in this country provide 41.3 percent a retiring worker’s income on average, while those in other developed countries provide 60.8 percent. That’s roughly one-third less than other nations’ program — and yet this “liberal” argument claims that our cost-of-living calculations are so lavish that they must be slowed down.


DO these smug, self-satisfied turds like "Deaniac83" care? Hell no! All they care about is pumping out their loopy, obfuscating, pro-corporate, pro -plutocrat rhetoric and expecting the rest of us to swallow it. "Now be a good little do -be, and understand that Barack had no choice what with all those crazy people on the Hill!'" Sorry, bozo, don't buy it! Barack needs balls (or maybe a shot of 'T' or some Androgel), and if he had half the balls of John Kennedy, he'd teach those Teapee twerps, dysfunctional Reepos a thing or two. One example: He could have opted to use the 14th amendment last year to increase the debt ceiling on his own, as opposed to allowing the insane sequestration that now looms, unnecessarily I might add. But invoking the 14th would have required some balls. He didn't do it, now we have even more of a mess as this "fiscal cliff" evolves.

Sure it might have invited a constitutional crisis, but that is the price when you must confront insane nuts who somehow managed to get elected and are wreaking havoc - holding the nation hostage - by using the same ploy as leverage when they weren't taught properly not to do so the first time!

The difference between these wussie -ass, corporate-puppet Dems and the old line liberals like me, is we are still prepared to take the other side to the mat, not sit down with them and make tea....and give them everything they want.

If there is to be a Democratic Schism, I say bring it on! The sooner we get rid of the DINOS in the D- party, the once upon a time party of fearless men like FDR and JFK, the better off we all will be. Then we can leave the corporatists behind! 

If corporatism, on the other hand, is the only game to be left in town, then count me out as being any future contributor to its advancement.