A Few Words of Wisdom From Michael Moore

A friend of mine forwarded this to me recently. A very interesting perspective which makes a lot of sense

30 Years Ago Today: The Day the Middle Class Died

By Michael Moore

From time to time, someone under 30 will ask me, "When did this all begin, America's downward slide?" They say they've heard of a time when working people could raise a family and send the kids to college on just one parent's income (and that college in states like California and New York was almost free). That anyone who wanted a decent paying job could get one. That people only worked five days a week, eight hours a day, got the whole weekend off and had a paid vacation every summer. That many jobs were union jobs, from baggers at the grocery store to the guy painting your house, and this meant that no matter how "lowly" your job was you had guarantees of a pension, occasional raises, health insurance and someone to stick up for you if you were unfairly treated.

Young people have heard of this mythical time -- but it was no myth, it was real. And when they ask, "When did this all end?", I say, "It ended on this day: August 5th, 1981."

Beginning on this date, 30 years ago, Big Business and the Right Wing decided to "go for it" -- to see if they could actually destroy the middle class so that they could become richer themselves.

And they've succeeded.

On August 5, 1981, President Ronald Reagan fired every member of the air traffic controllers union (PATCO) who'd defied his order to return to work and declared their union illegal. They had been on strike for just two days.

It was a bold and brash move. No one had ever tried it. What made it even bolder was that PATCO was one of only three unions that had endorsed Reagan for president! It sent a shock wave through workers across the country. If he would do this to the people who were with him, what would he do to us?

Reagan had been backed by Wall Street in his run for the White House and they, along with right-wing Christians, wanted to restructure America and turn back the tide that President Franklin D. Roosevelt started -- a tide that was intended to make life better for the average working person. The rich hated paying better wages and providing benefits. They hated paying taxes even more. And they despised unions. The right-wing Christians hated anything that sounded like socialism or holding out a helping hand to minorities or women.

Reagan promised to end all that. So when the air traffic controllers went on strike, he seized the moment. In getting rid of every single last one of them and outlawing their union, he sent a clear and strong message: The days of everyone having a comfortable middle class life were over. America, from now on, would be run this way:

• The super-rich will make more, much much more, and the rest of you will scramble for the crumbs that are left.
• Everyone must work! Mom, Dad, the teenagers in the house! Dad, you work a second job! Kids, here's your latch-key! Your parents might be home in time to put you to bed.
• 50 million of you must go without health insurance! And health insurance companies: you go ahead and decide who you want to help -- or not.
• Unions are evil! You will not belong to a union! You do not need an advocate! Shut up and get back to work! No, you can't leave now, we're not done. Your kids can make their own dinner.
• You want to go to college? No problem -- just sign here and be in hock to a bank for the next 20 years!
• What's "a raise"? Get back to work and shut up!

And so it went. But Reagan could not have pulled this off by himself in 1981. He had some big help:

The AFL-CIO.

The biggest organization of unions in America told its members to cross the picket lines of the air traffic controllers and go to work. And that's just what these union members did. Union pilots, flight attendants, delivery truck drivers, baggage handlers -- they all crossed the line and helped to break the strike. And union members of all stripes crossed the picket lines and continued to fly.

Reagan and Wall Street could not believe their eyes! Hundreds of thousands of working people and union members endorsing the firing of fellow union members. It was Christmas in August for Corporate America.

And that was the beginning of the end. Reagan and the Republicans knew they could get away with anything -- and they did. They slashed taxes on the rich. They made it harder for you to start a union at your workplace. They eliminated safety regulations on the job. They ignored the monopoly laws and allowed thousands of companies to merge or be bought out and closed down. Corporations froze wages and threatened to move overseas if the workers didn't accept lower pay and less benefits. And when the workers agreed to work for less, they moved the jobs overseas anyway.

And at every step along the way, the majority of Americans went along with this. There was little opposition or fight-back. The "masses" did not rise up and protect their jobs, their homes, their schools (which used to be the best in the world). They just accepted their fate and took the beating.

I have often wondered what would have happened had we all just stopped flying, period, back in 1981. What if all the unions had said to Reagan, "Give those controllers their jobs back or we're shutting the country down!"? You know what would have happened. The corporate elite and their boy Reagan would have buckled.

But we didn't do it. And so, bit by bit, piece by piece, in the ensuing 30 years, those in power have destroyed the middle class of our country and, in turn, have wrecked the future for our young people. Wages have remained stagnant for 30 years. Take a look at the statistics and you can see that every decline we're now suffering with had its beginning in 1981 (here's a little scene to illustrate that from my last movie).

It all began on this day, 30 years ago. One of the darkest days in American history. And we let it happen to us. Yes, they had the money, and the media and the cops. But we had 200 million of us. Ever wonder what it would look like if 200 million got truly upset and wanted their country, their life, their job, their weekend, their time with their kids back?

Have we all just given up? What are we waiting for? Forget about the 20% who support the Tea Party -- we are the other 80%! This decline will only end when we demand it. And not through an online petition or a tweet. We are going to have to turn the TV and the computer and the video games off and get out in the streets (like they've done in Wisconsin). Some of you need to run for local office next year. We need to demand that the Democrats either get a spine and stop taking corporate money -- or step aside.

When is enough, enough? The middle class dream will not just magically reappear. Wall Street's plan is clear: America is to be a nation of Haves and Have Nothings. Is that OK for you?

Why not use today to pause and think about the little steps you can take to turn this around in your neighborhood, at your workplace, in your school? Is there any better day to start than today?

P.S. Here are a few places you can connect with to get the ball rolling:

Main Street Contract for America

Showdown in America

Democracy Convention

Occupy Wall Street

October 2011

How to Join a Union by the AFL-CIO (they've learned their lesson and have a good president now) or

UE

Change to Win

MoveOn

High School Newspaper (Just because you're under 18 doesn't mean you can't do anything!)

This article was published at NationofChange at: http://www.nationofchange.org/30-years-ago-today-day-middle-class-died-1312662464. All rights are reserved.

A "Sane" Explanation and Approach to our Current Economic and Political Crises from Rep Jim Himes (D-CT)

I received this very interesting email from my Congressman today. It's worth a read. Finally, someone in Washington with a head on his shoulders:

For the first time since the late 1700s, the United States of America is at real risk of financial default. Other countries have defaulted before, but never as the result of deliberate foolishness. In 1939, in a fit of form over substance, the U.S. Congress created the "debt ceiling," a legal limit on our debt. Since then, that limit has been raised over 80 times. As a tool of fiscal discipline, it has underperformed, to say the least.

As a tool for highlighting political hypocrisy, the debt limit is unimpeachable. Members of Congress routinely vote to cut taxes or raise spending, both of which require borrowing that they then vote against. That's like running to the store, buying a flat screen TV, and then making a big show of not paying your credit card bill because of your mounting debt.

But this time, the sham has become deadly. Should the debt ceiling not be raised, the government will be unable to pay bills such as Social Security checks, Medicare payments, and salaries for our soldiers, judges, and air traffic controllers. Equally worrying, the U.S. would almost certainly lose its AAA credit rating, a national asset we have guarded for two centuries. Once again, middle-class families who can afford it least will suffer most—through increased interest on mortgages, small business loans, and credit cards, and through damage to retirement accounts and other savings.

While debates over the debt ceiling have reached fever pitch, it's been months since Congress seriously considered the problem most Americans see every day: a weak recovery and unacceptable levels of unemployment.

If there's one redeeming feature of the debt ceiling chicanery, it's the discussion it has prompted on how to address the unsustainable path of our nation's finances.

Warren Buffet famously said that "only when the tide goes out do you discover who's been swimming naked." Since 2000, when the Congressional Budget Office projected year after year of government surpluses, we've been swimming naked. We've spent without discipline on two wars, a drug benefit for Medicare, and a stimulus bill to jumpstart the economy. And we've taxed less and less, to the point where the federal tax burden we feel is now at its lowest level since 1958. So when the economic tide went out three years ago, there we stood, our trillions of dollars of debt for all to see.

As usual, the fevered rhetoric surrounding our finances is not helpful. Those interested in allocating blame for the debt find that it must be shared between Presidents and Congresses of both parties and notably, on the Great Recession.

The misinformation and demagoguery have been even worse. No, we are not three months away from becoming Greece. Yes, the magnitude and timing of spending cuts really matters; cut too much too soon, and our hesitant recovery might fall back into recession. And yes, the long term problems in Medicare and Social Security are real and should be equitably addressed sooner rather than later.

Anyone familiar with the details of these challenges knows that success will look something like the proposals made by the Simpson-Bowles Commission or more recently by the Senate's Gang of Six. Both proposals included significant cuts, additional revenue achieved mainly by eliminating tax loopholes and deductions, and proposed reforms to Medicare, Social Security, and Medicaid. Both proposals received bipartisan support from strange bedfellows like Senators Dick Durbin and Tom Coburn. Both proposals were also condemned by both ends of the political spectrum and by many interest groups.

Those (like most of the Republicans in the House) who insist that no additional revenue should be on the table must acknowledge that a "cuts alone" strategy would devastate our nation's investment in the highways, airports, and other infrastructure critical to our nation's prosperity. They must acknowledge that spending cuts will reduce or end the availability of education and health care to many of our least advantaged citizens. This is particularly true if we hesitate to make the huge defense and security budgets share in the effort. And they must explain why taxing the very wealthiest among us at the rates they paid in the 1990s would prohibit the stunning economic growth we experienced in precisely those years.

On the spending and entitlements side, we must acknowledge that because of our aging population and the continuing climb in health care costs, Social Security, Medicare, and Medicaid, if unreformed, will eventually squeeze out all other spending.

Social Security is the lesser and least urgent of these challenges. It is capable of paying promised benefits until around 2037. But ominously, for the first time last year, Social Security paid out more than it took in. That is a clarion call for us to do what Ronald Reagan and Tip O'Neill did in 1983 and reform the program to assure its availability for generations to come.

Reforming Medicare is a larger, more urgent, and more politically challenging issue. Medicare has unfunded liabilities (promises it has made to the Americans alive today) totaling almost $40 trillion. Working Americans pay into the system, but the average American family will receive more than $200,000 more in benefits over a lifetime than he or she pays in.

We all worry about our health care, particularly as we age. As we saw in the health care debates of 2009 and in the response to Congressman Ryan's Republican plan to "voucherize" Medicare, the topic can be used as a powerful political weapon, often at the expense of reform. Fortunately, in a delivery system as wildly inefficient as ours, there is much we can do to cut costs without affecting the availability or quality of care or without simply shifting costs as proposed by Chairman Ryan. Just ask citizens in other industrialized countries who have better health care indicators at roughly half our per capita cost. The federal budget, our economic health, and our capacity to keep the promise of health care for our seniors may depend on another look at how our nation conducts the business of health.

Time is short. As I have said for months, we should never have let the sham of our debt ceiling imperil our credit and our hesitant economic recovery. But if we seize the moment to achieve a comprehensive plan for financial stability, perhaps it will have been worth it. If not, we'll have this discussion again soon, not because of the debt ceiling, but because our creditors will force it.

My Progressive Principles

As we near the election -- although those of us with progressive leanings may lose -- I thought I would document the political principles I believe in. What the heck?

- The welfare of the human race and real people can never be measured in dollars and cents. The welfare of one human life is worth more than billions and billions of dollars.

- Money is "distributed" by a marketplace that is far from perfect and rewards disproportionately to people's contributions -- sometimes exponentially.

- Markets make great servants, but terrible masters.

- Tax breaks to the rich rarely pay for themselves. Government spending creates jobs.

- America was founded by immigrants and is a country of immigrants. That is its strength.

- Socialism is the ownership of all means of production by the state. Social Democracy is a system of government where private industry, the govt, the unions and other social organizations cooperate for the welfare of society. We could use a little dose of Social Democracy now and then.

- A person's accumulation of dollars should not determine the size and volume of his/her voice in the political process and government.

- The value of the next marginal dollar to a billionaire is far less than the value of that same dollar to society as a whole.

- The poorest persons access to healthcare, education, food and shelter trumps the richest person's access to his or her next dollar.

- Our nation has been polluted by people trying to discredit the source of messages contrary to their views instead of by addressing the issues themselves. These people are outright vile, mean spirited, and untruthful. I call this "Rovian Propaganda" and it is one of the very worst practices in our political arena and one of the biggest threats to our liberty.

- "Progressive" and "Liberal" are tremendously good words. Jesus Christ, Ghandi, Franklin, Lincoln, Galileo, Einstein, Mother Theresa, FDR, Martin Luther King and many more -- that's pretty damn good company and I'm proud to be counted as one of their followers!!!!

Are the top US tax rates too high?

I was recently asked whether I thought the top US income rates are too high. Here is my answer:

First of all, my issue is more with wealth accumulation than income. However, the two are pretty closely linked. Nonetheless, I will address the issue from more of a wealth perspective than an income one.

In order to address the issue, there are several basic questions to ponder, among others:

1. Is our society inherently fair? Do virtually all Americans have access to the services that will "level the playing field" (i.e. food, shelter, education, healthcare). Are entrepreneurs fairly incented to provide growth and innovation? Do all Americans have access to "life, liberty and the pursuit of happiness"?

2. What is the current skew of income and wealth in the US? What are the long term ramifications of this skew? If negative, what can be done address it?

3. What is the value of an incremental dollar to one of the wealthiest Americans vs. the value of that incremental dollar to society as a whole?

Okay, here's my short answers to those questions (I could probably write a book on them, but this will have to suffice for now):

1. Is society inherently fair?

I'd have to say no. Too many people don't have access to health care. Too many people are falling below the poverty line. Too many people don't have adequate retirement funds. Too many of our schools do not provide the quality of education necessary for our kids to have a shot at the "economic brass ring"

On the flip side, are entrepreneurs fairly incented? I would say yes and would also note that our economy seemed to do pretty well in terms of innovation and growth when the top tax rate was still significantly higher.

In terms of life, liberty and the pursuit of happiness, I would have to say that those at the very top have the opportunity to more fully experience life and participate in our society. With skads of money in the bank, one has more opportunity to take financial risk, drive up prices of "cherished goods" like housing, land, automobiles etc, and the freedom to pursuit almost anything their heart (and ego) desires.

I think even at the middle end, this access to LLPH is constrained -- not only in terms of material goods, but also in our ability to participate in our government. How many millionaires are there in the congress and senate (as a percentage of the total compared to the percentage of millionaires in the US as a whole)? Is it an oddity that the very richest person in NYC is mayor (this is not a criticism of Bloomberg whom I think is great, just a statement of fact)? Does a plethora of dollars from the very wealthy during elections "crowd out" the voices of a concerned majority?

Obviously, there are major inequities here.

2. What is the current income/wealth skew and what are its ramifications?

I know I'll sound like a broken record on this one, but the top 1% controls 42% of financial wealth (36% of total wealth, including housing). The average salary of a CEO today is 400 times that of an average worker vs. 40 times in the 1960s.

If we allow this to continue unfettered, the skew will only get worse. With middle income families only earning enough to "scrape by" and the very high end families having the luxury to save because of their high income (I read an interesting article by an economist comparing savings to a luxury good), I think it's pretty easy to read the tea leaves.

The ramifications? As more and more wealth gets concentrated in the hands of an elite few, we run the risk of becoming a "high tech banana republic." If that ever happens (and I hope not), the masses will begin to feel economically ostracized and will conclude that if the "rules" of society are unfair, why should we follow them? The rest is self evident.

3. The marginal ultility/value to a wealthy individual vs. society as a whole?

I think it's fair to say that the incremental utility/value of the "next dollar" (or million) to a billionaire is much lower than the utility/value of that dollar to society as a whole. To the billionaire, that dollar just represents "monetary gravy" and incremental cushion (to a certain extent encouraging risk, which is a good thing). Given a society with the healthcare, poverty, education and retirement issues that we have today, I would say that that incremental dollar could be put to much greater use.

So, yes, I believe that we do not tax enough at the high end.

My solutions:

- I'd rather tax wealth than income. A dual income household might only make the top income category for several years in their lifetime, after having worked very hard to get there for years.. They should have the right to use it to share in the bounty of our economy/society and just to pay for necessities like college education. However, once their savings accumulates to a certain point (incremental utility of dollar to them < incremental utility of dollar to society as a whole), there should be some sort of taxing mechanism, including, but not limited to an estate tax.

- I would eliminate the corporate income tax completely to spur investment

- I would lower the payroll tax to increase employment opportunities.

- I would surtax any funds earned in the US by US citizens that are transferred overseas.

I can't tell you what is the appropriate mix of these things and what their optimal levels are, but those are the types of economic overhauls I would consider

Battle Hymn of the RepublicansII.mov

To My Fellow Democrats and My Independent Friends

I want to urge you to get out and vote Democratic this year. Why? Number One: we need to support our President. Number Two: after 8 years of the Bush/Cheney "reign of terror" we finally have a President we can be proud of. Think about it: he's made more legislative achievements since anyone named LBJ. Were they controversial? Yes. Were they beneficial to middle class America? A resounding Yes. And he's been subjected to more ridicule, subterfuge and mistruths than any President in my lifetime.

Let's examine the issues. Is govt "taking over" healthcare? No. But today children with pre-existing conditions are covered and soon adults will be. Was the stimulus effective? Not as much as it could be, but the only reason is, is that the tea partiers have been on this crusade to say that deficits are "bad" in general. Are they? No. (someone please study Macroeconomics and, please read Keynes) When you build new infrastructure, you hire construction workers, architects, engineers, surveyors, who, in turn, spend their money at supermarkets and dept stores, who, in turn, need to hire more people and buy more inventory etc etc. The only problem with the stimulus, is it should have been significantly more. (Think about it in simpler terms. When your parents took a mortgage for $40K to buy a $50K house, they were probably nervous; when they sold that house for $150K 20 years later, the now reduced 40K mortgage was not that big a deal)

Has Obama been perfect? No. IMHO he should have held out for the public option and the stimulus should have been bigger. But you know what? With the party of NO saying NO just for the mere sake of saying NO, it wasn't easy. After two years, was Bill Clinton the Bill Clinton most people admire today? No. After two years, was Ronald Reagan the "saint" conservatives revere today? Of course not.

Democrats need to vote this November to give Obama some tailwind. Independents: I ask you this question? Despite the bad economy, do you really think the GOP and tea partiers have real answers. No! Their policies (i.e. reduce the deficit NOW and repeal Healthcare) will only make things harder for the middle class and, therefore, most of America.

Again,finally we have a President we can be proud of. Despite the vengeful rhetoric, we need to support him.

Is the deficit and debt necessarily a bad thing?

I keep on hearing people complain about how we’re living off the backs of our children by creating an insurmountable level of debt that they’ll never be able to pay off destroying America as we know it.

Scary thoughts.

As, a matter of fact, the flames of our beloved Tea Partiers are largely fanned by the words “deficit” and “debt.”

So I decided to take a look at some of the underlying numbers.

First, some facts:

· The current budget deficit stands at about 11% of GDP, about 1 percentage point more than in the last year of Bush’s administration. The percentage of deficit to GDP has risen as high as 28% during WWII, obviously a less-than-normal time in terms of fiscal policy. Right now we’re carrying on two wars (one that’s winding down, thank God) and are hopefully recovering from the greatest economic meltdown since the Great Depression – I think that qualifies as a “less-than-normal” time and justifies higher than usual spending. Historically, the percentage of deficit to GDP has fluctuated in both directions; it will go down again.

· Over the last several decades, much of America’s economic growth has been fueled by deficit spending. During the Reagan years, for instance, GDP grew by 83% while total federal debt grew by 187%; during Clinton’s administration we experienced 45% GDP growth and a 24% increase in debt and during George W Bush’s eight years GDP grew 45% while total debt grew 75%.

· When my parents bought our house for a grand total of $21,000 in 1962, they were scared to death of the $16,000 mortgage they signed up for. 20 years later they sold the house for almost $100K and paying off the mortgage was a non-issue. LESSONS LEARNED: the economy grows, prices go up (hopefully through productivity growth, not rampant inflation), debt is fixed.

· The current federal debt is approximately $15Trillion; it’s hard to get a definitive number for unfunded entitlements through 2050, but I hear that it’s somewhere between $50-80Trillion. If we take total 2010 tax receipts at $2.17Trillion and increase them by 2% per year (about the projected productivity growth for the intermediate term) through 2050, we generate cumulative tax receipts of about $130Trillion over that time (at 3% annual growth in tax receipts, it would be a cumulative total of $163Trillion). Entitlements come out of the budget, so by my simple reasoning we should be able to cover those “unfunded” entitlements as well as pay back the $14Trillion in current debt. Obviously, we would eventuallyhave to get back to a balanced budget or nearly balanced budget for this scenario to play out.

Now let’s ask the converse of the question: what would have happened to our economy 2008-2010 WITHOUT the bailouts, the govt “takeover” of the US auto industry, and the modest stimulus package?

Here’s my prediction:

· Well, if the current unemployment rate is 9.6% WITH all of the above, one would have to predict that it would be significantly higher WITHOUT all of the above. Same for the “real” unemployment rate which most people estimate is somewhere between 15-20%. So let’s say the official unemployment rate goes up to 15% and the “real” unemployment rate to 25-30%. The consequences would be disastrous.

· First of all, tax receipts would plummet and welfare payments, especially unemployment payments, medicaid and medicare payments would rise dramatically. In effect, by not spending we would in effect be creating the very deficit that we were trying to avoid.

· The housing market would take a major nosedive – worse than it is now. People would literally be put out on the street, leading to many social/law enforcement issues. Jobs of anyone employed in construction, the banking industry, the mortgage industry and other related industries would be in severe jeopardy.

· Due to low consumer demand, companies would lay off more people exacerbating the unemployment rate and all of the effects thereof.

· There would be a major sell-off of the dollar.

· The Chinese would probably demand a significantly higher interest rate to buy our debt (if they were willing to buy it at all). This, of course, would increase the amount of the federal budget devoted to interest payments and further exacerbate the “involuntary” deficit we created.

· The balance of trade might actually tip in the US’s favor because of generally less demand, depressing imports. Over time, though, if enough US production capacity was closed down in response to less domestic consumer demand, this situation could reverse, maybe dramatically – hard to tell.

· Multinationals with production capacity in the US (companies like Toyota, Sony, Siemens) would probably shut down over time due to lack of domestic US demand. Instead they would most likely choose to import their products to the US, further weakening the US balance of trade and the value of the dollar

· Public school budgets would be slashed, leading to classroom sizes of 50+ kids in most areas. Same for budgets for law enforcement, sanitation, and public works maintenance.

· Despite, the self-inflicted deficit, the wealthy would scream for a tax cut, which would be counterproductive because 1) they would probably NOT spend the money, but hoard it (most likely they would convert it to non-dollar currencies, further weakening the balance of trade in our Short Term Account) and 2) a tax cut would benefit hardly anyone else because X% of nothing is still nothing.

Perhaps in Milton Freidman’s world all of this is necessary to allow the free market to “adjust” the economy. Yes, eventually the dollar will weaken to such a level where there is incentive to buy US goods, increasing employment and consumption blah…blah…blah….However, I personally would not want to live through such a prolonged “adjustment” period. (According to Keynes, "in the long run we're all dead).

In effect, by not increasing the deficit in the short term with the intent of lessening the burden of debt passed onto our children, we might in fact not only unintentionally increase the level of total debt passed onto future generations but more so be lessening the quality of the America that we pass onto them – if, in effect, America as we know it would exist at all.