One Good Reason to Raise the Minimum Wage: the 99% Want Their Money Back

What's a big factor in driving up deficits and government spending? Lazy, no-good moochers on welfare, getting a free ride.

Aljazeera America: State and local governments have awarded at least $110 billion in taxpayer subsidies to business, with 3 of every 4 dollars going to fewer than 1,000 big corporations, the most thorough analysis to date of corporate welfare revealed today.

Boeing ranks first, with 137 subsidies totaling $13.2 billion, followed by Alcoa at $5.6 billion, Intel at $3.9 billion, General Motors at $3.5 billion and Ford Motor at $2.5 billion, the new report by the nonprofit research organization Good Jobs First shows.

Dow Chemical had the most subsidies, 410 totaling $1.4 billion, followed by Warren Buffett’s Berkshire-Hathaway holding company, with 310 valued at $1.1 billion.

The figures were compiled from disclosures made by state and local government agencies that subsidize companies in all sorts of ways, including cash giveaways, building and land transfers, tax abatements and steep discounts on electric and water bills.

Meanwhile, families in poverty are having trouble getting by -- because government supposedly can't afford to pay for things like food stamps or the Temporary Assistance for Needy Families (TANF) program. Welfare reform was supposed to lift people out of poverty, but it's done the opposite. And it was all predictable.

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Washington D.C., a Corporate Subsidiary

When the Senate rejected closing loopholes in background checks for gun purchases earlier this year, they definitely went against the will of the people. After all, a CBS News/New York Times poll found that 92% of voters supported the expansion. Yet the Senate, in a not-even-close 54-46 vote, rejected the bill, preferring instead the soft-on-crime status quo. With public support for the bill so nearly universal, why would the Senate side with criminals and reject what is a very common sense measure?

The answer to that is simple. The National Rifle Association owns a lot of senators. And let's not pretend -- as the NRA themselves do -- that the gun lobby organization is nonpartisan. The NRA owns the GOP. Of the fifty-three Democratic senators serving at the time, forty-nine received no funding from the NRA. Only seven Republicans could say the same. And you have to assume that some of those seven aren't funded because they're shoe-ins. Why waste money on a candidate who's in no danger of losing? Just throw up a national ad statewide and call it a day. The senate went soft on crime because the Republican Party did. And the Republican Party made sure criminals and terrorists could still get their weapons through the gun show loophole because the NRA demanded it.

And so we now have a status quo embraced by Senate Republicans, but rejected by 92% of Americans. Clearly, something is broken here. But there's a fix and it's steadily gaining ground.

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Stealing America Right From Under Our Noses

"Yes, 'there's class warfare, all right,' warns Warren Buffett. 'But it's my class, the rich class, that's making war, and we're winning.'"

That quote, much beloved by liberals concerned with economic justice, opens a piece at MarketWatch by Paul B. Farrell. Farrell then goes on to agree with Buffett and take the argument further; there's a "new American Civil War between the rich and the rest." Buffett, the billionaire investment capitalist behind Berkshire Hathaway, issued his warning in a New York Times op-ed back in 2006. It was true then, but it's much truer now. Led by gains at the state level, Republicans are moving to strip the poor and the middle class of things they've paid for with their tax dollars or worked for at their state jobs, then take all that money and give it to the wealthy.

But that's only the start. Writes Farrell:

Not just the 16 new GOP governors in Wisconsin, Michigan, Ohio, Florida, and across America fighting for new powers. Others include: Chamber of Commerce billionaires, Koch brothers, Forbes 400, Karl Rove's American Crossroads, Grover Norquist's Americans for Tax Reform -- which now has 97% of House Republicans and 85% of the GOP Senators signed on his "no new taxes" pledge -- the Tea Party and Reaganomics ideologues.

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You Can't be a Military Hawk and a Budget Hawk at the Same Time

According to Republicans, we absolutely must reduce the deficit. "Americans are left to wonder: Could we one day find ourselves at the epicenter of [a debt crisis like Greece's]?" asks Rep. Paul Ryan. "Could a European-style debt crisis one day happen right here in the U.S.? The answer is undoubtedly 'yes.' And the sad truth is that inaction by policymakers to change our fiscal course is hastening this day of reckoning."

Of course, in order for the US to suffer a debt crisis like they have in Greece, the rest of the world would have to go insane and begin to hate their money. Everyone would have to cash in all their bonds at once, regardless of maturity. For bondholders as a whole, this would result in taking a loss of billions of dollars. So those holding the most bonds would have to have a damned good reason to do it. This would only happen if everyone had some reason to believe that the bonds were worthless -- which, of course, no one does. Ryan's "day of reckoning" is fearmongering. There is no imminent run on America's bank. In fact, if there were, it would be irresponsible of Ryan to talk like this, since it would only serve to weaken confidence in the solvency of his own government. The fact that he feels comfortable issuing the warning so publicly is proof enough that he doesn't believe it. Then again, I suppose it's possible that he does think it's true and he's just an unhelpful idiot. Go ahead and pick whichever explanation suits you best; whether he believes his own nightmare scenario isn't relevant to this discussion.

What is relevant is a simple question; "If the deficit is the problem, what are you going to do about it?" Up until now, Republicans have felt safe offering sham alternatives to Democratic solutions. The GOP hasn't had to come up with anything that would actually work, since their opposition to most legislation has been a matter of political strategy; oppose everything, make Washington completely dysfunctional, then run against a dysfunctional congress by blaming everything on Democrats. It hasn't been especially good for the country, but it's good for the Republican Party and that's what really counts.





In the ideas department, Republicans have only have one product -- tax cuts. How this is supposed to reduce the deficit is a bit of a mystery, although House minority leader John Boehner has given a good try at explaining it.

"You equate the idea of lowering marginal tax rates with less revenue for the federal government," Boehner told reporters who questioned the "less money equals more money" math. "We've seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment, and more people paying taxes. And if you look at the revenue growth over those 30 years, you've got a prime example of what we've been talking about."

"This is practically the reverse of the truth," counters Talking Points Memo's Brian Beutler. "In the years after the Ronald Reagan and George W. Bush tax cuts, economic growth and employment were significantly lower than they were after Bill Clinton's 1993 tax increases."

In fact, the most recent round of Republican tax cuts make up a lion's share of the projected deficit.


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"Lower taxes=more revenue" makes for a nice theory, but no one has ever actually gotten it to work. So, if the deficit really is the problem, you've got to cut something. Something big. Something bloated.

Reuters:

U.S. lawmakers and watchdog groups on Friday called for a dramatic revamp of the defense budget to reverse widening U.S. deficits, including termination of the $382 billion Lockheed Martin Corp (LMT.N) F-35 fighter.

Representative Barney Frank, one of the chief negotiators working on financial regulation reforms, convened a bipartisan task force that identified nearly $1 trillion in budget savings that could be culled from the Pentagon budget through 2020.

"We are looking down the barrel of record deficits that threaten our national security," Laura Peterson, policy analyst with Taxpayers for Common Sense and a task force member, told a news conference. "There's plenty of fat to cut from the military budget without compromising our safety."

The United States currently spends more money on our military than any nation in the world. A lot more. In fact, a crazy lot more. In 2008, our military spending made up nearly half -- 48% -- of all military spending in the world. If Republicans really were the deficit hawks they like to pretend to be, they'd jump right on board here. But, of course, Republicans aren't serious about the deficit. They'd rather have you believe that the relative pittances we spend on social programs, foreign aid, and the commons make up most of the deficit. They'll trim around the edges, cutting back on education, unemployment benefits, and by privatizing whatever they can, but they'll never be able to cut that $1 trillion that way. Especially not if they stick to their tax-cutting fantasy economics. Deficit reduction is just an excuse to attack programs they oppose on ideological grounds.

"[Republicans are] quite happy to borrow hundreds of billions to spend on defense, because they just happen to like spending money on defense," writes American Prospect's Paul Waldman. "They don't find unemployment benefits, or health care, or any of a hundred other things we could spend money on to be particularly worthy, but instead of just saying so, they say, 'Well, we'd love to, but we just can't afford it.' You can't call yourself a 'deficit hawk' if the only programs you want to cut are the ones you don't like anyway."

Whether Ryan or Boehner join in on cutting military spending will determine whether or not they're serious about the deficit. You may be able to argue that the US needs a much larger military budget than other nations (I don't think it'd be a good argument, but that's not the point), but there's absolutely no way you can argue that we need to make up half the world's market. That is just insane.

So those are the choices; trim around the edges and puff yourself up into a phony deficit hawk or take a meat axe to the military budget and become an actual deficit hawk.

For myself, I don't think it's much of a mystery which way Boehner and Ryan will go.

-Wisco


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Cheney's Chernobyl

Let's be clear here, drilling five miles beneath the ocean surface is a desperate move. It's the sort of thing you'd do if you couldn't find oil any place else. Despite what Republicans like Sarah Palin have been saying, environmentalists didn't force drilling offshore by opposing drilling on land in places like the Alaska National Wildlife Refuge. Like deepwater drilling, drilling in ANWR would be a desperation move. Of the leases of federal land that oil companies hold, 68 million acres are unused. ANWR isn't the only place left. And the final nail in the coffin of "we have to do deepwater drilling" is oil price. If we were really so desperate for oil that we absolutely had to drill deep in the ocean, supply and demand would dictate that oil prices would be through the roof in historical terms. Nearly the exact opposite is true:



There is no logical reason to be drilling this deep. We don't need oil that badly.





As we see the environment in the Gulf Coast slowly poisoned, a common refrain is that this is our fault. It's our unending thirst for oil that forces us to do this -- I've walked down that road myself. But, again, the historical facts and further thought cast doubt this. If demand had forced this to happen, oil prices would reflect that. And, of course, with barrel after barrel after barrel spilling out into the Gulf by the minute, that waste isn't jacking up the price either. Turns out we can pour all that "necessary" oil down a drain and not have it make a dent. Sure, Americans burn oil as if it were our religion and that's a major problem, but to say that our demand has forced this upon ourselves isn't entirely accurate.

The fact of the matter is that the big black cloud of oil darkening the Gulf of Mexico exists for no good reason. A nearly unimaginable fortune of oil is lost and the only impacts are in public health and environment. No gas lines exist, no price spike is breaking us, no engine goes thirsty. Gusher aside, we now see what the world would be like if there were no Deepwater Horizon and we find it changed not at all. Throw in the gusher and we find it would've been a better world without it. I think we can stop talking about the "necessity" of offshore drilling now.

So why do we do this? Because it's expensive. And if something's expensive, then there's a lot of money to be made. You just need to figure out how to pass on that expense, so construction companies like Halliburton can cash in. So you get an army of lobbyists and have government create incentives for oil exploration. Suddenly, a big waste of time and money isn't so personally expensive anymore. It helps to have a corrupt corporate stooge like Dick Cheney to help you out. He actually let lobbyists write energy policy, which turned out to be awesome for the "drilling where we don't need to" industry.

CNN, July 2005:

As the energy bill moves closer to becoming law, debate is still raging over the first overhaul of national energy policy in a decade.

Supporters say the $14.5 billion bill will pave the way for more exploration and ultimately less reliance on foreign oil. Critics say it will enrich the already wealthy oil industry without addressing the need for relief from record oil and gasoline prices.

But if there's one thing that both parties can agree on, it's that the oil industry as a whole stands to benefit from its passage -- which could be an attractive point for investors looking to share the wealth.

"The bill will provide an elimination of royalties that oil and gas companies pay the government for drilling in the deep water in the Gulf of Mexico," CNN reported. "While details still need to be finalized, those companies that drill deeper will receive more relief, said KeyBanc vice president Kim Pacanovsky." The American Petroleum Institute estimated ending royalties amounted to a $5 billion giveaway to oil companies. And the only way oil companies could get that money was to drill where they had no business drilling.

The media has started calling Deepwater Horizon "Obama's Katrina." This is inaccurate.

It's Cheney's Chernobyl.

-Wisco


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