We have gone way beyond simple pay-to-play politics or even living in an oligarchy where the rich and powerful have a disproportionate influence over public policy. We are now at a point where the power of "We the People" that the Founders put in the driving seat of our democratic system no longer applies. Short of a few million dollars, don't even think about participating. We were promised that, if we played by the rules, we would enjoy the rewards of our efforts with good jobs, decent wages, and a steadily improving quality of life, not only for ourselves but, more importantly, for our children and grandchildren. If we invested our savings in a home, our own and our children's education, and for our retirement, we could sleep nights, confident that the much-vaunted American economic machine would deliver for us.
That has been a cruel joke. Many of us have been deprived of our livelihoods, savings, and homes while the perpetrators of this national and global calamity remain in charge and unpunished. Not only that, they continue to reap huge profits, salaries, and bonuses which they use to buy politicians and laws that further enrich them and insulate them from the type of reckoning that is essential.
This type of predatory behavior is not new, of course, but it is being conducted on a much larger scale and with more powerful tools -- and is, arguably, much more dangerous to the country -- than what occurred a hundred years ago during the Gilded Age and reoccurred in the 1930s, leading to the Great Depression. The damage caused to the economy and the democratic process by unregulated corporations and corrupt politicians led to reforms at the federal and state levels, including anti-trust laws and corporate, banking, stock market and workplace regulation.
These safeguards against corporate and other abuses were enforced for the next thirty years until "big money" took over the Republican Party in the 1970s and began a systematic assault on government at all levels, using vilification, distortion and outright lies to advance their cause. We are now experiencing the consequences of three decades of corporate deregulation, tax breaks for the wealthiest Americans, a complete disregard for the poor and vulnerable, and an all-out attack on working people and those who try to speak out for them.
All of this has been done in the name of supposedly well-established economic principles, originally laid out in the bible of the unfettered free-market capitalists, namely Adam Smith's 1776 book, Wealth of Nations. However, those who claim to be Smith's most ardent disciples have either never read it or been very selective in the lessons they have drawn from it. Smith would surely turn in his grave if he knew what was being done in his name. Far from advocating the completely unrestrained corporate behavior that is attributed to him by those who benefit most from that ethos, this long-time professor of Moral Philosophy (not Economics, Finance or Entrepreneurship, please note) sought to develop a comprehensive set of philosophical principles that would guide individuals in their quest to live virtuous lives and participate constructively in a variety of spheres in modern civilized societies, including commerce.
Smith's present-day acolytes should not only read Wealth of Nations more carefully but also its companion volume, The Theory of Moral Sentiments. As Nicholas Phillipson brilliantly sets forth in Adam Smith: An Enlightened Life, these two volumes were part of a long-term project of the Enlightenment to develop a comprehensive Science of Man, that included law, aesthetics, economics, history and ethics.
First and foremost, Smith believed that all constructive members of civilized societies needed to develop an internal moral compass -- what he called"the impartial spectator" -- that would enable them to do the right thing in their own as well as in other people's eyes. He illustrated how this principle would work:
"In the race for wealth, and honors, and preferments, (the individual) may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But, if he should justle (sic), or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play which they cannot admit of."
These are hardly the words of a person who would encourage the type of predatory behavior by the crony capitalists that we have witnessed in recent years. On the contrary, rather than propound such self-serving chimeras as if we increase the wealth of the rich, it will trickle down to the rest of us, the market is self-correcting, or the wealthy are the job-creators, Smith explicitly identified labor as the source of all other wealth. As he put it, "The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable."
Smith condemned those merchants and manufacturers of his day who argued that their nation's wealth and power flowed from expanding overseas trade. They "knew perfectly well in what manner it enriched themselves. It was their business to know it. But in what manner it enriches the country was no part of their business." Doesn't this sound familiar? Have we not been repeatedly witness to and victims of the self-enriching behavior that Smith decries but is advocated by the professed disciples of his economic principles? In fact, he goes even further in his condemnation of the merchant classes whom he viewed as frequently ruthless in their pursuit of wealth. "It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed."
Smith would be appalled by the behavior of those who justify their selfish actions by citing his name and the economic rules that he supposedly espoused. While it is true that he thought that markets worked best when laborers, artisans, farmers, merchants and others were freed from the control of feudal masters and royally-sanctioned monopolies, that did not mean that these folks should engage in cut-throat, race-to-the-bottom, survival-of-the-fittest competition with each other. On the contrary, in his view, "commerce... ought naturally to be... a bond of union and friendship."
The constraints on the free flow of goods and services that he was arguing against were those government-supported monopolies (royally-sanctioned, at that time) and the empire-building trade wars that they engaged in. In his view, promoting internal commerce would always be more beneficial to the public as a whole than foreign adventures, motivated by "the mean rapacity, the monopolizing spirit of merchants and manufacturers who neither are nor ought to be the rulers of mankind" but whose actions have, "during the present and preceding century, been... fatal to the repose of Europe." Instead of destructive international competition for power and resources, Smith believed that trade among nations - like that within the domestic economy -- should also be based on "a bond of union and friendship."
Not only do we need to revisit and apply, in updated form, the real versus the corrupted version of Smith's principles in order to set the country straight economically, we must also attend to the warnings of the Founders regarding the corrupting effect of money on the democratic process.
It never did. Nor was it ever a democratic system. This country was founded and run by lawyers and bankers. Always has been always will be.
Don't forget that Reagan raised taxes a dozen times.
His 1982 increase the biggest ever.
Your Hannity talk points are lame.
But when 40% or more don't pay any income taxes the whole society doesn't have a stake in sensible spending (which is a huge part of the problem). You have a system bereft of cost controls. Yes, the wealthy should pay more than others...but everyone should contribute.
"The constraints on the free flow of goods and services that he was arguing against were those government-supported monopolies" which is a bit like handing out funds to your friends at Solyndra, A123, Evergreen etc.. It is good to remember that in the tale of Robbin Hood he stole from the Sherriff of Nothingham (the government) whose taxes (serfs paid something like 30%) were too high. The politicians and their associates have never been comfortable with an independent citizenry.
We should all pay our "fair share" of taxes, WHEN wages for the working class return to a fair share of the corporate profits. Until then, these rants about those who pay NO taxes on their slave wages that barely keep food on the table, are absurd. If those at the top continue to take all they can, while demanding employees take pay and benefit cuts to keep their job...well then they should also expect to pay the most in taxes....
http://research.stlouisfed.org/fred2/series/PRS85006173
FRED« Nonfarm Business Sector: Labor Share
While corporate profits are increasing:
http://research.stlouisfed.org/fred2/series/CP
FRED« Corporate Profits After Tax
Mainly because of reduced wages and benefits:
"JPMorgan’s July 11 “Eye on the Market” newsletter put it, “Reductions in wages and benefits explain the majority of the net improvement in [profit] margins… US labor compensation is now at a 50-year low relative to both company sales and US GDP.”
The modern idea of universal, or even universal white male suffrage lagged a few years behind the founders.
He was very much opposed to large corporations and monopolies. At one point he also said that no society worthy of the name would leave certain functions to the free market. He didn't specify, but if he were around today he'd certainly apply that to health care and probably to education and other social goods.
The GOP has warped Adam Smith’s “The Wealth of the Nations” into their Ayn Rand Capitalism: The Unknown Ideal. The only problem is that Ayn Rand was a novelist, she was not an economist.
Adam Smith on taxes:
"The expense of defending the society, and that of supporting the dignity of the chief magistrate, are both laid out for the general benefit of the whole society. It is reasonable, therefore, that they should be defrayed by the general contribution of the whole society, all the different members contributing, as nearly as possible, in proportion to their respective abilities."
"When the toll upon carriages of luxury, upon coaches, post-chaises, &c. is made somewhat higher in proportion to their weight, than upon carriages of necessary use, such as carts, wagons, &c. the indolence and vanity of the rich is made to contribute in a very easy manner to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country."
(The Wealth of Nations)
So we were all Keynesians long before Nixon and Milton Friedman knew it.
Well, and let's not even wait for the day Ayn Randians find out about what's written in their gospel. The first quote is even more explicit than Jesus on taxation.
Is this the Ayn Randian tax gospel that you are hoping the GOP do not fiind out about:
. In her essay "Government Financing in a Free Society", Rand wrote:
“In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.”
Yes, let’s hope they never find out that Ayn was for voluntary taxes.
Ayn Rand's position on government finance is unusual, to say the least. Rand believed in a legitimate state, but did not believe in taxation. This left her in the odd and almost certainly untenable position of advocating a minimal state financed voluntarily. . In her essay "Government Financing in a Free Society", Rand wrote:
“In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.”
Disagree? Then please supply Smith's quote.
When "Big Money" took over the RNC in the 70's where were the Dems ?
Bottom line: you can't talk about deficits and where the money has to come from/ reductions vs taxes on the rich/ without really examining where the money actually is.
Because, as you point out, it was employed in the context of "free trade and free enterprise" versus "feudalism and monopolistic merchants" discussion.
How did THAT happen again?
I'm afraid it's quite impossible to get around the conclusion that there has been some really really bad scholarship going on in punditry ever since Reagonomics hit the stage.
Too bad that more than a handful of these really really bad scholars (in terms of knowledge of the history of their subject) got themselves that little thingy from Sweden.