Wednesday, January 28, 2009

The C-word

The great tower Moloch built for itself is about to fall. All we need to do is let it. Instead, political leaders all over the world, many of them well-meaning souls with the best of intentions, are struggling to find some means, any means, of propping it up. It's as though Goliath had stuffed himself so full that he'd collapsed of his own weight. And David were desperately trying to revive him, so the Philistines could reassuringly maintain the accustomed level of tyranny. Such is the power of the status quo, tradition, inertia, timidity, call it what you will.

President Obama is working on a plan. The Democrats are working on a somewhat different, probably better, plan. And the Republicans are -- well -- being Republicans. Some things never change. Columnist Bob Herbert, of the New York Times, wrote eloquently the other day about this rather quaint society of self-righteous fools and knaves, in an article titled The Same Old Song.
What’s up with the Republicans? Have they no sense that their policies have sent the country hurtling down the road to ruin? Are they so divorced from reality that in their delusionary state they honestly believe we need more of their tax cuts for the rich and their other forms of plutocratic irresponsibility, the very things that got us to this deplorable state?
He continues, writing very sensibly about the pickle we are now in, and the complicity of the Republicans in putting us there. But this is the passage that really got to me:
The question that I would like answered is why anyone listens to this crowd anymore. G.O.P. policies have been an absolute backbreaker for the middle class. (Forget the poor. Nobody talks about them anymore, not even the Democrats.) The G.O.P. has successfully engineered a wholesale redistribution of wealth to those already at the top of the income ladder and then, in a remarkable display of chutzpah, dared anyone to talk about class warfare.
Finally, someone in the mainstream liberal media has had the guts to invoke the dreaded words: "class warfare." To be safe, he puts the phrase in the mouth of the Republicans themselves. Fair enough, since they've been the only ones to even raise this issue. But what they, in their paranoia, see lurking in the deep dark recesses of Democratic party ideology, is exactly what is lacking in that ideology. In the daily barrage of media coverage on the economy and what's happened to it, the 800 pound gorilla lurking in the background is what no one wants to see.

The "wholesale redistribution of wealth" from the middle class to the "Masters of the Universe," accompanied by a relentless process of grinding the working class and the poor into the dust, has been going on for some time. It is not simply a result of the current economic meltdown. Too many people had been working for too long at too many $6 or $7 an hour "MacJobs" to support themselves, not to mention their families. (Barbara Ehrenreich has told this story with great eloquence -- and indignation.) Their only recourse was that credit card, what else could they be expected to do? And when they discovered that the house they were struggling to pay the mortgage on was apparently appreciating in value, well why not take advantage of the added equity to put a nice chunk of cash in their pockets by taking out a second mortgage? What these people didn't know was that the toxic debt they were being talked into accumulating at such an alarming rate was actually a commodity, to be bought and sold for literally billions in profit by the Masters of the Universe, who sliced it and diced into so many "tranches" no one knows any more how to keep track of it.

Already, back in 2006, at least one person was aware of what was happening -- and wasn't afraid to use the C-word. Amazingly enough this prescient individual was no less than the greatest "Master" of them all: Warren Buffet. A remarkable NY Times interview with Buffet actually had the dreaded word in its title: In Class Warfare, Guess Which Class Is Winning. This piece is definitely worth a read. Here's a sample:
Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.

Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
So. Almost three years ago, it was evident even to Warren Buffett that something was very wrong. And, of course, the tax code was only one small part of the general assault of the wealthy and super-wealthy on the classes they perceived to be so far beneath them as hardly worth acknowledging at all.

(There's a lot more to this article, which, by the way, was written by someone who describes himself as a conservative. Here's the link again in case you missed it the first time: Class Warfare. The whole thing is definitely a must read for anyone trying to evaluate the latest bailout proposals, from both left and right.)

But the Masters finally outsmarted themselves. Their tower of greed has been shaken to its foundations and will soon crumble of its own weight. Since everyone on the left side of the congressional aisles is afraid of the C-word, however, what we are hearing over and over again is that by bailing out Wall St., we are also protecting "main street." Nothing could be further from the truth. Class differences are real. Class warfare is real. The 800 pound gorilla may still be lurking in the background. It's only when he decides to pounce that there will be any real hope for meaningful democratic change.

The tower must be allowed to fall.


  1. Why do you bother preaching to those who have already lost and those about to lose. I have yet to hear a groundswell of protest against the system including sub-prime. The vast majority are waiting for the bailout which will allow them to carry on their profligate spending on credit and consider the renewal of their credit lines. Politicians and the Media are constantly predicting that the depression is almost over and we hang on to every thing they say in vain hope. We the people enjoy spending vast credit and we the people elect politicians who see the reduction of interest rates to get us out of recession. That's what got us into it in the first place.

  2. Well, Gregory, I preach to the losers to help them understand the nature of the shell game they just lost -- and encourage them to be smarter next time 'round. In any case, I'm not sure that "we" are in fact doing any of the things you say "we" are. I think the vast majority are simply looking on in shock and amazement, scratching our heads and trying to figure out what we need to do in order to survive. The powers that be are spinning like crazy, that's for sure. But I really don't think they expect anyone to actually take them seriously. They are spinning to reassure themselves and in the vain hope they can buy some time before the obvious consequences ensue. It's sad to see so little serious protest emerging from the general populace, but that's largely because the reality of what's happening hasn't really hit home yet for most. No one bothered to protest what was happening in Vietnam until large numbers of middle class kids starting getting drafted -- THAT got their attention!


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