Sunday, January 29, 2012

King John Economics

According to many versions of the Robin Hood legend, King John was in the habit of taking all of the peasants' Meager resources for his own ends. The very epitome of injustice, the vile king legalized robbery and forced the peasants into misery. He did all of this simply to make himself even wealthier than he already was.

The contemporary United States is clearly following the King John Model of Economics. We have created a system that enables a very small few to become obscenely wealthy as the direct result of policies that harm a great many of the rest of us.

Before addressing that injustice,however, we all must agree on indisputable facts. First among those facts is the massive inequality in our present American economic system.

To see just how unequal our system is consider the following chart from Bill Moyers web page:

The obvious thing to notice is that most American's incomes have not changed much over the last 30 years. The top 1%, however, has seen a massive explosion in their wealth. This is not, furthermore, a bit of good luck or hard work. The top 1% has profited directly from changes in public policy. Their taxes have been cut, slashed, dropped, and cut again ... they now pay but a fraction in taxes compared to what they did in the 1970s. Furthermore, the top 1%, consisting of largely financial industry fat cats, has made a bundle on deregulation of the banking industry. Many more examples could be cited, but you get the point: public policies have, almost without exception been geared to favor the extremely wealthy. The system has been rigged to make the richest among us even richer.

The primary defense of such a system is that allowing the top 1% so much wealth is better for all of us. It is claimed that all that wealth will eventually trickle down and find it's way into all our pockets. If the wealthy have more money, they will create more jobs, and invest in building communities. (another possible defense is to claim that it is unfair to tax the wealthy any more than we do. I have addressed this objection in another blog post, read it here)

But we have had these tax slashing, deregulating policies for over thirty years now. The wealth has NEVER trickled down. As the above chart shows, only the wealthy have seen their wealth explode greatly, the rest of us are not particularly better off regarding our income. Nor have policies created jobs. On the contrary, The American manufacturing industry has been all but destroyed, as jobs were outsourced overseas. Communities have not been rebuilt or restored, but eviscerated. We once had small family restaurants and little local book stores. Now we have only Walmart, Starbucks, and McDonalds. Small main street cities have become ghost towns, or perhaps just Walmart storage facilities.

And the cost for the 99% of us who have not benefited from the tax breaks and deregulation is that far fewer of us have health insurance, or if we do have it, it costs far more and covers much less. Not very many of us have pensions or reliable savings accounts. We are buried in debt, losing our homes, and seeing the retirement age pushed up as the amount of social security we will one day receive falls down.

There is only one truly reasonable conclusion we can reach. The massive profits of the 1% are the direct result of the huge losses for the 99%. By scamming us in the housing markets, stealing our money in the banks, denying us needed health care, wiping out our retirement, and burying us in debt, the richest have prospered almost beyond imagination.

These same wealthiest 1% drove the economy into the dust and, rather than be punished for all of the jobs they cost us, the homes they lost us, and the debt they piled on us, our government took our tax dollars and handed them over to the financial elite so they could pay bonuses and take spa days. Of course that's hardly surprising, given that our elected officials run campaigns financed by the 1%, and are thus beholden to their wealthy masters.

History tells us that the nobility of King John's age forced him to sign Magna Carta; to share much of his power and resources with them. The would not longer suffer personal injustice for the benefit of the King alone.

We are called today to force those who run our system to something far more far reaching than Magna Carta. Any system that benefits the few at the expense of the many is an unjust and immoral system. Because our system, more than most in the contemporary democratic world, greatly benefits a very few to the detriment of nearly everyone else, it is deeply unjust.

In itself, this realization does not tell us what economic system is most just; importantly, however, we know that we are obligated to change the system we have.

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