Learn From History

If, as the French poet Baudelaire once wrote, the greatest trick the devil ever pulled was to convince the world he didn’t exist, the greatest trick that plutocrats ever pulled was to convince working people they cared about the working class’s best interests.

And, to paraphrase Santayana, those who fail to learn from history are condemned to vote Republican. Those who fail to learn from economics become senior fellows at the Heritage Institute and pontificate on the Sunday morning talk shows.

Seventy years ago, on Jan. 11, 1944, President Franklin Roosevelt, in the midst of World War II, laid out to Congress his vision for an Economic Bill of Rights that would establish an American standard of living higher than ever before.

“We cannot be content, no matter how high that general standard of living may be, if some fraction of our people — whether it be one-third or one-fifth or one-tenth — is ill-fed, ill-clothed, ill-housed, and insecure,” Roosevelt said.

He proposed “a second Bill of Rights,” which would assure, among other things, the right to a job; the right to earn enough to provide adequate food and clothing, recreation and a decent home; the right to adequate medical care and the opportunity to achieve and enjoy good health; the right to adequate protection from the economic fears of old age, sickness, accident, and unemployment; and the right to a good education.

Roosevelt died 15 months later, before he could solidify the rights established in his New Deal. He had gotten Congress to approve many reforms such as the Social Security Act of 1935, which supported retirees. lifting many of them out of poverty; creation of federal agencies such as the Works Progress Administration that gave jobs to eight million unemployed people during the Great Depression; labor laws established the right of workers to organize into unions; a price-support system kept farmers on the land; a federal minimum wage was a step toward a living wage; banks and the stock market were regulated; bank deposits were insured; antitrust laws were tightened; the GI Bill of Rights provided education, housing, job training and other benefits for millions of veterans returning from World War II; and tax rates increased to 94% for the wealthiest individuals to help pay for it.

Since then the plutocrats have worked tirelessly to rescind many of the reforms of the New Deal that helped create the middle class. Republicans regained control of Congress in 1947 and passed the Taft-Hartley Act, which restricted the rights of unions to organize and conduct strikes, over President Harry Truman’s veto. Congress reduced the top marginal tax rate to 91% during the postwar economic boom of the 1950s. That tax rate not only paid the bills but also encouraged the rich to plow profits back in their businesses, which created more good-paying jobs.

Fifty years ago, on Jan. 8, 1964, Lyndon Johnson called for a War on Poverty and took advantage of a Democratic landslide in the 1964 elections to make another run at implementing Roosevelt’s Economic Bill of Rights. His Great Society programs addressed civil rights, consumer protection, education, the environment, housing, medical care, urban problems, rural development and transportation. The laws included the Civil Rights Act, the Voting Rights Act, the Food Stamp Act and establishment of Medicare and Medicaid.

Johnson also agreed to reduce the top tax rate from 91% to 70%. That’s where the rates largely stayed until Ronald Reagan agreed with Congress in 1982 to reduce the top individual rate to 50% — and further to 28% in 1988.

In Bill Clinton’s first year in the White House, Democrats increased the top rate to 39.6% for the top 1.2% of wage earners and cut taxes for small businesses and the poor. The budget passed without a single Republican vote as GOP leaders predicted the tax increase would plunge the nation further into a recession. “This is the Democrat machine’s recession, and each one of them will be held personally accountable,” Rep. Newt Gincrich, who has a Ph.D. in history, said. Rep. Dick Armey, who has a Ph.D. in economics, predicted, “The banks will fail. Clinton’s plans will only worsen the recession.” Sen. Phil Gramm, who also has a Ph.D. in economics, agreed: “Clinton’s pie-in-the-sky fantasies will crash our economy.”

Instead, of course, the economy boomed in the Clinton years. The unemployment rate achieved a 30-year low of 3.9% in April 2000. The higher tax rates balanced the budget from 1998 through 2001, when he turned over a $128 billion surplus to new President George W. Bush in fiscal 2001. Then Bush cut the tax rates, which plunged the budget back into the red, and he gutted regulatory agencies. The free market finally got a chance to regulate itself, which allowed financial excesses that resulted in the Wall Street crash of 2008 and the Great Recession. The rich got richer — the government bailed out the banks that had bet on derivatives schemes — while the ground crumbled under the middle class. And the plutocrats managed to get embittered working-class whites to blame minorities and President Obama for their hard times.

Republicans are claiming that the War on Poverty was a failure, but census figures show the Great Society helped to reduce the poverty rate from 19.5% in 1963 when Johnson became president to 12.1% in 1969, when Richard Nixon became president. Poverty bottomed at 11.1% under Nixon in 1973 and climbed back to 15.2% in 1983 as Ronald Reagan dismantled many of the Great Society welfare programs. The poverty rate under Clinton dropped from 15.1% in 1993 to 11.7% in 2001, when George W. Bush took over. Poverty increased to 14.3% in 2009, when Obama became president. It now stands at 15%, with 46 million Americans living in poverty.

Corporate profits have returned and Wall Street has boomed under Obama but despite 46 straight months of private-sector job growth, creating more than 8 million jobs, the unemployment rate remains around 7% as 12 million people are still looking for work. But Republicans have insisted on budget cuts at the state and federal level that have resulted in layoffs of 728,000 government employees. Republicans in Congress also blocked the extension of unemployment benefits that expired Dec. 28 for 1.3 million long-term unemployed Americans, which puts a further drag on economic growth. Because Republicans never learn.

End the War on Weed

Colorado has taken the first step toward demilitarizing the war on marijuana as the state has authorized selected dealers to sell as much as an ounce of cannabis to state residents and one fourth of an ounce to tourists. Washington state is planning to authorize marijuana sales this spring. Since 1970 federal authorities have claimed the authority to ban the sale or possession of marijuana as a dangerous “Schedule I” drug in the same class as heroin, LSD and methaqualone with, among other things, “no currently accepted medical use,” which is nonsense. Under Attorney General Eric Holder the Department of Justice has agreed to look the other way for what amounts to an experiment.

In addition to the revenue, legalization of marijuana could undermine Mexican cartels, which get an estimated 60% of their revenue from pot. And making marijuana available in regulated shops, similar to liquor stores, would cut the link between casual users and underworld dealers, who might push more dangerous drugs.

Democrats might as well embrace the legalization of marijuana. Polls show younger voters are more supportive of relaxing marijuana laws than older voters who are more likely to vote Republican anyway. In Texas, where it’s been 20 years since Democrats won a statewide race, Kinky Friedman, a country singer-songwriter, humorist and novelist, is running for Texas agriculture commissioner as a “Blue Dog” Democrat, on the platform of legalizing marijuana. He said it could save the state $215 million annually in enforcement costs, as well as the cost of holding 74,000 non-violent prisoners, when the state could be generating hundreds of millions of dollars in tax revenue. His primary opponents are two little-known farmers who want nothing to do with the marijuana debate. Any of them would be better than the likely Republican. But for Kinky, on his third try for statewide office, legalizing weed is worth a try. — JMC

From The Progressive Populist, February 1, 2014


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