The old proverb from Benjamin Franklin...
"In this world nothing can be said to be certain except death and taxes "
Can now be rewritten to include...
... "unless you're rich"
The “massive tax cut” touted as beneficial to the middle class, will in effect crush what’s left of the middle class in America. Politicians on both sides of the political isle strive for an ever purer strain of free enterprise combined with subsities for agriculture and industry, but nothing for workers. In the real world of industrial economic competition, governments help their citizens by creating policies designed to benefit industry and workers – except for the American government who appear to only care to increase profits for corporations. Dissenters from the free market, anti regulation, pro corporate fantasy, are quickly dismissed as protectionists, a word that ranks in the economics lexicon just below terrorist.
Within the generally poisonous atmosphere in Washington DC, America’s tax policy was the last bastion of partisanship one could depend on. I say “was” because there is now a stunning connection between Republicans and Democrats, and an even more stunning disparity between America’s tax policy, and the American people’s interests. The leadership of both parties have been promoting a global financial model that displays a total indifference to the fate of American jobs, and the latest incarnation of “tax reform” could end up becoming the final nail in our economic coffin.
Why would the US government, which has not been shy about defending the nation’s military industrial complex, be in such a hurry when it comes to altering tax policy? The story actually begins with the recovery of Europe and Japan after WWII and with the logic of the cold war. In that era the US was the industrial pre-eminent, and we were building what was to become the strongest economic system in the history of the world. We were also building an alliance system, and one of the prerequisites of membership in our new club was providing access for the huge consumer market of the United States.
We were so far ahead of the rest of the world that it didn’t really matter if military allies like Great Britain, Germany, France, Korea, or Japan, practiced a different form of capitalism, namely a state led economic development model. It also was irrelevant that contrary to the dogma preached by the US, state led economic development actually worked.
Moreover, our indifference to the rest of the world was justified because we had our own vast, unacknowledged system of industrial planning, research, and development – it was called the Pentagon. US industries where enjoying huge benefits from technologies created by military agencies like the Defense Advanced Research Agency (DARPA), and from the research spending of the National Science Foundation, and the National Institute of Health, and The National Aeronautics and Space Administration (NASA), who’s combined efforts subsidized our world class universities, and served as incubators of industry by handing off technological advancements for monetization.
In the end we where hypocrites of the highest order - we had our own “socialist” closet industrial policy, and criticized every other model, even though the system we created, was in no way coherent or strategic, and it has withered into nothing over time.
US policy makers have never adjusted to that reality, perhaps because it is so difficult to admit that the foundations on which decades of policy have been built - this fallacy of trickle down economics, financial services deregulation, and repeated tax cuts in the face of massive rising debt, are flawed beyond repair. Perhaps they cannot grasp that the advantages of free market capitalism are being crushed by a centrally controlled Leninist capitalism that circumvents international trade rules, and has proven to fail with every new financial collapse. Perhaps many in government now only serve as a prerequisite to their post-service employment in the private sector. Or perhaps campaign finance laws like “Citizens United”, that gave corporations the same rights as people, have given all the leverage to American corporations rather than American workers. Most likely, it’s a combination of all these factors.
Government programs and the private sector working together to solve issues appear to have only come up with innovative ideas that always benefit corporate America, but continue to abandon working Americans. To add insult to injury, the current tax plan is funded on the backs of the middle class and the working poor. So in the end we are increasing the debt load on the American worker, while ensuring that corporations and the Chinese workers they employ will be the only winners.
It’s clear that something must be done to address our dysfunctional tax system, it is also clear that the United States Government is failing to do it. What is less clear is why US workers should be expected to foot the 1.5 trillion dollar bill, particularly when the stock market achieves new highs almost on a weekly basis. How much more obvious can it possibly become before we come to the realization that US businesses and multinational corporations have not only manipulated the process, but have condemned the working class in America to decades of hardship – for the sake of profit.
Thanks for reading...
MDG...