"Everybody for a good while accepted that the surpluses were real," insists Daniels, now the governor of Indiana. When pressed, however, he also concedes that by the time Bush took office, "the economy was already unraveling." Indeed, a wave of layoffs at the end of 2000 prompted Dick Cheney to warn, "We may well be on the front edge of a recession here."
The conflicting forecasts – one of sunshine and surplus, the other of gloom and contraction – should have set off alarm bells in the White House. But instead of rethinking the prudence of its massive giveaway to the rich, the Bush team dreamed up a new rationale for cutting taxes: to provide a needed jolt to the economy. "It's a fair thing to say that the stimulus argument was added in the spring of '01, when it had not been there before," Daniels says.
The stimulus argument was lousy economics. The previous two decades, after all, had demonstrated that "trickle-down" tax cuts don't juice the economy – they create bubbles and balloon deficits. Proponents pointed to Reagan's original tax cut in 1981, claiming it had spurred economic growth. But that is nothing more than "urban legend," Stockman says. The economy "did recover after 1982," he says, "but mainly because the Federal Reserve defeated inflation."
In fact, Stockman insists, Bush's tax cuts for the rich represent a bastardization of Reaganism. "The Republican Party originally said that prosperity comes from the private sector," he says. "But today's Republicans have become Chamber of Commerce Keynesians – using tax policy as a way of stimulating, boosting, prodding the economy." The Party of the Rich, in essence, was offering up a twisted version of New Deal policies that laissez-faire Republicans like Reagan had long opposed.
Spinning the tax giveaways as a stimulus plan did serve one useful function: It helped obscure the true purpose of the Bush tax plan. In an internal memo written just days after the inauguration, O'Neill advised Bush that he had a "great opportunity" for quick action on his tax cuts if he framed the choice for Congress as tax cut vs. recession. "We can get this argument on our ground," O'Neill wrote, "and stop the drumbeat about a tax cut for the rich."
With no patience for the specifics of tax policy, Bush deputized Vice President Dick Cheney to push through his tax cut for the rich. Once a deficit hawk who confessed that he was "not convinced that the Reagan tax cuts worked," Cheney had emerged from his tenure as CEO of Halliburton as a leading advocate for rewarding big corporations and their executives – even as GOP moderates warned that Bush's tax cut would foreclose needed investments in education and infrastructure. "The vice president had no interest in what I had to say," recalls Chafee. "He ran the show right from the beginning, and he suffered no compromise."
As the economy worsened, even the president's Treasury secretary grew concerned about the tax cuts. O'Neill pushed Bush to include a trigger mechanism that would rein in the cuts if the projected surpluses failed to materialize. "The trigger was a good idea – having the foresight that if things turned bad, we wouldn't have to reverse course in a difficult time," O'Neill says now. "But there was never any serious interest in it" from the Bush administration.
To Chafee, the opposition to a trigger mechanism seemed to offer a clue about the real goal of the tax cuts: They were designed not to boost the economy, but to force the kind of spending cuts championed by Grover Norquist and other small-government activists. His suspicion that the starve-the-beast crowd was driving the cuts was confirmed, he says, by a conversation he had while walking the Senate corridors with Trent Lott, then the GOP majority leader.
"What's going on here?" Chafee asked. Why not safeguard the economy by adopting a trigger mechanism?
Lott turned to Chafee. "We're going to strangle the spending," he said. On the stump, Bush hyped the benefits of his plan by emphasizing how much in taxes it would save a single waitress. But the real action was at the top rung of the income ladder. Over 10 years, the bottom fifth of income earners could expect to pocket an extra $744. That waitress might be left with enough cash to change out the clutch on her Corolla. The top one percent, meanwhile, would receive more than $340,000 on average – enough to buy his and hers Bentleys.
Wednesday, November 9, 2011
How Republicans Protect the Rich (4)
"Everybody for a good while accepted that the surpluses were real," insists Daniels, now the governor of Indiana. When pressed, however, he also concedes that by the time Bush took office, "the economy was already unraveling." Indeed, a wave of layoffs at the end of 2000 prompted Dick Cheney to warn, "We may well be on the front edge of a recession here."
The conflicting forecasts – one of sunshine and surplus, the other of gloom and contraction – should have set off alarm bells in the White House. But instead of rethinking the prudence of its massive giveaway to the rich, the Bush team dreamed up a new rationale for cutting taxes: to provide a needed jolt to the economy. "It's a fair thing to say that the stimulus argument was added in the spring of '01, when it had not been there before," Daniels says.
The stimulus argument was lousy economics. The previous two decades, after all, had demonstrated that "trickle-down" tax cuts don't juice the economy – they create bubbles and balloon deficits. Proponents pointed to Reagan's original tax cut in 1981, claiming it had spurred economic growth. But that is nothing more than "urban legend," Stockman says. The economy "did recover after 1982," he says, "but mainly because the Federal Reserve defeated inflation."
In fact, Stockman insists, Bush's tax cuts for the rich represent a bastardization of Reaganism. "The Republican Party originally said that prosperity comes from the private sector," he says. "But today's Republicans have become Chamber of Commerce Keynesians – using tax policy as a way of stimulating, boosting, prodding the economy." The Party of the Rich, in essence, was offering up a twisted version of New Deal policies that laissez-faire Republicans like Reagan had long opposed.
Spinning the tax giveaways as a stimulus plan did serve one useful function: It helped obscure the true purpose of the Bush tax plan. In an internal memo written just days after the inauguration, O'Neill advised Bush that he had a "great opportunity" for quick action on his tax cuts if he framed the choice for Congress as tax cut vs. recession. "We can get this argument on our ground," O'Neill wrote, "and stop the drumbeat about a tax cut for the rich."
With no patience for the specifics of tax policy, Bush deputized Vice President Dick Cheney to push through his tax cut for the rich. Once a deficit hawk who confessed that he was "not convinced that the Reagan tax cuts worked," Cheney had emerged from his tenure as CEO of Halliburton as a leading advocate for rewarding big corporations and their executives – even as GOP moderates warned that Bush's tax cut would foreclose needed investments in education and infrastructure. "The vice president had no interest in what I had to say," recalls Chafee. "He ran the show right from the beginning, and he suffered no compromise."
As the economy worsened, even the president's Treasury secretary grew concerned about the tax cuts. O'Neill pushed Bush to include a trigger mechanism that would rein in the cuts if the projected surpluses failed to materialize. "The trigger was a good idea – having the foresight that if things turned bad, we wouldn't have to reverse course in a difficult time," O'Neill says now. "But there was never any serious interest in it" from the Bush administration.
To Chafee, the opposition to a trigger mechanism seemed to offer a clue about the real goal of the tax cuts: They were designed not to boost the economy, but to force the kind of spending cuts championed by Grover Norquist and other small-government activists. His suspicion that the starve-the-beast crowd was driving the cuts was confirmed, he says, by a conversation he had while walking the Senate corridors with Trent Lott, then the GOP majority leader.
"What's going on here?" Chafee asked. Why not safeguard the economy by adopting a trigger mechanism?
Lott turned to Chafee. "We're going to strangle the spending," he said. On the stump, Bush hyped the benefits of his plan by emphasizing how much in taxes it would save a single waitress. But the real action was at the top rung of the income ladder. Over 10 years, the bottom fifth of income earners could expect to pocket an extra $744. That waitress might be left with enough cash to change out the clutch on her Corolla. The top one percent, meanwhile, would receive more than $340,000 on average – enough to buy his and hers Bentleys.
The conflicting forecasts – one of sunshine and surplus, the other of gloom and contraction – should have set off alarm bells in the White House. But instead of rethinking the prudence of its massive giveaway to the rich, the Bush team dreamed up a new rationale for cutting taxes: to provide a needed jolt to the economy. "It's a fair thing to say that the stimulus argument was added in the spring of '01, when it had not been there before," Daniels says.
The stimulus argument was lousy economics. The previous two decades, after all, had demonstrated that "trickle-down" tax cuts don't juice the economy – they create bubbles and balloon deficits. Proponents pointed to Reagan's original tax cut in 1981, claiming it had spurred economic growth. But that is nothing more than "urban legend," Stockman says. The economy "did recover after 1982," he says, "but mainly because the Federal Reserve defeated inflation."
In fact, Stockman insists, Bush's tax cuts for the rich represent a bastardization of Reaganism. "The Republican Party originally said that prosperity comes from the private sector," he says. "But today's Republicans have become Chamber of Commerce Keynesians – using tax policy as a way of stimulating, boosting, prodding the economy." The Party of the Rich, in essence, was offering up a twisted version of New Deal policies that laissez-faire Republicans like Reagan had long opposed.
Spinning the tax giveaways as a stimulus plan did serve one useful function: It helped obscure the true purpose of the Bush tax plan. In an internal memo written just days after the inauguration, O'Neill advised Bush that he had a "great opportunity" for quick action on his tax cuts if he framed the choice for Congress as tax cut vs. recession. "We can get this argument on our ground," O'Neill wrote, "and stop the drumbeat about a tax cut for the rich."
With no patience for the specifics of tax policy, Bush deputized Vice President Dick Cheney to push through his tax cut for the rich. Once a deficit hawk who confessed that he was "not convinced that the Reagan tax cuts worked," Cheney had emerged from his tenure as CEO of Halliburton as a leading advocate for rewarding big corporations and their executives – even as GOP moderates warned that Bush's tax cut would foreclose needed investments in education and infrastructure. "The vice president had no interest in what I had to say," recalls Chafee. "He ran the show right from the beginning, and he suffered no compromise."
As the economy worsened, even the president's Treasury secretary grew concerned about the tax cuts. O'Neill pushed Bush to include a trigger mechanism that would rein in the cuts if the projected surpluses failed to materialize. "The trigger was a good idea – having the foresight that if things turned bad, we wouldn't have to reverse course in a difficult time," O'Neill says now. "But there was never any serious interest in it" from the Bush administration.
To Chafee, the opposition to a trigger mechanism seemed to offer a clue about the real goal of the tax cuts: They were designed not to boost the economy, but to force the kind of spending cuts championed by Grover Norquist and other small-government activists. His suspicion that the starve-the-beast crowd was driving the cuts was confirmed, he says, by a conversation he had while walking the Senate corridors with Trent Lott, then the GOP majority leader.
"What's going on here?" Chafee asked. Why not safeguard the economy by adopting a trigger mechanism?
Lott turned to Chafee. "We're going to strangle the spending," he said. On the stump, Bush hyped the benefits of his plan by emphasizing how much in taxes it would save a single waitress. But the real action was at the top rung of the income ladder. Over 10 years, the bottom fifth of income earners could expect to pocket an extra $744. That waitress might be left with enough cash to change out the clutch on her Corolla. The top one percent, meanwhile, would receive more than $340,000 on average – enough to buy his and hers Bentleys.
How Republicans Protect the Rich (5)
After the meeting, Cheney set out to remove anyone who stood in the way of the new tax giveaway. He phoned O'Neill and demanded the Treasury secretary's resignation. He also dispensed with economic adviser Larry Lindsey, whose frank assessment of the possible costs of the Iraq War had threatened to derail the tax cut.
Budget-conscious Republicans in Congress who opposed the tax cuts could not be disposed of – but they could be strong-armed. Voinovich and Sen. Olympia Snowe of Maine, who refused to go along with cuts of more than $350 billion, were summoned to the White House for a meeting with Bush and Cheney. "The president wanted nearly a trillion dollars when he started with us," recalls Voinovich. "They were working on us: We need more, we need more." The senators held out for a smaller bill – though in hindsight, Voinovich says, there shouldn't have been any tax cuts. "Just think where we'd be if we'd gone along with what the president wanted," he says, laughing bitterly. "Where would we be today? Oh, my God."
In the end, Cheney's voice was the only one that mattered. In April 2003, when the bill reached the floor, the Senate deadlocked 50-50. The vice president cast the deciding "aye" that moved the tax cut into law. The benefits were even more tilted to the rich than the first Bush tax cuts. When fully phased in, 53 percent of the new cuts went to the top one percent. Those making $10 million or more pocketed an average of $1 million a year – twice the haul they made from the earlier cuts, and every cent of it borrowed. "It was a deficit-financed tax cut," concedes Hubbard, who chaired Bush's Council of Economic Advisers.
The deal privileged gambling on stocks over working for a living: The tax rate the richest pay on their long-term capital gains was slashed by 25 percent, while their rate on dividends fell by almost 60 percent. The move not only fueled speculation of Wall Street, it further widened the considerable gap between rich and poor. "It was a very destructive combination to have a national economic policy that stimulated debt-financed capital gains and then taxed the windfall at the lowest rate imaginable," says Stockman. "That contributed, clearly, to the growing imbalance in household income and wealth."
But Republicans didn't stop there. The following year, they passed the little-noticed American Jobs Creation Act. Named in the same Orwellian fashion as Bush's "Clear Skies" and "Healthy Forests" initiatives, the 2004 law allowed corporations to bring home billions in profits they had stockpiled in offshore tax havens – the very flight of capital that Bush had blessed by torpedoing tax harmonization three years earlier. Under the tax amnesty, corporations repatriated $300 billion in profits they had stashed offshore. But instead of paying the nominal corporate tax rate of 35 percent, they were taxed at just 5.25 percent.
The title of the bill notwithstanding, corporations invested almost none of their windfall in new factories or other measures to create the 500,000 jobs that Republicans had promised. In fact, many companies that received the biggest tax break actually slashed jobs. Hewlett-Packard laid off 14,500 workers – one pink slip for every $1 million in profits it shipped back home from overseas. All told, according to an analysis by the National Bureau of Economic Research, up to 92 percent of the "jobs creation" money was handed out to top executives and shareholders in a frenzy of dividend payments and stock buybacks. And thanks to the GOP's cut on investment income the previous year, wealthy individuals who pocketed the offshore profits paid the same rate on their bonanza, 15 percent, that a waitress at a diner might pay on her tips.
When Democrats regained control of both the House and Senate in 2006, they temporarily halted the GOP's binge of borrowing from the Treasury to give tax cuts to the wealthy. But that didn't stop Republicans from finding other ways to aid the rich. As the economy collapsed in 2008, the Bush administration used the crisis to provide a stealth handout to the nation's banks – even those at no risk of failing. Under the TARP bailout, overseen by Treasury secretary and former Goldman Sachs CEO Hank Paulson, taxpayers were forced to give banks $254 billion for assets worth just $176 billion – a handout of $78 billion to the financial sector, including $2.5 billion for Paulson's cronies at Goldman. "Paulson pushed the money into the hands of the banks – no strings attached, no accountability, no transparency," Elizabeth Warren, then-chair of the Congressional Oversight Panel, told Rolling Stone last year.
As with the offshore profits, the banks used the money to line the pockets of executives and investors – while doing little to speed the recovery of Main Street. "We gave an enormous subsidy to these financial institutions, and they have not returned it to the American people," said Warren. "The administration could have said, 'All right, take this and multiply it throughout the economy.' But Paulson never made that a condition of taking the money."
Taken together, the Bush years exposed the bankruptcy behind the theory that tax cuts for the rich will spur economic growth. "Let the rich get richer and everybody will benefit?" says Stiglitz. "That, empirically, is wrong. It's a philosophy of trickle-down economics that's belied by the facts." Bush and Cheney proved once and for all that tax cuts for the wealthy produce only two things: "lower growth and greater inequality."
The GOP's frenzied handouts to the rich during the Bush era coincided with the weakest economic expansion since World War II – and the only one in modern American history in which the wages of working families actually fell and poverty increased. And what little expansion there was under Bush culminated in the worst fiscal crisis since the Great Depression. "The wreckage was left by Dick Cheney, Grover Norquist and the gang," says Chafee. "This was their doing."
By driving the economy into the ditch, Republicans left the next president little choice but to drive up deficits in the short term by launching a massive campaign of federal spending to ward off a global depression. But even the $787 billion stimulus engineered by President Obama was hamstrung by his predecessor's ongoing giveaway to the wealthy: Republicans insisted that nearly 10 percent of every stimulus dollar be devoted to financing the annual "patch" to the Alternative Minimum Tax – the off-budget legacy of Bush's tax cuts for the rich. This was a $70 billion handout that inflated the cost of the stimulus package without stimulating anything – other than the paychecks of wealthy Americans.
From the outset of the Obama presidency, in fact, Republicans have engaged in a calculated, across-the-board campaign to protect the tax privileges of the wealthiest Americans. Their objective was made explicit by Rep. Eric Cantor during the height of the stimulus debate: "No Tax Increases to Pay for Spending" declared one bullet point on Cantor's website. "House Republicans are insisting that any stimulus package include a provision precluding any tax increases, now or in the future, to pay for this new spending." Having racked up the largest deficits in American history, Republicans suddenly found it expedient to return to their old-school rhetoric of deficit-bashing. "Under Bush, they had a story about deficits not mattering," says Michael Ettlinger, who directs economic policy at the Center for American Progress. "Then, all of a sudden Obama becomes president, and deficits matter again."
The battle reached a fever pitch over health care reform. To truly understand the depth of the GOP's entrenched opposition to Obamacare, it's crucial to understand how the reform is financed: The single largest source of funds comes from increasing Medicare taxes on the wealthy – including new taxes on investment income. According to the Tax Policy Center, Americans who make more than $1 million a year will pay an extra $37,381 in annual taxes under the plan. The top 400 taxpayers would contribute even more: an average of $11 million each.
Budget-conscious Republicans in Congress who opposed the tax cuts could not be disposed of – but they could be strong-armed. Voinovich and Sen. Olympia Snowe of Maine, who refused to go along with cuts of more than $350 billion, were summoned to the White House for a meeting with Bush and Cheney. "The president wanted nearly a trillion dollars when he started with us," recalls Voinovich. "They were working on us: We need more, we need more." The senators held out for a smaller bill – though in hindsight, Voinovich says, there shouldn't have been any tax cuts. "Just think where we'd be if we'd gone along with what the president wanted," he says, laughing bitterly. "Where would we be today? Oh, my God."
In the end, Cheney's voice was the only one that mattered. In April 2003, when the bill reached the floor, the Senate deadlocked 50-50. The vice president cast the deciding "aye" that moved the tax cut into law. The benefits were even more tilted to the rich than the first Bush tax cuts. When fully phased in, 53 percent of the new cuts went to the top one percent. Those making $10 million or more pocketed an average of $1 million a year – twice the haul they made from the earlier cuts, and every cent of it borrowed. "It was a deficit-financed tax cut," concedes Hubbard, who chaired Bush's Council of Economic Advisers.
The deal privileged gambling on stocks over working for a living: The tax rate the richest pay on their long-term capital gains was slashed by 25 percent, while their rate on dividends fell by almost 60 percent. The move not only fueled speculation of Wall Street, it further widened the considerable gap between rich and poor. "It was a very destructive combination to have a national economic policy that stimulated debt-financed capital gains and then taxed the windfall at the lowest rate imaginable," says Stockman. "That contributed, clearly, to the growing imbalance in household income and wealth."
But Republicans didn't stop there. The following year, they passed the little-noticed American Jobs Creation Act. Named in the same Orwellian fashion as Bush's "Clear Skies" and "Healthy Forests" initiatives, the 2004 law allowed corporations to bring home billions in profits they had stockpiled in offshore tax havens – the very flight of capital that Bush had blessed by torpedoing tax harmonization three years earlier. Under the tax amnesty, corporations repatriated $300 billion in profits they had stashed offshore. But instead of paying the nominal corporate tax rate of 35 percent, they were taxed at just 5.25 percent.
The title of the bill notwithstanding, corporations invested almost none of their windfall in new factories or other measures to create the 500,000 jobs that Republicans had promised. In fact, many companies that received the biggest tax break actually slashed jobs. Hewlett-Packard laid off 14,500 workers – one pink slip for every $1 million in profits it shipped back home from overseas. All told, according to an analysis by the National Bureau of Economic Research, up to 92 percent of the "jobs creation" money was handed out to top executives and shareholders in a frenzy of dividend payments and stock buybacks. And thanks to the GOP's cut on investment income the previous year, wealthy individuals who pocketed the offshore profits paid the same rate on their bonanza, 15 percent, that a waitress at a diner might pay on her tips.
When Democrats regained control of both the House and Senate in 2006, they temporarily halted the GOP's binge of borrowing from the Treasury to give tax cuts to the wealthy. But that didn't stop Republicans from finding other ways to aid the rich. As the economy collapsed in 2008, the Bush administration used the crisis to provide a stealth handout to the nation's banks – even those at no risk of failing. Under the TARP bailout, overseen by Treasury secretary and former Goldman Sachs CEO Hank Paulson, taxpayers were forced to give banks $254 billion for assets worth just $176 billion – a handout of $78 billion to the financial sector, including $2.5 billion for Paulson's cronies at Goldman. "Paulson pushed the money into the hands of the banks – no strings attached, no accountability, no transparency," Elizabeth Warren, then-chair of the Congressional Oversight Panel, told Rolling Stone last year.
As with the offshore profits, the banks used the money to line the pockets of executives and investors – while doing little to speed the recovery of Main Street. "We gave an enormous subsidy to these financial institutions, and they have not returned it to the American people," said Warren. "The administration could have said, 'All right, take this and multiply it throughout the economy.' But Paulson never made that a condition of taking the money."
Taken together, the Bush years exposed the bankruptcy behind the theory that tax cuts for the rich will spur economic growth. "Let the rich get richer and everybody will benefit?" says Stiglitz. "That, empirically, is wrong. It's a philosophy of trickle-down economics that's belied by the facts." Bush and Cheney proved once and for all that tax cuts for the wealthy produce only two things: "lower growth and greater inequality."
The GOP's frenzied handouts to the rich during the Bush era coincided with the weakest economic expansion since World War II – and the only one in modern American history in which the wages of working families actually fell and poverty increased. And what little expansion there was under Bush culminated in the worst fiscal crisis since the Great Depression. "The wreckage was left by Dick Cheney, Grover Norquist and the gang," says Chafee. "This was their doing."
By driving the economy into the ditch, Republicans left the next president little choice but to drive up deficits in the short term by launching a massive campaign of federal spending to ward off a global depression. But even the $787 billion stimulus engineered by President Obama was hamstrung by his predecessor's ongoing giveaway to the wealthy: Republicans insisted that nearly 10 percent of every stimulus dollar be devoted to financing the annual "patch" to the Alternative Minimum Tax – the off-budget legacy of Bush's tax cuts for the rich. This was a $70 billion handout that inflated the cost of the stimulus package without stimulating anything – other than the paychecks of wealthy Americans.
From the outset of the Obama presidency, in fact, Republicans have engaged in a calculated, across-the-board campaign to protect the tax privileges of the wealthiest Americans. Their objective was made explicit by Rep. Eric Cantor during the height of the stimulus debate: "No Tax Increases to Pay for Spending" declared one bullet point on Cantor's website. "House Republicans are insisting that any stimulus package include a provision precluding any tax increases, now or in the future, to pay for this new spending." Having racked up the largest deficits in American history, Republicans suddenly found it expedient to return to their old-school rhetoric of deficit-bashing. "Under Bush, they had a story about deficits not mattering," says Michael Ettlinger, who directs economic policy at the Center for American Progress. "Then, all of a sudden Obama becomes president, and deficits matter again."
The battle reached a fever pitch over health care reform. To truly understand the depth of the GOP's entrenched opposition to Obamacare, it's crucial to understand how the reform is financed: The single largest source of funds comes from increasing Medicare taxes on the wealthy – including new taxes on investment income. According to the Tax Policy Center, Americans who make more than $1 million a year will pay an extra $37,381 in annual taxes under the plan. The top 400 taxpayers would contribute even more: an average of $11 million each.
How Republicans Protect the Rich (6)
Rarely in American history has a tax so effectively targeted the top one percent. "It took Republicans about four months to figure out how much they hated it," says McIntyre, president of Citizens for Tax Justice. Republican rage over the president's health care plan has far less to do with the size of government or the merits of the individual mandate than the blow to the investor class. If Obamacare remains in place and the Bush cuts for the wealthy expire as planned, top earners will be paying a tax of 23.8 percent on capital gains – more than they have at any time since Clinton cut the capital gains tax in 1997. Health care reform, griped The Wall Street Journal, was nothing but a "sneaky way" for Democrats to wage a "war on 'the rich.'"
A key element of the GOP's war on the poor was cemented by the surprise election of Scott Brown to replace Ted Kennedy in the Senate in January 2010. As a candidate, Brown had made his high-mileage GMC pickup truck the star of his campaign commercials. "I love this old truck," he said. "It's brought me closer to the people." But Brown's real allegiance was to his wealthy donors: the billionaire Koch brothers, who bankrolled the Tea Party, and the financial interests who made a last-minute investment of more than $450,000 to propel Brown into office.
As soon as he was sworn in, Brown set about hollowing out the so-called Volcker Rule, which was designed to bar big financial institutions from using their own money to make risky, speculative bets on the market. By agreeing to provide Democrats with the crucial 60th vote on finance reform, Brown secured an exemption from the trading ban for mutual funds and insurers – a move directly benefiting Massachusetts-based financial giants like Fidelity and MassMutual. Brown also insisted that the Wall Street giants who caused the financial collapse – banks like Goldman Sachs and JP Morgan Chase – be allowed to continue using taxpayer-subsidized capital to gamble on hedge funds and private-equity deals. Former Fed chair Paul Volcker was furious: "Allowing a bank to invest in a speculative fund," he said, "goes against the very intent of the bill."
But Brown wasn't done. At the 11th hour, he forced Democrats to spike a tax on big banks and hedge funds that was designed to generate $19 billion to pay for the costs of financial reform. As a result, consumers and small banks had to pick up the tab. Brown, meanwhile, was richly rewarded for his efforts on behalf of Wall Street: During a three-week period at the height of negotiations, he raked in $140,000 in campaign cash from big financial firms, including Fidelity and MassMutual, Goldman Sachs and JP Morgan.
When Republicans won back control of the House in last year's midterm elections, they followed Brown's lead and moved swiftly to betray their Tea Party backers by running up more deficits on behalf of the rich. Within days of the election, Republicans not only secured a two-year extension of the Bush tax cuts for the wealthy, they also enabled America's richest scions to inherit millions of dollars without paying a dime in taxes. All told, the GOP's two favors for the party's biggest donors were secured in a lame-duck bargain that adds another $858 billion to the debt – an amount greater than the original stimulus plan the Republicans opposed so bitterly.
First, the GOP filibustered a Democrat-led effort to extend the Bush tax cuts on only the first $250,000 of income. The party leadership's hard-line stance – supported by barely a third of all voters – turned $90 billion over to the wealthiest Americans. It also set a precedent for further extensions that would cost nearly $1 trillion over the next decade. At the same time, the GOP drove through a deal that actually raised taxes for couples who make less than $40,000 a year – and then turned much of the extra cash over to couples who earn more than $200,000. Obama agreed to this massive transfer of wealth in order to retain the Bush tax cuts for the middle class – but the only other significant thing he got in return was a one-year extension of jobless benefits for the long-term unemployed.
But even the GOP's big payday for the wealthy pales in comparison to the handout that Republicans secured by gutting the estate tax. With the expiration of the Bush tax cuts, the inheritance tax was set to snap back to its Clinton-era standard: exempting the first $1 million of all estates from taxation, and stepping up the tax rate on the wealthiest estates to 55 percent. Instead, Obama agreed to raise the exemption to $5 million and lower the top tax rate to 35 percent – an apparent horse trade demanded by the Senate's second-ranking Republican, Jon Kyl of Arizona, who then allowed the president's nuclear-stockpile treaty with Russia to move forward in the Senate.
Shockingly, the deal actually sweetened the bargain the super-rich had received in 2009, enabling the heirs to the richest 0.25 percent of estates to pocket an extra $23 billion they would have otherwise owed in taxes under Bush. In fact, under the terms Kyl demanded, the federal government will spend more to eliminate or cut taxes for 100,000 rich people than it will to extend unemployment benefits for 7 million Americans.
In a little-noticed detail, the two-year deal also created a loophole that allows the wealthiest couples to pass on $10 million to a child today – while they're still living – without paying a penny of tax. That means the rich can offload their wealth to their children before it increases in value – evading higher estate taxes in the future. "In the next two years," one tax attorney crowed to The Wall Street Journal, "wealthy people have an unprecedented opportunity to push a lot of the value of their assets out of the estate-tax system." According to tax historians, the new rules create the most generous tax environment for wealth transfers for the super-rich since 1931.
And that was just the beginning of the budget-busting handouts the GOP demanded for the rich. In April, Republicans in the House passed a budget that would have slashed income taxes on corporations and the wealthiest Americans to just 25 percent – a $3 trillion giveaway that would have been financed by doubling out-of-pocket expenses for future retirees on Medicare. Top Republicans like Cantor have also pushed for a replay of the American Jobs Creation Act – endorsing a new tax amnesty that would allow corporate giants like Apple and Pfizer to bring home $1.4 trillion in offshore profits that would be taxed at just 5.25 percent – a favor for the wealthy that would generate another $79 billion in deficits. "At the same time they're talking about these big deficit problems, running around saying, 'We're broke,' they're contemplating one of the most egregious tax giveaways in recent memory," says Greenstein of the Center on Budget and Policy Priorities. "The potential windfall gains are beyond enormous – and the lion's share would go to shareholders of these big corporations and their executives."
Never mind that the previous tax amnesty in 2004 created virtually no new jobs, as corporate executives eagerly pocketed the windfall for themselves: Republicans are once again claiming that the tax amnesty will enable corporations to spend their repatriated wealth putting Americans back to work. Mitt Romney, the GOP presidential front-runner, promises that the flood of corporate cash will generate "hundreds of thousands if not millions – of good, permanent, private-sector jobs." That flies in the face of basic economics, given that corporate America is already sitting on hundreds of billions in domestic cash reserves. What the tax amnesty would do, however, is boost stock prices. According to an analysis by JP Morgan, as much as two-thirds of the $1.4 trillion that would be brought back into the country would go to stock "buybacks and dividends" rather than "new factories, new jobs and new equipment," as Romney claims.
JP Morgan has a big stake in the debate – as do fellow bank-bailout beneficiaries Citigroup, Bank of America and Goldman Sachs. Combined, the four financial giants have $87 billion in untaxed profits stockpiled offshore. That's similar to the combined offshore profits of drug giants Pfizer and Merck at $89 billion. Tech giants Cisco and Microsoft have more than $61 billion they'd like to bring home, while Big Oil companies Exxon and Chevron have $56 billion. The company with the most to gain, by far – with offshored reserves of $94 billion – is corporate America's most notorious tax scofflaw, GE.
Romney's rival for the GOP nomination, Rick Perry, has also endorsed the tax amnesty for giant corporations. But for Perry, the proposal doesn't go far enough on behalf of the rich. "Why not talk about how you are going to repatriate those dollars at a substantially lower rate than 35 percent?" Perry said recently, stumping in New Hampshire. "Like zero."
In September, Perry went even further, proposing a flat tax that would take a sharp bite out of the paychecks of the poorest Americans – while slashing taxes by more than 40 percent for the wealthiest. When confronted by a reporter over the fact that his plan would give millions to the rich, Perry replied: "I don't care about that." His plan is almost as regressive as Herman Cain's original 9-9-9 plan, which called for increasing taxes on 84 percent of Americans – squeezing $4,400 a year out of every middle-class couple to finance a $455,000 tax cut for millionaires. What's more, both Perry and Cain want to abolish the estate tax entirely and eliminate all taxes on capital gains. A similar plan by Michele Bachmann would enable 23,000 millionaires to pay no taxes at all – while allowing the top 400 earners to pocket nearly two-thirds of their income tax-free, and then pass those riches on to their heirs without paying a penny. "It's madness," says Stiglitz. "And it is dangerous to the fiscal order. The wealthy know very well how to convert normal income to capital gains income."
A key element of the GOP's war on the poor was cemented by the surprise election of Scott Brown to replace Ted Kennedy in the Senate in January 2010. As a candidate, Brown had made his high-mileage GMC pickup truck the star of his campaign commercials. "I love this old truck," he said. "It's brought me closer to the people." But Brown's real allegiance was to his wealthy donors: the billionaire Koch brothers, who bankrolled the Tea Party, and the financial interests who made a last-minute investment of more than $450,000 to propel Brown into office.
As soon as he was sworn in, Brown set about hollowing out the so-called Volcker Rule, which was designed to bar big financial institutions from using their own money to make risky, speculative bets on the market. By agreeing to provide Democrats with the crucial 60th vote on finance reform, Brown secured an exemption from the trading ban for mutual funds and insurers – a move directly benefiting Massachusetts-based financial giants like Fidelity and MassMutual. Brown also insisted that the Wall Street giants who caused the financial collapse – banks like Goldman Sachs and JP Morgan Chase – be allowed to continue using taxpayer-subsidized capital to gamble on hedge funds and private-equity deals. Former Fed chair Paul Volcker was furious: "Allowing a bank to invest in a speculative fund," he said, "goes against the very intent of the bill."
But Brown wasn't done. At the 11th hour, he forced Democrats to spike a tax on big banks and hedge funds that was designed to generate $19 billion to pay for the costs of financial reform. As a result, consumers and small banks had to pick up the tab. Brown, meanwhile, was richly rewarded for his efforts on behalf of Wall Street: During a three-week period at the height of negotiations, he raked in $140,000 in campaign cash from big financial firms, including Fidelity and MassMutual, Goldman Sachs and JP Morgan.
When Republicans won back control of the House in last year's midterm elections, they followed Brown's lead and moved swiftly to betray their Tea Party backers by running up more deficits on behalf of the rich. Within days of the election, Republicans not only secured a two-year extension of the Bush tax cuts for the wealthy, they also enabled America's richest scions to inherit millions of dollars without paying a dime in taxes. All told, the GOP's two favors for the party's biggest donors were secured in a lame-duck bargain that adds another $858 billion to the debt – an amount greater than the original stimulus plan the Republicans opposed so bitterly.
First, the GOP filibustered a Democrat-led effort to extend the Bush tax cuts on only the first $250,000 of income. The party leadership's hard-line stance – supported by barely a third of all voters – turned $90 billion over to the wealthiest Americans. It also set a precedent for further extensions that would cost nearly $1 trillion over the next decade. At the same time, the GOP drove through a deal that actually raised taxes for couples who make less than $40,000 a year – and then turned much of the extra cash over to couples who earn more than $200,000. Obama agreed to this massive transfer of wealth in order to retain the Bush tax cuts for the middle class – but the only other significant thing he got in return was a one-year extension of jobless benefits for the long-term unemployed.
But even the GOP's big payday for the wealthy pales in comparison to the handout that Republicans secured by gutting the estate tax. With the expiration of the Bush tax cuts, the inheritance tax was set to snap back to its Clinton-era standard: exempting the first $1 million of all estates from taxation, and stepping up the tax rate on the wealthiest estates to 55 percent. Instead, Obama agreed to raise the exemption to $5 million and lower the top tax rate to 35 percent – an apparent horse trade demanded by the Senate's second-ranking Republican, Jon Kyl of Arizona, who then allowed the president's nuclear-stockpile treaty with Russia to move forward in the Senate.
Shockingly, the deal actually sweetened the bargain the super-rich had received in 2009, enabling the heirs to the richest 0.25 percent of estates to pocket an extra $23 billion they would have otherwise owed in taxes under Bush. In fact, under the terms Kyl demanded, the federal government will spend more to eliminate or cut taxes for 100,000 rich people than it will to extend unemployment benefits for 7 million Americans.
In a little-noticed detail, the two-year deal also created a loophole that allows the wealthiest couples to pass on $10 million to a child today – while they're still living – without paying a penny of tax. That means the rich can offload their wealth to their children before it increases in value – evading higher estate taxes in the future. "In the next two years," one tax attorney crowed to The Wall Street Journal, "wealthy people have an unprecedented opportunity to push a lot of the value of their assets out of the estate-tax system." According to tax historians, the new rules create the most generous tax environment for wealth transfers for the super-rich since 1931.
And that was just the beginning of the budget-busting handouts the GOP demanded for the rich. In April, Republicans in the House passed a budget that would have slashed income taxes on corporations and the wealthiest Americans to just 25 percent – a $3 trillion giveaway that would have been financed by doubling out-of-pocket expenses for future retirees on Medicare. Top Republicans like Cantor have also pushed for a replay of the American Jobs Creation Act – endorsing a new tax amnesty that would allow corporate giants like Apple and Pfizer to bring home $1.4 trillion in offshore profits that would be taxed at just 5.25 percent – a favor for the wealthy that would generate another $79 billion in deficits. "At the same time they're talking about these big deficit problems, running around saying, 'We're broke,' they're contemplating one of the most egregious tax giveaways in recent memory," says Greenstein of the Center on Budget and Policy Priorities. "The potential windfall gains are beyond enormous – and the lion's share would go to shareholders of these big corporations and their executives."
Never mind that the previous tax amnesty in 2004 created virtually no new jobs, as corporate executives eagerly pocketed the windfall for themselves: Republicans are once again claiming that the tax amnesty will enable corporations to spend their repatriated wealth putting Americans back to work. Mitt Romney, the GOP presidential front-runner, promises that the flood of corporate cash will generate "hundreds of thousands if not millions – of good, permanent, private-sector jobs." That flies in the face of basic economics, given that corporate America is already sitting on hundreds of billions in domestic cash reserves. What the tax amnesty would do, however, is boost stock prices. According to an analysis by JP Morgan, as much as two-thirds of the $1.4 trillion that would be brought back into the country would go to stock "buybacks and dividends" rather than "new factories, new jobs and new equipment," as Romney claims.
JP Morgan has a big stake in the debate – as do fellow bank-bailout beneficiaries Citigroup, Bank of America and Goldman Sachs. Combined, the four financial giants have $87 billion in untaxed profits stockpiled offshore. That's similar to the combined offshore profits of drug giants Pfizer and Merck at $89 billion. Tech giants Cisco and Microsoft have more than $61 billion they'd like to bring home, while Big Oil companies Exxon and Chevron have $56 billion. The company with the most to gain, by far – with offshored reserves of $94 billion – is corporate America's most notorious tax scofflaw, GE.
Romney's rival for the GOP nomination, Rick Perry, has also endorsed the tax amnesty for giant corporations. But for Perry, the proposal doesn't go far enough on behalf of the rich. "Why not talk about how you are going to repatriate those dollars at a substantially lower rate than 35 percent?" Perry said recently, stumping in New Hampshire. "Like zero."
In September, Perry went even further, proposing a flat tax that would take a sharp bite out of the paychecks of the poorest Americans – while slashing taxes by more than 40 percent for the wealthiest. When confronted by a reporter over the fact that his plan would give millions to the rich, Perry replied: "I don't care about that." His plan is almost as regressive as Herman Cain's original 9-9-9 plan, which called for increasing taxes on 84 percent of Americans – squeezing $4,400 a year out of every middle-class couple to finance a $455,000 tax cut for millionaires. What's more, both Perry and Cain want to abolish the estate tax entirely and eliminate all taxes on capital gains. A similar plan by Michele Bachmann would enable 23,000 millionaires to pay no taxes at all – while allowing the top 400 earners to pocket nearly two-thirds of their income tax-free, and then pass those riches on to their heirs without paying a penny. "It's madness," says Stiglitz. "And it is dangerous to the fiscal order. The wealthy know very well how to convert normal income to capital gains income."
How Republicans Protect the Rich (7)
The Republican mania for rewarding the rich with tax cuts has become so warped that the normal rules of budgeting no longer seem to apply. Arguing for an extension of the Bush tax cuts, Sen. Kyl spelled out what could well serve as the Party of the Rich's credo: "You should never have to offset the cost of a deliberate decision to reduce tax rates on Americans." The same rule, of course, doesn't apply to spending for those in need: At the time he called for more borrowing on behalf of the rich, Kyl was also fighting to deny unemployment benefits to 5 million Americans. "Continuing to pay people unemployment compensation," he scoffed, "is a disincentive for them to seek new work."
In retrospect, the true victor of the midterm elections last year was not the Tea Party, or even Speaker of the House John Boehner. It was Grover Norquist.
"What has happened over the last two years is that Grover now has soldiers in the field," says Bartlett, the architect of the Reagan tax cuts. "These Tea Party people, in effect, take their orders from him." Indeed, a record 98 percent of House Republicans have now signed Norquist's anti-tax pledge – which includes a second, little-known provision that played a key role in the debt-ceiling debacle. In addition to vowing not to raise taxes, politicians who sign the pledge promise to use any revenue generated by ending a tax subsidy to immediately finance – that's right – more tax cuts.
Norquist insists the measure is necessary to force Congress to rein in spending. "I'm not focused on the deficit," he says. "The metric that matters is keeping spending down." But in the real world, the effect of Norquist's oath is to prevent the government from cutting the deficit by ending tax breaks to the rich. All told, tax breaks cost the government $1.2 trillion each year – far more than defense spending ($744 billion), Medicare and Medicaid ($719 billion) or Social Security ($701 billion). And most of the breaks – think of them as government subsidies delivered through the tax code – go to the wealthy. The richest one percent of Americans receive a 13.5 percent boost in their incomes from such subsidies – almost double the benefit the bottom 80 percent receives. Under Norquist's pledge, lawmakers are forbidden from ending any kind of tax break – mortgage deductions for luxury vacation homes, subsidies for giant oil companies, lower tax rates for private-equity millionaires – without using the money to pay for another tax cut. "If you can't get rid of tax expenditures – if old Grover is going to call that a 'tax increase' – it's not just ludicrous, it's deception," says Simpson, the former GOP senator.
Ludicrous or not, Norquist's intransigence on tax expenditures killed the "grand bargain" that President Obama proposed during the debt-ceiling standoff. In return for $1 trillion in cuts to social spending and national security, plus another $650 billion in reductions to entitlements like Medicare, Obama asked Republicans to get rid of $1.2 trillion in wasteful tax subsidies. "Democrats weren't talking about raising taxes – they were talking about eliminating tax expenditures, for God's sakes!" says Voinovich. "Many of them should have been eliminated a long time ago." But with so many Republicans committed to Norquist's anti-revenue pledge, Boehner was forced to walk away from the deal.
"Grover's got 'em terrified," says Simpson. "I always tell Republicans, 'Hell, Grover can't kill ya. He can't burn down your house. The only thing he can do to you is defeat you in re-election – and if re-election means more to you than your country, then you shouldn't be in the legislature.'"
The battle over the debt ceiling underscores the GOP's rapid evolution into the Party of the Rich. The budget savings projected from the compromise that Republicans wound up agreeing to – $2.1 trillion – won't even begin to pay for costs incurred by the Bush tax cuts. In their first decade alone, the cuts wound up depriving the Treasury of $2.5 trillion – with 38 percent of the money now going to the richest one percent of Americans. For all their talk of cutting the deficit in recent years, Republicans have spent far more of the public's money to subsidize the wealthy.
Indeed, since Republicans began their tax-cut binge in 1997, they have succeeded in making the rich much richer. While the average income for the bottom 90 percent of taxpayers has remained basically flat over the past 15 years, those in the top 0.01 percent have seen their incomes more than double, to $36 million a year. Translated into wages, that means most Americans have received a raise of $1.50 an hour since the GOP began cutting taxes during the Gingrich era. The most elite sliver of American society, meanwhile, saw their pay soar by $10,000 an hour.
America became a great nation with a prosperous middle class on the strength of a progressive tax code – one that demands the most of those who benefit most from our society. But the Party of the Rich has succeeded in breaking the back of that ideal. Today, says Johnston, "the tax system ceases to be progressive when you get to the very top of the wealthiest one percent." Above that marker, the richer you get, the lower your relative tax burden. "We have moved toward a plutocracy," Warren Buffett warned in a recent interview. "As people have gotten richer and richer, they have been favored by taxation – and have gotten richer to a greater degree."
Read more: http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109#ixzz1dFc8x3u6
In retrospect, the true victor of the midterm elections last year was not the Tea Party, or even Speaker of the House John Boehner. It was Grover Norquist.
"What has happened over the last two years is that Grover now has soldiers in the field," says Bartlett, the architect of the Reagan tax cuts. "These Tea Party people, in effect, take their orders from him." Indeed, a record 98 percent of House Republicans have now signed Norquist's anti-tax pledge – which includes a second, little-known provision that played a key role in the debt-ceiling debacle. In addition to vowing not to raise taxes, politicians who sign the pledge promise to use any revenue generated by ending a tax subsidy to immediately finance – that's right – more tax cuts.
Norquist insists the measure is necessary to force Congress to rein in spending. "I'm not focused on the deficit," he says. "The metric that matters is keeping spending down." But in the real world, the effect of Norquist's oath is to prevent the government from cutting the deficit by ending tax breaks to the rich. All told, tax breaks cost the government $1.2 trillion each year – far more than defense spending ($744 billion), Medicare and Medicaid ($719 billion) or Social Security ($701 billion). And most of the breaks – think of them as government subsidies delivered through the tax code – go to the wealthy. The richest one percent of Americans receive a 13.5 percent boost in their incomes from such subsidies – almost double the benefit the bottom 80 percent receives. Under Norquist's pledge, lawmakers are forbidden from ending any kind of tax break – mortgage deductions for luxury vacation homes, subsidies for giant oil companies, lower tax rates for private-equity millionaires – without using the money to pay for another tax cut. "If you can't get rid of tax expenditures – if old Grover is going to call that a 'tax increase' – it's not just ludicrous, it's deception," says Simpson, the former GOP senator.
Ludicrous or not, Norquist's intransigence on tax expenditures killed the "grand bargain" that President Obama proposed during the debt-ceiling standoff. In return for $1 trillion in cuts to social spending and national security, plus another $650 billion in reductions to entitlements like Medicare, Obama asked Republicans to get rid of $1.2 trillion in wasteful tax subsidies. "Democrats weren't talking about raising taxes – they were talking about eliminating tax expenditures, for God's sakes!" says Voinovich. "Many of them should have been eliminated a long time ago." But with so many Republicans committed to Norquist's anti-revenue pledge, Boehner was forced to walk away from the deal.
"Grover's got 'em terrified," says Simpson. "I always tell Republicans, 'Hell, Grover can't kill ya. He can't burn down your house. The only thing he can do to you is defeat you in re-election – and if re-election means more to you than your country, then you shouldn't be in the legislature.'"
The battle over the debt ceiling underscores the GOP's rapid evolution into the Party of the Rich. The budget savings projected from the compromise that Republicans wound up agreeing to – $2.1 trillion – won't even begin to pay for costs incurred by the Bush tax cuts. In their first decade alone, the cuts wound up depriving the Treasury of $2.5 trillion – with 38 percent of the money now going to the richest one percent of Americans. For all their talk of cutting the deficit in recent years, Republicans have spent far more of the public's money to subsidize the wealthy.
Indeed, since Republicans began their tax-cut binge in 1997, they have succeeded in making the rich much richer. While the average income for the bottom 90 percent of taxpayers has remained basically flat over the past 15 years, those in the top 0.01 percent have seen their incomes more than double, to $36 million a year. Translated into wages, that means most Americans have received a raise of $1.50 an hour since the GOP began cutting taxes during the Gingrich era. The most elite sliver of American society, meanwhile, saw their pay soar by $10,000 an hour.
America became a great nation with a prosperous middle class on the strength of a progressive tax code – one that demands the most of those who benefit most from our society. But the Party of the Rich has succeeded in breaking the back of that ideal. Today, says Johnston, "the tax system ceases to be progressive when you get to the very top of the wealthiest one percent." Above that marker, the richer you get, the lower your relative tax burden. "We have moved toward a plutocracy," Warren Buffett warned in a recent interview. "As people have gotten richer and richer, they have been favored by taxation – and have gotten richer to a greater degree."
Read more: http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109#ixzz1dFc8x3u6
How Republicans Protect the Rich (8)
Far from creating the trickle-down economics promised by Reagan, the policies pursued by the modern Republican Party are gusher up. Under the leadership of Majority Leader Eric Cantor, the House's radicalized GOP caucus is pushing a predatory agenda for a new gilded age. Every move that Republicans make – whether it's to gut consumer protections, roll back environmental regulations, subsidize giant agribusinesses, abolish health care reform or just drill, baby, drill – is consistent with a single overarching agenda: to enrich the nation's wealthiest individuals and corporations, even if it requires borrowing from China, weakening national security, dismantling Medicare and taxing the middle class. With the nation still mired in the worst financial crisis since the 1930s, Republicans have categorically rejected the one financial policy with a proven record of putting the country back on a more prosperous footing. "You hear the Republicans say that you don't dare raise taxes in a weak economy," says Stockman. "Ronald Reagan did – three times." Not even the downgrading of America's debt – which placed the world's only superpower on credit par with New Zealand and Belgium – has given GOP leaders cause to reconsider their pro-wealth jihad. In August, as the so-called Supercommittee began its work to complete the debt-ceiling deal by reducing future deficits by another $1.5 trillion, Cantor issued the Party of the Rich's marching orders, insisting that Republicans not buckle under the "tremendous pressure" to hike taxes and instead target spending cuts in "mandatory programs."
The composition of the committee offers little hope that Congress will hold the rich accountable for their share of the deficit burden. While Democrats appointed deal-oriented centrists like Sen. Max Baucus to the committee, Republicans stocked it with anti-revenue hard-liners, including Sens. Jon Kyl and Pat Toomey, who used to run the Club for Growth – an ally of Norquist's Americans for Tax Reform. "Your wallet is safe," Norquist tweeted after the Republican roster was announced.
In an interview with Rolling Stone, Norquist expresses pride that the GOP has been so thoroughly transformed since the days of Reagan. "It's a different Republican Party now," he says. Norquist even goes so far as to liken the kind of Republicans common in Reagan's day – those willing to raise taxes to strengthen the economy – to segregationists. The "modern Republican Party," he says, would no sooner recognize a revenue-raiser than the "modern Democratic Party would recognize George Wallace."
Norquist expresses no discomfort at the moral impact of his project – providing tax favors for the wealthy that are paid for by cutting services to those who truly need them. "I understand greed and envy," Norquist says. "The idea that somebody's making money and you want to steal some of it? That's an interesting idea. But it's not morality. It's certainly not justice."
Such extremist rhetoric – equating taxation with theft – is exactly the kind of talk that dismays old-line Republicans. Many of those who fought for years at the side of Ronald Reagan say they no longer recognize traditional GOP values in the new Republican Party. Fighting for the rich, after all, is not the same as championing the right.
"You can look up my record: On conservatism and taxes I was better than Jesse Helms," says Simpson, the former senator. "But whatever happened to common sense? People are going to look around in five or 10 years and say, 'Whatever happened to the things that made me comfortable? That made our streets and schools good things?' And they'll look, hopefully, at Grover Norquist. I can say to you with deepest sincerity: If this country and this legislature are in thrall to Grover Norquist, we haven't got a prayer."
This story is from the November 24, 2011 issue of Rolling Stone.
Read more: http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109#ixzz1dEpE26LM
The composition of the committee offers little hope that Congress will hold the rich accountable for their share of the deficit burden. While Democrats appointed deal-oriented centrists like Sen. Max Baucus to the committee, Republicans stocked it with anti-revenue hard-liners, including Sens. Jon Kyl and Pat Toomey, who used to run the Club for Growth – an ally of Norquist's Americans for Tax Reform. "Your wallet is safe," Norquist tweeted after the Republican roster was announced.
In an interview with Rolling Stone, Norquist expresses pride that the GOP has been so thoroughly transformed since the days of Reagan. "It's a different Republican Party now," he says. Norquist even goes so far as to liken the kind of Republicans common in Reagan's day – those willing to raise taxes to strengthen the economy – to segregationists. The "modern Republican Party," he says, would no sooner recognize a revenue-raiser than the "modern Democratic Party would recognize George Wallace."
Norquist expresses no discomfort at the moral impact of his project – providing tax favors for the wealthy that are paid for by cutting services to those who truly need them. "I understand greed and envy," Norquist says. "The idea that somebody's making money and you want to steal some of it? That's an interesting idea. But it's not morality. It's certainly not justice."
Such extremist rhetoric – equating taxation with theft – is exactly the kind of talk that dismays old-line Republicans. Many of those who fought for years at the side of Ronald Reagan say they no longer recognize traditional GOP values in the new Republican Party. Fighting for the rich, after all, is not the same as championing the right.
"You can look up my record: On conservatism and taxes I was better than Jesse Helms," says Simpson, the former senator. "But whatever happened to common sense? People are going to look around in five or 10 years and say, 'Whatever happened to the things that made me comfortable? That made our streets and schools good things?' And they'll look, hopefully, at Grover Norquist. I can say to you with deepest sincerity: If this country and this legislature are in thrall to Grover Norquist, we haven't got a prayer."
This story is from the November 24, 2011 issue of Rolling Stone.
Read more: http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109#ixzz1dEpE26LM
Sunday, November 6, 2011
Grains of Sand
From "The Big Think" by Adam Lee
In his book Unweaving the Rainbow, Richard Dawkins opens with an arresting analogy:
"We are going to die, and that makes us the lucky ones. Most people are never going to die because they are never going to be born. The potential people who could have been here in my place but who will in fact never see the light of day outnumber the sand grains of Arabia. Certainly those unborn ghosts include greater poets than Keats, scientists greater than Newton. We know this because the set of possible people allowed by our DNA so massively exceeds the set of actual people. In the teeth of these stupefying odds it is you and I, in our ordinariness, that are here."
As small and ordinary as they may be, our individual lives are spectacularly wonderful things. Each of us is one permutation out of countless possibilities, like one grain thrown up by randomness out of an ocean of sand. Each of us gets the chance to live once, to bring our distinctiveness to the world, and then each of us will die, never to exist again. Death is a tragedy, but how small it seems when weighed against the incredible gift of getting to live in the first place!
I think at times of the inconceivable odds that resulted in DNA's twisting double helixes combining to make me, me, out of all the innumerable trillions of human beings who could have been here in my place. My existence is the end result of an unimaginably vast chain of chance events, funneled and guided through the ages by the invisible tug of natural selection, billions of unborn ghosts spinning away into oblivion every second as each decision point cleaves the tree of contingency.
My genome is a patchwork, a convergence of different genes assembled by evolution over the ages. I have genes for lactose tolerance and decreased melanin, from ancestors a few dozen or a few hundred generations removed, pastoral herders who lived at high latitudes. I have genes for curiosity and wanderlust, the genetic legacy of the black men and women who were the first to leave our ancestral African homeland and spread out across the face of the world.
I have genes for upright walking and a larger braincase, first sculpted on the savanna as our apelike ancestors came down from the trees. I have genes for body hair and sweat glands and the three inner ear bones, inherited from our tiny mammalian ancestors who scurried and hid in the Triassic night to avoid the great stomp and glittering eyes of the world's reptilian masters. I have genes for five fingers and five toes, inherited from the fishlike tetrapods that swam and waded in the humid, marshy shallows of Devonian jungles. I have genes for a spinal cord, gifted to me by the wormlike ancestor of vertebrates that curled through warm Precambrian seas. And deep within my every cell, there are the mitochondria, the genetic homeobox, cytochrome C, the Krebs cycle - all common elements in the toolkit of life, some inherited from the first animals or the first eukaryotes, others dating even further back to the simple, ancient lifeform that was the common ancestor of every living thing on this planet.
The story of life is a rollercoaster ride of glory and disaster, of defeat and triumph. The planet's fossil record captures the many catastrophic blows that drove life on Earth to near-extinction, and the many subsequent resurgences as life sprang back in its exuberance, bringing forth new species to replace the vanished ones. That striving, that tenacity, that too is a hallmark of Earth and part of the generic heritage we all share.
This wasn't always the consensus view, of course. Prior to Darwin's era, the prevailing belief in paleontology was of a static world, where all species were God's perfect and eternal creations, each one a link in the great chain of being. The idea that any of them could have been lost to extinction was enormously controversial - blasphemous, you might say. Some of the first fossil hunters clung to the notion that the forms they saw preserved in stone still existed, alive and undiscovered, somewhere on the planet. But the evidence eventually mounted until that view was impossible to sustain any longer, despite its theological implications.
But the reality surpasses the fantasy. Unlike the believers who explain in all sincerity that their myths are "true but not real", our origin story is both true and real. And it's far grander and more majestic than the small, unimaginative, human-centered myths of antiquity. Just think of what it implies about our interconnectedness: the pulsing of a jellyfish's bell, the coordinated swerve of a school of fish, the dapple of sunlight through a redwood's vast green canopy, the explosive colors of a coral reef, the hidden biospheres in sulfuric hot springs and frozen Antarctic lakes - all of them are kin to me. Choose any of those living things, and however it twists and turns, there's a path backwards along the tree of life that leads to a point where my ancestors unite with theirs. (This is the subject of another outstanding book by Dawkins, The Ancestor's Tale, which I highly recommend.)
We all share in this history, and we all have the potential to carry it forward, which ought to be part of what makes human life so valuable. Each of us is a bearer of that heritage, a single outward-reaching thread of life's multibillion-year journey through time. And if life survives into the far future, if one day we reach that unimaginably distant shore that beckons to us, any of us might have played a part in reaching it; in the end, anyone's genes might turn out to be essential. There are those who say that atheism devalues life, and I answer - could anything give us a better sense of how rare, fragile, and precious life really is?
In his book Unweaving the Rainbow, Richard Dawkins opens with an arresting analogy:
"We are going to die, and that makes us the lucky ones. Most people are never going to die because they are never going to be born. The potential people who could have been here in my place but who will in fact never see the light of day outnumber the sand grains of Arabia. Certainly those unborn ghosts include greater poets than Keats, scientists greater than Newton. We know this because the set of possible people allowed by our DNA so massively exceeds the set of actual people. In the teeth of these stupefying odds it is you and I, in our ordinariness, that are here."
As small and ordinary as they may be, our individual lives are spectacularly wonderful things. Each of us is one permutation out of countless possibilities, like one grain thrown up by randomness out of an ocean of sand. Each of us gets the chance to live once, to bring our distinctiveness to the world, and then each of us will die, never to exist again. Death is a tragedy, but how small it seems when weighed against the incredible gift of getting to live in the first place!
I think at times of the inconceivable odds that resulted in DNA's twisting double helixes combining to make me, me, out of all the innumerable trillions of human beings who could have been here in my place. My existence is the end result of an unimaginably vast chain of chance events, funneled and guided through the ages by the invisible tug of natural selection, billions of unborn ghosts spinning away into oblivion every second as each decision point cleaves the tree of contingency.
My genome is a patchwork, a convergence of different genes assembled by evolution over the ages. I have genes for lactose tolerance and decreased melanin, from ancestors a few dozen or a few hundred generations removed, pastoral herders who lived at high latitudes. I have genes for curiosity and wanderlust, the genetic legacy of the black men and women who were the first to leave our ancestral African homeland and spread out across the face of the world.
I have genes for upright walking and a larger braincase, first sculpted on the savanna as our apelike ancestors came down from the trees. I have genes for body hair and sweat glands and the three inner ear bones, inherited from our tiny mammalian ancestors who scurried and hid in the Triassic night to avoid the great stomp and glittering eyes of the world's reptilian masters. I have genes for five fingers and five toes, inherited from the fishlike tetrapods that swam and waded in the humid, marshy shallows of Devonian jungles. I have genes for a spinal cord, gifted to me by the wormlike ancestor of vertebrates that curled through warm Precambrian seas. And deep within my every cell, there are the mitochondria, the genetic homeobox, cytochrome C, the Krebs cycle - all common elements in the toolkit of life, some inherited from the first animals or the first eukaryotes, others dating even further back to the simple, ancient lifeform that was the common ancestor of every living thing on this planet.
The story of life is a rollercoaster ride of glory and disaster, of defeat and triumph. The planet's fossil record captures the many catastrophic blows that drove life on Earth to near-extinction, and the many subsequent resurgences as life sprang back in its exuberance, bringing forth new species to replace the vanished ones. That striving, that tenacity, that too is a hallmark of Earth and part of the generic heritage we all share.
This wasn't always the consensus view, of course. Prior to Darwin's era, the prevailing belief in paleontology was of a static world, where all species were God's perfect and eternal creations, each one a link in the great chain of being. The idea that any of them could have been lost to extinction was enormously controversial - blasphemous, you might say. Some of the first fossil hunters clung to the notion that the forms they saw preserved in stone still existed, alive and undiscovered, somewhere on the planet. But the evidence eventually mounted until that view was impossible to sustain any longer, despite its theological implications.
But the reality surpasses the fantasy. Unlike the believers who explain in all sincerity that their myths are "true but not real", our origin story is both true and real. And it's far grander and more majestic than the small, unimaginative, human-centered myths of antiquity. Just think of what it implies about our interconnectedness: the pulsing of a jellyfish's bell, the coordinated swerve of a school of fish, the dapple of sunlight through a redwood's vast green canopy, the explosive colors of a coral reef, the hidden biospheres in sulfuric hot springs and frozen Antarctic lakes - all of them are kin to me. Choose any of those living things, and however it twists and turns, there's a path backwards along the tree of life that leads to a point where my ancestors unite with theirs. (This is the subject of another outstanding book by Dawkins, The Ancestor's Tale, which I highly recommend.)
We all share in this history, and we all have the potential to carry it forward, which ought to be part of what makes human life so valuable. Each of us is a bearer of that heritage, a single outward-reaching thread of life's multibillion-year journey through time. And if life survives into the far future, if one day we reach that unimaginably distant shore that beckons to us, any of us might have played a part in reaching it; in the end, anyone's genes might turn out to be essential. There are those who say that atheism devalues life, and I answer - could anything give us a better sense of how rare, fragile, and precious life really is?
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