Saving capitalism

Because many readers have concluded that the author of this column is — as a recent e-mail described him — “a typical lying socialist idiot” — I have taken over. I have no use for Obama-loving Commies.
Call me the Clever Capitalist. A proud member of the “1 percent,” I have considerable power and one goal: the preservation of capitalism in the United States. How to accomplish that goal is the topic of this column.
The greatest threat to the current brand of U.S. capitalism is democracy. My power, though significant, is insufficient to end democracy. So my task is to preserve capitalism within a democratic republic.
Ultimate power resides in the people, and that power includes the ability to trade one economic system for another. I can buy time by using my money to influence elected officials, but finally the people will have their way.
And the people are not enjoying many tangible benefits from Capitalism 2012.
Along with other members of the top 1 percent, I hold 43 percent of the nation’s financial wealth. The next 19 percent hold 50 percent. The bottom 80 percent — that’s a lot of potential voters — hold 7 percent of America’s financial wealth.
And the masses are beginning to realize their plight is getting even worse.
Since 1979, the average pre-tax income for the bottom 90 percent of households has decreased by $900, while that of the average household in the top 1 percent increased by more than $700,000. From 2009 to 2010, the top 1 percent collected $93 of every $100 in income growth.
Being clever, I recognize that Capitalism 2012 is not sustainable. People will vote against their economic interests for a while, but I can’t expect them to do so indefinitely.
And this is scary. When they rally against Capitalism 2012, they might not understand that there are versions of U.S. capitalism that benefit a majority of the people. They might pull a France and reject not just Capitalism 2012, but less extreme versions of capitalism that have, in the past, served the nation well.
Capitalism is at risk, but I have a plan. I’ll give the people a little more income mobility and a little more wealth equality, just enough so they do not unite against the economic system that I hold dear.
I’ll start with taxes. The deficit is getting troublesome, even to me, and my argument that the best solution is for the people to cut my taxes is wearing thin.
So for the highest income earners like me, I’ll nudge the income-tax rate up from 35 to 39.6 percent. I’m no fan of taxes, but this seems an acceptable compromise.
After all, I did quite well with this rate from 1993 until former President George W. Bush reduced it in 2002. And I fared well in the 1980s, when the top rate was 50 percent. Even the 70-percent rate I endured in the 1960s and ’70s was bearable. I’d prefer not to return to the 1940s and 1950s — when the top income-tax rates were above 90 percent — even though my pain did not seem to hurt the economy.
Some of my extra taxes should be used to help people attend college. Consistently dropping wages is no way for me to get popular support for capitalism — especially when 46 million Americans already live in poverty — and some sort of post-secondary education is the only option the masses have to increase their wages. After all, 30 million of those folks are potential voters.
Access to health care is another issue that’s creating problems with the masses. Fifty million people have no insurance. When they get sick or their relatives die, they tend to get annoyed at the economic system. I’m not keen on a single-payer system — that sounds like socialism — but maybe a system in which private insurers engage in capitalist competition for consumer dollars would work. If I could craft a system that not only placated the masses but helped reduce the federal deficit, all the better. A side benefit would be the increased productivity I’ll get from my healthier laborers.
None of these changes are dramatic. Indeed, they might not be enough to calm the masses. So I need a good salesman.
Even while he promotes these relatively minor changes, this political leader needs to convince the masses he is on their side. His rhetoric must be compelling.
This creates a risk, of course. It could be that those like me, whose primary goal is to protect capitalism, will be confused by his rhetoric. They’ll hear his grandiose words and lose track of the fact that the changes he proposes are minor. My fellow capitalists may oppose him, even though he is the best way to preserve capitalism. Surely, though, they’ll be wiser than that.
His rhetoric is important, because the masses need to feel they have won something significant if he manages to increase the taxes on the highest income brackets to rates that are still historically low. He also needs to be able to communicate the universal advantages that capitalism offers over a socialist system in which supply is calculated not by a market, but by a committee.
He needs to convince them that a slightly modified version of Capitalism 2012 gives them a renewed shot at the American Dream. Preferably, so they can relate to him, he needs to have experienced poverty. Ideally he should be black, as blacks are three times as likely as whites to live in poverty.
Where can I find such a leader?

Contact Eric Fleischauer at www.mile304.com or eric@decaturdaily.com.

The death of empathy

Thousands of individual tragedies are playing out in Alabama among two separate groups: undocumented immigrants and those without health insurance.

Laws dealing with both issues will be prominent in the final days of the state legislative session this week.

In the past year, undocumented immigrants have found themselves separated from their citizen children. They have lost their housing because of a state law making their contracts unenforceable. They have lost their ability to seek or obtain jobs.

Religious groups, horrified at the legislative treatment of people they see as fellow children of God, have spent the last year trying to communicate the immigrants’ plight.

A different set of tragedies has overwhelmed a growing class of impoverished Alabamians as they see their ability to obtain health care for themselves and their families diminished. Religious groups have tried to explain to voters and their elected representatives the misery these individuals confront as they go without the preventive care that could improve the quality of their lives and prevent fatal complications.

The theory behind the strategy of the religious groups is that the laws and budgets creating such human misery are taking place in a state dominated by Christians, who every Sunday are reminded that they are to love one another just as Jesus loved them. While financial resources may limit the mercy-driven options of Christians, creating empathy for the victims of tight budgets and punitive laws would seem to be a first step.

If we understand our fellow humans, goes the theory, we will accept them as our neighbors. Our faith will then temper our judgment.

It turns out the religious groups misjudged their audience.

After futile weeks of talking about the certain deaths that will result from state Medicaid cuts, State Health Officer Dr. Don Williamson switched tactics. Instead of discussing the plight of the poor, he argued that the rest of us might be inconvenienced by long lines when some of our doctors, deprived of Medicaid revenue, relocate to other states.

Opponents of the state’s law on undocumented immigrants have largely given up discussing the toll on the immigrants and their children. Now they are pointing out that the loss of immigrant farmers may force the rest of us to pay more for our tomatoes.

Empathy clearly has no place in our legislative process. The only question our lawmakers believe we are asking is, “How does it affect me?”

A clash of special interests

The sponsor of a bill that would have created a charter school system in Alabama complained loudly when it died in committee last week.

State Rep. Phil Williams, R-Huntsville, blamed the bill’s failure on “special interests.” It was an amusing complaint, given that the bill owed its existence to special interests. The special interest he singled out for blame was the Alabama Association of School Boards.

As special interests go, the school-board association is not a bad one. Unlike the Alabama Education Association, its primary mission is not protecting teachers’ jobs. And unlike the special interests that were pushing the charter bill, its main mission is not to make a corporate profit from a business model that relies on tax dollars.

The corporate proponents of the charter bill — companies that hoped to snag contracts managing charter schools — make up a special-interest group Alabamians should fear. They benefit from public school failure. Anything that helps public schools succeed hurts their shareholders.

While the much-amended charter bill that died in committee would have done little harm to public schools, the original bill Williams sponsored had the fingerprints of corporate lobbyists all over it. It was designed not just to make sure charter schools were profitable, but to ensure public schools failed.

Maybe Williams is right that special interests killed the charter-school bill. If so, Alabamians can be thankful that the clash between special interests that played out in Montgomery resulted in legislative paralysis. Better no law than a bad one.

A warning from Lugar

At a time when the nation is desperate for leadership, its elected representatives are mired in ideological grandstanding.

After losing a primary battle to a tea party candidate who promised not to compromise with Democrats, U.S. Sen. Richard Lugar, R-Ind., issued a dire warning.

“I don’t remember a time when so many topics have become politically unmentionable in one party or the other,” Lugar said.

“Republicans cannot admit to any nuance in policy on climate change. Republican members are now expected to take pledges against any tax increases. For two consecutive presidential nomination cycles, GOP candidates competed with one another to express the most strident anti-immigration view.”

Our democracy is built on the concept of compromise. By voting for candidates of either party who reject compromise, we are damaging our nation.

Avoiding France’s mistake

While cheering for capitalism, Congress is careening down the same path that led to the election of a socialist president in France.
America shares with France two problems: a struggling economy marked by high unemployment and an increasing national debt. France dealt with the problems in a way that led to a popular rejection of capitalism. The U.S. House is mimicking the French strategy.
Much of America’s increased national debt is the result of a revenue shortfall caused by a recession-triggered decrease in consumer demand.
The opposing theories on how best to deal with the intertwined problems of lethargic demand and excessive debt are austerity and stimulus.
The austerity strategy works on the assumption that the growing national debt is a cause of the economic problem, rather than a symptom. Reducing the debt by increasing taxes on the wealthy is a mistake, under this theory, because such taxes are a disincentive to prospective investors who are already jittery about national solvency. The only solution, under the austerity theory, is to cut expenses.
France pursued the austerity approach under outgoing President Nicolas Sarcozy. It did not work. Austerity measures, by definition, decrease demand. Job creators may be concerned about France’s national debt, but it turns out they are more concerned by a lack of demand. Capitalists do not hire people because they approve of the national balance sheet; they do so because there is demand for their products.
England, Spain and other countries that tried austerity are having similar results.
In a recession, the drop in consumer demand leads to a drop in production and resulting layoffs. The layoffs, of course, push consumer demand even lower. This was the downward spiral that began sucking the life out of the U.S. economy in late 2007.
The idea behind a stimulus strategy is to reverse the spiral. There is no good way to increase consumer demand directly, so the government — using borrowed money — increases public sector demand. The critical task of debt reduction must come after the private sector recovers.
The United States — politically torn between austerity and stimulus — fell somewhere in the middle. The federal government increased its expenditures enough to counteract cuts by state and local governments, but not enough to replace the drop in consumer demand. So today we are better off than austerity-crippled France, but we continue to struggle with 8 percent unemployment, anemic economic growth and suppressed tax revenue.
The budget recently passed by the U.S. House — drafted by Rep. Paul Ryan, R-Wis. — adopts the austerity approach. Like Sarcozy, Ryan and his colleagues would slash expenditures that benefit the poor while reducing taxes on the wealthy.
Austerity is an economic mistake.
Moreover, as Sarcozy discovered, it is political suicide. Employing a strategy that hurts the masses while benefiting the wealthy — all while increasing the deficit — results in political rebellion. And that’s what France got, in the form of the election of socialist Francois Hollande.
Hollande is an actual socialist. President Barack Obama — despite the casual epithets hurled at him from the right — is not a socialist. He does not believe that the government should own the means of production. To be sure, he supports a more active governmental role in the economy than do House Republicans. He proposes tackling the deficit with increased taxes on the wealthy, although at a lower tax rate than has been common in the past. He opposes wholesale cuts in the welfare system and rejects austerity as a solution to depressed consumer demand.
In short, Obama’s economic prescription is one designed to impose as little misery as possible on the masses.
Believers in capitalism should support his efforts. The majority of Americans have almost no ability to accumulate capital and thus are powerless in our economic system. They have immense potential power, however, in our political system.
The lesson of France is that capitalism depends on popular support.
Ryan, like Sarcozy, has adopted an austerity approach that — if implemented — eventually will cost him his job.
That Ryan eventually will succumb to a public backlash is no big deal. It would be a big deal, however, if capitalism goes down with him.
Obama is not the antithesis of capitalism in these troubled economic times, but its best chance for continued public acceptance.
Contact Eric Fleischauer at www.mile304.com or eric@decaturdaily.com.