3-16-2005 Economic turnaround since New Deal - cynicism - nastiness - Vietnam

Before the Reagan-Bush43 tax revolution US had smallest gap between rich and poor of any developed nation. Today we have the largest gap. The poorest 40% have 3% of the wealth and falling fast. The richest 1% are living large.

This year we’re cutting health care, education, science – and giving a $140,000 additional yearly raise to those making over $million annually.

Bush43’s “Era of ownership” does not mention that the young “own” the huge debt being generated. Federal tax revenues are lowest % GDP in 50 years 17%. Reagan-Bush43 tax revolution is shifting distribution of rewards of increased productivity – to rich - away from working class. Tax “cuts” are really a “shift” of tax load to future members of working class. The gap should keep increasing.

The 1983 Social Security adjustment asked workers – thru regressive payroll taxes - to contribute increased $ which the government would set aside. Reagan and Bush43 have instead spent “TRUST” fund from workers on tax cuts for the rich, defense spending and disguise the size of his real deficits.. Clinton raised taxes in upper brackets slightly and was setting Trust fund aside and paying down deficits as promised Bush43/Greenspan say we don’t have enuf $ for Ssecy benefits for workers - and the rich cannot be asked to return their much larger tax shifts – the $10 trillion deficit turnaround in 10 year projections Bush43 vs Clinton

Bush43 tax cuts- in capital bubble (too much capacity – not enuf demand) huge cuts of progressivity and prog taxes – inflating bubble further – cut labor market participation 10%. “stimulus” package should give quick short-term boost. Only 8% B43 cuts into economy quickly – only items added by Democrats. 92% of the cuts anti-progressive à long term structural deficits after recovery while we should be running a surplus.

Cuts in Bush43 budget – veterans healthcare (1% increase with many amputees etc coming in – 1/3 on waiting lists. Center for Disease control – when bird flu is seen as possible pandemic – medicare – Medicaid – cut health care for more of the poor

In 1950 à 2004

Total fed tax load 20% à 17% extra 3% because most progressive taxes cut

Corporate taxes were 26.5% à 9.1% make states pay - where top1% pay 5.2%

Estates, cap gains, interest ~40% à abolish? bottom 20% pay 11.4% rate

payroll – regressive 6.9%. à 35.5%

in the future Bush43 plan - all taxes on consumption = “reform”

Most recoveries labor gets 9% growth – Bush43 recovery .3% wage increase (mostly top)

Most recov Corp profits 12.3% growth - B43 – corp profits 39% increase =40.4% of all growth

Clinton helped the ratios (corporate share up 10% - payroll share down 12.4% W&Dp149

Bush43 economics - Census Bureau - 2001 through 2004, poverty increased, income stagnated and the ranks of the uninsured grew, while the United States spent $trillions on tax cuts, which mainly benefited wealthy families. Since Bush43 came to power, 4.3 million people have fallen below the poverty line, bringing the total number in poverty in 2003 to 35.9 million, or 12.5 percent of the American population.

Bush43 2001 tax cuts- in a capital bubble (too much capacity – not enuf demand) were really huge cuts of progressivity in the income tax and all the most progressive taxes. It cut labor market participation 10%. A stimulus package should give quick short term boost. Only 8% of his “stimulus” went into economy quickly – only items added by Democrats. 92% of the cuts anti-progressive à long term structural deficits while we should be running a surplus.

Cuts in Bush43 budget – veterans healthcare -1% increase well below inflation with many amputees etc coming in – 1/3 on waiting lists.) Center for Disease control – when bird flu is seen as possible pandemic. Medicare and Medicaid – cut health care for more of the poor. Vocational education gone completely – first education cuts in many years.

the Bush43 SSECY commission – along with borrowing from the bond market to bet on the stock market - recommended a change in indexing - from “standard of living” to “inflation.” The current plan Boomers (who vote) will get about 36% of earlier earnings in benefits. People now in their 20’s would get 27% of earlier earnings after this “small” adjustment has 40 years to compound. Babies born now will get about 20% of earlier earnings – the next generation 12% and so forth – a slow phase-out of Social Security - fulfilling a long term goal of the anti-new-dealers.

Current events – In 1973 in Chile Kissinger and CIA “approved” BLOODY military coup – General Pinochet – overthrow democracy. . Pinochet’s agents even blew up a diplomat from the elected government in Washington DC because he was stirring upb trouble. We’re just finding hundreds of hidden bank accounts. Conservative economists overhauled Chile’s economy including privatizing Chile’s Soc Security system – without the huge debt Bush43’s plan incurs.

“private” pension (with soaring stock market) finances a 20-year annuity $315 a month.

Same earnings in old system pension more than double - almost $700 a month - good until they die.

HOW DID US go from least unequal to most unequal – Social Darwinist heaven?

The mantra “GOVERNMENT IS THE PROBLEM” is fundamental.

“TAXES ARE EVIL” “I WANT MINE – HELL WITH THE FUTURE” are easy steps from there.

The contradictions between Cold War reality and American principles – fake dominoes etc - made much of the left cynical and angry. The cultural backlash from war protests, Civil rights, women’s rights , school prayer, etc became a “culture war.” Cultural wedge issues were used with great facility by the old anti-New-Deal coalition.

It starts with cynicism about government. Assassinations, riots,

Vietnam – right after WWII French try to regain their colony from Ho who had fought Japanese. Ho quotes Declaration of Independence wants us as ally agst Chinese (rather eat 20 years of amer or French s**t rather than 1000 years of Chinese s**t).

Our Army guys on the ground tell us “go with Ho – he will win” politicians ignore – simplistic categories “communist” - need French in Europe for NATO – all communists are alike as “dominoes’ – Chinese, Russians, Viets

Civil rights – non-violence – television - King preaches Ghandian passive resistance – Christian and middle class values – Bull Connor – dogs, water hoses - hate-filled faces in Little Rock

LBJ – passion for power to live up to FDR legacy (Pope and statue) filling shoes martyred war hero (who could have withdrawn) but Cuba Blowback– JFK dead - Let Vietnam blow up and go down the tubes just after pretty-boy leaves? Argggh!

Johnson has run against “war-monger” Goldwater – Daisy atomic countdown commercial – with plans to escalate ready for right after election – he must guard his political capital – afraid of the “Who Lost China” crowd –

LBJ - Texas constituency – not war hero - must be tough

McCarthy’s slimy aura still overhung politics – esp for those who had designs on grand historical achievements like eliminating

Phone calls to Richard Russell – this horrible impossible Viet war will be the death of me – hopeless – how can I escape – and simultaneously hypersensitive to criticism

McNamara forced to resign when he decided the war was unwinnable

What Johnson wanted to with his presidency – poverty and civil rights

1964 24^th amendment – outlaw poll tax – Civil rights act

1965 – Voting rights act

Poverty rate – 22% 1959 drops to 11% 1973 –

Great society biggest effect elderly 30% to 15% Whites 19% to 9%

Blacks only (approx) 45% to 30%

5 days after Voting rights Watts Riots – Black Nationalism – Malcom X

Showing the war on TV is critical – reporters with troops – blood and guts – summary executions – napalm – villages being burned while women and children huddle

Very nasty polarizing arguments - war is evil vs pacifists are traitors

Cynicism nastiness public life - Assassination RFK – middle east blowback - MLK killed – more big riots –

NIXON – very nasty political fighter - before 1968 election - secret negotiations with Vietnamese leaders – stop peace talks – I’ll get you a better deal – peace would be inconvenient for election

Claims “Secret Plan” for ending war