In early September The Wall Street Journal and NBC News conducted a poll that presages an election year of deep political turmoil. Of the Americans interviewed, 73 percent judged the United States to be headed in the wrong direction (no doubt for contradictory reasons). Only 44 percent of those polled approve of President Obama’s leadership; 33 percent approve of his economic plans. Congress was held in worse regard: 82 percent judged the two houses unfavorably. In fact, more than half (54 percent) would prefer that the whole gang (including their own senators and representatives) be thrown out. Many commentators think the discontent is due to the terrible economic mess we are in. That is only part of the problem. It is exacerbated by hardened ideologies.
I have been wondering lately whether there is much value in writing about our political economy, so calcified is our national discourse. Why, after all, write a column asking for more civil debate from a relatively small readership when a media giant like Rush Limbaugh can rant over and over at 15 or 20 million listeners that President Obama wants to destroy the United States by destroying our economy? Even with the readership of a magazine like America, it becomes evident, after sifting through readers’ comments on our Web site, that there is little chance of persuasion in the presence of fixed opinion.
If a columnist or blogger expresses concern about the inequitable distribution of wealth and income or the plight of workers or unions, this is often ridiculed by commenters as leftism, class warfare or socialism.
Discussions in the Catholic press thus mirror the polarization of the mass media, depending on whether we get our information from MSNBC or Fox News. Even carefully mounted arguments offered in our “newspapers of record” meet with little more than namecalling.
The prestigious financier Warren Buffett recently wrote an op-ed piece for The New York Times. He pointed out that some of the super-rich, who make money from money, often pay less in taxes than people who make money from a job: “The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.”
A frequently heard response to the Buffett column was that his ideas were “job killers,” even though Buffett had pointed out that an average of two million jobs a year were added between 1980 and 2000—prior to the Bush tax cut. But one of the mind-boggling “refutations” of his proposals was that he is a socialist. Warren Buffet: a socialist? Yes, you heard it right.
This should come as no surprise when one reflects on how the word socialism is batted around. “Obamacare,” we are told, is socialized medicine. This is so preposterous, one might have thought the president had actually proposed a single-payer or three-tiered plan that would cover everyone in the country. Then at least we could have seriously debated two truly competing plans for saving our troubled health care system.
If we ever come to agree to overhaul our tax code completely, let it be accompanied by an admission that the poor indeed already pay taxes. Since April, the mantra has been circulated by some news outlets that “47 percent of all households pay not a single dime in taxes.” Even if that figure is true for income taxes, it will come as a surprise to middle class and poor families who pay federal payroll, state and municipal taxes. As the Institute on Taxation and Economic Policy estimates, the bottom quarter of taxpayers paid 12.3 percent of their incomes in state and local taxes in 2010. So much for “not a single dime.”
To bring up such facts will inevitably be brushed off by some readers as just another salvo in the “class war” against the rich. This is simply not the case. I have only admiration for many wealthy families who have a profound commitment to service and solicitude for those in need. But if there is some kind of class war going on in our money-media society, it has already been declared against the working middle class and the poor. The only socialism we have in this country is for the super-rich and bailed-out banks.
Like Father I too was looking forward to a serious debate of the health care issue. President Obama repeatedly promised to televise such a debate on CSPAN, even explicity stating that he would not, as the Clintons had done, negotiate the plan behind closed doors.
We all know what happened to that commitment. And what came out from behind the Pelosi-Reid locked doors was an extremely complex plan which may not even be constitutional. President Obama, wisely, I suspect, delayed implementing the great part of the plan until after the 2012 elections. Do we wonder why?
Warren Buffet, in addition to being a great investor, is a good salesman. He may well be speaking honestly about his being undertaxed, but he also knows how to build good will on the cheap. Can you imagine any other major corporation, such as say GE, which could have one of its highest ranking corporate executives commit inside trading violations on company takeover speculation and escape virtually unscathed? What Warren says, he likely knows, won't affect his taxes, but he also knows it will likely buy him cheap insurance (make that free) against corporate misconduct outrage. He knows a PR bargain when he sees it.
Personally I do not agree with those who seek to extend the Bush tax cuts for the very wealthy, but as I am interested in solving the deficit problem, not playing envy politics for votes, I will support them only if the top quintile are also included, the well-to-do as well as the wealthy. That would recover, according to the OMB, 2/3 of the $4 trillion hypothetically lost from those tax cuts over the next decade, whereas limiting it to the high earners as President Obama proposes saves less than a fifth. That is the real reason democrats can be credibly accused of playing class politics for votes: their plan does not even approach solving the problem, but it does keep their constituency from losing their tax cuts and is calculated to produce envy votes for them rather than seriously address the lost revenue.
President Obama not only went against his word on public funding of his election and his promise to put the health debate on CSPAN for all to buy in to, but, worse in my opinion, he took the truly good and workable plan of his own bipartisan commission and discarded it rather than fight for it. His moment of leadership came and went when he punted. Now we are caught up in this political intransigence. It didn't have to happen.
Much of what Fr Kavanaugh says here is eloquent and true. But it is by no means all that is true. I hope what I have provided makes for a more complete description of the where we are and how we got here.
But Professor, if a columnist or blogger expresses concern about the unimaginable levels of debt our nation has assumed, the sustainability of our entitlement programs, or the unconstitutional expansion of the federal government, this is often ridiculed by commenters as rightwingism, oligarchy, or predatory capitalism.
There is deep disagreement about what sort of country we want America to be. While I join you in wishing for a more civil and constructive discourse, this divide will need to be worked out in elections. You will vote for the people who best represent your ideas about how America should be ordered. I will do the same.
God bless you, sir. A good article, but I suggest that you attend to the plank in your own eye.
@ Father Kavanaugh:
"I have been wondering lately whether there is much value in writing about our political economy, so calcified is our national discourse."
If you don't, who will? Thank you.
You stated, "The best kept secret in the Church and the nation still seems to be the Church's social doctrine."
I've been wondering, myself, as to where it went.
On the matter of the redistribution of wealth:
Various systems of free enterprise, as an economic system, has done a great deal for the industrialized West over the past few centuries. It appears as though it will do great things for the rest of the World as they emulate Western systems of economics (including free enterprise,) government, and open markets.
We must be careful, though, not to equate the West's systems of free enterprise (especially Capitalist free enterprise) with Christianity, nor to elevate it to a moral code, nor to claim its benefits in the absolute, forever more.
The redistribution of wealth is not done to punish rich people just because they are rich. It is a near absolute necessity to combat the greatest evil of unfettered free enterprise - the unnatural concentration of wealth in the hands of a few.
We have seen a steady forty year rise of an incipient oligarchy of private individuals and corporate executives. We may be there, already. Wealth, industrial power, news media, and systems of finance, banking, and investment have been sufficiently concentrated to the point where it may be too late to turn back. The players are immune from responsibility for the consequences of their lust for money and power. This will destroy our democracy.
There are at least two ways to deal with the unnatural concentration of wealth in the hands of a few, whether the few are individuals or corporations. These methods are fundamental and structural, and they can do so much for our democracy and our society.
First, we need a real progressive income tax. This is one of the easiest ways to deal with the abnormal concentration of wealth, resources, and power. Reducing exorbitant ratios in net income for high earners compared to low earners helps, also, to stabilize a society and thwart class wars and class exploitation.
Second, we need to legislate corporate personhood out of existence. Unrestricted corporate funding of campaigns for elections and corporate funding on political issues, whether by hard or soft money, moves our democracy further in the direction of government by corporate managers. Some industries have already succeeded in passing into law, immunity from legal liabilities for some or all of their own products.
There are any number of ways to deal with the abnormal concentration of wealth in the hands of a few, as a result of unrestricted capitalist free enterprise. However, passing a real progressive income tax, and abolishing of corporate personhood are so fundamental and structural that alone they will yield enormous benefits for our people, our society, and our democracy.
thanks for your comments
Walter Mattingly rightly points out public workers unions were able to secure 'sweet' pensions and work rules from politicians [of both parties] by currying favors at election time. He fails to point out that in every jurisdiction steps are being taken to severely limit work rules and pensions for public workers.. In San Francisco two limiting pension measures are on this Nov. ballot.
But where, Walter, are the GOP measures to have the super rich pay more than 15% on carried interest, dividends, capital gains? There are no measures!, in fact the GOP wants these incomes to go to zero tax. Hedge fund managers make up to 4.5 BILLION a year and now pay just 15% and the GOP wants it to go to Zero.
Walter says there are envy votes .. what I envy is the super rich getting the sympathy and votes of middle class wannabees. From whence comes this alliance?.
I may not be your best man to answer this as I am not and never have been a Republican, but let's begin with a recognition that the US has a very progressive income tax structure, as half pay zero income taxes and the other half all income taxes. I also get a bit fatigued with the Taxman Taxman don't tax me, tax the fellow behind the tree song that is played over and over again. No one wants to pay more taxes, but it is ok by some if others do There is no doubt that there are all sorts of special interests and loopholes shot through the tax code. Reagan removed many of them in his tax reforms of 1986, but they keep creeping back in. A Daschle leaves his position atop the Senate, contracts out a 7 figure salary to the pharmaceutical industry, and soon we have an expensive prescription bill passed. That's how we got boondoggle tax wastes such as ethanol subsidies, sugar subsidies, and even tobacco subsidies, Solyndras, no bid defense contracts, etc. Bear in mind, too, that the "just 15%" you describe will next year be the exact corporate tax rate in Canada.
My own view is that our greatest current and near future economic problem is entitlement expenditures, especially medicare/medicaid and also social security longer term, as well as defense and government spending and benefits, followed at some distance by tax revenues. That seems to have been what the president's own bipartisan commission concluded. With a little more backbone and wisdom President Obama might have moved on it, but as the two extremes of both parties opposed, he passed, a real tragedy in my opinion. There are all sorts of positions in both parties, but to me, the largest problem, cuts in entitlements and government spending, including military retirement programs and benefits, are the first issue, with tax increases the important secondary issue. Once democrats are genuinely amenable to cutting significantly there, as the Bowles/Simpson plan did, then we should simultaneously proceed with tax increases. Currently neither side is budging, and won't until after the elections, a very long wait given our circumstances.
As stated above, the reason I consider the Obama proposed increase on the very wealthy to be more class envy geared to reelection than effective problem solving is that it recovers only 18% of the $4 trillion revenue the OMB estimates lost to the Bush/Obama tax cuts. Extend that to the well-off, the top quintile of earners, and you recover 2/3rds. Less than a fifth I consider not being serious about solving the problem; 2/3, much more so.
I never read, in its entirety, Pope Leo XIII's encyclical letter, Rerum Novarum, 1891. RN is considered to be the launch of the Church's views on social justice in modern times.
Since this subject deals with elements of social teaching in the Church, and we are reminded of it by Ernie, I thought I would go back for a proper read. Without commentary, you can find it HERE.
Absolutely fascinating! I don't think I would have reacted this way in my college years. One of the things that makes it so interesting is that the reader can FEEL the enormous anxieties and fears as Western civilization is in the throes of metamorphoses in philosophy, government, morals, politics, economics, social order, views of humanity, and the role of the Church in modern times.
There are sentences that juxtapose outdated ideas, in my view, with progressive ideas about which we are still in debate and great disagreement. The early paragraphs bring us into the contemporary history and the great foment of that time. I get the sense that Pope Leo XIII is well aware that he is trying to defuse an enormous munition that, should it explode, would be devastating for Western civilization and the Church.
Not being a student of Church social teachings from RN to the present time, I am not sure how all of RN translates to this time and this place.
Speaking of translation, the encyclical letter was titled, On the Condiction of the Working Classes, before Rerum Novarum. RN translates to "On New Things." I think the translation calls more for an idiom like "On Current Events," or "On Big Things That Are Going Down." Sometimes it is titled, Rights and Duties of Capital and Labor.
May I suggest a post on AM that focuses on a discussion of RN and/or Church teachings on social issues from RN to present? What is current thinking in the Church on social issues? What are the derived imperatives for action? Is there a goal or ideal state for social justice?