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John F. KavanaughOctober 03, 2011

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.

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Basile Pennyworth
11 years 6 months ago
Thank you Father Kavanaugh! Your columns are invaluable. It is said that the seed never sees the flower. The seeds you plant are blossoming. i often wonder what I can do, by the way I live my life, to make a difference. At age 81 some possibilities are out of reach. But today I mailed a letter to my bishop, asking that the Church's position on social issues be better promulgated. How many heard of the U.S. Bishops' Labor Day statement this year, for example, taking a strong stand once again for the poor? The best kept secret in the Church and the nation still seems to be the Church's social doctrine. Lord, take away our fears!

C Walter Mattingly
11 years 6 months ago
With nothing but respect, I would take issue with what I consider to be Fr Kavanaugh's somewhat one-sided characterization of the issues here. True, Rush is as demagogic as Olberman, but when speaking of the "plight" of unions, we are talking about hugely powerful corporate special interest groups which have colluded with their elected representatives, with whom they were supposed to have arm's length negotiations, but who, as Corzine even said in a union hall, was on their side (as opposed to the interests of the citizens he was elected to serve). The results are not only apparent in NJ gaping budget deficits, but everywhere: San Francisco city workers who make as large and larger retirement benefits than they did their last year of work, a Wisconsin teachers' union which had a nocompete overpriced insurance plan that was required to be accepted by the schools without competing bids, my city where Police and Fireman's benefits threaten to overtake the entire city budget in 20 years, etc. Most harmful of all is public education, which as totally dominated by government and union control might be closely allied to the socialism Fr. Kavanaugh refers to. Where else could one have such job security that he could not be fired even if he did a poor job if he was senior to a good junior teacher, where he could avoid for decades being even evaluated on whether or not his students learned anything, where pay had to be based on seniority, not quality of teaching? This all came about from excessive union power to pursue its own self-interest, from something FDR warned us not to do-extend collective bargaining to the public sector. Even Al Shakar, former union leader par excellence, said that he would start representing the interests of students when they started paying union dues.  And we all know the terrible results, despite extraordinarily high expenditures per student compared to other OECD countries. The teachers' unions acted just as other self-interested corporate monopoly allowed to function uncontested for 40 years would have-with great self-interest. and little else.
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.

Mike Evans
11 years 6 months ago
The state of the economy and the rapid deterioration of both Iraq and Afghanistan adventures should be cause enough to declare a national emergency. Reasonable people might find it beneficial to begin to work together to resolve problems and even provide basic survival funding for government operations like airports, highways, and social safety nets. Instead, the two parties continue to declare war upon each other and the public is polarized by the insane and irresponsible comments of well financed radio, tv and newspaper pundits who are stirring the pot for their own commercial advantage. Name calling has already become sticks and stones and many people are being injured in the collateral damage. We need a kindergarten teacher to arrive and dish out some invective and perhaps some monetary spankings. We've already had out lost decade; are we going to stand for a lost century?
Michael Cremin
11 years 6 months ago
"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."

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.
Norman Costa
11 years 6 months ago
@ 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. 
Norman Costa
11 years 6 months ago
@ Ernie:

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.
Norman Costa
11 years 6 months ago
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.
11 years 6 months ago
I very much appreciate these comments, from Mattingly on one side to DCosta on the other. Although I judge the unions to be far more valuable and essential to justice, it seems, than Mattingly,I think they are subject to the same hubris, greed and distrust of regulation that I find in corporations and banks. The other entries remind me that, dispite the fractured decency in discourse, there is a deeper solidarity many of us share than the divisions that separate us.
thanks for your comments
ed gleason
11 years 6 months ago

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?.

C Walter Mattingly
11 years 6 months ago
I don't wish my comments above (#2) to be taken in any way as a denial of the gains in social justice that came about in the first half of the last century through the labor movemet. It was a great movement and moment in our history. My response to Fr Kavanaugh was an attempt to portray a more balanced picture. I do believe that over decades the balance of power shifted excessively and that unions today, especially public unions whom FDR warned us to keep out of collective bargaining, have morphed into self-interested, special interest groups that sometimes work against the collective good and to that extent become obstacles to social justice. An excellent example of this is the question of the secret ballot in company union elections. It was argued for and included as a recommended procedure in the original NRLA act in the 30's as a preventative to keep company representatives from badgering and intimidating employees during representational elections. This was reaffirmed in 1947, and the Supreme Court in a 1969 ruling explicitly stated that the best way to assure that voters could truly express their own opinions in union elections was the secret ballot. Skip to the current times, and now unions, realizing perhaps they are in a better position to cajole and badger undecided voters than company representatives, wish to do away with the secret ballot. I have hope, however, that this union excess is now being corrected, as the cities and states are broke and the public alerted. It is not so much Gov Walker who is reversing the tide on this one, but Mayor Rahm Emanuel of Chicago and Gov Cuomo of New York, liberal democrats, who are doing so.
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. 
Norman Costa
11 years 6 months ago

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?

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