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David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

Over the years, we’ve all seen solid examples of the Versailles mentality in our media — ie. the mentality that glorifies Washington and its inhabitants as heroes saving the rest of America from itself. But usually these examples are a bit subtle in how they weave the arrogance into the prose. Usually, you have to really stop and do a careful double-take when you see a piece of Versailles propaganda.

That’s why this recent piece from the notoriously servile Matt Bai in the New York Times is such a groundbreaker. Never have I seen such a monumentally blatant piece of Versailles triumphalism. In that sense, it is truly The Versailles Manifesto. Here are the key excerpts to show you what I mean:

“In theory, all the people who populate the federal government, whether as senators or midlevel bureaucrats, are on loan from other places, often doing the nation’s business at the cost of more lucrative or convenient opportunities back home.”

“Plenty of people don’t like [Rahm] Emanuel, and plenty more don’t like his politics. But whatever one thinks of the man, it’s indisputable that he has spent most of his adult life doing the people’s work.”

“Had the elections board counted that against him, whether or not he had set foot back in Chicago for months at time, it would have lent credence to the destructive idea that there is Washington and there is the rest of us.”

In the first example, Bai asks us to ignore the revolving door between government and business, whereby many politicians invest time in Congress to then cash in on that time as lobbyists. Nothing to see there, he says — we are asked to believe that instead, most D.C. pols are making a noble sacrifice to serve the public “at the cost of more lucrative or convenient opportunities back home.” (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

As the House considers a bill to extend the Bush tax cuts for the top 2%, slash corporate taxes and potentially make the Estate Tax more generous to billionaires than ever before, it’s instructive to put the move into a larger cultural/historical context. And thanks to newly released IRS documents, we can do just that.

As the Institute for Policy Studies reports, officials at the National Archives recently released a 67-year-old U.S. Treasury Department report detailing what the richest Americans once paid in taxes in the middle of the 20th century. IPS notes that “We have simply never had clearer evidence of just how much America used to expect out of individual wealthy Americans — and just how little, by comparison, we expect out of our wealthy today.” Here are some of the details:

We learn, for instance, that 1941′s top executive at IBM, Thomas Watson, collected $517,221 in compensation that year, about $7.7 million in current dollars. Watson paid 69 percent of his total 1941 income in federal income tax.

Last year, today’s chief exec at IBM, Sam Palmisano, took home $24.3 million for his executive labors. We don’t know how much income above that sum Palmisano reported in 2009, or exactly how much of that total he paid in taxes. (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

During the recent fight over extending unemployment benefits, conservatives trotted out the shibboleth that says the program fosters sloth. Sen. Judd Gregg, for instance, said added unemployment benefits mean people are “encouraged not to go look for work.” Columnist Pat Buchanan said expanding these benefits means “more people will hold off going back looking for a job.” And Fox News’ Charles Payne applauded the effort to deny future unemployment checks because he said it would compel layabouts “to get off the sofa.”

The thesis undergirding all the rhetoric was summed up by conservative commentator Ben Stein, who insisted that “the people who have been laid off and cannot find work are generally people with poor work habits and poor personalities.”

The idea is that unemployment has nothing to do with structural economic forces or rigged public policies and everything to do with individual motivation. Yes, we’re asked to believe that the 15 million jobless Americans are all George Costanzas — parasitic loafers occasionally pretending to seek work as latex salesmen, but really just aiming to decompress on a refrigerator-equipped recliner during a lifelong Summer of George.

Of course, this storyline makes no sense. From liberal Paul Krugman to archconservative Alan Greenspan, economists agree that joblessness is not caused by unemployment benefits. With five applicants for every one job opening, the overarching problem is a lack of available positions — not a dearth of personal initiative. (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

Over the past few hours, the mediasphere has been ablaze with talk that Republicans and their insurance industry backers supposedly won a huge victory with a Virginia court’s ruling that the mandate to buy private insurance is unconstitutional. On the policy merits, this seems to make no sense. At all. In fact, the Republicans pushing this court case may have inadvertently helped America take a progressive step on health care, if progressives can actually take advantage of the situation. Hear me out.

The mandate to buy insurance was always a huge giveaway to the private insurers. It guarantees them a pool of customers that will pad their profits for eternity, thus solidifying private insurance as the profit-taking middleman in the American health care system. The Virginia court, however, struck down the mandate but did not strike down the other mandates forcing the insurers to sell you insurance. For instance, the court ruling did not eliminate the mandate for insurers to sell you insurance despite your preexisting condition; did not eliminate the mandate for insurers to use a certain percentage of their revenues to provide health care services (rather than padding profits); and did not eliminate the mandate that ends lifetime caps on health care benefits.

So, assuming this ruling stands (which, granted, is a big assumption), we have a situation whereby the insurance companies no longer have the state forcing you to buy a private product with no public alternative (ie. a public option), but the insurance companies do have the state forcing them to offer their product to you in a way that doesn’t discriminate against you on the basis of pre-existing condition, and in a way that allows you to buy their product when you want to buy it.

Someone please tell me how this is a bad thing for the progressive cause of cracking down on the insurance industry and empowering health care consumers.

This is exactly why you have the insurance companies freaking out, threatening ever-higher premiums unless they get the mandate they originally rammed through Congress. And like loyal corporate lapdogs, this is why you have the Obama administration – which crafted the original health care bill with the insurers – telling the New York Times that “if (the mandate) eventually falls, related insurance reforms would necessarily collapse with it, most notably the ban on insurer exclusions of applicants with pre-existing health conditions.” It’s a scare campaign aimed at making sure the insurers get their ransom – aka the guaranteed profits and power that come with a customer mandate. (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

Four pieces of news today about the tax debate lead me to the modest conclusion that America — or at least the capital that governs in its name — has gone entirely, unmistakably and undeniably batshit crazy.

1. We just had an election that focused intently on the problems that come with a growing national deficit and debt. Correspondingly, almost every major poll after the election shows the majority of the country therefore doesn’t want to extend Bush tax cuts on income above $250,000 a year. Nonetheless, a Democratic president who won the biggest electoral landslide in contemporary history on a promise to rescind those tax cuts — that same president is now pushing to extend those very tax cuts, thus seriously increasing the national deficit/debt.

2. President Clinton’s former chief of staff, John Podesta — a man who, as head of the liberal Center for American Progress, zealously defends the economic record and model of President Clinton — just issued a press release arguing for an extension of all the Bush tax cuts in order to not “abandon the millions of Americans who are struggling to keep their families afloat.” In other words, President Clinton’s former chief of staff is arguing that returning to President Clinton’s tax rates would “abandon the millions of Americans who are struggling to keep their families afloat.”

3. The Democratic Party, which for a decade rightly argued that Bush tax cuts blew a hole in our budget and didn’t spur serious economic growth, is now suddenly arguing that we must extend all the Bush tax cuts to preserve the prospect of economic growth. Somehow, the party now believes spending $60 billion a year on reducing tax rates for income above $250,000 is a better way to spur economic growth than using the same money to (as just one example cited in the New York Times) make college entirely free for half of all American students.

4. Despite Democrats controlling all branches of America’s federal legislative apparatus, Republicans are governing the country. As the AP reports under the headline “Republicans achieve top goal in Obama tax-cut plan,” the GOP “largely dictated the terms of President Barack Obama’s proposed tax-cut compromise.” This, despite the fact that to stop the Bush tax cuts, all Democrats had to do was pass nothing.
As I said, mark this day down: It’s the day it became undeniably clear that we’ve gone completely batshit crazy.

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David Sirota is the author of the best-selling books “Hostile Takeover” and “The Uprising.” He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at ds@davidsirota.com.

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Follow David Sirota on Twitter: www.twitter.com/davidsirota

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This piece was first published on The Huffington Post.

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

Redistributionist — as epithets go, the moniker is so mild, so … 2008. Today, we’re hammered by screeds against Democrats’ alleged socialism and President Obama’s supposed Marxism. The class war is clearly on — the paranoids and royalists of the world have united, seizing the means of propaganda production in these waning days of this year’s election campaign.

The onslaught, of course, is predictable. After all, this is an election season, which inevitably evokes redbaiting crusades by the plutocrats. Less predictable is this crusade’s traction. As Wall Street executives make bank off bailouts, as millions of Americans see paychecks slashed and as our economic Darwinism sends more wealth up the income ladder, it’s surprising that appeals to capitalist piggery carry more electoral agency than ever.

What could cause this intensifying politics of free-market fundamentalism at the very historical moment that proves the failure of such an ideology? Two new academic studies suggest all roads lead to ignorance.

The first, by Harvard’s Michael Norton and Duke’s Dan Ariely, finds that Americans grossly underestimate how much inequality our economy produces. Among the survey respondents, the vast majority said they believe the richest 20 percent own 59 percent of the wealth, when, in fact, that quintile owns 84 percent of the wealth. In other words, in spite of the data, many believe our system produces the moderate equality we desire, which means many see efforts to better spread wealth as a confiscatory overreach.

That, however, is not the full story of 2010. Because this now-ascendant economic view relies on misperceptions about inequality, we are still left to wonder: What accounts for those misperceptions? (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In the last 72 hours, we’ve finally seen the outlines of the inevitable Democratic civil war that’s been brewing over taxes and spending. Both sides argue that their way is the path to economic prosperity – and so the question is, which side represents a fact-based argument, and which side represents fact-free theorizing?

Before answering that question, let’s first outline which side is which.

On one side is the Obama administration and progressive Democrats, pledging to keep its promise to let the Bush tax cuts for the very wealthy expire on schedule. Most on this side want to reinvest some or all of the recovered tax money and plow it into domestic spending that would rebuild crumbling infrastructure and economically support those hard-hit by the recession.

On the other side are conservative Democrats in Congress who are becoming increasingly brash in their declarations that either today’s middle-class Americans or tomorrow’s middle-class Americans (via. debt interest payments) should have to pay higher taxes or suffer through slashed services/benefits in order to prevent today’s wealthy from paying any more. This is a varied group, but a nonetheless powerful one in its diverse motivations.

For instance, you have many “Blue Dog” Democrats. Afflicted with a debilitating case of Selective Deficit Disorder, these Democrats cite their devotion to deficit hawkery as reason to vote against unemployment benefits – but also defend policies like the Bush tax cuts. Democratic Sen. Ben Nelson is about the best example of this. (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In a terrific column for Tax.com, Pulitzer-Prize winner David Cay Johnston breaks down new government data and puts USA Today’s whole “lowest tax bills since 1950″ revelation into dollars and cents we can all understand:

In 1979 federal taxes for the median-income household totaled $6,100, but in 2007 taxes slipped to $6,000. That $100 decline, measured in 2007 dollars, understates what a bargain taxes have become. Back in 1979 federal taxes equaled 18.7 percent of comprehensive household income. By 2007 incomes had grown 28 percent in real terms, so the tax burden not only dropped in absolute dollars, it also fell as a share of median comprehensive income to 14.4 percent. So over 28 years median income has risen in real terms by $9,100 while federal taxes have fallen by $100.

As Johnston points out, this is not something you hear very much about from journalists — or as he puts it, “those who play journalists on television talk shows.” And you certainly don’t hear it from congressional Republicans or rank-and-file conservatives, who continue to bewail allegedly high taxes as our biggest problem, despite the real emergency of cash-strapped communities now slashing police forces, tear up roads and even outsource entire municipal workforces. (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In a very solid piece about what the fight over Harvard Professor Elizabeth Warren and the new Consumer Financial Protection Bureau (CFBP) is really about, ABC News includes this revealing snippet from the Financial Services Roundtable, one of the most powerful corporate front groups in Washington:

The financial industry, for its part, would like Obama to pick someone more likely to see their side of the issue, not just the consumers’ side.

“We believe the Consumer Financial Protection Bureau should focus on both ends of the transaction,” said Scott Talbott, chief lobbyist for the Financial Services Roundtable in Washington.

Not to put too fine a point on it, but the new agency is called the Consumer Financial Protection Bureau, it is not called the Bank Financial Protection Bureau (as, frankly, you might call the rest of the government). Indeed, the new agency’s whole mission is to protect consumers, meaning it shouldn’t “focus on both ends of the transaction.” It should see issues exclusively through the prism of consumers. That’s its very r’aison d’etre. (more…)

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

As the planet’s economy keeps stumbling, the phrase “worst recession since the Great Depression” has become the new “global war on terror” – a term whose overuse has rendered it both meaningless and acronym-worthy. And just like that previously ubiquitous phrase, references to the WRSTGD are almost always followed by flimsy and contradictory explanations.

Republicans, who ran up enormous deficits, say the recession comes from overspending. Democrats, who gutted the job market with free trade policies, nonetheless insist it’s all George W. Bush’s fault. Meanwhile, pundits who cheered both sides now offer non-sequiturs, blaming excessive partisanship for our problems.

But as history (and Freakonomics) teaches, such oversimplified memes tend to obscure the counterintuitive notions that often hold the most profound truths. And in the case of the WRSTGD, the most important of these is the idea that we are in economic dire straits because tax rates are too low. This is the provocative argument first floated by former New York Gov. Eliot Spitzer in a Slate magazine article evaluating 80 years of economic data.

“During the period 1951-63, when marginal rates were at their peak – 91 percent or 92 percent – the American economy boomed, growing at an average annual rate of 3.71 percent,” he wrote in February. “The fact that the marginal rates were what would today be viewed as essentially confiscatory did not cause economic cataclysm – just the opposite. And during the past seven years, during which we reduced the top marginal rate to 35 percent, average growth was a more meager 1.71 percent.”

Months later, with USA Today reporting that tax rates are at a 60-year nadir, Secretary of State Hillary Clinton told a Brookings Institution audience that “the rich are not paying their fair share in any nation that is facing (major) employment issues … whether it is individual, corporate, whatever the taxation forms are.” (more…)