THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
23rd September, 2010 0
With mid-term elections approximately one month away, this edition of the Review kicks off a trio of forums in which we pose critical questions to candidates in key races throughout the Great Lakes Bay Region, with a goal of hopefully engaging them in meaningful dialogue. Of course, it doesn’t always work that way, as a disquieting trend in recent years has been for candidates to chart a ‘cautious’ course through rocky waters.
But given serious issues like unemployment, environmental degradation, economic instability, and mounting intolerance as represented by the TEA Party movement; is ‘political correctness’ and a tendency to ‘play it safe’ really what we are seeking from candidates wishing to lead us out of our precarious future?
In his crowning work Social Contract, the French philosopher Jean-Jacques Rousseau attempted to answer the question: What absolutely is the best government? His answer to both brilliant and illustrative: ‘The question is not answered because everyone wants to answer it in his own way. Subjects extol public tranquility, citizens individual liberty; the one class prefers security of possessions, the other that of person; the one regards as the best government that which is most severe, the other maintains that the mildest is the best; the one wants crimes punished, the other wants them prevented; the one wants the State to be feared by its neighbors, the other prefers that it should be ignored. As moral qualities do not admit of exact measurement, agreement about the mark does not mean agreement about the valuation.”
As a journalist that has weathered and witnessed the extremes of politics for four decades, from the birth of the SDS in Ann Arbor back in the 1960s and early ‘70s, to the perceived extremes of leaders, whether they be named Nixon, Carter, Reagan, Bush, or Obama; or at a state level, Blanchard, Engler, or Granholm, one tendency I have noticed is how the entire body politic seems to be breaking down.
America has moved from a moral mindset that viewed productivity, optimism, pride, and collective security as ‘core values’ to an unmitigated greed that has collapsed what we once held as inviolate; and transferred us into an unwashed state of anger that is juxtaposed by degenerative apathy.
As Vanity Fair editor Graydon Carter noted in the latest edition of Vanity Fair, “We are now defined more by what we don’t like rather than what we do like. And the list of what we don’t like is long and getting longer. Conservatives define themselves more by their hatred of liberals than anything else, and conversely, liberals by their distaste for conservatives. What else don’t we like? Wall Street, Google, and BP for a start. We don’t like pro-abortion nuts or anti-choice nuts. We don’t like New York or California. We hate Obama, Bush, and Cheney. (We’ve all but given up on Congress”). We hate big media, big oil, and big China.”
Or maybe, just maybe – all of this is a mis-directed illusion – the objects of our antipathy manufactured totems that exist to absorb our anger and deflect our action against the true perpetrators of our ills; namely, the large corporate conglomerates that have usurped the corridors of our democracy through unprecedented influence peddling and lobbying, driving us all into a state of helplessness, degenerating into apathy, that any true meaningful reform can ever occur.
One thing Americans do not like – regardless of their mindset or party affiliation – is for elected officials and public servants to enjoy advantages, which they as taxpayers, are denied. In the last year alone your U.S. House & Senate have voted themselves $4,700 & $5,300 raises and also voted not to give a social security cost of living raise in 2010 and 2011.
From a state perspective, the unfunded liability for the state's four major pensions — schools, state employees, police, and judges — is pegged at $11.6 billion, and the future health care liability ranges from $45-50 billion. Even if the state started meeting its obligations today, it would take $2 billion annually for the next 30 years just to get even.
Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages are in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out.
In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.
Taxpayers have put up an estimated $17.5 trillion toward guarantees, loans, and bailouts since 2008, but what do they really have to show for it? Banking interests have been the key beneficiaries of that $17.5 trillion in guarantees, loans & bailouts, yet they actually do have something to show for it. At top-tier firms such as Goldman Sachs and J.P. Morgan Chase, the aid has meant record profits. Along with Morgan Stanley these three entities, which received funds from the ‘Troubled Asset Relief Program’ will reportedly dole out an unprecedented $29.7 billion in bonuses for 2009, almost half of that by Goldman Sachs alone, meaning it will enrich its 31.700 employees by an average of $415,000 each.
Last week I received an e-mail from Sen. Debbie Stabenow extolling the benefits of the latest round of $30 billion funding to promote small business. But in reality, this is simply another round of bank funding, intended to loosen the purse strings at banks to make loans to small business because the defaults will once again be guaranteed by the Treasury (i.e. you and I as taxpayers.)
Last year when The Review did an extensive series entitled In Search of Stimi, designed to track the flow of stimulus dollars into the tri-city area, virtually all of the money distributed went to government, education, and banks – but none, that we could find, ever made its way to small business.
The only funding available for small business was in the form of an SBA loan (not a grant) that only one bank in our region, First State Bank, agreed to facilitate. After meeting with them and submitting paperwork for close to a year for a small loan less than $10,000, nothing ever came of it. Why? Because they had never seen a request for funding whereby the money would go to an independent vendor – the only funding approved for small business was to extinguish loans, a majority of which were held by First State Bank – so once again, this ‘small business stimulus’ was nothing more than another bank bailout wearing different clothes.
As for the banking industry as a whole, Congress did pass needed legislation to hold down arbitrary increases in interest rates on credit cards; but not before postponing the effective date of the new law one year down the road, which allowed Citibank to pump up the interest rate for some credit-card holders to nearly 30 percent, with other companies soon following suit. As a whole the banking industry will take in an estimated $38.5 billion in 2009, just on charges for bounced checks. Indeed, all those myriad little extra fees now account for more than half of the industry’s profits.
As for ‘Government & Education’, they also did quite well in 2009, thank you. According to The Free Enterprise Nation, which is a national organization representing the economic interests of those within the state who actually work and support the ‘private sector’ portion of our economy, the latest survey by the U.S. Government’s Bureau of Economic Analysis showed that the average federal employee earns $119,982 per year in compensation & benefits, while the average private sector employee earns $59,909. To cover the additional compensation packages of government employees, $100 billion a year is taken from the private sector in income taxes.
With 1/3 of the seats in Congress up for grabs, these are just a few of the specifics behind the inequities in our society that are fueling the 2010 mid-term election year. How it will pan out is anybody’s guess; but hopefully you will find the coverage that we give candidates through our forums illuminating, engaging, and informative.
And hopefully each candidate uses this opportunity to step up to the plate and use their office to fashion they type of society that Rousseau envisioned where individuals are given the freedom to flourish: “Man is born free, and everywhere he is in shackles. It is too difficult to think nobly when one thinks only of earning a living. Free people, remember this maxim: we may acquire liberty, but it is never recovered once it is lost. Our greatest evils flow from ourselves. Remorse sleeps during prosperity but awakes bitter consciousness during adversity. Take the course opposite to custom and you almost will always do well. The fruits belong to all and the land belongs to no one.”
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THE NEW GILDED AGE (Part 2)