Category Archives: rich vs poor

Walmart’s Free enterprise/lunch

I recently heard the author of the book Free Lunch give a speech in which he said that the Sam Walton descendents had earned a large portion of their fortune, if not most of it, from taxpayers rather than consumers. He claimed they did it by extorting huge tax advantages out of the communities that they wanted to build a Walmart store in.

I wouldn’t have commented on it except that I just opened this page unrelated to the book’s author. It is an animation of Walmart openings since the store was started in Arkansas by Sam. I imagined every town giving millions to the Walton family to get their own Walmart and beat out the other poor schmuck communities nearby which were too cheep to pay the extortion.

The Peace Prize

I’m very impressed with the Nobel Committee’s Peace Prize selection.

I heard about Yunus’s small loans several years ago on NPR and they make so much sense. I wish a few Republicans would pay attention to this as it is exactly what the party used to encourage before it got the idea that a free enterprise economy meant steering big government contracts to cronies and campaign contributors, making them rich, and easing their tax burden.

The Republican “invisible hand”

If there is any economic assumption that undergirds today’s Republican Party it is that Adam Smith had it right when he described the “invisible hand” that make markets work most efficiently.

Light-weight Republican hacks like Grover Norquist have been championing a simple-minded and corrupted version of Smith’s philosophy. Unaware or indifferent to Smith’s very real belief that fairness and charity should be introduced into the invisible mechanics of the soulless marketplace Norquist has said that his goal is to make “government so small that you can strangle it in a bathtub.”

Tom Delay Grover Norquist and a whole passle of Republicans are guilty of their own more selfish violations of the invisible hand. Perhaps camophlaged hand is a better discription of things like the K Street Project where Republican lobbyists ply congressmen and their staffs for statutory law which will tilt the invisible hand in their favor or win them government contracts like the many shabby ones granted during the Second Iraq War.

Today’s example of the GOP’s visible hand has to do with President Bush’s billion dollar Reading readiness program which got directed to good ole boys friends of the Republican Party.

Not surprisingly when good-ole-boys get overpriced federal contracts they turn around and contribute a hunk of their “earnings” to the campaigns of the small government folks who got him their big payday. Its just plain old good business.

Or take the secretive, arch-conservative, New York multi-millionaires who have spent millions to organize petition drives in dozens of states to put caps on state taxation fueled not only with their money but with a heavy dose of deceit. Invisible hand indeed!

Structural barriers to poverty

An interesting column on Poverty by economist Bradley Schiller contends that for the vast majority of impoverished Americans their condition is short term. Schiller pointed to a study by the University of Michigan which found that only 5% of poor Americans stayed poor for ten years out of the 13 years they were studied. That means that 19 out of 20 poor people were able to escape extreme poverty most of the time.

Democrats would be well advised to pay attention to this because it helps explain why America continues to be a place where optimism sells. In many ways the Democrats are too steeped in the Era and ethos of the Depression.

Schiller suggests that the best thing to do is to work on eliminating the structural barriers which make it difficult for people to escape poverty. One of those is a very Republican barrier. Usurious interest rates of short term loan business like title loans have become widespread as they left the Republicans Deep South in search of new customers in Republican leaning states. They are very much like the company stores of the coal fields or tenant farming which replaced the plantations after the Civil War.

In Republican eyes if a good ole boy can get rich by earning a 100 or 150% return on a loan to some poor desperate person so be it. Not exactly a family value – usury. Apparently it doesn’t make any difference how you make a buck so long as the law allows it and keeping it legal is what the Republicans want.

Yet a ruinous loan is a structural barrier. It should also be noted that Republicans have also  become the primary champions for gambling which provides a sin tax for government. Gaming in America reminds me of the failing Soviet Russian’s dependence in the late 1980’s on revenues from vodka sales which helped to keep the population in a compliant stupor.

Schiller also mentions the 5 million low achieving students who drop out of school every year. This is another critical barrier because poorly funded school systems drive kids out before they can get the tools to help them achieve success. This too is an outcome of Republican politics because Republicans champion “local control” of schools which all too often means localalized financing of schools.

I’ve thought for years that Congress should withold federal education revenue from states which refuse to implement some financial equity between their rich and poor school districts. I suggested this to Paul Wellstone a few months before he died. The Senator didn’t disagree with me but told me that too many Congressmen would fight such a plan.

Non-standard labor

After the BBC news it was off to breakfast in the hotel and the complimentary copies of the Financial Times and International Herald Tribune. While I read the Tribune’s story about the Danish police breaking up an alleged terror plot in Hans Christian Anderson’s home of Odense, which we passed through two days ago, Claudia read about Europe’s answer to illegal immigration in the Times. Non-standard labor. This is the new world threat and the origin of the alleged Danish terrorists – illegals who work dirt-cheap under threat of constant arrest in barrios or slums, with no government protection for things like mistreatment or loss of life and limb.

Then I read about the poor child workers in India who now face being liberated from the slavery of middle-class Indian families who employ them as domestic help. It seems India has now passed a law making such employment illegal and threatening a two-year jail term to any middle-class Indian family who takes such a child off the streets. Now these middle-class families will have to bribe police to keep the kids or send them back to the streets.

What challenges for the brave new world. Fortunately there were some stories about silly stuff like the birth of the boy to Japan’s royal family and the escape of the Austrian girl from the man who put her in an underground cell for eight years. It’s nice to have distractions from the real world.

The GOP and making good money

An article today caught my eye and on a topic I’ve been licking my lips to expound on. The GOP and its new ethos that confuses the making of money with the strengthening of the economy.

It seems that the US military which pays starvation wages to its enlisted personnel wants to crack down on Payday loan establishments that prey on servicemen. In the story today one soldier took a $255 dollar advance on a $300 guaranteed pay check. This used to be called usury and most states used to have laws against it. That fee is comparable to a 459% interest rate. Compare that with the going rate for a home mortgage loan and you can see how soldiers are being taken.

But the military sees its servicemen being bled dry by these Republican sanctioned outfits. The military wants to protect its troops from these predators but everyone should be protected from them. The growth of the once non existent car “title loans” is the same thing. Poor people hand over their car titles for emergency money and lose their only means of transportation for loans that are in the neighborhood of 100 % or more.

Rather than protect the vulnerable poor (even servicemen) Republicans insist that the poor are entitled to ruin themselves and have only themselves to blame. Too many of these modern Era Republicans never saw anything wrong with any way to make a buck (other than selling drugs).

Just look at gambling. Once strongly anti-gaming the Republican Party now pushes gaming everywhere despite it socially destructive consequences. The Republicans, hate to tax wealthy people even when the wealth is acquired more through legislation than enterprise. But with reduced tax revenues, socially destructive gambling has become an acceptable new source for revenue. Except for Indian gaming……That’s why Republicans in state’s like Minnesota have tried to break into the Indian gaming industry and why they rail against Indian sovereignty. Why are we letting all these poor Indians keep all this money? It would be better if we just let them sell cigarettes and set up title loans on the Rez.

Stealing the Franchise

In the old days (twenty years ago) Republicans agonized that Democrats brought ineligible voters to the polls. Today they are attempting to shore up their sagging fortunes by denying the vote to voters who are eligible but inclined to vote Democratic.

In Minnesota and other tightly contested states Republicans had an outstanding organization to prevent people in Democratic districts who couldn’t prove their eligibility from voting. They even sent people to Duluth. This can be considered strict enforcement of the rules and is hard to fault.

But now in red state legislatures laws are being passed to prevent people, who coincidentally are more likely to vote Democratic, from voting. Who would this be? The poor. People without driver’s liscences. People who work two jobs and can’t easily register to vote. These laws now join the long standing Republican policy of removing for a lifetime the voting rights of convicted felons. At least this latter law applies equally to wealthy, white, Republican embezzlers as it does to poor, minority, drug dealers.

This is evidence of the Deep South’s takeover of the Republican Party with its ancient and revered practice of denying black citizens the right to vote through poll taxes, voter tests and intimidation.

NOW had a good expose of this last week. No wonder Republicans want to kill PBS.

Poison Pills

Why are corporate execs paid so much more compared to “joe six packs” than they were a couple decades ago? This writer suggests it is a reaction to deregulation and an effort by corporate managers to make it difficult to be replaced in a takeover bid.

This was sent to me by Vic who regular readers will recognize as my long time email sparring partner. Its of interest to me because my wife is a corporate exec and because I’m a great believer in the progressive income tax.

I don’t know why the salaries have risen as they have but I believe that people who have benefited most from our nation’s bounty have a greater obligation to support the system that made their success possible. This explains my support for the progressive income tax vs. the Republican’s dearly beloved flat tax (which also apparently came down from Mt. Sinai).

Just where the top tax percentage should fall is always open for negotiation. In the FDR years they approached 90 percent and helped pave the way for the booming market in legalized tax dodges and loopholes. Today its closer to 30  percent and the system is still bedeviled with dodges and loopholes. Now the Republicans are poised to eliminate most of the Estate taxes for the very rich if the Democrats push for an increase in the minimum wage.

Don’t do it Dems. The poor already know you want to do it. Wait to see if you can get control of the House and if you do then revive the Estate tax and the raise the minimum wage!

George Bush is soaking the Rich?

A Wall Street Journalist says that under George Bush tax policies taxpayers making over $200,000 have seen their taxes rise from 41% to 47 percent……That caught my attention. I presume he’s not talking about the tax rate on the 2hundredthousandaires but their slice of the tax pie that goes toward the federal budget. Is this really a laffer? I linked first before reading the commentary which I only listened to with half an ear. I’ve got to read this carefully, think about it and make some pronouncement…… but right now I’m grilling shishkebobs.