The Minimum You Need to Know About Voodoo Economics

voodoo doll imageIt’s almost impossible to avoid hearing about “Voodoo Economics” this week. The Republican tax plan, either one, is a bigger train wreck than any of their health care plans, and I say that having been born a Republican. We have the best government money can buy, just look at the tax plan. Bought and paid for by groups with money funding yet another tax cut for the rich by raising taxes on the middle income and poor. Ultimately it is designed to purge the country of “undesirables” who want a living wage by denying them health care, forcing them to flee this country as refugees.

How did we get here?

Easy, people don’t understand that a one time fix only works once. After you fire a bullet you can drop the hammer on that same cartridge as many times as you want because it no longer has a bullet to send or powder to send it with.

JFK Pitching Tax PlanThis all started around the time I was born, a time many call Camelot. The newly elected young king, JFK, decreed that the tax system set up to fund the war was pulling the economy down too hard in peace time. The top marginal tax rate was 91% on incomes above a million dollars. Coming from a moneyed family himself, the young king decided his family should be allowed to keep a bit more. After his death, the top rate was cut to 70%, unemployment did go down, but the deficit became a real part of life. NPR has a very good write up on it here.

People who called themselves “conservatives” but in reality were fraud peddlers for the rich latched onto a single part of the financial agenda. Cutting the top tax rate. For generations after that was their One & Done mantra. They quietly skip over the increases to minimum wage, social security, unemployment benefits and highway constructions. In truth, “conservatives” are trying to get rid of all those other things, turning all highways into for-profit toll roads owned by people funding their campaigns. The unemployed could then simply become poor, be unable to afford health care and die off, thus reducing the strain on government resources. They justify the need to eliminate all of these things by saying they need to reduce the deficit and national debt, yet somehow none of those needs come into play when it comes to cutting the top marginal tax rate. Selective hearing and spreadsheets which leave the inconvenient lines off.

Ronald ReaganNow we get to the first President I can remember voting for, Ronald Reagan. He got elected because he played in quite a few cowboy movies and he made Americans feel good. We weren’t going to have a wimp in office who wouldn’t nuke Iran for invading our Embassy and taking American officials hostage. It didn’t matter what any of his policies or promises were. Everyone knew in the fiber of their being that he would push the button. The Iran Hostage Crisis had gone on for over 400 days. By and large the country had written those hostages off. We, as a people, were ready to turn Iran into the world’s largest sheet of glass.

Thank you Canada imageIf you didn’t live through that time you probably cannot understand the feeling average Americans had. You probably also won’t understand just how Canada endeared itself to this nation until the last American who lived through that time has passed. Something our current President has chosen to ignore, probably because he doesn’t read anything other than a Tweet or a headline. Yes, we are pissed about the sandy oil pipelines, but, they are still our buds.

The fraud peddlers for the rich, conservatives, whispered into uncle Ronnie’s ear. Cutting taxes and providing tax credits for companies to off-shore jobs, initially sold as a solution to illegal immigration, became the fundamental core of Reaganomics. Yes, the “solution” to our Mexican illegal immigration problem was said to be for American companies to build a bunch of factories in Mexico providing jobs for the Mexicans in Mexico so they would quit coming across the border illegally.

Sound familiar? Knew it would.

Same shit you hear every few years. Tens of thousands of good paying factory jobs went to Mexico. American unemployment skyrocketed. For many, a living wage became unattainable. They were forced into minimum wage jobs, if they could find a job at all.

Sound familiar? Knew it would.

Yes, the IT/Computer boom was just starting. I even went to college for it. I sat in classrooms with 40+ year old union factory workers and they were being asked to retrain for an industry their brains had not been conditioned to understand. Most quit before completing the two year program.

Jobs re-training doesn’t work. You can’t re-train someone who has done 20+ years of physical labor to become a knowledge worker. Oh sure, you can find the random curious individual who sucked in the labor industry because they really should have been a knowledge worker all along, but large scale with a broad brush, no, it doesn’t work. There are studies proving this now, but back then it was something new. You can retrain a labor worker to perform a different labor task. Say, going from factory line to welding, auto mechanics or A/C repair, etc., but you cannot expect them to completely rewire their brain. Likewise, you cannot retrain most knowledge workers to do labor jobs, especially after they have spent 20+ years sitting at a desk. Their mind may adapt, but their body won’t. When it comes to re-training, you can only hope for small shifts, not massive leaps.

Somewhere during Uncle Ronnies time in office, Americans learned a new word: Trillion. The national debt hit one trillion dollars. The rich got richer and the factory workers got screwed. Yes, I was riding high in the IT world (we called it the computer world then) but I grew up on a family farm and had relatives who worked in factories. I got to see the devastation every time I came home.

Did I regret my vote? No. The one thing I and most other Americans wanted happened. The hostages came home. Yes, there are many stories about scandals, but, in the end, even Iran believed Ronnie was going to push that button turning their country into the world’s largest sheet of glass. That was the driving force behind them cutting a deal. They all knew they were going to die if they didn’t. As a nation we had tolerated the hostage situation as long as we were going to and we put a President in office which made that clear.

Ever since JFK cut the top tax rate, the lives of the working class have been getting worse. Oh, to be sure, there was a brief rise in employment, but it wasn’t long lasting. By the time Reaganomics kicked in, the death of the middle class was assured. Public policy ensured there would never be another generation of High School kids to graduate and earn a decent living in a factory, buying a home and raising a family. If you weren’t equipped to be a knowledge worker, you weren’t going to have a good life.

If you are old enough to be reading this, you’ve heard at least one battle over minimum wage. It was always the wrong solution, just like cutting the top tax bracket. The correct solution was and always will be The Ethics in Income Act. Feel free to click the link and read about it if you wish. In a thimble, it ensures all boats really do rise by making the wealthiest individuals directly responsible for bettering the lives of the poorest. I realize such an act will get painted with many unsavory labels, but those who paint those labels forget, I’m a knowledge worker. The act is basic logic. You can never close a gap by artificially raising the bottom ever dozen years while allowing the top end to rise uncontrollably. There has to be an unbreakable leash which ensures the distance can never get beyond a certain point.

So now, we have yet another group of fraud peddlers for the rich, conservatives, chanting the only mantra they know, cut taxes on the wealthy. Logic dictates this is stupid. The only way to eliminate the national debt in a consumer economy is to ensure the consumers have all of the money to spend. Trickle down never trickles down. The rich simply grow bigger hands via off-shore accounts, to hold onto all of that money. It also overlooks yet another simple fact, if you try to turn this into a global consumer economy, it means no corporation has any interest in helping build a nation, they simply exploit all profit from one then move on to the next, consuming all of its wealth and resources.

That, children, is how we got here. Once again the rank and file of the middle class on down had tolerated enough. We elected a President which told the world that and conservatives saw that as a ringing endorsement of their plans to give the wealthy yet another tax cut.

It all begs one question. What word comes after trillion? History dictates if this tax plan goes through, we will all learn that word.


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