It's All Your Fault, Part II
©30 June, 2011
Pirate Joe

    We're all familiar with the refrain by now: "There's no money. Revenues have all dried up; we need to cut, cut deeper and cut again into government spending, and (of course), lower taxes on the ruling class. Obviously, we must also privatise Social Security if it is to survive at all. We cannot afford any kind of health care reform. What else can we do? What do you do when you lose revenue? That's right: you make cuts and scale back. Government must do the same, least we bury future generations in a tsunami of debt".
    The logic seems firm and unassailable: don't spend beyond your means. The logic seems firm and unassailable because it is, for it is not the logic, but rather the premise it is based on that's faulty. A neat propaganda trick: get them to say "yes" by presenting them with a fact that is unquestionably true, (in this case the premise that spending money you don't have can be risky) and it's much easier to get them to keep believing (and saying yes to) everything that follows. Stated another way, postulating truisms at the start is a great way to insure that they'll never think to question what follows.
    It's quite true, cuts are one of the best ways to respond to diminished revenue. Except that we don't have diminished revenue. There is not one penny less money around now than there was when things were going well. Not one red cent less.
    Probably because so many other things in our lives are consumable, we tend to think of money that way also. "I lost $156 in a poker game last Saturday night, or I lost $275,000 in the stock market. Just as food or fuel is consumed and ceases to exist in its original form and vanishes, it is easy to perceive of money as consumed if we don't actually stop to think about it. The fuel you burned is gone, but that $156 you lost in the poker game last Saturday is now in someone else's pocket. That $275,000 you lost in the stock market is by no means non-existent: you no longer have it, but someone else does. The point is, that money still exists. To be clear, in that last example, I am talking about real money: If you buy a share of stock at $5/share and it rises to $500/share and you sell it, you made $495. If you hold it and it crashes, and you sell it off at $5, did you lose $495? No. You broke even.
    Let's return to the question I asked in the first part of this series: Where did the money go? Pause and think about that for a bit. Was it destroyed? Did, (for example) the Army load it into boxcars, drag it out to the middle of the desert and burn it? Did little green men from outer space vaporise it with their ray guns? I'm goofing around a little, but do you have any explanation as to how those physical dollars could have been destroyed? The answer to all these questions is no. The inevitable conclusion is that if the actual, physical dollars were not somehow destroyed, (they were not) then they still exist, (someplace) and the amount of total wealth therefore remains the same, regardless of recessions, depressions or plain old hard times.

It Had To Go Somewhere:

    If we accept the postulation that the money was not destroyed, and we can see that it is no longer "here", we can only conclude that it went somewhere else. The trick now is to divine just where that "somewhere" is. Here is another joyful opportunity to hoist Rush Limbaugh by his own petard. He always told us to "follow the money", didn't he? Yes, but I don't think he wants us to explore this particular trail. Let's take a look at some of today's conditions and analyse them a bit.

We have:

Pay Cuts and Massive Unemployment.
    The value of labour diminishes as the supply far exceeds the demand. Jobs are cut (or rather sent overseas) and those who are working get pay cuts. The money flows upward.

Record Foreclosures:
    You and/or the bank may come out with less than you started with, but again, that wealth didn't just disappear: it was paid to the seller who sold the house to you. In other words, regardless of how much money you or the bank may end up losing, it has no effect on the total amount of wealth, but don't worry about the bank. It will add extra interest and fees and foreclose, or get bailed out by the government. Or both. The money flows upward.

Taxpayer-Financed Bail Outs:
    (And guaranteed C.E.O. bonuses) for the very banks that are turning you out to the street. What a deal! Your tax dollars contribute to the bonus of the C.E.O. who's bank is dispossessing you. It's a sweet deal, all right, it's just not sweet for you.
    Wall Street got a nice, soft, cushy landing and you paid for it. Your derrière hit the pavement. Hard. The money flows upward.

Corporate Tax Breaks:
    These come in three delicious flavours:

        good: tax breaks for sending jobs overseas,

        better: pay no taxes at all, or

        best: pay no taxes at all and get a (multi-billion dollar) "refund" cheque!

    Could it possibly get any better than that? Just where on the form 1040 is the option box you check to: "pay no tax and receive a multi-billion dollar "refund" "? Somebody help me; I just can't find it. Oh, and by the way, is this the sort of "wasteful government spending" that Republicans want to eliminate? Hell no.
    Choose whatever flavour you wish but: The money flows upward.

Rising Gas Prices:
    Record profits, billions in gifts from the government every year, and it still isn't enough! The money flows upward.

Tax Cuts For The Rich:
    A Republican for-the-rich-only tax cut is in their 2012 budget. The money flows upward.

Privatisation:
    Public resources are sold to private firms for a pittance. The money flows upward.  The services you once received at cost (through taxes) are now sold to you at cost plus profit plus C.E.O salaries and bonuses. The money flows upward.

Attacks on Unions:
    Unions created the middle class by fighting for fair wages and hours, workplace safety, pensions and medical coverage. As such, they are the only major organisations dedicated to the well-being of workers. No, they are not perfect, (what human organisation is) but would you rather return to a five dollar per 112 hour, 7 day work week? Which, by the way, works out to seventy-one cents per day or 4.5 ¢ per hour.
    If you are middle class, chances are that your parents or grand parents belonged to a union, (or worked at a shop that had to improve its conditions to match those of its unionised competitors) making it possible, for example, to send their children to college.
Effective propaganda causes people to whole-heartedly endorse positions, policies and politicians who work against their own best interests.     The right has scored a major victory here, convincing workers that unions are to blame for current economic conditions. Don't fall for it; ask not why the union guy makes so much, but rather why you make so little. Remember, the ruling class considers the middle class to be created with wealth stolen from them. They want it back.
Weaken unions and: the money flows upward.

Wall Street Non-Regulation:

    Wall Street demands the right to do whatever it wants, whenever it wants to whomever it wants. Speculators, (just one example) are parasites on the public well-being who serve no useful purpose except to themselves. They artificially drive up prices on most of what we consume, in effect, driving our incomes down. The money? (you guessed it) flows upward.

Non Income-Based Taxes: 
    Any tax that is not based on your ability to pay is rapacious and tyrannical while punishing people for being poor and/or falling upon hard times. I'm thinking of property tax here. How is it justifiable that the government should steal your home because you lost your job?
    Vilified as the I.R.S. is, at least they are fair enough to lower your tax as your income falls. Should your income drop below a certain level, you owe them nothing at all. Property tax, however, is based on an arbitrary "assessed value": an imaginary amount of money that you don't have, and may never get. Once you've paid your tax for the year to the I.R.S., you're done. You never pay tax on that money again. Property tax will tax you again and again on that imaginary money that you don't have. Property tax forces folks who have already hit hard times into homelessness.
    If these local taxes were income based, this could never happen. When any government demands a tax that is not based on your ability to pay, they are robbing you of your wealth and security. As newly impoverished people are forced from their homes, guess what?The money flows upward.

Government Of, By And For The Lobbyists:
    Ever wonder why big corporations and the ruling class always seem to get just what they want? That's easy. They pay the campaign bills.  They want laws written to favour them, and they get them. It's the guy who signs the cheque that always names the tune. The money flows upward.
    For example: want alternative energy? Well, Exxon does not. Since they are paying the campaign bills, (and will, thanks to the Supreme Court, be paying more of them), don't expect anything more than a token alternative energy programme until the last practical drop of petroleum is gone.
    If we want government that serves our needs, we have to sign the cheque, and that's called public campaign financing: no private money, no corporate money, and no money of your own. Everyone gets the same amount for the same office. Some side benefits: a level playing field, candidates who are beholden to no one but their constituents and the opportunity to run for public office becomes available to everyone.

Conclusion:

    I have attempted to illustrate how the money flows upward and why (that) although there seems to be no money around, there is, in reality, no less of this resource now than there was before this depression.
    I believe that public campaign financing is truly the most important issue before us today, the one issue that affects everything else, the only solution to the über-capitalism that will make peasants of us all.  Unless the upward flow of wealth is reversed, we will see nothing but the dawn of the New Feudalism; the return of the basic two-class society, consisting of the very rich and the very poor. By the way, want to guess which one they have in mind for you?

Coming Up:

Should money be considered a public resource?