The Reagan Revolution Against the 99%.

Former CIA case officer, former member of National Security Council (NSC) and former CIA Angola Task Force Commander John R. "Bob" Stockwell provides an analysis of the Reagan Revolution. He discusses the fundamental restructuring of the economy and foreign policy, and how Reagan accomplished this. Stockwell scrutinizes Reaganomics and shows how it has weakened the U.S. economically while carrying out an enormous transfer of wealth from the poor and middle classes to the rich. He also criticizes the Reagan record on civil liberties and the interventionist foreign policy.

Recorded July, 1987
News: June 24, 1987; April 14, 1987

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Who Should We Tax More: Dead Billionaires or the Unemployed?

67%, a full two-thirds of American corporations, pay no income taxes at all last year.  At the same time, a record 20 million-plus Americans collected unemployment benefits, a year that ended with the jobless rate at 10%, with underemployment coming closer to 20 percent.  Fast forward to the end of the third quarter of 2010 and the unemployed have transformed into the long-term unemployed.

So, the choice is simple, tax the unemployed. They're  growing at a faster rate than any other group and it appears they're here to stay as well. Lets tax the hell out of them. 

Wait. Are unemployment benefits taxable in the fist place?

The answer, of course, is a resounding "yes".  This is despite the fact that unemployment compensation is usually less (and sometimes a lot less) than the unemployed's former paycheck.  Hmmm...I guess that means every cent is necessary in the struggle to make ends meet.  However, rest assured, The American Recovery and Reinvestment Act states the first $2,400 of unemployment benefits is tax-free. After that, the remaining benefits is considered taxable income.

Now, who is this genius who decided to tax the unemployed? Well, I'll give you a hint. The year was 1985. Yep, that's right. President Ronald Reagan.

“Under the guise of tax reform, we agreed to raise $2.3 billion from people who don’t have jobs.” -- Rep. Brian Donnelly (D-MA) on the Reagan tax measure to raise revenue.

What would the power elite do without the callous "spirit" of the GOP, who as President Obama said, “hold workers laid off in this recession hostage to Washington politics” and spend billions of dollars on tax breaks for the super wealthy who are doing better than ever.

Meanwhile, back at the ranch, just this year alone, four billionaires died, (George Steinbrenner (net worth: $1.5 billion), Janet Morse Cargill of the family that founded Cargill Inc. (net worth: $1.6 billion), Texas pipeline magnate Dan Duncan ($9.8 billion), and California real estate mogul Walter Shorenstein ($1.1 billion)).  Thanks to Bush's tax cut bill, 2010 is the year without an estate tax. Too bad, the treasury loses approximately $6.5 billion in tax revenue.

This wonderful Bush tax bill, enacted in 2001, ensured that as the value of estates exempt from the tax gradually went up over the past eight years, the tax rate on estates was reduced. During 2010, according to the 2001 law, the estate tax disappears entirely, only to be restored in 2011 at a rate of 55% on estates of $1 million or more, which is where things stood before the 2001 change.  And the purpose of this was??

Anyway, if we let the Bush tax cuts expire, and we return to pre-Bush income tax levels for the richest Americans (among other tax changes), it will result in an increase of more than $217 billion in tax revenues for 2010 and 2011. The expirations will then contribute another $1.25 trillion from 2012 through 2015, and an additional $2.2 trillion from 2016 to 2020.

And here's another thing:  Economists agree that giving unemployed people money to spend stimulates the economy much more than does preserving tax cuts for the rich.  The CBO report, Policies for Increasing Economic Growth and Employment in 2010 and 2011, scores "increasing aid to the unemployed" as the highest-scoring policy proposal to stimulate economy.

The CBO estimated that increasing aid to the unemployed would have the greatest effects on GDP per dollar of budgetary cost and the second highest cumulative effect on employment of the policy options considered.

On the other hand, as our unemployment rate soars and average Americans pay the price, the elites, who are generating more profits than ever, are hoarding their cash and refusing to invest their earnings.

Many companies are focusing on cost-cutting to keep profits growing, but the benefits are mostly going to shareholders instead of the broader economy, as management conserves cash rather than bolstering hiring and production. [...]

“Because of high unemployment, management is using its leverage to get more hours out of workers,” said Robert C. Pozen, a senior lecturer at Harvard Business School and the former president of Fidelity Investments. “What’s worrisome is that American business has gotten used to being a lot leaner, and it could take a while before they start hiring again.”

Well, that was simple. The dead billionaires win. Tax the hell out of them and all of their alive and wealthy friends.

Contact your representatives and senators and get them to repeal Reagan's foolish unemployment tax.

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Is the Transfer of Wealth Complete?

Well, if there is any truth to Goldman Sachs plan to deliver total pay and bonuses in excess of $22 billion, after profits more than tripled last quarter, it appears the transfer, if not complete, is well on its way. Reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts helped set the stage for this new era of Wall Street wealth,
as if they really needed it.

Is there any doubt that we, the taxpayers have been scammed on the most massive scale ever to occur in history? We, the taxpayers, who bailed them out, saving them from facing the consequences of their own criminal behavior can't afford housing, can't afford health care, can't afford to pay our bills, can't find a job, meanwhile, the guilty parties are getting ready to divvy up billions of dollars.

But, are we, the taxpayers totally innocent? Not really. Although most of us did not directly participate in creating this systemic ponzi scheme that makes Madoff's devious contrivance look like child's play, we did cultivate the environment, over the last 30 years, that made it possible for these banksters, corporate criminals and our own government to get away with sucking the wealth of our country into their greedy paws.

Decades ago, when we bought into trickle down, supply side Reaganomics, that scapegoats the so-called "welfare queen", we made the decision that the value of money trumps all other values, and encouraged young minds to follow the money, and only the money, rather than allowing the endogenous process to occur - regarding education and career choice - that would facilitate true laissez-faire equilibrium, we planted the "seeds" of destruction. By promising a world of perpetually increasing returns, "we the people" promoted a "Gordon Gekko" value system where "greed is good", because the only fuel this promised "world" required was greed.

Take the increasing flow of graduates from top colleges into the world of finance. According to Laurence Katz , professor of economics at Harvard University and former chief economist at the U.S. Department of Labor, in 1970, three to five percent of Harvard graduates went into the finance industry. That percentage grew to fifteen percent in 1990, and in 2006, a whopping forty percent of Harvard grads pursued a career in finance. Why was there such a dramatic increase? Because, Harvard graduates who chose careers in finance made three times the pay of their peers.

So, what's the problem? Well, lack of diversification, for one. Rather than innovating products and services that actually contribute to society, all of the educated brainpower collects to create and develop monstrously complex financial products, that are, for the most part, worthless, mostly because the process of finding out their true value is close to impossible. These "financial frankenstiens" are often composed of so many layers of different investments - each one with a whole new set of rules, that operate in opposing and convoluted ways - that it would take an infinite amount of time to unravel their worth.

In good times, these monstrosities consume themselves or decompose, however, in times of crisis, these extraordinarily complicated debt securities are more like bundles of tiny little pieces of Styrofoam, plastic, disposable diaper fill, fiberglass, aluminum, and every other non-biodegradable material you can imagine, all twisted, entangled and knotted together. These exotic "brainchilds" - not understood by regulators, buyers, or even their inventors - have only served one purpose: to clog up the financial arteries of our economic system.

In addition to Wall Street and the financial industry - with so much money on the table - collecting brainiacs, like Dick Cheney collects arterial plaque, the entire credit derivatives market was deregulated. The melding of greed, an abundance of brainpower, and deregulation blurs...no, erases the lines between legitimate business and crime or criminal behavior; in effect, institutionalizing crime within the "mainstream" economy.

So, is it any surprise that the "Frankenstein" economy emerged? Not really. But, that doesn't mean it's too late, but we better act fast because it's only a matter of time before we, the taxpaying people, find ourselves in a third world country, pledging our allegiance to the United States under Goldman Sachs.

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Affluenza: Unsatiable Desire for an Abundance of Possessions

Affluenza, according to author of the book, Affluenza: The All Consuming Epidemic and filmmaker, John De Graaf, is a term describing "a painful, contagious, socially transmitted condition of overload, debt, anxiety, and waste resulting from the dogged pursuit of more”.

My guess is this insidious disease, "affluenza" began right around the time President Reagan took office in 1980, and Laissez-faire capitalism dominated most of our thinking. By the end of Reagan's two terms, after he had established "nibor dooh" (steal from the poor to give to the rich) economics, that's what I call it anyway, affluenza began to spread faster than sexually transmitted diseases in the porn industry.

Trickle down or "nibor dooh" economics achieved its true goal, evolving the meaning of the word, "affluent" to encompass the ordinary and the "working class" to include the poor, immensely increasing the divide between the "haves" and the "have-nots". The "noble" reason or rationalization is that income disparities and/or inequality vs. economic growth are supposed to encourage those at the lower end of the earning spectrum, and motivate them to catch up, however, they left out the part about the harder the "low earners" try, the further behind they will get creating a class of people Katherine Neuman calls the "Near Poor" in her book, The Missing Class.

In 1979, the top 1% of the US population earned, on average, 33.1 times as much as the lowest 20%. In 2000, the top 1% earned 88.5 times more than the lowest 20%. By now the discrepancy is much greater proving that President Reagan, Alan Greenspan and George W. Bush did nothing more than transpose the Robin Hood story.

Prior to this time, we were slowly emerging from a time when the importance of sacrifice was paramount. Forfeiture of material goods for the sake of something considered to have greater value placed the emphasis on higher ideals such as God, Country, and "humanity" (New Deal). Of course, this era (1930-1945) of sacrifice followed the pain of a market meltdown - the stock market crash of 1929, prior to which times were much like today.

Man is designed to satisfy his needs and desires with the least possible effort. In addition, the more he owns the more he wants. Lawmakers, who have not transcended their greedy natures, are normally the first in line when society prospers, and will try to create law for their own profit at the expense of others...Enron, Bear Stearns, Haliburton, Iraq War, tax cuts for the rich etc.

Bear Stearns is the latest casualty in what appears to be a growing trend of corporate scandals and failures tied to what appears to be poor fiscal management and lack of regulation, but in reality, is a carefully constructed legal system to benefit those at the top . In other words, as Frederic Bastiat says,

"It is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds."

When legislators create laws that contradict morality, society will either try to stop the "lawful" crime or as our society has chosen, choose to share in it, - affluenza, - thus making "lawful" crime universal. The victims of these greedy lawmakers - instead of fighting the unjust legislation or lack thereof - will try to fall in and end up following the "evil-doers," out of ignorance or in hopes of gain, even if it means suffering the consequences.

As terrifying as it seems, a financial melt down may be the only cure for "Affluenza" as it will force us to reduce consumption and waste, give us a chance "dry out", and figure out what's really important to us. Who knows? People might start choosing work that reflects their values, what they're good at doing and what they love to do instead of going for the job that can fill up their 28,000 square foot mansion with junk, closets the size of bedrooms to store the junk, hummers and garages large enough to store the hummers, entertainment centers that put movie theaters to shame and so on...

Unfortunately, human nature being what it is, usually requires some sort of comeuppance before true justice has a chance.

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Asked About the Deficit, McCain Cites Reagan’s Example

From the NY Times Blog:

"When Senator John McCain was asked here this afternoon how he plans to balance the budget, he said that he hoped to do so by stimulating economic growth – and approvingly cited the example of President Ronald Reagan.

There was one thing he did not mention during his response: the deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending.

The exchange occurred at a town-hall-style meeting held in a tent outside Bridgewater Associates, an investment firm. A member of the audience stood up and asked Mr. McCain, who has called for balanced budgets, how he plans to do it.

“Basically, which is it?” the man asked Mr. McCain. “Straight talk: Do you want to raise taxes, cut entitlement spending, cut defense spending, or have a deficit?”

Mr. McCain did not explain how he plans to balance the budget, but spoke generally about hoping to stimulate the economy – and cited President Reagan.

“I don’t believe in a static economy,’’ Mr. McCain said. “I believe that when there’s stimulus for growth, when there’s opportunity, when people keep more of their money — and the government is the least efficient way to spend your money — that economies improve.’’

“When Ronald Reagan came to office,’’ he said, noting that few in the audience were old enough to remember, “we had 10 percent unemployment, 20 percent interest rates, and 10 percent inflation, if I’ve got those numbers right. That was when Ronald Reagan came to office in 1980. And so what did we do? We didn’t raise taxes, and we didn’t cut entitlements. What we did was we cut taxes and we put in governmental reductions in regulations, stimulus to the economy, and by the way, Jack Kennedy also did that as well – and so my answer to it is a growing economy. And I think you best grow the economy by the most efficient use of the tax dollar.’’

Mr. McCain – who has said that he wants to balance the budget while making the Bush tax cuts permanent, cutting additional taxes, and keeping troops in Iraq – said: “I believe we can grow this economy, and reduce this deficit.’’

He said that he expected expense in Iraq to decline as the Iraqis shoulder more of the burden, and he also hinted at some cuts in federal programs.

He noted his opposition to the expensive Medicare prescription drug benefit, which he voted against. “Now you are paying for my prescription drugs,’’ he said. “Why should that be? Why should that be? Why should that be?”

But he said he thinks the problems can be solved. “Is it going to be tough? Yes. It’s going to be very, very tough.’’

Earlier, when he was asked if he plans to resign from the Senate this summer to make it easier for a Republican to win the election to succeed him, Mr. McCain said: “No, I will not. I have every confidence that there are a number of Republicans who would be elected. I do not envision a scenario of resigning my seat.’’

But then, on reflection, he seemed to open the door to the idea at least a bit. “But I would go back and think about it, and think about the scenario that you just described,’’ he said. “Right now my intentions are to remain in the United States Senate. ‘’

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