Today on Blogcritics
Home » Culture and Society » On the Road to Revolution

On the Road to Revolution

Please Share...Tweet about this on Twitter0Share on Facebook0Share on Google+0Share on LinkedIn0Pin on Pinterest0Share on TumblrShare on StumbleUpon0Share on Reddit0Email this to someone

As he always does, the venerable John McLaughlin closed his show Sunday morning with a prediction, and it was one which would have done Cassandra proud. He predicted that by early next year we would see the passage of a national sales tax or value added tax.

This is hardly a new idea, but it seems to have gained credibility in the current environment of massive debt, deficits and uncontrolled spending. Most European nations have value added taxes and the idea was given serious consideration by Democrats last year. It's even similar to the FairTax which many on the political right support, with the key difference being that the intent of the FairTax is to replace the income tax while a value added tax would be levied in addition to other existing taxes.

Now, in the face of massive debt and ballooning obligations for national health care and social welfare spending, the idea of a national value added tax is becoming increasingly attractive to the administration and Democrats in Congress. It may not be the only way out of the financial crisis, but it is certainly the easy way out. After all, why spend responsibly when every new excess can be offset by placing ever greater demands on the limited resources of the working people of the nation?

As things stand right now, the tax burden on US citizens is already approaching the level of the most overtaxed nations in the world like Denmark, France and Japan. With the inclusion of state and local taxes, which range between 6% and 13% depending on the state, some Americans pay over 50% of their income in taxes. In addition, the distribution of taxation is very uneven, with the top half of income earners paying almost all of the taxes while lower income earners pay little or nothing. More and more government spending is directed towards those who pay little or no taxes as the tax burden on higher earners continues to increase.

This has already led to a feeling of desperation among taxpayers, who see the cost of out-of-control government spending coming out of their shrinking paychecks. It is this despair which has produced the Tea Party movement as a grassroots effort to stop the juggernaut of federal spending and debt before it runs over and crushes us all.

Everyone knows that the government's current sources of revenue cannot possibly meet their growing obligations. Of course, this doesn't stop the government from spending and spending. Rather than being responsible and making cuts, now they think that a value added tax is the easy way out. Each 1% in VAT would generate close to $1 trillion in new government revenue per decade, which means that it wold take a 5% VAT to offset the difference between the current budget and the 2008 budget. Add on another 5% if you want to balance out the ballooning future costs of social security and national health care.

That's 10% added onto the tax burden of every American who pays taxes, which comes down to close to a 50% increase in actual taxes paid for the average taxpayer. Because it is a sales tax its impact is much larger on the taxpayer than an equivalent increase in income tax as currently structured. In real terms that VAT is an enormous tax increase which will literally bring many hard-pressed working people to their knees. It will drive people into poverty and debt, destroy savings and investments, lead to bankruptcies and foreclosures as well as further weakening of national productivity.

This means fewer and fewer people paying more and more taxes. Taxpayers are protesting now. If a VAT gets passed on the same kind of partisan basis and disregard for the desires of the people as we saw with the passage of health care, the already high level of anger may well flare out of control. Taxpayers already have a heightened awareness of this issue and will see a VAT as a loaded gun pointed at their heads. Millions are protesting now. If a VAT passes it could be the thing which touches off outright revolution.

Of course, the mere threat of a value added tax along with the massive hidden tax cost of cap and trade may be enough to bring about a political revolution before any further dangerous legislation passes. Increasing numbers of Democrats are joining Tea Party groups, largely out of protest over government stimulus and bailout spending. The Democrats in power have been ignoring the will and the anger of the people, but if they won't listen, there's an election just seven months away and they can all be voted out of office.

Let us hope that our constitutional system of elective representation solves this problem before angry citizens go to greater extremes. If the political elite doesn't get the message that the era of tax and spend is over, then let's tell them that their careers are over.

Powered by

About Dave Nalle

  • Mark

    I can’t wait to see the morass of exceptions and rebates that will be an American VAT.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    In other words, the same kind of mess as in what passes for our healthcare bill – another 2000-page document?

    Why can’t they keep it simple?

  • Mark

    Tax lawyers gotta eat.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Why have the environmentalists failed to complain? Just think of the trees which must be felled to print this stuff!

    Dan(Miller)

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    A question, Dave – do you really favor the present tax code.

    One advantage of VAT would be to eliminate frivolous spending and frivolous production. Hopefullly, a person would be likely to think twice before purchasing something they don’t really need.

  • http://www.republicofdave.com Dave Nalle

    No Roger, I don’t favor the present tax code. And I don’t object to a VAT as a method of collecting taxes. The problem is that the VAT as proposed will be an additional tax system, added on to all of the state taxes and the income tax as it already exists.

    If it replaced the current system that might not be such a bad thing – that’s basically what the FairTax is. But as an additional tax mechanism on top of all the existing ones, it’s absolutely unacceptable.

    Dave

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, in that case I tend to agree.

  • http://handyfilm.blogspot.com handyguy

    There are a lot of very large, unsupported assumptions in this article [as usual].

    Yes, if a giant VAT were added to current tax burdens without any revisions we would all be outraged, not just those who are allergic to all taxes in general.

    But there isn’t even a proposal on the table yet. Aren’t you tilting at windmills here?

    And just a reminder…the healthcare bill is written to pay for itself. [Unlike, for two examples, the Medicare Part D drug benefit and the first 6 years of the Iraq war.] There’s plenty of deficit spending in our future, but most/all of it will come from other expenditures.

    As David Leonhardt pointed out in a still-very-relevant column from a couple of years ago:

    “The taxes that the federal government took in last year equaled 18.4 percent of the gross domestic product, almost exactly the average since 1980.

    …A family in that top 1 percent of earners paid a total federal tax rate — including everything from payroll taxes to income taxes to capital gains taxes — of 30 percent in 2004. That was down from 41 percent a decade before. Since the 1950s, tax rates on high-income families have generally been falling.

    The top earners pay a bigger share of the government tab than in the past because their incomes have risen so sharply — even more sharply than their tax bills.”

  • http://handyfilm.blogspot.com handyguy

    To continue that thought for a second:

    When top tax rates were 90% [1951-1963] and 70% [1964-1981], the US still managed to have a prosperous economy…somehow. How do our rabidly anti-tax buddies account for that?

    If Obama lets the rate go back up from 30% to 40%, ideologues will howl, but the rich will still be very, very rich.

  • http://ruvysroost.blogspot.com Ruvy

    Nalle,

    Let us hope that our constitutional system of elective representation solves this problem before angry citizens go to greater extremes. If the political elite doesn’t get the message that the era of tax and spend is over, then let’s tell them that their careers are over.

    Are you finally waking up?

  • http://www.republicofdave.com Dave Nalle

    There are a lot of very large, unsupported assumptions in this article [as usual].

    Those are what we call “opinions” – and they are the product of what we call “reason.”

    Yes, if a giant VAT were added to current tax burdens without any revisions we would all be outraged, not just those who are allergic to all taxes in general.

    But there isn’t even a proposal on the table yet. Aren’t you tilting at windmills here?

    No, I’m preparing people for what’s coming down the road so that we can act quickly to stop this idea dead in its tracks as we failed to do with the health care boondoggle.

    And just a reminder…the healthcare bill is written to pay for itself. [Unlike, for two examples, the Medicare Part D drug benefit and the first 6 years of the Iraq war.] There’s plenty of deficit spending in our future, but most/all of it will come from other expenditures.

    Health care certainly will not pay for itself. It will be paid for by the taxpayers. And your assertion that past excessive spending somehow justifies even more of the same is just irrational.

    When top tax rates were 90% [1951-1963] and 70% [1964-1981], the US still managed to have a prosperous economy…somehow. How do our rabidly anti-tax buddies account for that?

    The top marginal rate doesn’t accurately represent the real tax burden on individuals, plus the tax rate was much lower for most of the population and wages were actually higher relative to cost of living than they are now during those periods, which means more disposable income to pay the taxes with.

    If Obama lets the rate go back up from 30% to 40%, ideologues will howl, but the rich will still be very, very rich.

    Except for the people on the margin between the wealthy and the middle class who will be hit the hardest and can least afford it and those in the middle class who will be driven down into poverty.

    Dave

  • http://handyfilm.blogspot.com handyguy

    Except for the people on the margin between the wealthy and the middle class who will be hit the hardest and can least afford it and those in the middle class who will be driven down into poverty.

    Again, assertions without proof, or even evidence. Which taxes, specifically, are going to drive the middle class into poverty? And I get a giggle out of “the margin between the wealthy and the middle class.” What income level are you talking about, and how big a tax burden are you referring to? It’s easy to throw accusations around without bothering to back them up.

    Read some of David Leonhardt’s articles on this subject. [He is the NY Times economics columnist.] You will no doubt consider him partisan because he has praised many [not all] of the president’s ideas and policies.

    But he presents his case calmly, rationally, with common sense, unlike the sometimes shrill [but often dead-on accurate] Krugman.

    The gap between the very wealthy and the rest of us is approaching obscenity, in fact may have already passed it. And the president’s oft-repeated $200,000-$250,000 threshold for tax increases has been adhered to.

  • cannonshop

    Handy, it’s about Purchasing Power. Back when the top rate was 90%, a single wage-earner in the construction trades could afford a house, car, and support his family (wife and kids) on an annual income of less than ten grand.

    An average tax rate of 3% was sufficient to build the Interstate Highway system, NASA, and the entire jet-age from immediate post WWII to the adoption of the F-15 in the early 1970’s.

    In the time I’ve been alive (1973 to the present) that’s become no longer the case. to maintain the same base standard of living my stepfather had in 1972 (the year before I was born) making 30,000 dollars, I’d have to make over a hundered fifty thousand dollars a year, not including the much higher relative amount I’d have to pay in taxes at the higher bracket of the present-I actually can’t make enough as Skilled Labour to have the same lifestyle he had then-as a high school drop-out, and I’ve got two years of college.

    I made just shy of ninety grand this year, and I’m Paying two grand to the IRS on the Fifteenth of April.

    Now, in today’s world, if I wanted to get earlobes-deep in debt with loans I’ll never pay off, I could get…close.

    If you use real-dollar terms, the combination of the loss of production infrastructure in this country, the devaluation of the currency, and the national addiction to debt combine to make something really clear:

    People Like ME can’t afford the expanding federal government. My tax rates go up, my purchasing power is stagnant or declining, real-life standard of living is dropping.

    The pattern is unsustainable, and the Democrats just put a supercharger on it.

  • http://handyfilm.blogspot.com handyguy

    Cannon, I sympathize. I was unemployed 10 of 12 months last year, and yet I have to write a big check to the IRS next week.

    But that has nothing to do with rising income tax rates. They haven’t risen for me, or for you, lately, nor are they scheduled to.

    I think nearly everyone, liberal Dems like me included, support a sane tax policy. But the tendency of people on both sides to caricature each other’s views does not move that conversation forward in anything close to a constructive way.

  • http://handyfilm.blogspot.com handyguy

    The president called on Congress to establish a bipartisan commission on deficit reduction.

    Republicans ignored/sneered at the idea. So Obama established the commission himself.

    One assumes the commission will look at entitlement and defense spending as well as at tax policy — the three main ocmponents of deficit reduction. Perhaps the commission is one part of what Dave has in mind when he says this is “coming down the road,” and maybe a VAT will be proposed.

    But I bet there will be plenty of rebates and exceptions involved.

  • cannonshop

    #14 Handy, what you’re missing, is that as long as my INCOME (raw numbers) stays static, my tax rates don’t go up-but that income is declining in terms of value, which the tax rates don’t account for-so I’m losing money and effectively paying higher taxes if I try to hold the level I had as recently as last year in real-dollar terms.

    They aren’t indexing income tax to inflation, and never have-if they DID, the ‘Marginal” incomes would be a lot higher, and tax-anger would be a lot LOWER.

    The other thing about the 90% rate, when it was in action, the top earners could cut that burden down, by investing in businesses that put Americans to work at the lower collected rates-that’s no longer the case, and hasn’t been since the Carter years.

  • http://drdreadful.blogspot.com Dr Dreadful

    Those are what we call “opinions” – and they are the product of what we call “reason.”

    Opinions are very seldom arrived at through reason. Reason is – or should be – what we use to try and find out whether our opinions are valid.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    It would be nice, Dreadful, if things were that clear-cut.

    Of course, Dave’s fudging also when he grounds his opinions in Reason.

  • cannonshop

    #15 Generally, when Democrats talk “Bipartisan” what they mean is “You Agree with ME, and I sacrifice Nothing.”

    The rest of the time, it’s a matter of agreeing on things that have little to no net positive effect. Our system relies on adversarial, as opposed to cooperative, relationships in the halls of government.

  • http://handyfilm.blogspot.com handyguy

    There was little or no inflation from fall 2008 to the present, and inflation hasn’t been high in quite some time, other than gas price spikes.

    The total inflation for 2009 was minus 0.3%, in other words deflation.

    Yes, the wages of the middle class have stagnated. To blame this on high tax rates is ideological nonsense. The Bush tax cuts have been in effect for nearly a decade now, and they of course benefited primarily the wealthy.

  • http://handyfilm.blogspot.com handyguy

    Thanks, Cannon for another unsupported, partisan swipe [#19]. Why do you insist on making wild generalizations like that, always without backup?

  • cannonshop

    Just to add a couple of examples for supporting evidence…

    McCain-Feingold Campaign Finance Act: prior to being ruled mostly-unconstitutional in the Supreme Court, it had no teeth and was unenforceable.

    The PATRIOT act: when Democrats and Republicans agree on something, it’s usually a bad idea. This turd passed with near unanimous bipartisan support.

    TARP/Bank Bailouts of 2008 and early 2009-again, if both parties agree so readily, there’s probably something seriously wrong with it.

  • cannonshop

    #20 I’m not blaming the stagnation on tax-rates, I’m saying that BECAUSE of wage stagnation and dollar devaluation, the Tax Rates aren’t linked to reality, Handy.

  • John Wilson

    It’s been a long time since one could say “the venerable John McLaughlin”. He’s just old and set in his ways, now. But I suppose you enjoy the program because a bunch of rightists gang up on a hapless moderate.

  • John Wilson

    Dave doesn’t Reason, he Rationalizes.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    We all do to an extent, John. It’s not as easy to tell one from the other as we’d like to believe – because all our arguments proceed from values, and unresolvable arguments from different values.

  • http://handyfilm.blogspot.com handyguy

    Latest projections by CBO on TARP money:

    Originally allocated at $700 billion, final cost is likely to be about $110-125 billion — and that includes $40 billion or so spent to help homeowners, not big companies.

    For AIG we spent $70 billion and will only get $34 billion back. For the auto industry, we spent $80 billion and will get about $46 billion back.

    But for banks, the government has been paid back with interest and will actually show a profit of about $7 billion.

    No doubt we’d prefer zero. But this is a lot better than we thought it would turn out even 6 months ago.

  • http://blogcritics.org/writers/realist Realist

    It will drive people into poverty and debt, destroy savings and investments, lead to bankruptcies and foreclosures as well as further weakening of national productivity.”

    Just how is this different from what we now have, Dave? As people fall further and further behind in this poor excuse for an economy (something of which I myself have become personally aware from recent adverse experience), with what are the people going to buy anything so taxed? You and I both know they can’t and won’t, so what little economic recovery we can expect will be killed off by this tax if it is passed.

    Our nation has outsourced and offshored our ability to grow the economy, and we are now at the point where we are going to have to decide what we are going to do without. We cannot afford everything contained in any domestic government budget, so something is going to have to go. For instance, do we really need over 700 military bases, many in foreign nations which pose no threat to us? These alone cost us billions. Are we to forgo reversing the sorry state of our infrastructure? If so, this would adversely affect the economy much worse than a VAT would, but no one’s taxes would have to be increased to allow the continued deterioration. What about all those expensive business-friendly loopholes in the tax laws which never manage to trickle down any benefit to those of us whose labor creates that increased value? When you stop laughing, we’ll continue.

    If I were heartless and cruel, I would advocate the elimination of Social Security and Medicare so that their funds can be applied in favor of an ever-growing military whose task is to take from the rest of the world what we no longer produce for ourselves. I would abandon any pretense that the government cares one whit about the populace (except to staff the military), and divert that decadent social spending into promoting the interests of the state and to further aggrandize its power to perpetuate itself. The purpose of a citizen is to serve the state, is it not? And is the state not the very top of society whose individual personal importance and worth far outweighs that of thousands (if not millions) of the lesser beings they dominate for furthering their personal goals of dominating other elites by whatever means possible?

    Whew! I need a break. I better go find my Phillip K. Dick anthology and read something of his that will lighten my mood!

  • http://www.republicofdave.com Dave Nalle

    The gap between the very wealthy and the rest of us is approaching obscenity, in fact may have already passed it. And the president’s oft-repeated $200,000-$250,000 threshold for tax increases has been adhered to.

    (picks self up off floor laughing)

    Obama has already raised taxes substantially in his budget by rescinding past tax breaks and instituting all sorts of new tax measures on businesses, all of which will be passed directly on to consumers in the form of increased energy costs and higher costs for manufactured goods.

    The health care “reform” includes all sorts of revenue generating measures which are not limited by the income of the people they target. And then we have cap and trade coming around the bend, which would hit everyone with thousands in additional energy costs and taxes, again with little regard to income.

    As for that margin between the wealthy and the middle class, if you think that earning $200,000 a year makes you one of the rich, you’re either a Democrat or you don’t live in the real world — is there really a difference? At that income level people don’t have the kind of disposable income they used to have, and another $6000 or more a year in additional taxes will be big lump for many of them to swallow.

    And I know that you all want to soak the terrible ultra rich who pay almost 97% of all taxes in this country, but if you make it too difficult for them they will just leave and take their money with them as they did in England in the 1970s. Once their money starts leaving the country, trying to get that money from the rest of the population will be devastating.

    Have fun in your socialist paradise where everyone lives on the dole.

    Dave

  • http://handyfilm.blogspot.com handyguy

    I don’t advocate soaking the rich, or believe that they are evil. I do find it ridiculous when anyone claims the rich are already being soaked.

    I don’t know which business tax measures Dave is referring to [perhaps he doesn’t either — makes for better polemics when you leave out the specifics].

    But if he’d like to restore the ridiculous tax break companies were getting by first getting government subsidies to cover their retirees’ prescription drugs, then being allowed to deduct the same subsidies on their tax returns — well, I’d be interested in how twisted the logic would need to be to justify that.

    There are many taxes, and many tax breaks. This administration has provided numerous new tax breaks for businesses as well, in the stimulus bill, in the recent jobs bill, in the health bill. I’m sure we won’t see them mentioned in any of Mr. Nalle’s articles, because he prefers to distort and caricature whenever it suits his ends.

    Viva la revolucion. Bleah.

  • http://www.indyboomer46.blogspot.com Baritone

    According to Nalle, between health care reform and his so far imaginary VAT, all Americans will be bankrupt and would be headed to the poor house, except there are no poor houses. (Of course, Nalle could once again regale us with his great “work house” idea. But that’s another story.)

    No matter who says what here, someone else has a “Yes, but” to counter it with.

    Now, I’m supposed to feel the pain of those earning $200,000. per year. I’m sure all the folks earning one tenth that will shed big crocodile tears for them – maybe start a fund: “Help! Help the ‘Two Hundred Granders.’ Give what you can. Give till it hurts. I know, anything hurts, but hey, we gotta dig deep to keep these folk’s heads above water. Think of the toll this can have on soccer moms alone.” (or hockey moms should you prefer.)

    The average family earning around $200,000. in Indy lives in a less than 10 year old, 2 story, 2500 square foot home having 4 bedrooms and 2.5 baths, with a finished basement and a 3 car garage in which are parked generally 2 middle market cars both usually less than 5 to 7 years old, alongside their $3200. John Deere lawn tractor and perhaps a ski-doo or snowmobile for good measure. If they happen to be a little older than average, that 3rd garage bay just might be taken up by say, a vintage 1965 Vette, usually covered with a canvas tarp just for funzies.

    In the house are at least 1 and often 2 big, wall mounted flat screen TVs, several smaller ones scattered about the place and 2 to 3 or more new or relatively new computers, late model appliances in the kitchen and a whirlpool tub in the master bath, etc., etc., etc.

    And now, the government is threatening all that conspicuous consumption? Tough shit!!

    Awww, but what meaning is there to life if you can’t accumulate all kinds of useless, but expensive crap?

    B

  • http://www.indyboomer46.blogspot.com Baritone

    A few years ago, The Indianapolis Star had an article regarding the then CEO of Eli Lilly (I forget which one,) who, it was reported, had only earned around eighteen million dollars the previous year – down from a high a few years prior of around twenty six million bucks.

    I started feeling really bad about this, and I had an urge to get really sick and manically depressed so I could get scripts for a bunch of Lilly drugs just to help them out, you know?

    I commented in response to the article that I imagined “the Missus” was no doubt forced to start clipping coupons and taking in laundry. Poor dear.

    Life is suffering for us all.

    B

  • Jordan Richardson

    Awww, but what meaning is there to life if you can’t accumulate all kinds of useless, but expensive crap?

    If I can’t have a flatscreen in the door of my fridge, life’s not worth living.

  • http://www.indyboomer46.blogspot.com Baritone

    Exactly!

    B

  • STM

    One big problem with VAT, or GST (Goods and Services Tax … same beast, different name) is that it is supposed to phase out certain parts of existing tax systems so that in theory, you pay less tax if you play your cards right.

    Unfortunately, everyone’s experience is the opposite … a VAT or GST is ADDED, which means you pay more on everything from ice creams for the kids to petrol.

    Don’t get sucked in by it.

    It’s one of the greatest pea-and-thimble tricks politicians have every foisted upon us. And they’ve foisted a few, so you get an idea of how bad this is.

    I pay it here, and I hate the bloody thing. It’s a complete rort.

  • cannonshop

    Baritone, you really don’t get it, but I’m going to try anyway…

    It’s not conspicuous consumption if you want to own a house without mortgaging your unborn children’s future, (or theirs), it’s not conspicuous consumption if you want to eat regularly without needing a bank loan.

    It’s not conspicuous consumption to not want to live on the dole, Baritone, or want to take a vacation occasionally that isn’t ‘spend a weekend at home instead of working overtime.”

    The majority of working americans don’t work for big corporations-they work for middle and small businesses, which are the ones most adversely impacted by the policies of the Democrat Left-big corps can afford to outsource offshore or pay the vig, they can afford the legions of corporate tax lawyers necessary to avoid paying ANY tax, they can afford and are a part of the Federal Corporatism political machine.

    The things that would have made me support “Healthcare reform” begin with real reforms;

    For instance, making employer-provided health insurance 100% tax deductable-so that instead of being a ‘cost’ it becomes a means to control costs, and encourages businesses to offer the stuff (and self-employed people to spend on it instead of just hoping not to get sick!)

    Instead, we got…something else. Something designed by people who basically hate the idea of independent businesses and free enterprise.

  • http://www.indyboomer46.blogspot.com Baritone

    “Something designed by people who basically hate the idea of independent businesses and free enterprise.”

    A pointless and untrue statement.

    I’m afraid, Cannon, it is YOU who “don’t get it.”

    B

  • Baronius

    Baritone, why do you care how much the CEO of Eli Lilly makes?

  • http://handyfilm.blogspot.com handyguy

    When a CEO makes 200 or 300 or 500 times what the average worker in his company makes, it’s worth pointing out.

    And the fact that this ratio has dramatically increased in recent decades, while many workers’ pay has stagnated, is not some irrelevant factoid.

    Even CEOs of companies that are performing poorly often get paid huge amounts. And even if they authorized big layoffs.

    What should be done about this is another question. Shaming them in the public square may be pointless, since they’ve in many cases already demonstrated that they’re shameless.

    But Barney Frank’s proposal to require shareholder knowledge of/participation in executive pay decisions seems like a common-sense start.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I wouldn’t care jack shit what any CEO makes if there were no abject poverty and if it was a world of plenty for each and everyone to be able to meet their basic needs.

    But in light of the fact that it obviously ain’t so, on either count, Baronius’s rhetorical question is either disingenuous or the height of simple-mindedness.

  • http://drdreadful.blogspot.com Dr Dreadful

    It’s not conspicuous consumption if you want to own a house without mortgaging your unborn children’s future, (or theirs), it’s not conspicuous consumption if you want to eat regularly without needing a bank loan.

    It’s not conspicuous consumption to not want to live on the dole, Baritone, or want to take a vacation occasionally that isn’t ‘spend a weekend at home instead of working overtime.”

    I can’t help but notice, Cannon, that your retort to B-tone stops there.

    How about all those cars, TVs, computers and those various bizarre forms of motive power which probably get used once a year at most and which, in any other country but the US, you rent when you need them rather than own the damn things?

  • cannonshop

    #42 What about them? if a New Yorker wants to sit in traffic every sunday instead of riding the subway, that’s his business. (personally would never live in such a place. too crowded, dirty, and dangerous.)

    sure, doc, people buy/own shit they don’t need, and it’s caused problems, we’re not going to solve those problems on a blog, and adopting eurosocialized…anything isn’t going to solve them either-some of the worst examples of conspicuous consumption are in areas where the bulk of the population’s on some form of government support.

    (You’ve lived here long enough, remember ‘Redneck jokes’?) Making people poor won’t cure conspicuous consumption, it just makes them poorer, and, in the case of expanding government, more dependent (and therefore, more likely to try to fill the void with junk, or drugs, or food…)

    The reason advertisers are always going after teens, is that they’re the ones who spend every dime on a reliable basis-because most of them have few to no real-world responsibilities to temper their expenditures.

    IMHO, it shouldn’t be legal to give someone under twenty-one a credit card unless they can show proof of employment, and I consider giving a kid money without making them work for it is a form of child abuse that inhibits their growth and development as citizens.

    Then again, I also think we need to abandon this idea of being a ‘Consumer culture” and go back to being a “Producer Culture”, so there you go.

  • http://www.indyboomer46.blogspot.com Baritone

    Frankly, I seriously doubt that anyone earning two hundred grand a year is likely to find themselves “on the dole.”

    And once again – those making a fraction of that could really give a rats ass about someone else’s friggin’ vacation. Give me a break.

    All these dire predictions are little more than hysteria. Nalle has transmogrified from a reasonably sane and thoughtful political thinker into a Glen Beckian fear monger and conspiracy nut. Many of you Wing Nuts are following suit.

    B

  • Baronius

    Handy, why is it worth pointing out? My duty is to take care of myself, mine, and those who have less than I do. I look upon the Trumps of the world with pity when I notice them at all. I don’t want what they have, and I don’t see how I have a right to take it from them.

  • http://drdreadful.blogspot.com Dr Dreadful

    adopting eurosocialized…anything isn’t going to solve them either

    Of course not. American society has evolved very differently from European. (Which goes some way to explain why the healthcare bill doesn’t much resemble eurosocialized… anything.) But that’s no excuse for dismissing every ‘European’ idea out of hand either.

    some of the worst examples of conspicuous consumption are in areas where the bulk of the population’s on some form of government support.

    Citation? And do you mean ‘worst’ as in ‘most extravagant’ or as in ‘least able to afford’?

    Making people poor won’t cure conspicuous consumption

    I didn’t say anything about making anybody poorer. I’m not that hands-on. But a little discouraging people from taking much more than they need, or more than the(ir) economy can support, can’t do any harm.

    IMHO, it shouldn’t be legal to give someone under twenty-one a credit card unless they can show proof of employment

    Agreed 100%. But isn’t that a form of nanny-stating?

  • http://joannehuspek.wordpress.com Joanne Huspek

    I’m afraid the “revolution” won’t come soon enough. We’re all still fat and lazy. Even the “poor” and disenfranchised have free cell phones, free cable, free bus fare and nearly free housing. Why would anyone rise up against the impending taxation? We haven’t hit bottom yet.

  • http://handyfilm.blogspot.com handyguy

    According to Business Week, the average CEO of a major corporation made 42 times the average hourly worker’s pay in 1980. By 1990 that had almost doubled to 85 times. In 2000, the average CEO salary reached an unbelievable 531 times that of the average hourly worker.

    I see this as part of a corrosive culture of greed. There is a self-protecting privileged class.

    [There are counter-examples which to me only strengthen the argument. Whole Foods has a salary cap — no one can make more than 19 times the average worker. Stock options are distributed to 93% of employees. The CEO even reduced his salary to $1 per year a few years ago.]

    [Michael Moore profiled a couple of smallish employee-owned companies in “Capitalism: A Love Story.” The non-cutthroat attitude of the managers was intriguing and charming.]

    At the very least, I would think you would be intellectually curious about this phenomenon. I’m not suggesting radical government action. But this “who cares?” attitude seems very odd to me.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Indeed, it’s as though such astronomical disparities in remuneration were of no real effect on the rest of the world, totally independent of the state of affairs worldwide, never mind the effect in terms of shared perceptions.

  • http://handyfilm.blogspot.com handyguy

    And you have to wonder: What do these guys think of the people who work for them who are paid so much less? Do they respect them? Are they grateful at all? Are they contemptuous that someone would work for chump change?

  • http://www.republicofdave.com Dave Nalle

    When a CEO makes 200 or 300 or 500 times what the average worker in his company makes, it’s worth pointing out.

    Why? Concern over CEO salaries in large companies is inherently fallacious. If you took the salary away and divided it among the workers they would gain at most a few cents a day in salary. But in reality if you took it away it would be added to corporate profits, again increasing dividends by some small fraction of a cent.

    Dave

  • http://www.indyboomer46.blogspot.com Baritone

    Nalle refuses to get it. The disparity in pay between big corporate CEOs and the grunts who actually produce the product or service the company provides is largely a problem of symbolism.

    Is what a CEO actually does on a day to day basis worth 500 times what a line worker does? Are the particular knowledge and skills a big corporate mucky muck brings to the conference table 500 times greater than those a line worker must possess? These guys (it is mostly guys) might as well live on another planet. It’s been demonstrated on that network show which has the boss man trying to perform incognito the supposedly menial work that his or her employees must do and usually failing spectacularly.

    Given the failure rate of many of our large corporations, it is not that far out to suggest that a room full of monkeys could randomly come up with better decisions than the average human CEO.

    How anyone can defend these exhorbitant yearly earnings is beyond me. Even the mugs that fail – those who run their companies into bankruptcy – wind up with multi-million dollar bonuses or buyouts. I’d be more than willing to go in and fuck up a big corporation for a whole lot less. They’d be getting a lot less bang for a lot fewer bucks.

    And Bar – the point regarding the Lilly CEO which seems to have gone right by you, was that I really didn’t care. It was simply a response to the media attention that characterized his smaller income (only $18,000,000. for pity’s sake) should somehow be of concern to all of us.

    B

  • cannonshop

    Frankly, the CEO issue is a side quest, a distraction-like talking about how much Base-Ball players earn (millions of dollars to play a kid’s game), or what an actor picks up if he’s famous-even on box-office bombs.

    Though it does have one thing in common with politics: the Board of Directors is supposed to negotiate/approve/offer CEO salaries, and they are in turn supposed to be answerable to shareholders, and a lot of the truly insane pay-outs to CEO’s (especially the ones that don’t actually perform well, whose companies are running in red ink and debt or have plunging profits) comes about because of shareholder apathy-much as how most of our GOVERNMENT problem comes from voter apathy going back decades.

    It’s interesting also to note that most ‘bad’ CEOs went to the same schools that graduated our most high-handed public officials. There may be a correlation there.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    The U.S. has long been a consumption based society. Consumption, conspicuous, “unnecessary” and otherwise, has driven the markets.

    Three hundred thousand new $500 Apple iPad toys were sold on the first day and About 3 million to 7.1 million iPads are expected to be sold this year, based on estimates from market research firms. “It appeals to people who can walk around a house and play with it,” says Gerry Purdy, an analyst at Mobiletrax.

    Silly thing to buy or not, it does to some extent stimulate the economy; that is needed if there is to be a recovery from the “recession.” I have no idea where the things are manufactured, but if not already made in China or elsewhere outside the U.S., I suspect they soon will be.

    If the country does not go belly-up in the process, it would probably be good, in the long run, were the U.S. to get over its consumption fetish and rely on U.S. manufacturers to produce what all good folks consider necessities. Lots ‘a luck. In the “long run,” of course, we are all dead.

    Dan(Miller)

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Cannonshop, It’s interesting also to note that most ‘bad’ CEOs went to the same schools that graduated our most high-handed public officials. There may be a correlation there.

    What a dastardly thing to say, Sir! It is guilt by association! Clearly, those who become public officials are pure and unaffected by their own material prosperity and power over others, while CEOs are vile bandits. Not only that, CEOs lack the sense of noblesse oblige, so consistently displayed by the political class.

    Dan(Miller)

  • Baronius

    It’s been clearly demonstrated that a lousy CEO can do more than 500x the damage of a lousy warehouse worker. Companies should be focused on getting rid of bad management. The pay for the good executives seems reasonable.

    I don’t know if CEO’s are greedy. I don’t see a lot of them on chat boards talking about taking other people’s wealth. I do see a lot of progressives complaining about other people’s pay, wanting to cap it, or wanting to tax it. Progressives seem far greedier than CEO’s.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Baronius, It’s been clearly demonstrated that a lousy CEO can do more than 500x the damage of a lousy warehouse worker.

    That’s probably true, as “everyone says,” but finding rigorously collected empirical data to back it up might be difficult. Be that as it may, and without adequate empirical data either, I would suggest that

    It’s been clearly demonstrated that a lousy political appointee, elected official and even career bureaucrat can do more than 500x the damage of a lousy CEO.

    Dan(Miller)

  • http://drdreadful.blogspot.com Dr Dreadful

    Baronius, there’s nothing inherently greedier about a progressive as opposed to a CEO. There is something irresponsible about paying a CEO many times what his work is worth.

    Try appointing 100 progressives to a CEO position, offer them a seven-figure salary and big fat benefits and see if they turn you down. 99 of them won’t. 99 of them will also have a sudden miraculous POV change as to the employer-employee relationship.

    Human nature.

  • http://handyfilm.blogspot.com handyguy

    I wonder how Dave’s neighbor and fellow libertarian, the Whole Foods CEO John Mackey, would respond to Dave’s snide dismissal of the significance of the CEO-to-average-worker pay ratio.

    [As noted above, Whole Foods caps that ratio, for all top execs, at 19 to 1, and Mackey lowered his own salary to $1 a year a couple of years ago.]

    It may indeed be more symbolic than material, but the idea that companies [and chief executives] can do well without dividing their people into Royalty and Peons certainly seems to have some appeal, both intellectually and morally.

    [Dave is snide about most everything recently. Gone are the days of civil discourse around here, it seems.]

  • Baronius

    Baronius, there’s nothing inherently greedier about a progressive as opposed to a CEO.

    I don’t see CEO’s trying to take money from progressive bloggers. Progressive bloggers seem obsessed with other people’s wealth. Maybe greed is the wrong word; it could be envy. Greedy people want more for themselves. Envious people want to take things away from others.

    It’s funny that in our culture, we all talk about what liberals see as conservatives’ bad motives, but we never talk about what conservatives see behind liberals’ thinking.

    There is something irresponsible about paying a CEO many times what his work is worth.

    What is a CEO’s work worth? Some guys ran their banks intelligently, and avoided bad risk. They saved their companies billions. Some CEO’s of trusts invested all their money with Madoff. They lost their companies everything.

  • http://handyfilm.blogspot.com handyguy

    Doc, one assumes that at least some of those hypothetical progressives would try to run the companies with a greater sense of fairness to workers, and also give plenty of the big salary to charity — as I’m sure a number of ‘overpaid’ CEOs do already.

    I’d also remind Baronius that Obama carried the rich people’s vote in 2008. Not all people in high tax brackets are opposed to lending their support to a ‘statist’ progressive agenda.

  • cannonshop

    #52 I’d say, Baronius, a CEO is worth what he brings to the company in terms of profitability, stability, growth, and prosperity. A good CEO is priceless, a bad one, is catastrophic. Karl Icahn has a pretty good site covering what’s gone wrong in the boardrooms, and why companies are paying out these ridiculous compensations to CEO’s whose performance is…well, ‘underwhelming’ is probably too mild a term. But, as I’ve said before (repeatedly) the same problems in Corporate America persist in Government America-waste, fraud, incompetence, abuse, apathy, poor service, and vast differences in both compensation and authority between the top levels and the people who actually boots-on-the-ground work, sinecure jobs, and (as we’ve seen with AIG, General Motors, and TARP) a reliance on Taxpayers to make up the cost of unrepaired mistakes.

    Eisenhower warned us about a “Military Industrial Complex” but there’s a bit nastier threat at work here-a “GOVERNMENT Corporate” complex, and it saturates both parties, and does harm in only cosmetically different ways.

    The recent RNC scandals just highlight this problem-the middlemen like RNC and DNC are the ‘enablers’ for this Corporate-Government complex, think of htem as the ‘datalinks’ between crooked pols, and crooked CEO’s-both groups act as sumps to get around the individual contribution limit, both act as enablers in the purchase of congresscritters and presidents, neither group is particularly interested in or concerned with the harm their enabling has done and continues to do to the United States, and both are well-protected from being brought to task by legal means or changes in the law that might reduce their poisonous influence on the state of the Union.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    “Progressives seem far greedier than CEO’s.”

    Examples, please. And don’t bring up the Clintons. They’re politicians.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    And what’s wrong with noblesse oblige, BTW?

    One distinct advantage of rule by aristocracy was that they didn’t need public office in order to enrich themselves.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Nothing is wrong with noblesse oblige. I suppose it’s better to seem to look out for the best interests of those whom one considers one’s inferiors than to seem to look out for the best interests of no one. Besides, it probably provides an element of giddy satisfaction to those looked-out-for as well as to those who do the out-looking.

    Dan(Miller)

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Human nature. One reason, perhaps, why monarchy is still a titular form of government in the UK. People do need the assurance that they’re being “looked after.”

    Perhaps Dreadful might care to comment.

  • http://drdreadful.blogspot.com Dr Dreadful

    I think Machiavelli put it far better than I can.

  • John Wilson

    CEOs aren’t chosen through some kind of CEO Aptitude Test. Nor are they chosen in some competition to demonstrate proficiency. They get the job through aggression and manipulation. The skills they demonstrate are basically skills of personal infighting and dominance. Doesn’t translate into effectiveness as a CEO , and that’s why so many US companies are failing.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    John Wilson, Here — I’ve fixed it for you.

    Politicians aren’t chosen through some kind of Politician Aptitude Test. Nor are they chosen in some competition to demonstrate proficiency. They get the job through aggression and manipulation. The skills they demonstrate are basically skills of personal infighting and dominance. Doesn’t translate into effectiveness as a leader of society, and that’s why so many US companies and the country as well are failing.

    Dan(Miller)

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Actually, they’re chosen on the basis of the private club they belong to, the schools they graduate from, the connections they have – all of the above.

    The good ole boys’ club, the proper breeding ground of corporate America.

  • cannonshop

    #69 And government America, Roger. If the boy is the father of the man, and all that, we can look at the people at the top, look at where they went to college, and there’s a pattern-and it’s strongly connected to a nation in debt, with declining production, high-handed government that manages to miss the target while loading up the verbiage in its laws and regulations, and all the rest of what’s wrong in both Corporate America, and Government America.

    As much as Libs hate Newt Gingrich, the man made Clinton’s administration effective in keeping Bill Clinton’s campaign promises to the moderate segment of the population-prior to 1994, the man was drifting hard left and only pleasing the left-most side of his party (the one ON the left). After the ’94 elections, he was yanked back to the middle, and achieved the balanced budgets he’d promised in the 1992 campaign.

    What it may come down to this time, is that the same moderating effect isn’t possible today-the GOP is effectively leaderless, the Hard-Left is in complete control, and they’re rushing the agenda through ‘just in case’ they lose that control in November.

    Practice has shown that it’s easier to pass a law, than to repeal it-particularly when repeal may upset wealthy applecarts that feed political slush-funds, and that grass-roots only run so deep-without corporate sponsorship, it’s nearly impossible to legally raise enough to fund a serious campaign.

  • STM

    What most of us realised during the global financial crisis was that getting to the top of the corporate stratosphere has nothing to do with how well qualified (or talented) one is to run a big corporation.

    Most big corporations will pretty much run themselves if everything is going smoothly. Which has been the case for decades.

    It was only when the boat got rocked that we all realised most of those jobs were a rort, part of the old-boys’ club and based on who you know, not what, or how good a bullsh.tter you are – and that the whole thing’s been a complete and utter rort from the get go.

    Talent has nothing to do with it. Some of the most talented people in these organisations never get a look in, especially if their talent poses any kind of threat to the status-quo.

    I reckon you could pluck a promising middle manager from many of these joints, stick him/her in the top job, pay him/her a 10th of the dough – and still get a better result.

  • cannonshop

    #71 Solid analysis, STM. The strongest and most effective corporate leadership Boeing ever had, was a CEO who worked his way up from a first-line management position. He retired (then died) a few years ago. Our worst so far, have all been products of the so-called best schools, people who entered the work-force IN management with no practical experience or knowledge of the things they were allegedly there to manage.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Cannonshop, re #72 —

    Would it be a stretch to apply about the same analysis to our beloved government?

    Dan(Miller)

  • http://handyfilm.blogspot.com handyguy

    That’s a pretty vast generalization, gentlemen.

    And in the case of politicians, almost completely ignores the role voters play.

  • cannonshop

    #73 Pretty much.

    #74 how about the Non role voters play? Like in the case of Boards of Directors, Party officials often try to control, or eliminate potential candidates even before the Public is aware of them, leaving voters with “bad, or worse” for options.

    The last forty years have been rife with this phenomena-since most americans will either vote ‘Democrat’ or ‘Republican’ and ignore all non “D” or “R” choices, this problem becomes self-reinforcing. We have gotten more and more polarized choices in terms of rhetoric, because both parties mainly play to the ‘active’ segments of their own base-thus we get anti-abortion creationist god-botherers in the R camp, and Neo-Socialist New Left Weathermen on the ‘D’ ticket-both of whom then have to try to ‘run to the middle’ during the General elections, often with comical outcomes during truly contested years (1992, 2000, 2008), or the opposite-someone who doesn’t appeal to ANYBODY (Dole in ’96, Dukakis in ’88, John Frikkin’ Kerry, and the democrat sacrifice in 1984.

    The parties often miscalculate-there were Dems that could have won in 2004, and won easily, Bush was very unpopular even among Republicans that year. They chose the phony war-hero and actual war-protesting traitor John Kerry over members of their party who could have beaten Bush handily. After the first Bailouts in 2008, there was no way ANY Republican could have won the Presidency, no matter what their policies or personal charisma, and the GOP was facing an impossible year to begin with with the Housing collapse begun a year prior. This was probably the number one reason John “I’ll get it next time” McCain finally got the party-brass to back him…with disastrous results for the GOP.

    But you’re right, the responsibility of the voters (like the Shareholders in a major company) can’t be voided from this-they LET the Party tell them who should run in the primary-Alan Keys was specifically excluded in 1996 and 2000 from the debates, in spite of being a religious right-wing god-botherer, solid Dems with good records likewise were basically ‘ignored out of the race’ throughout the 1980s and 1990s, and only started gaining some traction after 1994’s massive Democrat defeat in the Congressional races.

    Party leaders point to hte extreme, and party membership LETS THEM GET AWAY WITH IT.