Sunday, October 26, 2008

Whither Trickle?

From Truthdig

Finally, let’s discuss the other bit of demagoguery in McCain’s most recent speeches, when he complains about the “redistribution of wealth” and equates an income tax rebate for working people with “welfare.” Leaving aside the racial subtext of those remarks, it is hard to say whether they display ignorance, dishonesty or both. The American tax system, like all other taxation in modern nations, has always redistributed wealth. Sometimes it sends streams of money upward, from low-income taxpayers into the pockets of corporate executives; at other times it sends those streams downward, to assist the very poor.

via The Greenbelt


Casey said...

"The American tax system, like all other taxation in modern nations, has always redistributed wealth."

True.... Kind of. But this is misleading. There was no income tax [except for a few crisis moments] until 1913 in America (0% income tax for everyone!), which means people were not taxed by the federal government for making money in America for -- what is that -- 137 (?) years. I'm not saying things were perfect then, but my great-great grandpa, a first generation immigrant from Denmark, was a masseuse in Battle Creek and his wife didn't work. They had a house and raised like seven children. That'd be tough to do these days, with or without "federal assistance." What I'm trying to argue is that the progressive income tax may not be, in practice, as progressive as it is in theory.

The McCain/Bush model is a horrible economic model, but it irritates me somewhat that both they and their opponents are using language that is, at best, outdated, and at worst, grossly misleading. The terms "free market" and "socialism" ought to be seriously suspected when uttered by anyone who is referring to the American economy since the Great Depression. The disastrous economic boom and bust that we've seen over the past twenty years has had very little to do with anything that could be considered a free market, as I've argued before.

The idea that it is "that simple" -- sending the stream of money downward to assist the poor -- is betrayed by almost every recent attempt at such assistance: starting with LBJ's "Great Society," which, while working theoretically toward the goal of "eradicating poverty" once and for all, in practice herded minorities into tighter and tighter housing projects in almost every major urban area in America. See Cabrini Green in Chicago, for example, where they filmed Candyman.

More recently, as if anyone needs to be reminded, Clinton's effort to expand homeownership to the poor may have apparently "worked" for a decade or so, but the consequence may leave the targets of Clinton's assistance screwed for the rest of their lives (try, for example, having the kind of bad credit that comes with having your house foreclosed... and try it in this economy). When the bubble pops, we know who gets screwed the hardest.

I know what Conason is saying, and I respect the impulse and the intention... but if history and theory have anything to tell us, it simply is a legitimate concern, whether we're watching the preparation of the pavement for the road to you-know-where.

It's possible that I'm wrong about all of this, that I've been deluded by a bourgeois grand narrative by propagandists from economists with Nobel prizes to Rush Limbaugh. But I hate keeping these two cents in my pocket when someone might be able to use them...

fenhopper said...

Since we've been running a socialistish market since the depression the claim is pretty silly that democrats are threatening capitalism. Unless you want to blame FDR for setting us on this dangerous path. Besides, he was just a term or two away from being a potentate wasn't he?

And so if the argument of trickle down vs trickle up is mostly about theory and principle McCain is appealing to a principle of poor (((minority))) people don't deserve our welfare; but Hardworking Rich white people should keep the power they've earned. And then some.

So don't you think Conason is making the same point about the confounds of socialism-vs-capitalism? We can just get by with calling this capitalism but I agree that 'free market' is kinda hard to argue.

And yet McCain has been riding on —and apparently finding success with— the very simple he's flirting with socialism but we're not claim. Isn't Conason just problematizing that argument?

Casey said...

"Potentate," ha.

Prolly a good point -- I guess I hadn't considered just using the term "capitalism" defined this way. In the old model, as Marx laid it out, capitalism was a kind of "pure" system and socialism was the transition phase on the way to the other "pure" system: communism. That's not even close to happening, and anyone who fears it is isn't paying attention...

My hesitation has nothing to do with partisan differences -- Obama in particular seems very moderate to me, and I like him for that. On the other hand, Clinton and Bush have both been moderates when it comes to the economy... what I'm longing for is either a communist or a libertarian, I suppose, to really "move" the argument.

When McCain talks about Ireland's 11% business tax, for example, I almost pay attention (until I remember how ridiculous it would be to lower our business tax from 36% to 11% just to compete with Ireland).

I think I've finally written enough to convince myself to just give up this line of thinking, though (thanks for hearing me out): for whatever reason, my need to see a total social/economic reformation every generation isn't going to happen. Let the status quo reign, however tenuously (after all, my life's just dandy).

But then again: aren't you ever jealous of the 1848 revolutions in Europe, or even the more modest 1968 "revolution" in America? Don't you want to see something like that in your lifetime? Obama doesn't seem radical enough for that, for me...