Time to Pay the "Clown Tax"
By Eric Mader
It was the afternoon of November 3rd, the day after the 2004 election, and the Bush-Cheney team had just declared victory. Like many Americans, I was in a state of despondent disbelief. It was bad enough we had put these reckless clowns in office in 2000, but a second term? Having done such damage their first four years, I thought with another four they'd be likely to push us to the brink of disaster.
There was, however, one thin silver lining in the Bush win. At least he'd still be at the helm when the results of his policies began to be felt. In short: there'd be no blaming anyone else (i.e., the Democrats) for the mess they'd made of it. I penned a little ditty and emailed it to everyone I knew--especially the Republicans in my address book. The ditty ended as follows:
You've flouted the planet
Re-elected your man
He'll still be in office
When the shit hits the fan
That was back in 2004. I think it's pretty clear that the shit is now hitting the fan.
The fall in property values and the fall in the dollar and the fall in the stock market have got a lot of people down, worried actually. And for good reason. Because the bill America is now called upon to foot is really pretty hefty. We are finally starting to pay what we might call the "Bush tax."
In the past two presidential elections, many supported the Bush ticket because, they said, Republicans would "lower taxes" and "promote growth by deregulation." And it's true: ever since the Bush team came into office, the mantra has been "deregulate, deregulate, deregulate!" Deregulation is one of the main Republican planks. According to this economic philosophy, you cut all the regulations you can and allow companies to simply do whatever they want. Just as the Bush team cut most of our important pollution and environmental regulations, so they did the same thing with the regulations that used to keep the banking and finance industries in line.
Bush and the people he appointed gleefully tore up that carefully written rule book that previously governed Wall Street financial firms. And now we'll have to pay for their irresponsibility. Bush and Co. let the foxes invent their own rules, because, in Republican doctrine, government shouldn't have any oversight function. The result has been almost a decade of decreasing rules as to what kinds of financial instruments Wall Street firms could use to play hide-and-seek with each other. As we can see, hide-and-seek is not the best game to play with a nation's wealth.
Now we see how it all turns out--don't we--and now America is paying for its mistakes: its biggest mistake being to elect these extremists to begin with. America is finally paying the "taxes" it owes under the Bush Administration. And this tax assessment is proving rather expensive, isn't it? Above I called it the "Bush tax." But why not make it clearer? It is the tax modern citizens must pay whenever their leaders play fast and loose with the budget, with war and peace, with the laws governing finance and industry. And this is how Republicans, increasingly, have played it. We should really call it the "clown tax."
Many have blamed (lifelong Republican) Alan Greenspan and his policies. It's not unreasonable to blame this (lifelong Republican) finance guru. The problem is that Greenspan allowed too much cheap money--money was too easy to borrow. But why did Greenspan go so far in this direction? Some studies point out that the pressure was on to loosen lending standards because our government itself had borrowed enormous sums to finance the Iraq war and wasn't ready to come even close to paying for these expenses by maintaining anything like a reasonable tax structure. So we see the Republican philosophy in action: You spend more than ever, go waaaaay into debt, but you don't pay for these expenses, you just keep borrowing money from people you should be suspicious of to begin with, i.e., China. And you pour out this borrowed money on projects that, mostly, you don't even pay attention to. Contracting for the Iraq war has been an incredible farce in terms of the accounting practices allowed. Our financial well-being was handed over in the form of huge bricks of cash to people who could be trusted, mainly, to steal them.
This is called "small government"? I'd call it robber baron government. Our country has been nearly bankrupted by eight years of Republican leaders doing whatever the hell sounded good for the time being and not thinking anything as to what the results would be. The Iraq war has been exactly this (we do not, contrary to current rhetoric, have anything like "victory finally in sight") and our economy is proving another painful instance of the same thing: irresponsible, ideologically motivated policy decisions on a world-altering scale.
So as we watch our wealth decrease weekly--from the value of our homes to the stocks we have in our porfolios to the value of our currency itself--we should think about how all this disaster relates to the eight recent Republican years. How thoughtless arrogance on the world stage and voodoo economics at home have led to one pretty nasty tax bill. Yes, at the end of the day, Bush has raised your taxes more than anyone ever has.
John McCain is part of this same party and a supporter of the same economic philosophy. Sure, McCain can now see, like everyone else, the disaster that his own party's policies have brought about. But he hasn't presented anything in the way of how he will differ in his own approach. All he can do is imply that he is "different," that he is a "maverick," and will clean things up. But the problems we have are not mainly the result of individuals' bad character, or individual politicians stealing directly from the public coffers. They are the result of bad laws and bad foreign policy and bad tax policy--policies that have hurt mainly middle and lower-class Americans but, as we see, have also finally hurt richer Americans too.
Want to see how closely McCain is connected to the deregulators who set the stage for this disaster? Just take a look the career of Phil Gramm, the former Texas senator McCain has counted on most for his economic policy. It should frighten anyone.
How long will we be paying the "clown tax"? I really don't think a McCain White House would be independent enough of the big lobbying powers and beholden enough to our struggling middle class to bring our country back to what it should be: a country of law and order and reasonable, well-considered policies. I think the Republican party is too drunk on its own discredited economic philosophy, its own ties to (very) big business, to make and promote the kind of level-headed policies we need. What do you think? Does the Republican approach to economy and foreign policy deserve another four years?
Is your home's value down twenty or more percent? Are you maybe in danger of losing your home? It's the clown tax.
Is everything you buy at the store suddenly more expensive because your dollars are suddenly worth much less than before? It's the clown tax.
Has your stock portfolio lost a third of its value, so that what you thought you could count on to help out your retirement is now less valuable than if you'd buried it in jars in the yard? Time to pay the clown tax.
How much has this hidden Republican tax cost you so far?
The clown tax: a payment assessed to all Americans for Republican deregulatory foolishness and arrogant cowboy adventurism. Want to really lower your "taxes"? Then don't put another clown in the White House.
As this article was finished, the news has hit that the U.S. government is arranging for a massive bailout package to stabilize markets. It is estimated that it will cost taxpayers half-a-trillion dollars. The bailout is judged to be the lesser of two evils, and no doubt it is. But the real evil is in the policies that created the crisis to begin with, and resulted in the billions already lost, and will now cost taxpayers hundreds of billions more in the form of this federal patch-job to keep the ship from sinking completely.
Markets are "soaring" on news of this new bailout plan. What does "soaring" mean? The Dow is up around 3.6 percent. In other words, investors gain back a fraction of what they've lost already.
On McCain's main economic advisor former Texas Senator Phil Gramm:
On the financial impact of the Iraq war (a brief into to Joseph Stiglitz's research):
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