A man of little intellect and loud voice speaks from the floor of the Chicago Board of Trade. He shouts at the camera from the hectic trading floor, with little knowledge outside of that arena but with monumental opinion. His name is Ric Santelli and while the market was collapsing and leaving us in the very serious financial mess in which we now find ourselves, he touted and spouted and never once…from the place where he is supposedly an expert said…”watch out! The sky is falling!”
Perhaps his true genius is to fool the people with a wonderful sleight of hand. By talking faster than he thinks and at his peak velocity not thinking at all, he stuns Americans into such stupor that they ask themselves…”what did he just say?” And then they think…”Well, he’s there. He must know what he’s talking about.”
Until the next day or the next week or the next time he comes back or another of his colleagues on financial-tout television returns from lunch with some multi-millionaire trader and suddenly has the epiphany that teachers make too much money, that firemen don’t work all that hard on most days and that cops, after all, wear bullet proof vests, so do they really need pensions?
We can only wonder at the genius of these financial pundits as we recall how they collaborated to leave us in near penury from the last fiscal disaster. And their sage advice can only make us tremble at what kind of new crisis they are preparing for us. We know the current crisis. They chew on it each day like a hound on a bone. It is “debt.” It intransigent, immovable, monumental debt, hanging over us like a giant sword. The pundits furrow their brows and talk of alleviating debt, trimming, cutting and downsizing. They are the landscape gardeners of the punditry.
Our representative pundit, Santelli, worries that we have all created too much debt. We have too much debt in national government, he says. And too much in states. He like the other financial pundits did not predict the crash when the market climbed to beyond stalling altitude. And when talking now of cutting our debt he conveniently never mentions cutting military spending or raising taxes…the two taboos. He fails, for example, to point out in his worrying over debt that we spend more on the military than all the other countries of the world combined.
Yet Bill Clinton cut the military, raised taxes slightly, balanced the budget and created 22 million private sector jobs. He still had time to fight off impeachment while hiring someone to check on terrorists. This guy, when carried over to the Bush White House, ran around screaming that no one was paying attention to the fact that terrorists were about to attack us.
Bush, whom the Supreme Court had said was rightfully our President, was playing golf in Texas and didn’t read the report of the potential hijackers that was frantically sent to him a month before the 9/11 attacks. Therefore, on the night of 9/11, Bush’s National Security Advisor (N-a-t-i-o-n-a-l SECURITY A-d-v-i-s-o-r) was about to deliver a speech on why we should be advancing “Star Wars” the consistently failed attempts to hit one missile with another missile.
It is important only because before decrying the ruin and the “hundreds of trillions of dollars of unfunded debt” which is a meaningless term, not useful at all, one could easily look around Washington and make real cuts but those cuts are not even considered. Why? Because, as Santelli knows but won’t tell you, this is not about real cost cutting. This is about eliminating. It is about eliminating social programs. The rich want to lower their taxes even more than they have. To do so, they must cut Social Security and Medicare.
Ric Santelli mentions debt as though the Middle Class created it. He doesn’t enter a footnote about the fact that teachers and firefighters and nurses and all the other workers who don’t really expect any attention or even much gratitude didn’t create the debt. They have their own debt…credit cards, home mortgage, auto payments. But they didn’t create the national debt.
The fact is that the national debt was created by Reagan, then Bush the First, then some by Clinton, who eventually put a lot back, and then Bush II. Here’s why it is not good to have a stupid President or a crook…take your pick. We pick stupid. Because, like Bush II, he will take a $5.6 trillion debt and turn it into a $13 trillion debt and then leave a mess so bad that the next year and the year after that the debt is locked in to $1trillion a year.
Rick Santelli knows that the public employees didn’t create the debt. But he doesn’t work for public employees. He works for the financial industry and those who run CNBC. The people who trade the stocks and push the stocks pay his substantial salary. What would he do if he did not have that job that would pay him that amount of money? Could he make the same by shouting from street corners the way he does from the floor of the exchange? Not likely. Does he have an axe to grind for reducing debt? Absolutely. Yes. No one should tax his billionaire bosses.
The industry that creates wealth by an ongoing revaluation of a company’s securities only mirrors value. It doesn’t really create value. It is a mistake to think that because an investment firm can price something higher by persuading people it is worth more. Selling it for more…at a higher price, hasn’t really created value. In fact, the assumption that they have is exactly what is wrong with our current economy. They built up the price on credit default swaps. But they were always worthless.
Santelli has been twisted by the system for so long that his head is lodged in the general area where he would normally sit. Unions for cops are not blackmailing or terrorizing states. They are asking for the best possible deal that they can get. And you are very unlikely to meet an anarchist grade school teacher. If the states don’t like the negotiations on wages, they can discuss, negotiate, arbitrate. It is not the end of the world or anywhere near it. Times are tough, yes. But we still have lots and lots of money.
It is all in the pockets and the bank accounts of the rich.
Santelli and people of his ilk, stock traders, think that we should be free and roaming and wild. Out there on a limb, risking and being rewarded for risk. Really? We just bailed them out…”we” meaning teachers and nurses and cops and firemen. Sure, hard economic times create difficult situations. People must pay taxes to hire people to conduct NECESSARY SERVICES for most of the population. Santelli and his financial friends, free ranging and free speculating and free earning…wanting no taxes because that impinges on their “freedom” don’t need many of these services. So they don’t want them negotiated.
In the states that have the lowest ranking in all categories of education, all of them…all…have non-union teachers. They make the lowest wages and they are the worst teachers and their students do the worst on all tests. Wisconsin, which pays it’s teachers the munificent sum (their teachers are all hugely wealthy) of $51,000 per year, has union teachers and its scores are among the highest in the nation.
At the same time, the stock market, which was at less than 7,000 in the depths of the “Recession” (time will tell whether or not it is a Depression) in 2009 when there were 15 million unemployed, has now risen on Washington’s birthday 2011, less than two years later, to 12,000. And we still have 14 million are unemployed. Wow. Those unemployment numbers have almost vanished! Recovery must be nearly complete.
So does Santelli think that is strange, that the market booms while the people bust? Virtually no jobs created but the market almost doubles. Billions of dollars are being made by corporations. The stock market is booming, luxury sales are expanding…but teachers, firemen, cops, nurses…they’re all a drag on the economy apparently. Rush Limbaugh, also a brilliant commentator like Santelli, contributing mightily to the GDP, calls them “freeloaders.”
Santelli clearly thinks that the unions are vultures, feeding on the poor governments who now, suddenly, must pay more. But in Wisconsin, the budgets have been balanced. At least they were until the new Governor gave away $114 million in tax cuts to companies that were already in Wisconsin. Not to attract new companies but merely to let a company like Allen Bradley, which now does much of its manufacturing overseas have lower tax rates for doing the same damned thing that it was already doing, only now it is smaller…and pays less taxes.
Who is in the best position to help absorb the problem of too few workers paying too little in taxes to balance the books for the State of Wisconsin? Is it a teacher making $51,000 a year or a cop or a nurse making about the same? Or is it a businessman making $250,000 to $500,000 a year? Is it easier for a teacher to absorb an $8,000 hit or a businessman to absorb an $8,000 hit.
Which one creates more value in the long run? Are teachers five times less valuable than a stockbroker? Or a CPA? Or a governor who was a failed city manager, one who ruined his previous community with the same kinds of tactics he is using on the state…at least for one year? Who should pay the freight? The guy whose master’s degree earns him $50,000 to teach your kids or one whose MBA trades stocks on the uprising tide of a fixed stock market for other rich individuals?
Let’s suppose that no one honored contracts. Then the contract between the People of Ohio with John Kasich or the contract of the people of Wisconsin with Scott Walker could be invalidated, just as they are trying to invalidate previous agreements with workers. Let’s invalidate all contracts and recall Scott Walker and Ric Scott and John Kasich.
Santelli has the financial pundit’s typical eyesight problem. He can only see down. He can’t see up. He can’t see a rising production in our economy creating jobs. He can’t look up to the shelf on which the millionaires and billionaires are sitting, eating their escargot and drinking their champagne. He can only look down, to where we trim the benefits for workers, the health care benefits, the pensions, the kids’ college funds, the myriad of daily purchases that go into running a family, the school uniforms, books, lunches, bus fare and school activities.
Santelli and Limbaugh and all our great oracles cannot see up, where the big incomes are. They cannot or will not (maybe it is too scary) look up there where the media bosses have their castles in the sky, with $60,000, $100,000, $200,000 a month incomes and who will never ever know if they paid 39% rather than 35% or 45% rather than 39%.
They’ll never know what they pay because they never pay what the tax rates show. They average paying only 23% because much of their income is in long-term capital gains which is only 15%. So the richer you are, the more you make. If you own a big piece of EXXON stock you make more because EXXON makes billions of dollars every quarter and all that goes right past the tax collector and back to the company. They pay no taxes because of tax loopholes made by George W. Bush’s administration just for them.
We can expand our workforce perhaps, maybe, if we eliminate unions. One female Tea Party state legislator in Missouri wants to revoke child labor laws. She wants to bring children back into the workforce. No information on whether she has ever considered taxing millionaires another ten grand or so rather than enlisting kids back into the labor pool.
In 1979, we had something like an $80 billion dollar deficit. This year the deficit alone will be something like a trillion dollars. Here’s how it works. Under Bush—before the Bush Financial Collapse of 2008—we were losing $250 billion to $300 billion a year. That’s right. Under these same guys, the same Neocons who want you to believe that they are serious about cutting spending the deficits were running even up to $500 billion.
So let’s use minus $300 billion. Then we lost the tax revenue from about 10 million people who lost their jobs under Bush’s Recession in 2008. That’s minus another $330 billion. Then…when people are out of work and have nothing, we give them unemployment to survive on and then when that runs out we give them food. That cost us another $300 billion. So right away, President Obama, for example, walked into a trillion-dollar deficit basically. (Actually, it was Bush’s last budget, but it was Obama’s first year.)
Then President Obama and the Democrats set up a stimulus plan to try to get the country moving out of a still falling economic condition. They allocated about $787 billion to be spent in 2009 and in 2010. The problem was that, of that money, about one third or about $260 billion or so were tax cuts that the Neocons demanded but that didn’t do anything but put more money back into the pockets of the rich.
So the stimulus brought the budget deficit up to about $1.4 trillion. That is the condition left to us by the 8 years of the Bush Administration. They spent 8 years creating two wars, sending jobs overseas, creating a real estate bubble on which they created a stock market swindle and it all crashed. Was Bush just stupid or was he a crook?
We know that more and more people are coming out to say that he and Cheney and Rumsfeld are, in fact, guilty of making up false reasons to go to war. Rumsfeld himself is trying to deflect attention away from himself and somehow hang the responsibility around Colin Powell’s neck. The rats are leaving the ship. Switzerland says that they will indict Bush if he ever steps on Swiss soil
These are the people that Santelli believes, the Neocons, the Fundamentalist Evangelical Neocons, who want to eliminate unions but don’t want to cut the military or raise taxes on anyone who could pay enough taxes to impact our fiscal situation. Of course not. Why tax the rich, where the money is, when you can eliminate the services mostly used by the Middle Class and the poor.
All of our problems would go away…all of them…if we did two simple things. Create jobs and raise taxes on those who can afford to pay.
Number one, we need to create 5 million direct government jobs. Five million times $40,000 is $200 billion. Those jobs would create the same number of jobs in the private sector. That itself would give a return of one-quarter of the amount paid out for the jobs, about $50 billion. So the net would be a $150 billion investment, minus the taxes that those five million government workers would pay.
It would reduce the real unemployed in the private sector by 5 million. The 5 million employed by government and the 5 million that would be picked up (actually a little more than that) by private companies, would virtually eliminate all the Bush unemployment and create in one stroke ten times more jobs than were created in all the 8 years of the Bush Administration.
But there’s more. The 5 million government jobs would be created in green energy, battery technology, aquaculture, wind and solar, electric and flex-engine vehicle development and natural gas development. About half these jobs could be converted to private jobs within a couple of years. So the 5 million would fade out and the renewed U.S. industrial production would fade in.
The renewable energy sector, with the commitment of 5 million workers to focus on it, would enable us to eliminate something like 5 to 10% of current energy needs from abroad. This would strengthen our balance of payments and strengthen the dollar, which would make us fiscally stronger.
This alone would bring out budget deficit back to where it was when Bush was President. With the budget cuts now being undertaken, it would come close to balancing the budget.
Number two…we would make each person pay his or her fair share of taxes. Corporations would no longer pay no taxes. No matter how many deductions that they have, they would pay a minimum of at least 10%. One dollar out of ten would go to running the country. To give you an ideas, corporations now account for 7% of government revenues. In 1950, it was 32%!
The top .1% account for plus or minus about 110,000 families. So if we just take that number times the average that they earn each year, $1.8 million, and Uncle Same takes one third and they keep two thirds ($1.2 million) then we would have $66 billion merely from the top one-tenth of one percent. Scale this down so that you drop the one-third to a firm, no-deduction 28% at the $300,000 level, and the 24% at the $100,000 level and you can calculate in less than a couple of minutes that we can balance the budget and create surpluses.
The problem is not that we do not know what to do. If Clinton were President and we had a Democratic House and Senate, we could solve the problem overnight. We know what to do. Rich Republicans understandably don’t want to do it.
So, Ric Santelli and Rush Limbaugh and John Boehner and Mitch McConnell, get some common sense and put this country back on a sound fiscal course.
Unless, of course, you and your Neocon friends are simply crooks.