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Riots and Civil Society Warren Buffett Shelters from Hurricane Obama

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Remember "No New Taxes"?

by Christopher Chantrill
August 24, 2011 at 1:25 pm


IT WAS INTERESTING to watch Rep. Nancy Pelosi (D-CA) talkin’ to the folks in Oakland last week. I found myself transfixed by her sophisticated blend of hand gestures, ranging from the one-finger point, the two-finger jab, and the full-hand chop.

Listen, she told them, explaining her vote for the debt-ceiling bill. “Here’s what we got. We got no Cuts in Medicare, Medicaid, and Social Security.” Then the camera cut away to a group of rent-a-victims holding signs: “Taxes Save Lives” said one; “Cuts Kill” and “Tax the Rich” said others. Where do the community organizers find these people?

All we need now is President Obama addressing the 2012 Democratic National Convention to thunderous applause: “Let me be clear. No New Cuts!”

Back when President George H.W. Bush reneged on his “No New Taxes” pledge Americans still dwelt in the budgetary Garden of Eden. In 1990, in the existential crisis that required a balanced deficit-reduction package of tax increases right in the middle of a recession, the US federal debt was only 55 percent of GDP, according to usgovernmentspending.com.

There is no doubt the tax-increase package worked. It slowed down the economy just enough to let Candidate Clinton claim in 1992 that the US had the “worst economy in the last 50 years.”

But now, after a run of bad luck, the US debt is up to 100 percent of GDP, unemployment is 9.1 percent of the work force, and it’s just a matter of time before the Cuts begin.

I wonder, as the president would say, what “folks” in the Democratic Party leadership will be “thinkin’” when the Cuts do begin? Wouldn’t they be thinkin’: now I know how Bush the elder felt after reneging on No New Taxes?

And if the Cuts do begin won’t it lead to a split in the Democratic Party and a Third Party progressive candidate? We’ve had two elections recently, 1992 and 2008, where the GOP voters were clearly in the mood to teach their party a lesson. What about the Democrats? Are they wimps or something? What is it going to take before they rise up to protest their sellout party leadership? The end of Obamacare as we know it?

How about a third party ticket with George Soros for president and General Wesley Clark for vice-president? (Yes I know George Soros was born in Europe. But after all the money he has shoveled at the Democrats he deserves to be made an honorary natural-born American.)

Never mind about Cuts, you say. What about Jobs? Don’t Democrats care about Jobs?

You can’t really expect rank-and-file Democratic voters to get all bent out of shape about Jobs. After all, Democrats are either billionaires like Warren Buffett, cooing sweet nothings about tax increases in The New York Times, or they are dime-a-dozen liberal trustafarians, or they are government workers, or they are benefit recipients. Why should any of them care about Jobs? Independents care about jobs. So do Republicans.

Have you seen any Democrats out in the streets recently demonstrating about Jobs? I thought not. Rank-and-file Democratic voters don’t spill out into the streets on the issue of Jobs. But they do care about Cuts, just like the Greeks.

If you want to understand the Greek meltdown, writes Takis Michas of the Greek national daily Eleftherotypia, you need to know that Greeks have had a large state and a weak civil society ever since the 1800s.

Since the 1930s, political patronage has been disbursed through increases in public sector employment, regulations that limit competition, and the imposition of levies on transactions that benefit third parties... The view that the state is good and that markets are bad is widespread, held across the political spectrum, and is understandable in a rent-seeking society where all activities, including market transactions, are seen as redistribution.

There’s only one difference between Greece and the United States. It’s in that phrase “across the political spectrum.” In the United States the notion that markets are bad only holds on the liberal side of the spectrum.

In other words our Democratic friends, from Nancy Pelosi down to the activists yelling “Sellout” at her recent town meeting in Oakland, are just like the Greeks. They believe in a big state and they believe in redistribution, known to economists as clientism and rent-seeking. As for the market, they think it is all run by a “corporate oligarchy” in the service of corporate greed. Ask The Nation. Ask the Greeks.

“Socialist governments... always run out of other peoples’ money,” said the grocer’s daughter. That’s why any Republican politician with a hope of winning an election now demands a balanced program of cuts: spending cuts, and tax rate cuts.

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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presented by Christopher Chantrill

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