Doomed to Repeat It

If you want a truly eerie experience, read a history of the 1920's. I've been reading Only Yesterday and Howard Zinn's The Twentieth Century, but you can check out Roger Butterfield's The American Past, or any of a variety of accounts of that era.

Of course, every period has its own peculiarities, but what is so weirdly familiar is the odd little echos. During the Harding and Coolidge presidencies the Secretary of the Treasury was one of America's super rich, a man who would feel quite comfortable among today's one percenters, Andrew Mellon. He ushered through Congress, in 1923 "The Mellon Plan," which Zinn notes, called for "What looked like a general reduction of income taxes, except that the top income brackets would have their tax rates lowered from 50 to 25 percent, while the lowest-income group would have theirs lowered from 4 to 3 percent."

As Congressman William Connery (Massachusetts) noted, this "is going to save Mr. Mellon himself $800,000 on his income tax." Today, Mitch McConnell and John Boehner are channeling Mellon, as they declaim we simply must cut taxes on the richest Americans, (the "job creators" is the Republican re branding of the 1%) as they dig in their heels and refuse to allow the income tax rates on millionaires and billionaires be raised from 28% to 31%, or some numbers in that vicinity.

It's the same fight--we must cut taxes for the rich. Cutting taxes for the rich is good for the poor, for the jobless. Money will flow from the rich to the poor.

As if. As if, ever.

Because this was an act of Congress, the Mellon plan was entirely legal. This law was just one way the rich wrote the laws to enrich themselves, while selling it to the 99% of their day on the notion the Republicans were taking the government off their backs.

There is a certain fairness to this Republican swindle, of course: If you can sell this to Joe Sixpack, Joe Sixpack deserves his place at the bottom of the barrel . Anyone who is this stupid, deserves to be flushed down the toilet and kept there.

During these years, America saw income distribution fall into a steep pyramid. "One tenth of one percent of the families at the top received as much income as 42% of the families at the bottom," as the Brookings Institution reported. Sound familiar? Pie graphs today, actually, look even worse.

When the stock market crashed in 1929, the blame was assessed through the lenses of the beholder. The verdict from Milton Friedman, the Nobel prize winning libertarian economist from the University of Chicago, a man who believed nothing the government ever did was right, was that the whole calamity was just a big government blunder. Specifically, Friedman said the Federal Reserve caused the crash by tightening the money supply and that was that.

(This, if I may digress, simply illustrates how a Nobel prize may be won by an imbecile. The Nobel committee may have been impressed by Friedman's mathematical models, which the committee did not understand. They may have been impressed by his clarity, which made complex jumbles understandable. What they apparently missed,was that he was simply wrong, but working in a field where there is no experimental process, so he could say outrageous, patently stupid things and nobody could prove he was wrong.The man may have been revered by his colleagues, but truth be told, he was an imbecile. He was the original Chauncey Gardner.)

Of course, John Kenneth Galbraith saw it differently, in his classic study, The Great Crash. He pointed to a complex of infirmities, but most basically the severe redistribution of wealth, with the very few rich and the many poor. Unhealthy corporate and banking practices--and they didn't have mortgage backed securities or modern day derivative trading--trouble in foreign economies and trade.

The problem capitalism has, is once the bottom 42% do not have enough money to buy the things made by the 1% and their factories, there are no customers to support the 1% any more. Henry Ford realized this, which is why he paid his workers more than he really had to, in strictly short term terms. On some level, he realized, he had to make somebody just rich enough to buy his cars, so he started with his own workers, selling his product to the men on his assembly lines. He paid them a wage and they paid him back by buying his cars. There was the original, and most benign version of trickle down. Henry Ford was no friend of the working man, but he at least realized he needed the masses, if only to manipulate them.

Mitch McConnell and his patrons cannot even grasp that much. They don't think they need the lower 80% at all, except as voters.

The Republican President, Calvin Coolidge, looking on from retirement, set the standard for sophistication of economic analysis, as he inveighed in all his wisdom: "When more and more people are thrown out of work, unemployment results."

Today's Republicans, of course, are less reality based. They believe the whole problem with joblessness is we haven't made our richest 300,000 rich enough. This 300,000 richest would be hiring and turning the economy into high gear if only we cut their taxes even more than we already have, and promised them enough money so they will be finally willing to spend some money on hiring new workers.

Of course, most rich people run businesses. And most businesses need customers with money to spend on things the businesses provide. But, not to worry, if you just make these rich richer, they will not worry about where the customers are going to come from--they'll hire and trickle down wealth, because, ultimately, they are very nice rich people.

What is particularly disturbing about all this is not so much we have heard it all before, nor even that when we heard this before it was just before the bottom fell out. What is really disturbing is when you read about what Mellon did and said, and when you read about how the American voters voted in Harding, then Coolidge, then Hoover, all of whom were owned by the richest 1%, and were saying these very same things, the American voters kept voting them in.

Every four years, you hear the reassuring phrase: Voters are not fools.

But the evidence is to the contrary.

What you hear locally is voters do not remember beyond yesterday. They remember the last political ad they heard before they got in their car to drive to the polls. They are, simply put, incompetent. And they elect the wrong people.

What they have voted for, with the Tea Party revolution, was a government shut down. The guiding concept was government is the problem, not the solution. It's an old Reagan line, one of those lines Rush Limbaugh makes his living exploiting.

And it's this thinking which will destroy Medicare, Social Security, and ultimately, our military, our interstate highway system, our bridges, ports, airports and our economic power, along with our universities, our capacity for research and development and anything which depends on cooperative effort.

Name me a country which has prospered, let alone prevailed, which had a weak central government.

This is really what Barney Frank said, when they asked him why he was leaving Congress. Was he simply fed up with the vitriol welling up from Congress? Were the Republicans now just too venomous to deal with? He kept replying, Congressmen do not parachute in through the Capitol Dome. They are elected by voters at home. Nobody knew what he was saying. He was saying: Stupid people voted these stupid people in. I cannot keep working in an institution controlled by stupid people. For this, Barney Frank is despised as being elitist, a bully and mean. Of course, he is none of these things. He simply refuses to remain politically correct. He is pugnacious just as Rush and Mitch McConnell are. But David Brooks and others are offended by Barney because he does not suffer fools gladly and sees stupidity as something which should be challenged.

He made cub reporters think before they asked a question, so Barney is a bully. And the Congress and the cub reporters will not save us.

Eventually, the stupidity will catch up with us.