New York magazine
calls it a
“Mass Movement for Millionaires.” The
New York Times' Paul Krugman
sums up the idea: “Hey, sacrifice is for the little people.”
The
Campaign to Fix the Debt
is a huge, and growing, coalition of
powerful CEOs, politicians and
policy makers on a mission to
lower taxes for the rich and to
cut Social
Security, Medicare and Medicaid under the cover of concern about the
national debt. The group was spawned in July 2012 by
Erskine Bowles and
Alan Simpson, architects of a misguided deficit reduction scheme in
Washington back in 2010. By now, the "fixers" have collected a war chest
of $43 million. Private equity billionaire
Peter G. Peterson, longtime
enemy of the social safety net, is a major supporter.
This new
Wall Street movement, which includes
Republicans and plenty of
Democrats, is hitting the airwaves, hosting roundtables, gathering at
lavish fundraising fêtes, hiring public relations experts, and traveling
around the country to push its agenda. The group aims to seize the
moment of the so-called
"fiscal cliff" debate to pressure
President
Obama to concede to
House Republicans and continue the
Bush income tax
cuts for the rich while shredding the social safety net. The group
includes
Goldman Sachs’ Lloyd Blankfein, JPMorgan Chase’s Jamie Dimon,
Honeywell’s David Cote, Aetna’s Mark Bertolini, Delta Airlines’ Richard
Anderson, Boeing’s W. James McNerney, and over 100 other influential
business honchos and their supporters.
Corporations represented by
the fixers have collected massive bailouts from taxpayers and gigantic
subsidies from the government, and they enjoy tax loopholes that in many
cases bring their tax bills down to zero. Sometimes their creative
accountants even manage to get money
back from Uncle Sam. For
instance, according to
Citizens for Tax Justice, Boeing has paid a
negative 6.5 percent tax rate for the last decade, even though it was
profitable every year from 2002 through 2011.
These CEOs talk
about shared sacrifice, but it seems that they don’t intend to share
anything but your retirement money with their wealthy friends. As
New York mag
reports:
“Most
on-the-record comments are a mishmash of platitudes about shared
sacrifice and working together for the good of the country. But
interviews with a number of organizers and CEO council members point to a
massive networking effort among one-percenters — one that relies on
strategically exploiting existing business relationships and appealing
to patriotic and economic instincts."
As the Fix the
Debt gang moves around the country spreading their message, they are
starting to attract public protests. On November 27, they were greeted
in North Carolina with a
rally
from NC Progress, which called for an end to the Bush tax cuts for the
wealthiest 2 percent and told the group to keep its hands off the
middle-class wallet. The fixers are often vague about their mission, and
they tend to speak in coded language that conceals their actual goals.
Let’s have some blunt talk about what the fixers want to do and why they
want to do it –
talk you're unlikely to hear in mainstream media
supported by corporate advertising.
1. “Fix” means cut:
When they say “fix” Social Security, they mean cut Social Security.
Fixers want to convince the public that a well-managed, hugely popular
program that does not add to the deficit (it’s self-funded) is somehow
in crisis and requires intervention in the form of various cutting
schemes. They seek this because many of the rich do not want to pay
taxes for Social Security, and financiers want very much to move toward privatization of retirement accounts so they can collect fees on such
accounts.
2. “Reform” means rob. When the say
“reform” the tax code, they mean “make taxes even lower for the rich.”
The wealthy do not pay their fair share of taxes in the United States,
which is a major reason there is a large deficit in the first place.
When the very wealthy pay lower tax rates than ordinary working people,
the result is an increasing redistribution of income upward that puts
the U.S. in the top 30 percent in income inequality out of 140 nations, according to the Central Intelligence Agency . We’re a shameful #42. Income inequality is not only unfair, it’s dangerous and makes society unstable.
3.“Bipartisan” means all of the rich.
Fix the Debt is a pro-business ideological movement pretending to be a
bipartisan group of concerned citizens. But the group is really just a
coalition for the greedy, unpatriotic rich. There are plenty of
financiers and other 1 percenters in the Democratic Party, and some of
them have decided to join forces with their GOP counterparts to work
toward a goal that means a great deal to all of them: Making the rich
even richer.
4. “Concern” means covet. There was a
time, a couple of generations ago, when business leaders would not dare
to go public with their desire to increase income inequality and stick
it to hard-working Americans. When Owen D. Young, CEO of General
Electric in the '20s and '40s, spoke to an audience at Harvard Business
School in 1927, he emphasized that the purpose of a corporation was to
provide a good life not only to owners, but also to employees.
Corporations, he said, were meant to serve the larger goals of the
nation:
“Here in America, we have raised the standard
of political equality. Shall we be able to add to that, full equality of
economic opportunity? No man is wholly free unless he is both
politically and economically free.”
Fast forward to
2012: Jeffrey Immelt, the current CEO of GE, is a member of the Fix the
Debt Campaign, which is designed to lower the expectations of
hard-working Americans. Goldman Sachs honcho Lloyd Blankfein explained
this recently in a CBS interview:
“You’re going to
have to do something, undoubtedly, to lower people’s expectations of
what they’re going to get, the entitlements, and what people think
they’re going to get, because you’re not going to get it.” ~ Goldman Sachs CEOLloyd Blankfein
5. “Fiscal conservative” means economically confused.
Longtime Wall Street executive Steve Rattner, one of Obama’s auto
bailout czars, has been using his influence to attract tycoons from the
financial industry to the Fix the Debt movement. Over the last year,
Rattner has been on a crusade to convince Americans that they should put
aside their worries about real crises like unemployment to focus on the
deficit. Rattner, like many of his cohorts, poses as a moderate whose
thinking is needed to counter the advice of respected economists like
Nobel Prize-winners Paul Krugman and Joseph Stiglitz, who have long been
warning that defict hysteria is not only counterproductive, but based
on a lack of understanding of how the economy actually works.
Political
economist Thomas Ferguson, who teaches at UMass Boston and is a senior
fellow at the Roosevelt Institute, described the dubious policies the
fixers defend:
“Talk about the audacity of hope! The
people who brought you the Great Recession by pushing deregulation and
financial leverage to insane dimensions are back. Now they propose to
‘fix the debt’ by throwing average Americans who generously bailed them
out in 2008-09 over the fiscal cliff.
One trusts that even in our
money-driven political system, their transparently self-interested
nonsense will be firmly rejected. There is no reason why anyone needs to
do anything at all about Social Security for a long time; as even Peter
Orszag admits in the fine print. It just isn't a driver of the deficit.
The
U.S. does need to reduce its spending on defense and it certainly needs
to aggressively contain medical costs. But you do both of those the old
fashioned way. In the case of defense, you stop plunging into wars and
attend carefully to what actually is needed to defend America. In the
case of medical spending, you end ‘fee for service’ schemes that reward
endless tests and procedures and you vigorously pursue anti-trust and
regulatory remedies. You don't simply cut Americans off from health
care. It's ridiculous that we have ‘single payer’ for ailing banks, but
not citizens. If you are worried about the deficit, just let tax rates
rise back to the levels of the Clinton era, when growth ran far ahead of
today's economy, and tax dividends, carried interest, and capital gains
at the rates working Americans pay. And don't, absolutely don't, let
American companies escape taxation by stashing their money abroad.”
6. "Strip-mining is not leadership." Fixers
present themselves as magnanimous, responsible leaders doing what they
believe is best for the country. But that’s a tough sell when you’re
advocating policies that mainly benefit…yourself.
Economist Rob
Johnson, director of the Institute for New Economic Thinking and also a
senior fellow at the Roosevelt Institute, shared his view of the
Campaign to Fix the Debt in an email. As he memorably put it,
"strip-mining is not leadership":
“I believe that a
convincing argument depends upon the demonstrated self-sacrifice of the
leader offering a vision. This group does not appear to be doing
something for the nation. They are doing something for their own
self-interest (tax liability). There is confusion between: 1) what is
good for business and therefore jobs, something we all should be
concerned about; and 2) the personal benefit of CEOs based on who bears
the burden of the debt reduction plan. This group does not seem to gain
the credibility that comes from generous contribution through self
sacrifice. As a result they will arouse great suspicion rather than
inspire us as 'leaders' who are guiding the design of a just, productive
and coherent society.
With all of the suspicion of leadership
in America, business, media, scholars and politicians have to lead in a
credible way. This just looks like guys defending their self-interest
in a dysfunctional period of our nation's history because elites take so
much for themselves.”
It's no secret that the wealthy have done extremely well over the last several decades, even since the Wall Street-driven financial crash that devastated millions of Americans. In 2010, the top 1 percent of U.S. families
raked in as much as 93 percent of the country’s income growth, according to Emmanuel Saez, a UC Berkeley economist who looked at IRS data.
Which raises several important questions for Bowles, Simpson, Blankfein, Rattner & Co.: How much is enough? How far are you willing to tip the balance of income in the country toward the wealthy? What concern do you really have about the deficit, or for that matter, the future of America? Inquiring minds want to know.
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