Democrats Still Don't Get It: It's Employment (and Lack Thereof), You F-cking Morons

OT, but here's a copy of the letter I sent Steny Hoyer (who is my representative) today:

Dear Mr. Hoyer,

I have a suggestion for a change in Social Security taxes which, I believe, could be revenue neutral, and highly stimulative.

As it is now paid, the Social Security tax is highly regressive, paid by all of the poorest Americans, and paid less, proportionally, by wealthier taxpayers. The ceiling of $106,800 means that those most able to pay, pay less as a proportion of their income, even though there is no income limit for receiving benefits.

The tax also falls disproportionally on small businesses, as they often employ low wage and part time workers, but are unlikely to pay enough to reach the limit on payments.

My suggestion is to couple the elimination of the payroll tax ceiling with the exemption of the first $10,000 in income from withholding. This would accomplish two important things. It would put more earnings in the hands of poorer workers who would almost certainly spend all of it, stimulating business demand and encouraging job creation. It would also make it easier for small business owners to hire part time workers. (Of course, the actual numbers to achieve revenue neutrality would have to worked out, I just proposed $10,000 off the top of my head, but any similar change would be a step in the right direction.)

Politically, it would require conservatives, who keep saying they favor small business, to put their money where their mouth is. It would make it difficult for them to say they are favoring small businesses while advocating policies which in fact favor the very most wealthy.

I donât know if this idea has been proposed before. I certainly have never heard of anyone suggesting it. Please consider this, as it is obvious to me that the economy desperately needs additional stimulus, and fiscal policy seems to be off the table for the foreseeable future.

I posted a copy on my brother's blog, where most of the readers are much, much more conservative than I, and even there, the comments are fairly positive.

Maybe it'll catch on?

The blockquote was supposed to end after "foreseeable future." Must have screwed up the tag.

It's simple arithmetic: ten percent of the workforce [1] is unemployed, but 90% are employed and see taxes as a bigger problem than unemployment. What's more, the employed are more likely to vote and vastly more likely to make campaign contributions.

[1] Yeah, I know that understates the problem. Tell me: my just-graduated son is finding bupkis for prospects and isn't counted in the total.

A big problem is that the reason we have 10% unemployment, on top of a seldom mentioned base rate of 5-7% who are not, some can't, seek a job, is that roughly 70% of the economy is consumer based with the majority of that being the middle class. A middle class that has been falling behind for fifty years.

Consider that at one time a single middle-class adult could raise two kids and a wife, own a home, provide all the necessities and still afford to indulge in the occasional luxury. With some care and restraint there was even a chance they could send at least one of their kids through college. And all that on a forty hour week and, perhaps, a little overtime.

People forget that mama didn't go to work primarily to satisfy her career cravings. She went to work because the family was too broke to maintain their spending levels without a second adult working.

The heavy use of credit in the 90s was another way for the middle class to maintain a lifestyle based on retail purchases. As was the more recent use of a house as an ATM.

All these were stopgap measures to maintain a dream of a middle-class consumer lifestyle. More pressure and trickery and exploits to keep the wheels turning. Always doing more with less.

This recession is rooted in the simple fact that the middle class has run out of ways to maintain spending. There are simply no more credit lines, nothing left to exploit or hock that isn't owned by someone else already. Being well trained and dedicated consumers since the early 50s the middle class has done everything asked of it. And has nothing but a stack of bills to show for it.

Longer hours, six or seven days a week, faster production, without health-care, as contract employees without recourse, living in a double mortgaged house, credit cards maxed out, driving a car that will break down before it's paid off ... there is nothing left to do but face that fact that the exploiters have won and their sons and daughters aren't going to see what their parent got to see.

The middle class has been ridden hard and put up wet too many times. It has nothing left to give. Problem is that when the 70% of the economy that is the consumer culture stops spending there is nobody left to sell to. If you can't sell serviced and stuff the companies cut employment. Jobs go away.

The right keeps telling people that government can't produce jobs. (Overlooking the many government jobs that evidently don't count.) The right tells you that business produces jobs. But they get that wrong. Business only produces jobs if there are people who are able to buy the goods and services produced.

In the end 70% of the economy is consumed driven. It is a prosperous and optimistic middle-class that produces the economic activity that provides a market for products and jobs.

The sad fact is that over the last 50 years the middle class has been exploited. They have played the pigeon at the poker table and kept the game going by being willing to keep playing even as they lost more than they gained. The middle-class has been the optimist and sorely abused alter-boy to the unregulated free market and the 'greed is God' religion.

The middle class is tapped out and can no longer ante up. The bright-eyed optimism is gone. The alter-boy realizes it was all a scam. The point of the exercise was him getting used.

But the middle class will have its revenge. For without a middle class you don't have a democracy, or a functioning economy. Without a functioning social contract will there be enough police and security cameras to keep order? Wall Street played the working man for a chump. It isn't clear that the MOTU can maintain their lifestyle without a market to sell to and exploit. Yes, they can froth the market for a time by selling to each other but without constant stirring the froth deflates.

The fact is the golden goose has stopped laying. It is coughing up blood.

The question is; how do you rebuild the middle-class? How do you do it from where we are now. The entire system has been structured to systematically shake down the middle-class. The defenses they had before are gone. Labor laws, unions, the cultural standard of wages AND benefits, even the expected normality of working an eight hour day has gone.

There is not a lot any politician can do to reverse the fortunes of the middle class. Especially not in the present political situation. Not with one house of congress and half the senate owned by free-market theocrats who have fifty years of history cheering the exploitation of the middle class and blaming the losers for their poverty.

The bad news is that things are going to keep getting worse. The good news is that if the citizenry is angry and in a throw-the-bums-out mood today they should be livid in 2012. By then people may have had a belly-full of free-market religion and pitying billionaires.

A guy can dream.

Say lies often enough and persistent enough and it becomes true, is the mantra more tax breaks and continues present breaks will solve the problem. Somehow Atlas the economic god will willingly create miracle jobs if we lay sacrifices of taxbreaks at his alter.

As I have said and stated SINCE I WAS IN 11th FRIGGIN GRADE IN 1982 with the Reagan start of outsourcing, taxcuts and undercutting the middleclass. A country/society cannot survive or thrive on an economy solely based on service/consumer economics (technology and information included). Our manufacturing and resource based industries beside the agricultural have been gutting or vertically streamlined. The economy as an environment isn't diversified, it has become specialised such that there aren't enough jobs for the mass of reeducated persons to get the higher paid work. The workforce for previously well paid blue collar/labor jobs have become diluted (out of country outsourcing or union busting) such that wages have dropped below sustainable forcing people to get caught on the credit/debt wheel that make the Wall Street financial houses and hedge funds rich betting on if you can even pay off your debt.

Marx failed to anticipate the rise of a middle class because he failed to foresee an economy fueled by cheap & plentiful petroleum, Art. Global petroleum production has peaked and as it goes into terminal decline, cheap & plentiful petroleum becomes a thing of the past and so does the middle class. This is the dynamic being worked out and its underlying narrative is biogeochemical rather than economic or political. Things are indeed going to get worse as fossil fuels deplete and environmental problems worsen. Throwing the bums out of government will do no good because whatever bums you replace them with can't magically provide cheap & abundant energy to maintain or restore a middle class with purchasing clout. Soon it will come down to being able to grow, scrounge, beg or steal enough to eat. This is just the beginning. Marx & Malthus will have the last laugh, or would if they weren't dead.

I think what Marx failed to anticipate was not cheap petroleum, but organized labor. If workers had not fought for better conditions, the US could very well have become a communist state.
As it was, the solution served to make workers comfortable, and the very wealthy enraged. Much of the campaign against working Americans is the culmination of the fight by the very rich against unions and income taxes.
My proposal above would decouple the interests of workers and small businesses from those of the very wealthy, possibly forcing the Republicans to admit that it is the very most rick they serve, not the deceived workers who vote for them.

@4 "For without a middle class you don't have a democracy, or a functioning economy."
@7 "I think what Marx failed to anticipate was not cheap petroleum, but organized labor. "

It's worth nothing that "middle class" does not mean what it used to. In the US, "middle class" basically means "white and has a job". The people described by @4 as middle class are workers - white collar, but workers nonetheless. If you attend a job where you work for the man and are paid, then you are a worker.

The old "middle class" without whom democracy cannot function are rentiers - people with enough leisure to dabble in politics. I suppose that means the teabaggers.

C'mon guys, you just can't mention immigration, can you. (Why not? 'fess up, please.) Jobs have not just been outsourced. They are also being taken by legal and illegal immigrants, skilled and unskilled. They can be paid less. Things are necessarily going to get bad if your legal immigrants for 50 years are less intelligent than the population average (95 IQ by one estimate) and if hyper-ethnocentric high-birthrate Hispanics with a 10 point IQ deficit (which nobody knows how to raise and which won't be raised) have been flooding in illegally in such numbers that they will eventually be the majority population. I can understand it if you are all Jews. It is obvious now if it wasn't before that the Jews hate the historic American nation and are doing their utmost to murder it. But what excuse do the rest of you have?