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Stopping the Plutocracy
By Michael Cudahy and Jock Gill


"Thus it is manifest that the best political community is formed by citizens of the middle class, and that those states are likely to be well administered in which the middle class is larger and stronger --if possible than both other classes."
-- Aristotle, Politics, Book IV

From time to time the relationship between the power of money, and this country's more noble progressive ideals get seriously out of balance. A classic example was at the turn of the last century. Branded the Gilded Age, it was an historical moment of obscene acquisition. Wealth ruled the nation, and thrived on influence, the manipulation of raw political power, and a total disregard for the democracy that had made this country strong. Similar periods occurred during the 1920s, and as recently as the 1980s and 1990s. Everything was for sale -- including the politicians who had been elected to guard the welfare of those who could not afford to protect themselves from the predatory appetites of the wealthiest members of American society.

Serious evidence suggests that we are in the midst of another such period in American history. The New York Times recently referred to it as "The Wal-Martization of America." Millions of American families are one paycheck, or a second or third job, away from abject poverty. A minimum of 51 million American workers live without proper health insurance, and an inability to pay medical bills is the leading cause of personal bankruptcy. What was once a large and prosperous middle class in this country is rapidly beginning to decline. The 21 million workers who earn between $30,000 and $50,000 have little room to move when faced with feeding, clothing, educating and providing health care for a normal family of four. Millions of families live a heartbeat, or a job layoff, away from being wiped out. A recent Harvard study shows personal bankruptcy is at an all-time high. In this past year, 1.6 million people filed, with 92 percent of those coming from the middle class. Should this frightening trend continue to accelerate, the real possibility exists that the American democracy of Jefferson and Franklin could be in serious jeopardy.

Recently Kevin Phillips, former chief political strategist for Richard Nixon and author of "Wealth and Democracy," said he no longer believes that democracy even exists in this country, but has in fact been replaced by a plutocracy -- a government controlled by its wealthiest individuals to promote their own specific agenda. "The plutocracy," Phillips said, "and I think we have one now -- and we didn't 12 years ago -- is when money has ceased just entertaining itself with leveraged buyouts, and all the stuff they did in the 1980s. It has now taken over politics, and takes it over on both sides when money not only talks, money screams. When you start developing philosophies in which giving a check is a First Amendment right. That's incredible. But what you've got is that this is what money has done. It has produced the fusion of money and government. And that is plutocracy."

At the turn of the last century, this country was blessed to have courageous and progressive politicians such as Presidents Theodore Roosevelt and Woodrow Wilson who recognized the threat that unchecked monetary influence over politics and government represented to American democracy. Roosevelt's famous quote that, "Every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare might require it," would undoubtedly have him expelled from his own party -- should he have the audacity to say it in modern times. What has happened is that the rich in this country have decided that they are willing to spend whatever it takes not just to buy an occasional senator or congressman, not the president or the vice president, but the entire system. They have purchased laws and government contracts, tax loopholes and the White House. And, they have shielded their purchases in layers of executive and governmental protections. And what are the implications of this corrupt purchase? This massive takeover is rapidly undermining and destroying America's greatest and most stabilizing asset -- this country's middle class -- the very foundation of our democracy. It is a conscious attack determined to reduce this nation to a country of rulers and ruled -- greatly expanding the chasm between rich and poor -- while focusing government's attention on protecting the venal lucre of the nation's wealthiest few.

Since the early 1970s the average annual salary, adjusted for inflation, has risen from $32,522 to $35,864 -- according to a Fortune magazine study -- an increase of approximately 10 percent. In that same time the annual compensation of this country's top 100 CEOs has increased from $1.3 million to $37.5 million -- according to the same Fortune survey. Over this 30-year period, we have seen American CEOs earnings increase from 39 times the pay of the average worker to more than 1,000 times in 1999. In comparison the CEOs of major corporations in Great Britain and France earn only 22 times the wages of their average workers. But remarkably, as we approach a presidential election year President Bush and his Republican Party are doing their best to ignore these realities, while the Democrats seem incapable of framing new ideas to correct them. At a moment in American history that invites anticipation, innovation and the courage for bipartisan cooperation, all we are hearing is mind-numbing babble. We have little doubt that the vast majority of middle-class voters would embrace a presidential candidate who stepped forward and expressed positions designed to restore their position of strength in American society. A candidate who understands that Americans hunger for boldness and innovation. A candidate who understands that the power of ideas, eloquently articulated will defeat money, and its plutocracy, in this arid climate of greed and acquisition.

It is what Teddy Roosevelt would do. Is there one out there?

Michael Cudahy is a contributing writer to the ModerateRepublican. He and Jock Gill contribute to a Web log called www.greaterdemocracy.org. Mr. Gill, who served in the Office of Media Affairs in the first two years of the Clinton administration, is an Internet communications consultant. This article first appeared in the Pittsburgh Post-Gazette on November 30, 2003.


The Magic Words

By Mark Kittel

We are obsessed with taxes. We are a nation that spends an inordinate amount of time fretting over how much Uncle Sam is taking out of our paychecks, how much more the state takes on top of that, how much were paying in school taxes and property taxes. If you own or partner in a business, youre obsessed with how much your company has to pay in taxes every quarter, how much the government is cutting into your profitability. We spend a nice chunk of money on accountants every tax season to look for ways to get out of paying additional tax on top of what weve already lost through payroll. We write angry letters to the editor, irate letters to Members of Congress and governors and local town boards, complaining bitterly about how much we pay in taxes compared to our neighbors in other towns or states and demanding that our taxes be lowered. And every election year, we listen for the magical words tax cuts and pull the lever or punch the card for the person that promised such blessed relief from our tax burdens.
As we head into this election year, we will doubtless hear the president sing the praises of his tax cuts, hear how these cuts have stimulated the economy, how the cuts have helped the average American keep more of his hard-earned money, and hear how the terrible tax-and-spend liberal Democrats want to repeal the tax cuts and raise taxes again. The hope will be that taxes are our highest concern and priority. The hope will be that we will ignore our concerns and questions about Iraq and Afghanistan, look past the fact that Bushs foreign policies have made enemies out of allies and other nations are set to punish us economically, forget that the healing economy has yet to pull the nation out of its unemployment pit and that improving business has not stemmed the flow of decent jobs out of our country and into foreign lands. The hope will be that we do not care about the administrations poor environmental record, that we can set aside our misgivings about the Patriot Act and other attacks on our Constitution, let go of our disparate agendas and unite again under the magic tax cuts. Fearing a Democrat-led tax hike, Republicans will be expected to fall in line and support the presidents election, and the fence-sitters in America will hopefully see that it is in their best self-interest to give Bush another four years in office.
But we should already know that there is no magic in the tax cuts. All magic tricks involve illusion and distraction, and the tax cuts are no exception. What you dont pay to the IRS you pay to someone else. When the feds reduce taxes, they must also either reduce spending or begin spending money they dont have. If they go the route of deficit spending, we end up paying the taxes in the future rather than now, but we still end up paying the price. With reduced spending, states are then left to pick up the tab for essential programs and services that the federal government no longer funds, so individual states must either hike their own taxes, deepen their own debt or cut their own spending. And so it continues on down to counties, townships, municipalities and cities.
Yet we rarely debate or question the merits and wisdom of tax cuts within our own party; no one wants to admit that in the end, we either pay our taxes to someone at some level or else we lose the essential services that no private enterprise wants to pay for. It has become practically an article of faith amongst Republicans that tax cuts are good, tax cuts are always good for the country. If you dont think thats true, try the inverse mantra instead: Tax hikes are bad, tax hikes are always bad for the country. We have become the party of tax breaks, tax cuts, tax rebates. At the same time, weve managed to convince ourselves that the Democrats are the tax-and-spend liberal party, out to rob every last one of us of our precious paychecks and turn the money over to crack-moms and deadbeats on welfare.
Thus, when it comes down to election time, we see our choices as being between the one that cut my taxes and the one thats going to raise my taxes. We forget that by supporting federal tax cuts were likely to see increases in our state and property taxes. We tend to become blind to other concerns, tend to sacrifice all else for the sake of keeping our taxes low, keeping a few more dollars of our paychecks safely in our hands. We might have dozens of reasons to not vote for the Republican candidate, we will have more than ample cause to choose someone that is moderate, progressive, fiscally responsible and conservative, and yet we will leave that behind out of the simple fear that if we dont vote Republican, our taxes are going to skyrocket.
I dont know where we get this almost irrational fear of taxes from. Im sure part of it comes from our fear of the country moving away from pure capitalism and into socialism. We hate the idea of our money being
taken from us and handed out, unmerited and unearned, to the lowest members of society. We dont want to pay for other peoples children to have decent schools, we dont want to pay for someone elses retirement or for someone elses medical needs, we dont want to pay for someone elses drug treatment and rehabilitation. We see this as an unfair assault on our salaries. Its not that we are cold-hearted and uncompassionate (although Ive encountered many Republicans, and non-Republicans, that have zero concern for their fellow Americans). We would just rather not have the government force us to pay for these programs. We also often accept as an article of faith (and this is shared by many non-Republicans) that the government is overly large, wasteful, and lacking in any accountability for the success or failures of its programs. From this perspective, its easy to understand our knee-jerk reaction to tax increases. A tax hike automatically equates to even larger government, expanded waste and less accountability. Conversely, a tax cut must equate to small government, better budgeting and improved accountability for those few tax dollars that are available.
But if our concern is about how our tax dollars are being spent, not simply how much we are being asked to spend, then shouldnt we be asking for a candidate that promotes fiscal responsibility and accountability and not simply tax cuts? Would it not serve our country and communities better to ask for a government that spends wisely and accounts for its actions and spending accurately, rather than simply starving the government of money? Contrary to how Republicans are commonly portrayed in this country, we are not simply a party of white old rich men with no compassion or concern for our neighbors and fellow citizens. There are non-whites in this party, too; there are middle-class and blue-collar workers here, men and women alike;
there are straight people, gay people, people who support abortion rights without supporting abortion itself, gun-lovers as well as gun-control lovers. And most of us do care deeply about the society we live in, the environment we live in, the communities that we partake in and that our children are raised in. We have a vested interest in building a better country and community for all people. We just dont believe that money can solve societys ills; only society itself can solve societys problems. This one point is where we depart from the tax-and-spend liberals, in our belief that simply spending more money on a problem will not translate to more improvements in the solutions to those problems. In the end, regardless of our political leanings or affiliations, we share the same basic desire to make our country grow and prosper and to build a better society.
But it is not possible to simply rely on the goodwill of citizens to make these things happen, and sooner or later we will all have to admit that simply improving the lives of people in our local communities is not enough, that in order to solve the problems we face as a nation we must give the national government the power to solve those problems. And that means we have to pay our taxes and ask the government to spend that money for us. Whether we pay now or pay later or ask our grandchildren to pay the bills, building a better country requires money.
Just because we have to pay the taxes does not mean that we have to put up with waste and inefficiency, however. If we shift our focus from how much we pay in taxes, and focus instead on what exactly our money is doing for us, we could achieve the goal of eliminating government waste without starving ourselves of the services and programs that serve to improve our country. We need to look at our taxes and tax spending the same way we look at an investment; when we put money into stocks or bonds or real estate, the question is never How much will this cost? but What will I get in return, what will the results be? Every tax dollar should be seen as money invested in our country, and we should take no less responsibility in tracking how that dollar is spent than we would with the dollar we put into a mutual fund.
How likely is a shift like this to occur in our grand party, how likely are we to get leaders and representatives that drop the magic words tax cuts? It depends entirely on us, of course. We first have to stop talking about taxes in terms of cuts and hikes, and instead talk about them in terms of investing and results. We have to speak of taxes this way amongst ourselves and to others outside the party, remind ourselves and others that every
cut
comes with a price tag. And we have to set tax cuts aside at election time. Taxes and tax cuts are expected to unite Republicans at the expense of all else and all other issues. We cannot afford tax cuts if the price is our values and our beliefs.


Mark Kittel is a contributing writer to the ModerateRepublican.

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