Thursday, November 18, 2010

Article Of The Week

It's a curious case of populism, that which the media claims finds its voice in the likes of Michelle Bachmann, Sarah Palin, and Glenn Beck, three of the leading voices of corporate privilege in the U.S.A.

Recently, it had the Washington Post columnist David Ignatius columnist in "Why is Congress protecting a tax code that benefits the rich?" lamenting the "pro-billionaire version of populism (which) seems to have won big in the midterm elections." He cites

the demise of a congressional effort to strike down one of the most outrageous provisions of our messed-up tax code, which is the special treatment of "carried-interest" compensation that's paid to many investment fund managers.

This loophole is so unfair that it gets criticized even by some of the tycoons who have benefited from it, such as former Treasury secretary Robert Rubin and other prominent investors I've queried. Basically, it taxes the money paid to managers of private-equity funds and similar partnerships at 15 percent, as if it were risk capital, rather than at ordinary income rates of 35 percent.

The carried-interest break survives as do other policies which benefit big business

by invoking small business. It's argued that if congressional reformers have their way, they will gut compensation for all the little mom-and-pop partnerships that depend on carried interest....

A similar illogic leads many people to believe you are attacking Main Street if you suggest withdrawing the Bush-era tax cuts to people making more than $250,000.

Ignatius, normally a supporter of President Obama, notes "the politically enfeebled Obama administration has caved to extending the tax cuts." He misses (slightly) only when he suggests that support of tax cuts for individuals so wealthy most Americans never will know anyone they benefit may be "part of the American ethos that we all think we're rich."

Most Americans do not believe they themselves are rich, instead believing, no matter how stratospheric their income or privileged their lifestyle, that they are "middle class." They do believe, consciously or otherwise, no matter how unrealistically, that they may become rich. This fantasy, though long held in this nation, has been fueled in recent years by the ever-spreading practice of legalized gambling- and the mainstream media's glee in reporting, in words and pictures, every big winner. They are so normal and average, we see, just like we are. And if I can just land that one big lottery ticket or the catch the right slot machine....

But Ignatius is right on target (my Sharron Angle language) when he concludes

fixing the carried-interest loophole is probably dead, for this Congress and the next. It was hard enough to beat the big guys. But once they successfully hid under the cover of the little guys, it was impossible.

That political legerdemain is making America more unequal every year, and the polls show people are mad as hell at Wall Street and Washington, both. And yet the popular chorus continues: Save the tax breaks for the rich.

"People are mad as hell at Wall Street and Washington" while "the popular chorus continues: save the tax breaks for the rich." It brings to mind a favorite passage, one I've previously quoted, from page 249 of Thomas Frank's What's the Matter with Kansas? which shows, as Frank argued, that Kansans are similar to other Americans:

The state watches impotently as its culture, beamed in from the coasts, becomes coarser and more offensive by the year. Kansas aches for revenge. Kansas gloats when celebrities says stupid things; it cheers when movie stars go to jail. And when two female rock stars exchange a lascivious kiss on national TV, Kansas goes haywire. Kansas screams for the heads of the liberal elite. Kansas comes running to the polling place. And Kansas cuts those rock stars' taxes.

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