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Entries tagged "State Of The Union"

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Unconventional Wisdom: The President Talks About Inequality

January 26, 2012 ·

A wordle of President Obama's 2012 State of the Union speech. By Kurtis Garbutt.What a difference a week makes. GOP presidential hopeful Mitt Romney finally disclosed on Tuesday that he paid a measly 13.9 percent of his vast income in taxes in 2010 and will probably pay just 15.4 percent on his 2011 earnings. Those rates are far lower than what the IRS demands of you, or the two of us, or Warren Buffett's secretary.

Thanks to the persistence of the Occupy movement and Romney's tin ear, the anger over inequality, recent college grads who can't pay their student debts, and elderly people being thrown out of their homes is boiling over into outrage.

Thanks to this pressure, President Obama devoted much of his State of the Union address to the damage extreme inequality wreaks on our democracy. IPS experts John Feffer, Phyllis Bennis, Sarah Anderson and John Cavanagh all offer their takes on this important speech.

At IPS, we're spreading the stories, facts, and figures about our nation's 30 year march toward extreme inequality in as many ways as we can. IPSers Chuck Collins and Sam Pizzigati have built the leading inequality website. (Please visit www.inequality.org to see what we mean). Chuck's latest book 99 to 1: How Wealth Inequality Is Wrecking the World and What We Can Do About It will be released shortly before Tax Day, and he's a featured expert in "We're Not Broke," a new documentary that premiered on Sunday at the Sundance Film Festival, which highlights the growing public outrage toward those in the 1 percent who are key drivers of inequality. Too Much, Sam's weekly newsletter, highlights news and views that show how our world would be considerably more caring, prosperous, and democratic if we narrowed the vast gap that divides the wealthy from everyone else.

As the outrage grows, change that seemed impossible not long ago becomes possible. IPS is working with the National Nurses United union and a wide range of groups in this country and around the world to build support for a tax on speculative Wall Street trades, which could raise hundreds of billions of dollars for urgent needs, such as jobs and climate programs. The Institute is working with other allies to lay out the shift from a Wall Street casino to a green Main Street economy.

Remember, Wall Street banks and global corporations have driven down wages, working conditions, and environmental standards both in the United States and everywhere else. We need solutions that cross borders. That's why IPS is working with allies around the world — from Occupy Nigeria to groups fighting the U.S. drug war.

A movement for the 99 percent is growing like wildfire, and each and every one of you is part of it.

This post was originally sent out to IPS supportes in our biweekly Unconventional Wisdom Newsletter. Sign up for UW and other IPS newsletters here.

The State of the 99 Percent

January 25, 2012 ·

While we’re still waiting for actions to match his rhetoric, President Barack Obama made three critical points in his big speech about the problem of inequality—a problem that the Occupy movement has pushed into the public consciousness.

President Obama reviews the State of the Union address with his speech writer. Photo by the White House.1. The Rules are Rigged in Favor of the Rich

Early in his address, the president said that “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

Despite the popular myth that the rich are rich solely because of their hard work and talent, in reality, much of the explosion of wealth at the top is a result of the rich rigging the rules.

Case in point: rich people, who make most of their income on the stock market, pay a far lower tax rate than ordinary Americans. Warren Buffett pointed this out several years ago when he offered a million dollars to any CEO who could prove he paid a higher tax rate than his secretary. Not one came forward.

In a brilliant stroke of political theater, Obama invited Buffett’s secretary to sit with the First Lady during the speech. This came just hours after Mitt Romney revealed he had paid only a 13.9 percent rate on his 2011 income taxes—thanks to the deep discount rate of 15 percent for financial earnings, compared to the top rate of 35 percent for income from actual work. Obama proposed a minimum tax rate of 30 percent for people who make more than one million dollars a year.

2. We Have Tackled Extreme Inequality Before

A century ago, the rich were enjoying the so-called “Gilded Age” with extreme levels of inequality. Starting in the mid-1930s, in the depths of the Great Depression, our government, pressed hard by a militant labor movement, raised taxes on the rich, protected worker rights, and began a four decade march toward much greater equality. By speaking of “restoring an economy where everyone gets a fair shot,” Obama reminded Americans that our current levels of inequality, which rival those of the Gilded Age, are hurting tens of millions and degrading our democracy, and that we know how to reduce extreme inequality in this country.

3. The Occupy Movement is Not About Envy

The president also effectively rebutted the common conservative argument that all this Occupy ruckus is about nothing more than petty jealousies. “When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet.”

Obama’s sharp rhetoric is an important contribution to the public discourse about inequality. Yet deeds are stronger than words. And right now, Obama is not expected to include the millionaires tax increase in the budget he delivers to Congress next month. For the millions of young people who joined the Occupy sites last fall because they can’t find jobs nor pay off their student loans, Obama weakly admonished colleges not to raise tuitions. No word of what many of those students demand, namely that they not be required to repay those loans until they have incomes.

No real relief from Obama for the millions of Americans who can’t pay their mortgages. He said he was proposing a small fee on the big banks to help pay for a program to allow homeowners to save on their mortgages by refinancing. This is small compared to what is needed: a reduction in the principle on those mortgages down to what the market says they are worth.

So, the challenge to the American people remains huge. Yes, we now have a President who is talking about the obscene inequality that is ripping this country apart. Yet, it will only be through massive pressure from below that bold measures to tax Wall Street, tax corporations, tax the wealthy, and tax pollution get enacted.

And, while Obama talks of wind farms and other green jobs, he still is not articulating a bold vision to transform this nation’s economy from a war economy still addicted to fossil fuels to a green Main Street economy that creates jobs while advancing ecological balance. The Congressional Progressive Caucus has released an Act for the 99% that included some of this vision, particularly for millions of new jobs paid by a fairer tax system.

We all know that thirty years of deregulating Wall Street and lowering tax rates on the rich won’t be undone quickly. For years, Wall Street has crashed the economy and corrupted our politics. Only bold, transformative vision and action can restore our democracy and improve the lives of our people.

Sarah Anderson and John Cavanagh wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions.

A Deficit of Ideas

January 27, 2011 ·

Today, the White House will announce plans to eliminate the color coding warning system created after 9/11 under the Bush administration. If there is a problem, the Obama administration says, they will tell us. Unlike the doom-and-gloom Republicans, Obama is once again trying to reduce fear and inspire "hope," though he was careful not to use that specific campaign word during his State of the Union address.

But make no mistake about Obama’s speech — at the dawn of what promises to be two years of gridlock, Obama is settling back into where he is most comfortable — the campaign trail. It was no coincidence that the stories he featured throughout his address came from battleground states like Michigan, Colorado, and Oregon or that he visited Wisconsin the next day.

By portraying himself as a sensible centrist above the fray of bipartisan bickering, he futilely attempted to appease one side and then the other, often almost in the same breath. Allow gays in the military (to make Democrats happy) but also allow ROTC on college campuses (to make Republicans happy). Allow people not born in the United States to stay (Democrats) but secure the borders (Republicans).

Obama attempted to appeal to the center by pushing a pro-business agenda and emphasizing American exceptionalism. But pandering to business has a high price. The spending freeze on discretionary domestic programs would have a devastating effect on many American families. Obama emphasized job-creating exports but failed to mention that our trade policies have increased our imports even more. Our trade deals also push a deregulatory agenda that undermines workers and the environment everywhere. Instead of addressing climate change, Obama spoke of “clean energy,” code for the use of oxymoronic "clean coal" and nuclear power.

He missed out on the opportunity to advocate for a progressive vision of the United States and to take on a real leadership role. IPS scholars pointed out that he should have proposed gun control or criminal justice reform. In addressing the deficit, he gave only vague reference to cutting the military budget, a necessary action to take if we are serious about job creation and deficit reduction. Obama failed to propose new ways to generate revenue by clamping down on corporate tax dodgers. Read all of the great suggestions the IPS staff proposed for Obama on the IPS Blog.

Obama is right when he says we are living in a different time. The Republicans have the strength of the conservative movement on the outside pulling them and the nation further and further to the right. We, as progressives, need to apply that same pressure. Hope alone will not sustain us.

SOTU: Smoked Salmon on Wonder Bread

January 26, 2011 ·

The good news for President Barack Obama is that his one joke in an otherwise dead-serious 2011 State of the Union address elicited a chuckle from the assembled lawmakers in the chamber and sent ripples of humorous asides through the blogosphere. In case you missed it, Obama made the case for a historic reorganization of government by highlighting the layers of bureaucracy regulating salmon.

"The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater," he quipped. "And I hear it gets even more complicated once they're smoked."

This prompted Michael Moore to make an actually funny joke via Twitter, "Soon a fresh water salmon will sit next to a salt water salmon in the spirit of civility." It provided a welcome break from wondering why Vice President Joe Biden couldn't stop frowning and, as at least one tweeter surmised, whether House Speaker John Boehner’s seat behind the president had a built-in tanning device.

This may end up as Obama's "smoked salmon" speech, just as we remember President George W. Bush's 2006 State of the Union address as his switchgrass moment.

(In case you forgot, that was when he declared, "We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switchgrass." Millions of Americans spontaneously shouted "switchgrass!?" at no one in particular, then laughed at Bush.)

To be sure, eloquent moments abounded in Obama's second SOTU address, such as this one:

"We are part of the American family. We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled."

Bad Policy Menu

But like serving smoked salmon on Wonder Bread, the president's State of the Union address sandwiched inspirational comments with crummy foreign, domestic, and energy policies. Here's a summary of what was on the menu, according to my Institute for Policy Studies colleagues.

Obama's remarks about the nation's entrenched wars were strikingly unrealistic. "This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq," he proclaimed. "America’s commitment has been kept; the Iraq War is coming to an end."

IPS fellow Phyllis Bennis countered in her real-time analysis for the PBS NewsHour's website that the Iraq War isn't wrapping up, the Afghanistan War is failing, and we can't afford either one. If we are ever going to find 15 million jobs, we need to end the wars and cut military spending.

Then there was the five-year freeze he proposed on the funding of discretionary domestic programs. It would choke off vital assistance to a shrinking middle class and growing numbers of poor and low-income families, IPS fellow Karen Dolan warned.

The sound of the president's silence on climate change and the BP oil disaster was deafening, as IPS fellow and Earthbeat Radio host Daphne Wysham explained. His call for boosting "clean energy" rang hollow because, as Wysham says, he was using the term as "code for 'clean coal' (an oxymoron if there ever was one), nuclear power, and natural gas."

Given the administration's overwhelmingly corporate-friendly tilt, she finds it impossible to get optimistic about Obama actually ending subsidies for oil companies."As long as the Citizens United Supreme Court ruling stands, allowing unlimited campaign contributions from corporations, including large oil companies, it's unlikely that Congress will embrace this proposal," she said.

Catering to Big Business

Obama's pledge to slash the corporate income tax was mistaken, argued Chuck Collins, director of the Institute's Program on Inequality and the Common Good. "It is true that statutorily, the U.S. has a high 35 percent corporate income tax rate. But the effective rate — the percentage of income actually paid in taxes — is considerably lower than in most industrial countries," he said.

Obama also missed an opportunity to get serious about the nation's chronic prison problem (too many Americans are in the slammer) and absurd drug laws. "The budgetary and political stars are finally aligned for serious criminal justice reform," wrote IPS fellow Sanho Tree. "Just yesterday, a group of former world leaders and other dignitaries came out against the drug war. With this much political cover, he would be practically impervious to jabs from the right."

Finally, as linguist George Lakoff predicted, Obama used "business language to indicate that he is pro-business" in this speech, emphasizing "the need for 'competitiveness' as if America were a corporation," and calling for "investments" in education, research, infrastructure, and "clean energy." As he has done for years, Lakoff sounded the alarm about this practice, which undermines even the better aspects of Obama's speeches.

"Economic success lies in human well-being, not in stock prices, or corporate and bank profits," he explains. "These are truths. We need to use language that expresses those truths." Read more about this on Common Dreams in Lakoff's commentary The 'New Centrism' and Its Discontents.

SOTU: Glossing over the Pervasive Suffering Caused by Joblessness

January 26, 2011 ·

President Obama is to be praised for not giving into crisis-hysteria around Social Security and instead calling to protect this vital, popular and stable program.

He also deserves credit for reiterating his call for an end to the Bush tax cuts for those Americans making over $250,000 a year. This is the least of what's necessary for the economy to turn toward a path of recovery.

However, Obama missed the mark in several areas. He seemed to gloss over the pervasive economic suffering in the country as the result of staggering un- and under-employment numbers. And by calling for a five-year freeze on the funding of discretionary domestic programs that offer vital assistance to a shrinking middle class and growing numbers of poor and low-income families, Obama lost a chance to demonstrate true leadership in getting an economy that works for all of us back on track.

Until we get serious about direct public job creation, a positive prescription for reversing the alarming trend of growing poverty and inequality in this nation, and real solutions for soaring health care costs, we won't be able say that President Obama or our federal lawmakers have done their jobs.

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