The ‘Hunger Games’ Economy
That our Congress is intent on taking from the many to enrich the few was on full display during passage of the new $1.1 trillion federal spending bill, as five provisions show.
In a Washington run by and for oligarchs, official theft happens suddenly and without warning. No public hearings. No public debate. Instead, as we saw in North Carolina and Wisconsin, it occurs with just abrupt moves to shift power and money from the many to the richest few.
And with little focus by our best news organizations on the consequences for people’s lives, especially if they are in the 90 percent, many people have no idea they just got officially mugged.
The continuing resolution to fund the government was combined with an omnibus spending bill to create a 1,603-page statutory monster called the “cromnibus.” Among the provisions that show how both political parties help corporations pick the pockets of the vast majority, while far too many mainstream journalists help obfuscate the awful truth:
• Already retired blue-collar workers who belonged to unions can now be cheated out of some of their pension money, with only those age 80 and older fully protected.
• Another $345.6 million will be cut from the budget of the Internal Revenue Service, in a favor to big corporations and the rich that will have little effect on workers, whose taxes are withheld before they are automatically processed via computer. The cuts mean fewer audits of corporations and rich individuals. Top corporate auditors earn at most about $150,000 a year, but find on average $19 million of taxes owed. To Congress, that $126 to $1 ratio is not worth the political cost, but shifting more of the burden of government to you is cheap and easy.
• Another $60 million was cut from the Environmental Protection Agency, in a boon to companies that pollute the air and water, and instead of cleaning up after themselves, shove the expense onto all Americans.
• Despite a 2-1 vote to legalize marijuana in the District of Columbia, Congress said no, revealing again how Washington does not trust the states or local governments.
Cromnibus – Just Another Word for Theft
And then there is the biggest and baddest provision, the one that could sink the economy again the way reckless behavior on Wall Street cost trillions of dollars in 2008.
The big banks are now free to enjoy their winning bets in the derivatives casino, while forcing taxpayers to pick up the losses if they grow so large that they threaten to bankrupt any bank. Majorities in the House and Senate evidently forgot that such gambling sank the economy six years ago.
The Wall Street bailouts infuriated voters, surveys show, but when it came time to vote, the citizenry seemed not to be able to connect the dots between senators and congressmen who collect their pay from taxpayers but regard Jamie Dimon of JP Morgan Chase, Lloyd Blankfein of Goldman Sachs, and other big bankers as their real bosses.
The cromnibus repealed a portion of the Dodd-Frank bill, which prohibited buying derivatives with regular bank deposits, like your paycheck money, which the Federal Deposit Insurance Corporation insures up to $250,000. If banks place a lot of bad bets, the FDIC will now have to step in to cover them.
Senator Elizabeth Warren, Democrat of Massachusetts, tried to stop this massive giveaway to the five biggest banks in America, which do 95 percent of the derivatives business. But even Warren’s moral authority and deep expertise in how banks operate with disregard for the general welfare were not enough to overcome the power of their campaign contributions and connections.
Dimon, the boss at JPMorgan Chase, was whipping votes for the provision. Backing him up was President Obama, whose administration has refused to prosecute the “Too Big to Fail” banks and whose attorney general, Eric Holder, repeatedly lied when he claimed to be pursuing the bankers.
So powerful is the influence of Wall Street money that the provisions Warren railed against were literally written by Citigroup, as Mother Jones revealed. The Senate voted 56-40 for the cromnibus, including the Citigroup language.
In what could have been a scene in the Hunger Games movies, the big banks and our elected leaders joined together to steal from blue-collar workers.
For the first time in 40 years, since the Employee Retirement Income Security Act was adopted in 1974 to ensure workers would collect pay they deferred into pension plans for their old age, Congress decided that benefits already earned can be taken away.
This historic shift got one sentence in The New York Times: “It allows certain multi-employer pension plans to shore up their finances by cutting retirees’ benefits.”
Notice the focus on the money and the pension plan without mentioning that up to 1.5 million workers and retirees will be affected, or that the first big plan failures are not expected for more than a decade.
That this provision got almost no news coverage shows just how much our leading news organizations cater to economic elites favored by advertisers, and how the current generation of reporters at the best news organizations comes heavily from the upper economic tiers of American society.
Reporters and editors whose parents were coal miners, truck drivers and clerks have given way to those with degrees from elite schools, some with trust funds that insulate them from the realities of American life for the vast majority. With that shift comes a predicable change in perspective, from “there is plenty that needs fixing” to “the world generally seems quite just.”
In the late 1990s I suggested a story about how a family gets by on two grand a month. A prosperous colleague at The Times said, “No one in New York City lives on $25,000.” When I offered to take my colleague to the subway stop at 74th St. and Roosevelt Ave. in Queens, saying we could easily find such people on the streets, the reply shifted to this: “Oh, those people. Nobody cares about those people.”
The Times has, of course, written a great deal about the poor, but in the daily report about the cromnibus and other legislation, the tone and the specific details often focus on the institutional — as with the single line above about strengthening balance sheets — rather than the unbalancing of retirees’ meager finances.
Next month a new Congress will begin. Expect more of the same – rapid and major changes, and cuts and repeal of longstanding laws that have in common one element found in the preamble to our Constitution: promoting the general welfare.
AFP Photo/Saul Loeb