tax

Market Watch article: “Tax Super rich now or face Revolution”


By Mitch Gurney

April 1, 2011

It’s extremely rare for the corporate media to publish an article as candid as this one, Tax the Super Rich Now or face a Revolution a commentary by Paul B. Farrell and published by Market Watch, a division of the Wall Street Journal Digital Network owned by News Corp (who also own Fox Networks).

So I was taken aback by as I read the opening paragraphs:

Yes, tax the Super Rich. Tax them now. Before the other 99% rise up, trigger a new American Revolution, a meltdown and the Great Depression 2.

Revolutions build over long periods — to critical mass, a flash point. Then they ignite suddenly, unpredictably. Like Egypt, started on a young Google executive’s Facebook page. Then it goes viral, raging uncontrollably. Can’t be stopped. Here in America the set-up is our nation’s pervasive “Super-Rich Delusion.”

As mentioned in my opening paragraph the parent company of Market Watch is News Corp, also the parent company of Fox Network. Rupert Murdoch is the CEO of News Corp and very much a member of the power elite. News Corp and Fox are essentially the “Republican Learning Channel” as evidenced by their political slant and their huge campaign contributions to the GOP. Why are they publishing an article so inflammatory as this …what’s up with this? 


Granted commentary published by a major news source don’t necessarily represent the opinions of the company but it is rare for today’s big corporate owned media to publish something as bold as this. It makes me a bit uneasy…

Mr Farrell continues:

We know the Super Rich don’t care. Not about you. Nor the American public. They can’t see. Can’t hear. Stay trapped in their Forbes-400 bubble. An echo chamber that isolates them. They see the public as faceless workers, customers, taxpayers. See GOP power on the ascent. Reaganomics is back. Unions on the run. Clueless masses are easily manipulated.

Even Obama is secretly working with the GOP, will never touch his Super Rich donors. Yes, the Super-Rich Delusion is that powerful, infecting all America.

Providing a view offered to him, Mr Farrell notes:

Here’s how one savvy insider who knows described this Super-Rich Delusion: “The top 1% live privileged lives, aren’t worried about much. Families vacation at the best resorts. Their big concerns are finding the best Pilates teacher, best masseuse, best surgeons, best private schools. They aren’t concerned with the underlying deterioration of America or the world, except in the abstract, because they aren’t directly affected by it. That’s not to say they aren’t sympathetic, aware, or don’t talk about the issues you bring up. They are largely concerned with protecting and enhancing their socio-economic positions, ensuring their families live well. And nothing you write about will change things.”

Warning, in 2011 that attitude is delusional, deadly, yet pervasive in America.

In continuing Mr Farrell also writes:

Still, you don’t believe there’s a depression ahead here in America? The third great market crash of the 21st century?

A new economic revolution about to blow up in our faces? No, you don’t believe, can’t believe … you, me, we are all infected by the Super-Rich Delusion, just as Americans were in the Roaring Twenties.

Check the stats folks: The last time America’s wealth gap between the Super Rich and the other 99% was this big was just before the 1929 Crash and the Great Depression.

You can’t remember? Or you won’t? America is trapped in “terminal denial,” a setup for failure. Too many still live in the false hope of this Super-Rich Delusion. Do you believe government stats hyping a recovery? Believe Wall Street’s nonsense about a new bull market ahead? Believe Exxon-Mobile’s misleading ads about energy stocks. Believe Bill Gross’ when he says dump Treasury’s, and buy his emerging country bonds? Dream on.

Start preparing for the third meltdown of the 21st Century, and depression

Past history and even current events in the Middle East support Farrell’s position that disparities of this nature do eventually lead to revolutions and he parallels current conditions to that of the Great Gatsby. Current conditions also parallel those leading up to the French Revolution.

The foundation of modern economics primarily embodies the theories promulgated by Scottish economist and moral philosopher Adam Smith published in 1776, An Inquiry into the Nature and Causes of the Wealth of Nations. The book is a “reflection on economics at the beginning of the Industrial Revolution and argues that free market economies are more productive and beneficial to their societies.” Essentially Smith’s theory maintains that if everyone pursues their own self-interest, then by the invisible hand, by nature, the self-interest of all will be maximized. And that everyone is, or should be, trying to maximize his or her own profit. In what Smith termed the invisible hand, that is, in reference to a matter of nature, such a market maximizes profit for the totality of buyers and sellers and so helps everyone including the nation. People ideally should pursue their own endeavors in a market place as unencumbered by government interference as possible.

Most Americans and especially conservatives embrace Smith’s economic views even if unconsciously as they form our free-market principles. Government should interfere as little as possible. Eventually the market place is the great equalizer. Most view the world as extremely challenging and competitive and everyone must fend for themselves. Most, especially staunch conservations whether rich, middle class, or poor, believe that the degree of success and wealth one attains demonstrates their discipline and are to be rewarded. This is one reason why many widely support less government, less regulation, in relation to the business environment at least, and less tax.

Most often the knowledge that the wealthy and corporations pay less taxes than the vast majority of the population does not faze the most staunch adherents to Smith’s theory for that is in their veiw how it should be. Even knowledge that tax legislation is designed to create such disparities and often drafted by those who stand to benefit most is viewed as not a problem either.

The negative discourse over taxes has dominated our political landscape for many years. Most people are solidly convinced they’re evil and relief is needed and the government can’t be trusted. Little thought is given to potential unscrupulous behavior by individuals and the damages it can cause i.e. the likes of Bernie Madoff, Enron, and others. They each were disciplined but in an unscrupulous manner.

Another way to view taxes is the investment the citizens make to build and maintain the infrastructure needed to support their nation. That infrastructure becomes the shared common wealth of the society which all members, regardless of stature, use.

Here are a few things that taxpayer money, the shared investment, pays for: the interstate highway system, the satellite system, the security system and protection via the police, firefighters, and the military, the banking system, and the court system. Nearly every business depends on bank loans via the banking system, contract enforcement via the court system, communications via the Internet and satellite systems, and the shipping of goods via the highway systems and ports. In addition to the private citizens America’s multi-national corporations depend on the protection provided by our military. This allows for the fulfillment in life and creates opportunities that enhance the common good for all. As we can see wealth is accumulated (and maintained) only by using other people’s money through this infrastructure.

With less investments made by the citizens into the common wealth the less revenue the society has to maintain and create greater opportunity for all. Many say that we do not have a revenue problem, that we have a spending problem. Seldom do I hear anyone say we have both. In reality the more money one makes, the more one tends to use the common wealth, and the more responsibility one has to contribute to its maintenance.

We often hear concern expressed regarding the transfer of wealth to those in need through social support programs or more recently from the taxpayers to the banking industry during the bailouts. Another transfer of wealth that occurs but from ordinary citizens to the wealthy and corporations yet never discussed in this manner are those that occur on a routine bases through transfers made through government subsidies, writing off business expenses, tax breaks, no-bid contracts, tax deductions for interest and taxes paid on privately held property, etc. These are transfers of wealth and should be understood as such.

Obviously taxes need to reasonable and some balance is necessary. It is reasonable to expect those who do well in their pursuit for self-fulfillment are to be rewarded and their success itself is the reward. But is it an equable system where they have special privileges and free access to the common wealth merely because of that success?

If current conditions continue Farrell’s warning may be proven correct and history may indeed repeat itself.

Mitch Gurney

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