26 Jul 2004, reply to your question on the Balanced Budget Amendment.
The balanced budget amendment is a bad idea for many reasons. Number one is the one pointed out that it removes the options that Keynesian economics allow for combating recession. Most lawmakers and government officials today have a crude understanding of the concept of using government deficit spending to help the country out of a recession. However, politicians do not see the economy the same way economists do. Politicians are always trying to violate economic laws to gain a political advantage. This is not new.
Number two is the discomfort many of us have towards amending the constitution. Some amendments have been good, but they were essentially designed to change social issues, not economic ones. If Congress cannot change the laws of economics by legislation, how can they change them by Constitutional Amendment?
Number three is that it has been tried, some of you were asking about something having been done in the past. I think you were referring to the Gramm-Rudman-Hollins act. There are a number of hits about this on the Internet, so I will not go into detail here.
Number four is that the amendment will require a supermajority to make law. It takes a supermajority of both houses and state legislature to amend the Constitution, as it should. The problem is that it takes the same supermajority to undo an amendment, which is even harder to achieve. Technically, Congress can't pass a law overthrowing the principal of simple majority rule. (The filibuster rule is a convention, not a law.) Some states, such as California and Arizona have passed laws that require a supermajority to undo, and with predictably disastrous results. I will leave that question to the Constitutional lawyers.
Number five is the political consequences of concentrating power in fewer and fewer hands. Suppose you have an economic committee of 15 members. They will decide on all legislation going to Congress. Suppose eight of them secretly decide to vote together. You now have eight people deciding the economic fate of the country. Now suppose five of the eight secretly decide to vote as a bloc. You get the point. By the way, this is not fantasy, but the normal way democratic governments operate.
The problem, as I see it, is not that we are burdened with a collection of bad laws and bad policies. There will always be bad laws and bad policies. This applies to all governments, at all times of history. By taking potshots at dozens, or hundreds of issues, we scatter our resources and dissipate our strength. We need to make this a one-issue campaign. We need to focus on the one great challenge facing the lower and middle-class in America today, i.e. the class war.
Before you start thinking about Communism and the class struggle, I’d like to ask a few questions.
First, name three economists. Is Karl Marx on that list? Chances are he is the only economist most Americans could name, even though they probably wouldn’t think of Marx as an economist unless they were given a hint. (To be fair, many Americans might name Alan Greenspan, but he is known primarily for being a lightning rod, and besides, nobody can understand what he says, anyway!)
Most economists wrote about the struggle between the workers and the owners of the means of production. Capitalist economists naturally assumed there would always be conflict between the working class and the owners. But Marx made that the focal point of his life’s work. Although a prolific writer, his one book, Capital: A Critical Analysis of Capitalist Production, caused a paradigm shift in Human thought. It brought about a fundamental change in the way the ordinary person looked at himself and the Human Race.
Karl Marx has had more influence on our generation, and on human beings alive in the past century, than any other man in history. He teachings go alongside with those of Jesus, Copernicus, Darwin, Freud. Einstein, in changing the way we perceive ourselves as living creatures.
Think of the Cold war, and the emotional grip it has had on all humanity. Think of the economic, political, military, social, and diplomatic consequences of the Second World War and the Cold War. Think of the resources used by all sides of WWII and the Cold War, and how else they could have been used. Think of the hatreds and fears that so many lived with, and millions died for, because of the wars.
Marx said that the inevitable abuses by the capitalists would bring about a class war, with the workers revolting against the capitalists, taking over ownership of the means of production, and creating a classless society. He said this would happen because of the internal contradictions of capitalism.
The Communist takeovers of countries rarely followed his scenario, however. Most of the communist revolutions happened in agrarian societies, by the peasants against the landlords. But the real exceptions were the highly mechanized leaders of the industrial revolution. By Marx’s predictions they should have been the first to fall. Instead they prevailed. Had these industrialized nations continued on their path of concentrating all power and wealth in the hand of a tiny minority, the merciless exploitation of the working class, and the political powerlessness of the middle class, we might indeed have seen communist revolutions following the predictions of Marx.
The Fascists also promised to bring about the end of class warfare, by combining political power and business ownership into the ruling class, they would effectively declare that the ruling class had won the struggle.
But the battle between the classes did not escalate into the economic Armageddon predicted by Marx. Even the staunchest supporters of laissez-faire capitalism realized that the role of the government must include more than simply preventing monopolies and enforcing business contracts. It must also help smooth out fluctuations in the business cycle by controlling taxes, deficit spending, and money supply. This philosophy was convincingly demonstrated by the worldwide depression that occurred between WWI and WWII. No matter what the political system, ideology, religion, all suffered the consequences. (Except the very rich and the very powerful, of course.) The only brief period that the plutocracy received a body blow was at the turn of the century, when Teddy Roosevelt challenged the monopoly trusts, and Woodrow Wilson pushed through progressive reforms.
The options of communism and fascism were ruled out as solutions to the class struggle by most Americans except the most ideologically hide-bound. In two years, 1938-39, two men, Josef Stalin and Adolf Hitler convinced most of the world that communism and fascism were hideous evils. It is interesting to note that during the violent labor unrest of the 30’s, we saw the birth of the public relations industry, and businesses lined up to rehabilitate their tarnished image with the public. They had no intentions of reforming, mind you; they only wanted the population to think they had reformed.
During the 1930’s, the population of the US had decided, upon seeing the abuses that capitalists would commit if not held in check, allowed much government regulation of business, and much freedom to labor unions. This trend started to reverse itself as early as 1947. Congress fought for laws liberalizing business and restricting the power of labor unions. The class war had been re-engaged in earnest. In the 50’s we saw corporate reputations raised to giddy heights, while labor unions became identified with mobsters. Question. If labor leaders were on the take, (and they were) then who was paying them off? Corruption requires two or more parties.
The ideal situation was for governments to indoctrinate and regiment the population so they make good employees. Also to make the population pay for this by taxing themselves. Big business would be protected and assisted in acquiring new resources by drafting armies of citizens and paying for them with tax money. Naturally, the upper classes would not carry their fair burden of combat or taxes. They would give the orders, however, since they knew best how to give them.
This class war suffered a minor stumble during the Vietnam War, when many poor and middle-class Americans refused to co-operate and essentially mutinied against the ruling class. The draft lottery, which took away the advantages enjoyed by the wealthy, brought about the speedy end of the war. The draft was ended, and business went back to usual. Now, the people would have to pay for a professional army, and taxes had to go up. But not taxes for the rich. During the Reagan years we saw huge gains by the rich and powerful. The Clinton years brought even more concentration of wealth into fewer hands, and a very real loss of income to the lower and middle-classes. Bush carried this to grotesque extremes. And now, President Bush, like Warren Buffet, wants to declare, “Our Class Won.”
Make no mistake, the crises and conflicts in Medicare, Medicaid, Social Security, immigration, taxation, bank and market regulation, racial discrimination, sexual discrimination, union voting, are all battles in the class war. They all use emotion to drive them, and they all result in making the working class pay more and more of the costs of government while asking the wealthy to pay less of the cost and receive more of the benefits.
I am not he only person that believes we are in a major battle in the class war. Ralph Nader agrees. Mario Cuomo agrees. Michael Moore agrees, Howard Dean and Al Gore agree. I don’t think John Kerry sees it, though. He made his fortune, and his wife is even richer. They think this is a battle over the invasion of Iraq, or who gets to marry whom, or who gets to decide if a woman can have an abortion.
Do you remember one of “Dubya’s” campaign planks, that of “allowing” us to invest in mutual funds instead of Social Security? You notice how quickly that went away. Wall Street investors do not need Social Security: They have provided themselves with a comfortable retirement plan, and they intend to divert the money coming into the Social Security fund to Wall Street as soon as they win the next election. They have already declared union pension funds and savings deposits to be fair game. During Reagan’s term we saw the rich steal trillions from both. Some thieves that went to jail in a great fanfare of righteous indignation were soon released quietly, on technicalities, and then given full Presidential pardons.
Like the poet Dylan (Bob) said, “Steal a little and they throw you in jail. Steal a lot and they make you a king.”
July, 2004
July, 2004
