Saturday, January 31, 2009

I really like Obama, but then, I'm a craven reformist...

Recent conversation between husband and wife, chez nous:

Me: And then Obama said (I paraphrase), "It doesn't matter whether government is big or small, what matters is if government works!" Wow! And he excoriated those CEOs who make those 40 million a year salaries! He lay into them! I've been complaining about that for years.

H: Yeah, He's telling the CEOs: Stop fucking it up for the rest of us.

Me: The rest of us?

H: The rest of the ruling class! Obama is telling the CEOs, You're being stupid. You're showing too much bling!

Me: Aww... you mean, the CEOs, in their ostentation, are showing the kind of utter disregard for the underclass, the kind of contempt, that would galvanize the oppressed to revolt? Or just such lack of awareness? Marie Antoinette unwittingly put her name on the list for the guillotine when she showed such immense misunderstanding of the class structure of her society, when she told the working poor of Paris that if they didn't have enough bread, they should eat cake.

H: (felt my comparison glossed over too many distinctions and tactfully ignored it) "The problem in America today isn't how much the ruling class pay each other every year, $40 million vs $4 million vs $1 million -- the problem is that they exist."

Me: You mean, Obama is helping, helping mightily, he'll ease some misery at the bottom, he'll let the current rule continue.

H: That's why the ruling class let him become president. He knows his job. If he's good at it, all the better for them.


Scott said...

I happened to have a conversation about this very topic with one of my socialist friends today. It's great to see Obama take these CEOs to task, and I loved it when Biden said he wanted to throw them into the brig! Although I expect he was going a little off script there . . .

But for all his fist shaking, the most powerful man in the world (Obama) has done nothing concrete to take back the $18 billion in bonuses! A few months ago, a lot of people were talking about how much we could have done with $700 billion. But imagine, how much good could be done just with this $18 billion?

He could--and should--just nationalize the banks, then he could just tell them all what to do, but so far he doesn't seem to want to do that. So he is still beholden to the market and hoping that throwing money at the free market will fix it.

Neoliberalism is dead, but nothing yet has taken its place.

Dan said...

You want to give $18 billion more to the banks??? I assume that's what you mean by giving back, that's where it came from.

Taking it back is going to be messy. Not only would they need to get people to pay back money (how do they do that, send a bill?), but you'd have to reverse the taxes, too, which are about 50% on payroll, 12% or so city and state in NYC, where most of it is given out, the rest federal, plus another 7.5% the employer paid in Social Security, plus I think 1% into the unemployment insurance to the state. I can hardly see NY state and the city coughing up almost $2.5 billion to the banks, state-owned or not, and various parts of the fed giving back over $8 billion already collected. Can you imagine the outcry if the $10.5 billion collected in taxes is returned to the banks? The other $7.5 billion from the employees is also going back to the banks, essentially a negative stimulus. If you support the stimulus, you can't possibly support this, too, it works in direct opposition.

The more likely outcome is super-high taxes on any such future payments, as was done in the past to equalize salaries. That's the only solution that's worked. Unfortunately it also creates entrepreneurial flight to countries with lower taxes. Which is why there are so many French people developing their ideas in the US and Britain, for example. And then a few years later the cycle reverses. This has all happened before.

HumanProject said...

Scott -- it feels so good to see those words: "Neoliberalism is dead"!!!

I hate to feel happy about the economic downturn (100,000 jobs lost in a day, was announced yesterday) -- but there is a feeling that some kind of change might be possible.

I worry it'll be "Neoliberalism is dead, Long live neoliberalism!"

HumanProject said...

Dan -- good points about the bureaucratic impossibilities.

You mentioned the role played in the past by high taxes to help relieve income inequality. Even in this country, in the 1950s, US corporations paid taxes that today would seem extremely high.

But with globalization, this isn't possible. So what is the solution?

Scott said...

I mean give it back to the taxpayer, not the banks. It is criminal that we the taxpayer are handing out money to the banks and they are in turn handing out bonuses in large piles to their CEOs.

Dan said...

Scott, I don't know which CEO's you're talking about. None of the banks that took government money paid any bonuses to their CEO's afterwards. The money you want back is the money paid to the rank and file. You may think they're being paid too much, and a few are, but most of them are taking a real beating -- finance base salaries are low relative to other professional salaries (doctors, lawyers). Without much of a bonus they're wondering why they're working harder than everyone else, why they gave up their 20's and 30's so a bunch of losers could get mortgages on houses they couldn't afford.

You're mad at something, so are more easily manipulated by the media. Just like the country was driven into the Iraq war, it's now being driven into this hatred of something it doesn't fully comprehend. All I'm saying is look carefully before you step into this pile.

Dan said...

HP, I wish I had a solution. But then, if I was that smart, I wouldn't be spending my time on other people's blogs, I'd write my own! :-)