Tyranny of Plutocracy: Holding People Hostage Over a Fiscal & Climate Cliff

The common good continues to be subordinated to the corporate bottom line in Washington, where dialogue has been almost exclusively reduced to forms of extortion of the working class by the monied class, at the expense of the planet and democracy.
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The hostage-taking-for-profit of the environment and the planet by corporate plutocrats is analogous to corporate CEO economic blackmail, the extortion of maximum monetary gain from a "Grand Bargain" fabricated in the name of deficit reduction that fails to address the underlying economic recession and jobs deficit.

By conceding a false deficit narrative that perpetuates upward redistribution of wealth and neglects job creation and the redress of ecological destruction, too many in Washington are complicit with plutocrats' economic and climate extortion. Republicans' complete fealty to monied plutocracy is met by Democratic leadership's willingness to bargain away benefits of Medicare and Social Security in order to pay for continued tax breaks for the elites. Instead of making the programs stronger by making them better, the president seems determined to capitulate to Republicans like Sen. Lindsey Graham, whose most recent drama centers on the professed intent to "save Medicare and Social Security from insolvency" by cutting benefits, in order to prevent the U.S. from "becoming like Greece."

Who Needs a Habitable Planet?

Victor Menotti, executive director of the International Forum on Globalization (author of Faces Behind a Global Crisis: US Carbon Billionaires and the UN Climate Deadlock) traces some of the arms of the "Kochtopus" - so-called Koch-funded radical free-market lobby groups, think tanks and media relations firms - to unravel the source of Koch brothers Charles and David's exponentially-increasing fossil fuels wealth. Prime donors to political campaigns, lobbying efforts and climate denial science, the Kochs have been said to have spent more than Exxon to obstruct climate change legislation, including clean air laws and efforts to phase out fossil fuels in favor of renewable energy. Oil billionaires made rich by polluting the planet have made the U.S. the major obstacle to meaningful response to production of greenhouse gases, holding hostage action in Washington and, in turn, any meaningful global commitment at the recent United Nations Climate Conference in Doha, Qatar. Instead, the U.S. backed a "new paradigm" of voluntary pledges that critics say fall far short of holding global temperatures to a 2 degree Centrigrade increase and placing the world on course for a 4-6 degree Centigrade increase.Lee Fang of the Center for American Progress notes, "The real strategy of the Koch brothers to dismantle state clean energy programs has been laid out for many years." Greenpeace reported in 2010 that the American Legislative Exchange Council received $408,000 in grants from Koch foundations over the span of a decade (1997 to 2008) to provide state legislators with "model legislation" undermining environmental action on air, water quality and climate change.

IFG's previous report, Outing the Oligarchy: Billionaires Who Benefit from Today's Climate Crisis, relates a multifaceted assault on democracy by a "new class of plutocrats" who exert influence through control of media, election financing, writing legislative policy, legalizing off-shore tax havens, and suppressing unions and worker salaries, while seeking to gain for themselves government subsidies, tax shelters, deregulation and weak regulation of banking and trade, etc., and privatization of every governmental service possible. These are "crony capitalists who have gotten rich by polluting the planet, and now they are plowing their cash back in to prevent any legal protections for the planet and its most vulnerable peoples," said Menotti, co-author of the report. Not only do they seek privatization of services like health insurance, military, Medicare and Social Security, they look to control valuable scarce resources of the commons, such as fresh water.

The Koch Brothers' exponentially increasing net wealth is reportedly amplified by their activities surrounding oil derivatives speculative trading by which companies are able to artificially inflate prices on oil and other commodities. As oil speculation has reached an all-time high, the Kochs and other oil companies see more profits and the price of gas skyrockets, even as the brothers lobby to eliminate oversight of insider trading of commodities by the Commodity Futures Trading Commission.

Rigging the rules to cash in on a large scale, the Kochs are said to have committed one of the "the most stunning -- yet silent -- transfers of wealth ever." Their obstruction of market interventions intended to redress "converging economic and ecological crises" places the Koch multi-billionaires at the forefront of assaults on the right to clean air and fair wages, as well as the right to vote.

Two Budget Proposals Better Than Simpson-Bowles

Popular wisdom of Washington elites and their well-paid lobbyists holds that earned benefit insurance programs like Medicare and Social Security, invested in by workers, are the "true source of government's spending problems." The same D.C. elites utter not a sound about the rich paying their progressive fair share of taxes; job creation as major deficit reduction; application of a small fee on Wall St. speculative transactions; or elimination of hundreds of billions of dollars of taxpayer subsidies to oil, pharmaceutical and insurance industries. Ultimately, Washington insiders' prime goal is further corporate tax cuts on the backs of the middle- and low-income, in part by cutting and privatizing Social Security and Medicare.

Promoted by Republicans, Blue Dog Democrats and "Fix the Debt" CEOs as a "balanced" approach to deficit reduction, Simpson-Bowles is in fact a formula for continued wealth transfer upward, by cutting social and earned benefit insurance programs like Medicare and Social Security. Colorado Sen. Mark Udall is among legislators who has stated he is "a big advocate of using the Simpson-Bowles model as a starting point for a deficit-reduction plan." He and Sen. Bennett and 5 of 7 Colorado representatives (DeGette, Perlmutter, Coffman, Polis and Tipton) signed a letter addressed to House and Senate leaders calling for expeditious action "to institute a comprehensive deficit-reduction plan that cuts spending, responsibly reforms and strengthens entitlement programs and overhauls the tax code...There should be no higher priority for this Congress than crafting a bipartisan deficit-reduction plan..." No mention of the wealthy paying their fair share of taxes; only obtuse hints at overhauling the tax code and cutting Social Security and Medicare to "strengthen" the programs. Nevermind that Social Security is a separately-funded program that does not contribute to the deficit. Only the progressive caucus proposes improving the programs without cutting benefits, e.g., by permitting Medicare to negotiate bulk rates for medicines, as the VA does.

Rep. Jan Schakowsky, who served on the Simpson-Bowles Commission, wrote The Sham of Simpson-Bowles . A gift to the weatlhy elite, Simpson-Bowles would lower individual tax rates and reward moving jobs offshore by permanently eliminating corporate taxes on foreign profits. Simultaneously, the plan proposes shifting greater costs to working people by taxing employee health benefits; increasing Medicare/Medicaid out-of-pocket costs by over $100 billion; and ultimately requiring deep cuts to domestic programs like housing, nutrition, job training, etc.

Though contributing nothing to the deficit, Shakowsky notes that Simpson-Bowles seeks to increase Social Security age of eligibility (asserting that people are living longer, though many with lower income are actually not) and to reduce the annual cost-of-living adjustment using a "chained" consumer price index (CPI) to measure inflation - a proposal recently offered by President Obama as compromise with Republicans. Writes Schakowsky, "For future retirees, all these changes taken together would reduce the average annual benefit for middle-income workers - those with annual earnings of $43,000 to $69,000 - by up to 35 percent."

The common good continues to be subordinated to the corporate bottom line in Washington. Bailed-out CEOs are amply rewarded with big bonuses while workers' pensions remain fair game. Both Republicans and Democrats targeted military and federal employee pension programs for cuts in July 2011 budget talks -- a reported $36 billion in cuts to federal employee pensions, and $11 billion from military retirement programs over 10 years. The White House offered a similar proposal to cut as much as $40 billion from pensions at the time.

Two alternative budget proposals determinedly ignored by Washington and corporate media would more fairly and efficiently address the deficit than Simpson-Bowles -- The People's Budget by the Congressional Progressive Caucus's and Rep. Jan Schakowsky's Fairness in Taxation Act. Shakowsky's proposal creates higher tax brackets for millionaires and billionaires, while eliminating subsidies for Big Oil, as well as tax loopholes for corporations that send jobs overseas.

Noting that the worst deficit we face is the jobs deficit, in 2011 Schakowsky introduced a Jobs Bill to create 2.2 million jobs to restore infrastructure and meet community needs, all fully paid for by her Fairness in Taxation Act.

Corporate media's embrace of a "Grand Bargain" is evident in their constant seeking out of corporate CEOs like David Cote of Honeywell and Goldman Sachs CEO Lloyd Blankfein as deficit "experts." Blankfein voiced his primary concern to CBS news for the effect of the "fiscal cliff" on the stock market, lacking speedy resolution.

The "Grand Bargain" is in reality a "Great Betrayal" of the lower/middle income, observes economist William Black. Washington dialogue has been almost exclusively reduced to forms of extortion of the working class by the monied class, at the expense of the planet and democracy.

Failure of Republicans and Democrats to address the corrupting influence of money in politics signals an urgent need to grow grassroots environmental and democratic efforts, including the Justice and Green Parties.

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