So This Is Socialism? (Guest Voice)

So This Is Socialism?

by Marc Pascal

The Wall Street Journal laments that “high-wage earners, Wall Street hedge-fund managers, oil-and-gas investors, corporate executives, well-to-do seniors and Washington lobbyists all take hits in President Barack Obama’s budget plan.” Instead, the “budget winners include middle-class families, low-wage workers, lower-income retirees, veterans, preschoolers, college students and the homeless.”

And Republicans argue that the vast majority of Americans should oppose this budget? The Journal also forgot to mention that the proposed increase in the tax on capital gains will result in a tax rate still lower than the one enacted by President Reagan and a Democratic Congress more than 27 years ago.

Screams of “class warfare” and “the beginning of a massive socialistic experiment” by conservatives and the Republican Zombie Party are ludicrous after looking at the facts.

With our 24/7 news cycle and the hundreds of political commentators jockeying for attention, the ones with the most outlandish headlines and claims get their 15 minutes of fame. Extreme political partisanship produces only outrageously silly tempests in tea pots.

When calculating the tax increases on the wealthiest 2 to 5 percent of the population, the additional tax burden will not send them to food banks, cancel their spa treatments, or make any noticeable dents in their fabulous lifestyles. They still will be able to keep Ramon the Gardener, Rosa the Maid and Isabel their bilingual nanny. Neiman Marcus and Northern Trust will not file for bankruptcy protection. Permitting the Bush tax cuts to lapse on their own accord will slightly increase the top marginal income tax rate from 35% to 39.4%.

Life as we know it in the U.S. will not be altered into a 1970’s era Soviet-style gulag. Alternatively, the tax cuts for the middle class and poor will amount to increased weekly income to spend of between $10 and $40 per household. Fine, if the goal is to help make that trip to Wal-Mart a bit less stressful. However, they are not much if the goal is to alter the vast economic chasm between the top 2% of wage-earners – who collectively make more than the entire bottom half of the U.S. population – and the rest of us Americans.

One could claim that the President Obama’s proposed Federal Budget for 2009-2010 is radically different from that of his Predecessor. But in reality, it appears to be an assembly of numerous incremental and modest changes. The policies being pursued are distinctly Democratic and progressive as opposed to those this country has pursued for the past 40 years. Elections do have consequences.

The multi-trillion dollar U.S. economy is not going to be fundamentally altered this year or next by increasing the share of Federal Spending by a few percentage points. However, by altering the government’s overall emphasis towards many neglected policies in the areas of education, environment, transportation, energy, healthcare and other social programs, and if continued in their same general formats and funding levels, will eventually lead to some major changes in four to ten year’s time.

If Republicans want an accurate example of “class warfare,” they should turn to 1789 and the French Revolution, which actually had a more profound impact on the world than the earlier American Revolution. After years of neglecting the vast majority of its population, one of the world’s great powers was brought down by a violent overthrow of the government. The U.S. has never and will never get anywhere close to such a class conflict.

In response to a plea that the people have no bread to eat, Queen Marie Antoinette allegedly quipped “so let them eat cake.” Translated for the U.S. at the beginning of the 21st Century: “The people are losing their jobs, homes, healthcare, and cannot pay their bills…So let’s have more tax cuts and reductions in governmental assistance.” Promoting policies that are sensitive to the realities of the day might prevent personal or party disaster.

Republicans should also remember that the French revolution exacted a heavy toll on its clueless aristocracy, wealthy business class, top church and political leaders, and the very king and queen of the nation. Their heads were unceremoniously and literally removed with a new-fangled invention called the guillotine. Today, punishment for poor leadership is only permanent exile from inside the beltway.

Perhaps we should take note when a number of prominent American billionaires call for increasing taxes on the wealthy to ameliorate the huge disparities in U.S. income and wealth. They might not just be altruist but simply concerned about their own collective best interests.

Rejecting federal stimulus money to help the poor and unemployed of a state is not the best way to engender long-term good-will among the state’s electorate. This is all the more important when the state’s political leadership is trying to make some obscure effort to remain faithful to questionable political and economic ideologies.

So after all the excessive hysteria, empty warnings that the world as we know it will end, and the pointless grandstanding, we will still have the same massive problems facing our country. If the opposition cannot present a detailed and coherent alternative, then it should get out of the way. Life is too short to waste time listening to frivolous arguments.

Life is constantly presenting us with new challenges. Perhaps some of the current proposals will have to be modified in 2 years. However, there is really minimal danger in trying a few new things, and changing direction on some major policy issues. We really cannot keep doing the same things we did for the past 8 years that landed us in this mess.

Insanity is defined as constantly doing the same thing over and over yet expecting a different result. The Republicans propose insanity. President Obama has proposed an educated, thoughtful and rational shot in the dark. I think we should opt for the latter.

Marc Pascal has J.D. and M.B.A. degrees from Case Western Reserve University in Cleveland, Ohio 20 years ago. He worked for many years as an in-house legal counsel for several large business enterprises and later started 4 new ventures with partners. He now lives in Phoenix with his wife and young song. He is an independent business and management consultant who provides consulting services to various privately-held business enterprises in the Phoenix area.