What Recession? As the Economy Crashed Around Them, 400 Richest Americans
Lined Their Pockets with $30 Billion
By Les Leopold,
AlterNet: October 1, 2009.
Their combined wealth is more than enough to insure the uninsured for the
next twenty years or more.
It's great to know that during the worst economic crisis since the Great
Depression, the wealth of the 400 richest Americans, according to Forbes,
actually increased by $30 billion. Well golly, that's only a 2 percent
increase, much less than the double digit returns the wealthy had grown
accustomed to. But a 2 percent increase is a whole lot more than losing 40
percent of your 401k. And $30 billion is enough to provide 500,000 school
teacher jobs at $60k per year.
Collectively, those 400 have $1.57 trillion in wealth. It's hard to get your
mind around a number like that. The way I do it is to imagine that we were
still living during the great radical Eisenhower era of the 1950s when
marginal income tax rates hit 91 percent. Taxes were high back in the 1950s
because people understood that constraining wild extremes of wealth would
make our country stronger and prevent another depression. (Well, what did
those old fogies know?)
Had we kept those high progressive taxes in place, instead of removing them,
especially during the Reagan era, the Forbes 400 might each be worth "only"
$100 million instead of $3.9 billion each. So let's imagine that the rest of
their wealth, about $1.53 trillion, were available for the public good.
What does $1.53 trillion buy?
It's more than enough to insure the uninsured for the next twenty years or
more.
It's more than enough to create a Manhattan Project to solve global warming
by developing renewable energy and a green, sustainable manufacturing
sector.
And here's my favorite: It's more than enough to endow every public college
and university in the country so that all of our children could gain access
to higher education for free, forever!
Instead, we embarked on a grand experiment to see what would happen if we
deregulated finance and changed the tax code so that millionaires could turn
into billionaires. And even after that experiment failed in the most
spectacular way, our system seems trapped into staying on the same
deregulated path.
Instead of free higher education, health care and a sustainable economy, we
got a fantasy finance boom and bust on Wall Street which crashed the real
economy. We have our 400 billionaires, and we have 29 million unemployed and
underemployed Americans. We have an infrastructure in shambles. We have an
environment in crisis. We have a health care system that would make Rube
Goldberg proud. And we have the worst income distribution since 1929.
I hazard to guess that each and every Forbes 400 member could get by with a
net worth of $100 million. I don't think that would kill their
entrepreneurial drive or harm our economy--in fact it would be a major boon
to the economy to step back from the edge of such massive concentration of
wealth. The real problem is getting there form here. A wealth tax that kicks
in when you become worth more than $100 million would be a good start. The
Eisenhower tax rate on adjustable gross income over $3 million a year would
help as well.
And please let's not call it socialism, now that we've placed the entire
financial sector on welfare to the tune of over $13 trillion in subsidies
and guarantees. (By the way, the yearly budget outlays for means tested
programs for low income citizens is about $350 billion per year. So Wall
Street's welfare is about 37 times as large as welfare for poor.)
So if narrowing the income/wealth gap isn't socialism, what is it? It's the
America that thrived in the 1950s and 1960s. It's the America that created a
middle-class and vowed never to let the financial gamblers return us to
another depression. It's an America that put its people to work and built an
infrastructure that was the envy of the world.
Where's Dwight David Eisenhower when we need him?
***
http://www.nytimes.com/2009/10/07/opinion/07kaplan.html?_r=1&th&emc=th
Beijing's Afghan Gamble
By ROBERT D. KAPLAN
NY Times Op-Ed: October 6, 2009
IN Afghanistan's Logar Province, just south of Kabul, the geopolitical
future of Asia is becoming apparent: American troops are providing security
for a Chinese state-owned company to exploit the Aynak copper reserves,
which are worth tens of billions of dollars. While some of America's NATO
allies want to do as little as possible in the effort to stabilize
Afghanistan, China has its eyes on some of world's last untapped deposits of
copper, iron, gold, uranium and precious gems, and is willing to take big
risks in one of the most violent countries to secure them.
In Afghanistan, American and Chinese interests converge. By exploiting
Afghanistan's metal and mineral reserves, China can provide thousands of
Afghans with jobs, thus generating tax revenues to help stabilize a
tottering Kabul government. Just as America has a vision of a modestly
stable Afghanistan that will no longer be a haven for extremists, China has
a vision of Afghanistan as a secure conduit for roads and energy pipelines
that will bring natural resources from the Indian Ocean and elsewhere. So if
America defeats Al Qaeda and the irreconcilable elements of the Taliban,
China's geopolitical position will be enhanced.
This is not a paradox, since China need not be our future adversary. Indeed,
combining forces with China in Afghanistan might even improve the
relationship between Washington and Beijing. The problem is that while
America is sacrificing its blood and treasure, the Chinese will reap the
benefits. The whole direction of America's military and diplomatic effort is
toward an exit strategy, whereas the Chinese hope to stay and profit.
But what if America decides to leave, or to drastically reduce its footprint
to a counterterrorism strategy focused mainly on the Afghanistan-Pakistan
border? Then another scenario might play out. Kandahar and other areas will
most likely fall to the Taliban, creating a truly lawless realm that wrecks
China's plans for an energy and commodities passageway through South Asia.
It would also, of course, be a momentous moral victory achieved by radical
Muslims who, having first defeated the Soviet Union in Afghanistan, will
then have triumphed over another superpower.
And the calculations get more complicated still: a withdrawal of any kind
from Afghanistan before a stable government is in place would also hurt
India, a critical if undeclared American ally, and increasingly a rival of
China. Were the Taliban to retake Afghanistan, India would face a radical
Islamistan stretching from its border with Pakistan deep into Central Asia.
With the Taliban triumphant on Pakistan's western border, jihadists there
could direct their energies to the eastern border with India.
India would defeat Pakistan in a war, conventional or nuclear. But having to
do so, or simply needing to face down a significantly greater jihadist
threat next door, would divert India's national energies away from further
developing its economy and its navy, a development China would quietly
welcome.
Bottom line: China will find a way to benefit no matter what the United
States does in Afghanistan. But it probably benefits more if we stay and add
troops to the fight. The same goes for Russia. Because of continuing unrest
in the Islamic southern tier of the former Soviet Union, Moscow has an
interest in America stabilizing Afghanistan (though it would take a certain
psychological pleasure from a humiliating American withdrawal).
In nuts-and-bolts terms, if we stay in Afghanistan and eventually succeed,
other countries will benefit more than we will. China, India and Russia are
all Asian powers, geographically proximate to Afghanistan and better able,
therefore, to garner practical advantages from any stability our armed
forces would make possible.
Everyone keeps saying that America is not an empire, but our military finds
itself in the sort of situation that was mighty familiar to empires like
that of ancient Rome and 19th-century Britain: struggling in a far-off
corner of the world to exact revenge, to put down the fires of rebellion,
and to restore civilized order. Meanwhile, other rising and resurgent powers
wait patiently in the wings, free-riding on the public good we offer. This
is exactly how an empire declines, by allowing others to take advantage of
its own exertions.
Of course, one could make an excellent case that an ignominious withdrawal
from Afghanistan is precisely what would lead to our decline, by
demoralizing our military, signaling to our friends worldwide that we cannot
be counted on and demonstrating that our enemies have greater resolve than
we do. That is why we have no choice in Afghanistan but to add troops and
continue to fight.
But as much as we hone our counterinsurgency skills and develop assets for
the "long war," history would suggest that over time we can more easily
preserve our standing in the world by using naval and air power from a
distance when intervening abroad. Afghanistan should be the very last place
where we are a land-based meddler, caught up in internal Islamic conflict,
helping the strategic ambitions of the Chinese and others.
Robert D. Kaplan is a senior fellow at the Center for a New American
Security and a correspondent for The Atlantic.
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