We tend to think that computers and automation will threaten only low-skilled workers. Paul Krugman argues that the opposite may be true, that the low-skill jobs that could be replaced have already been replaced, and that it is the high-skilled ones that are now at risk of elimination. It is actually harder to design computers to clean your house or take care of your garden than it is to do legal analysis.

Those middle-class people who have been misled into working against their own interests and supporting the oligarchy’s assault on the social safety net and public services because they think it affects only other people may want to think carefully about that.

The message that is being drummed into our ears every day is that America is broke and that the middle class and the poor are the ones who must bear the pain of solving the problem, because we must never, ever, raise taxes, even on the very rich.

In a speech in Wisconsin in support of the unions, Michael Moore says what I have been saying for sometime, that the problem is not that America is broke but that a greedy oligarchy is looting the country’s wealth.

“Let me say that again, and please someone in the mainstream media, just repeat this fact once. We’re not greedy. We’ll be happy to hear it just once. 400 obscenely wealthy individuals, 400 little Mubaraks, most of whom benefited in some way from the multi-trillion dollar taxpayer bailout of 2008 now have more cash, stock, and property than the assets of 155 million Americans combined.
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The nation is not broke, my friends. There’s lots of money to go around, lots, lots. It’s just that those in charge have diverted that wealth into a deep well that sits in their well-guarded estates. They know. They know. They have committed crimes to make this happen.”

As Jason Easley and Sarah Jones comment:

Moore did something brilliant. He shifted the narrative. Republicans want the Wisconsin story to be about the budget. Early on Democrats were focused on the issues of liberty and collective bargaining. Moore broadened the message and created a third narrative about how decades of pro-corporate and pro-wealthy economic policies have redistributed the nation’s wealth from the people to a small group of super-rich haves. This is the story that terrifies both conservative politicians and the network of billionaire wealth that owns them.

I am glad that someone of Moore’s prominence is getting that message out. We cannot expect the Democratic Party leadership to do so since they are part of the oligarchy.

Like most people, I had assumed that the shortfall in state public sector pension funds that is causing budget problems was because the states had not made sufficient contributions to the fund to met their promises. Paul Krugman says that he too bought that argument.

But a new study (pdf) by Dean Baker of the Center for Economic and Policy Research shows that the shortfall emerged only in 2007 and is largely due to the financial crisis. As Baker says:

Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today. This is by far the major cause of pension funding shortfalls. While there are certainly cases of pensions that had been under-funded even before the market plunge, prior years of under-funding is not the main reason that pensions face difficulties now. Another $80 billion of the shortfall is the result of the fact that states have cutback their contributions as a result of the downturn.
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In sum, most states face pension shortfalls that are manageable, especially if the stock market does not face another sudden reversal. The major reason that shortfalls exist at all was the downturn in the stock market following the collapse of the housing bubble, not inadequate contributions to pension funds.

So the idea that the problem is caused by generous retirement giveaways by state governments to greedy unions is simply false. This serves to remind me that I should not trust any conventional wisdom that aligns itself conveniently with oligarchic interests that control the propaganda apparatus but should always ask for the data.

So Congress has passed and Obama has signed yet another continuing resolution to extend funding to keep the government running for another two weeks, until March 18, 2011. This is the fifth such extension. The previous ones provided stop-gap funding until December 3, then December 18, then December 21, and then March 4.

These ad-hoc actions are because Congress has still, six months into the fiscal year that began n October 1, 2010, not only not passed a budget but not passed even one of the twelve appropriation bills.

We will now be subjected to another tedious spectacle of wrangling as the March 18 deadline looms, which will likely result in another temporary extension.

How long will they keep kicking this can down the road? It is quite incredible that the world’s biggest economy is being run like a struggling mom-and-pop store, not knowing whether it can pays its bills from week to week.

Complicating things is the fact that this not the only contentious budgetary issue. There is also the debt ceiling of $14.294 trillion which is now predicted to be reached some time in April or May. Expect to see another circus around that issue. There is no doubt that it will be raised (because the oligarchy will demand it) but it is an issue that allows for a lot of demagoguery and who can resist that?

There is this odd notion that the public sector employees are living off the largesse of the rest of us, i.e., the taxpayers, and that they have used their union power to somehow pull a fast one. This is false. As David Cay Johnston points out, the pension benefits that unionized workers get is not something that is a gift to them from us. It is essentially deferred compensation that was negotiated with employers. In other words, part of the wages they were entitled to was deferred until their retirement.
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Susie Madrak points out how the biggest corporations are avoiding paying any taxes while the federal and state governments are demanding that ordinary people pay more. She also highlights the movement USUncut that highlights the tax inequities and is based on a successful UK model.

In Alexandre Dumas’s novel The Count of Monte Cristo there is a scene were two men are being taken out for a public execution for crimes committed independently of each other. At the last minute, a pardon is received for one of the men. The other man, who had been resigned to his fate, becomes outraged and angrily demands to know why the other had been pardoned and not him, and insists that the other man must be executed as well and fights with his guards until he is killed.

On observing this scene, the Count notes the curious and deplorable psychology at work in humans where we seem to delight in dragging others down to our level, even if we do not benefit in any way by doing so. He tells his companions “Do you not see? that this human creature who is about to die is furious that his fellow-sufferer does not perish with him? and, were he able, he would rather tear him to pieces with his teeth and nails than let him enjoy the life he himself is about to be deprived of. Oh, man, man – race of crocodiles, how well do I recognize you there, and that at all times you are worthy of yourselves!”
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What is currently taking place in the US is a ruthless class war perpetrated by the oligarchy on everyone else. The pattern should be clear to anyone because the plan is being done at the federal level and repeated all across the nation at the state level: Cut taxes on the rich to create a budget ‘crisis’ and then use that to eliminate programs that benefit the poor and middle class. As a result we have cuts in wages and benefits, social services, education, regulatory agencies, and an all out war against labor unions, while the rich get richer.

One of the extraordinary features of contemporary American life is the willingness of so many people in the middle class to turn against their own class (and the poor) in the service of the oligarchy. The upper middle classes and many in the middle class support this assault because they do not realize that what the oligarchy is demanding of those below them in the socio-economic ladder is eventually going to destroy them too. Those professionals who smugly see themselves as people whose skills are so valuable that they can succeed on their own in the marketplace without the protection of collective bargaining and thus sneer at unionized workers as pampered and privileged and lazy, do not seem to realize that the reason they enjoy their privileged life and seeming autonomy is precisely because unionized workers laid down the foundation on which they could build their own careers.

Labor unions are what gave us so many of the basic rights we take for granted. Sam Smith lists some of the things that the labor movement in the United States led the struggles for and are significantly the result of labor union organizing and action:

• The end of child labor
• The right of workers to negotiate with their employers over wages, benefits and working conditions
• The 8 hour work day and paid overtime
• Compensation for workers injured on the job.
• Unemployment insurance.
• A minimum wage
• Pensions
• Healthcare insurance
• Paid sick leave, vacations and holidays
• Elimination of job discrimination by ethnicity, color, religion, sex or national origin
• Family medical leave

People who have forgotten the long and often deadly struggle by unions for these things may think of the benefits we now have as somehow ‘natural’ that will remain even after unions are destroyed. But they are wrong. The oligarchy would like to return us to the days when management could demand any amount of work hours, eliminate workplace safety rules, cut salaries and benefits at will, and fire people for no cause.

Thus it has been heartening to see the solidarity amongst so many people in Wisconsin and Ohio who are demonstrating and occupying statehouses to show their opposition to these policies. We have seen some unions see through the divide-and-conquer strategy of the Wisconsin governor who sought to exempt the police and firefighters from his union-busting strategies. Those groups have joined the protestors, rightly recognizing that if the present assault on some unions succeeds, their unions might well be next.

In a weird way, the uprisings in the Middle East have helped their cause. Of course, we should not in any way compare the two kinds of protests since the people in the Middle East are actually risking their lives to overthrow decades-long repressive regimes. But what those other protests have done is make mass demonstrations seem heroic. If not for them, the American mainstream media, which is an arm of the oligarchy, would have been able to portray the labor protests in the US as ‘lawless’ and ‘undemocratic’.

It is extraordinary that the political and media class acts as if there is no choice to solve the budget problems other than to cut wages and services that benefit the poor and middle class. There is an obvious alternative: Raise taxes, with the amount of the hike rising rapidly with income. Yes, tax the rich.

The tax giveaways for the rich in the latest tax deal that Obama and his congressional pals agreed to in December are truly obscene. They have snuck in goodies to benefit the very rich in all kinds of places. As just one example, it is only rich people for whom it is worthwhile to itemize their deductions in Schedule A. Most people claim the standard deduction of $5,700 while the rich can claim very much more. But at least in the past, some limits on Schedule A deductions started to get phased in for those people with incomes over a high amount ($166,800 for married couples filing jointly in 2009). But this year even those limitations have been removed, even though the only people who benefit are those who do not need more money in the first place. No wonder we have budget deficits. If one needed to point to one symbol that clearly demonstrates that the rich are determined to contribute as little as possible to the government while squeezing as much as they can out of it, the elimination of the Schedule A limits is it.

What is extraordinary is that there will be some people (even those who are nowhere close to being wealthy) who protest my post, saying that the rich have ‘earned’ every cent they get and are thus ‘entitled’ to keep as much as they want and that the government is essentially ‘robbing’ them of the fruits of their labor by taxing them at all. They do not see that the entire system is rigged to create a self-perpetuating oligarchy.

Such people have essentially a feudal mentality, a serf-like admiration of the wealthy, and contempt for people in their own class. All that is missing is their willingness to bow down and touch their forelocks as the wealthy drive by in their limousines.

Matt Taibbi makes a point in an article in the latest issue of Rolling Stone whose title says it all: Why Isn’t Wall Street in Jail?. The article says that, “financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.” One of the sources for Taibbi’s story sum up the situation succinctly:

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s f—– up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s f—– up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail.

This immunity shows how deeply the White House and Congress are in cahoots with the financial sector to steal from all the rest of us.

Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

When a society creates a class of people who think they are above the law and immune from any consequences for their actions, that society is doomed. We already have the spectacle of people in the US who are not prosecuted for crimes committed in the so-called ‘war on terror’, even gross violations such as torture. As a result, its political leaders risk becoming international fugitives.

The immunity that major financial firms and individuals now feel they have as a result of the power they have over political leaders is going to result in further financial crises.

To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. “You put Lloyd Blankfein in pound-me-in-the-a– prison for one six-month term, and all this bullshit would stop, all over Wall Street,” says a former congressional aide. “That’s all it would take. Just once.”

But that hasn’t happened. Because the entire system set up to monitor and regulate Wall Street is f—– up.

The Taibbi piece is long but well worth reading for those interested in the state of the world economy. He describes how the financial sector is supposed to work to benefit the overall economy and how all the checks and balances have been grossly subverted to enable the looting.

In theory, it’s a well-oiled, tag-team affair: Billionaire Wall Street A—hole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the A–hole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.

That’s the way it’s supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who’s in office or which party’s in power.

Unless Americans become more aware of this and demand punishment for corporate crimes instead of obsessing about political trivialities, we are doomed.

The mental stumbling block, for most Americans, is that financial crimes don’t feel real; you don’t see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They’re crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let’s steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy. They’re attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone’s claims of ownership equally. When that definition becomes tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality.

The story Taibbi tells is an absorbing yet sickening one. He names names. If you had any doubts at all that the US is run by a corrupt oligarchy of financial and political insiders who have nothing but contempt for laws and the ordinary people who are ruined by their actions, this article should dispel them.

One of the ideas being floated around is to ‘means test’ Social Security benefits. i.e., to base benefits on income and wealth. Kevin Drum explains why this is already being done at some level by the way benefits are calculated and why it would be a pointless exercise to pursue any further.

Paul Krugman also makes an important point about keeping our language on benefits clear. Using the umbrella term ‘entitlements’ in budget debates is meaningless because the economics of Social Security is quite different from Medicaid and Medicare.