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Sunday, October 23, 2016

Today Weekend Reader brings you The Crash of 2016: The Plot to Destroy America—and What We Can Do to Stop It by Thom Hartmann, a former psychotherapist, entrepreneur, political commentator, and host of his own weekday radio show, The Thom Hartmann Program.  The Crash of 2016, scheduled for release on Tuesday, details why changes to the American economic system by Republican leaders—whom Hartmann refers to as Royalists—may have caused the U.S. to now find itself in the midst of an economic catastrophe. Hartmann remains optimistic that reforms are possible, but they need to be implemented now and implemented properly

You can purchase the book here.

In a 1966 article, TIME magazine looked ahead toward the future and what the rise of automation would mean for average working Americans.

It concluded, “By 2000, the machines will be producing so much that everyone in the U.S. will, in effect, be independently wealthy. With Government benefits, even nonworking families will have, by one estimate, an annual income of $30,000–$40,000. How to use leisure meaningfully will be a major problem.” And that was $30,000–$40,000 in 1966 dollars, which would be roughly $199,000 to $260,000 in 2010 dollars.

Ask anybody who was teenage or older in the 1960s, this was the big sales pitch for automation and the coming computer age. There was even a cartoon show about it—The Jetsons—and everybody looked forward to the day when increased productivity from robots, computers, and automation would translate into fewer hours worked, or more pay, or both, for every American worker.

And there was good logic behind the idea.

The premise was simple. With better technology, companies would become more efficient. They’d be able to make more things in less time. Revenues would skyrocket, and Americans would bring home higher and higher paychecks, all the while working less and less.

So by the year 2000, we would enter what was then referred to as “The Leisure Society.” Futurists speculated that the biggest problem facing America in that Jetsons future would be just how the heck everyone would use all their extra leisure time!

And, of course, there were also those who were worried about what kind of degeneracy would emerge when a nation has lots of money and lots of free time on its hands.

This didn’t happen. And it didn’t happen because Ronald Reagan stole the Leisure Society from us and he handed it over to the Economic Royalists.

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Tax Cuts of Mass Destruction

In 1981, the Royalists went right to work taking down that first pillar on which FDR rebuilt the American middle class: progressive taxation.

Taking advantage of the oil-shock crisis, neoliberal shock troopers immediately ushered through a revolutionary change to the tax code with the Economic Recovery Tax Act of 1981.

The first major piece of legislation signed by Reagan, it slashed the top marginal income tax rate down from 70 to 50 percent, cutting estate taxes for wealthy businesses and slashing capital-gains and corporate-profit taxes.

Reagan succeeded, a few years later, in dropping the top income tax rate even lower, to 28 percent—where it hadn’t been since before the Great Depression. It was the second largest tax cut in history. And it was nearly identical to the largest tax cut ever, Treasury Secretary Andrew Mellon’s in the 1920s, the one that created the bubble known as the Roaring Twenties, which eventually burst in 1929.

The Great Forgetting had certainly arrived. The economic mistakes of the 1920s were coming back around. And, again, the influx of all this hot money in the market, coupled with a robust deregulation agenda through the 1980s and 1990s, would trigger a series of painful financial panics.

The reason why the Leisure Society could be imagined by TIME magazine is because, ever since 1900, working people’s wages tracked evenly with working people’s productivity.

Crash of 2016 graph

So, as productivity continued to rise, which was likely, due to increasing automation and better technology, so, too, would everyone’s wages. And the glue holding this logic together was the current top marginal income tax rate.

In 1966, when the TIME article was written, the top marginal income tax rate was 70 percent. And what that effectively did was encourage CEOs to keep more money in their businesses, to invest in new technology, to pay their workers more, to hire new workers and expand.

After all, what’s the point of sucking millions and millions of dollars out of your business if it’s going to be taxed at 70 percent?

According to this line of reasoning, if businesses were to suddenly become way more profitable and efficient thanks to automation, then that money would flow throughout the business—raising everyone’s standard of living, increasing everyone’s leisure time.

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  • tbmuch

    I am afraid it is too late to halt America’s down fall, the recklessness of congress allowing wall street and others to steal and profit from their greed has almost run its course.

    • rkief

      Yes, it certainly looks hopeless, but some Americans are fighting back. We need to replace those legislators who favor – and are being highly remunerated, and supported by – the corporatists, and pressure the president, whose pro-Wall Street actions have not met our expectations, to “man-up.”

      It’s too late to get a better president (without impeachment, which would end up putting the Speaker of the House one heartbeat away,) but Barack Obama must be more hands-on, and pay more attention to what the Hell’s going on.

      At the same time, since we can’t expect our Republican politicians not to act in their own self-interest, we must pressure the Democratic ones to grow a collective spine.

      • JJSchwartz

        But how? Congress has totally control of of the electoral procedures on Capitol Hill. The only thing that comes to mind is for the citizens to vote ‘against’ all incumbents. After a few cycles perhaps elected legislators will realize and take to heart that their elected positions are not meant to be lifetime appointments and with that in mind perhaps they’ll think about the welfare of the nation rather than the welfare of their party first and their political afterlife a close second.

        • rkief

          I wish I had an answer for you, but replacing all incumbents is not that answer, since Potomac Fever (the system of corporate contributions) will affect the new bunch in the same way. Only an informed and concerned electorate can keep the honest (and there are some) and dispatch the villainous. Being an ex-teacher, I can attest to the fact that reaching those who don’t want to learn is no easy task – and that was when no money or propaganda was involved.

          • JJSchwartz

            I agree with you. I tend to be an idealist. That’s why way back when I was opposed to term limits because I thought that it was up to the electorate to keep someone in office or send them packing to K Street. (Shudder the thought!) What you point out is the rub; an ‘informed and concerned electorate.’ ‘We’ got stuck with the Tea Party faction because the voters that voted them in were not concerned about the nation as a whole and though many may have been informed, their radical right ideology prevented them from considering the rest of the nation and what their draconian measures would do to others.

          • charleo1

            At it’s heart, I don’t believe those who voted for the T-Party
            were doing so because they thought the T-Party would be
            bad for the Nation. Not at all. The problem is, the picture
            that has been drawn for them, determines what they believe is happening. Which is actually, a near identical inverse to reality. One example of this, is not so much their reversion to cold war rhetoric about Communism. That comes with the T-Party’s roots firmly anchored in the ultra right, John Birch Society of the 1960s. But, the selectivity in their accusations of Communism, is a bit of a mystery. What I’m getting at is, how they’ve managed to get T-Party voters to attach a McCarthy like label to Barack Obama, and the Left. Without at least some of that rancor spilling over on the corporations, who one could argue, have literally sold our economy out to the Communist Chinese. Which are today, every bit as averse to liberty, and Civil Rights, as they were when they brutally shot down their own people, in Tiananmen Square in ’89. My other question is, does wealth truly absolve all manner of sin on the radical right? Or, what am I missing?

        • sigrid28

          Term limits would be a good idea–is not by law than by action of an enraged electorate. New judges on the Supreme Court to restore the Voting Rights Act, reverse the excesses of Citizens United, and give the ACA all of its force by making every state participate–that could happen under President Obama or the next Democratic president. Harry Reid could abolish the abuses of the filibuster in the Senate, and John Boehner could ignore the lousy precedent of the Hastert Rule in the House, allowing present legislation to move along. We’re not helpless if we just get busy and stop all of this handwringing.

  • charleo1

    As one commenter put it, the 21st Century may be spent relearning the lessons
    of the 20th Century, about the 19th. Today, the single largest hurtle to rebalancing
    the system, and restoring the parity between labor, and management, rich, and
    poor, or having an economy that serves both, much more equitably, is labor itself.
    And although attitudes are changing, there remains far too many Americans that simply refuse to consider the majority of the problems they are rightly concerned
    about, uncontrolled public debt, rising poverty, joblessness, public assistance, the
    decrease in the standards of living, and the financial insecurity that accompanies
    all that. Is due almost entirely to the immense power of corporations over public
    policy. Over our government institutions, from top to bottom. From the Federal to
    the State, extending downward throughout thousands of local councils, who are
    towing the corporate line. They are cutting education, closing police, and fire
    stations, to make room in their depleted budgets to build sports stadiums for mega
    rich, franchise owners. As other public works such as water, and sewer systems,
    systems, fall into disrepair and pollute lakes, tributaries, and surrounding farm land.
    It sounds trite to say government by the rich, for the rich. But it’s also mostly true,
    there is very little governing, of the rich. Even as they use their considerable sway
    over public opinion, with their deafeningly loud, and omnipotent, corporate bull
    horns, they use to frame their argument aganist regulations, and taxes. The people
    in this Country have seldom been exposed so directly to the harm of their ravenous,
    greed. For which there is never a substitute, nor a day spent resting, in their relentless pursuit of having all the cake, all the time, and consuming it, on their terms.

    • sigrid28

      Great post and worthy conclusion, underscoring the fruits of success for those who will have “all the cake, all the time.” For those who still don’t get this, I recommend a xxxx film staring xxxx illustrating the surrealistic life of the woman credited with devising the famous imperative to which you refer, “Let them eat cake.” In “Marie Antoinette,” we see life at the upper extreme of economic inequality, when the obscenely wealthy finally receive their comeuppance by fighting among themselves for the privilege of putting the queen’s night gown over her head or tying her shoelaces. The pampering of those who think only of their entitlements has no end–except in the French Revolution.

    • John Pigg

      You want to know why I consider myself Democrat? It is almost entirely related to some of the issues that Thom Hartmann. Mainly, ending Free Trade…..and taxing the wealthy at higher rates.

      I find the National Democratic Party disingenuous with its economic policy, I think the NDP would rather appear to help low income voters instead of providing the nation with the policies it needs to bring in more attractive jobs.

      • charleo1

        I think I understand exactly what you’re saying. There have been numerous occasions when my feelings toward the Democrats have been very, ambiguous. Especially in the short time Democrats were handed what was an extraordinary advantage in 2009. Too many times, on some of the most important issues, there was Leader Reid out there telling all the people, that had just voted for them, and thought they’d put them in charge, why it was they just couldn’t get this done. Couldn’t actually prevent too big to fail. Couldn’t include a public option. Couldn’t pass campaign reform laws to mitigate Citizens United. Or, reform immigration, or trade, or tax policy. Because this Democrat from Arkansas, or that one from Louisiana, was not going to vote with the majority, and if any one Democrat, or Joe Liberman, doesn’t vote in lock step, we can’t overcome the filibuster. So, sorry about that, all you Democrats out there. Yes, we realize, it looked for all the world, when the Republicans were in charge, they done anything they damned well pleased. But, gosh darn it, they just keep threatening with that 60 vote thing, that we realize none of you had ever heard of, until now. And we never mentioned it once, in all the campaigning, speeches, or fund raisers. And we could have gotten rid of it, or changed the
        threshold so it didn’t take every fucking one of us to bring a bill to
        the floor and pass it. But, now you see how it is. And, have you
        noticed, since they no longer control the House, the Senate filibusters are barely mentioned? Not a factor. And so now they pass bills in the Senate. Even immigration! Only now, every-thing’s blocked in the House. Now, isn’t that precious?

  • JJSchwartz

    Scott, I agree totally. RR supporters fail to realize that ALL of the presidents from Truman on contributed to the eventual demise of the Soviet Union. RR contributed but as it happened RR just happened to be at the finish line.

    • foundingprinciples

      No, the venerable Ronald Reagan did much, much more than those before him. The policy under Truman was containment. Ronald Reagan stated his policy toward the Evil Empire very clearly: “We win, they lose” the Cold War.

      Carter before him advised not angering the Russians because he not only accepted that there was going to be a permanent world with Communism, but that we should not risk their anger in order to engage them in nuclear arms negotiations.

      • JJSchwartz

        Carter was the exception. Other than President Carter from Truman on there was an evolution of foreign policies from president to president. It started with containment and ended under Reagan’s bellicose approach that finally undid the Soviet Union. No, it wasn’t just one president at all.

        • foundingprinciples

          Well, Leftist Communism rotted from inside, of course. But the venerable Ronald Reagan was really the first president who did not refer to accommodation, appeasement or containment.

          He knew what was needed: DEFEAT.

          • Sand_Cat

            “Venerable,” as in almost a saint? That’s probably what you think, but that doesn’t make it so, nor does it make Reagan’s role in the fall of the USSR particularly heroic. In fact, he made us more like them, had hundreds of thousands murdered in Latin America and elsewhere, and – in my opinion – gave a gigantic push to the decline in morals and ethics in this country which you, of course, blame on the “liberals.”

          • foundingprinciples

            The great Ronald Reagan, along with the heroic Oliver North, helped to end the vicious rule by the murderous Sandinista Communists in Central America.

          • Sand_Cat

            You bet. Only trouble is, the Sandinistas weren’t vicious, and to overthrow them, Reagan supported far more brutal regimes in Guatemala and El Salvador and killed lots of teachers and other government workers trying to improve the lives of Nicaraguans, not to mention his and the “heroic” Oliver North’s plot to set up a shadow government answerable to no one but themselves by selling arms belonging to the US government – not them – to a country they condemned as an enemy and terrorist nation after swearing they would never negotiate with terrorists. All of which goes to show how real your commitment to “founding principles” really is[n’t]. You conveniently overlook the fact that the greatest fear of almost all of the “founders” was abuse by the Executive Branch, and even they probably never conceived of an action as treacherous as this.

          • foundingprinciples

            You are wrong.

            The Sandinistas closed radio and TV stations, nationalizing them; the newspaper, La Prensa, was strictly censored. Lane Kirkland of the AFL-CIO spoke out about how the regime intimidated, harassed and tortured labor leaders. The Sandinistas had good relations with the PLO. Sandinista Patrick Arguello Ryan was killed in the hijacking of an airline jet. Jews were harassed and threatened in Nicaragua, and a synagogue was burned down. Catholics and Protestants were attacked. The Moskito Indians were put into concentration camps, and their crops and churches and homes were burned to the ground.

            The Leftist American press helped: A study showed that the leading newspapers devoted five times more coverage to human rights abuses in El Salvador than in Nicaragua: 216 stories covered the murders of 4 American nuns and 2 labor organizers, but only 7 stories covered the massacre of THOUSANDS of Moskito Indians by the Sandinistas. Costa Rican President Arias itemized the Sandinastas’ noncompliance with promised reforms, but the media ignored it.

          • Sand_Cat

            So now you’ll use dueling death tolls and “my terrorists are better than yours” to dodge the real issue here: the saintly Reagan and heroic North attempted to trash the Constitution they swore to uphold by setting up an unconstitutional accountable to no one but them agency funded by the theft from the US government – and thus, the taxpayers – and illegal sale of weapons to an enemy of the US in order to keep funding a terrorist campaign against those who overthrew a brutal dictatorship – supported by the US, naturally – which slaughtered plenty of citizens. In fact, some of the mass graves blamed on the Sandinistas contained Somoza’s victims, or those of the Contras. How democratic would you be if you led a small country under attack from both its neighbors and openly threatened by the most powerful nation on earth? So the Sandinistas weren’t pretty; when did they ever have a chance to be? And I’d still bet on El Salvador or Guatemala for the largest body count. Only a couple of years ago, it was still common to find fresh victims of the death squads in these quasi-democracies. And we haven’t talked about Honduras.

            Your “founding principles” are crap; you support the real founding principles only when you can torture them into condemning “liberals,” and of course anyone who disagrees is a liberal or far worse.

          • foundingprinciples

            The Left-winger assault on morals began well before the honorable Ronald Reagan became president. In fact, as a governor, Ronald Reagan stood up to the degenerate New Leftists in California.

        • Sand_Cat

          It appears that Carter, or his National Secuirity Advisor, helped “lure” the Soviets into Afghanistan, a huge contribution to their downfall.

  • mandinka

    You also left out that he is a card carrying communist

    • Sand_Cat


  • howa4x

    The republican greatest achievement was to get the middle class to vote against it’s own interest and support wealth for the 1% thereby taking away money for lower tuitions for their kids, limited investment in public projects and infrastructure. The wealthy now try to keep their royalist position by an organization called ALEC, which stands for the American legislative exchange council, and is made up of corporations and republican state government elected officials. Here corporations get to write legislation that benefits their industries. The right to work laws passed in SC, Mich. and Wis. benefit corporations by breaking the backs of unions, and putting hurdles on them against organizing workers. Or it may be to loosen state laws around Fracking, or any industrial practice that will benefit corporate members. IN SC the governor Nikki Halley passed a rule that sea level rise couldn’t be mentioned in any state document as a favor to the real estate/development interests that want to build on the shore line. the 1% also have their republican congressmen constantly trying to dilute Dodd/Frank so that the betting casino on wall st could get back in full swing. During the last meltdown 80% of the stimulus went to just 10% of the people. The wealthy were bailed out 100% and said that while they recapitalized there had to be high unemployment. They will bring us down again because they are so big that a systemic failure could pull down the entire economy and they know it. The tea party are dopes for supporting these people who could care less if they lived or died. The only reason they oppose HC reform is it took investment money away from Wall st. since the insurance companies were publically traded and the ACA demands that 80% of your premium has to go to your care or be refunded. Prior to the ACA the 1st 20% went to investors
    The middle class has to wake up or face extinction

  • Defend The Constitution

    Those attempting to displace our moral standards with savage instincts may yet destroy the framework upon which liberty & prosperity depend.

    • Sand_Cat

      Yes, and Ronald Reagan was one of their number.

  • Socialism is Organized Evil

    Civilization was not magically designed, but rather advanced over thousands of years as our ancestors gradually discovered the ideas and institutions that enabled savage bands and tribes to develop into the nation states of today.