The Oligarchs Vs. the People

The Oligarchs vs. the People An Oligarchy, by common definition, is a government which a small group of people control for their own corrupt and selfish purposes. That definition can also be extended to the concentration of economic power. Here in America, there’s little distinction between economic and political power.


Sometimes to advance one’s interests, it’s necessary to get people to think in ways that are inimical to their own well being. To accomplish this, it’s necessary to advance theoretical constructs and get people to buy into them. True education involves the ability to actually think about things and arrive at one’s own conclusions otherwise “education” becomes “indoctrination”. One’s education should work for them and not in support of someone else’s agenda.

While pursuing a graduate degree in business during the early 1980’s, I was taught new economic theories about how the world worked. The early 80’s were a time of severe recession with high interest rates and unemployment with memories of the Arab oil embargo still fresh. The new theories that were advanced to address these problems revolved around what’s referred to as supply side economics. The basic idea behind supply side economics is that cuts in marginal tax rates spur economic development and, counter intuitively, increase government revenues. To spice up things a bit more, the theory supported deregulation of certain industries. The income demographic these policies were directed towards was the upper income earners and the wealthy based on the idea that these groups would invest in things that would spur economic growth and create jobs. So the idea was that Adam Smith’s invisible hand of the markets would be the thing that would guide us to prosperity and the government needed to shrink itself (i.e. cut taxes) and get out of the way (i.e. eliminate the rules via deregulation) so that hand could do its thing.

 There were legions of people educated on these theories and ready adherents were found in the administration of Ronald Reagan as he deployed them with abandon. Unfortunately, the tax cuts didn’t quite pan out by as advertised. All these cuts did was to leave less money to cover the government’s expenditures. This left Reagan with the dubious distinction of producing larger budget deficits than all of the presidents who preceded him combined, hence beginning the growth in our national debt and fostering a massive misallocation of resources that is contributing to the current economic malaise. Even at that time, supply side economics (i.e. trickle down economics) proved to be a dismal failure. Notwithstanding those failures, this theory continued to be subscribed to up until the administration of G.W. Bush.

Prior to the advert of supply side economics, the theories of British economist John Maynard Keynes ruled American economic thought. Keynesian economics, which came to the fore during the Great Depression, supports tax cuts also, with one major distinction; they’re targeted towards those in the lower and middle income demographic based on the idea that these groups are were most likely to spend them. So the resource allocation was skewed towards these groups to support demand for goods and services and the government is more interventionist as opposed to getting out of the way. In many ways, Keynesian economic thought runs nearly the opposite of supply side economic thought.

The Obama administration appears to be more of a Keynesian bent. I mention supply side economics, Reagan, Keynes and my early 80’s education as these are the backdrops to the current crisis and the very battle that is being waged in front of us. This explains the battle between the Obama administration and the network CNBC. It explains the criticisms waged against the administration by CNBC personality Jim Cramer (and his recent comeuppance at the hands of comedian Jon Stewart). It explains why the Republican Party can say little other than moan about tax cuts and be the party of no. That battle is, to put it simply, one over resource allocation. It’s about whether the people get something from their government for their taxes or whether the oligarchs continue getting the same skewed resource allocation they’ve enjoyed for the past 30 years. It’s truly a battle that pits the interests of the oligarchs against the interests of the people. Make no mistake, in this battle; the oligarchs aren’t going to go quietly into the night, even though they are mainly the ones who created the mess we’re in. We’ve been sold on the idea that the interests of the common man are aligned with the oligarchy. So tax cuts should be given to them, so the common man can have a job, even as his job is shipped overseas. Merely investing in a stock or bond, particularly today, has very little to do with job creation. If that were so, then the run up in the equity markets would have produced jobs galore along with raised incomes. In the main, that did not occur.

 This brings me to the idea of why we should be paying taxes to begin with. I firmly believe that my tax dollars should have some sort of return for me and my community. I’m really not interested in funding the CIA to foment coups or otherwise meddle in the affairs of other nations. That may advance the economic interests of a small few, but does absolutely nothing for me and mine. I’m not interested in funding wild concentrations of wealth by cutting capital gains taxes and estate taxes-the evidence is in, those cuts did not spur jobs or much of anything else other than transfer more money in the pockets of the oligarchy. I’m really not interested in paying someone’s multi-million dollar bonus. Above all, I’m not interested in funding “Iraqi” freedom or anyone else’s freedom when I’m not “free” to walk down the street without worrying about crime. Let the Bush tax cuts expire; they should have never been made in the first place and if the oligarchs want to throw a hissy fit, let them. They had the party and it’s only right to ask them to pay for it.

What’s a reasonable return on my tax dollars? That’s simple-let’s start off with a better and affordable education for my children, reasonably priced healthcare and a bridge that does not fall down when I drive over it. Add to that a real war on drugs and not the fake war that leaves many urban communities in the crossfire (more on that later). Please don’t talk about taxing me unless you’re prepared to provide that because make no mistake, the people aren’t prepared to go quietly into the night either.

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