Economics And Democracy II

            It was recently mentioned (Columbus On The Record 9-27-13) how the recent sales tax increase in Franklin County has met such public indifference. The same was said with regard to the state sales tax increase earlier this summer. A previous post pointed out the recent actuality of income distribution within the US; that 10 percent of the population account for 48 percent of the income, 90 percent for 52 percent of the income. That 90 percent in turn spends (consumes) most of its earnings. The economists’ critique is that this is not a “progressive” tax (based on wealth or actual dollars in hand), but a “regressive” tax (based on head count. If you dwell in the kingdom, you must pay the king’s tax collector). Whether regressive or progressive, according to Robert Reich, the tax is a rule or regulation that our democracy formulated in order to institute an economy. The outcome (or consequences) of that tax IS our economy. Formulate it differently (through the democratic process) and you arrive at a different economy. Currently, just such thinking dominates the national headlines with one group of our legislative representatives threatening to inflict damage on the entire country’s economy if the rules are not to their liking. Of course, changing those rules, according to Mr. Reich, is what makes for an economy. Indifference follows this entire scenario, much as it does central Ohio’s tax increases. One could speculate that we, as a people, have become so inured (desensitized) to the aesthetics and strategies of terrorism over the last 20 years that we simply have incorporated its approach into our everyday. Mr. Reich was upbeat about economics, knowing that in a democracy a difference could be made.  A 9-27-13 Wall Street Journal article materializes Reich’s economics approach while at the same time questioning our “democracy”. In The Hidden Biotech Provision in Budget Showdown, Alicia Mundy states: “Tucked into the House version of the bill that would have funded the government—in addition to the high-profile language designed to defund the health-care law—was an overlooked provision dubbed the Monsanto Protection Act by critics. Supported by the genetically modified food industry and Monsanto Co., the Farmer Assurance Provision would allow farmers to grow genetically modified crops even if a court had blocked their use. It was first passed into law as part of the 2012 Senate-House agreement that kept the government running that time around. More recently, it was inserted into the stop-gap funding bill that Republicans in the House passed Sept. 20.” Outcry has been made that although the various practices that brought the near total meltdown of the financial sector in 2008 were illegal at most, unethical at least, no upper level executives or managers have been prosecuted. In a famous 60 Minutes interview, the reasoning given by the head Federal Justice Department prosecutor was that it would have threatened the national economy. What Reich promotes seems to make the prosecutor’s rationale quite legitimate and necessary; pass laws (which were passed) that allow a practice while a court of law blocks that practice makes it incredibly difficult to know what is illegal, let alone enforce a rule, form an economy. At the end of her article, Alicia Mundy exposes why Reich may not have been so upbeat and positive had Bill Moyers asked him how he felt about democracy. Mundy writes: “The rider isn’t likely to resurface in any continuing resolution this year, said a Republican House aide. “The rider is toxic,” he said.  No one in the House wants to claim it as their own, he said.” A representative democracy legislating laws, rules and regulation authored by anonymous legislators produces the kind of economy we now find ourselves roiling in.

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