Hooray for Barack Obama’s new direction, and his bold initiative to make the super rich pay their fair share. Predictably, Republicans are calling it class warfare, forgetting that it was Reagan and Bush who declared war on the poor and middle classes by slashing taxes on the wealthy and declaring that greed was good. It is no secret that the richest Americans have grown considerably richer under Reaganomics, while the poor got poorer and the middle class lost ground. Not only did the Republicans shift the tax burden away from those who could afford it and onto the backs of those who could not, they also gave license to criminals and con artists on Wall Street and in corporate boardrooms by cutting regulations and enforcement. With greed given virtue status and a no-holds barred approach to business and finance, the Republicans turned the US economy into a high-stakes casino where ethics and common sense were both thrown out the window.
The spectacle of Enron energy traders gleefully cheating California electricity markets was emblematic of the Republican-inspired business culture, while the Ponzi schemes of Bernie Madoff, Allen Stanford, and perhaps hundreds more like them are the logical outcome of a deregulated environment. Once respected financial firms jumped into the game by throwing caution to the wind and leveraging their clients' investments at ratios of 30 or 40 to one. The appearance of wealth that these radically irresponsible practices created was nothing more than an illusion—a house of cards that could only be sustained by the impossibility of continuous growth and unlimited profitability. They turned the economy into a giant Ponzi scheme, doomed to fail as soon as credit and trust in the markets took even the smallest downturn. Yet, incredibly, most of those who were responsible—the CEOs, the Wall Street traders, and the politicians who gave them license to steal—will keep their ill-gained wealth while millions of workers suffer the loss not only of their dreams, but of their jobs, retirements, health insurance, and homes.
The Republican ideology and worn out slogans of “tax cuts and small government” are now thoroughly discredited, and Obama is right to claim a bold mandate for change. Huge investments are needed to pay for the debts created by the gambling losses of the super rich. And those who have benefited, and continue to benefit by the protections of free markets and a law-abiding society, would do well to appreciate the special privileges afforded them, and see as their patriotic duty the repayment of the nation’s debts.