Hullabaloo

Wednesday, March 24, 2010

 
Living In The Gipper's Shadow

by digby

An awful lot of people think Hillary Clinton is a robot who doesn't care about anything but herself. And maybe she is. Politicians are all enigmas to me. I don't know about you, but this picture looks to me like someone who is sincerely happy that health care reform passed:


Secretary of State Hillary Rodham Clinton congratulates President Barack Obama on the House vote to pass health care reform, prior to a meeting in the Situation Room of the White House, March 22, 2010. (Official White House Photo by Pete Souza)


The truth is that, for good or ill, it wouldn't have happened without the Clinton initiative that came before. I'd imagine that Teddy and Truman and Johnson and all the others who worked to pass a big health care bill would have been happy too. It's a win for the team, if nothing else.

But it would seem that Democrats finally did something about the biggest economic problem our country faces:

For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.

Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.

Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reform’s effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan.

Isn't it pretty to think so? But I don't actually believe there is a deliberate effort to end the age of Reagan or he wouldn't have wasted so much time on the silly idea of post-partisanship. And the gentle dealings with the financial industry tell the tale on that. The beginnings of a reversal of income inequality that HCR represents is more a natural result of a large Democratic majority finally passing major legislation that's been bottled up for decades, not the intent.

Still, this is a good beginning on a structural problem that has to be dealt with on every level:

A big chunk of the money to pay for the bill comes from lifting payroll taxes on households making more than $250,000. On average, the annual tax bill for households making more than $1 million a year will rise by $46,000 in 2013, according to the Tax Policy Center, a Washington research group. Another major piece of financing would cut Medicare subsidies for private insurers, ultimately affecting their executives and shareholders.

The benefits, meanwhile, flow mostly to households making less than four times the poverty level — $88,200 for a family of four people. Those without insurance in this group will become eligible to receive subsidies or to join Medicaid. (Many of the poor are already covered by Medicaid.) Insurance costs are also likely to drop for higher-income workers at small companies.

[...]

Since 1980, median real household income has risen less than 15 percent. The only period of strong middle-class income growth during this time came in the mid- and late 1990s, which by coincidence was also the one time when taxes on the affluent were rising.

For most of the last three decades, tax rates for the wealthy have been falling, while their pretax pay has been rising rapidly. Real incomes at the 99.99th percentile have jumped more than 300 percent since 1980. At the 99th percentile — about $300,000 today — real pay has roughly doubled.

That was a recipe for a banana republic --- or a revolution. And if we define the age of Reagan in those terms then we can say that the Democrats have taken a useful step in ending that epoch of American self-destruction.

But there's a long way to go. In addition to the epic temper tantrums we are seeing among Republicans, the Masters of the Universe are similarly overwrought:

Health Care Law Signals US Empire Decline?

The passage of the health care law shows that the US empire is declining because it illustrates the fact that people expect the state to take care of them, David Murrin, the co-founder of Emergent Asset Management hedge fund manager, told CNBC.

On Tuesday, US President Barack Obama signed into law health care legislation that expands health coverage for the poor, imposes new taxes on the rich and forbids insurance practices such as refusing coverage to those with pre-existing conditions.

In their expansionary phase, empires force people to go out, seek risks and fend for themselves, Murrin said, reminding of the dismantling of the British empire after the war, when the National Health Service, which ensures universal health coverage in Britain, was created.

"This (empire decline) is actually a dead-set course that societies get into and it will happen very quickly I'm afraid," he told "Squawk Box Europe."

Those are the guys who define the Age of Reagan. And until Obama and the Democrats figure out a way to make people understand that their problems aren't going to be solved by enabling these people to continue to run amock, we're still going to be living in the Gipper's shadow.

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digby 3/24/2010 10:30:00 AM |