Asset Man by David Atkins

Asset Man
by David Atkins

Digby has been sounding an alarm to which far too few on the left are paying attention: namely, that the bipartisan austerity commission will in fact come to a deal that includes just enough in token tax revenue to be considered a "compromise," when in reality it will be anything but.

Conventional wisdom says that Grover Norquist and his allies will stridently oppose any sort of tax increases at all, thus scuttling the deal. But tax cuts are only one path to the dystopic Objectivist future Norquist and his allies envision for America. Digby cited an excerpt from Chait's book The Big Con about Norquist's Lenin fetish. But perhaps the most telling bit comes in the paragraph immediately following:

Rather, he deals in dialectical shifts, such as the inevitable death of the World War II generation, a group that Norquist has called "Anti-American" for its statist proclivities, or the rise of stock ownership, which conservatives call "the investor class." "You can't have a hate-and-envy class if 80 percent of the public owns stock," he once declared. "That makes it impossible for Democrats to govern. It spells the end of their world." He frequently refers to the conservative struggle, and its inevitable triumph, as "the revolution."

Let's set aside for a moment the comedic wrongness of Norquist's beliefs even granted his ideological perversions. An economy vested wholly in financial markets leads to massive inequality. Inequality means most of the poor and even the middle class are in debt, rather than "invested" anywhere. But even if most Americans were stock owners, their holdings would be so insignificant as to make their status as stock owners politically irrelevant. It is speculated that when Rove declared that he had the math proving that Republicans would win in 2006, he was looking at micro-targeted demographic numbers that far overestimated the number of homeowners who would vote Republican.

Conservatives have this radical belief that those who own assets will inevitably vote and think like conservatives, while renters and wage earners will vote and think Democrats. They fail to understand that that only works once the assets in question reach a substantial enough amount to matter--which, in the case of most Americans, they never will. That sort of delusional thinking isn't surprising, though, from the sort of people who look at the Lincoln Memorial and feel not pride in their country, but anger that worthy capitalists were bilked out of their tax money to build it, rather than allowed to build a strip mall there instead.

We see this same thinking from as early as Ronald Reagan in 1975:

"Roughly 94 percent of the people in capitalist America make their living from wage or salary. Only 6 percent are true capitalists in the sense of deriving income from ownership of the means of production...We can win the argument once and for all by simply making more of our people Capitalists."

What does this have to do with the Austerity Commission? Everything. Tax cuts are simply a means of "starving the beast," which forces cuts to government programs, which theoretically leads to Objectivist self-sufficient nirvana without the need for statist evils like FDA or public schools.

But the best program cut of all is the one that takes money locked away in a tax-funded government program, and converts it into a financialized asset. The entire economic conservative enterprise is based on the idea of raising asset values while driving down wages and defined government benefits. As I said before:

American public policy on both sides of the aisle reoriented itself away from a focus on wages and toward a focus on assets. Specifically, the idea was that wage growth was dangerous because it led to core inflation in a way that asset growth did not. American foreign policy became obsessed even more than it had been with maintaining access to oil, both to prevent future oil shocks and to prevent inflationary oil spirals. Wage growth was also dangerous because it would drive increasing numbers of American corporations to employ cheaper overseas labor.

But that left the question of how to sustain a middle class and functional economy while slashing wages. The answer was to make more Americans "true Capitalists" in Reagan's terms. Pensions were converted to 401K plans, thus investing about half of Americans into the stock market and creating a national obsession with the health of market indices. Regular Americans were given credit cards, allowing them to take on the sorts of debt that had previously only been available to businesses. Most crucially, American policymakers did everything possible to incentivize homeownership, from programs designed to help people afford homes to major tax breaks for homeownership and much besides.

Medicare and Social Security, meanwhile, are the big prizes. They're where the money is:

When policymakers attempt to privatize Social Security and Medicare, they aren't necessarily supervillains hoping to turn America into a nation of nobles and peasants. Some are, but not all. The objective is to convert what they see as "useless" money sitting in the financial equivalent of a freezer, and put it to "productive" use in asset investments.

Would Grover Norquist give in slightly on corporate tax breaks in order to move money out of Social Security and Medicare, and into private retirement accounts and health savings accounts? Of course he would. That sort of thing is the whole point of cutting taxes in the first place.

And all the while conservatives would bellow about how unfair it was that taxes were "raised" even an inch, and portray the austerity sandwich as a victory for Democrats.

By far the best thing Democrats could do is simply blow off the commission and refuse to participate. The game is rigged, and there's no sense even playing.