Monthly Archives: May 2016

Naked Capitalism on the Lies Told About Social Security


The 7 Biggest Myths and Lies About Social Security

Yves here. While the arguments made in this article will be familiar to many readers, it’s a good piece to circulate to friends, family and colleagues who have or are in danger of swilling the Peterson Foundation anti-Social Security Kool Aid.

By Steven Hill, a senior fellow with the New America Foundation. Excerpted from his new book Expand Social Security Now!: How to Ensure Americans Get the Retirement They Deserve (Beacon Press, 2016

Social Security is bankrupting us. It’s outdated. It’s a Ponzi scheme. It’s socialism. It’s stealing from young people. The opponents and pundits determined to roll back the United States to the “good old days” before the New Deal regularly trot out a number of bogeymen and bigfoots to scare Americans into not supporting their own retirement well-being. That hasn’t worked too well. Americans of all political stripes remain strongly supportive of Social Security and other so-called “entitlements” like Medicare. But the other reason for plastering the media waves with a chorus of myths and lies is to stir up a political climate that causes politicians of both parties to cease looking for better alternatives other than to cut, cut, cut, or even to maintain the inadequate status quo. Below are rebuttals to some of the biggest whoppers regularly told about one of the most popular and successful federal programs in our nation’s history.

1. Social Security is going broke and will bankrupt the country.

Social Security is not going broke, not by a long shot. The Social Security Board of Trustees released its annual report to Congress in July 2015, and among all the tables, charts, and graphs in that big fat report, it would be easy to miss the most important take-home message: Social Security is one of the best-funded federal programs in U.S. history. That’s because it has its own dedicated revenue stream, which is composed of the insurance premiums paid by every worker (deducted from our paychecks by what is called “payroll contributions”), which are automatically banked into the Trust Fund. Even the Pentagon and the defense budget do not have their own dedicated revenue stream.

In fact, Social Security has not one dedicated revenue stream, but three. Besides the payroll contributions, Social Security is also funded by income generated from investing all those set-aside wages into U.S. treasuries. That money earns a sizable return on the investment. And Social Security is also funded by revenue that comes from levying income tax on Social Security recipients (yes, your Social Security check and that of other Americans is treated as income and taxed—and it brought in $756 billion to the Trust Fund in 2014). Those three revenue streams combined have banked $2.8 trillion in the Trust Fund and resulted in a $25 billion surplus in 2014.

Bankrupt? That charge does not even pass a good laugh test.

Indeed, because Social Security has its own funding source, and by law is not allowed to spend any money it does not have, it is actually impossible for Social Security to add to annual operating deficits or the national debt. Moreover, the Social Security Board of Trustees is required by law to report to Congress every year about the financial fitness of the program. The annual trustees report projects its revenues and payouts, not just for the next five, ten, or twenty years, but for the next seventy-five years. It’s one of the few programs anyone can identify that has had the wisdom to plan for the future, rather than planning around short-term political calculations and the next election cycle.

Over the next twenty years, as more and more of the huge population bloom known as the baby boomers continues to retire, Social Security is projecting a modest shortfall of just 0.51 percent of gross domestic product (GDP). If nothing is done to plug that gap, sometime in the 2030s the Trust Fund will have enough to cover only 75 percent of benefits. But there are so many budgetary ways to cover that shortfall, it becomes clear that the problem is not the finances of finding the money but the politics of partisanship and paralysis. No other government program can claim that it is fully funded for almost the next quarter century. What government critics ever say that the Defense Department or the Departments of Energy or Education are going bankrupt? Yet those programs don’t have dedicated revenue streams, and certainly no one plans or projects costs for those programs over the next seventy-five years.

For example, simply removing the payroll cap and taxing all income brackets equally would not only be fairer to all Americans, it would also raise all of the money and then some to plug any Social Security funding shortfalls twenty years from now. Opinion polls have demonstrated that most Americans—even 70 percent of Republicans—think if they pay Social Security tax on their full salary, others should as well. That’s just one example of the many adjustments we can enact that would make the U.S. retirement system more fair, robust, and stable, and better adapted to the realities of today’s economy.

2. Social Security is unsustainable because we have fewer workers for every retiree, even as our society is “greying” and people are living longer.

Another charge leveled by critics is that the number of workers compared to the number of non-workers—what is known as the dependency ratio—is declining, and so as a result Social Security is unsustainable. President George W. Bush really pushed hard on this point in his bid to gut the program and turn it into private accounts. In his 2005 State of the Union address, President Bush said:

“Social Security was created decades ago, for a very different era. . . . A half-century ago, about 16 workers paid into the system for each person drawing benefits. . . . Instead of 16 workers paying in for every beneficiary, right now it’s only about three workers. And over the next few decades, that number will fall to just two workers per beneficiary. . . . With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees.”

President Bush’s key strategist, Karl Rove, had the president tour the country to promote his privatization plan for Social Security, and he repeated his talking points everywhere he went, in state after state. President Bush must have set some kind of record: rarely has anyone been so wrong so often about Social Security as the president was during his “privatization or bust” tour.

Yet this claim by not only President Bush but key Republican and even some Democratic leaders reflects a deep misunderstanding. The “dependency ratio” is not just a factor of the number of workers compared to the number of retirees. It has to be configured according to the number of total dependents, including children. A different picture emerges when children are included.

The fact is, declining birthrates have resulted in a fall in dependent children, so the rise in the number of retired will be partly offset by a decline in the number of dependent children. According to Gary Burtless, an economist and demographic expert at the Brookings Institution, when the decline in children is factored in, total dependency ratios in many countries in 2050 will look more favorable than the ratios were in the 1960s. In the United States, for example, the dependency ratio peaked in 1965, when there were ninety-five dependents (both children and retirees) for every one hundred working adults. By 2050 the figure will be eighty dependents for every hundred workers, which, while much higher than the highly favorable figure of forty-nine dependents in 2000, will still be markedly lower than the number of dependents in 1965.

How did we as a society manage to get wealthier in the 1960s and ’70s despite a much higher dependency ratio? The answer, in a word, is “productivity.” Labor productivity is a measure of the amount of goods and services produced by each worker, which in a well-functioning economy increases over time due to the implementation of technology, greater education and job skills training, as well as more efficient business practices. If our labor productivity continues to increase, and the political system passes on the economic gains in the form of a broadly shared prosperity, then the rising tide will float all boats. Political analyst Michael Lind has argued that “productivity growth can solve much or all of the pension funding problem,” and as proof of that he points out that if the ratio of workers to retirees goes from 3 to 1 today to the expected 2 to 1 in the future, that is quite a minor shift compared to a change from a ratio of 16 workers to 1 retiree in 1950, or even 8 workers to 1 in 1960, to 3 to 1 today—a shift made relatively smooth and painless by education, training, and technology-driven productivity growth over the past half century.

That doesn’t mean that we can ignore factors like dependency ratios, but the fact is that as long as our economy is healthy, robust, and growing, creating jobs and increasing productivity, and the political system is inclusive and passes on the increased prosperity to the general public in the form of higher wages and a robust safety net, there is no reason that the greying of society or the ratio of workers to dependents should hamper the nation’s economic future.

3. IRA s and 401(k)s have replaced private pensions and Social Security. Americans want to be self-reliant on their own private retirement accounts, because you can do better investing on your own.

One would think that the volatility and havoc wreaked by the stock market in recent years would have laid to rest the notion that “self-reliant” Americans can invest and save on their own. It’s really not that easy to build up a private nest egg in savings that an individual will need to cover their needs during their post-work years. The fact that three-quarters of Americans nearing retirement have less than $30,000 in their private savings—less than 5 percent of what they will need—shows what a bust of an idea this really is.

For years, advocates for deregulation and entitlements have pushed for privatized retirement accounts—401(k)s, IRAs, and other private savings vehicles managed by Wall Street’s financial managers, which skims off the top their own lucrative fees. At the same time, businesses have pushed to shut down their “defined-benefit” pensions, which have long provided a guaranteed monthly payout for life, just like Social Security’s lifetime annuity. Now that we have nearly three decades of experience with replacing pensions with 401(k)s and IRAs, and of Americans trying so hard to stuff their retirement piñatas, it’s clear that most American retirees are no more secure than before. In fact, they are much less secure.

The 401(k) system that was positioned in the 1980s to replace pensions was sold to American workers as the new and improved successors to the guaranteed payout of a defined-benefit pension. Business leaders and the politicians took away what worked and replaced it with an experiment. But that experiment has failed, and proven to be more fragile and inefficient than the system it replaced. Besides having failed to produce enough retirement savings for the vast majority of Americans, the 401(k) system has forced everyday Americans to face a number of significant risks, the most obvious being that you can lose your personal savings to unpredictable stock market gyrations or a housing-market downturn, especially since most people have little expertise in how to navigate the ups and downs. But there is also the uncomfortable fact that, with wages flat over the last few decades, millions of individual workers have been unable to save enough. Consequently, as we have seen, 80 percent of the federal subsidy for individual retirement savings goes to the top 20 percent of income earners—the people who need it the least.

4. Social Security is stealing from young people and saddling them with a level of overwhelming debt.

Billionaire Peter G. Peterson has been one of the pioneers of this kind of intergenerational doom-saying. Headlines about the old stealing from the young certainly grab the media spotlight. But this one is an old, old trope that never made any sense. Peterson first raised it back in 1982, in the midst of the deliberations of the Greenspan Commission. Social Security, Peterson wrote, “threatens the entire economy. . . . The Social Security system will run huge deficits . . . these deficits will push our children into a situation of economic stagnation and social conflict and create a potentially disastrous situation for the elderly of the future.”

But Peterson hasn’t been the only Cassandra prophesying a generational war between young and old. More recently, the Washington Post’s Robert J. Samuelson took up the cause. “We need to stop coddling the elderly,” he wrote in a 2013 column, calling Social Security and Medicare “a growing transfer from the young, who are increasingly disadvantaged, to the elderly, who are increasingly advantaged.” In a 2014 column, Samuelson continued his anti-elderly and antigovernment debt diatribe, writing, “Giving the elderly as a class special treatment heaps the costs of deficit reduction on workers and children.”

Pitting the elderly against children makes little sense for many reasons, but one obvious one is that today’s children will one day be seniors themselves. And they will need the retirement benefits that people like Peterson and Samuelson are trying to cut from retirees. Robbing Peter to pay Paul might make sense from a maniacally focused budget buster’s perspective, but it makes little sense from a public policy perspective. If that makes sense, then why not cut funding from cancer research, or diabetes treatment, since those ailments mostly affect older people and not the young. But obviously the young today could be attacked by those ailments tomorrow. Society benefits as a whole when it tries to address conditions that affect humanity as a whole.

5. We have to raise the retirement age because people are living longer and the nation can’t afford to pay for all these aging retirees.

Wrong. We do not have to raise the retirement age.There are common-sense changes we can make to Social Security that would not only safeguard it financially for the future, but would actually allow us to double the monthly benefits for retirees. For example, we could increase tax fairness by lifting the cap on the payroll tax so that wealthy Americans make the same percentage contribution as every other American. At the same time, the payroll contribution base could be extended to profits from investment income, such as capital gains. This would raise additional revenues in a progressive fashion that could be used to enhance the program for all Americans.

6. Social Security is un-American and too “socialistic” for most people in the United States.

Un-American? Too socialist? Social Security remains one of the most popular and successful government programs in history—opinion polls show nearly 70 percent of Republicans don’t want it to be cut or hurt. So if Social Security is too “socialist,” Americans must all be a bunch of closet socialists. Millions of Americans from all political persuasions now depend on Social Security, and no amount of divisive rhetoric, or even Pete Peterson’s billions of dollars, can change that fact.

7. The United States already has the world’s highest living standard, with an overly generous retirement system for seniors. We must be more realistic.

The United States is quite a bit less generous to its retirees than other developed nations. The Organisation for Economic Co-operation and Development (OECD) tracks and compares features like national pension systems. According to its numbers, the U.S. pension “replacement rate” for the average earner—the share of gross income the pension is expected to replace—is 38.3 percent, which is below the OECD average of 54.4 percent and 58 percent for countries in the European Union. For low-income workers—defined as earning 50 percent of the average wage—the United States was even more stingy, with a replacement rate of 49.5 percent compared to the OECD average of 71 percent and 73.9 percent for EU countries. Like in the United States, retirement pensions in most of these other nations are funded by regular payroll deductions from both workers and employers.

On other replacement metrics like “transfers in retirement income,” which measures the share of retirement income made up by both public pensions and social welfare assistance, the United States also looks stingy. The OECD average is 58.6 percent while the U.S. average is only 37.6 percent, barely half the average of the EU countries at 70.6 percent and just above Mexico and South Korea. Consequently, the poverty rate for seniors in the United States is substantially higher than in most other OECD countries, nearly 20 percent compared to 12.8 percent in the OECD and 8.9 percent among EU countries in the OECD. The U.S. rate is even higher than in Chile and Turkey.

My proposal for Social Security Plus shows how to greatly expand the retirement payout for America’s retirees, as well as how to pay for this expansion. This proposal would not only double the current payout, it would also make our retirement system fully portable. That’s the type of bold step that our country needs. Our American nation is heading into an anxious era driven by a new, high-tech economy in which more workers will have to gain access to a portable safety net without the benefit of a single employer or a regular workplace. Many workers will have multiple employers, none of whom would be expected to provide much of a safety net under the current, antiquated model. If we are going to provide adequate resources for our retired seniors, we have to update, upgrade, and modernize our retirement system.



Naked Capitalism on Tax Inversions


Bogus Defenses of Tax-Dodging Corporate Inversions

Posted on May 20, 2016 by 

By Roger Bybee, a Milwaukee-based writer and activist who teaches Labor Studies at the University of Illinois. This is the second article in a three-part series, originally published in the May/June issue of Dollars & Sense. You can find part one here.

Why Inversions?

The crucial motive in transferring corporations’ “nationality” and official headquarters to low-tax nations is that inversions shield the “foreign” profits of U.S. corporations from federal taxation and ease access to these assets. This protects total U.S. corporate profits held outside the United States—a stunning $2.1 trillion—from any U.S. corporate taxes until they are “repatriated” back to the United States.

Major corporations benefit hugely from the infinite deferral of taxes purportedly generated by their foreign subsidiaries. “If you are a multinational corporation, the federal government turns your tax bill into an interest-free loan,” wrote David Cay Johnston, Pulitzer-Prize winning writer and author of two books on corporate tax avoidance. Thanks to this deferral, he explained, “Apple and General Electric owe at least $36 billion in taxes on profits being held tax-free offshore, Microsoft nearly $27 billion, and Pfizer $24 billion.”

Nonetheless, top CEOs and their political allies constantly reiterate the claim that the U.S. tax system “traps” U.S. corporate profits overseas and thereby block domestic investment of these funds. But these “offshore” corporate funds are anything but trapped outside the United States. “The [typical multinational] firm … chooses to keep the earnings offshore simply because it does not want to pay the U.S. income taxes it owes,” explains Thomas Hungerford of the Economic Policy Institute. “This is a very strange definition of ‘trapped’.”

In fact, these offshore profits can be, and are, routed back into the United States through the use of tax havens. (Tax havens, where corporations and super-rich individuals place an estimated $7.6 trillion, were thrust into the international spotlight with the recent release of the Panama Papers. See William K. Black, “Business Press Spins Elite Tax Fraud as ‘Good News’,” p. 5.) “‘Overseas’ profits are neither overseas nor trapped,” explained Kitty Rogers and John Craig. “It is true that for accounting purposes, multinational corporations keep these dollars off of their U.S. books. But in the real world, the money is often deposited in U.S. banks, circulating in the U.S.”

However, the “overseas” profits come with some significant constraints on their use, pointed out David Cay Johnston. “The funds can only be accessed for short-term loans back to the U.S., and are not useful for major investments like new factories or long term R&D, or for investment outside the U.S.,” said Johnston. But inversions eliminate these restrictions on how such funds can be used. “By inverting and then using a variety of tax avoidance schemes, the firms can have access to these earnings virtually free of U.S. taxes,” notes Hungerford. “This is undoubtedly the primary motivation to invert.”

The inversion route is not the only means for U.S. corporations to radically slash their U.S. taxes and gain access to offshore earnings. Any particular company’s tax-avoidance strategy is dependent on the specific conditions it faces. As tax expert Johnston notes, “Every company has its own unique issues so it will decide what works for it.”

Some giant multinational corporations, like Apple, Microsoft, and Google, have chosen to bypass inverting. Instead, they utilize immensely complex shifts of their revenue to minimize their taxes and maintain access to their offshore earnings. These maneuvers have gained exotic names like “Double Dutch Irish Sandwich,” reflecting the multiple transfers of capital that they employ. The corporations involved are able to avoid the public backlash brought on by jettisoning their U.S. nationality. On the other hand, such ploys require careful planning and execution, compared to the simple, direct step of inverting.

Corporate inversions also head off the possibility of higher rates being imposed in the United States, an idea with very broad public support as shown by polling. But in addition to the vast political resources that corporations bring to any fight in Congress on corporate taxes, inversions remind U.S. public officials that their policies can be undermined by CEOs’ unilateral decisions to relocate anywhere on the globe. Companies use this trump card to weaken the push for increases in corporate taxes and instead build momentum for further federal concessions.

Johnson Controls: The Ugly Truth

The most recent inversion deal, orchestrated by Johnson Controls—called the “latest and quite possibly the most brazen tax-dodger” in a New York Times editorial—explodes the myths underlying the standard rationale for inversions. Johnson Controls, which has been based in the Milwaukee area for 131 years, is the 66th largest firm in the United States.

Much media coverage has focused on the $149 million in annual tax savings that Johnson Controls will purportedly reap by jettisoning its U.S. identity and moving its official “domicile” to Ireland, where the tax rate is 12.5%. This is a tidy sum, but not because Johnson Controls was victimized by paying the statutory rate of 35%.

On the contrary, Johnson Controls has already been benefitting handsomely from a U.S. tax system that is remarkably generous to major corporations. As Matthew Gardner of the Institute on Tax and Economic Policy pointed out, “Between 2010 and 2014, Johnson Controls reported just over $6 billion in U.S. pretax income, and it paid a federal income tax rate averaging just 12.2 percent over this period.” Significantly, “This is actually lower than the 12.5 percent tax rate Ireland applies to most corporate profits.”

Far more central to Johnson Controls’ inversion is the virtually tax-free status that it will gain over its vast pile of profits accumulated offshore, Gardner argues. Digging beneath the surface, Gardner found, “At the end of 2014, Johnson Controls disclosed holding $8.1 billion of its profits as permanently reinvested foreign income, profits it has declared it intends to keep offshore indefinitely.”

The tax stakes for Johnson Controls are therefore much higher than the annual savings so often cited. “Reincorporating abroad would allow Johnson Controls to avoid ever paying a dime in U.S. income tax on profits currently stashed in tax havens,” Gardner stated.

Johnson Controls is using the common inversion strategy of arranging for a smaller corporation based in a low-tax nation to purchase a much larger firm operating in the United States. In this case, the Ireland-based Tyco International (itself an inverted firm which had long been based in the United States) is buying Johnson Controls. Tax expert Edward Kleinbard describes this as a “minnow swallowing a whale” scenario that characterizes many inversions.

The Johnson Controls-Tyco deal qualifies as a so-called “super inversion,” as Fortune put it, because it evades a number of new ownership regulations set by the U.S. Treasury Department to discourage inversions. “Tyco shareholders will own 44% of the deal after it is done, avoiding any penalties the Treasury Department has tried to impose on these deals,” Fortune reported. “The Treasury Department had set an ownership requirement in 2014 of 40% for foreign firms involved in inversion deals with U.S. corporations, in an effort to discourage inversions.”

The deal with Tyco will change virtually nothing for Johnson Controls International except for its slightly modified name—“Johnson Controls plc.”—and its ability to manipulate the U.S. tax system. The company’s new domicile will officially be Cork, Ireland, but it will retain its real operating headquarters in its present site near Milwaukee. It will continue to be listed on the S&P 500 stock index. Johnson Controls will still be protected by the vast legal architecture safeguarding U.S. firms, like those on securities, intellectual property, and patents.

The corporation’s CEO Alex Molinaroli insists that the firm is simply acting to best serve its shareholders: “It would be irresponsible for us as a company to not take advantage of the opportunities that come along.” The inversion will also provide some advantages to the CEO himself, with Fortune observing, “Molinaroli will receive at least $20.5 million and as much as $79.6 million for doing the deal over the next 18 months.”

Johnson Controls also stands to retain other advantages. It will remain eligible for U.S. government and state contracts under current law, as have Accenture and other firms which have staged inversions. Between 2010 and 2014, Johnson and its subsidiaries received more than $1 billion in federal contracts—more than $210 million a year, according to ITEP’s Gardner. Furthermore, Johnson Controls’ ability to gain federal and state tax incentives for job creation will apparently continue.






Naked Capitalism: Corporations Ducking Taxes

Wolf Richter: Which US Companies Stockpile the Most Profit “Overseas?” But Where the Heck is the Money?

Posted on May 14, 2016 by 

Yves here. As we’ve written before, the idea that US companies’ profits booked offshore means actual cash is sequestered is a complete canard. Most of the time, the funds are in the US. Yet it seems this point needs to be made repeatedly to penetrate the corporate spin otherwise.

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street

There is a misconception about the uncanny ability of very profitable US companies, like Microsoft and Apple, to park their profits overseas in order to dodge US taxes: the money from these profits that are parked “overseas” isn’t actually overseas.

It is registered in accounts overseas, for example in Ireland, but is then invested in whatever assets the company chooses to invest it in, including in US Treasuries, US corporate bonds, US stocks, and other US-based investments. This was revealed to the public during the Senate subcommittee investigation and hearings in March 2013 that exposed where Apple’s profits that were officially parked “overseas” actually end up.

“Tim Cook emerged smelling like a rose, the triumphant CEO of America’s most iconic welfare queen,” I wrote at the time. And so the practice continues in all its glory.

These funds cannot even be “repatriated” because they’re already here — or wherever the company wanted to invest them.

According to a recent report by the Government Accountability Office (GOA), this and other practices give large corporations a big advantage over small businesses and individuals. Some key findings:

In each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability.

Among large corporations (generally those with at least $10 million in assets), 42.3% paid no federal income tax in 2012.

Of those large corporations whose financial statements reported a profit, 19.5% paid no federal income tax that year.

For tax years 2008 to 2012, profitable large U.S. corporations paid, on average, U.S. federal income taxes amounting to about 14% of the pretax net income that they reported in their financial statements (for those entities included in their tax returns).

Federal Tax collections from corporate income taxes are now around 2% of GDP while those from individual income taxes are over 8% of GDP and rising. I added the red arrow and label to indicate where we stand:



The report points out the vast difference between the much bemoaned statutory corporate income tax rate of 35%, one of the highest in the world, and the Effective Tax Rate, which is zero for some of the most profitable companies.

But how much of their profits are registered overseas? The interactive chart below shows the 50 US companies with the most profits stockpiled “overseas” to avoid taxes in the US, while the actual money is wherever, including in US-based assets (hover over the blue bars to get the amounts):

Total Profit Stockpiled Overseas by Company | FindTheCompany

OK, disclosure, I’m envious. I wish I could legally do that. As American, my worldwide income is taxed in the US (plus in other jurisdictions) even during the times I lived overseas — which makes American expats the laughing stock of much of the rest of the world. And we have no one else to blame but us; we voted these geniuses in Congress into office.

Apple shares have plunged 32% from June last year, and $282 billion in shareholder wealth has evaporated, on swooning sales and crummy data from suppliers. But still, Apple’s market capitalization is over $500 billion. And Alphabet’s is nearly $500 billion. Along with Facebook, Amazon, and LinkedIn, they constitute the Big Five in Silicon Valley, with a giant footprint on commercial real estate. And this could get very ugly! Read…  Silicon Valley Commercial Property Boom Ends, Totally Exposed to Big-5: Apple, Google, Facebook, Amazon, LinkedIn

Food Stamps in Manufacturing

A graphic saved for posterity from the International Business Times website:



We’re Not in Lake Wobegon Anymore

How did the Party of Lincoln and Liberty transmogrify into the party of Newt Gingrich’s evil spawn and their Etch-A-Sketch president, a dull and rigid man, whose philosophy is a jumble of badly sutured body parts trying to walk?


In the years between Nixon and Newt Gingrich, the party migrated southward down the Twisting Trail of Rhetoric and sneered at the idea of public service and became the Scourge of Liberalism, the Great Crusade Against the Sixties, the Death Star of Government, a gang of pirates that diverted and fascinated the media by their sheer chutzpah, such as the misty-eyed flag-waving of Ronald Reagan who, while George McGovern flew bombers in World War II, took a pass and made training films in Long Beach. The Nixon moderate vanished like the passenger pigeon, purged by a legion of angry white men who rose to power on pure punk politics. “Bipartisanship is another term of date rape,” says Grover Norquist, the Sid Vicious of the GOP. “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” The boy has Oedipal problems and government is his daddy.

The party of Lincoln and Liberty was transmogrified into the party of hairy-backed swamp developers and corporate shills, faith-based economists, fundamentalist bullies with Bibles, Christians of convenience, freelance racists, misanthropic frat boys, shrieking midgets of AM radio, tax cheats, nihilists in golf pants, brownshirts in pinstripes, sweatshop tycoons, hacks, fakirs, aggressive dorks, Lamborghini libertarians, people who believe Neil Armstrong’s moonwalk was filmed in Roswell, New Mexico, little honkers out to diminish the rest of us, Newt’s evil spawn and their Etch-A-Sketch president, a dull and rigid man suspicious of the free flow of information and of secular institutions, whose philosophy is a jumble of badly sutured body parts trying to walk. Republicans: The No.1 reason the rest of the world thinks we’re deaf, dumb and dangerous.

Rich ironies abound! Lies pop up like toadstools in the forest! Wild swine crowd round the public trough! Outrageous gerrymandering! Pocket lining on a massive scale! Paid lobbyists sit in committee rooms and write legislation to alleviate the suffering of billionaires! Hypocrisies shine like cat turds in the moonlight! O Mark Twain, where art thou at this hour? Arise and behold the Gilded Age reincarnated gaudier than ever, upholding great wealth as the sure sign of Divine Grace.

Here in 2004, George W. Bush is running for reelection on a platform of tragedy—the single greatest failure of national defense in our history, the attacks of 9/11 in which 19 men with box cutters put this nation into a tailspin, a failure the details of which the White House fought to keep secret even as it ran the country into hock up to the hubcaps, thanks to generous tax cuts for the well-fixed, hoping to lead us into a box canyon of debt that will render government impotent, even as we engage in a war against a small country that was undertaken for the president’s personal satisfaction but sold to the American public on the basis of brazen misinformation, a war whose purpose is to distract us from an enormous transfer of wealth taking place in this country, flowing upward, and the deception is working beautifully.

The concentration of wealth and power in the hands of the few is the death knell of democracy. No republic in the history of humanity has survived this. The election of 2004 will say something about what happens to ours. The omens are not good.

Our beloved land has been fogged with fear—fear, the greatest political strategy ever. An ominous silence, distant sirens, a drumbeat of whispered warnings and alarms to keep the public uneasy and silence the opposition. And in a time of vague fear, you can appoint bullet-brained judges, strip the bark off the Constitution, eviscerate federal regulatory agencies, bring public education to a standstill, stupefy the press, lavish gorgeous tax breaks on the rich.

There is a stink drifting through this election year. It isn’t the Florida recount or the Supreme Court decision. No, it’s 9/11 that we keep coming back to. It wasn’t the “end of innocence,” or a turning point in our history, or a cosmic occurrence, it was an event, a lapse of security. And patriotism shouldn’t prevent people from asking hard questions of the man who was purportedly in charge of national security at the time.

Whenever I think of those New Yorkers hurrying along Park Place or getting off the No.1 Broadway local, hustling toward their office on the 90th floor, the morning paper under their arms, I think of that non-reader George W. Bush and how he hopes to exploit those people with a little economic uptick, maybe the capture of Osama, cruise to victory in November and proceed to get some serious nation-changing done in his second term.

This year, as in the past, Republicans will portray us Democrats as embittered academics, desiccated Unitarians, whacked-out hippies and communards, people who talk to telephone poles, the party of the Deadheads. They will wave enormous flags and wow over and over the footage of firemen in the wreckage of the World Trade Center and bodies being carried out and they will lie about their economic policies with astonishing enthusiasm.

The Union is what needs defending this year. Government of Enron and by Halliburton and for the Southern Baptists is not the same as what Lincoln spoke of. This gang of Pithecanthropus Republicanii has humbugged us to death on terrorism and tax cuts for the comfy and school prayer and flag burning and claimed the right to know what books we read and to dump their sewage upstream from the town and clear-cut the forests and gut the IRS and mark up the constitution on behalf of intolerance and promote the corporate takeover of the public airwaves and to hell with anybody who opposes them.

This is a great country, and it wasn’t made so by angry people. We have a sacred duty to bequeath it to our grandchildren in better shape than however we found it. We have a long way to go and we’re not getting any younger.

Dante said that the hottest place in Hell is reserved for those who in time of crisis remain neutral, so I have spoken my piece, and thank you, dear reader. It’s a beautiful world, rain or shine, and there is more to life than winning.