Wednesday, March 2, 2011

A propaganda blast from Morgan Stanley

Via:  Mish  Download “USA, Inc.” here.

Here is a trenchant, cutting analysis (not) of what ails America, looking at the USA as if it were a private company, not a nation—and we all know how American companies deal with excessive costs.  They take it out of labor’s hide.

Of course, the recommendations are to cut the entitlements of everyone, including “those for whom there are few alternatives” (paraphrase).  And naturally, we should tax consumption (make the tax system more regressive)—because everyone else does.  (In Euroland they get a lot more for their money, but that isn’t mentioned.)  I will credit them with showing that we could basically solve the fiscal problem by raising the marginal tax rate on the highest two tiers of income to around 75 percent, something I’ve been advocating for a while.

The basic flaw of the report—other than treating a nation as a private corporation, which carries a frightening amount of pernicious subliminal baggage—is its excessive reliance on arithmetic, scenarios and other corporate finance style BS that has nothing to do with what ails us (IMHO), namely, that our social contract no longer works.  Prima facie evidence of which is the prevailing kleptocracy that has replaced democracy in the United States.  The rules of corporate governance, the interlocking boards and CEOs, the tax system, the bought-and-paid-for Congress and its major client, the military-industrial complex, the massively messed up health insurance system—everything today conspires to make the USA, our nation, a banana republic.  Yes, we have no democracy.  The rich get richer, the poor get poorer.

How do you address a massively unequal rigged economic system, according to Morgan Stanley?  By cutting the entitlements of those at the bottom.  To make us more competitive, so the rich can get richer on the backs of American serfs.

The American social contract is broken.  It will take more than arithmetic to solve this problem.  It will take a massing of social will to reinstitute democracy in America. 


See also:  Fix Congress First!

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