What is it with these billionaires, lecturing us to “suck it up” if we don’t like the bailouts? A few months ago it was Charlie Munger, co-founder of Berkshire Hathaway and sidekick to the better-known Warren Buffett, who said “we shouldn’t be bitching about a little bailout”, and people facing financial troubles should just “suck it up and cope.” Back in September when Munger was speaking, we didn’t know just how little the bailout was, but now that the Federal Reserve has been forced to divulge details of its six bank emergency financing vehicles, we discover that over $3 trillion in taxpayer money was delivered to US and foreign banks, companies like General Electric, mutual funds like PIMCO, and a few individuals, some of whom happened to be billionaires like Charlie Munger. (Image)
Today on Meet the Press it was the turn of NYC Mayor Michael Bloomberg, who said the following about President Obama’s tax proposal:
‘Look, this is what I did, this is the best I can do. Suck it up,’ Bloomberg said, when asked how Obama should deal with Democrats angered by the tax measure and other compromises with Republicans.
Bloomberg went on to say the Democrats should cease their partisan infighting and begin working on “centrist solutions” for the economy. He suggested Obama needed to broaden his pool of business talent at the White House and should hire hedge fund manager Roger Altman, a former deputy secretary of the Treasury in the Clinton administration.
Which of these ideas is the more insulting I’ll leave up to you, but hasn’t the nation sucked it up enough under the leadership of bipartisan, centrist, triangulating, corporatist Democrats?
We all know millions of middle class and poor people are going to get hurt if the unemployment benefits are not extended. Obama is able to claim that he is preventing this damage with his agreement with the Republicans to extend these benefits for one more year. But in exchange for this, Obama caves in on one of his most important campaign promises – to let the Bush tax cuts expire. By pushing these out two more years, he deprives the taxpayers of $700 billion in revenue that would have come largely from a small number of millionaires and billionaires.
The one year – two year timing difference is critical to the Republicans in this deal. The middle class and poor people are, without a shadow of a doubt, doomed to lose their benefits a year from now. The Republicans will relish the opportunity in the House to kill any further extension of these benefits, and if the economy tanks even more than it has as a consequence, so much the better for the Republicans. They’ll blame it all on Obama.
Two years from now, though, in the middle of a presidential election, the Republicans will make it a big campaign issue to re-extend the Bush tax cuts, because otherwise it will be “raising your taxes” in a time of economic distress. This is the same argument they are using today, though they neglect to mention the average American will get a tax benefit of a few hundred dollars, while billionaires will get nearly $200,000 annually. Also without any doubt, the Republicans will find something important the Democrats want and hold that hostage until they get their way.
Democrats Get the Word – Cooperate
The Democrats, admonished by the media and billionaires everywhere to be all centrist and bipartisan, will cave in. This is what they do, and with a hedge fund manager like Roger Altman replacing Larry Summers, it will be in the personal interest of the team running the Treasury to see that they do it.
Besides sucking it up on the Bush tax cut extension, you are being required to suck it up on a Social Security tax holiday, the first step to making Social Security dependent on the general fund of the Treasury for its survival, which in turn will lead to brilliant deficit reduction ideas later from the Republicans, such as turning your Social Security taxes over to Wall Street for “investment”, or letting millions of people opt out of the program altogether. This has been a Republican dream for decades, and now to become a reality under Obama’s tax proposal.
Oh yes, there is another Republican stalking horse in the proposal – a reduction in the death tax from 55% if the tax cuts are allowed to expire, down to 35% as part of Obama’s compromise. This is yet another step to abolishing the death tax altogether, which is the most potent tool government has to avoid the emergence of an oligarchic or aristocratic society in America. More than anything in the Obama tax proposal, this has the most insidious long term consequence for the economic and social health of this country.
Are you getting the impression our billionaire overlords are getting a little bit testy? They are so used to having their way, to being idolized in society, that these protests must be getting on their nerves. Even President Obama, though not yet a billionaire, is acting out in public with petulance at his supporters who refuse to walk in lock-step down this centrist path to bipartisan, adult compromise with his friends on the Republican side of the aisle.
When you think about it, who better to lecture us to “suck it up” than our billionaire leaders and captains of industry? No one is more expert than these people at “sucking it up” – your taxpayer dollars, that is.
First posted at The Agonist