Robert Reich Reports

[Liquid]

The $$ tail is wagging the dog of capitalism.

These robber barons don't want to pay taxes yet their business rely on American technology, debt, financial services, defense, air traffic control, postal service, roads, ports, etc. all paid for by taxes...

Like spending all your money on a fancy, posh interior while the hull deteriorates away under you!

 

[billy backstay]

The $$ tail is wagging the dog of capitalism.

These robber barons don't want to pay taxes yet their business rely on American technology, debt, financial services, defense, air traffic control, postal service, roads, ports, etc. all paid for by taxes...

Like spending all your money on a fancy, posh interior while the hull deteriorates away under you!

When Warren Buffets tax bill is far less per dollar earned than his Secretary, something is seriously wrong with the tax laws and needs to be corrected.

Unfortunately we are governed by "The Golden Rule - Those with the most Gold make all the rules." Same as it ever was, and ever shall be......

 

[billy backstay]

Robert Reich​

MAR 1 • 3M

Office Hours: Musk's racism​

Friends,
After Scott Adams, the creator of “Dilbert,” called Black people a “hate group” and said, “I don’t want to have anything to do with them” and that white people should “get the hell away from Black people,” media outlets have dropped his comic strip.

In response, last Sunday Twitter chief Elon Musk blasted the media as being “racist against whites and Asians.” He offered no criticism of Adams’s comments.



Elon Musk @elonmusk
@monitoringbias For a *very* long time, US media was racist against non-white people, now they’re racist against whites & Asians. Same thing happened with elite colleges & high schools in America. Maybe they can try not being racist.
8:45 AM ∙ Feb 26, 2023

---

59,670Likes10,920Retweets

Later, Musk agreed with a tweet that said “Adams’ comments weren’t good” but “there’s an element of truth” to them. Musk then suggested that media organizations promote a “false narrative” by giving more coverage to unarmed Black victims of police violence than they do to unarmed white victims of police violence.


Since Musk took over Twitter in October, the platform has seen a spike in virulently racist slurs. In November, Musk met with leaders of civil rights groups to assure them that he would not reinstate banned Twitter accounts until he established a clear process for doing so, and that representatives from civil rights groups would be included on a content moderation council to advise Twitter on these policies.

But Musk never formed the content moderation council. Instead, he reinstated numerous banned accounts, including those of neo-Nazis and others previously banned for hate speech.

Meanwhile, the public is being swamped with Musk tweets. When a tweet that he posted during the Super Bowl failed to achieve as much engagement as a tweet from President Joe Biden, Musk demanded that Twitter staff change its algorithm to artificially inflate Musk’s tweets by a factor of 1,000. Many people who have not chosen to follow Musk are being served his tweets in their feed through the “For you” tab of the app’s homepage.

In sum, the richest person in the world used part of his fortune to buy one of the world’s largest media platforms, then reinstated previously banned neo-Nazis and peddlers of hate speech, then allegedly changed its algorithms to make his posts into the platform’s most popular, and is now defending a racist cartoonist and criticizing the media as being racist against white people.

 

[Steam Flyer]

This is NOT going to make the world a better place.

 

[billy backstay]

Greed needs guardrails!​

Republicans and their corporate backers are trying to shift costs and risks onto the rest of us​

Robert Reich

I’m not surprised that migrant children who have been coming into the United States from Latin America without their parents, fleeing violence and poverty, have ended up in some of the most punishing jobs in the country.

And I’m not surprised that a train carrying dangerous chemicals derailed, causing a toxic plume that is sickening people in Ohio.

In fact, I’m not surprised that corporate greed is making life dangerous for ever greater numbers of people.

I saw it when I was secretary of labor in the early 1990s, overseeing enforcing the nation’s labor laws.

The department had only 1,100 inspectors responsible for the health and safety of 130 million workers, including any children who might be working illegally in dangerous conditions. And not even the biggest penalty we could impose was high enough to deter companies that treated such fines as costs of doing business.


The Labor Department is still woefully understaffed, and penalties are still too low. Every time the department’s budget is up for review, members of Congress — mostly (but not entirely) Republicans — refuse to appropriate enough funds for inspectors or to increase penalties.

So of course migrant children coming into the United States, fleeing violence and poverty, have ended up in dangerous jobs.

In Delaware, Mississippi, and North Carolina, young children are working in slaughterhouses. In Michigan, young children are making auto parts used by Ford and General Motors. In Virginia, girls as young as 13 are washing hotel sheets. In Florida and Tennessee, 12-year-olds are doing roofing jobs. In South Dakota, children are sawing planks of wood on overnight shifts.

It’s a throwback to the late 19th century, when children were drafted into dangerous work.

On Monday, the Department of Labor announced new steps to stop exploitative child labor. Biden officials say they’ll ask Congress to increase funding for inspectors and to increase monetary penalties.

But on the basis of my experience, I know that industry lobbyists will fight these steps tooth and nail. And most Republicans (along with some Democrats) will do their bidding, because many of these companies finance their campaigns.

The problem extends far beyond child labor.

On February 3, a freight train carrying hazardous materials derailed in East Palestine, Ohio. The result was a massive fire with plumes of black smoke, an evacuation order, and worries about the impact on the environment and public health.

Amid mounting criticism that Biden did not personally visit East Palestine, Donald Trump showed up. He handed out branded water bottles and bragged afterward about the “incredible reach” of his visit in the media and online.

Yet Trump oversaw a major rollback of rail-safety regulations after the rail industry delivered more than $6 million to GOP campaigns. Backed by Senate Republicans, the Trump administration rescinded part of an Obama rule requiring railroads to have better brakes, and it killed requirements that rail cars carrying hazardous flammable materials be equipped with electronic braking systems.

Norfolk Southern had once touted electronic braking systems, but the company’s lobbyists pressed for the rule’s repeal, telling regulators it would “impose tremendous costs without providing offsetting safety benefits.” The argument prevailed with Trump officials. (The Biden administration has not moved to reinstate the brake rule or expand the kinds of trains subjected to tougher safety regulations.)

Ever since Ronald Reagan decried government regulation as strangling the economy, Republicans have resisted all efforts to constrain corporate greed through health, safety, environmental, and labor protections. In Congress, they’ve starved agencies of funds they need to enforce regulations or kept penalties so low that regulations don’t deter corporate misconduct.

When they control the White House, they rescind tougher rules put in place by previous Democratic administrations and staff regulatory agencies and departments with industry stooges — foxes guarding henhouses — to ensure that proposed regulations are slowed and that enforcement is hobbled.

Their argument is always the same: Regulations stifle growth and jobs.

But just as Republican tax cuts for big corporations and the wealthy have not trickled down, Republican regulatory cuts have not benefited most people. Big companies and their major shareholders enjoy larger profits, but average working people bear the costs and risks. Citizens in places like East Palestine, Ohio, become sickened by toxic plumes. Children fleeing violence and poverty in Latin America become injured on jobs they should never have been offered.

Capitalism needs regulation if it is to serve the public. Greed requires guardrails if it is to stay on track.

 

[Steam Flyer]

My experience in industry was mostly with air pollution regulation, secondarily with chemical exposure and mechanical workplace hazards.

Smaller businesses tend to be a bit more personal, aside from actually caring about their employees because it's Fred and Bill and you've met their kids not some faceless numbers in a spreadsheet, and often are harmed by regulatory efforts. They tend to get a disproportional amount of attention, partly because there's more of them and partly because it's easier to check on Bill and Fred than it is to work your way past layers of security and then wander around FacelessCo's huge facility looking for the thing you're supposed to be checking.

But there is a far more sinister principle at work, directly connected to pure greed and stupidity. I say stupidity, because pollution harms everybody including the 0.1%ers. And mitigating pollution is expensive. It can be expensive as hell, which is why the big corporations argue about and lobby (and buy ads and sponsor FOXY News) against intrusive gov't over-reach, but what they actually do is to cut the expensive stuff, legal or not, and pocket the money fast.

 

[billy backstay]

MAR 3 • 7M

Republicans are right about E.S.G., but for the wrong reason​

The problem isn't "woke" capitalism. It's corporate capitalism.​

Friends,

For nearly two decades, major corporations have touted principles known as E.S.G. (short for environmental, social and governance factors), ostensibly by focusing their businesses on these concerns as well as on profits.

But now Republicans are taking aim at this approach, calling it “woke capitalism,” and are using it to demonstrate that Democrats and progressives are trying to impose their views on the rest of society.

In other words, the fight over E.S.G. is extending America’s culture war into the C-suites of big American corporations.

On Wednesday, Senate Republicans, helped by two Democratic defectors, voted to block a Labor Department rule allowing retirement plan managers to include E.S.G. considerations in their investment plans. The vote is likely to draw President Biden’s first veto.

Republicans are right about E.S.G. — but for the wrong reason.

The problem with E.S.G. isn’t woke capitalism. It’s corporate capitalism. Corporate money has corrupted American politics so much that our democracy cannot effectively deal with environmental and social concerns.



CEOs and pension fund managers who tout their records on E.S.G. are engaged in a kind of social greenwashing — designed to burnish their brands and attract investors (including retirees) who want to believe they’re doing good while they’re also doing well.

But most of this is baloney. Investors don’t want to do good at the expense of doing well. They’re unwilling to sacrifice shareholder returns to advance their environmental and social values. They want high returns and they want environmental and social goals. But they can’t have both. They’d do more good by donating to nonprofits seeking to protect the environment and advance the social causes they believe in.

Corporations and institutional investors won’t deviate from maximizing short-term profits and shareholder returns unless they are required to do so by law. And even then, only when the penalty for violating the law multiplied by the probability of getting caught is higher than the profits from continuing with the illegality.

When I was secretary of labor, big corporations would violate laws on worker safety, wages and hours, and pensions whenever doing so was cheaper than obeying the law. And they’d fight like hell against such laws to begin with, all the while telling the public what wonderful citizens they were.

The soothing corporate and Wall Street talk about E.S.G. is designed to forestall such laws by creating the false impression that corporations are already doing what needs to be done for the environment or social issues, so there’s no need for more laws or regulations.

In 2019, the Business Roundtable – one of Washington’s most prestigious corporate groups – issued a widely publicized statement expressing “a fundamental commitment” to the wellbeing of “all of our stakeholders” (emphasis in the original), including employees, communities, and the environment. The statement was widely hailed as marking a new era of E.S.G.

Since then, the Roundtable and its members have issued jejune statements about all they’ve done to reverse climate change and alleviate poverty.

Not incidentally, these were priorities in President Biden’s “American Families Plan” and “Inflation Reduction Act.” But the Business Roundtable didn’t lobby for these bills. It lobbied against them. Hypocrisy? Only if you believed the Roundtable rubbish about corporate social responsibility and E.S.G. in the first place.

The pressures on companies to maximize their profits and share values -- social responsibility and E.S.G. be damned – are coming from shareholders, top executives (whose pay is linked to stock performance), and from retirement plan managers, even those who tout their commitment to E.S.G.



It’s tempting to chalk this up to “greed,” but neither corporations nor retirement plans are capable of such emotions. They aren’t people, no matter what the Supreme Court says. They’re bundles of contracts. The specific people who enter those contracts on behalf of corporations, shareholders, and retirees have no interest or expertise in the environment or in any particular social issues. They’re simply doing what they understand to be their jobs – maximizing shareholder value.

If we want these transactions to be better aligned with public needs rather than private profits, laws must demand this and penalties for violating laws must be increased. Corporate taxes must rise to fund public investments in non-fossil fuels and social safety nets. Regulations must be strengthened to protect the public.

But laws and regulations won’t do any of this if corporations continue to spend vast sums on politics.

The most telling trends over the last three decades have been the growing share of the economy going into corporate profits – generating ever-greater compensation packages for top executives and ever-higher payouts for investors – and the declining share going to most Americans as wages and salaries.

Much of the reason is the vast increases in corporate and Wall Street money flowing into the campaigns of lawmakers who cut corporate taxes, enact corporate subsidies, and block or dilute regulations.

The divisive blather over E.S.G. is simply masking these trends.

The most socially responsible action pension plans and corporations can take to allay environmental and social problems is to refrain from putting money into politics, and to support campaign finance reform.

What do you think?

 

[billy backstay]

FRIDAY, MARCH 3, 2023

Debunking “No One Wants To Work Anymore” ​

I keep hearing “no one wants to work anymore.”

The U.S. Chamber of Commerce, corporate America’s biggest lobbying group, claims there are over 10 million job openings right now in the US for which employers can’t find workers.

Federal Reserve chair Jerome Powell says the U.S. is dealing with a “structural labor shortage” that won’t be resolved anytime soon.

But here’s the truth: there is no labor shortage.

There is a shortage of jobs paying sufficient wages to attract workers to fill them.

When a problem is wrongly described, the solutions posed often turn out to be equally wrong.

For most Americans, real inflation-adjusted wages continue to drop. Any pay increases workers may have earned in the past few years have actually been pay cuts, because wages have lagged behind the rising costs of basic necessities — like housing, food, childcare, and healthcare.


You don’t have to be a financial wizard to see why some workers might say the hell with it.
So, what should be done about the difficulty employers are having finding workers?

Simple. If employers want more workers, they should pay them more.

Many corporations are raking it in right now, they can clearly afford to.

Of course Jerome Powell and his colleagues at the Fed don’t want to hear this. They’re aiming to deal with the so-called “labor shortage” by slowing the economy so much that employers can find all the workers they need without raising wages.

But the Fed increasing interest rates to slow the economy will prevent millions of people from getting desperately-needed raises and cause millions more to lose their jobs — disproportionately low-wage workers, women and people of color.

Meanwhile, Republicans and some corporate economists blame the “labor shortage” on overly generous unemployment benefits. They say the way to get more people into jobs is to make their lives outside jobs less tolerable.

Rubbish. Most unemployed people are already hard up.

Pandemic benefits are long over, and even before COVID, America’s unemployment system was already the least generous of any rich nation.

Taken to its logical extreme, the corporate Republican argument holds water only if you don’t give a damn about workers.

Sure…you could eliminate all safety nets and at some point people without jobs will hurt so much they’ll have to take any available job, at any wage, whatever it demands.

But do this, and we’ll end up with an economy that’s even crueler than today’s economy.

Look: If we want more people to take jobs — AND we wish to live in a moral society where people can maintain decent lives — the answer is to pay people more.

Instead of saying “no one wants to work anymore,” we should be saying, “no one wants to be exploited anymore.”

(Source: youtube.com)

 

[Steam Flyer]

It's difficult to believe that "conservatives" are so bad at basic capitalism.

I think it's the difficulty overcoming their prejudices. When your deep fundamental belief is that "workers" are inferior, that "free markets" does not apply to a worker's right and ability to bargain his productivity for his wages, then it becomes very easy to believe in "labor shortages" and "people don't want to work."

Problem- if you follow this same line of (un)reasoning, you end up with forcing people to work against their will.

We tried that. In a modern economy, it just does not work. We actually fought a war against it.

 

[billsreef]

It's difficult to believe that "conservatives" are so bad at basic capitalism.

Hell, they are incapable of rational thought.

 

[billy backstay]

"Look: If we want more people to take jobs — AND we wish to live in a moral society where people can maintain decent lives — the answer is to pay people more.

Instead of saying “no one wants to work anymore,” we should be saying, “no one wants to be exploited anymore.”"

A semi-retired friend has been looking for a part-time job, just for something rewarding to do for 15-20 hours a week, and make a few extra bucks. Not a single one of interest pays enough to be of any value. With actual vehicle costs at 65 cents a mile, one loses $13.00 on a 20 mile RT to a PT job and back home.

 

[billy backstay]

Why Warren Buffett is wrong and Joe Biden is right about stock buybacks​

The unvarnished truth about where most profits are going​

Robert Reich




Friends,

Warren Buffett, one of the richest people in America, defended stock buybacks in his highly anticipated annual letter to Berkshire Hathaway shareholders, released a few days ago.

“When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive).”

Buffett may be correct about buybacks being good for shareholders, for the simple reason that each remaining outstanding share has more corporate profit behind it.

But the Oracle of Omaha is dead wrong about buybacks being good for the country. They merely enrich people who own shares of stock (the richest 10 percent of Americans own 92 percent of the stock market) rather than add to the productive capacity of America.

Many pundits (including Andrew Ross Sorkin of The New York Times’s DealBook) are failing to draw the distinction — assuming that if stock buybacks are good for corporations and their shareholders, they must be good for America.

Rubbish.

To take but one recent example: Last year, the Norfolk Southern Railway enjoyed record revenue and operating income — $3.2 billion in the fourth quarter alone, a remarkable 13 percent year-over-year increase.

How did the railroad accomplish this? By cutting nearly 10,000 jobs — reducing its workforce by a third while running fewer, longer trains. Some trains now stretch longer than 2 miles. It made these changes despite warnings that they worsened safety risks.

The corporation also refused to provide its remaining workers with sick leave. And it failed to invest in improved safety equipment. (As I noted last week, the railroad mounted a major lobbying blitz against stronger safety regulations.)

And what did Norfolk Southern do with all the money it saved from cutting its workforce, running longer trains, refusing sick leave, and scrimping on safety?

Over the past two decades, it has boosted shareholder payouts by 4,500 percent (along the way enriching Warren Buffett and other investors).

Specifically, it has spent billions on stock buybacks — hitting a record $4.7 billion in buybacks and dividends last year.

Then it went off the rails, literally, releasing a toxic plume over East Palestine, Ohio.

On Saturday it went off the rails again, near Springfield, Ohio, although thankfully this Norfolk Southern train wasn’t carrying hazardous materials.

Companies don’t get better because of buybacks. Shareholders only get richer. While railroads spent more on stock buybacks than rail safety, Warren Buffett’s wealth increased by $42 billion.

Researchers at Deloitte point out that buybacks and dividends have soared as a share of GDP, while corporate investments in equipment and infrastructure have stagnated. Many of the social costs of this failure to invest have been shifted to the public-at-large, as we saw in East Palestine.

Stock buybacks don’t create more jobs. They don’t increase wages. They don’t grow the economy.

Before 1982, it was illegal for corporations to purchase their own stock to artificially prop up share prices. Then Ronald Reagan’s SEC adopted a rule protecting corporations from being charged for this kind of stock manipulation.

Jump ahead to 2017 and the Trump-GOP tax cuts added fuel to the fire. Since then, stock buybacks have more than doubled, reaching a record high $1.2 trillion in 2022 alone.

That’s $1.2 trillion that did not go into improving quality of life for American workers or building the American economy. It just went straight into the pockets of already-wealthy shareholders and CEOs.

Once again, Wall Street gains at the expense of working families.

Which is why the Inflation Reduction Act imposes a 1 percent tax on buybacks. And why Biden wants to raise it to 4 percent. The Stock Buyback Accountability Act of 2023, introduced by Senators Sherrod Brown and Ron Wyden, would do just this.

From the standpoint of America as a whole, Biden is exactly right about stock buybacks. Buffett is utterly wrong.

 

[billy backstay]

Privatize the profits and socialize the losses. This is the Golden Rule.

Those with the most Gold will make all the Rules. Same as it ever was and ever shall be.......

 

[billy backstay]

Open in app or online Sunday caption contest: cantina​ And last week's winner​ ROBERT REICH MAR 5 ​ ​ ​ SAVE​ ▷ LISTEN​ Please submit your caption in the Comments section. Winners will be announced next Sunday. For consideration, please post your caption by tomorrow (Monday), at 9 pm PT, 12 midnight ET. ​ Leave a comment Last week’s winner: ​ "I didn't think Mar-a-Lago would be so run down."​

 

[billy backstay]

Psst! An urgent message for Jerome Powell​

Further interest-rate hikes to fight inflation will worsen inequality. And they’re unnecessary.​

Robert Reich

Mr. Powell,

As chairman of the Federal Reserve Board, you’re making your semi-annual policy report today to Congress.

I hope you don’t think me impertinent, but I have an urgent question for you that I hope one of the senators asks: How can you justify further rate hikes in light of America’s staggering inequality?

You and your colleagues on the Fed’s Open Market Committee are considering pushing interest rates much higher in your quest to get inflation down to your target of 2 percent. You believe higher interest rates will reduce consumer spending and slow the economy.

With due respect, sir, this is unnecessary, and it would be unjust.

Over the past year, you’ve raised interest rates at the fastest pace since the 1980s, from near zero to more than 4.5 percent.

But consumer spending isn’t slowing. It fell slightly in
November and December but jumped 1.8 percent in January, even faster than inflation.

As a result, you’re now saying you may need to lift rates above 5 percent. A recent paper by a group of academic and Wall Street economists suggests that you will need to raise interest rates as high as 6.5 percent to meet your 2 percent target.

This would worsen America’s already staggering inequalities.

You see, the Americans who are doing most of the spending are not the ones who will be hit hardest by the rate increases. The biggest spenders are in the top fifth of the income ladder. The biggest losers will be in the bottom fifth.

Widening inequality has given the richest fifth a lot of room to keep spending. Even before the pandemic, they were doing far better than most other Americans.

Their current spending spree is a big reason you and your colleagues at the Fed are having so much difficulty slowing the economy by raising interest rates (in addition to the market power of many big corporations to continue raising prices and profit margins).

The higher rates are flowing back into the top fifth’s savings, on which they’re collecting interest.

The top fifth’s savings are still much higher than they were before the pandemic, so they can continue their spending spree almost regardless of how high you yank up rates. Take a look at this chart:


(Sources: J.P. Morgan Private Bank, Haver Analytics. Data as of October 2022.)

But yank up rates and you’ll impose big sacrifices on lower-income Americans. The study I mentioned a moment ago concludes that “there is no post-1950 precedent for a sizable central-bank-induced disinflation that does not entail substantial economic sacrifice or recession.”

There’s also no post-1950 precedent for the degree of income inequality Americans are now experiencing.

The people who will endure the biggest sacrifices as the economy slows will be the first to lose their jobs: mostly, those in the bottom fifth. Relying on further interest-rate hikes to fight inflation will only worsen the consequence of America’s near-record inequality.

There’s no reason for further hikes, anyway. Inflation is already slowing.

I understand your concern, Mr. Powell. What looked like a steady albeit gradual slowdown is now looking even more gradual.

But so what? It’s the direction that counts.

You should abandon your 2 percent target rate of inflation. There’s nothing sacrosanct about 2 percent. Why not 4? Getting inflation down to 2 percent is going to cause too much pain for the most vulnerable.

And you should suggest to Congress that it use other tools to fight inflation, such as barring corporations with more than 30 percent market share from raising their prices higher than the overall inflation rate — as recently proposed by New York’s attorney general.

May I be perfectly frank with you, sir? It would be terribly unjust to draft into the inflation fight those who are least able.

Thank you.

Robert Reich

 

[billy backstay]

Office Hours: The Republicans' sexual obsession​

They're now seeking to prohibit everything except plain vanilla​

Robert Reich



This past weekend a speaker at CPAC declared that "transgenderism must be eradicated" in America.

Tennessee Republicans have banned drag performances with a new law so ambiguously written that could criminalize not only drag performers but transgender people simply existing in public.

Iowa Republicans have introduced bills to ban same-sex marriage.

The GOP is targeting LGBTQ+ Americans, introducing more than 300 anti-LGBTQ+ bills nationwide last year.

Ron DeSantis is purging Florida public schools of any mention of gender identity or sexual orientation.

Meanwhile, anti-LGBTQ+ hate crimes are on the rise, with the past two years being the deadliest on record for transgender Americans.

Under Trump, the Republican Party celebrated white supremacists and antisemites. The post-Trump Republican Party continues this despicable tradition but is also encouraging hate and bigotry toward anyone whose gender identity or sexual orientation or is different.

Today’s Office Hours questions: Why are Republicans fueling this horrific fire? Where will it lead?

 

[billy backstay]

Get ready: Two big upcoming theatrical performances​

Biden wants to tax the rich, and House Republicans don’t want to raise the debt ceiling. Here’s what will happen.​

Robert Reich





Friends,

A few days ago, I got a call from a reporter who wanted to know why President Biden has suddenly become a budget hawk: He’s proposing to trim the federal budget deficits by over $2 trillion over the next 10 years! He was an FDR-like spender in the first two years of his presidency, but now he’s turned into a Calvin Coolidge skinflint! What’s up?

What’s up is that Biden is neither a big spender nor a skinflint. He’s a cunning political operator.

Biden knows that he — along with his three immediate predecessors — have spent gobs of money. In addition, Bush and Trump cut taxes on the rich and on corporations.

Not surprisingly, the national debt has soared.

An economic problem? Not really. But that’s a different story.

The real problem is political. The huge debt is giving Republicans a big, fat target.

House Republicans are planning to stage theater-of-the-absurd pyrotechnics —refusing to raise the debt ceiling. Which means that at some point this summer, Biden’s Treasury Department will say America is within days (or hours) of defaulting on its bills. A default would be catastrophic.

To counter this, Biden is planning his own pyrotechnics.

In the budget released today, he’s proposing a “Billionaire Minimum Tax” that would require wealthy American households worth more than $100 million to pay at least 20 percent of their incomes in taxes (most middle-class Americans pay around 30 percent). Plus, they’d have to pay 20 percent a year on unrealized gains in the value of their liquid assets, such as stocks, which can accumulate value for years but are taxed only when they are sold (and not even then if left to their heirs).

Here’s the important thing: These taxes would apply only to the top one-hundredth of 1 percent of American households. Over half of the revenue would come from those worth more than $1 billion.

Biden is proposing additional tax hikes on the wealthy: reversing the Trump tax cut by raising the top tax rate to 39.6 percent from 37 percent, increasing the corporate tax to 28 percent from 21 percent (a partial rollback of Trump’s corporate tax cut), raising the tax on stock buybacks from 1 percent to 4 percent, and increasing the Medicare tax rate on income above $400,000 from its current rate of 3.8 percent to 5 percent.

All told, Biden’s new tax proposals would amount to a $2.5 trillion tax increase over a decade, on the richest of the rich.

Oh, and did I say? Taxing the rich is enormously popular.

Biden also wants to let Medicare officials negotiate with pharmaceutical companies for lower drug prices and cap the costs of drugs for seniors.

Also hugely popular.

But here’s the dirty little secret. Neither of these two theatrical productions — neither the Republicans’ refusal to raise the debt ceiling nor Biden’s big tax hike on the super-rich — will ever happen. They’re both fantasies.

A default on the nation’s obligations would bring on an economic calamity for which Republicans don’t want to be responsible.

A giant tax increase on the super-rich would be a miracle, given their political clout.

These two theatrical productions are being staged for the public — two competing performances, each intended to score political points against the other. Biden’s is rational and the Republicans’ is nuts, but that doesn’t really matter. They will both end in a dramatic flurry of last-minute negotiations, seemingly death-defying moves and counter-moves, and breathtaking cliffhangers.

Exciting? Of course. Important? Meh.

The denouement: The debt ceiling will be raised. The national debt will be lowered a bit. Social Security and Medicare will be left alone. And Biden and the Democrats will have leeway to do one or two more things before the gravitational pull of the 2024 election sets in — perhaps expand childcare or pre-K or enable more students to attend community college.

Yesterday I was in Columbus, Ohio, debating Arthur Laffer about the economy. We appeared before hundreds of students who had never heard of Arthur Laffer (or me, for that matter). If you’ve heard of him but don’t quite recall what he did, let me refresh your recollection: Art was the founder in the 1980s of so-called “supply-side economics,” the bonkers idea that the benefits of lower taxes on the wealthy trickle down to everyone else.

Trickle-down economics provided the theatrical scripts for Ronald Reagan’s, George W. Bush’s, and Donald Trump’s tax productions. The tax cuts were real, but the idea they were based on was always a fantasy. Nothing ever trickled down.

 

[billy backstay]

Most important bits........

a “Billionaire Minimum Tax” that would require wealthy American households worth more than $100 million to pay at least 20 percent of their incomes in taxes (most middle-class Americans pay around 30 percent). Plus, they’d have to pay 20 percent a year on unrealized gains in the value of their liquid assets, such as stocks, which can accumulate value for years but are taxed only when they are sold (and not even then if left to their heirs).

Here’s the important thing: These taxes would apply only to the top one-hundredth of 1 percent of American households. Over half of the revenue would come from those worth more than $1 billion.

 

[billsreef]

I keep wondering why I should feel bad for billionaires paying a lower percentage income tax than I do, when the proposals to raise it are still a lower percentage.

 

[Ishmael]

I keep wondering why I should feel bad for billionaires paying a lower percentage income tax than I do, when the proposals to raise it are still a lower percentage.

You're reducing the trickle-down economy by asking people to pay their own way. Isn't that kinda what Republicans keep asking for, people to pay their own way?