Bill explains how last week’s fiscal cliff deal gave tens of billions in tax breaks to Wall Street and corporations — what even the Wall Street Journal calls a “crony capitalist blowout.”
BILL MOYERS: There’s a chapter called “The Second Gilded Age” in Paul Krugman’s book where he describes the extraordinary rise in wealth and power of the very rich during this era of unregulated greed. Since Ronald Reagan’s election in 1980, the top one percent of Americans have seen their incomes increase by 275 percent. But after accounting for inflation, the typical hourly wage for a worker has increased just $1.23 cents.
Big money, as Krugman writes in this book, buys big influence. And that’s why the financiers of Wall Street never truly experience regime change – because their cash brings both parties to heel. So, the policies that got us where we are today – in this big ditch of chronic depression -- have done little for most, but have been very good to a few at the top.
But those at the top are not satisfied with having only most of it -- they want it all. And if he were writing his book today, Krugman could find plenty of evidence in the deal that supposedly kept us from going over the fiscal cliff. Behind closed doors, Congress larded it with corporate tax breaks worth tens of billions of dollars -- everything from tax credits for NASCAR racing and the railroads to subsidies for Hollywood. Rebates for the rum industry and loopholes for off-shore financing that could help giant multinationals like General Electric avoid billions of dollars in corporate income taxes.
Writing in “The Washington Examiner,” columnist Tim Carney says many of these expensive giveaways were “spawned by a web of lobbyists, donors and staffers surrounding Democratic Sen. Max Baucus of Montana” – chairman of the Senate Finance Committee. As we know from the Obamacare fight, Baucus is a connoisseur of revolving door corruption. “Pick any one of the special-interest tax breaks extended by the cliff deal,” Carney wrote, “and you're likely to find a former Baucus aide who lobbied for it on behalf of a large corporation or industry organization.” Even the pro-business “Wall Street Journal” was appalled. They called it a “Crony Capitalist Blowout.”
CEO’s and lobbyists were tripping over themselves as they traipsed up and down Pennsylvania Avenue between Congress and the White House, privately protecting their interests as they publicly urge austerity on everyone else. Here’s Lloyd Blankfein, CEO and chair of the global investment giant Goldman Sachs, when asked by CBS News’ Scott Pelley about how he would reduce the federal deficit:
LLOYD BLANKFEIN: You're going to have to undoubtedly do something to lower people's expectations the entitlements and what people think that they're going to get, because it's not going to they're not going to get it.
SCOTT PELLEY: Social Security, Medicare, Medicaid?
LLOYD BLANKFEIN: Some things. And you know, you can go back and you can look at history of these things, and Social Security wasn't devised to be a system that supported you for a 30-year retirement after a 25-year career. Entitlements have to be slowed down and contained.
SCOTT PELLEY: Because we can't afford them going forward?
LLOYD BLANKFEIN: Because we can't afford them.
BILL MOYERS: Ah, yes, but Goldman makes sure their entitlements aren't touched. Here's the story. After 9/11 Congress created tax-exempt Liberty Zone bonds to help small businesses rebuild near Ground Zero. Turns out Goldman's friends in high places consider it a small business, too, although it made $5.6 billion dollars in profits last year. As the fiscal cliff fiasco was playing out over New Year’s Eve, faster than the ball dropped in Times Square, a deal was struck in Washington that will extend the subsidies for Goldman’s fancy new headquarters in lower Manhattan. In their 43 stories of glass and steel, and a footprint two city blocks long, Goldman Sachs reigns supreme, thanks to a system rigged by and for the powerful rich.
And then this. Just hours before the fiscal cliff deal’s higher individual tax rates kicked in, Goldman handed Lloyd Blankfein and his top lieutenants “a total of $65 million in restricted stock,” bonuses awarded a month earlier than usual so they could all beat the coming tax hike from which they have been spared for more than 10 lucrative years. It will not surprise you, I am sure, to learn that “corporations announced more special dividends last month than in any other December since at least 1955.” Doing everything they can to avoid helping pay off the debt their CEOs have been urging Congress to cut.
As for working people, tough luck. Because the fiscal cliff deal ends the cut in payroll taxes, the average worker this year will take home about a thousand dollars less.
LOUDON WAINWRIGHT III: Hey, when Paul gets really bummed out, that’s when I get scared. But when Paul says there’s a glint of home, I feel we’ve all been spared.