WASHINGTON, Oct. 29 (UPI) -- The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the first of several wrap-ups for Oct. 29.
The National Center for Policy Analysis
(NCPA is a nonprofit, nonpartisan public policy research organization whose goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.)
DALLAS -- Why Class Warfare Isn't Selling This Year
By Bruce Bartlett
Going into this election cycle, Democrats thought that corporate financial scandals would reinvigorate the debate over the differing effects of government policies on income classes, called class warfare by those critical of what they perceive as attempts to divide American voters by class rhetoric.
But it hasn't worked out that way. New data from the Internal Revenue Service and the Securities Industry Association help explain why.
Despite Democratic claims to the contrary, in the 1980s every income group was better off -- so rising income for the wealthy didn't come at anyone's expense. To the extent the middle class was shrinking, it was because they were joining the ranks of the rich. The trend reversed a little under Bill Clinton but not much -- since Clinton ran on a middle-class tax cut in 1992, and when he raised taxes in 1993 only raised the top rate to 40 percent.
Even rhetorically, Clinton wasn't much of a class warrior, and in fact tied himself to a balanced budget -- as a consequence, the Democrats got out of practice with the class warfare issue.
Other factors still continue to make it difficult. Despite the $7 trillion decline in the stock market, stock ownership continues to rise. The number of households owning stock rose from 49.2 million in 1999 to 52.7 million this year. The number of individual investors rose 5.6 million to 84.3 million.
And new Internal Revenue Service data also make it difficult for Democrats to claim the rich aren't paying their share. As of 2000, the top 1 percent of taxpayers, ranked by income, paid 37.4 percent of all federal income taxes. The bottom 50 percent pay just 3.9 percent of all federal income taxes.
Thus Democrats are finding that their class warfare message has little impact since it resonates mainly with non-voters, while the Republican tax cut message hits home with taxpayers.
(Bruce Bartlett is a senior fellow at the National Center for Policy Analysis.)
The Institute for Public Accuracy
WASHINGTON -- Brazil: Beyond the Election
-- Steve Cobble, senior fellow at the Center for International Policy, Cobble was recently in Brazil.
"On his fourth run for president, Lula da Silva, the former leader of the San Bernardo Metal Workers Union, has won a huge victory. Brazil is the eighth-largest economy in the world and it's clear that the overwhelming majority of Brazilians have voted against the expansion of corporate domination over their lives. Lula's victory also means that the Free Trade Agreement for the Americas now faces major new obstacles. The opponents of unfettered corporate trade, both in Latin America and inside the United States -- including environmental groups and the AFL-CIO -- may now have an important new political force in the hemisphere to rally around ... The Brazilians have a much better voting system than the United States does, not to mention a superior counting system."
-- Antonia Juhasz, project director with the International Forum on Globalization, which has just released an in-depth report on alternatives to the current rules and institutions of economic globalization.
"Lula has called the FTAA the 'annexation of Latin America by the United States.' The tens of thousands of people gathering in Quito, Ecuador, to protest the FTAA (at the ministerial meeting this week) share his opinion, as do millions more like them around the world.... Lula's win shines a spotlight on alternative models to corporate globalization in use throughout the world and the proposals for change put forward by peoples' movements and civil society groups."
-- Mark Weisbrot, economist, co-director of the Center for Economic and Policy
Research and co-author of "Paying the Bills in Brazil: Does the IMF's Math Add Up?"
"The election of Lula da Silva by the largest margin in Brazilian history is a mandate for change, and will impact all of Latin America. The region is approaching the end of a 20-year, failed economic experiment: over the last two decades, income per person has hardly grown at all, and it is projected to shrink this year. Brazil used to have one of the fastest-growing economies in the world (from 1960-1980, income per person grew by 141 percent). Lula has pledged to lower interest rates (short term rates are now at 21 percent, among the highest in the world), restore economic growth, and help Brazil's tens of millions of poor people. Major obstacle: an IMF agreement that tries to commit the new government to maintaining many of the failed policies of the past."
The Independent Institute
(II is an independent public policy research organization whose goal is to transcend the political and partisan interests that influence debate about public policy. II aims to redefine the debate over public issues, and foster new and effective directions for government reform, by adhering to the highest standards of independent scholarly inquiry, without regard to political or social biases.)
OAKLAND, Calif. -- If we're really in danger, why doesn't the government act as if we're in danger?
By Robert Higgs
President George W. Bush, Vice President Dick Cheney, Defense Secretary Donald Rumsfeld, Homeland Security adviser Tom Ridge, and other government leaders rarely miss an opportunity nowadays to remind us of the grave danger we face.
In a speech on July 16, the president declared, "We are today a nation at risk to a new and changing threat." Noting that "the terrorist threat to America takes many forms, has many places to hide, and is often invisible," the president emphasized "our enduring vulnerability."
Evidently, the danger has not diminished much lately. I have just checked the threat indicator at the Web site of the Office of Homeland Security and found it, as of Oct. 27, to be yellow, signifying an "elevated" level.
Obviously, we're in a world of trouble. Equally obviously, the government accepts full responsibility for allaying the threat its leaders say we face. As the president himself put it in the July 16 speech, "The United States government has no more important mission than protecting the homeland from future terrorist attack."
But you've got to wonder. If we are really in such danger, why doesn't the government act as if we are? Danger is supposed to focus the mind and sharpen one's responses. The actions of the federal government, however, continue to be anything but focused. "Scattered to hell and back" describes them more accurately.
Consider, for example, that not long ago Congress passed and the president signed a farm bill that will increase spending by some $83 billion over the next decade. All disinterested parties recognize that the greater part of this vast sum constitutes nothing but welfare for rich landowners and related agribusiness interests. Regardless of how we might characterize it, however, one thing's for sure: every dollar spent on agricultural subsidies is a dollar not spent on fighting terrorism.
If terrorists menace us so seriously, why is the government squandering precious fiscal resources on welfare for agribusiness?
Even a small portion of the money being shoveled to farmers would go a long way toward modernizing the FBI's outdated computer system -- you know, the one that couldn't collate and communicate all the information the government possessed about the men who later hijacked the airliners on Sept. 11, 2001. The FBI now claims that it will invest in new computers, and that it will add some 900 agents to its payroll, some of them actually knowledgeable in foreign languages (some Arabic speakers might be nice for a change), but the bureau continues to complain that it is hard pressed for budgetary resources.
Rather than financing still another wing on farmer Smith's rural palace, why not use some of the farm loot to buy information about what the terrorists are plotting in their various haunts around the world? Just $10 billion of the agri-subsidy money -- mere chump change for the Farm Bureau guys -- would go a long, long way in loosening the tongues of informants in the back alleys of Karachi, Lahore, and Kuala Lumpur. That information might help to save American lives, which is a bit more than you can say for doling out mega-billions to the rice, corn, and cotton kings of this country.
The farm program, however, is scarcely the sole example of the government's misshapen conduct. Evidently it hasn't occurred to anybody in the government that the agencies responsible for dealing with the terrorist threat might need the public's money more than, say, the federal education and training programs, which have been soaking up more than $40 billion annually -- and I need not remind the reader just how effective those dollars have been in raising the reading, writing, and arithmetic skills of the student population.
Or maybe we could reallocate some of the $11 billion dished out each year for "community and regional development." Isn't it more pressing to obstruct the next gang of mad bombers than to fund more bike paths?
The entire Justice Department, which includes the FBI and other agencies assigned to preventing terrorism, employs some 126,000 persons (reported at the end of fiscal year 2000). Why can't the government bulk up its corps of critical protective workers by cutting away some of the 104,000 employees of the Department of Agriculture (or, barring that possibility, by diverting some of the G-men from the cruel and futile drug war)?
Pretty soon the USDA's staff will exceed the number of full-time farmers in the country. Shouldn't a nation truly threatened with mortal danger try to deal with that danger, rather than spending its resources on still another study of fluctuations in the yield of kumquats?
On Oct. 23, the president signed into law the defense department's appropriation act for fiscal year 2003. It provides the Pentagon with $355 billion, a whopping 12 percent more than last year's budget. The military construction bill provides an additional $10.5 billion, the energy department bill will add some $15 billion for the military's nuclear-weapons programs, and eventually Congress will cough up another $10 billion for a "contingency" account the president wants to use as a military slush fund.
Lest you think that this huge pot of money bears some relation to the fight against terrorism, you ought to consider the specific accounts it funds, such as $7.4 billion for the budgetary black hole known as ballistic-missile defense; $1.5 billion for another Virginia-class attack submarine, to use against the nearly nonexistent Russian navy; $4.7 billion for R&D on the F-22 plus 23 of the actual high-performance fighters, to use against the nearly nonexistent Russian air force; $1.6 billion for 11 V-22 Osprey tilt-rotor aircraft, a contraption so ill-designed that it poses a greater threat to its occupants than to any enemy; and $3.2 billion for 46 more F/A-18E/F fighters, to maintain air superiority over -- well, they'll think of somebody.
"Our enemy," George W. Bush has said, "is smart and resolute." All right, maybe so. But the president insisted, "We are smarter and more resolute."
Unfortunately, this claim does not sit comfortably with the facts. A smarter and more resolute government would not throw away the resources needed to ward off terrorists, using the available funds instead to finance winter vacations in Martinique for wealthy farmers, or to bankroll still another eminently dispensable "community development" project, or to keep a hundred thousand otiose employees on the payroll at the USDA.
A smarter and more resolute government would not fritter away scores of billions of dollars annually on producing, deploying, and maintaining an array of weapon systems fit only for fighting a Soviet Union that no longer exists.
It is all too clear that either we are not really in grave danger, and hence the government's actions, though sufficiently objectionable in many ways, are not lethally reprehensible, or we really are in grave danger and, given that condition, the government is acting in a completely irresponsible and utterly immoral manner. If semi-organized gangs of suicidal maniacs numbering in the thousands are out to kill us all, the government ought not to be fiddling with kindergarten subsidies and the preservation of the slightly spotted southeastern screech owl. It ought to get serious.
Early in the 20th century, a colorful character by the name of Smedley D. Butler rose to the rank of major general in the U.S. Marine Corps, serving in many places around the world and twice being awarded the Congressional Medal of Honor. In 1935, in retirement, he wrote a tract titled "War Is a Racket," in which he drew on his personal experiences to explain how some people -- politicians, bankers, and munitions makers -- profit from war, while other people -- ordinary soldiers and taxpayers -- bear the costs of war in blood and treasure. War is not what it's cracked up to be by those who lead the nation into it, he argued. It's just a racket.
Butler had in mind U.S. participation in World War I as well as U.S. interventions in Asia, Latin America, and the Caribbean. He died in 1940, so he never witnessed the even wider ranging global interventionism in which the United States has engaged during the past sixty years. If he were alive today, however, I have no doubt about how he would perceive the government's so-called war on terrorism. I even have a hunch about the word he would use to describe it.
(Robert Higgs is senior fellow in Political Economy at The Independent Institute and editor of its scholarly quarterly journal, The Independent Review.)
