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OpEdNews Op Eds    H4'ed 4/10/19

Socialism for the Rich, Capitalism for the Rest

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From Robert Reich Blog

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"We renew our resolve that America will never be a socialist country," Donald Trump said recently.

Someone should alert him that America is now a hotbed of socialism. But it's socialism for the rich. Everyone else is treated to harsh capitalism.

In the conservative mind, socialism means getting something for doing nothing. This pretty much describes General Motors' receipt of $600 million in federal contracts, plus $500 million in tax breaks, since Trump took office.

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Some of this corporate welfare has gone into the pockets of GM executives. Chairman and CEO Mary Barra raked in almost $22 million in total compensation in 2017 alone.

But GM employees are subject to harsh capitalism. GM is planning to lay off more than 14,000 workers and close three assembly plants and two component factories in North America by the end of 2019.

The nation's largest banks saved $21 billion last year thanks to Trump's tax cuts, some of which went into massive bonuses for bank executives. On the other hand, thousands of lower-level bank employees got a big dose of harsh capitalism. They lost their jobs.

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Banks that are too big to fail, courtesy of the 2008 bank bailout, enjoy a hidden subsidy of some $83 billion a year because they have the backing of the federal government. This hidden subsidy gives Wall Street, giant banks a huge advantage.

In 2017, Wall Street's bonus pool was $31.4 billion. So, take away the hidden subsidy, and that bonus pool disappears, along with most profits. Trump and his appointees at the Federal Reserve are easing bank requirements put in place after the bailout. But they will make sure the biggest banks remain too big to fail.

When he was in business, Trump perfected the art of using bankruptcy to shield himself from the consequences of bad decisions socialism for the rich at its worst while leaving employees twisting in the wind. Now, all over America, executives who run their companies into the ground are getting gold-plated exit packages while their workers get pink slips.

Under socialism for the rich, you can screw up big time and still reap big rewards. Equifax's Richard Smith retired in 2017 with an $18 million pension in the wake of a security breach that exposed the personal information of 145 million customers to hackers.

Wells Fargo's Carrie Tolstedt departed with a $125 million exit package after being in charge of the unit that opened more than 2 million unauthorized customer accounts.

Whatever happened to the idea of a meritocracy an economic system that allows everyone to get ahead through hard work, and economic gains go only to those who deserve them?

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Around 60 percent of America's wealth is now inherited. Many of today's super-rich have never done a day's work in their lives. Trump's response has been to expand this divide by cutting the estate tax to apply only to estates valued at over $22 million per couple. Mitch McConnell is now proposing that the estate tax be repealed altogether.

To the conservative mind, the specter of socialism conjures up a society in which no one is held accountable, and no one has to work for what they receive. Yet, that's exactly the society Trump and the Republicans are promoting for the rich.

Meanwhile, most Americans are subject to an increasingly harsh and arbitrary capitalism.

They need stronger safety nets, and they deserve a bigger piece of the economic pie.

If you want to call this socialism, fine. I call it fair.

 

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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Don Smith

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Dave Lindorff pointed out that it would be more accurate to say we have welfare for the rich.

Submitted on Thursday, Apr 11, 2019 at 4:04:14 AM

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We might say "Wealth-care". for the rich.

Submitted on Thursday, Apr 11, 2019 at 7:32:21 AM

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In the 1970s into the 1980s, a faction of the Republicans used to label this as corporate welfare, referring to the subsidization of public and private corporations... It is remarkable how that contention has fallen by the wayside of criticisms... but the term corporate socialism also emerged in that period to describe the assistance that giant corporations received from government support. At that juncture in time, it was where some of the left and the right intersected...

Submitted on Thursday, Apr 11, 2019 at 5:47:35 PM

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Dennis Kaiser

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Unregulated Capitalism is the death of democracy and the formation of fascism. Taxpayer dollars are diverted from people to corporations under the lie the people need these corporate entities in order to have jobs. Laws are put in place to enhance corporate profits. The role of the worker in the corporate structure has been diminished as laws are passed making it easier for corporations to show profits rather than making a better quality of work life for the worker. Should a corporation fall short in producing profits they typically lay off employees and the Presstitute Media Propagandists (PMP) highlight them as "lazy", "freeloaders", "welfare whores", and more as they reach out for unemployment and any other entitlement that still remains. Meanwhile, the corporation, because of the same collapse of profits receives bailout monies from the government, a good percentage of which typically goes out to bonuses for the top executives.

We have reached the point of total collapse as the largest example of socialism, the members of Congress (salaries paid by tax dollars, all entitlements paid for by tax dollars), continue to pass laws that keep or enhance the system as we now have it.

Submitted on Friday, Apr 12, 2019 at 11:21:34 AM

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Thank you so much for this piece. Its a story as old as time but we have to be vigilant and keep this narrative out front since the corporate owned media completely avoid the subject for obvious reasons. I am reading a book about the early roots of Socialism in the United States and every word I'm reading could easily be talking about today's corporate abuse and the government complicity in their profiteering. Thank you for all you do in raising awareness.

Submitted on Friday, Apr 12, 2019 at 12:26:52 PM

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This is probably Robert Reich's most salient and well-presented video to date...

Submitted on Friday, Apr 12, 2019 at 7:07:20 PM

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