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Watch out Tea Party, Progressive Anger Is Alive and Kicking

There's rising populist anger against the bailed-out billionaires -- they're only going to get more angry as the same folks who crashed the system are now making record bonuses.
 
 
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There's been a good deal of heated debate about the failure of progressives to respond to the economic crisis. Some argue that we're suffering from "abuse syndrome" which has sapped our emotional capacity to take on our oppressors. Others claim that progressives are a bit long in the tooth, and now are too comfortable and privilegedto mount a fight. We've also been warned the old progressive infrastructures -- unions, churches and community groups -- are not up to the challenge. (See: Are Progressives Depressed or Too Privileged to Produce Social Change? Or Are We Just Failing to Organize Effectively?)

To add to our general angst we've watched the Tea Party fill the breach to become, almost overnight, the most popular political formation in the country. While we were having our woe-is-me debates, the Tea Party destroyed health care reform by winning the Senate seat in Massachusetts.

But now Oregon has given us an important new data point. They just did what everyone said was impossible. They handily won a statewide referendum that raised state taxes on corporations, and on families earning more than $250,000 a year.

Even as I type these words I have trouble believing it actually happened. At least subliminally, I had bought the notion that most Americans hate government, hate taxes and hate the idea of redistribution of income. Hell, they don't even want an estate tax -- the Death Tax -- on the super rich! For the most part that has been true over the past decade, even in Oregon where school budgets have been voted down repeatedly.

But the financial crisis clearly is a game changer. There's a powerful rising populist anger against our new billionaire bailout society. People see that the entire set up is grossly unfair: Wall Street gets rich by gambling. Then when its bets go sour, the economy crashes, and the gamblers get bailed out. What's even more galling is the fact that the same folks who crashed the system are now making record bonuses, while 30 million people are out of work or forced into part time jobs.

The crash also is destroying state budgets all over the country as revenues decline along with the loss of jobs and business dislocations. Since states by law cannot run deficits, they feel pressured to slash budgets (and not raise taxes) which in turns leads to the loss of public sector jobs and cuts in services. Even with the stimulus funds, the gaps remain. In Oregon the state revenue shortfall is nearly $750,000 million -- caused not by overspending, but by the Wall Street crash.

The "old" progressive infrastructure came together in Oregon. Public sector unions along with other state and local progressive organizations mobilized to win tax increase on corporations that will raise the corporate minimum tax from $10 per year to $150. Also those families earning over $250, 000 would see a rise in their state income taxes.

The opposition called the "Oregonians Against Job-killing Taxes" trotted out the usual blather about how jobs would be lost if taxes rose. (What? If businesses had to pay another $140 per year, they'd be forced to shutdown and move to China?) But the public didn't buy it, voting 54 to 46 to raise taxes.

Oregon's progressive populists fought like hell and won big. They weren't crippled by depression or from being too privileged. They did what we always have to do -- organize our asses off. We owe them a great deal for reminding us how it's done.

Before we get too giddy, we need to square up the substance of the victory -- it was to raise money to fill the gigantic hole in the state budget caused by the Wall Street crash. In essence it was a defensive struggle. It was not a frontal attack on the billionaire bailout society.

But it opens up the possibility of progressive taxation, which is critically important. Our crisis was caused by a combination of financial deregulation, and by tax cuts for the rich that led to enormous wealth in the hands of the few. There was so much wealth at the top that the investor class literally ran out of tangible investments in the real economy. So the wealthy used their surplus capital to buy up Wall Street's fantasy finance instruments -- securities that provided a profitable return without owning anything real at all. That's what created the bubble that burst.

We need to relearn the lesson we had learned after 1929: too much wealth in the hands of the few is a recipe for speculative excess. It's not a coincidence that the income gap now is the greatest since 1929. We'll never get out of our bubble economy until we return to the kind of progressive taxation we had during our prosperous post-WWII decades

If only Obama and the Democrats had the nerve to slap a 75 percent bonus tax on the $150 billion of unwarranted Wall Street bonuses. After all those bonusesmiraculously appeared only after we shoved from $6 to $12 trillion into broken financial sector. But the Democratswill never do it until a national populist progressive movement forces them to.

Oregon proved that Americans at least are open to having the rich pay their fair share. I suspect they would welcome the chance to tax the bonuses that are going to the very bankers who caused the crisis in the first place.

Imagine the conundrum for the Tea Party. They rant and rave about big government and Wall Street, but how are they going to defend the record Wall Street bonuses?

Right now they don't have to because we don't have anything like a national progressive movement. But a candle was lit at the end of the Oregon trail, and or that I am grateful.

 
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