The Path to Prosperity: a Story of Corporate Greed, Dirty Politics, and the Nation’s Fiscal Crisis

1 November 2012

blog

By Sabrina Peterson

As a graduate student of nineteenth-century literature, the Ryan/House 2013 fiscal budget, The Path to Prosperity: a Blueprint for American Renewal, may seem like unlikely reading material for the literary scholar. Chapters on “free enterprise and economic liberty; limited government and spending restraint; traditional family and community values; and a strong national defense” (12)[i] certainly do not read like the novels of Charles Dickens or M.E. Braddon. Literary tastes aside, the connection between literature and money, narrative and finance is extremely critical to today’s debate on the fiscal cliff, sequestration cuts, and in particular to the Ryan/House 2013 fiscal budget because confidence in fiscal policies hinges on persuasive massaging. And I believe that messaging is rooted in narrative, literature, and story-telling.

In the nineteenth-century, literature played an important role in persuading public and individual confidence in the emerging modern financial system of Britain. As capitalists, traders, bankers, and economists forged the financial institutions that enabled money and credit to circulate and international trade to flourish, journalists and writers such as Charles Dickens made sense of these complex systems of exchange to a burgeoning readership of consumers. Public confidence in the financial system was possible in part because these writers crafted powerful messages about banking, currency, the stock exchange, and economic policy. Certainly, the messages were not always reassuring or accurate. What is certain though is the power of these messages, which helped to influence public approval of the new and developing money markets. Such tactics are not lost on the bankers, traders, financers, and especially the politicians of today.

After a month of researching and reading the entire document, I’ve learned that the fiscal policies and budget priorities of the 2013 Ryan/House budget relies on a similar kind of messaging strategy. In The Path to Prosperity the Obama administration’s fiscal policy and budget priorities are understood to employ a corporate model of governance that values deregulation, privatization, and cuts to social safety net programs such as Social Security and healthcare. The Ryan/House budget argues that this model is both ineffective and unsustainable because a corporate, neoliberal model of governance ultimately benefits only the wealthiest of Americans. However, the solutions the Ryan/House budget calls for are the same neoliberal policies: deregulation, the privatization of the Federal government, and deep cuts to social safety net programs. Presented as commonsense fiscal strategies and economic reforms to ultimately strengthen America’s fiscal status and lower the national debt, the Ryan/House budget instead exploits the very people he claims to empower: the American people.

In The Path to Prosperity, the Federal government is understood as an institution that must prioritize local community networks if it is to ensure that all Americans have an opportunity to thrive in the U.S. The Obama administration’s “top-down” approach, on the other hand, prevents the development of strong communities and weakens the nation’s social safety net because “[The President’s] policies place trust in an empowered federal government in place of families, local communities, and faith-based groups, sapping the latter of vitality and weakening communities in the process,” according to the Ryan/House budget (41). To “build community bonds, extend the ladder of opportunity to all, and strengthen the nation’s safety net” (41) the Ryan/House budget nevertheless calls for deep cuts to social safety net programs. The reason: Americans are best served by their communities and not the Federal Government. But by cutting Federal funding to social safety net programs the Ryan/House budget actually forces local communities and organizations to offer those services to fewer and fewer people or to no one at all.

The Ryan/House budget also argues that stagnant economic growth in the U.S. results from the current tax code, which is considered to be too complicated and unfair. Benefiting only those who can afford to lobby for lower rates and loopholes—typically wealthy individuals and powerful corporations—moderate- and low-income earners are either excluded from lower rates or unaware of cost-saving deductions. As a result, “the top 1% of taxpayers reap about 3 times as much benefit from special tax credits and deductions (excluding refundable credits) than middle income earners and 13 times as much benefit than the lowest income quintile” (60). However, the Ryan/House budget solution merely exacerbates the current situation. By proposing to turn the current six individual tax brackets into just two brackets of 10% and 25%, the Ryan/House budget benefits the wealthiest American taxpayers at the cost of moderate- and low-income taxpayers. For example, the U.S. tax rates for the highest and lowest income earners are 35% and 10% respectively, which means that under the Ryan/House budget the poorest taxpayers would still pay the same tax rate while the highest income earners would get a 10% tax cut. The Ryan/House budget actually makes the tax code more unfair and even less beneficial for moderate- and low-income earners by creating a two-class system for the rich and the poor of this country.

Finally, the Ryan/House budget argues that the government should prevent too-big-to-fail companies from receiving taxpayer money and corporate bailouts. Citing the 2008 financial crisis and the resulting Dodd-Frank Act, the Ryan/House budget argues that the bill does not go far enough to prevent large companies from reaping huge profits at the expense of hardworking taxpayers. According to the Ryan/House budget, the Dodd-Frank Act has instead “solidified government’s guarantee of Wall Street at the expense of the taxpayer and imposed burdensome compliance costs on a wide array of private-sector companies” (27). The Ryan/House budget interprets the Dodd-Frank Act as “another example of the trend of government overreach in the private sector” (27), which is believed to encourage rather than prevent corporate cronyism and the use of public funds for corporate bailouts. But the Ryan/House budget would actually give too-big-to-fail companies even more power with even less government oversight than before the 2008 financial crisis hit.

The Ryan/House budget presents deregulation, privatization, and cuts to the social safety net as disastrous actions endorsed and implemented by the Obama administration. However, the Ryan/House budget argues for even more extreme versions of the same policies. Presented as commonsense solutions that will benefit Americans and their families the Ryan/House budget capitalizes on messages of individual responsibility, freedom, national security and the fear of debt to effectively turn social welfare, corporate accountability, and social equity into unfair and bankrupt political policies.

And the Ryan/House budget uses this messaging because it works. The 2011 debt-ceiling debate is a perfect example of how effective messaging can shape the public’s support and endorsement of certain fiscal policies and budgetary reforms even if such policies do not ultimately benefit the public. And we see this happening again today with the discussion of the 2012 elections, the sequestration cuts, the 2013 fiscal budget, the fiscal cliff, and the expiration of the Farm Bill, Prop37 campaign, among other policies.

To date the debate and discussion of the sequestration cuts, the fiscal cliff, and the Ryan/House budget continues to endorse a neoliberal model of governance in which free and unregulated markets and private corporations determine the health and well-being of Americans; decide on the economic future and prosperity of American workers and retirees; and steer the conversation on how and what we talk about when it comes to the fiscal policies and budget priorities of our nation, state, and local community.

Regardless of our political affiliations, we as citizens need to WAKE UP and realize that we are losing our most basic rights, not privileges but rights.

We need to TELL the story. We need to CHANGE the messaging. We need to TAKE BACK our country from a political system that privileges corporate money above public rights; corporate profits over the public’s health and well-being, economic future and social welfare. 

“Americans truly face a monumental choice,” writes Paul Ryan in the introduction to The Path to Prosperity, “a choice that can no longer be avoided” (15).

Yes, we do face a choice, a truly monumental choice and a choice that can no longer be avoided. We can either carry on with business as usual or we can affect change by raising our voices, telling our stories, crafting our messages and taking action.

Elections are less than a week away, and the real work is only just beginning.


 

 


[i] All quotes are taken from the Ryan/House 2013 fiscal budget, The Path to Prosperity: a Blueprint for American Renewal.

 

 

 

, ,

Subscribe

CFJC promotes the basic human right to healthy food while advancing social, agricultural, environmental and economic justice. Through advocacy, organizing and education, we collaborate with community-based efforts to create a sustainable food supply. We envision a food system in which all activities, from farm to table, are equitable, healthful, regenerative and community-driven.

If you believe in these principles JOIN CFJC NOW.

No comments yet.

Leave a Reply