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SUNDAY. DECEMBER 30,2012
The fiscal cliff • • •
of the 1932
By Sam Pizzigati
Los Angeles Times
Close your eyes in Washington these
days and you can almost hear the echoes
°t 1932. Eighty years ago, just like today,
a fiscal crisis almost totally dominated
the nation’s capital.
Then, as now, fiscal conservatives
demanded immediate action to fix a fed¬
eral budget awash in red ink. And then,
as now, average Americans wondered
why all the fuss about deficits. The
Depression was in its third year, and mil¬
lions had no jobs. Why w ere politicians
haggling about balancing the budget?
Is history simply repeating? If so, bring
that repeat on, with the same final result.
That 1932 fiscal crisis produced an unex¬
pected, and stunning, watershed in U.S.
history, the moment when America’s rich
and powerful began to lose their lock
grip on the nation’s political pulse.
Elected leaders had until that moment
essentially accepted the plutocratic per¬
spective. The Depression, the financially
favored insisted, amounted to a natural
disaster. Nature had to be allowed to run
its course.
The policy prescriptions that elected
officials advanced in this political climate
boiled dow n to appeals that the wealthy
do the right thing. The wrong thing.
President Hoover and congressional lead¬
ers of both parties agreed, would be any
step that jeopardized “business confi¬
dence" in the nation.
Veteran progressives, meanwhile,
seethed. Congress was legislating “on
fundamentals laid down in the age of the
stagecoach,” declared Rep. Fiorello
LaGuardia, R-N.Y. That lawmaking had
concentrated “great wealth under the
control of a few families” and left “large
masses of workers entirely at their
mercy.”
That legislating had also left a hole in
the federal budget. In the 1920s Congress
had slashed the top income tax rate by
two-thirds, down to 25 percent. By late
1931, the federal government, all.agreed,
desperately needed to collect more reve¬
nue to function.
But this new revenue, top Democrats
and Republicans also agreed, must not
come from the rich. Serious people under¬
stood, as Democratic Party Senate leader
Joseph Robinson of Arkansas argued, that
the government could only tax the rich so
much “without discouraging investment
and production.” House Speaker John
Nance Gamer, D-Texas, stressed the same
theme. He delivered what a Los Angeles
Times dispatch would dub a "mild spank¬
ing" to his Democratic colleagues who
had dared suggest boosting tax rates on
high incomes.
The nation could never meet its fiscal
emergency by “soaking the rich," another
Democrat, Charles Crisp of Georgia,
added. Average Americans would have to
"gird" themselves for “tremendous sacri¬
fices" a national sales tax or some
other tax that demanded “backbone”
from all Americans, he said.
FROM 6A
Letters
1 thought the constitutional assurance
of a free press indicated an effort to
establish fairness. 1 thought the concept
of not being required to incriminate
myself was a kinfolk of fairness. Our
founding fathers put their fortune and
their lives on the line because they saw
that the King of England wasn’t treating
them with fairness.
I thought when we did some renovat¬
ing of our Constitution through the
years to give women the access to the
ballot box, and to give school atten¬
dance, the ballot box and other rights to
black citizens that we were on a mission
to add more fairness to our culture. I am
a child of the people called the Greatest
Generation. Those Americans knew
Hitler was evil and because we are a
nation of fairness, we went to war
against him.
Only in the mind of a “radical subset”
of today’s conservatives is it not obvious
that the concept of fairness shines out
like a bright watermark on the pages of
the Constitution.
We have just concluded an election
cycle where conservatives campaigned
that women do not need to be treated
fairly, where labor has been stripped of
the mechanism to negotiate for fair
working conditions, and campaigned on
a promise to keep our current broken,
unfair health care funding mechanisms.
•I guess you didn’t get the news.
We had an election. That guy who
campaigned as though fairness was
woven into the fabric of our
Constitution ... he won the votes of the
people.
Thank you for confirming what I
thought I picked up during the campaign
season: Conservatives don’t have any
affection for fairness.
The White House agreed, in part.
Hoover's Treasury Department asked
Congress ,o enact new or higher federal
excise taxes on many everyday purchases
and services But Hoover, who was run¬
ning for re-election, would not go along
with a national sales tax. He asked
Congress instead to raise the nation’s top
income tax rate from 25 percent to 40
percent.
That infuriated William Randolph
Hearst, the powerful media magnate andj"
the most fervent advocate of the national*
sales tax proposal. Hearst and his fellow—
rich had no particular fondness for taxing
sales. They simply wanted Congress to
put in place an alternative to taxing
income ... their income.
The House Ways and Means
Committee obliged and repudiated
Hoover, passing instead a 2.25 percent
manufacturer’s levy on everything but
food.
What happened next stunned
Washington. Average Americans pushed
back, bombarding Congress with angry
complaints about the pending stab at a
national sales tax. Rank-and-file
Democrats in Congress quickly respond¬
ed. They joined with progressive
Republicans and killed the conservative
tax proposal.
Amid House floor shouts of “soak the
rich" the rebellious lawmakers then
raised the top income tax rate from 25
percent to 63 percent.
House Majority Leader Henry Rainey,
D-111., sought to contain the damage. He
went live on national radio and tried to
convince Americans that the rich had sac¬
rificed enough. Law makers, Rainey pro¬
nounced, had raised income taxes on the
wealthy “to the very breaking point "
They had “soaked the rich.”
In fact, the soaking was more a quick
rinse. The revenue legislation Congress
passed still depended heavily on excise
taxes, many on everyday items. Even so,
the 1932 tax fight marked a turning point.
The rich reached for the brass ring, a
national sales tax, and the people slapped
them down.
In New York, an ambitious governor
took notice. Just two weeks after the tax
battle, Franklin D. Roosevelt, a candidate
for the 1932 Democratic presidential
nomination, would begin a series of
addresses that aligned his candidacy with
the grass-roots push against plutocracy.
“Do what we may have to do to inject
life into our ailing economic order,” FDR
would explain, “we cannot make it
endure for long unless we can bring
about a wiser, more equitable distribution
of the national income.”
The New Deal had begun.
What will we begin?
Sam Pizzigati edits Too Much, the Institute for
Policy Studies' weekly on excess and
inequality. This piece is adapted from his new
book, "The Rich Don't Always Win: The
Forgotten Triumph over Plutocracy that
Created the American Middle Class, 1900-
1970."
P.S. You did a shoddy job of explain¬
ing Obamacare last week. Maybe anoth¬
er day we can describe it with ... fair¬
ness.
Vernon Kuehn
Cumming
Letter policy
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comes your opinions on issues of
public concern.
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Letters should be limited to 350
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Mail letters to the Forsyth
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<a yf * f I SURE HOPE
7 1 GO OUT MORE
if \l20l ’V GRACEFULLY THANTUIS in
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Jett Koterba The Omaha World Herald
Resolutions to
New Year's Day slips
up on me sometimes and
1 haven't even taken the
time to make resolu¬
tions. Of course, 1
skipped the whole pro¬
cedure last year, and the
year before I broke so
many resolutions the
first week of the year, 1
said to myself, “What
the heck.”
I am always reminded
of people who say that
resolutions are made to
be broken. Then 1 realize
they had no intention of
keeping them in the first
place. If you are only
waiting for the clock to
toll the passing of the
year so you can break
promises to yourself,
why bother making them
in the first place.
The No. 1 item on
many lists usually begins
with losing weight and
getting more exercise.
This year the desires of
many hearts will be a
job and a better econo¬
my. Needless to say, the
pink slips will continue
to arrive and the fiscal
cliff if it is avoided will
be only a temporary
avoidance. Many people
will again dread the life¬
changing circumstances
and no amount of wish¬
ing will make any differ¬
ence for them.
\
f
2013
e.
Hope It’s Noteworthy!
to all our many good friends and kind
neighbors, we extend our warm wishes for a
year that’s as special as
you are!
American Proteins
4705 Leland Drive q Cumming, GA
770-887-6148 www.americanproteins.com
forsythnews.com | FORSYTH COUNTY NEWS
re
! •K
■
JULIANNE BOLING
Columnist
We will hear people
say they are glad 2012 is
over while others may
look at the world
through their rose-col¬
ored glasses and see our
leaders making life more
difficult for many of us.
We w ill hear the debates
and the disputes of
Congress and the legis¬
lative body in Georgia as
they try to decide how
best to help residents
only to disappoint them
once again with their
indecisions and bad
decisions.
We will find we are
mostly in denial of the
life and health of our
nation. We will hear the
“experts” tell how gun
control will solve kill¬
ings and prevent massa¬
cres of innocent people.
We will hear them tell us
how our health system
needs to be changed
only to find out mental
illness is escalating and
soldiers are not receiv¬
ing proper treatment for
7 A
their problems.
Making resolutions
would be easy for me if
I thought someone might
take them up and follow
them. 1 would resolve to
always have truth in
political situations; to
have law makers make
laws they must follow
themselves; to make
people accountable for
their actions and not
allow years of appeals to
hamper the legal system.
1 would resolve to
have less dissidence
among state and local
leadership and stop play¬
ing favoritism. I would
resolve that all men and
women are created equal
in every country of the
world. 1 would resolve
to stop paying dictators
any American funds they
will stockpile into their
personal coffers and
neglect their people.
There are so many
things about which we
could make resolutions.
Maybe if we all made
the same challenges to
our leadership we might
not need resolutions in
the future. No, guess
that wouldn’t work
either.
Cumming resident Julianne
Boling's column appears
each Sunday.