If we teach voters nothing else this very important election year, it has to be that the Republican Party’s treatment of the economy has no positives for anyone except the very rich. I know calling the only people the GOP loves “the 1%” is convenient, but the reality is, the GOP probably cares about fewer than 10,000 people, all told, and certainly not 3 million, as “the 1%” implies.
The number one problem with Republicans and the economy is, they don’t care about anything that benefits everyone. A truly healthy economy is one where everyone is on essentially equal footing, with an equal opportunity to generate the wealth needed to live freely and comfortably, as well as to create commerce on a level playing field. Unfortunately, the economy Republicans have created with their daft governmental reign is what can best be thought of as “lottery capitalism.” In this system, which Republicans call a “good economy,” everyone pays to be part of the system, but the only people who are rewarded are people who are lucky enough to win. Not only is there no reward for working as hard as possible; Republicans use every trick they can think of to penalize you for it. They like to pretend that hard work brings great riches, but the reality is, those who work the hardest in the economy they’ve created have the least chance of getting ahead.
As the name implies, the problem with lottery capitalism is exactly what’s wrong with playing the lottery. In order for someone to win the huge $100 million jackpot, at least $200 million worth of losing tickets must also be purchased. The elements that make up a successful lottery simply don’t work in a nation’s economy. Put simply, while our economic system used to generate a constant flow of wealth that benefited everyone, it’s now rigged in such a way that only a relatively small number of people control most of the wealth, and a far smaller amount of wealth actually flows through the system. For most Americans, wealth has been stagnant for decades, with small increases in wealth and income having been more than offset by an inflation rate that we have come to accept as “normal” or even “low,” despite the fact that it’s actually quite debilitating for many.
Since the dawn of the Republican era, everything about our economy has changed, and not for the better. Except for a relatively short time during the Clinton years, the only “good times” we have seen have been courtesy of bubbles, and not based on real American wealth. Thanks to modern-day Republicans, increasing numbers of Americans are one pink slip away from total disaster at any given time. Virtually all employment is now at-will, which means, absent a contract, an employer can fire you for any reason, or no reason at all. The right to form a union has virtually been taken away by Republicans, as well, at least in many places, especially in “right to work” states. Whether you realize it or not, the old “American Dream” of working hard and becoming self-sufficient, or even very rich, has largely become a thing of the past, and today’s GOP is perfectly okay with that.
As a consequence of this Republican-promoted lottery capitalist mentality, the American people have been trained to believe that responsibility is a one-way concept. We consumers have to be responsible when we borrow money or use a credit card, but the lender has no responsibility in the transaction at all. This is why our system seems to collapse on a fairly regular basis. We’ve been trained to rejoice during economic bubbles and to accept both the blame and the cost of everyone else’s screw-ups. We’re told that we are the ones who accepted the risk when things go wrong, while those “captains of industry” get off scot-free. In return for the privilege of carrying a card and using it to buy a large-screen TV, we have to accept constant, unrelenting and debilitating penalties as part of our responsibility as a consumer, even while those entrusted with our money do whatever they want with it, as if it’s their money personally. This is the Republican way. They speak a lot about “personal responsibility,” at the same time they denigrate anyone who dares even mention “corporate responsibility.”
Think about it; if you buy a $2000 TV, and your “at-will” employer lays you off, and you choose to place your health insurance bill ahead of your credit card bill, the bank gets to charge you so much in interest and penalties that your TV ends up costing you $4000. But if the same bank loses half of your 401(k) money through investments in toxic mortgage-backed securities, you assume the risk, and don’t get to charge them for anything. That’s just how Republicans like the economy; good for the very lucky and the very rich, and you can pretty much kiss their blarney stones.
Consider, it wasn’t that long ago that, if you needed an emergency loan, you’d have to go to “some guy” with a questionable business affiliation, who would hand you $1000 and order you to pay back $2000 in a month. According to the stereotype, he’d offer to break your legs if you didn’t pay. They were called “loan sharks,” and they were breaking the law. Now, in Republican-land, they’re called “payday lenders,” and they’re not only considered legit, but every attempt to regulate them has been rebuffed, even though they usually charge an interest rate of 600-700 percent. (source) Huge profits with no accountability; that’s the Republican economic vision. And if you think I’m being unfair, Google and count the number of “Christian” payday loan operations that are being offered. One features a very nice watercolor of an empty cross sitting on what was probably supposed to be Calvary. They offer loans of up to $1500, and “only” charge 15 percent PER WEEK. Apparently, usury is no longer against God’s law. Must have been in one of those rewrites of the Bible I keep hearing about.
Republicans love it when a few people get really rich while screwing many others. Place your money into a bank right now, and a passbook account will pay you a whopping 0.1 percent, if you’re lucky. Let them keep your money for two years, and that baby might soar to a whopping 1.2 percent. Meanwhile, for the privilege of allowing them to use our money rent-free, they’ll turn around and charge you 6 percent on a car loan, and upwards of 15 percent if you want a credit card. Oh, and they will charge you fees. Accidentally overdraft your account, and it will cost you between $30-40 per item, and they will do their best to debit your account from largest to smallest item, and call that a “courtesy,” even tough they collect a lot more money that way. Use an ATM, and you’ll pay the ATM owner $1-$3, and you’ll pay your bank a buck or two as well. And don’t be late with a payment on that credit card. If you’re a day late, they’ll charge $25, and if you’re late twice within the course of a year, they’ll also double the interest rate, because you’re now considered a “high risk.” Yet, when they lose your money, they pay nothing extra, and taxpayers will bail them out.
Our Republican-driven lottery capitalist economy, and our all-but-blind obedience to such concepts as “credit scores” has made us debt junkies. But look at who we owe money to, and what they’re allowed to get away with. Why are we required to adhere to some arbitrary “credit score,” while those who have most of the money have few or no requirements or restrictions placed on them at all, at least with Republicans in charge. Th GOP even tossed aside the basic restriction, “don’t steal the money,” when they passed Gramm-Leach-Bliley in 2000, which repealed Glass-Steagall. Ever since Democrats passed Dodd-Frank in 2010, they’ve been complaining and threatening to repeal that, because it re-institutes the concept of “don’t steal the money.” One reason bankers haven’t gone to jail in droves is because much of what they did was actually legal at the time they were doing it, thanks to Republicans’ love of lottery capitalism.
Because of the rules that force us to jump through hoops, everyone needs – or thinks they need – a credit card. So, there are tons of these credit cards for poor people, which might as well be called “Predator Visa.” They offer a guaranteed card with a $300 credit limit, and then proceed to take up that limit with fees. When the consumer gets their shiny new card in the mail, they find that it already has a $200 balance on it, without even making a purchase. They’re charged about 24% interest on that balance, and they’re also charged a “maintenance fee” of about $7-8 a month on top of the interest. And all of this is okay in our Republican-dominated economy, because they’re poor. And the poor and working class pay more to live in this society than the rich do. The banks will whine about risk, but really, who in our economy takes a risk, except the consumer, who’s struggling to live on an increasingly meager wage?
In lottery capitalism, those with the least money actually pay the most for everything. If someone gets backed into a corner financially, someone with money gets to “bail them out” and take them for every dollar they can get their hands on. That’s how Don Corleone made his fortune; so what’s wrong with that, right? Republicans apparently think the solution to organized crime is to just make everything they do legal. The situation is so bad, there are now companies that actually CONSOLIDATE multiple payday loans into “affordable monthly payments.”
Think about it. People with no problem paying for things pay lower interest rates than you, and they don’t pay all those fees. The rich don’t even invest their own money in the markets most of the time; they borrow the money they invest, and only pay a small interest rate. In the Republican version of capitalism, the people who work and make their employers rich get socked with all sorts of penalties because they’re not rich, while the rich are rewarded for having money.That’s the opposite of a progressive system. We’re supposed to be grateful because we don’t have debtor’s prisons anymore, but don’t we?
It’s time we cleaned up our system. Yes, there should be a penalty for missing a payment or overdrawing your account. But $25-35? The bank should be allowed to collect enough to cover its costs, and no more. The idea of punitive fees is ridiculous, and it’s too one-sided. If we’re to be penalized heavily every time we make a mistake, so should the bank or financial company. At some point, we have to make them realize this is our money they’re using. Every dollar in the economy comes from the Treasury. If we’re going to be held to a reasonable standard of responsibility in handling our money, then those whose business it is to handle our money should be held to a reasonable standard, as well.
Lottery capitalism has to become history, folks. It’s time for progressives to start taking charge, and demanding change to the entire system. Switching our money to smaller banks won’t solve the problem, because the problem is systemic. We should break up the big banks, to be sure, but if smaller banks are doing the same things, where’s the improvement? Predatory lending practices, whether by banks or anyone else, have to be regulated and oversight set up. The concept of payday loans really isn’t that different from pawn shops; there’s sometimes a necessity there. But such a system can’t be unregulated.
Of course, to reform our system, we’ll have to make sure Democrats win, not Republicans. Lottery capitalism is part of the Republicans’ DNA, while it’s not part of the Democratic philosophy at all, so it should be easy.