This Week:

Quote of the Week

What Goes Into Producing an Issue of Nygaard Notes?

Lunging for the Jugular Vein: The Coming Attack on the Income Tax

The "I Told You So" Section.  And Reasons for Hope
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Greetings,

Regular readers know that I don't usually use CAPITALIZED WORDS for emphasis. I prefer things like italics and "quotation marks." But there is apparently something about a PLEDGE DRIVE that changes everything, so you'll see a lot of CAPITAL LETTERS this week. These are not to be confused with your correspondence with elected officials, which might be called "Capitol Letters." Ha Ha Ha.

But, seriously, we have almost reached our goal of 13 NEW pledgers, so the urgency is real. I hope that you will put off addressing your pledge envelope no longer - NOW is the time. Of course, don't forget the handy ONLINE pledging option, found at www.nygaardnotes.org

Hello to the new readers this week! Just so you know, the Notes isn't usually this long. This is a special "double issue" of 3,500 words. A "normal" issue is about 2,000 words. I do this occasionally, and it's never clear to me exactly why. Part of the reason this week is that I had to get in some Pledge Drive-related stuff, and I also wanted to make room for an important piece on the next major domestic policy debate: the future of the income tax. So, there you have it: another double issue.

Another thing I don't usually do - in fact, I don't think I've ever done this before - is to say "I told you so" in the pages of the Notes. But this week I thought it was worth underlining that this ability to think ahead, and not simply react to "today's news," is a part of the reason why your support for independent media like the Notes is so important. In other words, it's another way to try to get you to send in your pledge of financial support for Nygaard Notes. Omigosh. Is that all I do these days? Well, it is all I do until I receive THREE MORE pledges. Will you help? Once I get my three more pledges, this version of the Nygaard Notes Pledge Drive will be OVER!

That's all for this week,

Nygaard

"Quote" of the Week:

The next time you hear a report on how well "the economy" is doing, consider this:

The front page of the Business Section of the New York Times (All The News That's Fit To Print!) of July 14th was headlined "Income Gains Go Mostly to the Affluent," and it pointed out that "The wages of typical workers are treading water, growing roughly at the same rate that inflation eats into their buying power."  A few paragraphs after that, the Times printed this week's "Quote" of the Week:

"Even as the average worker's wages are stuck in neutral, corporate profits, professionals' incomes, gains from investments and executive compensation - the kind that frequently comes in the form of stock options - are all surging, supporting healthy gains in the economy."

What Goes Into Producing an Issue of Nygaard Notes?

Here's a special "inside look" at the mysterious process that results in the production of each issue of Nygaard Notes.  I don't like writing about myself, but when it's Pledge Drive time I feel compelled to do all sorts of odd things.  I figure that some of you Nygaardians may be interested in how this process unfolds.  Plus, once you see how much time and effort goes into doing this newsletter, maybe you, too, will think it's a good idea to send in a pledge of financial support!

READING AND TALKING:  I spend between one and three hours per day doing work-related reading.  Mostly the daily press, but also the weekly and monthly press, reports from various think-tanks and non-profits, government press releases, books on politics and economics and culture and sociology and history, and all the other impossible-to-list sources that might be relevant to the issues I am writing about at any given moment.  This sort of reading - along with the talking and discussing with friends and political allies that I do - is part of my work every day.

CHOOSING:  Having digested all that stuff, I then try to think of the best subject matter (from about 10,000 possibilities!) for the upcoming issue of the Notes.  This week I chose the Bush assault on the income tax.  It could have been Iraq, or the Supreme Court, or Karl Rove, or a piece of media theory, or comments on race or poverty or organizing or... well, you get the idea.  Next week I'm planning to write about the London bombings, with a word about the nature of propaganda in a time of crisis.

FOCUSING:  Next I come up with a specific point I want to make.  Long-time readers know that I like to bring context, history, and theory into any given piece, so the decision as to how to "focus" an edition of the Notes is not an easy one.  I only have 2,000 words, after all!  This week the "issue" is the income tax.  But, as with every issue I write about, the real point is to help to reveal a process of thinking about the issue, so that people go on and do it for themselves.  Not everyone has all these hours to read, talk, and think that I do.  But everyone has the desire to try to make sense of our world.  Exposing and explaining some of the skills and tricks that readers can use to make sense of that world - as opposed to simply spewing out more facts and figures - is fundamental to the work of Nygaard Notes.

WRITING:  Then I start writing, based on the point I am hoping to make.  Sometimes I end up writing about something that is completely different than my original idea.  This is a good thing -  and part of the reason I choose to mostly self-publish as opposed to publishing elsewhere - but it  can be time-consuming.

SOURCING:  As I write, I am relying on memory to inform my points.  My memory of things I have heard, seen, and read, that is.  But I never trust my memory.  That's why I spend a lot of time in each issue looking up the sources for my facts and figures.  This week there are 25 or 30 formal sources in my (unpublished) footnotes.  Sometimes I have as many as 100 or more.  I am my own fact-checker, so I have to go look up, copy, save, and organize my sources.  And, like any good journalist, I double- or triple-source each fact, and I need to know about the reliability and track record of my sources, which involves more research.  Et cetera.  Suffice it to say that this, too, is a very time-consuming part of doing the Notes.

LAYOUT AND MAILING: Finally, I lay out the paper version of the Notes (does everyone know that there IS  a paper version?), take it to the printer, and address and mail them to the people who prefer to receive the Notes in physical form, and not in cyberspace.

OFFICE: I maintain a database of readers and sources, as well as a spreadsheet to track the financial parts of the small business that is Nygaard Notes.  People send me mail all the time, and I need to read, respond to, and file all of that.  Then there are taxes, and simple filing of the millions of pieces of paper that go into all this.  You should see my desk.

The Bigger Picture

So, you can see that there is a lot of time put into each issue of the Notes, both directly and indirectly.  And I haven't even talked about the time spent in working on being a better person (politically, emotionally, socially, etc), nor the time I spend in making sure that I hang out with the "right" people.  That is, people who will hold me accountable to the values that I say I support:  Solidarity, Justice, Compassion, and Democracy.

There is one other "larger issue" thing that I spend my time doing that I think is directly related to producing the Notes, although it might not at first glance appear directly related.  And that is the time that I spend taking care of myself.  There is a narcissistic, or self-centered, way that one can "take care of oneself," for sure.  But I am talking about the various ways that I take care of myself so that I can maintain my pace and not burn out, as so many of my former allies and co-workers seem to have done over the years.  I've been at this political stuff for over thirty years, for heaven's sake!

Here's a sample of things that readers have said about the Notes over the years:  "That you are able to avoid sarcasm and arrogance while making an impassioned case for change is helpful and compelling."   "A refreshing lack of cynicism..."  "...always a source of encouragement."  I get these sorts of comments all the time, and that's not an accident.  I work at it, as I think it is important for myself, and for all of us.  How do you build a mass movement, after all, if you are sarcastic, cynical, or discouraging?

When you send in your pledge of support for Nygaard Notes, you are essentially giving the gift of TIME, that is, the considerable time that is needed to do the work that I just summarized, in all of its aspects.  As I always remind readers, the more money I can take in through your pledges, the less time I have to spend working at my various other jobs, and the more time I can spend making Nygaard Notes better.  Remember, Nygaard Notes gets NO money from government, from grants, from advertisements, or, for that matter, from ANYWHERE ELSE but you, the faithful readers of Nygaard Notes.

Lunging for the Jugular Vein: The Coming Attack on the Income Tax

The Wall Street Journal, speaking about plans to privatize the Social Security system, said this on February 4th of this year:  "George W. Bush's plan to create personal retirement accounts is not simply an actuarial adjustment designed to boost old-age financial security.  It is a lunge for the jugular vein of the welfare state."

Wow.  That's pretty strong language.  The Journal is known for that.  Let's leave aside for the moment the idea that the United States is a "welfare state."  (That's a whole essay in itself.)  Let's consider, instead, that while Social Security has gotten an enormous amount of coverage in the nation's media, out of the spotlight another "lunge for the jugular vein of the welfare state" has been quietly going forward at the highest levels.  That lunge is the effort to do away with the income tax.

In January Mr. Bush appointed the "President's Panel on Federal Tax Reform."  This group was given the job of studying ways to "simplify Federal tax laws... so as to strengthen the competitiveness of the United States in the global marketplace."  This is the standard code language for attacking the idea of a progressive income tax.  In case there were any doubt at all, the January 7th Executive Order issued by the President stated that "At least one option submitted by the Advisory Panel should use the Federal income tax as the base for its recommended reforms."

The few reports on the Panel's work that have appeared in the media have given hints about the nature of what might be recommended.  According to the Washington Post, for example, the options range from "incremental changes to the existing income tax system, to more drastic changes such as a consumption tax."

The Knight Ridder news service characterized the work of the Panel as follows: "The presidential commission on tax overhaul is considering a proposal to add a national sales tax or some similar levy to the federal income-tax system."

The threat to the income tax - the most progressive tax we have - is real.  As the Wall Street Journal reported in January, "One lesson we draw from the makeup of the tax reform advisory panel that President Bush named on Friday is that he really does intend to get something done, perhaps as early as this year."  Uh oh.

A Very Radical Idea

Although one wouldn't know it from reading the media, the idea of moving the nation away from taxing income and toward taxing consumption - "one of Mr. Bush's top two economic initiatives upon winning re-election" according to the New York Times - is a very radical one.  Although it has been talked about in libertarian and other so-called "conservative" circles forever - or at least since the Constitutional amendment allowing the federal income tax was passed in 1913 - it is only recently that it could be openly spoken of by a sitting President as a high priority.

In a report this past March, Knight Ridder said, "Economists generally like consumption taxes because they are simple to collect and difficult to duck.  Many Democrats oppose them because they hit poor and middle-income Americans disproportionately hard."  That's a rather silly thing to say, journalistically speaking.  After all, what does "economists generally" mean?  And how many is "many Democrats?"  And isn't it true that it's possible to be both an economist AND a Democrat?

But, silly though it may be, the Knight Ridder article does hint at the basic issue at stake: What's being talked about at the highest levels is a re-writing of the tax code that would reduce taxes on the rich and increase taxes on the poor.  What gives this story added poignancy is that it comes on the heels of the already-passed Bush tax cuts, the benefits of which also fall to the wealthiest members of society.  What the Presidential Panel is now contemplating is a change in the basic tax code to lock in these advantages.  Yet, a look at the nation's media over the six months since the Panel was formed reveals not a single headline to this effect.

There was a little flurry of coverage on the Tax Panel in the middle of June, when the President pushed back the deadline for the Panel to release its recommendations.  The deadline had been July 31st.  Now it is September 30.  But it hardly matters.  CNN/Money reported on June 16th the comments of Clint Stretch, the director of tax policy at Deloitte Tax, a unit of the accounting giant Deloitte & Touche, who "was not surprised by the delay."  Mr. Stretch said, "I don't think it changes the long-term timing of (tax reform).  This was going to be next year's issue in any event."  The Journal went on to say that "By pushing the deadline back, Bush can work on building momentum for tax reform throughout the fall in preparation for a 2006 battle rather than have it 'sitting out there for five or six months.'"

If, indeed, there is a "battle" looming over one of the pillars of the Bush agenda, one might think it is the media's job to report on the issue now, rather than later.  Were the media to take such a proactive stance - as opposed to letting the sitting President set the timing and framing of the issue - the chances for the citizenry to make up their minds BEFORE the spin and propaganda on the issue are fully formed would be that much greater.  But, then, that would require actual journalism, as opposed to simply recording the words of the powerful.  If recent history is any guide, we shouldn't expect to hear much about this issue until the President wants us to.

So, while the media focuses on the President's rapidly-sinking plans for Social Security, it ignores the Bush administration's next "lunge for the jugular vein of the welfare state," currently scheduled for 2006: The attempt to do away with the income tax.

The "I Told You So" Section.  And Reasons for Hope

On August 10, 2001, in the Editor's Note for Issue #120 of this august publication, I said:

"For the Free Marketeers who seem to be running the country at the moment, Social Security is one of the Three Big Targets which they have slated for destruction (the other two being "welfare" and the income tax system).  All of these programs are greatly hated by the "Free Market" set because they are programmatic examples of cooperation and social responsibility, the two values that most directly challenge their preferred values of individualism and competition."

Seven months after that, on March 1, 2002, in an essay in Nygaard Notes #147 titled "Balancing Democracy and Freedom," I went on and on about Individualism, Dualism, and the Fetishization of Freedom, which I called the Three Pillars of American Ideology.  Speaking of "Freedom," I wrote:

"What can we expect in American politics in the near future?  I think we'll see increasing numbers of our elected leaders arguing for policies that reduce the role of public institutions that they perceive are limiting "Freedom."  The individualist, libertarian ideologues who are increasingly setting our national agenda have three main targets in the current era.  The first target, already mostly obliterated, was 'welfare,' targeted because any public assistance to anyone works to 'distort' the labor market and reduce 'competition' for jobs.

"The second, current, target is Social Security.  Weak though the American version is, it still is a 'social' program that keeps large amounts of money out of the financial markets, reducing the individual Freedom of Wall Streeters to profit from it.  Many wealthy people also very much resent having to share any of their wealth to provide security for poor people.  So the privatization argument, which only became 'respectable' about six years ago after spending decades as a fringe position, will be on the agenda for some time, with results uncertain.

"The third major target of attack from the Freedom Fetish crowd is the income tax.  Individualists hate taxation in any form, but the income tax is seen as pure 'confiscation' of their 'property.'  In the state of Minnesota, our libertarian Governor is very straightforward in his assault on the income tax, preferring to fund the state's budget mostly through the sales tax.  The argument goes that the sales tax is more 'fair' because people only pay it when they 'choose' to buy something.  Similar arguments can be heard, dimly, on the national level.  If the attack on Social Security is successful, look for the 'Anti-Income Tax' crowd to appear at center stage, arguing loudly for the 'freedom' of the wealthy to keep all of their money, not just most of it."

Back to Today: Reasons For Hope

That's what I said three-and-a-half years ago.  And the arguments that were only "dimly heard" on the national level then are about to be loudly heard now, as I explained above.  Or, maybe not.

Just three days after his re-election, Mr. Bush said, "I earned capital in the campaign, political capital, and now I intend to spend it.  It is my style.  I'm going to spend it for what I told the people I'd spend it on, which is - you've heard the agenda: Social Security and tax reform, moving this economy forward, education, fighting and winning the war on terror."

It's turning out to be much harder to "win" the "War on Terror" than the President hoped (I'll talk about some of the reasons for that next week).  And a brand-new Wall Street Journal/NBC News poll released this week shows that a whopping 57 percent of respondents believe that "Letting workers invest Social Security funds in the stock market" is a "bad idea."  Much of the President's "political capital" has been spent on that losing battle, as well.

So, thanks to the organizing efforts of many, many people in this country, maybe the President will have little "political capital" left to "spend" on attacking the income tax.  Maybe, that is, the Bush juggernaut is not as unstoppable as some people think.