FacebookTwitterGoogle+RedditEmail

Lying On Top, Ken Lay Only One of Many

by Dean Baker

“The third quarter is going to be great.”

That’s what Enron Chairman Kenneth Lay said last September to a room full of workers who had come to hear about the company’s prospects after a recent wave of bad news had sent the stock price plummeting. These were workers who had devoted their careers to building up Enron into one of the nation’s biggest companies. Most of them were counting on Enron stock to provide the bulk of their income in retirement. Not only did Mr. Lay lie to these workers about the state of the company, he went on to encourage them to persuade their family and friends to invest in Enron as well.

As despicable as Mr. Lay’s behavior was, he actually performed a valuable service for the nation. He showed the incredible contempt with which the nation’s elite–the ones with million dollar houses, yachts, and servants–view the people who have to work for a living. Unfortunately, Mr. Lay’s conduct is not unusual among the rich and powerful. He just happened to get caught.

While the corporate world is filled with Kenneth Lays, as millions of workers and shareholders are coming to realize, the ones that are most visible to the public are the nation’s political leaders. If you want lies from on high, a good place to start is the Republican attacks against people who want to rollback part of their tax cut. The Republicans are trying to convince the public that there is a conspiracy afoot to raise their taxes.

Of course none of us want to pay higher taxes–but the Republicans recognize that the taxes for the vast majority of the public will not be affected by the tax proposals on the table. Some members of Congress are pushing to limit the portion of the tax break that would go to the richest 2 percent of the population. For most of the nation the tax rate paid by this group has as much relevance as the tax rate in Portugal–we might end up paying those taxes one day, but it’s not very likely.

Given the choice between cutting Bill Gates’ taxes or extending health care coverage to the growing number of uninsured people and making prescription drugs affordable to seniors, most people would probably opt to have Bill Gates pay more taxes. But, if a little bit if lying can convince the people that it is their tax dollars at stake–well you’ve got the Republican party platform.

Lying to the public is one of the few areas of bipartisan agreement. The press recently reported that the Democrats will attack the Republican tax cuts–not by saying that they unfairly benefited the wealthy, or by pointing out that this money could have been used for important public needs–but rather by claiming that these tax cuts jeopardize Social Security and Medicare. According to the insiders, this argument scores better in the focus groups.

News Flash: the tax cuts have no effect whatsoever on Social Security and Medicare. Social Security and Medicare have accounts that are separate from the overall budget. When the programs are running surpluses–as they are now–this money is used to buy government bonds. The programs will hold exactly the same amount of government bonds regardless of whether this money is saved or spent. Therefore Social Security and Medicare cannot be affected at all by the tax cut, unless Congress were to default on the nation’s debt, a policy that no politician in Washington would advocate.

Everyone in Washington knows this to be true–the Social Security and Medicare trust fund are described in numerous public documents. However, instead of addressing real issues, the Democrats believe that their best political strategy is to scare people about the future of these vital programs.

In short, the country is filled with Kenneth Lays, people who have made it to the top by lying and stealing, and who have nothing but contempt for ordinary people. The effort to retake the nation is a long and difficult battle. But the first step has to be restoring honesty to political debates. The next time you hear a politician complain about tax increases, or threats to Social Security and Medicare, just remember: “the third quarter is going to be great.”

Dean Baker is currently Co-Director of the Center for Economic and Policy Research in Washington, D.C. He is co-author (with Mark Weisbrot) of Social Security: The Phony Crisis (University of Chicago Press) and writes the Economic Reporting Review, a weekly analysis of media economic coverage.

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

More articles by:
May 25, 2016
Eric Draitser
Obama in Hiroshima: A Case Study in Hypocrisy
Ryan Mallett-Outtrim
Does Venezuela’s Crisis Prove Socialism Doesn’t Work?
Dan Arel
The Socialist Revolution Beyond Sanders and the Democratic Party
Marc Estrin
Cocky-Doody Politics and World Affairs
Sam Husseini
Layers of Islamophobia: Do Liberals Care That Hillary Returned “Muslim Money”?
Susan Babbitt
Invisible in Life, Invisible in Death: How Information Becomes Useless
Mel Gurtov
Hillary’s Cowgirl Diplomacy?
Kathy Kelly
Hammering for Peace
Dick Reavis
The Impeachment of Donald Trump
Wahid Azal
Behind the Politics of a Current Brouhaha in Iran: an Ex-President Ayatollah’s Daughter and the Baha’is
Jesse Jackson
Obama Must Recommit to Eliminating Nuclear Arms
Colin Todhunter
From the Green Revolution to GMOs: Living in the Shadow of Global Agribusiness
Binoy Kampmark
Turkey as Terror: the Role of Ankara in the Brexit Referendum
Dave Lindorff
72-Year-Old Fringe Left Candidate Wins Presidency in Austrian Run-Off Election
May 24, 2016
Sharmini Peries - Michael Hudson
The Financial Invasion of Greece
Jonathan Cook
Religious Zealots Ready for Takeover of Israeli Army
Ted Rall
Why I Am #NeverHillary
Mari Jo Buhle – Paul Buhle
Television Meets History
Robert Hunziker
Troika Heat-Seeking Missile Destroys Greece
Judy Gumbo
May Day Road Trip: 1968 – 2016
Colin Todhunter
Cheerleader for US Aggression, Pushing the World to the Nuclear Brink
Jeremy Brecher
This is What Insurgency Looks Like
Jonathan Latham
Unsafe at Any Dose: Chemical Safety Failures from DDT to Glyphosate to BPA
Binoy Kampmark
Suing Russia: Litigating over MH17
Dave Lindorff
Europe, the US and the Politics of Pissing and Being Pissed
Matt Peppe
Cashing In at the Race Track While Facing Charges of “Abusive” Lending Practices
Gilbert Mercier
If Bernie Sanders Is Real, He Will Run as an Independent
Peter Bohmer
A Year Later! The Struggle for Justice Continues!
Dave Welsh
Police Chief Fired in Victory for the Frisco 500
May 23, 2016
Conn Hallinan
European Union: a House Divided
Paul Buhle
Labor’s Sell-Out and the Sanders Campaign
Uri Avnery
Israeli Weimar: It Can Happen Here
John Stauber
Why Bernie was Busted From the Beginning
James Bovard
Obama’s Biggest Corruption Charade
Joseph Mangano – Janette D. Sherman
Indian Point Nuclear Plant: It Doesn’t Take a Meltdown to Harm Local Residents
Desiree Hellegers
“Energy Without Injury”: From Redwood Summer to Break Free via Occupy Wall Street
Lawrence Davidson
The Unraveling of Zionism?
Patrick Cockburn
Why Visa Waivers are Dangerous for Turks
Robert Koehler
Rethinking Criminal Justice
Lawrence Wittner
The Return of Democratic Socialism
Ha-Joon Chang
What Britain Forgot: Making Things Matters
John V. Walsh
Only Donald Trump Raises Five “Fundamental and Urgent” Foreign Policy Questions: Stephen F. Cohen Bemoans MSM’s Dismissal of Trump’s Queries
Andrew Stewart
The Occupation of the American Mind: a Film That Palestinians Deserve
Nyla Ali Khan
The Vulnerable Repositories of Honor in Kashmir
Weekend Edition
May 20, 2016
Friday - Sunday
Rob Urie
Hillary Clinton and Political Violence
FacebookTwitterGoogle+RedditEmail