The War on Equality

The War on Equality

Neil Winward 24/12/2017 7

“When the Rich Wage War, It's the Poor Who Die”. This quotation from Jean-Paul Sartre's The Devil and the Good Lord was used by Linkin Park in their song Hands Held High. It was released about the time of the war in Iraq and intended, it seemed, to be an indictment of the Bush doctrine in the Middle East. Sartre's play, first published in 1960, predates the song by over forty-five years. It illustrates that little has changed in the power dynamics of waging war. Death comes in many forms: the sudden, horrific death associated with war; and the slow attrition of being ground down by economic adversity. This article takes a look at both and reflects on their connection.

Blueprint for Armageddon

Dan Carlin, something of a prolific podcaster, recorded an epic series of podcasts – six totalling approximately twenty-four hours – on the First World War. Much has been written on this war. There are many things worth remembering from this podcast series. One of Carlin's focal points is that this war marked a change from the battles of the previous century when, typically, battles started in the morning and were done by the evening.

Battles in the First World War went on for months, years and produced human suffering on a scale never before witnessed. This war brought barbed wire, massive artillery power, tanks, aircraft, poison gas and millions of casualties. Its survivors took the scars of the experience back to their societies and influenced a generation of politics, art, culture and offspring. It was supposed to be the war to end all wars. If war ever had romantic notions of a higher calling – service of one's country, a glorious adventure – this war swept those notions away.

Carlin talks in detail of the horrors suffered by individual soldiers. His simplest illustration is to suggest the listener go into their garden, dig a hole and sit there, regardless of the weather, for months. He suggests imagining adding artillery fire and the need to get out of the hole to run toward enemy fire moments after watching one's fellow soldiers be mown down. He talks of soldiers drowning in shell craters filled with mud, their comrades unable to pull them out. He talks of trenches filled with dead bodies and body parts with no prospect of removal or burial.

He contrasts the generals many miles from the front lines, sitting in chateaux, eating solid food and drinking fine wine, planning strategy that fails to take account of the toll that strategy takes on the troops that are supposed to execute it. He remarks on the politicians on the home front trying to manage the evolving emotions of their electorates.

The failure of the campaign involving the battle of Gallipoli caused a change in the British government. Winston Churchill, who was at the time First Lord of the Admiralty and one of the architects of the naval campaign that led to (but was not intended to involve) the ground campaign, was forced to resign. Upon resignation, Churchill joined the British war effort on the front lines, before making his eventual return to politics and playing a pivotal role in the Second World War.

The Politics of the Modern War

US troops are still in harm's way, most conspicuously in Afghanistan and one wonders why, according to what strategy and with what end in sight. Decisions to commit troops are political. Those decisions involve casualty calculations and those calculations have political consequences. Of course, they also involve lives and families. The political toll of returning body bags was felt acutely during the Vietnam War. The role of the press in chronicling the horrors of that war in real time was to connect vividly the consequences of political decisions to the casualties on the battlefield.

President Trump got in a spat with President Obama (it was a one-sided contest because Obama chose not to participate) about who had done a better job of offering condolences to the family members of deceased combatants. It was a remarkable demonstration of how not to handle such a sensitive topic. It was also a reminder that the era of presidents who have served in the military has passed. One of President Trump's many awful moments was his comment about his preference for war veterans who had managed to avoid capture rather than be captured – his focus was Senator John McCain.

Votes for Sale

Tax reform was signed into law by President Trump on December 22, 2017. It is the most sweeping tax reform since 1986 and will have a real impact on people's lives. The GOP believes that impact will be a positive one and felt as an increase in most people's pay packet. Corporations, however, are the biggest beneficiaries, together with those who invest in real estate through pass-through entities.

It is not the purpose of this article to analyse the Tax Cut and Jobs Act 2017 – that will come later – but rather to point out that decisions that take place in Washington DC, legislative actions, have profound consequences in the lives of regular people who for the most part, do not understand the underlying policy.

The shocking thing about this legislative act is that most politicians do not understand – may not even have read – this legislation. What was important to most was the fact of a tax bill having been passed into law with substantial tax cuts for the most important constituency – well-funded corporate donors.

The lone holdout when the bill was passed in the Senate, before it went to the conference committee for consideration, was Senator Bob Corker. His principled stand was based on concern that the tax cuts produced an increase in the deficit – that this was not prudent and not consistent with GOP principles.

His change of heart is a little mysterious. Perhaps the change in legislative language creating an additional deduction for taxpayers such as Senator Corker who own significant amounts of real estate was a factor. The same language, of course, is beneficial to many in the Trump administration, including the President himself. Perhaps it was simply convenient to tarnish Senator Corker with the implication of self-dealing as punishment for his earlier protest vote. If there were those doubting the absence of principle in the political class, they need look no further than this tawdry example of vote buying.

A Delicate Balance

Bad politics leads to wars. The tight web of national interdependencies built up by Otto von Bismark in the mid-to-late nineteenth century to establish the newly emerged unified German state's preeminence was beyond the power and skill of Kaiser Wilhelm II to manage after he removed Bismark. It took one simple shot – the assassination of the Archduke Franz Ferdinand by Gavrilo Princip – to bring the whole edifice crashing down.

To release forces concentrated on fighting the Russians, Germany provided money and logistical support to bring Vladimir Lenin back from Switzerland to lead the Bolshevik Revolution. The tactic had the desired effect, though it only prolonged the German war struggle at the cost of many more lives and did not bring about the victory that German General Ludendorff had assured his political sponsors. It also sparked a movement which sacrificed millions more lives at the altar of communism. The allegiance that Ludendorff hoped for was short-lived and Russia returned as a formidable enemy of Germany in World War II.

The Consequences of Bad Legislation

Political victories can be short-lived. The Trump administration is riding high perhaps for the first time since the flush of initial victory at the beginning of 2017. Passage of tax reform is likely to be a short-term political victory. When withholding tables are recalculated in early 2018, many will see an increase in their after-tax income. As the longer-term impact becomes clearer; as entitlements are cut – Speaker Paul Ryan has already advertised this initiative for 2018 – and the initiative to improve the nation's infrastructure stalls for lack of funds; as taxpayers realize that the benefits of the massive corporate tax cut flows not to employees but rather to shareholders through increased dividends and share buybacks exacerbating the unequal distribution of wealth; then the disaffection will grow.

Speculation concerning the longer-term consequences of this poorly crafted legislation is inevitably subject to personal bias. President Trump has no strategic goals other than self-aggrandizement and poking those whose discomfort will amuse and energize his base. He lacks the ability of Otto von Bismark to use his power to extend US influence in ways that will place America first as opposed to alone.

This is dangerous. When the rich make laws, it's the poor who pay.

Share this article

Leave your comments

Post comment as a guest

terms and condition.
  • Paul H

    2018 is going to be eventful like 2017. Liberals and Republicans going crazy and Trump making matters even worse for the US.

  • Harry Smith

    Very compelling and articulate

  • Jeff McKenney

    The most terrifying thing about Donald Trump is not the man himself, but his followers.

  • Ella Blun

    Remember how good Obama care sounded....then it became the biggest rip off in history...

  • Michael

    Merry Christmas!

  • Josh Nguyen

    Middle class, bend over here it comes again. Thanks politicians

  • Elijah Ford

    Demand is driven by consumers, not producers. When you cut taxes to corporations, you are increasing the supply side. Why would a company produce more items/lower prices if the demand is the same. This tax bill does virtually nothing for most Americans in terms of savings

Share this article

Neil Winward

Taxation Guru

Neil is the CEO of Sevara Capital Advisors. He is passionate about solving tax, accounting and regulatory problems for institutions that have invested billions of dollars of capital in multiple jurisdictions. His company provides solutions for banks, insurance companies and hedge funds to tackle their problems related to tax returns, financial statements, accounting and internal finance matters. Neil holds a master’s degree in Law from the University of Cambridge. 

Cookies user prefences
We use cookies to ensure you to get the best experience on our website. If you decline the use of cookies, this website may not function as expected.
Accept all
Decline all
Read more
Tools used to analyze the data to measure the effectiveness of a website and to understand how it works.
Google Analytics