Nation Lost: How to Restore the Dream





Our institutions have failed us. Catholic priests. Steroids in baseball. Supreme Court picked the president. WMDs in Iraq.  North_face_south_tower_after_plane_strike_9-11Corporate media has lost all credibility. We were told to get a degree, and students are ravaged with debt. baseballWe were told to invest in a home, values plummeted, and we were forclosed. The government bailed out the banks, and no one went to jail. Not only are the settlements but a fraction of quarterly profits, but are 50% tax fucking deductible.

The Corporatist State 2011 Shankbone

The stock market keeps breaking all-time records. They tell us the Recession has been over for years. That the unemployment rate keeps dropping. But more and more people are dropping out of the job market, the jobs we do find are lower paying than before, and the recovery hasn’t reached working people. Decades of wage-stagnation combined with over-taxation are disappearing the middle class.

K_Street_-_Evacuation_Route_(7496793860)We have no faith that our government is capable of reversing these trends.  We instinctively know that our politics has been corrupted. A recent study showed that our democracy is effectively broken – that public policy only reflects public opinion when the wealthy agree.

congressBoth Republican and Democratic party brands are toxic. Congress struggles to achieve an approval rating equal to lice.  Somehow, these corrupted and unpopular incumbents with toxic brand names who have little chance of fixing anything are reelected over 90% of the time.

Polls have shown that nearly a quarter of Americans want their state to secede from the union, and three-in-ten think a revolution may be necessary in the near future. Anti-government militia groups have increased nearly ten-fold since 2008.

We are justified in our rage, but it must be focused.

What does revolution look like in America? How do we fix our economy? Our country? We need only look inward, the solutions can be found in our past.

We Built This

Cape Coast Castle’s Door of No Return, Ghana

We came from Europe and killed the natives – free land. We imported unpaid labor to exploit the natural resources and erect infrastructure.

Obama visiting Cape Coast Castle

Genocide & slavery – chapters one and two of how America built it’s wealth. It’s unpleasant to think about because it’s ugly, but it’s important we keep perspective.

The cotton gin, tobacco, gold, steel, & oil (eventually autos). Robber barons exploited lax regulation & labor rights to amass vast amounts of wealth.

Northern Virginia Army Battle Flag
Northern Virginia Army Battle Flag

Volunteers_of_America_Soup_Kitchen_WDCFive decades after the Civil War, we fought in the Great War (WWI). We came home and partied our way through the Roaring Twenties before the Great Depression.

Income inequality (wealth inequity) reached astronomic proportions, unemployment reached 25%, there were bank-runs and the markets failed. (Sound vaguely familiar?)

President Franklin Delano Roosevelt

Elected in 1932, FDR promptly put in place the New Deal. Social Security for the elderly and the sick. The Civilian Conservation Corps and the Works Progress Administration put the unemployed to work. The National Labor Relations Act established the right to unionize. The Glass-Steagall Act regulated banks. The Securities and Exchange Commission restrained Wall Street.

eisenhowerIn 1931 the income tax rate for the wealthiest Americans was just 25%, before being raised to 63% in ’32. Raised again to 79% in ’36, maxing out at 94% in ’44 during WWII. War-led manufacturing was ramped up to the point that unemployment dropped to just 2%. The US was the best place to invest following WWII. The New Deal ensured that increases in productivity were proportional with increases for wage-earners. They were intertwined.John_F._Kennedy,_White_House_photo_portrait,_looking_up

We established the GI Bill for veterans, and made universities very, very affordable for in-state students. Eisenhower built the Interstate Highway system. JFK challenged us to land on the moon.

The Marshall Plan rebuilt Europe, and turned our enemies into economic allies. So renewed was our competition abroad, that growth at home began to sputter. LBJ responded with the Great Society – Civil Rights, Voting Rights, Medicare & Medicaid.

America had fixed the banks and the financial markets, had greatly reduced unemployment, gave assistance to the elderly, the poor, the sick, students, and veterans. Civil rights were established. The middle class grew and grew along with our economic strength. A single income was enough to support a home, a car, and a college education for our kids. We rebuilt our enemies, and we won the race to the moon. We were the shining city on the hill.

Dream Lost

Arthur Laffer
Laffer Curve
Laffer Curve

Part of LBJ’s Great Society was lowering the income tax rate for the wealthiest Americans from 91% to 77% in 1964, and 70% in ’65. The economy responded well. The Laffer Curve later emerged – showing that lowering top tax rates even further would further stimulate economic growth.

US_Supreme_Court_Justice_Lewis_Powell_-_1976_official_portrait
Powell
SCOTUS, circa 1973
SCOTUS, circa 1973

Lewis Powell, Jr. was a graduate of Harvard Law. He represented the tobacco industry at a time when they were trying to convince us that smoking cigarettes would not lead to lung cancer. He was a board member of Phillip Morris, and Chairman of the Richmond (VA) School Board. In 1971, the Powell Memo (Attack on the American Free Enterprise System) was sent to a friend/member of the US Chamber of Commerce, and spread among business leaders.  The Powell Memo urged the Chamber to be more aggressive in bending politics to the will of big business.

Nixon appointed Lewis Powell to the Supreme Court in 1972. In 1976, the SCOTUS kneecapped campaign finance limits and the Federal Election Commission. Their Buckley v Valeo ruling meant that since corporations are people and money is speech, corporations could use their wealth to buy politics (so long as they spread the wealth).

Reagan_BoraxoReagan came into office in 1980, having been accused of preaching voodoo economics (by George H.W. Bush in the primaries). Reaganomics is the supply-side approach to growth. It is the idea that if we give the wealthy more tax cuts, they will use their increased profits to hire the rest of us. Reagan lowered the top income tax rate from 70% to 50% in ’82, and 28% in ’88.

wagesproductivity
Improved productivity no longer filters down to wage-earners.
US_Income_Tax_Rate
Notice the arch that begins in the 1930’s and ends in the 1980’s.

To recap, the top income tax rates were between 70-94% from 1936-1982. We created programs to help the poor, elderly, sick, and students. We kept the banks and financial sectors in check. We built infrastructure and invested in research & development.

USIncomeInequality8square.svg
A rising tide lifts all boats. Until it doesn’t. Notice the bottom 20% has basically flat-lined. Even the top 5% has grown much more slowly than the .01%.

The top income tax rate has not been back above 40% for over 30 years now. Corporate tax revenues (% GDP) have hit a 50-year low. Union rights have been busted, numerous trade agreements have shipped manufacturing jobs overseas. We’ve deregulated the banks and financial industries. Our grand experiment with supply-side economics has been a disastrous failure.

We’ve tried sending both parents to work. We’ve tried piling up credit card and student debt, high interest mortgages and auto loans. We have programs to subsidize our low wages, from food stamps and section 8 to the mortgage tax and EITC  – but it’s simply not enough to keep up with the costs of living and raising a family. We cannot continue to tax the middle class into oblivion, just so the wealthy can be lavished with more and more.

Reclaim the Dream

495px-Hiroshima-NagasakiTo get back on top, we have to remix the elements that led to such great post-WWII growth. While we can’t bomb competing economies into submission, we can make America the most attractive place to invest again. We’ve tried using tax breaks as incentive for decades now, with increasingly horrendous results.

800px-Fiber_optic2We attract businesses with infrastructure. IPhone_San_JoseWe need to have highly functional roads, bridges and ports, fiber-optic internet, buried cables, an efficient power grid, an highly-educated workforce, etc. Doing these things not only attracts businesses, but creates job for Americans. Most importantly, we attract business by having a vast consumer-class with plenty of disposable income with which to purchase goods and services at local businesses.Black_Friday_by_Powhusku

Consumers = jobs. Businesses need our consumers. We have the leverage.451px-IPhone_Fashion_Valley

We know how to build a vibrant middle class. We know how to help the elderly and the sick. We know how to reduce homelessness. We know how to reduce poverty. We know how to educate our kids. We’ve done it all before. It wasn’t all that long ago. So why don’t we do it already?

Republicans proudly bow the wealthy, whom they refer to as job creators. Democrats can only go so far before their corporate sponsors put them in check.

Root of All Evil

The Supreme Court has effectively legalized political bribery. They’ve ruled that money is speech, which means congress does not have the authority (let alone the ability) to limit political donations.

Thus, elections keep getting more and more expensive, which means raising more and more money. Our politicians have little choice but to spend all day listening to the perspective and worries of the wealthy, special interest groups, and lobbyists. Politicians literally (and admittedly) owe their careers to their sponsors. It only stands to reason that they work together to please their real employers, their corporate sponsors, not the people.

Comcast-Time_Warner_Cable_LogoMost of that money goes to the corporate media (90% of US media is owned by just six corporations) to buy all of those shitty campaign ads. They are laughing all the way to the bank, and they like their low corporate effective tax rates.  Corporate media has no incentive to tell us how multinational corporations bought our government.

Cure All

jefferson28th Amendment. Our founding fathers bequeathed us a living document. The Bill of Rights are the initial ten amendments to the US Constitution. We’ve added 17 amendments since. Seventeen! Every generation does it, and it’s our turn now.

There are plenty of ways to tinker with government that may be worth considering – electoral college, gerrymandering, term limits, public financing, compulsory voting, etc. But the silver bullet to corruption is the elimination of money as political speech.

Our founding fathers knew a time like this could happen, when the courts and federal government were beyond corrupt. They gave power to the people to go over the heads of the federal government and the courts. State can call a constitutional convention and ratify an amendment with a two-thirds vote.

Susan_B._Anthony_on_her_50th_birthday
Susan B. Anthony

Rosa ParksIt’s certainly no small task. But look at at this way – women got the 19th Amendment passed, and they couldn’t even vote! We have to fight the system within the system. It takes planning and organization. It takes phone-banking and door-to-door canvassing. It takes sacrifice. The Civil Rights Act did not simply descend from the heavens. Rosa Parks did not simply sit on a bus one day. They are not going to simply hand the power back to the people, we must take it from them. We must fight.

Ben FranklinWhen emerging from the Constitutional Convention, Benjamin Franklin was asked what we had. He replied – A republic, if you can keep it.

We have to take the states before they become as corrupt as congress. It will happen if we don’t stand up now. We have no choice. California and Vermont have already called for an amendment. More states are joining the charge.  We will take our country back. We have no choice.

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