The US – as with our planet – is reaching a boiling point. For the first time in US history, kids are worse off than their parents. We can sense that the American Dream is a fantasy – whether or not we’re familiar with the term economic mobility.
Natives are being attacked by dogs & cops for protecting our water. Muslims & Hispanics have seen a spike in violent hate crimes. Blacks are being killed in the streets by cops who go unpunished while the first black president is delegitimized. Whites, nervous of browning demographics, are lashing out in economic frustration.
Since our public education is shoddy, and society pressures us into being loyal worker bees, most of us don’t have the luxury of time to learn about economic & tax policy. So we vote for Trump (or Brexit in the UK) because we’re at our wit’s end with forty years of wage-stagnation and a recovery that hasn’t. And while we might not know the solution, we know that the status quo is the problem.
Trump has argued that American workers are paid too well, and questioned the very concept of a federal minimum wage. President Barack Obama has called for $10.10/hr, while Secretary Hillary Clinton has called for $12, and Bernie Sanders has led the Fight for $15. Had the federal minimum wage kept up with inflation & increased productivity since the 1960s, it would be roughly $22/hr today. Having been raised but once in twenty years it sits at a paltry $7.25. Since $7.25 doesn’t cover the cost of living anywhere in the country, the government subsidizes corporations paying slave-wages with food stamps & welfare.
That fifteen dollar difference is still being made, mind you; it’s just going into the pockets of our corporate overlords. It’s essentially being stolen from us. Since we’re nice people we’ll split the difference and take $15/hr. We’ll do it gradually over a number of years, giving small businesses more time to adapt, with consideration of the urban/rural cost of living disparity, and tied to inflation so we don’t have this fight every ten years.
But the truth is…$15 isn’t enough. $22 isn’t enough. Free college & single-payer aren’t enough. If the US is to climb out of this death spiral we will require guaranteed basic income. We already do it in Alaska. We should have a negative income tax rather than simply expanding Social Security to everyone – though it’ll be more difficult politically. But it must be done.
Millennials, who’ve known nothing but war time & economic despair, favor socialism over capitalism. The truth is that every country maintains a balance. We have Social Security and public roads, but we don’t take over entire industries. Even when working toward universal healthcare, we forced people into the private, for-profit health insurance market. Guaranteed basic income leaves capitalism intact. It simply ensures that everyone participates. It’s a compromise.
Everyone knows – from Pauls Ryan to Krugman – that the key to economic growth is getting money into the hands of more people so they can go out and spend it at local businesses which will have to hire more people who will have money in their hands… Rather than food stamps, welfare, section 8 – we should simply give people money for the necessities, plus enough disposable income as needed to keep the economy humming.
We’ll continue the transition from a manufacturing-based economy to a consumer-based one. Besides movies & music, all we make anymore are bombs & financial transactions – and those are done by robots & computers. Due to automation, globalization, corporate-authored free-trade deals, and the erosion of union rights – our manufacturing jobs have been disappeared (consciously). We’re being forced to compete with slave-labor in third world countries – and that’s a race to the bottom that cannot be won.
Basic human greed & fiduciary responsibility to shareholders insist that we replace as many employees with machines as possible; dealing with humans will become a luxury of sorts. We already have driver-less Uber cars in Pittsburgh. We have restaurants with iPads for ordering and big box stores with self-checkout. Robots mimic chefs and construct bridges.
The robots won’t be taking over – since they can’t repair or create better versions of themselves – but they will be taking our jobs. Most of them, at least. And that’s a good thing. Automation increases productivity. We’ll free ourselves to do other jobs. We need more teachers and more doctors. We’ll still need people to write code & repair machines. We’ll need surgeons, counselors, police, engineers, architects, designers, chemists, scientists, theorists, writers, musicians, comedians, actors, inventors, entrepreneurs, investors…
We’ll still have people who are motivated by their desire to have the most and have the best. But rest assured – the robots (along with Indonesia & Bangladesh) are taking our jobs. And we can’t have hordes of jobless, homeless people wasting public resources getting arrested and sent to the emergency room every time they pass out drunk. There would be massive crime and open revolt. We need people to contribute as opposed to a drain on the economy. We don’t want people to turn to crime for the things humans desire. By giving people money to spend, they go out and buy things, thus contributing to the economy.
Quality of life: We’ll free ourselves to spend time with our families. We’ll end poverty & homelessness. We’ll remove the poverty-induced stress that leads to physical maladies and increased healthcare costs. We’ll have funds for nutritional foods and time to spend on physical activity. We’ll have time to pursue creative endeavors – the arts will flourish like never before. We’ll have time to ponder and explore. We’ll provide entrepreneurs a fertile market in which to sell their wares. We’ll be healthier and happier and we’ll remain an economic superpower.
We just have to stand up and demand it.
Or, we can continue the status quo. Forty years of wage stagnation can turn to 50 and 60 years, our economy can grind to a halt, and we won’t be able to afford our costly military anymore – let alone address climate change. Wealth inequity can keep the rich getting richer and economic immobility can result in a permanent class of elites.
Thing is, no one explicitly says they want to cater to the wealthy and punish the poor. Donald Trump and Paul Ryan want to reduce poverty and grow the economy. But their solution is more of the same supply-side, trickle-down Reaganomics we’ve been trying for 35 years. Thirty-five years which coincide with the divorce of wages from productivity.
We must stop pretending that businesses hire people out of the kindness of their non-existent hearts. We must get money into the hands of regular people instead of lavishing the wealthy with more tax cuts. We must use our vast consumer base as leverage to enforce our economic & tax policies rather than simply a natural resource to be exploited by multinational corporations. We must learn from our mistakes and strive to replicate our successes.
Corporations took over the country post-Civil War. We had robber barons & child-labor & labor organizers being murdered. Then the Great Depression. In response, FDR implemented Keynesian economic policy, social insurance programs, labor protections, and reigned in reckless behavior of financial institutions. The top federal income tax rate was between 70-94% for the forty years between the mid-1930s and ‘70s. The American Dream was alive & well and was a product of public policy.
Since Reagan, the top tax rate hasn’t gotten back to 40%. People who make money having money pay a lower rate than wage earners. CEOs used to earn a handful or a dozen times that of the lowest paid worker – now they take home thousands of times the average worker. Scant inheritance tax creates a dynastic, unmotivated ruling class. They hide their wealth from taxation in offshore accounts. Corporations have trillions in profits stashed overseas as well, biding their time in expectation of yet another repatriation tax holiday. They pull fancy accounting tricks like the double Irish and the corporate inversion. Corporate taxes used to represent a third of US tax revenue. They now pay roughly one tenth due to our insufficient effective corporate tax rate.
We’ve gutted IRS funding, slashing the number of agents who investigate corporations & rich folks cheating on their taxes. The FEC is at a stalemate, so lax campaign finance violations go unpunished. The DoJ has determined banksters too big to jail. We allow multinational corporations to pollute our atmosphere and our waterways – privatizing the gains while socializing the losses. We found trillions for war in the Middle East but we can’t get clean water to poor black folks Flint, Michigan.
The elites have fixed the system so well that it’s broken. The Supreme Court decided, through a string of disastrous decisions, that money is speech & corporations are people so political bribery = free speech. The dam was broken in the late-Seventies with Buckley v Valeo followed by Bellotti – then exacerbated recently with Citizens United and McCutcheon. Amoral corporations and immoral, wealthy donors are our politicians’ real constituents. They used public policy to usher in a massive upward wealth redistribution.
Wall Street was deregulated as the laws which protected us from their irresponsibility and greed were removed. Financial institutions created a mortgage bubble using predatory lending practices, packaging loans they knew to be worthless as gold, and betting against the market. The homes they didn’t foreclose lost significant value and the world economy was brought to its proverbial knees. Instead of making homeowners whole & jailing criminal & fraudulent banksters we rewarded them with hundreds of billions in a tax payer-funded bailout.
We’ve enjoyed 70-plus months of artificially enhanced growth featuring $80b in quantative easing and near-zero interest rates – a record period of growth that will inevitably come to a halt. The stock market has doubled and the unemployment rate halved, but literally all of the gains since the Great Recession have gone to the top one percent.
Unfortunately, we still haven’t addressed the cause of the last crash – they’re still allowed to gamble with our deposits and our mortgages. Now they’ve caused bubbles gambling with our vehicle and student loans. We haven’t done a thing to address our regressive tax policy, strengthen labor rights, encourage small businesses, or get money into the hands of consumers.
Both Trump and Clinton would further supply-side, trickle-down economic policy. Neither would reign in Wall Street nor address money in politics. One would jail journalists, round up minorities, intentionally target civilians with our military, and cavalierly threaten nuclear first-strikes in response to verbal barbs. The other would protect the domestic status quo at all costs and actively pursue World War III against (China,) Russia and Iran.
We were asking nicely with Bernie Sanders and the powers that be tilted the scales. We are again asking nicely with the Fight for $15. And we’ll keep on asking until we fulfill the promise of a more perfect union.
MLK said that “pent-up resentments” and “latent frustration” must have release. “If his repressed emotions are not released in non-violent ways, they will seek expression through violence; this is not a threat but a fact of history.”
Thankfully, our founders wrote revolution into our constitution. They picked up arms so we wouldn’t have to. But we must use the tools given us. Self-governance is both a serious responsibility and an amazing opportunity to create an egalitarian and equitable society. We cannot abdicate our duties, we must wrest our nation from the clutches of the oligarchs if we are to remain a free people and advance this great nation.
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