Reich’s clarity is a gift to us if we choose to see it. For years, I have believed that the root of all evil in our nation – both domestic problems and international issues – is the corrosive effects of big money on our politics, especially on the US Congress and Presidency. (It is why I supported John Edwards over Barack Obama and Hilary Clinton and did door-knocking and phone-calling in NH for him. Edwards was the one who pledged stridently to take on lobbyists as a central point of his campaign.)
Reich had a great post on Facebook today, which begins: “At the root of most of our political and economic challenges is the pervasiveness of big money in our politics. What can we do about it? Most importantly, three things:”
[attenuated]
(1) Reverse Citizen’s United.
(2) Revive public financing of elections.
(3) Reverse the growing concentration of income and wealth in America. Here Reich quotes Justice Brandeis: “We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can’t have both.”
At the end of his Facebook post, Reich says, “So don’t complain. Organize!” That means going beyond typing posts on Facebook and BMG.
The third item — reversing the excessive wealth concentration in America — is the most important thing we do. If we fail to accomplish that, nothing else matters.
Reversing Citizens United is thorny to do in a way that doesn’t make an already bad situation worse. I certainly WANT the press to have first-amendment protection, and I certainly want unions and public interest groups to compete freely with for-profit companies in the political arena.
I see precious little evidence that public financing of elections will ever be realized in any meaningful way, and I’m not sure I’d like the result if it were. I fear, again, that the “cure” is far worse than the disease.
Is the recent victory of Bill De Blasio in New York. It has some of the strictest campaign finance laws in the country (barring self finance) and Wall Street money could only take his opponents so far.
I have written a diary on the property tax scandal, how we need to tax intangible assets like stocks and bonds, trillions of dollars worth which are highly concentrated at the top. Obama should propose a 2% tax on stocks and bonds after the first $100K held by an individual, retirement accts get the tax above and beyond $1 million.
The disagree with the other two. The Supreme Court has already decided on Citizens United, Reich sounds like a Tea Party person who wants to overturn Obamacare. And I don’t want to pay for every Tom, Dick, or Harry who wants to run for public office on my dime, while we cut after school programs for kids.
I don’t think it’s fair of you to compare Reich to the Tea Party. Obamacare was passed by both houses of Congress and signed by a seated president who was subsequently re-elected. Citizens United was decided by 4 members of the Supreme Court, at least one of which is a notable corporate shill (John Roberts), and was done in a backdoor way (the court ruled on an issue not in front of it).
Citizens United is a really big issue because it seriously undermines democracy. Money is currently very important in politics because it is necessary to procure votes. Although I we are not yet seeing dollars perfectly correlated to votes, which is why well-funded but odious candidates are still losing, I think that it makes the difference in close districts, and I think that it influences the legislation that is being passed significantly.
Any coincidence the top two vote getters in Boston also raised the most money?
…when he says “Don’t complain, organize!” If you want to organize your town, ward, district, etc, get in touch with me at john (at) tehans (dot) com to get a free copy of ORGANIZE!, the grassroots organizing software I’ve been writing for the last couple of years. It’s in beta test right now, and it’s free while it’s being tested – walk the walk, people!
1) Yes
2) Have we ever had it? Would it involve restricting outside spending? What about spending by other candidates using public funds? What about third parties?
3) The problem isn’t really income inequality. If you think what it would take to reverse that, you may end up somewhere you don’t want to be. The problem is income inadequacy. The GOP likes to complain about the number of people on food stamps, which is a neat way of changing the subject. If you’re middle class, you will struggle to pay for college, and if your kids don’t go to college, they will struggle for their entire lives. They will struggle to eat.
So rather than complain about the rich (or rather, while we’re complaining about the rich), maybe we should uplift the poor. We will fail, but we will keep trying … because democracy is at stake.
The main problem is wealth concentration. For the very wealthy, “income” is a totally arbitrary number that can be and is manipulated for a variety of purposes including (but not limited to) tax minimization. Measures of income inequality grossly distort the true picture by minimizing the reality of the current wealth concentration.
The reason we have such widespread income inadequacy while living in the wealthiest nation in human history is that our wealth is concentrated in such a very few households.
Uplifting the poor is important and laudable. The most effective way to do that is transfer enough wealth from the top 1/2 percent to the middle of the wealth distribution, so that we again have a middle class (as measured by the wealth distribution) that has enough money in their pockets to restart the consumer economy.
Once that happens, there is long history to indicate that the poor (on the bottom end of the wealth distribution) will be treated relatively well — at least in comparison to the poor in the rest of the world’s nations.
Wealth used to be transferred through employment. But as Jaron Lanier has pointed out, Kodak once employed thousands of people. Instagram employs 13 people. Where did that money go? he asks.
One answer is “Wall Street,” but it’s a bit more amorphous than that, and has a lot to do with global labor markets (that is, foreign workers making iPhones for much less than we would, or even could consider).
How do we do it politically? How do we pull people up? (Again, rhetorical.) If by transfer you mean raise taxes on the rich … I don’t see the political will do it.
I’d like to challenge the notion that we shouldn’t have limits on income and wealth. Yes, no one likes to talk about this because it sounds so Communistic, but this is a large part of the problem.
The problem, as I see it, rests on the unbridled greed. Look at Mitt Romney. He has hundreds of millions of dollars in the bank, enough to fund his family for generations. Yet he continued to make more and more. Why? Because he could. And how did he make this money? By squeezing the employees of companies, breaking unions, laying people off – you name it. He did this primarily for money even though he already had enough of it.
What if there was an effective income cap of $1 million per year on Romney with a 92% income tax on income over that? Might this change Romney’s vision? Instead of breaking up companies to suck the dollars from their cores, maybe he would be more focused on building them for long-term survival?
I have met plenty of business people who’s business strategy is to quickly build a company so they can sell it in five years for millions. This strategy embodies short-term thinking. No one wants to start a business and work at it for the next 40 years. They want to start it, cash out, and do it again.
I think that this country made a big mistake when it lowered the top income tax rate from their confiscatory rates to the now 39%. It was completely sold as a way to collect more revenue, but people lost sight of the fact that a 92% rate is simply a cap on annual earnings. This cap encourages certain behaviors and discourages others. Of course no one is going to pay 92% of their income in taxes – they will instead *use* that income in the economy – we should encourage this with deductions that allow for it to be done in the Main Street economy, not the speculative economy, or even worse, the political economy.
The latter is what is happening now – the rich have so much money and they have learned that employing people to earn a 5% return is not nearly as good as either buying/selling things in a speculative way to maybe earn a 25% return, or using it for political power to change laws outside of the democratic process – which is a grave threat to our democracy.
It was your guys, Bill Clinton who signed NAFTA and GATT, these bills supported by John Kerry, Ted Kennedy, and Ed Markey. Don’t blame Mitt for playing by the rules established by D.C.
… it’s really not helpful. No, the unbridled capitalism Mitt Romney represents is not the fault of NAFTA, Absent NAFTA, he would still do it, just differently.
Sorry Dan but I think you should be banned. You might sincerely believe you’re raising points we need to hear, but you’re not doing it constructively, and you seem to do it just to do it. Waste someone else’s time, please.
That the whole challenge. We don’t just throw our hands up and say the political will isn’t there. We organize and continue the fight to generate the political will. I think another crash or continued struggles for large numbers of Americans may well move the people in that direction. There will be significant lag time with most politicians, more beholden to contributors than constituents.
“Income inequality” and “income inadequacy” are the same thing. Our total national income is not inadequate. It’s far larger than it was in 1960 or 1970. It’s just not distributed the same. To solve our demand problem, we must uplift the poor. That means some combination of redistributing from the rich and growing the whole pie.
How do we get there? Raise taxes on the rich, for sure. In particular, dividend and capital gains income. Much of it today comes from “investment” that does our real economy no good, because it creates jobs overseas or is part of a financial shell game wholly outside the real economy.
We have to structure a tax code that gives preferential treatment to companies and investors who create good jobs here. We disallow the rampant financial speculation that contributes nothing to our society but precarity. We make it easier for workers to organize. We raise the minimum wage – a lot. We invest like hell in education, particularly public higher education, and infrastruture to make our people and our transportation network once again the envy of the world.
True, none of this seems feasible in this Congress. But we build that “political will” and we get there.
The first step is to take back the House, but it’s more than that. That’s the point I was making in this diary. I think candidates like Cory Booker get us nowhere. Not that he’s a bad guy, he’s just not good enough. We can do better. We have to.
We have to take back the House — as soon as possible given the gerrymandering — as a first step. But we had the House, Senate and White House in a big way during 2009-10, with mixed results. So we need more than that, you’re absolutely right. A fairly significant shift in political culture is needed as well. They need to be as afraid of a populist “left” as they are of the NRA, Tea Party, banking lobbyists, etc. We haven’t had that, really, since the 30s. Maybe a moment in the 60s.
And that’s why you’re also right that Cory Booker won’t be much help. I know Gillibrand moved to the left when she was representing the whole state instead of an upstate district, but Booker’s tight with Wall Street. That’s not likely to change, since NJ has more Wall Street types outside Newark than in it. It’s not enough to have a “D” next to one’s name. We need look no further than the gold dome on Beacon Hill for proof of that.
The approach I like best is to significantly raise the generational transfer taxes — gift and estate taxes. The existing threshold ($5M) is already high enough to exclude all but the wealthy (see http://www.irs.gov/pub/irs-soi/ninetyestate.pdf) . Even in Massachusetts, a $5M home is more than “middle class”.
A return to the 70% rate that was in place from 1934 to the Reagan era is a good start. I would further support a higher rate of something like 85-90% for estates above, say, $100M.
One of the long-standing differences between American and European societies (especially England) is our rather explicit distaste for the consequences of maintaining a “landed gentry”. Generational transfer taxes recapture excessively concentrated wealth, and return it to the larger public.