Income Equality

The false dichotomy between progressive & moderate Democrats

Much of the argument following Jon Ossoff’s loss in the Georgia 6th district Congressional race suggests that Democrats need to be more progressive to win. Being a Bernie wannabe seems to be the prescription for firing up the bases to win such elections in an era when the GOP’s leader is an orange-hair baboon.

Others think it’s enough to be simply anti-baboon but that we need to ramp up get out the vote efforts, especially in off year elections when Dems don’t show up.

Others think we need to remove Nancy Pelosi who regularly appears in GOP ads against whatever Democrat is running.

Certainly, we need candidates with passion, but not the foaming at the mouth type we got from Bernie. We need to get progressives and the disenfranchised out to vote, but that’s not a matter of more phone calls. And getting rid of Pelosi, alas, is an idea whose time has come. She simply is too great a symbol for Democrats to overcome. But more important, her strategies are not working. She’s a lightning rod, but also an ineffective strategist.

But missing most is a reason to vote for Democrats.

Here’s where I think we are as a country, politically:

  • Everyone hates the others side, i.e., hyper-partisanship
  • The GOP holds one clear advantage: They appeal to people’s greed. “Cut taxes” has been a winning argument for 35 years.
  • Yet, progressive ideas are actually shared by a majority of Americans. People want government to spend more money on a host of broad budget areas.
  • The GOP holds significant structure advantages in gerrymandering districts to ensure that though they get fewer votes than Democrats for Congress, they elect more members.
  • Everyone seems to agree that government doesn’t work anymore. That meme seems to be a given, and there is no solution. Government is riddled with waste, fraud and abuse and nothing can change it.

Matthew Yglesias comes closest to a sound prescription for Democrats: Stand for something. This makes sense for one compelling reason: Americans want vision. They want to know you stand for something, even if it is anti-immigrants, poor-people bashing racism. Tell us what you think. Be bold. This is where the GOP has always held an advantage. You know what guides their thinking. They’re not afraid of their beliefs. They make no excuses for them.

Who knows what Democrats envision for Americans, other than whatever you’re identity, we’re with you? Bernie tried to lay down some markers with free college, healthcare for all and bashing “millionaires and billionaires.” But it wasn’t grounded in any philosophy, no foundation of what he wanted for America, other than free stuff. People think Democrats want to please everyone and thus have no core principles other than to spend more money.

So what to do? Not that anyone has asked me or that I have a pedigree in political campaigns. I’ve been in a few, though, and spent a career trying to impact narratives. So why not take a crack at it.

Leading Democrats in the House and Senate need to sit down and hammer out a vision of only a page or two and then figure how to reduce it to a 30-second elevator speech. I’d suggest they bring in not only politicians and political activists but also experts in communications and cognitive behavior—people who understand how people think. If I were among them, here’s what I’d suggest.

First, adhere to the Constitution’s mandate to “promote the General Welfare.” Talk about how we see Americans as “being in this together.” Americans love our Founding Fathers. Ground our principles in theirs—why they got us rolling as a nation.

Second, admit that government isn’t perfect, but talk about making government more efficient to better “protect” (not regulate) Americans. (Already we’re seeing that framing among progressives.) Be an agent of change. Part of the problem is that law making is now done hand in hand with lobbyists with so much detail in our laws that the bureaucrats tasked with implementing them have so many rules they must adhere to the process becomes tedious and inefficient.

Cite how politicians have made government less effective in order to prove their view that it doesn’t work. For example, if you cut the IRS staff to the bare bones, you can’t then complain that it doesn’t do its job of catching tax scofflaws.

Talk about making the economy work for people without a college education and making a college education affordable for more people. Talk about vocational education, teaching the trades where there are a lack of skilled workers. Embrace “free enterprise,” but point out that we don’t have free enterprise anymore. We have corporations that have successfully written the laws that give them all the advantages that protect their profits and hurt consumers and workers. It’s no longer a level playing field. Today, corporations cop out by saying they must provide “shareholder value.” That’s not the only goal they should have, just as a father’s role is not simply to bring home the bacon. They have a responsibility to their workers, the communities they operate in, and the taxpayers who provide the infrastructure they use to move their goods and services. As a simple example, if a businessman takes a prospect to lunch, he gets to claim part of the expense as a tax deduction. Why should taxpayers subsidize his marketing efforts? If it’s a good idea to have lunch, let the shareholders pay for it.

Fourth, be honest in saying that many jobs are not coming back unless Americans are willing to pay far higher prices for popular necessary goods such as clothing, autos, technology. We need to work together on making the future better for everyone. There will be upheavals as there were during industrialization at the end of the 19th century. People moved from the farm to the cities. They learned new skills. It was hard. It was a change of life style, but in the end it brought financial rewards. People who’ve lost their jobs to globalization need to make a sacrifice to adapt.

And yes, talk about taxes. Say exactly who will pay more in taxes, about how much and what benefits they will get for their higher taxes. As an example, if I said you could reduce your health care costs by $2000 if we raised your taxes by $1,000 is that a deal you’d consider? The conversation doesn’t start with taxes; it’s starts with envisioning what we want as a society and then figuring out a way to pay for it. That’s the way families work. Parents want a better future for their children and try to figure out how to get it by not only watching their spending but  looking for ways to increase their incomes and invest smartly in their children’s future.

When we talk about taxes we need to put it in terms of what will people pay, not the aggregate costs. Years ago, I tried to convince Virginia Democrats who wanted to raise the gas tax that instead of talking about the dollars they needed to raise, talk about how much the tax would increase the average car owner. It was about $126 a year. That’s a number people can understand. $1.5 billion is not.

George Lakoff has long had the right approach. Progressives spend too much time appealing to people’s reason. People don’t vote for reasoned arguments. They vote their values, which is why, for example, a Congressional district in Kentucky where a majority of the people receive food stamps, Medicaid and other benefits of the social safety net continually vote for a Congressman who wants to cut those programs.

Lakoff believes the fundamental difference between Democrats and Republicans is that the latter are paternalistic and the former maternalistic. Republicans believe in a strong father who lays down the law, expects obedience and believes in pulling yourself up the bootstraps. Democrats are more nurturing, want to see all boats lifted and empathize with those struggling.

The message of inclusion, both socially and economically, needs to reach not only rural whites, but the top 20 percent of income earners (those making more than $120,000 annually), according to the author of “Dream Hoarders.” The 20 percenters think they’ve got where they are solely through hard work without a bit of privilege, mostly the white kind. Moreover, they don’t think of themselves as rich because they compare themselves to others living in their sequestered neighborhoods. Many really have no idea how the other 80 percent live, where something as simple as a set of new tires can mean they can’t pay their rent.

What are Democratic values? Can we articulate them without worrying about offending someone? Can we say that, yes, many people have succeeded due to hard work (but with good luck, too), but not everyone can find that good luck that allows them to work hard to succeed? Can we return to those days when we saw all ourselves as being Americans who were “in this together?”

Graphically Speaking, Income Inequality Trends

Nice graphs, but which have the sub-hed:

Eleven charts that explain everything that’s wrong with America.

Why must progressives fall into conservative’s trap? When you say “what’s wrong with America” what people hear is what’s “wrong with Americans.” And thus, the “Un-American” charge. All the good that these graphs might do with independents is destroyed by the unfortunate frame.

So, Why Are the Rich Getting Richer?

The income chasm between middle class America and the richest Americans has grown enormously over the past 50 years. Few would dispute that. Harold Meyerson lays out the stats.

From 1947 through 1973, according to the Economic Policy Institute’s State of Working America report, released this week, the incomes of the poorest 20 percent of Americans rose 117 percent, while the middle 20 percent saw a rise of 104 percent and the wealthiest 20 percent a rise of 89 percent. From 1973 through 2000, however, the income of the bottom fifth increased by a scant 9 percent, the middle fifth by 23 percent and the richest fifth by 62 percent. Since 2000, the concentration of income gains at the very top has grown only more pronounced. The share of income going to the wealthiest 1 percent of Americans, which was less than 10 percent in the early ’70s, reached 23.5 percent in 2007 – the highest level on record save for 1928. (Note: Both years preceded epic crashes.)

No doubt conservatives don’t think this is a problem. And they are given a pass by progressives, who decry the income gap but don’t put the question to conservatives—Why? Meyerson and others have offered some reasons—the demise of labor unions, globalization and financial schemes that add nothing to the economy but line the pockets of the few. All perhaps true, but why don’t progressives keep hammering the GOP with actually two questions:

Why do you think this is happening? Give them a chance to explain the phenomenon. By forcing a explanation, there’s a good chance progressives will get fodder for a strong counter-narrative to the second question:

Do conservatives think this income gap is a good thing?

One book I’m almost finished relates.  It’s The Soul of Capitalism by William Greider. But rather than explain the gap, the book is really more about the book’s subtitle, “Opening Paths to a Moral Economy.” I’ll have more on it in another post.

Another waiting to be read promises to offer another reason. It’s Perfectly Legal: The Convert Campaign to Rig Our Tax System to Benefit the Super Rich—and Cheat Everybody Else by David Cay Johnston, a former New York Times tax reporter. This has always intuitively made sense to me. The folks who love to hail free enterprise ignore the fact the problem is not free enterprise versus a planned economy. It’s whether our free enterprise is really fair enterprise. Or are the rules, including tax rules, slanted to favor the wealthy?

Still, if progressives would demand answers from conservatives re why our economy increasingly seems to help only the few, they could set the foundation for the “free and fair narrative” that I think Americans would respond to.

False Argument on Taxes

Let’s have a show of hands: Do you want free-market capitalism or egalitarian socialism?

This is the argument that passes for political discourse. Victor Claar, as reported in The Post Sunday, believes that “ [w]hether because of differing intelligence, skill, ambition or luck, free markets produce different outcomes for different people, so envy is inevitable.”

That seems reasonable but he takes the argument to the illogical conclusion that because of these often random chances and opportunities, envy is behind the “social justice” urge to “spread the wealth around.” He says such ideas are “mean” because liberals are “suggesting those making over (sic) $250,000 should feel guilty for the hard work they have done to contribute something others find valuable enough to voluntarily pay for…. [P]ursuing self-interest in a system that allows you to be rewarded for pursuit of your own self-interest and at the same time in service of others? That’s certainly better than the alternative.”

And here I thought we were just talking about an adjustment to the tax code. Claar sees the end of the world as we know it.

Raising taxes on the wealthy is not socialism.  And asking those making more than $250,000 isn’t asking that they feel guilty, just asking they help pave the roads and build our schools. But that request is translated by economic conservatives as a guilt trip. Gee, now that you’ve figured me out, can I get up from the couch, doctor?

Pursuing self-interest and being rewarded for success? Seems reasonable to me. But much of what he and others are so strident in defending is not free market capitalism. What we have is a convoluted system of codes, judicial opinions and regulations that to many seem a rigged game.

Some folks just want a more level playing field, like the one we had 50 years ago while we were building interstate highways and suburban boxes for the prospering middle class.

Tax hikes are not apocalypses. But it seems to behoove those against such hikes to predict dire consequences. It much like the argument that raising taxes will shut down entrepreneurship and business investment. I doubt if a businessman wants to invest $1 million because he thinks there’s a $5 million return on investment he is, in the face of a three-four percent tax hike, going to put the money in his mattress instead of taking home $4.6 million.

Maybe worse, he’ll shoot himself because he now lives in a socialist state.

Cuts and Tax Hikes

Looming deficits will require both tax hikes, especially on the upper class who have seen their tax responsibility slashed over the past 30 years while their incomes soared, and spending reductions in the biggest program elephants in the room.  Michael Gerson, of course, doesn’t, speak of tax fairness or returning to the levels when America’s economy was at its zenith.  It needn’t be one or the other.  But at least Gerson has the cuts right.

There can be no serious reduction in federal spending without entitlement reform. Social Security and Medicare eventually will need to be transformed from middle-class entitlements given because of age to entitlements given to those with lower incomes.

…Necessary changes will not resemble the relatively painless deficit reduction deals of 1990 or 1993. This round may require not only the means testing of Social Security and Medicare but also the reduction or elimination of middle-class entitlements such as the mortgage interest deduction and the employer health-care exclusion.

I agree with all four cuts.  But then he suggests the number of public employees must be reduced.  Do we really need fewer financial and environmental regulators?  Do we need fewer teachers and police officers?  Can we get buy with fewer road repairs, snowing plowings, median mowings and parole officers?

I bring up the last four because they are of particular interest in my locality.  I’m attending a meeting tonight about what local organizations can do to get the grass mowed on our highway medians, which grows so high due to dwindling funds in the highway department responsible for maintaining them that site lines are obscured, creating traffic hazards.  My neighbors were upset about the lack of snow plowing during the past winter’s storms, which left many streets pot-marked—and still that way three month later.  And last week, some neighbors learned that a convicted sexual offender had rented a house immediately across from our local elementary school.  They were all up in arms and contacted the local parole office.  Within a day or so, the parole officer apprehended the man for violating the terms of his parole.  There are  a lot of communities who can’t afford that level of service. 

With more oil spills, stock meltdowns, and sexual predators in our communities, if Gerson gets his way, people may yearn for the days when we had adequate government.

GOP Bait and Switch

Just a brief addendum to my post the other day about the disingenuous lie that 47% pay no income tax.  As Derek Thompson of The Atlantic points out, poor people owe taxes, but they are offset by the Earned Income Tax Credit (EITC).

When Republicans rail against the 47% figure, they’re railing against features like the EITC. What is the EITC? It’s a refundable tax credit that rewards work and offsets the burden of payroll taxes for low-income payers by returning a fixed percent of income up to a maximum credit based on factors like number of children. But the EITC is a Republican creation. It was enacted in 1975 under President Ford (a Republican), and expanded numerous times over the last 35 years by Republicans. President Reagan (Republican) expanded it in 1984 and 1986. President Bush (Republican) expanded it against in 1990 and added supplemental credit for families with more than one child. President Clinton expanded it for childless claimants in 1993. President Bush (Republican) expanded it again in 2001.

So what we have is a program developed by Republicans to encourage welfare recipients to work instead.  When it succeeds, the GOP then pivots in its arguments and claims these very same people are cheating the government and are prime examples of “socialism.”  If it weren’t so cynical, it would be brilliant.

The Poor Rich Folks

Whenever you read this

According to the Tax Foundation, this year the top 10 percent of earners are on the hook for about 73 percent of all the income taxes collected by Washington.

…somebody is about to tell you how skewed the tax system has become in favor of the middle class and poor.  They’ll talk about the unfairness of a system where 10 percent of the people pay 73 percent of all income taxes

First, keep in mind that they are only talking about the income taxes, not about sales taxes, real estate taxes, payroll taxes or other taxes that fall disproportionately on the middle class and poor.

Second, the reason that rich folks are paying more of the income taxes is because they make more of the money than ever before.  See “15 Mind-Blowing Facts About Wealth And Inequality In America.”

‘Tolerate Inequality to Achieve Prosperity’

You wonder if these guys ever listen to themselves.

A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy. "We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all," Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion hosted by St. Paul’s Cathedral in London.

A Pittance for the Poor

The rich are getting richer.

The wealthiest 15,000 households, those making more than $11.5 million a year, got a record 6.04 percent of the nation’s $8.7 trillion in income, according to the study by University of California-Berkeley economics professor Emmanuel Saez. The previous year those households amassed 5.46 percent of the total, the tax data shows.

In Saez’s study, the richest Americans represent the top 0.01 percent of all households. In 1928, the year before the Great Depression began, the share of the nation’s income for this slice of households was 5.04 percent.

Hey, the poor are getting richer, too. 

Tax Notes said the richest 0.01 percent of Americans has had greater income growth than the rest of the country since the early 1970s. From 1973 to 2007, the average income for taxpayers in that category grew 758 percent, or more than $30 million. Excluding the wealthiest 10 percent, the rest of the population got an average increase of $286 over that period, or about $8.41 annually, adjusted for inflation, Tax Notes said.

It’s enough for a pack of smokes and a coke.  And you get it every year!  What are you complaining about?

What Do the French Got That We Don’t? Balls!

Say what you will about the French, their workers have the balls ours don’t.

[W]hen managers at the U.S.-owned Caterpillar factory [in Grenoble, France] refused to negotiate under pressure, workers recalled, resentments that had built up during several years of increasingly sour labor relations suddenly boiled over. About 40 employees invaded the executive suite, locked five top bosses inside and said they would be released only after resuming talks on the strikers’ demands.

…The latest detention took place Thursday, when workers facing layoffs at a printer plant near Strasbourg run by Faure et Machet, a Hewlett-Packard contractor, confined their bosses in a meeting room for about 12 hours and forced them to continue negotiating on a severance package. Previously, a 3M executive in Pithiviers was held overnight after announcing layoffs, as were the head of Sony France in Pontoux-sur-Ardour and three expatriate British bosses in a Scapa Group adhesive tape plant at Bellegarde-sur-Valserine.

Meanwhile, the UAW keeps asking Chrysler and GM, “How much more do you want us to cut our pay, Mr. Boss-man?  Beat me, beat me.”

The hostage-takings, a specifically French reaction to the worldwide crisis, have been denounced as illegal by President Nicolas Sarkozy. But they have been widely applauded among the French people — and in some instances have brought results. Most of all, they have dramatized the extent to which, in France perhaps more than anywhere else, the perspective of class struggle remains lodged in many people’s minds and shapes the way they view the economic crisis.

But we don’t have class struggle here, because the GOPers tell us that’s un-American.  The fact that upper 5% of Americans have seen their incomes soar while the middle class incomes have declined in the last 8 years, well, that’s because we haven’t given enough tax cuts to the rich so more crumbs can trickle down to the rest of us.

Beat me, beat me.