Category: Abandonment of Middle Class

It’s Time to Raise Taxes

The Daily Escape:

Autumn in Hunza Altit Valley Pakistan – 2017 photo by Nasr Rahman. This shows that beauty can exist in very difficult places.

In 1785, Thomas Jefferson called for a geometric progression in taxes on assets of property holders as a way of lessening inequality. People with more assets would pay much higher taxes. Today, we’re still in search of policies that will do the trick. From The Fiscal Times:

Democratic Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez have sparked intense debate this month by proposing higher taxes on the rich, with Warren calling for a wealth tax and Ocasio-Cortez proposing a 70% top marginal tax rate.

But, Senate Republicans are moving in the opposite direction. Three GOP senators reintroduced legislation to permanently repeal the federal estate tax. The 2017 GOP tax overhaul has already reduced the number of estates subject to the tax by roughly doubling the value of assets that can be excluded from the tax. For 2019, this tax will only be paid by 1,700 families, but that’s all too much for Republicans.

Axios just reported on what Americans think about taxes:

Polling has found tax increases on the wealthy to be popular. A survey earlier this month by The Hill and HarrisX found that 59% of registered voters, including 45% of Republicans, support increasing the top income tax bracket to 70%. A Fox News poll released last week found that 70% of voters favor tax increases on families making over $10 million a year and 65% favor tax hikes on incomes over $1 million annually. Paying taxes is a complicated and controversial issue. What is not controversial is the need for people to take advantage of tax services that can help ensure they pay the right tax and thus appease the ever-lurking IRS. Going to http://daveburton.nyc/tax-services-nyc/ will provide more detail on this.

Those numbers suggest that a complete repeal of the estate tax might be about as popular as the polar vortex.

This shows how vast the gulf is between Republicans and Democrats on taxes. A poll by Axios, along with SurveyMonkey, ironically presented at Davos, showed that 70% of Americans think the economic system is skewed toward the wealthy and the government should do more to fix it. It further showed respondents are ready to vote for a 2020 candidate who agrees.

  • 58% of people surveyed say that “unfairness in the economic system that favors the wealthy” is a bigger problem than “over-regulation of the free market that interferes with growth and prosperity”
  • Among 18-24 year-olds, that gap is a chasm: 76% to 21%
  • Among those 65 and older, it’s a very narrow 51% to 46%
  • 89% of Democrats agree
  • 68% of independents agree
  • But 77% of Republicans say over-regulation of the free market is a bigger problem than economic unfairness
  • A huge majority of Democrats (90%) said they would be excited to vote for a candidate who promises to reform the economic system, with 71% of independents saying the same.

(SurveyMonkey’s online poll was conducted January 16 through 18, 2019 among a national sample of 2,277 adults.)

After WWII, America had very high marginal tax rates, and one result was corporate income was reinvested in the company, rather than given to top management or shareholders. Why give 70% of every dollar to the government?

Back then corporations, in exchange for limited liability, assumed they had fiduciary duties to the public and to their employees as well as shareholders. But the Right got behind the doctrine that a corporation’s only duty was to their shareholders. CEO’s became significant shareholders through stock options.

Then, Reagan and Bush lowered taxes on corporate and personal income, and dividends.

Our basic political issue in America has become: “Does the economy exist to serve the nation, or does the nation exist to serve the economy?”

Our affirmative vote must be for the economy to serve the nation. Over the past 40 years, we have reduced taxes for high earners and corporations. We’ve added loopholes that subsidize corporations, but our need for infrastructure spending hasn’t declined, and our military spending has grown dramatically.

Over the past forty years, the share of income taxes paid by corporations has declined. It is now only 9% of US government tax revenues. It was about 24% in 1960.

We’ve financed the tax cuts for high earners and corporations with ever growing budget deficits. The golden age for these policies must end now.

We need to go back to the days of socially responsible capitalism, not the predatory capitalism we have today. High marginal income tax rates will help. In addition, taxing dividends at the same as ordinary income is a good idea.

Let’s raise the capital gains tax above its current 20% rate.

Let’s find a Constitutional way to tax wealth as Elizabeth Warren suggests. Add a very small transaction tax on sales of stock on all public markets.

It’s time to move past the politics of “What can America do about inequality without corporations and rich people actually giving anything up?”

This isn’t an anti-corporate, anti-wealth assault, it is a necessary corrective to bad tax policy from the 1970s to today.

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Monday Wake Up Call – January 28, 2019

The Daily Escape:

Bell Island, Franz Josef Land with Eira Lodge in foreground. The lodge is a remnant of Benjamin Leigh-Smith’s expedition in 1880 – 2017 photo by Ilya Timin, CC BY-SA 4.0.

The largest gathering of billionaires in the world took place last week at the World Economic Forum’s annual conference in Davos. Vanity Fair reports that they:

“…consume $55 Caesar salads and shark canapĂ©s, rub shoulders with Matt Damon, and attend parties that involve “endless streams of the finest champagne, vodka, and Russian caviar, dancing Cossacks, and beautiful Russian models…”

Bloomberg added: (emphasis by Wrongo)

“UBS and PwC Billionaires Insights reports show that global billionaire wealth has grown from $3.4 trillion in 2009 to $8.9 trillion in 2017…The fortunes of a dozen 2009 Davos attendees have soared by a combined $175 billion, even as median US household wealth has stagnated…”

And there was this report from Davos in the NYT by Kevin Roose: (emphasis by Wrongo)

“They’ll never admit it in public, but many of your bosses want machines to replace you as soon as possible. I know this because, for the past week, I’ve been mingling with corporate executives at the World Economic Forum’s annual meeting in Davos. And I’ve noticed that their answers to questions about automation depend very much on who is listening.”

Roose goes on to say: (emphasis by Wrongo)

“In public, many executives wring their hands over the negative consequences that artificial intelligence and automation could have for workers. They…talk about the need to provide a safety net for people who lose their jobs as a result of automation.

But in private settings, including meetings with the leaders of the many consulting and technology firms…these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.”

Roose quotes Mohit Joshi, president of Infosys, an Indian technology and consulting firm: (emphasis and brackets by Wrongo)

“Earlier they [large businesses] had incremental, 5 to 10% goals in reducing their work force. Now they’re saying, ‘Why can’t we do it with 1% percent of the people we have?’”

And American executives have come up with new buzzwords and euphemisms to disguise their intent. Workers aren’t being replaced by machines, they’re being “released” from onerous, repetitive tasks.

Companies aren’t laying off workers, they’re “undergoing digital transformation.” They’re being “reskilled”.

A 2017 survey by Deloitte found that 53% of companies had already started to use machines to perform tasks previously done by humans. That figure is expected to climb to 72% by next year. As an example, Terry Gou, the chairman of Foxconn, the Taiwanese electronics manufacturer, who makes iPhones, has said his company plans to replace 80% of its workers with robots in the next five to 10 years.

And Wisconsin just gave Foxconn $4.5 Billion to build a plant and employ 13, 000 workers. Can Wisconsin’s soon-to-be laid-off workers be “re-skilled”, and find employment?

A January 2019 report by the very same World Economic Forum estimates that the 1.37 million workers who are projected to be displaced fully out of their roles in the next decade according to the US BLS, may be reskilled to new viable (similar skill set) and desirable (higher wages) jobs:

“The report shows that, in the US alone, with an overall investment of US$4.7 billion, the private sector could reskill 25% of all workers in disrupted jobs with a positive cost-benefit balance. This means that, even without taking into account any further qualitative factors or the significant indirect societal benefits of reskilling, for 25% of at-risk employees, it would be in the financial interest of a company to take on their reskilling.”

The rest presumably will need to fend for themselves. They will likely rely on your taxpayer dollars to be “reskilled”, or go on government assistance.

The real question isn’t how to stem the tide of automation, it’s inevitable. The question for capitalists and our government is how the financial gains from automation and AI will be distributed, and whether the excess profits corporations reap as a result of layoffs will go in part, to workers, or solely to bigwigs and their shareholders.

Will we create a shared prosperity, or just a greater concentration of wealth?

Time to wake up America! This Fourth Industrial Revolution is underway, and estimates are that it will impact as many as 40% of American workers.

It’s time to understand that the 21st Century American corporation isn’t our friend, as constituted and rewarded. It is the enemy of our society, as they quietly work to eliminate your jobs.

We constantly reduce their taxes. We look the other way when they pollute our environment. We allow them to disproportionately finance our elections.

It’s time for a new Capitalism.

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Today’s Wages Have the Same Purchasing Power as in 1978

(Email publishing of The Wrongologist should be restored as Wrongo is using a different vendor, WordPress. Apologies to those who read in email.)

The Daily Escape:

Cliff Palace, Mesa Verde National Park, Colorado, as it might have looked at night in the 12th Century lit by camp fires. Mesa Verde is unique since it is the only NP that preserves the works of man – photo by Rick Dunnahoo

This is going to be a historic year, even when compared to 2018. And it’s starting out with a bang. The government is shut down, half the cabinet is empty, the 2020 presidential race has officially started, and the Democrats are taken over the House.

And that’s without whatever Mueller shoe will drop sometime in the year, or whatever Twitter atrocities Trump decides to commit. In other words, we’re going to have our hands full.

But today, let’s talk about how bad the economy is below the surface of the headline numbers. Debt is rising, and rising debt is supposed to be matched by rising income. It shouldn’t be a surprise that more income is required in order to service more debt. But so far, in the 21st century, for the bottom 90%, debt is growing while income is stagnating.

Pew’s Fact Tank has an analysis that speaks to this problem. Average hourly earnings for non-management private-sector workers in July were $22.65, 2.7% above the average wage from a year earlier. But in the years just before the 2007-08 financial collapse, average hourly earnings often increased by around 4% year-over-year.

And during the high-inflation years of the 1970s and early 1980s, average wages commonly jumped 7%, 8% or even 9% year-over-year.

However, after adjusting for inflation, today’s average hourly wage has about the same purchasing power it did in 1978. In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.

Here is Pew’s chart demonstrating the problem:

Because there’s been little growth in wages, the growth in the standard of living for those below the 90th percentile has been largely fueled by additional consumer debt. The WSJ reports that consumer debt, including credit cards, auto and student loans and personal loans, is on pace to top $4 trillion in 2019, the highest in history. Debt allows you to furnish your home, pay for education, and get a car without having to save for them. In that way, it supports the growing economy.

But Pew also shows how most of the income gains went to those at the top of the food chain:

 

 

Among people in the top 10th of the distribution, real wages have risen a cumulative 15.7%, to $2,112 a week – nearly five times the usual weekly earnings of the bottom tenth ($426).

This lack of symmetrical growth in debt and income actually matters. At some point household borrowers will default in greater numbers than they do today. When those losses occur, the monetary system won’t be able to bail out debtors (or banks) this time around as handily as we did in 2008.

 

Sluggish and uneven wage growth is a key factor behind widening income inequality in the US. Another Pew Research Center report found that in 2016, Americans in the top tenth of the income distribution earned 8.7 times as much as Americans in the bottom tenth ($109,578 versus $12,523).

Compare that to 1970, when the top 10th earned 6.9 times as much as the bottom 10th ($63,512 versus $9,212).

There is no simple solution to get American workers back on the right track. At a minimum, it will take a political groundswell aimed at overturning the way the tax code favors corporations. Along the way we will have to displace the political power of our corporate oligarchs.

Government must be made to serve the public interest, not Mr. Market.

Democracy is the sole mechanism enabling our citizens to have political and economic agency. But, democracy will cease to matter in a corporate-controlled, globalized system of government influence.

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Who The Dems Should Nominate for President

(There will be no Thursday column this week. Wrongo is in NYC.)

The Daily Escape:

The Passion Facade, La Familia Sagrada by Gaudi, Barcelona, Spain

Wrongo has been highlighting several people who have big ideas that could move our country toward reform of capitalism. One issue that impacts that reform is health insurance, and many Congressional candidates who won in the 2018 mid-terms ran either on preserving the ACA, or on implementing Medicare for All.

Talk has started on the 2020 presidential election, and the almost 30 potential candidates that seem set to try for the White House. Now that a Texas judge has declared the ACA unconstitutional, and should that decision be upheld, health insurance should be a big issue in 2020.

For Democrats, politics is a game of good policies badly presented. For Republicans, politics is a game of bad policies skillfully presented. With that in mind, let’s turn to Sen. Chuck Schumer (D-NY), who on Sunday with Chuck Todd, refused to endorse Medicare for All. Instead, he said: “there are lots of different routes” to a universal healthcare system.

Though Schumer says he will support a “healthcare plan that can pass,” there is no evidence that any of the alternatives to Medicare for All have a better chance of passing than Sanders’ single-payer plan that was introduced last year. In the House, a majority of the Democratic caucus supports single-payer.

This is what we have to look forward to in 2019 and 2020. The Dems old guard will try and triangulate on policy in an attempt to corral a few Republican Senators. Nancy Pelosi is not a fan of Medicare for All.

A few of the old guard are running for president, including Bernie and Joe Biden. On the progressive side of the Democratic Party, there is a big age gap to a few relatively young politicians who are clearly progressive-purists.

Benjamin Studebaker has a provocative column, “Why We Cannot Nominate a Young Person in 2020”. His argument is that Democrats who are between 40 and 60 may have the right level of experience and political gravitas, but they all grew up in the Party of the Clintons:

…the overwhelming majority of Democratic politicians in their 40s and 50s are centrists who came of age politically in the ‘90s and ‘00s. These are people who got into Democratic Party politics because they grew up admiring the Clintons….They have spent their political lives working with Gore and Kerry and Obama and that’s the discourse they swim in. Corey Booker is 49. Kamala Harris is 54. Beto O’Rourke is 46. Kirsten Gillibrand is 52. Amy Klobuchar is 58. This group has…been tutored in triangulation from the time they were political toddlers.

Studebaker says that we can’t count on any of these candidates if we want Medicare for All, or a host of other policy improvements. He thinks we need someone who was too left-wing for the Democratic Party in the 1970s, and there is only one such person left alive: Bernie Sanders.

Wrongo isn’t sure. The NYT’s David Leonhardt, in his “Secret to Winning” column, says that the Democrats need a candidate who can, and will run as an economic populist:

They need a candidate who will organize the 2020 campaign around fighting for the little guy and gal….It would be a campaign about Republican politicians and corporate lobbyists who are rigging the game, a campaign that promised good jobs, rising wages, decent health care, affordable education and an end to Trumpian corruption.

Leonhardt thinks that several of those younger Democrats can do the job. He says that the formula is: Return to an updated New Deal. Put the public interest first, not the interests of the over-privileged elites. Force corporations and the rich to pay increased taxes.

Norm Ornstein notes that by 2040, 70% of Americans will live in 15 states, which means that the other 30% of the country will choose 70 of our 100 senators. And the 30% that are in charge of the Senate will be older, whiter, more rural, and more male than the 70%.

Whomever the Dems nominate must have a plan to successfully strip away a few red states. Economic populism can help do that, since it helps the working classes and unemployed. Higher taxes on corporations and the wealthy, a higher minimum wage, and universal health care coverage are the cornerstones of the winning strategy.

The nominee must be someone who is authentic, not someone who is simply an ideologically pure lefty.

Being authentic means someone who doesn’t poll test every idea, and doesn’t base their messaging on what the editorial board of the NYT or WaPo thinks are the right ideas.

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The Kids Are All Right

The Daily Escape:

Autumn in Larch Valley, Banff National Park, Alberta CN – 2008 photo by Andy Simonds

For the past few days, Wrongo has been writing about both ideas and people that could help to shape a reform of American capitalism.

We’ve talked about Bernie Sanders, Richard Murphy, Alan Curtis and Alexi Yurchak, and the Yellow Vests in France. Today, let’s focus on America’s youth, at least some of them:

More than 1,000 young people and allies flooded the Capitol Hill hallways and offices of Democratic representatives to demand that elected officials listen to their youngest constituents—as well as some of the world’s top scientists—and back the bold proposal to shift the US to a zero-carbon energy system by 2050 in order to save the planet from an irreversible climate catastrophe.

The protesters were mostly members of the youth-led Sunrise Movement, 800 of whom had attended a training on lobbying members of Congress and their staffers the previous evening. They carried signs reading, “Do Your Job,” “Back the Deal,” and “No More Excuses“. Here is a picture of them in the halls of Congress:

Before you get all crazy about the (apparently) professionally-made signs, here’s a web site where you can easily make them. More from Common Dreams:

Many also wore T-shirts emblazoned with the following message: “We have a right to good jobs and a livable future,” two key components of the Green New Deal, which would create 10 million jobs in the first decade by putting Americans to work building a green energy infrastructure…

At least 143 of the demonstrators were arrested as they lobbied in 50 congressional offices. But, they had an impact. The number of Democratic lawmakers now supporting a Select Committee on a Green New Deal has now reached 31, twelve of whom signed on this week. How it came together reveals how the Congressional Progressive Caucus (CPC), will use its growing membership.

The Caucus agreed with incumbent members who were willing to have a select committee so long as actual lawmaking authority remained in existing committees.

This wasn’t all due just to the kids. Rep.-elect Alexandria Ocasio-Cortez (D-NY) has spent the past few weeks wrangling support for the Green New Deal as well. The outcome was the result of a collaboration between the CPC leaders, Ocasio-Cortez, and the Sunrise Movement.

Wrongo doesn’t know if a Green New Deal is a good idea or not, but much of the message will resonate with voters. Who will be against “good jobs and a livable future”?

And Alexandria Ocasio-Cortez is showing that she has really good political instincts.

We should be happy that these kids are speaking from their hearts. They are practicing for when they will need the strength to fight the hard political battles of their generation. But, why aren’t we seeing a million parents fighting alongside their kids?

We also should remember how undervalued kids are in America: We under fund their schools. We are providing only low-wage service economy jobs for most of them when they grow up. We hardly care whether they are covered under a health insurance plan. We take them from their parents at the border.

No wonder they are learning to act, since we, their guardians, seem unwilling to act for them.

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Funding The Revolution

The Daily Escape:

Lake Louise, Alberta, Canada in snow – photo by Yan Gao

When the President and the incoming Speaker of the House get into a televised shouting match over whether we have enough money to fund Trump’s wall, you know that things have to change in America. They’re fighting over use of a limited resource, the US government’s funding.

We now have within our means the ability to feed, clothe, shelter, and educate everyone. But, as a country, we are unwilling to do so, because we buy into neoliberal economic theory. Never in history have we had the ability to make our species as secure as we do now, but we choose instead to make as many as insecure as possible.

Until about 1980, economic growth created a level of prosperity that earlier generations of Americans could only dream about. But, economic growth no longer makes people more economically secure. We’ve become prisoners in a system that promotes permanent growth, where wages stagnate, schools decay, and Goldman Sachs sits inside our government.

The question we should be asking is: How can our politics provide an answer to our people’s need for economic security? We know that neoliberalism has reduced many of our people to states of economic insecurity. We know that our economic and social order must change, and profoundly, or face an eventual revolution. This isn’t an option, it’s a certainty.

That means that only state funding will create the (peaceful) change we need.

Here’s a big idea from Richard Murphy, a UK tax accountant:

…To put this another way, what may be the biggest programme of change ever known in human history is required in very short order. We need new energy systems; transformation of our housing stock; new transport infrastructure; radically different approaches to food that might even require rationing if we cannot create change any other way; different ways of working and new ways of using leisure time.

Murphy goes on to say:

But this must be done in a way that increases certainty. Jobs must be created on the ground…And I mean, in every constituency….but the transport and other infrastructure must be provided in that case and that does not simply mean more roads. The social safety net must be recreated. That means a job guarantee. It also means a universal basic income. And business must be transformed. Since that process will be incredibly expensive this requires capital and if that means state investment and co-ownership, so be it.

Murphy says that if this was wartime, our government would find the money to fund radical change. He says that we can no longer just extract higher taxes from the rich to solve our funding requirements, we need to create a vision, a plan and funding to achieve the change required.

One way to fund a portion of these requirements may be to restrict funding for the military, to eliminate tax breaks and subsidies for corporations. More from Murphy:

The time for pussy-footing is over. We know what we need to do. We know the scale of the issue. We know the reasons for acting….and we know we can pay for it. This is not left or right as we know it. And any party not addressing it is part of the problem and not the solution.

He’s suggesting deficit financing for societal gain. What are the chances that revolutionary change can happen? Almost zero today. Left to our political class, we’re just going to keep on doing what we’re currently doing, that is, until we can’t.

As we said yesterday, people say, “It’s the system, we can’t change it”.

But, in the Middle Ages, the exact same thing could have been said about feudalism. That institution was deeply entrenched, it was “how things are, and were meant to be.” It was inconceivable that something like democratic government could ever succeed feudalism, yet it did.

Today, our revolutionary task is to allow democracy to express its full potential to reshape and revitalize our social and economic life.

We must begin by setting priorities, taking resources from areas that drain the economy. Then we need to devote those resources to things that will make for a healthier, more secure economy.

One example is to adjust the priority that military defense spending has in our economy. Let’s stop being the world’s policeman, nobody wants us to do it. Then, use the excess resources to build infrastructure, and renewable energy systems.

Everything else we need then will become easier to build.

It’s a matter of deciding what our priorities are, and voting for those who agree with that vision.

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We’re Being Sold a Story

The Daily Escape:

Plague Fort (or Fort Alexander), St. Petersburg, RU. It was built between 1838 and 1845 on an artificial island in the Gulf of Finland. From 1899 to 1917, the fort housed a research lab focused on plague and other bacterial diseases. It was abandoned in 1983.

The Economist has an 8500-word interview with the documentary film maker, Adam Curtis. For 30 years, Curtis has produced documentaries on politics and society. Apparently, he has emerged as a cult-hero to the UK’s young thinkers trying to comprehend our chaotic world.

His latest film, “HyperNormalisation” (you can view the trailer here, or watch the entire 2+hour documentary here) argues that governments, financiers, and technological utopians have, since the 1970s, structured a simple “mostly fake world” for us, run by corporations, and kept stable by politicians.

Wrongo was attracted to this in part because Curtis takes the title of his documentary from work by a Russian historian, Alexei Yurchak, now a professor at Berkley. He introduced the word in his book Everything Was Forever, Until It Was No More: The Last Soviet Generation (2006). Yurchak says that in the 1980s, everyone from the top to the bottom of Soviet society knew that it wasn’t working. They knew that it was corrupt. They knew that the bosses were looting the system. They knew that the politicians had no vision. And they knew that the Party bosses knew they knew that.

Everyone knew it was fake, and they just accepted the fakeness as normal. Yurchak coined the term “HyperNormalisation” to describe that feeling. When Wrongo was in Russia in October, he heard a few Russians express this exact idea about the end stages of the Soviet Union in the 1980s.

The fall of the Soviet Union didn’t stop them from despising Gorbachev, who ended the state economy and replaced it with a less-than-functioning market economy. They longed for the simpler state of affairs, with less to think about, and less to worry about. Where everyone knew that the system didn’t work, but they all had jobs, and there was food in the markets.

2018 America is far from being the Soviet Union, but this is exactly the way the US is today. In most ways, everything the government touches, like elections, environment, tax policy, and health policy, could be substantially better for all of our citizens.

We all know everyone is unhappy, but everyone just says, “It’s the system. We can’t change it.”

A quote from Curtis:

There is a sense of everything being slightly unreal; that you fight a war that seems to cost you nothing and it has no consequences at home; that money seems to grow on trees; that goods come from China and don’t seem to cost you anything; that phones make you feel liberated, but that maybe they’re manipulating you, but you’re not quite sure.

He talks about the concept of “risk”, and how it entered our discussion, migrating from finance to politics in the 1980s. Today, everything has become about risk analysis, and how to stop bad things happening in the future: (emphasis by Wrongo)

Politics gave up saying that it could change the world for the better and became a wing of management, saying instead that it could stop bad things from happening. The problem with that is that it invites all the politicians to imagine all the bad things that could possibly happen—at which point, you get into a nightmare world where people imagine terrible things, and say that you have to build a system to stop them.

Can the people take power back from corporations and their captured politicians? Maybe, maybe not. People like stability and they fear instability. We saw that with Gorbachev in Russia in the 1980s.

But if we are to move past the collusion of corporations and politicians trying to keep us accepting things we know are unacceptable, we need to have better politicians.

The job of a master persuader is to tell a story that says, “Yes this is risky, but it’s also thrilling, and it might lead to something extraordinary”. The persuader must say, “Yes, I understand your fears but look, what’s happening isn’t right. We can do better than this”.

People are asking, “What is our future? What is this existence for?”

  • If you live in West Virginia surrounded by people taking opioids, you surely want to know what all that sorrow is for
  • If you are a recently laid-off GM worker, you’re asking the same thing
  • If you’re a student with $75k in student debt, and a cog job, you’re asking the same thing
  • If you’re a plumber with no health insurance and pancreatic cancer, you’re asking the same thing
  • If you’ve worked hard to elect someone who just lost because of ballot-stuffing, you’re asking the same thing

These are the questions that our politicians should be answering.

Do you see someone who can bring people together behind a better vision?

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Monday Wake Up Call – December 10, 2018

The Daily Escape:

The twin peaks of Ushba, Caucasus Mountains, Georgia – photo by Pflunt

Last week, Bernie Sanders was with Paul Jay on the Real News Network. The discussion was about how growing income inequality isn’t simply unfair. Bernie said:

Concentration of wealth in America causes concentration of political power.

Sanders had spoken at (his wife Jane’s) Sanders Institute in Vermont on Wednesday. In his subsequent interview, Bernie said:

But it is not just that the one tenth of 1 percent owns more wealth than the bottom 90%. They don’t put their wealth underneath their mattresses….They use that wealth to perpetrate, perpetuate their power. And they do that politically. So you have the Koch brothers and a handful of billionaires who pour hundreds of millions of dollars into elections, because the Supreme Court gutted the campaign finance laws…and now allow billionaires quite openly to buy elections.

We all know that wealth equals political power. Sanders gave a great example:

Lloyd Blankfein, the head of Goldman Sachs, came to Congress a few years ago…after the taxpayers of this country bailed them out because of their greed and their illegal behavior…..These guys, after getting bailed out, they come to Congress. They say, you know what we think Congress should do is…cut Social Security, and Medicare, and Medicaid. And by the way, lower corporate tax rates and give more tax breaks to the wealthy. That’s power. That’s chutzpah. We have it all, we can do whatever we want to do.

He closes with this:

My vision is that we have got to have the guts to take on Wall Street, take on the pharmaceutical industry, take on the insurance industry, take on the 1 percent, and create an economy that works for all.

….We’re seeing great young candidates who didn’t wait on line for 20 years to get permission to run, but kind of jumped in and beat some long-term incumbents. They’re saying, hey, I come from the community. I know what’s going on in this community, and I’m going to fight for working people, and I’m not afraid to take on big money…..So a two-part approach…..we need to fight for our agenda. We need to elect candidates from the grassroots who…are going to implement that agenda.

Bernie is the best messenger about our urgent need to reform capitalism.

In a similar vein, Seth Godin wrote last week about what he calls “Linchpin Jobs”. These are jobs that few can do, and which contribute greatly to society. That’s an interesting concept, but Wrongo focused on his apt description of “Cog Jobs”, which anyone can do, and which can be done with little effort, or skills: (emphasis by Wrongo)

Industry offered a deal to the worker:

Here’s a job. We’ll pay you as little as we can get away with while still being able to fill the job. We’ll make sure it’s easy to find people for this job, because we don’t want you to have much in the way of power or influence….In return, you’ll work as little as you can get away with. That’s the only sane way to respond to the role of being a cog.

This is the dilemma that faces low-skilled workers today: They can find work, but they can’t live on what they make at only one job. Clearly, cog-like work doesn’t create nearly as much value as intelligent work, but not everyone can find a linchpin job, they’re rare.

Can the paradigm that concentration of wealth equals concentration of power be shifted? Is Bernie Sanders the next FDR? While Wrongo thinks we need a younger leader to reform capitalism, Bernie is the right messenger for reform. His effectiveness as a messenger is clear when we see that 70% of the American people now support Medicare for All, just two years after his 2016 campaign.

And the message is clear. Without reform, we’ll have to look our grandchildren in the eye, and say we’ve wrecked their future.

Time to wake up America! This is the signal issue of our time. The reform of Capitalism must be at the top of our agenda.

Whomever the Democrats nominate for president in 2020 has to be a person that can start America down the road toward reducing the concentration of both money and power in America.

The choice in 2020 will either be more Trump, or a Democrat.

We shouldn’t select another tepid corporate Democrat. They probably won’t win. If by some chance one wins, we’d have to watch as our society becomes even more unequal for the rest of our lifetimes.

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Can America Learn From France’s Yellow Vest Movement?

The Daily Escape:

Turtlehead Pond, Groton State Forest, VT – October 2018 photo by mattmacphersonphoto

The Yellow Vests have thrown France into turmoil with their protests in recent weeks. They say they want lower taxes, higher salaries, freedom from gnawing financial fear, and a better life.

It’s a uniquely French phenomenon. Every automobile in France is supposed to be equipped with a yellow vest, so that in case of car accident or breakdown, the driver can put it on to ensure visibility and avoid getting run over.

That enabled the wearing of a yellow vest to demonstrate against unpopular government measures to catch on quickly. Most people had one. The symbolism was fitting: in case of an income inequality emergency, show people that you don’t want to be run over.

What set off the protests was a rise in gasoline taxes. But it became immediately clear that much more was driving the protests, that the gasoline tax was the last straw in a long series of measures favoring the rich at the expense of the majority of the population.

That’s why the movement achieved almost instant popularity and support.

The Yellow Vests held their first demonstrations on Saturday, November 17 on the Champs-ElysĂ©es in Paris. Most French trade union demonstrations are well organized. People carry banners and listen to speeches from leaders at the end. But, the Yellow Vests showed up without any organization, and no leaders to tell them where to go, or to speak for the crowd’s demands.

They were just there in yellow vests, angry and ready to explain their anger to any listener. Their message was:

We can’t make ends meet. The cost of living keeps going up, and our incomes keep going down. We just can’t take it anymore. The government must stop what it’s doing and change course.

This is another example that income disparity between the rich and rest of us is out of control on a global basis.

The Yellow Vest protesters know that our political systems are controlled by the rich, and by their captured politicians. They are enriching themselves on the backs of the working and middle classes. Interestingly, it was the French economist, Thomas Piketty, who has researched and publicized the fact that the US has the largest income gap of any Western nation.

We should be paying closer attention both to Piketty and the Yellow Vests.

Global corporations and their fellow traveler politicians know that this sort of discontent is infectious, so politicians always try to quell it quickly. If the American 90% got the idea from France, revolution might migrate, as our revolution in 1776 migrated to France in 1789.

It is interesting that the NYT reports that in France, the Yellow Vest protests were totally unanticipated by the government.

We all know that income inequality is a growing global problem, so how can it be that the suffering of a country’s citizens and their protest against the French government’s plan to increase gas taxes would be “totally unanticipated by the parties’’?  Are the powers that be in France completely tone-deaf to the needs of their constituents?

So, are there lessons for America in the Yellow Vest movement? There should be, because the issue here is similar to the issue in France, and elsewhere in Europe. That issue is economic insecurity.

There’s no political will to deal with job insecurity. There’s no mechanism in place for those who can’t pay their bills. Soon, given automation and AI, there will not be enough work available for everyone to support themselves and their families. Underemployed people will still need food, shelter, and health care, so they might start by demonstrating in order to get them.

The sooner our corporate and political leaders decide to work on these problems, the better we all will sleep at night. But, no one in the top 10% of our economic strata has any idea what it is like to go without the necessities; it is simply inconceivable to them.

Many think that there are no consequences to the inequality that has developed in America since 1980, but there certainly will be consequences. We are in the midst of economic class warfare. The politicians, bought by the corporate plutocrats, are pushing their corporatist agenda down the throats of the middle and working classes.

We can either engage in a slow reform of Capitalism, or we can wait another generation, and participate in an urgent, rapid destruction of Capitalism as we know it today.

If we opt to go slow, let’s not kid ourselves. You don’t close a deep wound with a Band-Aid. It takes surgery.

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