Notes for a Counterrevolution

With the passage of the Republican tax bill, the economic coup by the plutocracy against the people of the United States is nearly complete.  All that remains is to shred what is left of the safety net in the name of fiscal responsibility — and we can anticipate a concerted effort to accomplish that before the midterm elections.  What can Democrats do about it?

A coup requires a counterrevolution, not incremental "improvements."  None of the suggestions that follow are remotely possible before the 2020 elections, and even then they stand little chance of implementation: not all plutocrats are Republicans.  It's nice to dream, though.

First, the corporate tax rate should be reduced to zero.  Next, virtually all income, including wages, pass-through income, dividends and capital gains should be taxed on the same progressive scale.  Income reinvested in businesses thus would be tax-free, but all income distributed to individuals would be taxable.  Interest income, which encourages savings and the loans that finance economic expansion, would be tax-free.  Payments to foreign investors, who own a bit more than 20% of the US economy, would be taxed at internationally competitive rates.

All income should be taxed to finance Social Security, Medicare, and Medicaid, and all caps on taxable income should be removed.  To make American businesses more competitive with each other, anti-trust laws must be strengthened and vigorously enforced.  Vertical as well as horizontal combinations need closer scrutiny.

The devils can be worked out of the details with implementation, but since none of this is likely to happen anyway, I'll just leave the details to the economists.

Brexit

Thursday's vote on whether or not the UK stays in the EU has a lot of people nervous, even though the vast majority of Americans couldn't tell you what it is much less what impact it may have.  The British, at least, know what it is.  I'm not about to explain it here.

I do think it's interesting, however, how the two sides in the Brexit debate parallel the sides November's US election.  On one side are establishment neoliberals, continuing to invest irrational faith in the "rational markets" fallacy; embracing globalization with enthusiasm that entirely ignores its negative impact on people who actually have to labor for their living; and paying lip service to the social disruption arising from income inequality while imposing austerity measures to exacerbate it.

On the "other side" are proxies for pretty much the same economic elite, but offering a different approach to keeping working people subjugated.  They are the political leaders who pander to xenophobic and racist nationalism to achieve the power to accumulate excessive wealth.  They understand that people with inadequate education (a large majority) will feel comfortable if they can have scapegoats (the "other") for their powerlessness and financial distress.

Is one side better than the other?  Possibly, but neither is a good choice.  It's "heads they win, tails we lose."  All we can do is forget the lose-lose economics and apply our personal value systems to where they each stand on whatever social issues we count most important.

Sigh.

Income Inequality

Pundits and politicians are always going on about how improving education is the answer to income inequality.  They're wrong.

College graduates are significantly more likely to be employed than high school graduates  A lot of their jobs used to be performed perfectly well by high school graduates, but so what?  If you can get a slightly more intellectual waitperson to serve your yuppie clientele for the same price, you may as well do it.  Right?

Back in the old faculty room, it was pretty obvious to everybody that you can't make a silk purse out of sow's ear, nor a Rhodes Scholar out of a horse's ass.  Human aptitudes, sadly, tend to follow that old normal curve.  There are probable winners, possible winners,and certain losers.

This is not to say that we should not work very hard to improve education, especially to shove more of those nice kids in the middle of the normal curve towards the higher end of the "hump" — and certainly we have to lift a lot of poor kids out of the quicksand of poverty and failure, and give them all the opportunities that might help them.

None of that has anything to do with income inequality.

Nobody should work for poverty wages.  Every worker should earn a living wage.  Despite the insistence of Tea Party types, the real inequality problem is not a result of "government giveaways" to the poor (mostly children), but because people working full-time (albeit, at times, in several part-time jobs)  cannot make ends meet.

The answer is legislating a living wage — at this time, about fifteen bucks an hour — indexed for inflation.  Certain businesses will have to spend a lot more on labor.  Who will pay for those extra expenses?  Well, the rest of us, of course.  We won't be able to lay it all on the rich, as much as we might like to do so.  Just the same, we'd be spending a lot less to support programs like SNAP (aka food stamps) and Medicaid.

Also, when the people at the bottom get a boost, higher wages trickle up.  Okay, that will push prices up — but the people hurt most by inflation (apart from retirees like me) are the bankers.  You can be sure the bankers will find a way to deal with inflation, even if it means keeping a bit less of their wealth.

Nobody working full-time ever should have to depend on the social safety net for survival.

Evangelii Gaudium

Here's a little something from the Apostolic Exhortation, Evangelii Gaudium, recently published by Pope Francis:

Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion.

Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

Human beings are themselves considered consumer goods to be used and then discarded. We have created a “throw away” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers."

Certainly, you don't have to be a Catholic to agree.  You don't even have to be a theist.  Francis is one of the good guys.  Here's a little more:

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.

Read the whole exhortation here.