February 21, 2010

Create Real Jobs That Pay Off: Update Our 1970'S Infrastructure

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

One legacy of the Reagan tax cuts is that we stopped maintaining - and never mind modernizing - our infrastructure. As a result there is a LOT of work that needs doing. And there are a very, very large number of unemployed people. Hmmm...

There are so many more ways our economy suffers as the consequences of Reagan-era choices come home to roost. The current economic doldrums are in great part the result of Reagan-era choices:

* The deferred infrastructure maintenance and modernization that resulted from the tax cuts mean that our economy is no longer world-class. Bob Herbert has been writing about this problem for a while. From his most recent,

Schools, highways, the electric grid, water systems, ports, dams, levees — the list can seem endless — have to be maintained, upgraded, rebuilt or replaced if the U.S. is to remain a first-class nation with a first-class economy over the next several decades. And some entirely new infrastructure systems will have to be developed.

So here we are with a massive infrastructure deficit that is harming our ability to compete economically in the world. Just one example: China has 42 high-speed rail lines coming into operation connecting their major cities, and we are just starting our first one connecting ... Tampa to Orlando?

* The education cutbacks then are really hurting now.

* Energy. Cancelling all of Carter's efforts to solve our energy problems has left the economy dependent on last century's expensive and polluting energy sources and the monopolistic giants that control them.

* Debt. Tax cuts creating "structural deficits" have built up tremendous debt and the accompanying burden of paying interest on that debt and dependence on those who fund our borrowing habit.

* Militarization. We spend more on military than every other country on earth combined. The big defense corporations keep us from doing anything about it. Historically this kind of military spending and the resulting debt has ruined empires and kingdoms, and here we are.

* Government. Outsourcing/cutting/destroying/hating government and the commons has left us ill-equipped to catch up with China and others, and deal with monopolistic multinational corporate giants.

Schools, highways, power grid, ... everything. And all this work needs to be done on top of the need to retrofit all of our country's buildings to be energy efficient. Or we will just continue to fall forther behind. There is so much work that needs to be done. I wonder how the cost compares to the amounts that have been transferred to the very rich since the tax cuts started.

Hmmm... Let's see ... high unemployment ... lots of work that needs doing ... massive wealth accumulated at the very top ... hmmm... dot. dot. dot. And on top of that, there is all that evidence that past investment in infrastructure leads to great prosperity in the years following the investment ... dot. dot. dot. hmmm... Ideas are forming... connections are being made...

I can hear the shrieking from the "free market" conservative bunch now, just for thinking such thoughts: "But ... but .. that would be just WRONG to just ... give people jobs doing what needs to be done!!! and taxing the RICH -- the very beneficiaries of past infrastructure investment -- to pay for it? How can you even dare suggest such a thing???!!!"

Public works projects -- infrastructure. Example: In the 1950s, with top tax rates at 90%, we started the massive public works project that is the Interstate Highway System. How did that investment work out for our economy? How many companies benefitted from the ability to deliver trucked goods across the country in a short time? How did those top taxpayers do economically as a result of such investments?

Hmmm...

Posted by Dave Johnson at 12:12 PM | Comments (0) | Link Cosmos

February 8, 2010

Tax Cuts HURT Small And Medium Businesses

This post originally appeared at Campaign for America's Future (CAF). I am a Fellow with CAF.

Much of the public believes that tax cuts "create jobs." A recent Rasmussen poll found that 59% of voters believe cutting taxes is better than increasing government spending as a job-creation tool. This proves that repeating a slogan over and over can effect what people believe.

But here is some news: Corporate taxes are on profits. So a tax cut means that the more profitable companies -- the Wal-Marts, Exxons, and other giants -- benefit. They pay back less to the government for their use of the roads, schools, courts, police, fire & military protection and all the other services that helped them get so big and powerful. So the giant monopolistic corporations that are chewing up small businesses, destroying local and regional retailers, take those tax cuts and use them to turn themselves into even better small-business-destroying machines.

For example, giants like Wal-Mart are destroying local and regional retailers. But it is the Wal-Marts, not the local and regional retailers that are the beneficiaries of tax cuts. They already have every advantage in the world and tax cuts are just more ammunition helping them destroy the small and medium businesses that are the job engine of our economy. This is why the "usual suspects," the politicians who get their campaign funds from the giant companies and work with lobbyists for the largest corporations and the right-wing talk show hosts who always advocate what the largest companies want are the ones who always advocate corporate tax cuts as the solution to everything.

Meanwhile, since smaller businesses that are struggling don't pay taxes, the tax cuts do nothing for them. They're already being walloped by these giants, then walloped by the government giving their competitors even more advantage with these tax cuts, and then they get the infrastructure they depend on cut out from under them. When taxes are cut the infrastructure that supports building new businesses is weakened. The services these companies need are cut back. The schools get worse, the government services are cut back.

If you ask the managers of a small or medium business, they will tell you they want customers, not tax cuts. Customers cause companies to hire people, not tax cuts. All the tax cuts in the world won't "create" a job, if there aren't enough customers coming through the door or ordering products because there is nothing for the new employee to do. And if there are more customers and orders the company will hire people whether they get a tax cut or not. (A job-creating tax credit for small businesses like President Obama is proposing is a different story, and will incentivize hiring.)

So remember, businesses need customers not tax cuts.

Posted by Dave Johnson at 3:52 PM | Comments (0) | Link Cosmos

January 27, 2010

Very High Top Tax Rates Are Very Good For Business

Very high taxes at the top force executives into thinking and acting for the long-term interest of their business and surrounding community. If they can't get wealthy from a quick windfall then they have to run a sustainable business, and that depends on the health of the surrounding community.

Today executives can pocket a windfall in a short time and take off, leaving the mess behind for the rest of us to clean up. For example, the executives at Lehman Brothers got rich by destroying the firm and kept the money after it collapsed, while the employees were all laid off and the economy destroyed.

If high tax rates on the highest incomes mean it takes a decade to get rich, then the executives must do their part to keep the business and surrounding community healthy for that decade.

Posted by Dave Johnson at 3:02 PM | Comments (0) | Link Cosmos

December 31, 2009

Is Obama Progressive?

I think Jerome a Paris does a good job answering the question in his diary, Daily Kos: Obama is better than the extreme-right,

I've already described Obama as a "sane conservative" - he is running policies that would have been mainstream right-wing 30 years ago, and which would be mainstream rightwing in most of Europe, he's restoring competence in government (something I consider a major thing in itself, even if it makes few headlines) and he's mostly governing on the line he promised. It's welcome progress from recent years, and it beats the available alternatives on offer at the voting booth. He's doing the best with the system he inherited. But is he a progressive? In my view, not really. I'm of the opinion that the current system is hopelessly flawed and cannot continue as it is in the long term. And I'm not happy that Obama's policies have been to basically patch the system as it is, and push any resolution of its current contradictions further down the road. There will be a real crisis (a much bigger one than last year's) at some point in the future, but it's hard to tell if it's going to be next year or in a decade. Many people think authorities did a good job in avoiding the worst following last year's financial collapse, and that we're now back on the right track; if you're one of them, then the criticism of Obama as a hostage (or, if you're less kind, ally) to the banking lobby makes little sense and I fully appreciate that. [emphasis added]

Posted by Dave Johnson at 5:10 PM | Comments (2) | Link Cosmos

December 30, 2009

Taxes: Let’s Just Go Back To A Simpler Time

Are you concerned about the country’s large budget deficits? Are you wondering how we are going to pay for two wars, bank bailouts and economic recovery projects while continuing to maintain our roads and bridges and pay for our schools and police and firefighters? Are you wondering what we can do about the great concentration of wealth and income into the hands of a very few at the top?

There are so many budget problems. It would be so nice if we could just go back to a simpler time.

Well there is something we can do to solve most of these problems in one fell swoop. We really can just go back to a simpler time. Why don’t we just go back to the income tax structure that we had back when budgets were balanced, our infrastructure was maintained, our schools were good, the economy grew at a nice, fast clip and the middle class knew that their incomes would grow steadily? What I am suggesting is that we just return the income and corporate tax rates to where they were during the Truman, Eisenhower and Kennedy administrations.

After these “golden years” we cut those top taxes and things started to fall apart. Then we started borrowing to make up for the lost revenue and even borrowed all of the money in the Social Security Trust Fund. We deferred maintenance of our infrastructure of roads and bridges, etc. We cut school budgets. We cut … well almost everything except what the richest were taking home.

Cutting and passing the savings to a few at the top became the corporate business model, too, once executives no longer had to pay high taxes.

As a result of these policies income and wealth have concentrated at the very top ever since. While working people haven’t had much of a raise since the 70’s, the top 1% now recieve the highest share of the nation’s income since 1929. (If that date rings a bell, there’s a reason.) UC Berkeley Professor Robert Reich recently wrote, “In the U.S., the root of the problem is a growing share of total income going to the richest Americans, leaving the middle class with relatively less purchasing power unless they go deep into debt.”

Suppose we did go back to the tax rates of a simpler time? What effect would such a change have on how our country is doing?

The United States now has to pay a huge share of its budget just to cover the interest on the borrowing that tax cuts made necessary. Raising taxes, stopping the borrowing and paying off the debt would remove this huge drag on our economy.

Raising the top tax rates removes the incentive for corporate executives to lie, cheat and steal. Today they can pocket huge sums in a single year, and leave behind the mess they make for others to fix. But high taxes at the top would force longer-term thinking. When it takes years to build up a fortune you want your company to be around for a long time, and you need the surrounding public infrastructure to be in good shape to support your enterprise. So we would all benefit.

I know I am going to be accused of wanting to “punish the rich.” Nothing could be further from the truth. Taxes are not punishment; they are what we all pay to have the benefits and protections of modern society. Those benefits and protections enable people to become wealthy, and we ask that they give some back so others can prosper as well. We all want to be rich. With this tax structure, the more people make the more they can pay in taxes so we all benefit.

So of course we want our corporations to make money, too – and lots of it. That way they can distribute the money so shareholders benefit – and pay taxes.

I am asking that we return to a tax structure that builds wealth but also leaves the companies and communities that helped build the wealth intact and in good shape for the long term.

This was written as part of the Commonweal Institute Progressive Op-Ed Program and appears at the Commonweal Institute's Uncommon Denominator blog.

Posted by Dave Johnson at 12:17 PM | Comments (0) | Link Cosmos

December 22, 2009

Save Social Security - 10 Questions for the Deficit Commission

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

It is possible that there is going to be a “deficit commission” to look for ways to reduce our country’s budget deficits. I have some questions for them to ask to help get things started in the right direction:

1) President Reagan increased Social Security taxes, but used that money to cut the very top tax rates that only the wealthiest pay. Now that the money borrowed from Social Security is coming due, which income group is better positioned to pay it back, wealthy people or the elderly to whom this money is owed?

2) President Clinton left office with a huge budget surplus. Then, President Bush gave tax cuts to the wealthy, and his last budget had a $1.4 trillion deficit. How much of this change was because of those tax cuts for the rich?

3) How large was the country’s yearly budget deficit and total debt in the “Eisenhower/Truman” decades when the top tax rate was 90%?

4) Today we have an “infrastructure deficit” – the amount needed to repair our country’s roads, bridges, sewers, etc. – of somewhere upwards of $1.6 trillion. Was our infrastructure kept in good repair before the top tax rates were cut?

5) Concentration of wealth is long recognized as a threat to democracy, and now we are seeing a low-wage, everything-to-the-top economy with the greatest ever concentration of wealth going to a few at the top. Was the problem of wealth concentration increasing or decreasing before the top tax rates were cut?

6) When top rates were high people couldn’t take home vast fortunes in a single year. When it took several years to make a fortune did corporations depend on long-term or short-term thinking? Did the executives of corporations care if the infrastructure and communities their companies depended on were in good shape? Did large corporations fleece customers and exploit employees for quarterly returns as they do now?

7) The military budget is the largest item in our country’s budget. Was the military budget larger or smaller when we faced the cold war threat from the Soviet Empire?

8) Just how big is our military budget, if you add in veterans programs, nukes, intelligence and the military budget’s share of accumulated debt interest? How large is it in relation to all of the rest of the countries in the world, combined?

9) Speaking of debt interest, how much debt interest do we pay on the debt that has added up since we cut tax rates at the top? Who gets all that interest?

10) Some will say that proposals to bring back the tax rates of the Eisenhower administration are “socialist.” What was the name of the organization that accused President Eisenhower of being a Communist?

11) Does the following chart stimulate any ideas about how we might solve the debt problem?

Posted by Dave Johnson at 11:36 AM | Comments (1) | Link Cosmos

September 25, 2009

Government Takeover

Isn't "government takeover" just another way of saying "We, the People making the decisions?"

Posted by Dave Johnson at 10:05 AM | Comments (0) | Link Cosmos

September 18, 2009

Big Government

Government is us, democracy, We the People in control of the decision making. Conservatives rail against "big government," which literally means they are against We the People making decisions. And that necessarily means they want big corporations and a wealthy few making the decisions instead because that is the only alternative.

THAT is the choice - either the people through our government, or control by and service to a few big corporations and wealthy people.

Posted by Dave Johnson at 1:41 PM | Comments (0) | Link Cosmos

July 28, 2009

Why I Am Pro-Corporate

This post originally appeared at Blog for OurFuture. It was written for the Making It In America project.

I am pro-corporate. I’ll go a step further with that and proclaim that I believe that there are no bad corporations, and that I haven’t seen any corporations do anything wrong.

I see the way you are looking at me. I’d better explain.

The reason I say there are no “bad” corporations is because corporations are not sentient beings that can “do” things or that can be good or bad. They can’t make decisions. Corporations are just a bundle of contracts that allow groups of people to more easily raise capital and amass resources. Corporations are things, like chairs, and things do not make decisions, any more than a chair does. Corporations are tools and tools are neither good nor bad.

When I say I am pro-corporate, this is what I mean: The things that the corporate legal structure enables people to do are good for society. This is why We, the People decided to enact the laws that created corporations. If we want to be able to accomplish things on a large scale, like build a railroad or airports and airplanes or skyscrapers – or solar power plants to replace coal power plants – we want to enable people to more easily raise the necessary capital and amass the resources needed to get the job done. The legal structure of the corporate form of a business accomplishes this.

Corporations, a bundle of contracts, don’t “do” anything, people do. And that is why this discussion is important right now. We are looking here at how to restructure our economy, but before we can do that, we have to correctly identify what went wrong. We have to understand who the good and bad actors were.

So what are some of the things that companies have been doing that we as progressives think should change? Let’s use the highly-publicized example of Wal-Mart and their low wages and benefits and Chinese imports. Wal-Mart always complained about being cast as the bad-actor. They said that if Wal-Mart raised wages and benefits and their competitor Target didn’t, then they would be at a competitive disadvantage and Target would take over the business. And, by extension, any company that tries to “do the right thing” is immediately at a disadvantage to a company that does not.

Looked at this way, if we make Wal-Mart raise wages and Target doesn’t, then not only is Wal-Mart in trouble as a company but now we’re starting all over again trying to get Target to raise wages. And if THEY do so, then along comes K-Mart or Costco or a new company X-Co to pay the low wages, charge lower prices and take away the business. This feels like it is going around in a circle, trying to fix a problem in one place and the pressures of the system immediately make the problem appear somewhere else.

I think blaming companies for the things they "do" also places a lot of stress on people inside of them who might agree with us, and even can alienate them from otherwise supporting progressives. People in the corporate world often feel trapped because the rules of the game require them to engage in what we think of as bad behavior. These are good people who would be very helpful to us in making the correct changes but they feel forced by the system to do the things they do. They are pulled two ways. Executives at Wal-Mart on the one hand can be want to raise wages, and on the other hand have a responsibility to compete with Target.

So what am I getting at here? The companies are not the problem, the rules we set up for them are. Companies operate on a playing field on which the rules of the game are supposed to be decided by US. We, the People are supposed to set up the ground rules and then the companies are supposed to follow those rules. Wal-Mart followed those rules. If we didn’t like the wages and benefits that companies pay, why don’t we change the rules and tell them they all have to pay higher wages and provide better benefits?

Now we’re getting somewhere. Many progressives have been trying to get companies to "behave" in better ways, and haven't been getting much done -- I think due to not correctly identifying the problem. The real problem is that we haven’t set up the rules of the playing field to require these companies – all of them – to provide good wages and benefits, etc. It is our job to regulate what these corporations do. So why didn’t we, through our government, change the rules for all the companies, so they all had a level playing field and clear rules? Identifying why we have not fixed the rules is the path to fixing the larger problem.

What has been happening is that a few people in the bigger companies have been using the resources of those big corporations to influence our system and set the rules of that playing field to give an edge to their companies. They do this so they can personally gain.

This is where we need to focus to fix the corporate system. There should be no way for people in companies to have any say whatsoever in how the playing field on which they operate is set up. How to accomplish this is a subject for future posts.

As I said above, corporations are just a tool, like a hammer. But a hammer can do a lot of damage if a person hits you upside the head with it. That is what we have to stop: a few people using corporate resources and hitting us upside the head.

Oh, and for the record, I am pro-chair, too, though my wife will probably insist I am a pro-couch partisan.

Posted by Dave Johnson at 8:20 AM | Comments (2) | Link Cosmos

July 21, 2009

Should We Bring Back The 90% Top Tax Rate?

This post originally appeared at Open Left

How many stories have we heard in recent years of CEO’s and other executives looting, stealing, polluting and wreaking general havoc? The incentive to loot a company’s pension funds is money. The incentive to outsource our jobs is money. The incentive to deny needed treatments to an insured patient is money. The incentive to pollute our rivers and air is money.

Generally the incentive to lie, cheat and steal is money. This is especially true in the corporate world where the reason for … well, everything … is money. This is normal, and can be kept in check. But the temptation that pushes many over the line is not just money, it is the possibility of the big, humungous jackpot. And that is what we have today.

It used to be that you could make, why, millions of dollars if you worked hard, built a company, invented something important, or had amazing talent. But today mere millions is for chumps. Today you can loot a fund, rig an energy market, forward-run stocks or threaten to bring down an economy and end up with a quick payoff of billions.

When excessive, massive paydays are possible, it opens the door to overwhelming greed and a resulting compromising of principles.

There is a way to prevent the destructive behavior we have been seeing from the top. People won’t have an incentive to cheat and steal if they can’t get the huge jackpot from the proceeds. Let's limit the possibility of collecting a vast and fast return. The vast and fast return is the motivator, so take it out of the equation.

The way to do this is with a very steep progressive income tax with a very high tax rate on income above a certain level. So suppose we set the top tax rate back to 90% for people making over, say $3 million. $3 million a year is nothing to sneeze at, so there is still plenty of reason to do what you do to make a lot of money. And if you pass $3 million you still take home $100K for every million more you make, which is also nothing to sneeze at. But there is no longer a reason to engage in quick-buck schemes. Instead there is plenty of reason to build a solid business over time, and hopefully eventually build a fortune of hundreds of millions. As I said, nothing to sneeze at.

People could still become vastly wealthy, except it would take ten or twenty years to become vastly wealthy. You would have to actually do a good job, consistently, instead of looking for fast-buck schemes to cash out in a year. And for those who still need to make a billion or two a year, We, the People are the beneficiaries while they still take home hundreds of millions. It's a win-win.

Again, if we limit the income that can be realized from such behavior we reduce the incentive to engage in it. We as a society used to understand this. We used to tax high incomes at very high rates. We used to see that this provided all of us with a benefit.

An additional bonus from this idea: by limiting the amount that can be made in a single year we provide an incentive to stay involved and work hard and over a longer period of time build up a respectable fortune. Just not a vast and fast fortune.

Another benefit from increasing the top tax rates is that we need the money. Because of the huge tax cuts that were given to the wealthiest we neglected maintaining our infrastructure, we have run massive deficits, we cut services to citizens and now we are reaching a limit of our ability to borrow. So it is time to ask the beneficiaries of the policies that got us into this jam to pitch in again and help us get back out of it again.

Until the late 1970s the United States had a very, very high top income tax rate. From the time of FDR until the 1960s the top rate was 90% plus on very high incomes. From the 60s until the Reagan years it was in the 70%s. Under Reagan it ramped down to 28%. (See the numbers here.)

The periods of highest taxation of the highest incomes coincides with periods of the most investment in the country’s infrastructure, the period of building the middle class and American leadership in areas of education, science, technology and manufacturing. Perhaps this is because we, as a country, had the financial resources available to invest for the public good rather than tied up by a few at the top as we see today. Perhaps this is because in a consumer economy more regular people with more money keeps things going, and moving the taxes up to the prime beneficiaries increases the amount of money that regular people have to spend.

There were multiple historical justifications for these tax rates. Among these, we understood that the purpose of our economic system was for OUR benefit. So while we encourage people to produce we also understand that once the production is stimulated we all want to benefit from it. So after a certain point a tax kicks in and increases and we all share in the returns from the enterprise.

Another justification was that we needed the money to pay for WWII, and to invest in the things that pulled us out of the depression. Yes, we got out of the depression by raising taxes at the top.

But beginning in the 70s the malefactors of great wealth started a well-funded drumbeat of marketing messages to convince people that government and regulation are bad, the richest should not be taxed, the rich “create jobs,” cutting taxes increases government revenue, etc.

This huge propaganda campaign succeeded and turned the public against taxes and government. They convinced the people that the people should have no power. (Marketing can convince people to smoke -- it can convince people of anything.)

Look at the changes in the nature of our economy since tax rates were lowered. We have financialized the economy. We have been shipping manufacturing and jobs out of the country. We have been eliminating pensions. Wages have stagnated. We have massively increased debt. And a very few at the top have been able to use financial power to consolidate to themselves much of the income and benefits of the economy that We, the People built.

Reasonable returns that build up over time are boring. They require work. So when you can make out like a bandit you act like a bandit. Since the tax rates were lowered the nature of our economy has changed from building solid companies that treated their customers well and provided well-built products, to quick-buck schemes designed for fast cash out.

Corporate conservatives will argue that we just want to “punish success” by asking the wealthiest to pitch in. Actually we want people to make lots of money. In fact, we want more people to make more money. That’s the point of our economy – so that we all are prosperous. And with ever higher tax rates, when those at the top make more money we all make more money. So in fact with high top tax rates there is an additional societal incentive for the rest of us to encourage those at the top to make even more.

What we don’t want is people gaming the system so they can reap vast personal returns for themselves at the expense of the rest of us. We want the system functioning smoothly. A very high top tax rate helps fight this problem. In the recent financial collapse it was vast and fast returns that provided the incentive for the gaming, for taking huge risks and not worrying enough about the downside.

Some other points, off the top of my head: (This is a blog post not a Ph.D. thesis.)

- High tax rates at the top encourage work.

- High top tax rates limit the concentration of wealth.

- High top tax rates distribute the benefits of our economy to all of us, paying a dividend for participating in a democracy.

We can also use high top tax rates to increase investment incentives. A top rate of 90% provides a lot of room to set a favorable capital gains rate. If you only tax, say, 60% of the income from capital gains this would provide a huge incentive for the very rich to invest. This way a person in the 90% tax rate would only pay $54 in taxes and a person in a 20% tax rate would only pay $12 on capital gains.

We used to believe as a society in democracy and sharing the wealth. We used to believe in not letting a few get wealthy enough that they can use the resulting power to skew the country's policies in their favor. We used to believe that windfalls should be shared. This idea helps return us to a functioning democracy with the resources to act for our mutual benefit.

This idea retains the profit incentive while reducing the greed/bad-behavior incentive by capping the potential gains. These potential gains can be great enough that anyone can strive for them, without being high enough to drive massive greed.

So, what do you think? Should we set the top tax rate back to 90% or higher?

Posted by Dave Johnson at 10:50 AM | Comments (0) | Link Cosmos

July 16, 2009

Who Is At The Table?

This article was produced as part of Commonweal Institute's Progressive Op-Ed Program

Progressives believe in a “we’re all in this together” philosophy while conservatives follow a “you are on your own” philosophy. The differences between these approaches can be clearly seen in the battle over how we share the benefits of our economy.

Conservatives encourage people to take “personal responsibility” rather than to rely on each other for support and guidance. When it comes to things like negotiating for pay and benefits this approach limits each of us to the power and resources that we have alone as individuals.

But big companies are not “on their own.” They are legally allowed to concentrate resources and power that dwarf anything an individual could muster. Companies might have thousands, even tens of thousands of employees who have to do what they are told. They have top legal teams at the table across from you. They can place advertisements and hire PR firms to spin false stories that turn the public against you.

A “you are on your own” approach puts each of us alone at the table with powerful the big companies. When we ask for higher pay, time off, benefits or better working conditions they can set us against each other by saying, “we’ll just find someone else to do your job.” Big companies seeking to lower or eliminate worker costs (you) and pocket the savings on one side of the table with regular individuals on the other side of the table is a one-sided negotiation. The result is an increasingly one-sided economy, with the benefits of the economy going overwhelmingly to those who control these powerful companies.

The negotiating table is out of balance and the result is this terrible economic downturn.
There is another approach. We can create win-win solutions that work for companies and for each of us as individuals. This will happen when there is balance between those at the table negotiating shares in the benefits of our economy. To achieve this we need to strengthen the unions. We know this because there was a period in our history when we had a few strong unions which brought a better balance of power at the negotiating table. This balance didn’t just help union members, it created the middle class.

Unions are the very essence of “we’re all in this together”. People banded together and refused to work unless conditions improved. This unity gave them the power to ask for better wages, benefits, time off, sick pay, health care, pensions and other benefits that we all came to expect and enjoy. The resulting balance of power forced both sides to look for balanced, win-win approaches. It created an economy with a stable workforce that could afford to purchase consumer goods, so companies prospered as well.

But in recent decades the unions have been weakened. The companies have created a stacked deck, forcing unions away from the bargaining table. With only the big companies at the table, of course the outcome reflects their short-term interests. Job security is non-existent. Raises are rare. Benefits are cut. Pensions and health insurance are ever harder to find.

The fact is, when unions are weakened the interests of all workers, unionized or not, are not represented.

The current state of the economy demonstrates how the conservative “you’re on your own” approach has failed us. Our economy is terribly out of balance because the negotiating table has been out of balance for so long.

So it is time to restore balance. A progressive “we are in this together” approach can restore our economy. The Employee Free Choice Act, now before the Congress, is an example of the kind of progressive policy that would let workers join unions and again sit at the table without fear of being fired by their employers.

When working people are once again represented at the bargaining table, the big companies will be forced to accept win-win solutions. The economy will be restored and can once again benefit all of us.

Posted by Dave Johnson at 10:19 AM | Comments (0) | Link Cosmos

Future Headlines

Update -- Take a look at Headline 2020.

This post originally appeared at Open Left

Yesterday I wrote about ideas. Today I'd like to write about dreams.

At the recent America’s Future Now conference put on by Campaign for America’s Future, I attended a session led by Commonweal Institute’s Executive Director Barry Kendall called "Collaborating on Ideas for the Long-Term." Barry is also Co-Chair of the Progressive Ideas Network (PIN), an alliance of progressive think tanks. (Note - PIN recently published a book, THINKING BIG, Progressive Ideas for a New Era.)

Barry has been working with this group of think tanks to encourage long-term thinking, and was talking to the people attending the session about PIN's model for creating and supporting collective projects on big ideas.

To introduce the idea of long-term idea work, Barry used a concept that he calls "Progressive Victories, circa 2020," based on an idea from Joe Brewer at Cognitive Policy Works. His idea is to think about headlines that we would like to see at some point in the near or even distant future. Barry asked the group to imagine the headlines they would see in newspapers in the year 2020, if progressives are able to build true governing power and enact their agenda.

Here are just a few of the 2020 headlines offered by the group:

Rail Passengers Outnumber Auto Passengers 2 To 1
UN Global Governance Task Force Reels In Corporate Anarchy
Annual Citizen Dividend Raised to $20,000 - (mine)
World Population Growth Stabilized
Steady-State Economy Realized
10 Global Corporations Have Their Federal Charters Revoked For Criminal Activity
Citizen Representatives Now Hold Majorities on Corporate Boards
US Manufacturing Reaches New Peak
OMB Enacts Full-Cost Accounting on All Policy Proposals
Planet Temperature Stabilizes

These are great.

An exercise like this helps get us past the current habit many of us seem to have of reacting mostly to today’s events and battles, and thinking instead about where we might be able to take our society in the future. It was difficult to dream about the future when we were plagued by George W. Bush and the far right in office But we have some room now to try. Of course, some of the headlines presented (which I didn't include here) dreamed of a progressive resolution to current events, but the exercise is an attempt to move us past reaction and into proaction.

Thinking about possible futures brings with it the question of how to get there. I'll write about that tomorrow.

I am hoping that readers can leave comments with headlines they hope to see in 5, 10 and 20 years. My own headline from above, in the form that would be useful in a comment here, would be "May 2020, Annual Citizen Dividend Raised to $20,000". The opening paragraph of the accompanying story would be something like,

"The annual citizen dividend has been increased to $20,000. This is the dividend paid to all citizens as their share of the fees collected from businesses that put pollutants into the atmosphere up to their allowed cap, for oil and other extracted resources, and other recovery of externalized costs. A similar amount is added to the National Income Trust to increase future payouts. In similar news, because of increasing productivity the maximum workweek has been reduced to 15 hours and the minimum wage has reached $50 per hour."

Yes, I imagine an economy in which every person has a guaranteed income (before working) of $20,000, people only work 15 hours and the minimum wage is $50. Why not? With computers, robots and machines doing more and more of the work for us, why not? The economic paradigm we operate under today sure isn't working for most of us, so why not imagine something better for all of us?

We all feel the pressure of so many people competing for jobs. But imagine that instead of competing for scarce jobs, everyone just works fewer hours. Last March, in A Stimulus for Working Fewer Hours, economist Dean Baker wrote,

An alternative would be to have everyone share in the adjustment to excess supply by reducing work hours. Fewer work hours would mean roughly proportionate reductions in pay, but there would be the offsetting benefit of more leisure time. Workers would have more time to spend with their families or in nonwork activities. This would bring us more in line with the rest of the world, where the standard workweek and year is considerably shorter.

So what is your vision for a progressive future? Let’s come up with some headlines you would like to see in five, ten and twenty years. Give it a try. Tomorrow we can work on how to get there.

Posted by Dave Johnson at 8:24 AM | Comments (0) | Link Cosmos