The other obvious way to provide a quick boost to the economy is by giving employers tax incentives for shortening their standard workweek or work year. This can take different forms. An employer who currently provides no paid vacation can offer all her workers three weeks a year of paid vacation, approximately a 6% reduction in work time.

These are just a few ideas for restructuring the economy in ways the help all of us instead of just a few at the top. Please add your ideas in the comments.

We have a choice. We can continue with the system we have, and most of us -- the help -- will just get poorer and poorer while a few at the top take home more and more. Or we can change who gets what for what, and everyone comes out ahead.

*So which will it be, cake or death?

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Posted by Dave Johnson at 1:52 PM | Comments (3) | Link Cosmos

June 30, 2010

Watch Alan Grayson Give One Of The Best

Watch Alan Grayson give one of the best presentations of reasons to vote for progressives.

And the rubber chicken.

Skip to 9:57. Seriously, drag the slider until the time is 9:57. Worth it.

This was at the America's Future Now conference earlier in June. There is more video on the site.

Posted by Dave Johnson at 3:06 PM | Comments (0) | Link Cosmos

June 4, 2010

Go Off The Reservation

Please read: Progressives: Time to Go Off the Reservation,

We must be “off the reservation” as labor was under Roosevelt, and the civil rights movement was under Johnson. President Johnson wanted the Rev. Martin Luther King to shut down the demonstrations, saying that they would make reform impossible. With an independent movement, even King could not do that. Instead he went to Selma, and the resulting confrontation led directly to passage of the Voting Rights Act.

Posted by Dave Johnson at 9:05 AM | Comments (0) | Link Cosmos

May 5, 2010

Reagan Revolution Home To Roost: America Is Crumbling

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.

The conservative argument of the last 30-40 years boils down to this: "Hey look at this big pile of seed corn. Let's eat it!" Almost 30 years after the "Reagan Revolution" our infrastructure is crumbling around us. Since the Reagan-era tax cuts we have been deferring maintenance of (and never mind modernizing) our infrastructure, and as a result have become less competitive in the world economy.

Meanwhile our economic competitors, countries like China and India, have been building infrastructure like crazy. Other countries are investing, educating, improving public services because they know these things make the economy explode later. A major component of China's stimulus was infrastructure and public services - including public welfare - because of the economic benefits that come later.

Now for those countries it is later, while for us it's just becoming too late. Their investment is paying off while we're having trouble paying off the accumulated Reagan/Bush tax-cut debt.

How did we get here?

Public infrastructure is the roads, courts, education, etc. that enable an economy to prosper. We got ourselves out of the Great Depression with a big investment in public infrastructure. The government taxed the wealthy and built or improved modern roads, bridges, post offices, courthouses, shipyards, schools and other public structures that enabled business to take off.

And then business took off. The idea was, of course, that business would give back some of the returns to keep that process going. But instead the big companies and wealthy families funded a conservative propaganda machine that convinced people to let them just keep it. Look at this chart from 14 Ways A 90 Percent Top Tax Rate Fixes Our Economy And Our Country:

You can clearly see that the money that should have been invested in maintaining and modernizing our infrastructure instead has gone to a few wealthy people at the top of the food chain. (We're the food.) And of course, we all can clearly see the results of this in today's economy. They ate the seed corn, America is crumbling.

Now, here we are later and we are seeing the result of the Reagan Revolution. The American Society of Civil Engineers (ASCE) Infrastructure Report Card estimates that we are $2.2 trillion behind just on maintaining the existing infrastructure, never mind modernizing. Please click through and explore what ASCE is saying there. (Conservatives -- there are lots of pictures!)

What do we do?

The answer is obvious. It is called public investment. Ask the big companies, the banks and the wealthy to pay back some of the incredible amounts of money they have been piling up as a result of the past investment that We, the People made in building that infrastructure that enabled the economy to boom. Use that money to invest in maintaining and modernizing the infrastructure so that the economy can again thrive for all of us.

We can employ the unemployed and bring our infrastructure up to par at the same time. There is a lot of work that needs doing and we have a lot of people out of work.

The payback will be enormous. The economy will explode. And we can build sustainability into the process this time.

What is in the way?

The problem now is that the corporate/conservative propaganda machine has gone way past talking people into cutting taxes for the rich and cutting back on public spending for infrastructure and our people. Now they have become very extreme, convincing a number of people that government spending - We, the People spending on the common good - and government itself - We, the People making the decisions for ourselves - is the wrong approach. They believe that any government at all is "socialism" -- run for the benefit of all of us -- and that all public services must be "privatized" -- meaning run for the benefit of a few. They believe it is wrong, even immoral to have public schools, public transit, public health care, regulations that restrict what companies can do to consumers or the environment, etc.

They have the megaphone because they have the money. We have to confront this head on.

More to come!

This is another story of a wealthy few selling off the country's people and future. This is another story of gains for a few at the expense of the rest of us. These stories are becoming all too common. This is the Reagan Revolution coming home to roost, and I will continue to write about the terrible price we are paying and will be paying for a long time for the failed experiment in conservative ideology.

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Posted by Dave Johnson at 1:56 PM | Comments (1) | Link Cosmos

April 3, 2010

How Do We Counter Republican Propaganda?

The speech below by Rep. Paul Ryan lays out how the Republicans will campaign this fall. It is well-crafted propaganda, designed to get people to vote for what is really a corporate-run, privatized society replacing our democracy and distributing the benefits of everything that We, the People built over to a select few wealthy elites.

Lots and lots of people are buying it. There are a few reasons for this. I think the most important reason is that most people are not hearing anything else. There is nothing in any of the places where most people get information to counter this stuff.

Another reason people are buying it is that it draws on a few decades of trial-and-error narrative-building that has become a conventional wisdom. Many, many people actually believe now that cutting taxes increases revenue, taxes hurt and "take money out of" the economy, businesses always do things more efficiently and effectively than government, and the rest of the pro-corporate litany. Even our own Democratic leaders like President Obama frequently repeat this right-wing stuff, thereby destroying the credibility of progressive arguments.

The propaganda is backed by a rewriting of history that is taking place. Many people now think that Roosevelt's policies made the depression worse, etc. This is because the right is out there saying it over and over and no one is reaching the general public with anything to counter the lies. Today you can barely turn on a radio, open a newspaper, turn on the TV, go to most churches or go to many kinds of organized group activities like hunting groups, veterans groups, etc. without being blasted with this stuff.

Oh, and one more thing, you can't listen to any Republican, anywhere, talk without hearing the same points as you hear on the talk radio shows or read in the ubiquitous op-eds repeated almost word-for-word, driving the point home to people over and over from every direction. Imagine Democrats trying to drive a coherent, coordinated and repeated narrative. HA!

Those of us who believe in democracy need to come up with a public campaign to counter this stuff before it is too late. This requires a change in the way we think. Each of us must understand that our efforts have to start reaching out to the broad, general public, not just blog-readers, and make the case. The public out there beyond the blogosphere needs to hear reasons why one-person-one-vote democracy is better for them than one-dollar-one-vote "free market" corporatocracy or else they are naturally going to choose the latter. You can't blame people for making this choice if the only thing they are hearing out there in Kansas and Texas and Alabama is one side of the argument, and the other side isn't even engaging.

I'm saying we should start thinking about things like DailyKos and Firedoglake ads on the sides of buses. We should be thinking about putting up billboards that say "Government is We, the People making the decisions instead of big corporations making the decisions." We should be thinking about hosting public speaking engagements and getting our Fox-watching relatives to come.

So please read the following with the idea of how to counter it in mind. Instead of arguing with all the lies and distortions you are about to read, think about how to talk to regular people in ways that help them understand why democracy, taking care of each other, and our all-of-us-in-it-together progressive values benefit them.

For example, counter-arguments include informing people of the fact that government is "We, the People" making decisions for ourselves -- so "big government" really just means more control by the people over how our resources are used, and over our own lives. The tax burden rests on fewer people at the top because wealth is so greatly concentrated that a few people now get most of the income and control almost all of the wealth. And of course, much of what is complained about in the following was actually forced on us by Republicans, like the massive debt!

So here it is: Should America Bid Farewell to Exceptional Freedom? By Rep. Paul Ryan

Last week, on March 21st, Congress enacted a new Intolerable Act. Congress passed the Health Care bill - or I should say, one political party passed it - over a swelling revolt by the American people. The reform is an atrocity. It mandates that every American must buy health insurance, under IRS scrutiny. It sets up an army of federal bureaucrats who ultimately decide for you how you should receive Health Care, what kind, and how much...or whether you don't qualify at all. Never has our government claimed the power to decide when each of us has lived well enough or long enough to be refused life-saving medical assistance.

This presumptuous reform has put this nation ... once dedicated to the life and freedom of every person ... on a long decline toward the same mediocrity that the social welfare states of Europe have become.

Americans are preparing to fight another American Revolution, this time, a peaceful one with election ballots...but the "causes" of both are the same:

Should unchecked centralized government be allowed to grow and grow in power ... or should its powers be limited and returned to the people?

Should irresponsible leaders in a distant capital be encouraged to run up scandalous debts without limit that crush jobs and stall prosperity ... or should the reckless be turned out of office and a new government elected to live within its means?

Should America bid farewell to exceptional freedom and follow the retreat to European social welfare paternalism ... or should we make a new start, in the faith that boundless opportunities belong to the workers, the builders, the industrious, and the free?

We are at the beginning of an election campaign like you've never seen before!

We are challenged to answer again the momentous questions our Founders raised when they launched mankind's noblest experiment in human freedom. They made a fundamental choice and changed history for the better. Now it's our high calling to make that choice: between managed scarcity, or solid growth ... between living in dependency on government handouts, or taking responsibility for our lives ... between confiscating the earnings of some and spreading them around, or securing everyone's right to the rewards of their work ... between bureaucratic central government, or self-government ... between the European social welfare state or the American idea of free market democracy.

What kind of nation do we wish to be? What kind of society will we hand down to our children and future generations? In the coming watershed election, the nature of this unique and exceptional land is at stake. We will choose one of two different paths. And once we make that choice, there's no going back.

This is not the kind of election I would prefer. But it was forced on us by the leaders of our government.

These leaders are walking America down a new path ... creating entitlements and promising benefits that model the United States after the European Union: a welfare state society where most people pay little or no taxes but become dependent on government benefits ... where tax reduction is impossible because more people have a stake in the welfare state than in free enterprise ... where high unemployment is accepted as a way of life, and the spirit of risk-taking is smothered by a tangle of red tape from an all-providing centralized government.

True, the United States has been moving slowly toward this path a long time. And Democrats and Republicans share the blame. Now we are approaching a "tipping point." Once we pass it, we will become a different people. Before the "tipping point," Americans remain independent and take responsibility for their own well-being. Once we have gone beyond the "tipping point," that self-sufficient outlook will be gradually transformed into a soft despotism a lot like Europe's social welfare states. Soft despotism isn't cruel or mean, it's kindly and sympathetic. It doesn't help anyone take charge of life, but it does keep everyone in a happy state of childhood. A growing centralized bureaucracy will provide for everyone's needs, care for everyone's heath, direct everyone's career, arrange everyone's important private affairs, and work for everyone's pleasure.

The only hitch is, government must be the sole supplier of everyone's happiness ... the shepherd over this flock of sheep.

Am I exaggerating? Are we really reaching this "tipping point"? Exact and precise measures cannot be made, but an eye-opening study by the Tax Foundation, a reliable and non-partisan research group, tells us that in 2004, 20 percent of US households were getting about 75 percent of their income from the federal government. In other words, one out of five families in America is already government dependent. Another 20 percent were receiving almost 40 percent of their income from federal programs, so another one in five has become government reliant for their livelihood.

All told, 60 percent - three out of five households in America - were receiving more government benefits and services (in dollar value) than they were paying back in taxes. The Tax Foundation estimates that President Obama's budget last year will raise this "net government inflow" from 60 to 70 percent. Look at it this way: three out of ten American families are supporting themselves plus - through government - supplying or supplementing the incomes of seven other households. As a permanent arrangement, this is individually unfair, politically inequitable, and economically dangerous.

It raises a subtle but real threat to self-government when the few are paying more and more of the bill for government services and subsidies to the majority: "He who pays the piper calls the tune." The next chapter is the rule of "crony capitalism," where those who pay most taxes get the privileges, and government by and for the people is replaced by government by and for the few. The end of this story is soft despotism.

We already see enough of "crony capitalism." When government sends bailout money to Wall Street firms they label "too big to fail," that's "crony capitalism." When government buys shares in General Motors, names their management, and dictates their salaries, that's "crony capitalism." When big health insurance companies, instead of competing for market, team up with Congressional Health Care writers to order every individual to buy their products, that's "crony capitalism." When thousands of small businesses have to meet bottom lines with no government bailout, well, you're too small to succeed...good luck!

The Democratic leaders of Congress and in the White House hold a view they call "Progressivism." Progressivism began in Wisconsin, where I come from. It came into our schools from European universities under the spell of intellectuals such as Hegel and Weber, and the German leader Bismarck. The best known Wisconsin Progressive was actually a Republican, Robert LaFollette.

Progressivism was a powerful strain in both political parties for many years. Theodore Roosevelt, a Republican, and Woodrow Wilson, a Democrat, both brought the Progressive movement to Washington.

Early Progressives wanted to empower and engage the people. They fought for populist reforms like initiative and referendum, recalls, judicial elections, the breakup of monopoly corporations, and the elimination of vote buying and urban patronage. But Progressivism turned away from popular control toward central government planning. It lost most Americans and consumed itself in paternalism, arrogance, and snobbish condescension. "Fighting Bob" LaFollette, Teddy Roosevelt, and Woodrow Wilson would have scorned the self-proclaimed "Progressives" of our day for handing out bailout checks to giant corporations, corrupting the Congress to purchase votes for government controlled health care, and funneling billions in Jobs Stimulus money to local politicians to pay for make-work patronage. That's not "Progressivism," that's what real Progressives fought against!

Since America began, the timid have feared the Founding Fathers' ideas of individual freedom, so they yearn for Old World class models. Our Progressivists are the latest iteration of that same fear of the people. In unprecedented numbers, Americans are speaking out against the intolerable Health Care bill and irresponsible debt-ridden spending.

Does anyone recall Norman Rockwell's famous "Freedom of Speech" painting of an average working Joe standing and speaking his mind at a town hall meeting? Today's Progressivists ridicule average Americans speaking out at tea parties across the nation and denounce their criticisms as "un-American." Millions of average Americans reject their big government solutions, and that scares them.

Last January President Obama said: "There are simply philosophical differences that will always cause us to part ways. These disagreements, about the role of government in our lives, about our national priorities and our national security, have been taking place for over two hundred years."

He was right. So let's examine these "philosophical differences" of government. Progressivists say there are no enduring ideas of right or wrong. Everything is "relative" to history, so our ideas need to change. Progressivists say the Founders' Constitution including its amendments, with its principles of equal natural rights, limited government, and popular consent is outdated. We should have a "living constitution" that keeps up with the times. Progressivists invent new rights and enforce them with a more powerful central government and more federal agencies to direct society through the changes of history. And don't worry, they say. Bureaucrats can be controlled by Congressional oversight.

Would you like an example of how successful Congressional oversight is? Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (or GSEs), underwrote trillions of dollars in junk mortgages. Year after year their officials and others from HUD, Treasury, and other agencies who supervise them marched up to Congress for hearings. Red flags were raised. The oversight committees had other priorities and dismissed them out of hand. With the housing market already tanking, Financial Services Committee Chairman Barney Frank said: "This ability to provide stability to the market is what, in my mind, makes the GSEs a congressional success story." Less than 18 months later, the ‘market-stabilizing' GSEs went belly-up due to their shoddy business practices, collapsing the mortgage credit industry and sparking the worldwide financial meltdown. No one knows the ultimate cost to the taxpayers but it will be gigantic.

If Congress can't control what a few mortgage finance bureaucrats do with your dollars, why would anyone trust Congress to control what tens of thousands of bureaucrats will do with your health?

The Progressivist ideology embraced by today's leaders is very different from everything rank-and-file Democrats, independents, and Republicans stand for. America stands for nothing if not for the fixed truth that unalienable rights were granted to every human being not by government but by "nature and nature's God." The truths of the American founding can't become obsolete because they are not timebound. They are eternal. The practical consequence of these truths is free market democracy, the American idea of free labor and free enterprise under government by popular consent. The deepest case for free market democracy is moral, rooted in human equality and the natural right to be free.

A government that expands beyond its high but limited mission of securing our natural rights is not progressive, it's regressive. It privileges the powerful at the expense of the people. It establishes the rule of class over class. The American Revolution and the Constitution replaced class rule with a better idea: equal opportunity for all. The promise of keeping the earnings of your work is central to justice, freedom, and the hope to improve your life.

In their hearts Americans know this, but people were alarmed in 2008 by rising unemployment, falling home values, a credit crunch, and a financial meltdown.

They voted for a change of parties in the White House, and elected the largest Democratic Congressional majority in more than three decades. So overwhelming was their majority that the opposition is unable to do anything to stop them from running roughshod over our foundations. Harry Reid had a supermajority in the Senate that could not be filibustered. Still, the people's mandate for Congress and the new President was clear, simple, and unmistakable: get employment back on track ... get our economy growing again.

Americans have lost jobs nearly every month since these leaders took over the federal government in January 2009, more than 4 million at last count. The official unemployment rate hovers near 10 percent, but if we add in folks who have stopped looking for work due to lack of job prospects, the rate is a lot higher.

They began by passing the first Stimulus, a taxpayer giveaway to their favorite special interests. The price tag was $862 billion. They pushed through a second stimulus bill that cost you another $18 billion. Let's see: since 4 million Americans have been unemployed since they passed these "stimuli," that averages $220,000 per job lost. Think about that. Democrats can't even put people out of work without spending near a trillion dollars!

Just to return to where we were at the end of 2007, 8.4 million jobs have to be created. To reduce unemployment to its pre-crisis level of 5 per cent by the end of President Obama's term, our economy needs to create 247,000 new jobs per month. But we are headed in the wrong direction ... except in one field: the government is growing at breakneck pace in expanding federal payrolls.

Although millions of private sector jobs have been lost since the recession began, Washington is on track to add about 275,000 more people to the public payrolls - a whopping 15 percent increase. And we aren't talking minimum wages here. More federal workers make over $100,000 than those earning $40,000 or less. The average government worker's salary in 2009 was 21 percent higher than private sector salaries. The average federal worker's compensation package, including benefits, was nearly $120,000 in 2008, twice the private sector at $60,000. One study shows the private sector benefit package averages $9,900 while the federal package averages almost $41,000. Now the Administration wants Congress to privilege federal workers by writing off their unpaid student loans after ten years. People in productive private sector jobs would keep paying for twenty years. Progressivists would really like everyone to work for the government.

Has any Congress in history enacted, or tried to enact, so many foolish, squalid, and counterproductive programs?

It isn't good news when anyone losses his job. But I'll make an exception when the Speaker of the House and the Senate Majority Leader lose theirs in November!

As their first major item of business last year, these leaders pushed through a budget so bloated that it will double the federal debt in five years, and triple it in ten.

Now the Administration has sent Congress a budget that's far worse. The nonpartisan Congressional Budget Office [CBO] reports that 10 years from now, this budget will drive the federal debt burden up to 90 percent of the nation's entire economic production. It propels spending to a new record of $3.8 trillion next year [FY 2011]. It widens the annual deficit to a new record of $1.5 trillion this year [FY 2010], and raises $1.8 trillion in new taxes through 2020.

Two and a half years after this recession started, and no new private jobs? Think what these mind-boggling tax increases and mountain of debt are signaling to people who want to open or expand job-creating businesses. Congress keeps raising the barriers against work and production - that's your answer.

At a time when economic and job expansion should be Washington's highest priority ... and as if the multi-trillion dollar Health Care debacle were not enough, the Progressivist leadership in Congress are adding insult to injury by promoting their energy and climate agenda through their Cap and Trade plan. Put aside the fact that there is growing disagreement among scientists about climate change and its causes. This bill is a big mistake for other reasons.

CBO estimates that Cap and Trade's total cost is another near-trillion dollars. By one CBO estimate, the tax and energy cost bills for the average American household may grow by $1,600 a year. Other studies put this cost a lot higher.

If you don't believe me, let me quote a key Democratic Senator:

Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket. Coal-powered plants...natural gas...whatever the plants were, whatever the industry was...would have to retrofit their operations. That will cost money. They will pass that money on to consumers...So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted.

That was Senator Barack Obama in January 2008, talking about what he would do as President. Don't say the man doesn't work to keep his promises!

Economists across the spectrum tell us that Cap and Trade would make our long-term national economic production fall below potential, causing higher unemployment. Federal spending is on an unsustainable path that can only get worse if this happens. There is general agreement that the environmental improvements from Cap and Trade are either nonexistent or too small to measure.

Congressional leaders are also pushing an unprecedented expansion of the Federal Reserve Board's regulatory powers over financial institutions under the belief that government must protect the people from themselves. This measure will direct federal agents to inspect, and at their pleasure object to, the wages and compensation which businesses on Main Street as well as Wall Street wish to pay employees. It puts bureaucracies in charge of deciding the type and line of credit which consumers and businesses will have access to when they shop for cars, homes, education, and expansion of facilities. The Fed has already failed the twofold assignment it has - keeping the economy and jobs growing, and keeping prices stable. It should return to its original mission of guaranteeing the long-term value of our dollar. Instead the same leaders who never knew the government mortgage giants were supplying credit for worthless mortgages now want Fed bureaucrats to regulate the businesses that supply personal and commercial credit? If that happens, economic recovery will be a longer time coming.

And now I want to return to the Health Care Frankenstein. Most Americans understand that government-run Health Care is not free, not cheap, and not compassionate. I think most Americans believe Congress has no idea of what the public demand will be for subsidized Health Care. They are correct. When Medicare was enacted, Congress guessed it would cost about 10 percent of what it turned out to be after 25 years. Heck, Congress couldn't even figure the cost of the 3-month long Cash for Clunkers subsidy last year, underestimating it on the order of 1 to 9. Most Americans know the Congressional majority are clueless about what their government-run Health Care system is going to cost.

The drama that brought this creature to life was unedifying ... part tragedy and part farce. Ethical categories went out the window. Never in history have the deliberations of Congress been subverted on this scale. The secrecy, the lack of transparency, the half-truths were stunning. The votes called at midnight ... the 2 and 3 thousand page bills members of Congress had no time to read before the votes ... the sordid backroom deals, the Cornhusker Kickback that shamed Nebraska, the Louisiana Purchase, the "Gator Aid" Medicare privilege for Florida, the additional Medicare dollars for states whose wavering representatives only yesterday were ferociously denouncing earmarks ... the federal judgeship dangled for one lawmaker's brother ... the raid on the Medicare piggy bank ... the lie that $250 billion for "doc fix" shouldn't count as a Health Care cost ... the double-counted deficit estimate scam that would land any accountant in jail ... the proposed Slaughter rule that Congressmen not record a vote on a bill their constituents hate, just "deem" it passed and vote on the amendments...and to complete the farce, the phony Executive Order pretending not to fund abortions when the Health Care bill, as "the supreme law of the land," does fund abortions. The level of political corruption to buy the votes for this debacle makes all past examples look penny ante by comparison.

Self-government stands or falls on integrity, not only in those who represent you but in the enactment of law. This indecency soiled our freedom and embarrassed the democracy we promote in other nations. And this may not be the last of it. To enact its transformative agenda, this leadership employs the Machiavellian saying that the end justifies the means. America was born in a revolution against that whole idea. Soon it will be the norm.

The Constitution and the consent of the people are all that stand between limited and unlimited government power. Zealous ideologues with the best of intentions brush aside the limits on power in order to get whatever they believe is good for the people ... no matter what the people believe. Our system of freedom can survive an assault, but it won't survive if the people are frightened, or angry, or asleep at the switch. A great Democrat, President Andrew Jackson, once said: "eternal vigilance by the people is the price of liberty." We can thank our current leaders at least for this: they have awakened the nation to the danger of taking self-government for granted.

Congress is not only enacting a social welfare state agenda over the objections of the people. It is failing to address the problems that threaten to engulf our country, principally economic decline and entitlement-driven debt crisis. The coming election will be a referendum on the agenda of our current leadership. Either it will give them a mandate that says "more of the same," or it will end the abuse of power and put America back on the path of growth and freedom.

Supposing the American people use their referendum in November to elect a new majority, what would the next Congress do?

The first order of business will be "repeal and replace." We will work to repeal federalized Health Care and replace it with a robust, competitive open market in health care that puts patients and their doctors at the center - not employers, not insurers, and not government agents. This takes at least two elections, and we must show our perseverance.

A new Congress will then turn to the great problem of our stagnant economy and the debt tsunami bearing down on us. The days of pretending not to notice are over. The next Congress will understand this threat and act after transparent deliberation and real debate.

I have put forward my specific solution, called "A Roadmap for America's Future," to meet this challenge. The CBO confirms that this plan achieves the goal of paying off government debt in the long run - while securing the social safety net and starting up future economic growth.

The problem in a nutshell is this: Medicare, Medicaid, and Social Security, three giant entitlements, are out of control. Exploding costs will drive our federal government and national economy to collapse. And the recession plus this Congress' spending spree have accelerated the day of reckoning.

Today, Medicare is $38 trillion short of its promised benefits. In five years, the hole will grow to $52 trillion. Your family's share of this gap is $458,000. Medicaid will add trillions more in state and federal debt.

Social Security's surplus is already gone, and its debt is mounting. Unless its finances are strengthened, the government will be forced to cut benefits nearly 25 percent or raise payroll taxes more than 30 percent.

Both Republicans and Democrats have failed to be candid about this. And we have only postponed the crisis by shaking a tin cup at China and Japan.

A new Congress could start by making you the owner of your health plan. Under my Roadmap reform, a tax break that now benefits only those with job-based health insurance will be replaced by tax credits that benefit every American. And it secures universal access to quality, affordable health coverage with incentives that hold down health-care cost increases.

Everyone 55 and over will remain in the current Medicare program. For those now under 55, Medicare will be like the health-care program we in Congress enjoy.

Future seniors will receive a payment and pick an insurance plan from a diverse list of Medicare-certified plans - with more support for those with low incomes and higher health costs. To reform Medicaid, low income people will receive the means to buy private health insurance like everyone else.

Under the Roadmap's Social Security proposal, everyone 55 and older will remain in the existing program with no change. Those under 55 will choose either to stay with traditional Social Security, or to join a retirement system like Congress's own plan. They will be able to invest more than a third of their payroll taxes in their own savings account, guaranteed and managed by the federal government. For both Social Security and Medicare, eligibility ages will gradually increase, and the wealthy will receive smaller benefit increases.

And we need to get this economy moving again, so the Roadmap offers taxpayers an option: either use the tax code we have today, or use a simple, low-rate, two-tier personal income tax that gets rid of loopholes and the double taxation of savings and investment. And let's replace corporate income taxes with a simple, competitive 8.5 percent business consumption tax. These low-rate and simple tax reforms would provide the certainty and the incentives for investors to open new enterprises and for workers to find a marketplace expanding in new jobs.

The Roadmap plan shifts power to individuals at the expense of government control. It rejects cradle-to-grave welfare state ideas because they drain individuals of their self-reliance. And it still honors our historic commitment to strengthening the social safety net for those who need it most.

I would welcome honest debate in the next Congress on how to tackle our fiscal crisis - and the larger debate on the proper role of government. It's time politicians in Washington stopped patronizing the American people as if they were children - deferring tough decisions and promising fiscal fantasies. Tell Americans the truth, offer them a choice, and count on them to do what's right.

A political realignment is on the way. Democratic leaders are staking their party's future on their ideological agenda. Financial Services Committee Chairman Frank candidly admits that his party "are trying on every front to increase the role of government." Former President Clinton told a Netroots convention last year that "We have entered a new era of progressive politics, which if we do it right could last 30 or 40 years."

The question is, do we realign with the vision of a European-style social welfare state, or do we realign with the American idea?

My party challenges the whole basis of the Progressivist vision of this country's future. We challenge their attack on American exceptionalism. We challenge their claim that bureaucratic centralization is the only way the US can meet the economic and social challenges of our time.

Those leaders have underestimated the good sense of the American people. They broke faith with independents, Republicans, and their own rank-and-file. They walked away from the foundational truths that made America the wonder and the envy of the world. The price of their infidelity will be high.

I hope you won't mind an aside. I absolutely love Oklahoma! As you may know, I married Janna Little, daughter of Dan and Prudence Little, from Madill. Well, Janna and I are planning on spending half of our year here in retirement. And I can tell you it won't be Summer...it's just gets too hot here for a Wisconsinite. We will be spending the Fall and Winter here. You see, I love to hunt and fish. Each year we come for deer, duck, and turkey season. Janna refers to these times as Thanksgiving, Christmas, and Easter. There's something about Oklahoma that is truly captivating. It's a beautiful, big, unconstrained country with great-hearted people who know what it is to live like free men and women.

Some of my friends in Marshall County have on occasion called me "yankee," which I find particularly disturbing. I have always thought a yankee is someone from the Northeast, not the upper Midwest. Needless to say, I am told this can be fixed if I include among my life's achievements the high and noble accomplishment of noodling a giant catfish from the banks of Lake Texoma. And so, I will be returning in early June, otherwise known as noodling season, to gain this rite of passage so that I may never be called yankee again, and also hoping I keep my ten fingers intact.

Knowing America, and Oklahoma as I have come to know it, I am confident that the American character is up to every challenge. America is not over. This exceptional nation will not go down the way of mediocrity. Ronald Reagan used to say: "Freedom is never more than one generation away from extinction ... It must be fought for, protected, and handed on for [our children] to do the same." We are that generation. The fight is our fight, and it begins now! The time is at hand to reclaim America for freedom.

Thank you very much.

Note: Congressman Paul Ryan delivered this speech to the Oklahoma Council of Public Affairs in Oklahoma City on March 31, 2010.

Paul Ryan represents Wisconsin's First Congressional District. He serves as ranking member of the House Budget Committee and senior member of the House Ways and Means Committee.

Posted by Dave Johnson at 11:37 AM | Comments (2) | Link Cosmos

March 30, 2010

Dear Deficit Commission, It's Not Hard

Dear Deficit Commission,

It's not hard to figure out why we have a huge deficit. It's so easy I don't have to use words. Here are some pictures:

Bill Clinton raised taxes on the rich. Bush cut them.

Now, about that huge national debt...

That second chart kind of explains itself.

The third chart can help you find a place to get some money:

(Note: There is no more Soviet Union.)

In case that isn't clear enough, try this:

Let me know if you still have any questions.

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

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 6:32 PM | Comments (0) | Link Cosmos

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.

* 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

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."

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.

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