The “recovery” seems well on the way. Stocks are up. Banksters are bonusing more than ever before. Corporations have ready cash to invest. The problem, of course, is that unless you’re rich, it doesn’t make any difference where you live. For you, everything is going up except your income. We have a Wall Street recovery with no evidence that the benefits will, or reasons why the benefits should, trickle down. Republican regimes should have taught us by now that “trickle down” always means “gush up”. Robert Reich has written an excellent editorial with suggestions for Barack Obama’s SOTU speech that resembles plans that I have submitted here. If Obama takes his advice, or mine, which I doubt, I respectfully suggest that a toilet be placed under every Republican in the chamber to prevent an environmental catastrophe of draconian proportions.
PRESIDENT OBAMA will have to devote a big part of his State of the Union address to the economy, but which economy?
Corporate profits are up, in part because of reduced costs, especially payrolls, so jobs and wages remain in the doldrums. People with lots of financial assets or who are deemed “talent” by large companies are enjoying a solid recovery, but most Americans continue to struggle. In order for the public to understand what must be done, Mr. Obama has to be clear about what has happened and why.
The Great Recession accelerated trends that started three decades ago: outsourcing abroad, automating work, converting full-time employees to temps and contractors, undermining unions and getting wage and benefit concessions from remaining workers.
Mr. Obama should point out that the United States economy is now more than twice the size it was in 1980, but the real median wage has barely budged; that in the late 1970s, the richest 1 percent of Americans got about 9 percent of total income, while by the start of the Great Recession the richest received more than 23 percent; that wealth is now even more concentrated. And the economy is bogged down because most Americans, unable to borrow as before, no longer have the purchasing power to get it moving again.
The president should make it clear that corporations aren’t to blame; they’re meant to make profits. Nor is it the fault of the rich who have played by the rules. But he should stress that a future with no jobs or lousy jobs for most Americans is not sustainable — not even for American corporations, whose long-term profitability depends on broad-based domestic demand.
The solution is to give average Americans a better economic deal. For starters, he should propose to expand the Earned Income Tax Credit (essentially, a wage subsidy) all the way up through the middle class. And he should suggest making the tax system more progressive: The rate on the $50,000 to $90,000 income bracket should be cut to 10 percent; on the $90,000 to $150,000 bracket, to 20 percent; on the $150,000 to $250,000 bracket, to 30 percent. Make up the revenue by increasing taxes on the $250,000 to $500,000 bracket, to 40 percent; from $500,000 to $5 million, to 50 percent; and anything over $5 million, to 60 percent. Tax capital gains the same as ordinary income.
In addition, he should call for strengthening unions by increasing penalties on employers who illegally deter them. And he should make college affordable by allowing federal loans to be repaid as 10 percent of earnings for the first 10 years of full-time employment… [emphasis added]
Inserted from <NY Times>
I can’t say that I agree with all his ideas. He omits help for America’s most needy, the people who have been most harmed by the Republican recession. There is no indication that there will ever be sufficient openings to provide jobs for all who are willing to work. Therefore, to provide for the general well being, the federal government must either provide work in community service or provide a decent standard of living to those who cannot find work and a decent standard of living for those unable to work. I also prefer an educational system under which anyone who so chooses may have an education at taxpayer expense as high as their ability merits, to be paid back with their choice of community or military service, while receiving a decent income, the length of which depends on the level of education received.
14 Responses to “Give Main Street a Fair Deal!”
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Robert Reich is a voice of sanity, I don’t know how he managed to get into Clinton’s cabinet but I’m glad he was there for the credibility it gives him. I was thinking to myself after reading his statement “that about says it all” but your point about govt funding a decent standard of living is well taken, and absolutely vital and correct.
I have no doubt liberals will be thrilled by our PR-oriented presidents upcoming speech. I know all the folks with I Love Obama figuratively tattooed on their foreheads (not even remotely hinting that’s you TC-you’re a realist, I’m jaded but defiantly so!) will be floating on clouds like so many Hello Kitty characters waxing orgasmically about the stirring words, like receiving Holy Communion from their TV sets – but it’s only PR.
For a better idea of what’s coming they should read between the lines of Obama’s op-ed re: regulation in the WSJ. That’s the reality.
Oso, you’re probably right, and I said I do not expect Reich’s ideas or mine to surface in SOTU, but before I criticize the contents of the speech, I think it only fair that I hear the speech first.
Why would companies hire new people when they are profiting and giving their CEO’s bonuses? These companies are seeing monetary growth without those people they shed so in their eyes they won’t need them and will only reward the top…
That’s exactly right, Kevin. They have no incentive to hire, because Republicans have stacked the deck against American workers and some Democrats have been too cowardly to take them on,
The sad but blunt fact is that many jobs have gone away and they are not coming back – ever.
That’s why I think we need a new paradigm for distribution of wealth.
What? Boehner made it! hahahahahahahaah Of course he still works in a bordello for his money and power. Same as when he started in politics all those many years ago.
Boehner? Here?
Made the step to the realization of the “American Dream” wealth for me and none for you. Is what I meant Tom.
Gotcha! Quite so!
Unfortunately this will never pass with the repubs in there.
Of course not, but we have to keep presenting progressive proposals and show a clear alternative in what we want to do.
The so-called “American Dream” has become an increasingly horrific nightmare for all but our very richest. over the past 30 years There is a LOT to like in both Reich’s and your presentations here, TomCat. The paradigm, as you say, MUST shift, and pretty damn soon, too! Corporate growth has become malignant and is now killing the patient with its wholly self-serving greed. The way I see it, Wall Street and the business community have two choices: either scale down the greed and corruption and start finding a way to more equitably distribute the wealth FAST, or face a destructive revolution of epic proporrtions which will destroy this country once and for all!
Jack, we need to distinguish between honest corporations and corporate criminals, but I see no such move from even the honest corporations. Corporations are not people. They exist to make money and most current MBAs see the future as a three year profit window. Their predation on society must be controlled from without.