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Morning in America or “Mourning” in America?

Morning in America or “Mourning” in America?

It depends on your point of view.

Production vs Comp graph

If you are one of those owners of capital at the top, well it’s been GREAT! But if you are a regular working Joe, not good at all.

From the graph you can see that everyone’s income went up along with productivity until around 1973. A divergence started and stayed fairly close until around 1980. Then in 1984, we heard this in and ad for President Reagan:

It’s morning again in America. Today more men and women will go to work than ever before in our country’s history. With interest rates at about half the record highs of 1980, nearly 2,000 families today will buy new homes, more than at any time in the past four years. This afternoon 6,500 young men and women will be married, and with inflation at less than half of what it was just four years ago, they can look forward with confidence to the future. It’s morning again in America, and under the leadership of President Reagan, our country is prouder and stronger and better. Why would we ever want to return to where we were less than four short years ago?

Well, maybe because even though the economy was in the doldrums for a few years preceding 1980, at least the wealth was kinda sorta still being shared. But after that, not at all.

And after Reagan we had George H. W. Bush, then Clinton, then W, and now Obama. And not one of them have been able to change the rules in our country that allow the richest of the rich to get richer and richer as the bottom 99% fall behind.

The rules of the game are rigged in favor of those who already have great wealth. If you read the article in The Atlantic where I found the graph, you’ll learn more about how and why the divergence started and continues to expand, and you’ll find out what might happen if we don’t do anything about it (it’s not good), and what we could do to start to close the gap. (Hint: spend money to improve the education of our population and improve our failing infrastructure).

If the rich want to avoid a revolution, they better start looking out for the health and welfare of the communities that supply them with workers; first by sharing the wealth that comes from increased productivity with their workers, and second by encouraging local governments to increase spending to repair our decaying infrastructure systems.

Conservatives want to raise the Minimum Wage – Just Like Liberals!

Conservatives want to raise the Minimum Wage – Just Like Liberals!

We’re accustomed to hearing progressives and Democrats argue for raising the minimum wage. So it’s refreshing to hear a similar case being made from the other side of the ideological divide.

Ron Unz is a conservative activist and former publisher of The American Conservative magazine who until recently was leading a fight for an initiative to raise the minimum wage in California to $12.00 an hour. Unfortunately, lack of funds has derailed the effort as he explained in this interview with The Nation but what is striking from both this conversation and one he had on NPR earlier this year is that his key arguments for increasing the minimum wage resonate as much with liberals as they should do with conservatives.

For example, Unz makes the point in this New York Times Op-Ed piece that a low minimum wage amounts to a government subsidy for private businesses because the taxpayers pick up the tab for poorly paid workers to receive income support, food aid and other governmental support:

Ordinary taxpayers would be the other great beneficiaries, saving many tens of billions of dollars each year in payments for Food Stamps, the Earned Income Tax Credit, housing subsidies, and other social welfare programs. Businesses should pay their own employees rather than quietly shifting the burden to government programs and the American taxpayer. Conservatives and free-market supporters should endorse this simple idea.

He also is unsympathetic to the usual Republican braying that raising the minimum wage will force businesses, especially small ones, to lay off workers. He notes that the recent CBO report on the likely effects of raising the minimum wage clearly shows that the benefit for many millions of low wage Americans, who will gain a significantly higher income, far outweighs the possible loss of some jobs. Second, as a believer in the free market he expresses the view that if a business is unable to survive without paying a ridiculously low hourly wage, then maybe it doesn’t deserve to.

That these and other Unz arguments for raising the minimum wage sound much like our own is no accident. The logic of it transcends ideological and philosophical differences. So why do most congressional Republicans still oppose it?

Well, one strong reason is that Obama is for it and that’s enough for many to be against it on principle. But the GOP’s opposition is guided primarily by their reflexive support for small business owners most of whom object vociferously to increasing the minimum wage. And ideological consistency takes a hike since ordinary taxpayers provide what amounts to a $250 billion subsidy to the GOP’s business pals so that our working poor can have a somewhat decent living.

The strength of conservative objections has rendered a federal increase unlikely any time soon. The fight, however, has already shifted to the states. Here in Washington, for example, both the state and the city of Seattle are separately considering minimum wage increases.

Requiring American businesses to provide a decent minimum wage to their workers is not a Democratic or Republican issue, or a liberal or conservative one. It’s simply the right thing to do. Ask Ron Unz.

The 2014 midterm elections need not be a disaster for Democrats

The 2014 midterm elections need not be a disaster for Democrats

Conventional wisdom has it that the Democrats are in for a drubbing in the 2014 midterm elections. After all, polls show that Obama’s approval rating is at or near its lowest point in his presidency. The generic question of which party you will support in the next election now favors Republicans. And Obamacare may yet yield further frustrations in the New Year, particularly if computer glitches with the “backend” processing of enrollees on Healthcare.gov lead many to believe they have coverage when they do not.

Nevertheless, Democrats have a prospective domestic policy agenda that could help to confound CW – if they can summon the wisdom, courage and energy to push it forcefully.

For the 2014 campaign, Democrats can present their overall vision as one that maintains and even strengthens the social safety net for all Americans, increases the hourly wage of our lowest-income workers, and seeks to boost an already improving economy while simultaneously improving America’s international competitiveness. Key features:

A strong push to increase the minimum wage. Polling shows a strong majority of Americans support an increase in the minimum wage. The president has proposed a national raise to $10.00 an hour. Some cities are considering an increase to $15.00 an hour, as one municipality in Washington State (SeaTac) has already done. Fast food workers have staged nation-wide demonstrations in support of higher pay for workers on minimum wage. With so many low-wage workers struggling to make ends meet without resorting to government assistance, it’s an issue whose time has definitely come.

Extending long term unemployment benefits. Republicans may face a backlash to their unwillingness to include such an extension in the budget deal concluded recently by Democratic Senator Patti Murray and GOP Congressman Paul Ryan. GOP reasoning that losing their benefits will provide a necessary kick in the butt for these unfortunates to find jobs is contradicted by most of the available evidence. Lack of effort is not the problem; studies show that employers are less inclined to hire the long term unemployed. The public’s sympathies, not to mention the genuine pain that will be inflicted on up to 4 million unemployed Americans over the next several months if this federal program is not extended, make this a compelling issue for Democrats.

Switching to offense on the Affordable Care Act. Whatever its initial travails, the ACA is starting to settle down and show its promise. About 2 million Americans have enrolled in private insurance plans through Healthcare.gov or state websites thus far, and more have signed on directly with insurance companies. An additional 4 million have enrolled in Medicaid in the last few months mostly under the ACA’s expansion but also including some who qualified previously but never enrolled. There is reason to believe that many more will enroll before the enrollment period expires on March 31st. Republicans, meanwhile, not only lack a health care reform plan of their own but are doing everything they can to impede the only one on the table. Most egregiously, 25 GOP dominated states have deprived 5 million of their own low-income workers of an opportunity to be covered under an expanded Medicaid. This can only work to the detriment of the GOP. Whether it comes quickly enough to help Democrats is an open question; but the latter at least have something substantive to argue for, whereas Republicans are left to do what they do best – nothing. Unless carping, bemoaning and obstructing is viewed as doing something.

Beyond these three issues, it’s past time for Democrats to produce a progressive tax reform bill that addresses the disproportionately favorable treatment received by the rich that has characterized tax legislation since Ronald Reagan. While raising rates for wealthy individuals, particularly on unearned income, such a bill could lower corporate tax rates significantly while ensuring that profitable corporations actually pay taxes. If President Obama is serious about making income and wealth disparity the defining issue of his second term, this is a good place to start.

Finally, Obama and Democrats need to push much harder for a significant investment in our crumbling infrastructure and to restore cuts to science and technology research spending. Not all debt is created equal; the benefits of investments in infrastructure, science and technology and education will more than justify borrowing the money to pay for them, a lesson Republicans never fail to grasp.

The contrast between an agenda such as this and a GOP one that consists primarily of destroying health care reform, not raising taxes on even the mega rich and slashing programs for the poor and middle class in their phony crusade for fiscal rectitude, is one that Democrats should not be shy of drawing in 2014.