The Thirdworldization of America Continues

As I remarked some time ago, the Republican vision for America seems to be to make it the world's richest Third World country. Consider, I said, these frequent characteristics of Third World countries:

• Life is extremely pleasant for the rich, and extremely difficult for everyone else.

• Economic growth is hampered by poor transportation systems and crumbling infrastructure.

• Environmental regulation is minimal.

• The only widely respected public institution is the military.

Now, it appears, we can add one more item to the Republican wish list:

• The government tortures people.

Dept. of Naming Things: Inequality

A story in today's New York Times about how people have lost faith in the American Dream has this interesting passage:

“I don’t know what you mean by an unequal distribution of wealth,” said Robert Monti, a 74-year-old retired social studies teacher from Niagara Falls, N.Y., who identified himself as “a registered Democrat but haven’t voted Democrat in years.” 

 He said, “It’s a proven fact that everybody can’t make the same amount of money, and it’s a ridiculous assumption that they can. You’ll never have economic equality. Ever.”

Well, he's got a point. If inequality is the problem, surely what we want is equality. And practically nobody believes in equality of wealth or income.

So people should stop talking about economic inequality as the problem. The problem is really (choose one or more):

• the concentration of wealth and income at the top

• the fact that wealth and income are so skewed

• economic inequity

• economic unfairness

• the redistribution of income from the 99% to the 1%

There is one kind of equality, though, that Americans do believe in: political equality. Political inequality--the fact that the rich have so much political power--is at least as great a concern to Americans as the increasing concentration of wealth and income. And, of course, it will be hard to do much about the unfair income distribution without doing something about political inequality.

But the latter requires the Democrats to make a serious effort toward campaign finance reform.  So far, they've lacked the ganas for that. Or maybe the cojones.

Republicans Parody Themselves

If you're a Republican politician, what's the stereotype you struggle against? That Republicans are out of touch with ordinary people and only care about rich people and corporations.

So when Republicans won control of the Senate, what are the two issues where future majority leader Mitch McConnell says they may be able to work with Democrats? (a) The Keystone XL pipeline and (b) repealing the medical-devices tax. Yes, Mitch, that's definitely what American voters gave you a mandate to do. The people who care about these things are (a) the Koch brothers, and (b) medical-device manufacturers.

And with the recent fight in the House over the government spending bill, what were the key issues? Republicans wanted to (a) extend government insurance to cover the riskiest trades made by banks, and (b) allow the rich to give more money to political parties. Just what the public was demanding, another bailout for the banks and more money in politics.

If the Republicans are willing to be this naked about their priorities, Democrats should make them pay for it. They need a Mocker-in-Chief. Normally that's a good role for the Vice President. Unfortunately, this time he was busy lobbying for the bill.

If "the Democrats' Real Problem" Is Insoluble...What Then?

Writing shortly after the midterm elections, Josh Marshall had an article in TPM about "the Democrats' Real Problem." He agrees with those who say that the Democrats should have run on the economy, which is actually booming right now. But, he points out, this doesn't really resonate with voters, because wages haven't gone up. So it doesn't feel like a boom to voters. (Of course, gentle reader, you already knew that.) And that, he says is the Democrats' real problem:

[M]any Democrats look at all this and say... the party needs to embrace economic populism ... But I think this misses the point. The great political reality of our time is that Democrats don't know (and nobody else does either) how to get wage growth and ... economic growth ... back into sync...So find the policies, if there are any, build a political coalition around them. (Emphasis added.)

 And if there aren't any?

Let's consider that for a moment. The top 1% captured 95% of the income gains in the first three years of the recovery. Suppose that continues to be true, and wages in the US continue to stagnate while the economy grows. What then?

One alternative is to do nothing. (Philosophically, libertarian. This is just the result of individual decisions; no need for government intervention.) But we should understand that this means resigning ourselves to a permanent aristocracy. The rich would continue to get richer, and pass their wealth on to their children.

The other alternative is to say, "The growth in our economy should be shared widely across the population." (Philosophically, Rawlsian. If people didn't know whether they would end up among the 1% or the 99%, they would surely prefer  this alternative.) So we should take some of those income gains and spend them on things that benefit the 99%. For example:

• Raise the minimum wage and expand the Earned Income Tax Credit. Contrary to what Marshall believes, raising the minimum wage doesn't benefit only the poor. At every income level except the very top, people benefit, on average, from an increase. Maybe that explains why it gets so much support.

• Increase Pell grants, and cut the interest rate on student loans.  For the 70 percent of the class of 2014 that had student loan debt, the average debt was $33,000 (source). That's just a bit less than the national debt per person, but it has to be paid off in 25 years.

• Spend more on repairing infrastructure, especially transportation.  Rather than step into the quagmire of  how many jobs this will create, just call it something we need, and something we owe to future generations. 

• Mandate paid maternity leave.  We're one of about three or four countries in the entire world without it. Chad has paid maternity leave, for crying out loud. Nepal has paid maternity leave. Haiti has paid maternity leave.

All of these policies poll at more than seventy percent support. They're not as good, perhaps, as higher wages, but they would make the life of the middle class a lot easier. And the middle class knows it.

We can pay for them by increasing taxes at the top. There's plenty of room for increasing top marginal rates; in the booming sixties the top rate was 70%. But an easy sell on equity grounds is simply to tax dividends and capital gains at the same rate as wages and salaries.

(And while we're at it, how about raising the estate tax from 40% to 90% above, say, $50 million? This shouldn't be a great hardship--a billionaire can still leave his heirs more than $100 million, which should be enough to give the grandchildren a good start in life.)

So these policies end up looking a lot like the "economic populism" of the much-feared "Elizabeth Warren wing" of the Democratic Party. The assumption has been that these policies are extreme, and so will frighten moderates. The polling numbers don't support that assumption; quite the contrary.

Of course, policies like these would never get through a Republican-controlled Congress. That's the point: that's why Democrats should run on them. Although raising money may be a problem.