A Democratic Reform Program for America
22 August 2017 | Pago Pago, American Samoa
Michael Moore is correct. The democrats have no message, no plan and no leaders. They sawed Bernie Sanders off at the knees and have become a party of Republican lites. They don't understand what is going on and what is needed. They are lost, so I provide the Democrats a road map here of what needs doing.
What is going on is simple. The rich have bought congress off to rig the economy against the middle class. It needs to be un-rigged. The U.S. economy suffers from two major problems: stagnant growth, and rising income inequality, Growth stagnation arises from deficient aggregate demand and deficient aggregate demand, in turn arises from rising income and wealth inequality. While income inequality is growing and has multiple causes, at present, the additional dominate causes in operation are
1) the demise of marginal productivity pricing of labor and the misappropriation of all labor productivity gains since 1973 to increased CEO and management compensation (a redistribution of income analogous to corporate cannibalism).
2) our refusal to tax economic rents adequately, especially land rents, and
3) the invention of new high technology by a relatively few in the top end or the economy of the upper 1/3.
These four problems have made income inequality so bad that it has destroyed the middle class and thereby growth in aggregate demand and placed us in a new lower low without good growth because the rich hoard their new income gains and don't spend enough more. Government, with its bought laws, acts to make the income inequality worse by all the bought favors for the rich and by reducing income taxes on the rich. It is a corrupt mess and Democrats are complicit. They are a part of the problem; not a part of any solution at present and yet the Democratic party is only real path to reform. Our's is a very two party system.
The U.S. economy has in turn been chopped into two parts: a ‘dynamic’ high tech/industrial sector that is shedding jobs (the economy of the upper 1/3), and a ‘stagnant,' 'survivalist’ sector which acts as an ‘employer of last resort’. The bottom 90% percent of adult Americans have an average individual income of $30,438, down almost 10% from a decade earlier, an income on par with Greece. The bottom 50% -- 117,000,000 of them -- have an average annual income of $16,200, little better than the average and income in Mexico and lower than the average annual income in virtually all of the other 32 advanced OECD nations. About 40 percent of America's working age population is now unemployed. Think about these matters for a moment.
The reduced or stalled purchasing power of those not in the economy of the upper 1/3 is why our economy is stagnant and stalled out in its new "lower low," even with what additionally they are able to borrow and spend. The rich and wealthy, in turn, cannot spend enough and don't have the time to even enjoy what they have.
The Democrats need to attack the libertarian mantra of "cut taxes," "make government smaller" and "not interfere in the economy" or all such austerity policies by showing the problems they have created and by providing they lead to bad economic results and by urging the following reforms --
1) raising taxes substantially --
-----a) and very progressively on upper incomes,
-----b) on inheritances,
-----c) on the banking industry for the right to create new money for free and loan it out at interest
-----d) on capital gains at a 90% rate
-----e) cutting corporate welfare, including depletion allowances
-----f) on stock and bond trades in secondary markets
-----g) on domestic income held offshore with amnesty
2) adopt the Steiglitz recommendations for de-rigging the economy against the middle class and in favor of the rich.
3) adopt a set of fair and all encompassing usury laws instead of the none we have now,
4) revise campaign financing laws to get money out of politics
5) expand government substantially by --
-----a) adopting a massive and majorly labor intensive infrastructure program, to increase employment and fix our infrastructure,
-----b) adopt a program of free higher education but only at credible and good or better existing universities
------c) adopting laws reversing what the Trump administration has done and will do,
------e) adopting loan and grant programs for injured states transitioning away from libertarian austerity policies
------f) adopting basic MMT policies and practices that abandon the budget restraint
6) revise business regulation to simplify it, reduce costs and make it "bright line," general regulation and then enforce it strongly.
The Democrats could win with these programs if they were properly explained as I have here. These changes, without more, if properly done would radically transform America and the economy, but many Americans and most conservatives and republicans are not well enough educated in economics to know it. That is the task of the Democrats, but they need to find some knowledgeable people who understand these matters and so far they have not.