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Fixing Gross Inequality Is Not Socialism

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What if the president proposed something big -- something that really focused on a broader question, such as the fundamental inequality in America? Well, surely, if he did so, he would be labelled a socialist! Not socialist as defined in the academic sense, or as the rest of the world uses it in its political life, but in the crude way that Republicans have always used it -- as a brickbat to throw at their political opposition.

This has all happened before. In the 1936 election, when FDR proposed the "radical" safety net of Social Security, his Republican opponent Gov. Alf Landon painted a portrait, familiar to FDR's detractors, of the president as a communist and socialist:

Imagine the field opened for federal snooping. Are these 26 million going to be fingerprinted? Are their photographs going to be kept on file in a Washington office? Or are they going to have identification tags put around their necks?

Fortunately, Americans ignored him and gave FDR an overwhelming victory.

Democrats are again in an excellent position to take a risk like FDR took with the New Deal. They might give themselves some identity other than that of modest centrists, constantly worried about offending one constituency or another.

Professional party Democrats in Washington have been dismissive of the New Deal for the past twenty years, considering it a coalition of voting groups that are now "passé." While that is true, they could learn from the example of a White House administration tending to the needs -- and the pain -- of Americans. FDR's administration was not afraid to institute programs that the Republicans condemned as "socialist"; it was ready to take the flak from a right wing that was always prominent in the Republican party -- and that now seems to control it.

Commenting on Republican congressman Allen West's assertion that there are currently "78 to 81" Communists in the Democratic party, Thomas E. Mann and Norman J. Ornstein wrote in a recent Washington Post op-ed, entitled "Let's just say it: The Republicans are the problem":

The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country's challenges.

They're going to call us socialists or communists no matter what we do, so now seems like as good a time as any -- when their party is in disarray -- to solve inequality. It's not "class warfare." When I was young, America, indeed, had a real class system (in the same way that much of the world still does). Now, social distinction is largely based on income bracket, not birth. Inequality is the problem.

Discrimination because of class difference was bad enough, but our present inequalities have a new, quite sinister origin. Money means power. Super money means super power. It's not just that the top 1 percent -- and the top 0.1 percent -- skims their money off the top. What is more important is that power is concentrated in a very few hands, which is a disaster for our democracy. (See Paul Krugman's article "Plutocracy, Paralysis, Perplexity.")

As a result, we see two things happening. The first is abuse of the capitalist system -- demonstrated by free enterprise run amok as experienced in 2008, and from which we still suffer. The second is the tremendous control wielded by those who provide money for campaign financing. They are the people FDR once summed up quite neatly as "organized money."

Let us draw a line between business institutions that are expected to perform essential services for us and those that are allowed to carry on in the ways to which they are accustomed. (Although, hopefully, with less "buccaneering." The Dodd-Frank legislation designed to introduce regulation has been badly watered down or not even carried out.)

We should simply recognize those business institutions that provide basic services and require close monitoring to ensure that these services are performed well. No, not nationalization, but careful regulation of businesses that agree to provide specific services with agreed-upon "just profits."

Credit cards and a bank account are essential to daily life. The New York Times reported on April 30 that "The banking industry as a whole earned nearly $30 billion last year from overdraft fees on debit cards and checking accounts." An attorney from the National Consumer Law Center summed it up: "Profits are the reasons for fees, not risk or costs."

And what about loans for buying a house? Or for education? And health insurance, perhaps even life insurance? What about heating our home? Many communities contract with a provider for water and electricity. Is not the profit factor agreed upon? And monitored? (Is that not how we handle military contracts, even if we don't monitor those very well?)

There is a long history of business working closely with private enterprise, going back to the New Deal and on through World War II. At the local level today we have many examples. The Triborough Bridge and Tunnel Authority in New York comes to mind. There are other experiments with "hybrid companies," as Stephanie Strom informed us in the New York Times: "A new type of company intended to put social goals ahead of making profits is taking root around the country, as more states adopt laws to bridge the divide between nonprofits and businesses."

But, one knows that most institutions, particularly the big ones, will not respond voluntarily, or simply won't cooperate. Hence, there is little realistic choice other than government intervention and supervision. Government action was behind every program of the New Deal. And we seemed not only to have survived but also prospered. No question about it: on a nationwide scale, our government needs to provide the framework and monitoring of these "service institutions."

This regulation would be but one step in a major political effort to set right the inequality in our economic and social system. Introducing this in no way diminishes the other measures needed, such as a radical shakeup of the taxing formulas.

Shifting the thrust of economic policy to emphasize -- and actively promote -- the quality of our life is essential, and it's hardly radical or socialist. Are we Americans willing to grasp this?