The Cory Booker imbroglio has ignited a silly but potentially pernicious debate in the Democratic Party between so-called "pro-growth centrists" who want the president to focus on how well he's done getting the economy back on its feet after the Bush administration almost knocked it out, and "pro-fairness populists" who want him to focus on the nation's widening inequality and Wall Street's (and Romney's) continuing role in generating profits for a few at the expense of almost everyone else.
According to the National Journal's Josh Kraushaar, for example:
Conversations with liberal activists and labor officials reveal an unmistakable hostility toward the pro-business, free-trade, free-market philosophy that was in vogue during the second half of the Clinton administration..... Moderate Democratic groups and officials, meanwhile, privately fret about the party's leftward drift and the Obama campaign's embrace of an aggressively populist message... [T]hey wish the administration's focus was on growth over fairness.
This is pure bunk -- or should be.
Fairness isn't inconsistent with growth; it's essential to it. The only way the economy can grow and create more jobs is if prosperity is more widely shared.
The key reason why the recovery is so anemic is that so much income and wealth are now concentrated at the top is America's the vast middle class no longer has the purchasing power necessary to boost the economy.
The richest 1 percent of Americans save about half their incomes, while most of the rest of us save between 6 and 10 percent. That shouldn't be surprising. Being rich means you already have most of what you want and need. That second yacht isn't nearly as exciting as was the first.
It follows that when, as now, the top 1 percent rakes in more than 20 percent of total income -- at least twice the share it had 30 years ago -- there's insufficient demand for all the goods and services the economy is capable of producing at or near full employment. And without demand, the economy doesn't grow or generate nearly enough jobs.
Wall Street is part of the problem because it's responsible for so much of the concentration of income and wealth at the very top -- and for much of the distress still felt in the rest of the economy after the Street nearly melted down in 2008.
The Street has turned a significant part of the economy into a giant casino involving mammoth bets with other peoples' money. When the bets go well, the rich owners of the casino (Wall Street executives, traders, hedge-fund managers, private-equity managers) become even richer. When the bets go sour, the rest of us bear the costs.
The casino also requires continuous transfers of wealth from ordinary taxpayers. Some are built into the tax code. One is the preference of debt over equity (interest on debt is tax deductible), which awards Wall Street banks like JPMorgan for risky lending and awards private-equity firms like Bain Capital for piling debt on the firms it buys.
Another is the "carried interest" rule that, absurdly, allows private-equity managers (like Mitt Romney) to treat their income as capital gains even when they haven't risked any of their money.
The biggest of all is the invisible guarantee that if the biggest banks get into trouble, taxpayers will bail them out. This subsidy reduces the big banks' cost of capital relative to other banks and fuels even more risky lending.
None of this is fair. It's also bad for economic growth and jobs -- as we've so painfully witnessed.
Translated into presidential politics, all this means the president should be talking about fairness and growth and jobs, and explaining why we can't have the latter without the former.
It also means he should be attacking Mitt Romney because Romney is part of the system of casino capitalism that has harmed America and held back growth -- and Romney wants even less regulation of Wall Street (he's vowed to repeal Dodd-Frank).
And because the budget Romney has put forth would gut public services vital to the middle class and poor, while cutting taxes on the rich and on corporations even more than they've already been cut.
In other words, Romney epitomizes the unfairness of the American economy in this new Gilded Age. For that same reason, Romney is the quintessence of an economic approach shown to be anti-growth and anti-jobs.
ROBERT B. REICH, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
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 |
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| Obama | Romney | |
|---|---|---|
| Electoral Votes (270 to win) |
332 | 206 |
| Obama | Romney | |
|---|---|---|
| Total | 65,899,660 | 60,932,152 |
| Percent | 51.1% | 47.2% |
| Democrats* | Republicans | |
|---|---|---|
| Current Senate | 53 | 47 |
| Seats gained or lost | +2 | -2 |
| New Total | 55 | 45 |
| Democrats | Republicans | |
|---|---|---|
| Seats won | 201 | 234 |
Wonderful-wonderful music!
So, there are countless photos of Eminem, there is a wonderful book put out by Kanye West, Drake is Drake, and Lil Wayne is getting stuck...like flossing or something.
The story about the Neilsens' and what we as Americans have grown to love, to hear, to see.....differences of opinions and careful, but strategic moves by both our Military and also our attention....thats' where I seem to recall these heroics being awesome.
In the case of banks and financial firms, where the profits are so unfairly divided between the hireling management and the owner/inevestors, profits were looked so great investors were placated by the prospect of stock prices rising indefinitely. Now it's a different ballgame and we owner/investors need to demand a bigger cut of the profits from those overly-compensated hirelings.
Obama is right on the money to say the president's job is not to satisfy investors' expectations but to see all Americans have a fair shot at economic well being. The middleclass investors must make their demands heard for a bigger, fairer share of huge corporate profits, pure and simple.
There can be no social equality without economic equitability.
This column is about the systemic problems that are slowly but surely destroying the American middle class. However because of people like you, the parroting zombies of fox news, nothing will ever get done about these systemic problems. Are you a billionaire? If not, buddy, I suggest that you get friendly with welfare recipients so that they can show you the ropes. Why? Because, unless some drastic changes are made along the lines that Mr. Reich writes about, sooner or later you're going to be one of them. Or, if you really believe the nonsense you spout, you and your family can nobly starve and reduce the surplus population!
Many believe it is in no way fair to take from someone who has earned to give to someone who has not. The corollary being that when this happens, the productive stop producing because there is no advantage to it.
Why work 70 hours a week to run your own business when you can work 20 and get on the public dole?
Dr. Reich is referring to equalizing the gains of growth so that growth itself is maximized. If you actually read his post, he was saying that you can't have a growing economy when the vast middle class doesn't have the purchasing power needed to fuel business investment.
Indeed, equalizing the gains COMPLETELY would discourage productive investment, but that's not what Professor Reich is talking about. In fact, he's as much of a capitalist as any American is.
Dr. Reich was referring to the fact that the vast middle class, unable to buy as it could before, no longer has the power to fuel business investment.
The solution? Simply to have pay rising with productivity, as it had during the 20+ years after the 2nd World War
Why do none of these pundits, like Robert Reich, avoid defining this term? Because they would have to reveal that it isn't embued with the broad appeal that is found in the undefined term.
Without a definition of fairness, any converstaion about it is nothing more than proselytizing. We do not need more cheap politics. We need real answers. And fairness will undoubtedly be one of the keys to resolving our economic malaise. But these pundts should define what they mean.
We need to look at 4 specific areas....and how they relate to each other
1. Tax Cuts
2. National Debt
3. Federal Revenue
4. Spending
1st lets look at Tax Cuts. When Reagan put tax cuts in revenue actually doubled to the federal government. Reagan did increase taxes 12 times but the increases amounted only to 1/3 of the cuts. When Bush W. cut taxes revenue actually increased as well. At the same time the budget deficit grew.
Tax cuts are to revenue as spending is to debt is the way you need to look at it.
The debt grew because the spending increased. The revenue grew because of the tax cuts..
Another way to look at it is lets say no tax cuts happened. revenue grew and the debt grew. What caused the debt to grow if revenue grew. Common sense says spending. Regardless of what anyone thinks of tax cuts revenue grew and so did the debt. There is historical proof that when you increase taxes revenue declines in the long run...What needs to happen is tax cuts to increase which increases revenue and spending to decrease which decreases debt...
Eliminating the capital gains exclusion across the board would most certainly discourage risk and investment.