The 2016 Presidential campaign has begun. The months ahead will be full of the usual posturing and flip-flops, trips from New Hampshire to Iowa and back again, endless poll results, clever tricks and attempts to play ‘gotcha’ and all the other circus affects which mark and mar another ‘race to the top.’ And like the educational ‘race to the top’ it will fail; fail to reveal what really lies ahead in America unless we genuinely fix the income inequality which has produced more and more for the fewer of us and less and less for most of us as those at the top treat America as if it really does belong to them. Here is a look at the singular issue which needs to be resolved now if America and its people are to prosper.
ERAS END
As we move unsteadily into the 21st Century with America still struggling in its contradictory roles as debtor nation and superior military power, it becomes increasingly apparent that unless we recognize and change our current course, we face an unfailing reality of history: once a world power falls from the top it never again regains its status.
The growth of unions, opposed so ferociously and violently by the power structure through the first three decades of the 20th Century, became a reality as World War II brought all elements of our society together. Women left the home to work side by side with men for the first time in our national history. Roosevelt, listening to his advisors, made certain that the industrial giants critical to that war effort earned profits on their commitment to it. Labor and management worked closely and workers earned more money than they’d ever seen. The capitalist system worked at its very best and at war’s end had produced the world’s first middle class which would proceed to buy its way to America’s growth and prosperity.
The New Deal lasted for almost 40 years…but nothing lasts forever. The years took its toll on those policies which were not properly adjusted to meet the needs of our changing society. It seemed that problems were met simply by throwing money at them. Instead of continuing to be the conduit of opportunity between industry and working people, government grew to serve what it had established. In time government became the leading employer in the United States.
As this was happening, the industrial strength of America found new competition in Germany and Japan, and was losing business to them. The need for increasing taxes to support an increasing government caused the power structure to erupt. Their money and control and a clear misunderstanding among a growingly resentful working and middle class about what was taking place elected Ronald Reagan as President in 1980. The New Deal era was finished.
THE GREAT DIVIDE
But it did not. Rather that success produced key new laws which would instead heave the nation into a fiscal debacle reminiscent of the Great Depression of the 1930s – and once again Wall St operations were at the core of events.
By giving Rubin what he wanted – the end of the Roosevelt New Deal law which separated commercial banks from investment banks so that both could do banking and investments without the previous firewall of enforced separation – Bill Clinton unwittingly built the foundation of the 2007-8 collapse of the great real estate bubble – in which all-but-criminal collusion between the real estate industry, lending banks and investment houses all but brought the financial well-being of the nation into collapse.
While President Barack Obama and his advisers took the necessary steps to right the crisis, something became so glaringly apparent that we’ve been living with it for the last seven years.
The gap between the rich and the rest of the nation is so vividly apparent that all can agree we live with a consistent income inequality that has given the one-tenth of one percent of the nation staggering wealth and overwhelming influence on government activity while the rest of the nation lives in an income stagnancy and growing voter disinterest that has lasted almost twenty years. Less than one-third of eligible voters actually vote in national elections.
What this stagnancy has done is slowly but surely erode the very existence of the middle class and put a serious tear in the success of American capitalism. As the rest of the developed nations of the world watch China’s ascendency to productive power, America struggles with the policies of the power structure with no successful end in sight.
The Reagan era is over and it has wiped out America’s middle class and turned the nation into a non-productive society for all but a precious few.
INCLUSIVE CAPITALISM
A change for the better must come from the next Presidential race.
But this is truth: unless the eventual winner is the Democratic candidate (it will not happen with any of the Republican hopefuls) changes in the economic game will not take place and our country will face the 21st Century in serious trouble. The continued resistance to income equality that will leave us acting like a third-world oligopoly doing nothing more than supplying arms and soldiers for fighting the world’s wars.
This is what can be done: we can substantially alter the current marketplace by making major revisions to the tax code, legislate to pressure corporations to increase pay to match productivity growth and expand refundable tax credits to include low-income workers as well as households making as much as $80,000 a year.
Unless we make our economic system more equitable, more sustainable and more inclusive, the present inequality and lack of financial resources among the middle and bottom half of our population will result in insufficient consumer demand producing too little consumer spending, and the continued slump in domestic production and business growth.
Powerful corporations could and must improve conditions by promoting commercial activity, employment opportunities, access to credit and wealth creation.
The reality is that present practices cause business to lose profit-making opportunities when consumers have too little money to spend. In fact, continued inadequate purchasing power among the many will soon threaten the top 1% and the very system that has been corrupted by power and the greed it lets loose.
The most damaging trend that new proposals seek to counter is the sharply declining share of national income flowing to labor and the parallel increase in share flowing to the owners of capital.
Now the very people who see such changing economic policies as a threat to their personal wealth and power claim that all of this is about re-distribution of wealth from rich to poor. These are the same folks who said ‘give me the money and I’ll see to it that everybody gets a little’…the so-called ‘job-creators.’ They didn’t. They haven’t. They won’t.
To give you an idea about the kind of income the country needs to become a sharing economy, Obama would impose new taxes on the wealthy and on major financial institutions totalling $320 billion over the next ten years. The money would be used to finance tax cuts and credits for low to moderate income Americans. He would raise the capital gains tax a little more than 4% to couples making more than half a million per year and would change the laws that help the very rich avoid taxation on inherited wealth.
We will provide additional economic understanding in an upcoming article…but can say here that none of the new tactics necessary will pass in the Obama presidency.
The Presidential race in 2016 could become the most important election in this nation’s history.
It will certainly powerfully effect all our lives for the next fifty years.
“The Presidential race in 2016 could become the most important election in this nation’s history.”
Hasn’t that been said about every forthcoming presidential election? Why is 2016 different? We can expect the usual marination in bullshit from the major parties.