Can America reach a new equilibrium?

    If our current political deadlock, amplified by the market forces of technology and capitalism are projected without modification into the future, a world of extreme inequality, overwhelming local taxes and religiously contrived restrictions on personal behavior awaits us. The invention of cheap and home made weapons including drones, 3-D printed guns, and cyber blackouts will make an ever angry electorate turn more violent.

    Presently there is a presumption of personal freedoms, as in which movies we watch and selections of retail products. But as wealth and corporate power is further concentrated, think about the crowding of seats on an airliner and project it to the cheapening and sizing down of everything we think of as creature comforts. The possible election of a wall to wall Republican controlled government will not only repeat the financial disaster of '09, but intensify it as taxes on wealth are constrained and excessive military expenditures go into effect.

    Noted economists like Krugman and Stiglitz have stated some simple truths about the state of our economy and wealth distribution. The dire predictions of Republicans that stimulus spending, the Fed's actions, and new healthcare benefits would result in inflation, a stagnated economy and rampant unemployment have proved false. With startling stupidity Republicans are trotting out the Laffer curve in an attempt to revive trickle down economics despite the fact that in states like Kansas and in nations abroad, the effect of cutting taxes in order to increase revenue has proven to be economic disaster. The economy will never gain its full potential until the middle class is restored and poverty is eliminated.

    A major factor in the worsening of wealth inequality was the bundle of changes in the tax code, primarily on capital gains and dividends, and upper income rates. Coupled with unfunded wars and Wall Street deregulation, the stage was set for the Great Recession. As the economy recovered wealth was even more assuredly moved to the top. According to Stiglitz new wealth accrues to the rentier class, to the accumulation of assets, a process which is aggravated by our monopolistic bank system. This brand of wealth is distinct from the capital formation in industry---which is where the higher paying jobs might have been created.

    The President is proposing a swap of new taxes to transfer payments to the middle class, including the far reaching proposals on community college education. Simply put, at this stage of the game, transfer payments are the only sensible policy decisions which can be implemented to reverse the lopsided wealth-distribution-tax-breaks which distorted any prior notion this country ever held that middle classes are built and maintained with progressive tax rates---otherwise, the forces of technology and capitalism are too formidable and will always expand and win out.

    Thankfully there is a growing awareness that wealth inequality---which is a creator of social despair and crime, and a predictor of poor overall educational progress among the young and workers---that inequality must be addressed. Prospective Republican Presidential candidates are making fools of themselves in pratfalls to convince voters that they are now the populists who will come to the rescue of the poor and the stressed middle class. Republicans are even proposing increased child tax credits---and pathetically, the credits, in order to please their corporate masters, are being touted as necessary for the revival and maintenance of "human capital".

    In order to reach a new equilibrium we have to back track some and move ahead some. In back tracking we must revert to the notion that modern capitalism and technology will decimate a prosperous middle class unless taxation is progressive. How progressive? How much inequality is acceptable? 

    Taxes on capital, dividends and estates need to be readjusted to previous levels and the new revenue used for infrastructure spending and education.

    To move ahead we much reach a majority consensus that humans are humans, not robots, not "capital" to be trained and allocated efficiently. We must realize that wealth inequality on our current scale is a recent phenomenon resulting from specific tax changes and that those changes can be reversed. You say re-distribution is bad. I say the distorted distribution brought about by the corporate shills who promoted tax cuts and financial deregulation is bad.

    Can America reach a new equilibrium? If we focus on an agenda to identify the disastrous policies which Republicans keep regurgitating, policies which failed---if we put the facts squarely in front of our citizens and demonstrate how fairness can be restored and the middle class reinvigorated, I do think we can reach a new understanding and a sensible balance of wealth.

    If we can't stop the freight train of escalating inequality it's not too difficult to imagine a dystopian future where food is scarce, we live in shipping containers, and robots and 3-D printers have usurped our jobs. 

     

     

    Comments

    Really good piece of writing, Oxy. By the time I reached the end, I felt like I was listening to an orator at a podium, giving a rousing speech to a cheering crowd. And I was applauding right along with them.

    The horse is already out of the barn when it comes to technology - the forward motion can't be stopped, nor should it be. Advancements will always be fraught with pros and cons, but moving backwards isn't an answer. The imperative is that we remember to balance our humanity against the progress. Artificial Intelligence ... well, that's another blog.

    The tax code is in shambles, as are most of our governmental bulkheads. Anything that's more bits and pieces than whole cloth will inevitably fall apart. The layers of conflicting redundancy get thicker with each new "reform". It's an unfortunate truth that if you can afford good accountants, (and a few tax law attorneys), a closed door just leads to an open window. That said, though, the more attention given to low/mid-income earners and small businesses the better, since their savings equate to expenditures and job growth. It wouldn't hurt to narrow the definition of "small business" just a bit.

    Keep championing the cause, Oxy - the crowd's getting restless.


    Barefooted, thanks for your comments.
    We need to rile up that crowd and get some reforms put in place.


    Great post


    Much obliged, rmrd.


    Today in Congress Elisabeth Warren tells it like it is.  She explains why it is out of equilibrium.  We need more like her. "Talk is Cheap" and "Time to Put Up or Shut Up. "


    If the world of politics was a perfect mix of head and heart, we'd have a Clinton/Warren ticket.


    Barbara Boxer also raked the GOP for their hissy fit using a shut down again.  Only it wasn't on you tube just posted on face book.  If you have face book this is well worth the watch.  It is 20 minutes long.  Quite a rant.

    https://www.facebook.com/senatorboxer


    Wow!  That was great!  Thanks for the link.

     


    I can count on one hand the number of times I've regretted not having a Facebook account - this is one of them.


    It only takes a few minutes to sign up.  There is a group of us on there.  


    Great comments, you all.


    It's ya'll.


    No, it's y'allwink


    Them's fightin' words ... ;>)


    IMHO You'll get bombarded in your inbox of people wanting to be your friend.

    I personally don't trust Facebook and for the life of me I don't see why people thinks its worth the cost of the loss of privacy. 


    Latest Comments