Dem Rx

Certain folk are complaining that the Democratic Party has gone off the rails, and is incapable of doing anything right. Nonsense. Dems believe in what they have always believed, that the strength of our democracy depends on how well our citizens are treated.

It’s the Republicans who have gone off the rails, and are now devoting all their time to serving the very rich and living in a fantasy world where magic works just fine. In recent decades Republicans have operated at the edge of the law. This has resulted in 120 indictments, 89 convictions, and 34 prison sentences for Republicans, compared to 3 indictments, 1 conviction, and 1 prison sentence for Democrats over the same period. And that’s pre-Trump.

But aren’t the Dems just as corrupted by corporate bribery as the Repubs? The way I see it is that the Dems have no choice but to accept Corporate Personhood bucks if they want to mount an electoral defense against multi-billionaire fossil fuel science deniers and the like. That’s unfortunate, but unavoidable, and Dems in this trap have to be extremely careful.

Perhaps the biggest challenge is to correct the ongoing lies that Trump voters believe no matter what evidence there is to the contrary. The absurd Republican belief is that making the billionaires richer will help everyone. The opposite has been proven numerous times to be the case. Pure greed is the only thing the Republican belief serves. It makes the rest of us worse off.

Some problems and how to fix them.

Poverty: It seems so obvious. Set a minimum wage that allows people to simply live, without working two jobs. Currently that seems to be about $15 per hour. Every place where $15 has been tried has thrived.

Shorten the work week. We no longer work a 72-hour week, yet the 40-hour week didn’t bankrupt us. A 20-to-30 hour week is overdue. The transition will need to be carefully managed, but the result will be that more people will have work and fewer will be unemployed, which helps the country.

Get rid of desperate poverty with a guaranteed minimum income that prevents suffering from the worst effects of extreme poverty, but won’t be enough that it would be desirable.

Establish tax-supported national health care. This will save tens of thousands of lives yearly, and will vastly improve the national health, which in turn will boost economic health. Since cost control would be a part of national health care, excessive costs from fees, technology, and medicines would be reduced. We would no longer waste one of every three dollars on insurance administration, which contributes absolutely nothing to health care. The cost savings would be some $200B annually. That’s a savings of $645 per person per year just for instituting universal health care.

There are many other things Dems should support, policies that create greater common wealth. For example, encouragement of worker ownership of businesses. Policies that help domestic businesses be more competitive against overseas businesses that exploit workers with very low pay. For example assistance in financing a new business and modernizing older ones, and improvements in transportation and marketing. Tax breaks that help real people, not just corporate billionaires.

Perhaps the biggest challenge facing Dems is reaching Trumpsters, who have fallen for blatant lies, and live in a fantasy world where Trump will make them all rich. Dems must learn how to reach these people and show them how government actually works, and what will help them personally. That’s a tough challenge, because many such people are very resistant to such realization, and would rather remain in their fantasy world. They hate Obama and Democrats because they hate Obama and Democrats.

No, Democrats haven’t gone off the rails. The Democratic platform should be what it has always been: serve the people, all the people, not just the rich. Enact laws based on factual evidence, not quasi-religious faith that doesn’t hold up under inspection.

A Thinking Fantasy About the Future

Something for your brain to explore:

Here are the problems: There isn’t enough work for a 40-hour work week, thanks to the progress of technology. Computers have taken over every kind of job, from labor to CEO. Too many people are poor or unemployed because of it. Nobody can survive on minimum wage, which hasn’t changed since 1972. Taxes are not equitably assessed. Wealth is grossly out of balance.

The work week must be redefined in light of the fact that technology has made the forty hour week obsolete, just as the sixty hour week became obsolete before it, and the 72-hour before that.  We might define the work week as the gross number of hours needed to complete all work in the country divided by the number of able-bodied adults of working age. I have not tried to calculate the hours this way, but it is probably between twenty and thirty hours.

Here’s one picture of how things might look quite different. Suppose this was how it was:

Anyone working the defined number of hours weekly at any job would be paid at least a minimum wage sufficient to support two adults and two children without deprivation, but without luxuries of any kind. All basic needs would be covered, food, shelter, clothing, etc. At present this wage is probably in the range of $35/hr, yielding $1,050 weekly gross pay, $4,200 per month. This seems high because the shorter work week would still have to pay enough to live on. (Gross pay at the lowest rate is close to net pay because of the wealth tax, see below). Every hour worked beyond the defined full-time hours would be paid at 150% of base wage.

Salaried persons’ full time work would be the same number of hours as wage workers. Salaried persons’ pay would be based on their perceived or calculated worth to the employer.

All families would pay taxes based on their wealth, their net worth, not on income. The wealth tax would be a low percentage of net worth, most likely below 1%. Thus, the least wealthy would pay wealth tax based only on durable goods such as a car, washing machine, and kitchen range. The dollar amount would be low, but never below zero. With $5,000 net worth, the wealth tax would be about $40 for the first year. Nobody would have a negative tax, i.e., welfare; every family would be taxed.

There would be no deductions or exceptions to this tax, and no other federal tax would be collected from individuals or families. States are free to collect other taxes.

There would be very few exceptions to the work rule. Persons not required to work would include the retired and the disabled. Single persons with children would be required to work, and to cover the cost of childcare from wages.

This plan is radically different from what we have now, but notice that there is no class of poor people. The lowest paid are not poor, and would require no additional support from public funds. But their income is barely adequate to provide all essentials, with no luxuries.

The wealth tax, a specific percentage of wealth, would be naturally progressive, because richer people would pay the same percentage, but a greater dollar amount. The tax would probably be about 0.8% the first year. Those at the very bottom of the wealth scale would pay a low dollar amount, but the general trend would be for families with lower incomes to accumulate wealth over time, and thus their tax would increase. The tax, therefore, is a force for equality that solves the problem of finding the right degree of progression. It is notable that it is in the interest of the very wealthy to increase the wealth of families with lower income, because that would decrease their own tax.

The wealth tax percentage would be calculated regularly by the government as the gross wealth of the total of all citizens divided by an amount sufficient to cover all government expenses, including funds for retirement and health care for all citizens. An increased tax earmarked for national debt reduction or other use could be assessed if Congress so decided.

The government budget would be lower than at present because some budget items could be reduced or eliminated as being no longer necessary. The cost of poverty relief would be eliminated, so subsidies would be needed only for the disabled. Military costs, as the largest discretionary expense and the largest military budget in the world, by far, could easily be reduced by a third. The need for government workers would also be reduced. These things tend to lower the dollar amount of tax revenue needed, and thus the percentage of wealth tax.

Once the system was established, the trend for the wealth tax would be downward because the least wealthy and those with moderate income would accumulate wealth. Thus, within a few years it might be reduced to 0.4% or so. A net worth of $100M at 0.4% would come to $400,000, which is not much for someone with a net worth of a hundred million dollars.

These guesses do not include revenue collected from corporations. At present, corporations escape their fair share of tax in various ways. This would be ended by assessing an import duty for goods “imported” from companies headquartered overseas but sold in the US. This would increase revenue but decrease the nominal individual tax rate. There would be no exceptions to this duty, and no subsidies for corporations. They would also be subject to state taxes.

The nominal corporate tax would be lower than the present nominal tax rate, which is almost never paid, but which is a source of complaint by corporations.

Now, tell me all about why this would not work if we could suddenly drop it in our midst.

I’m not the only one thinking about this problem, obviously. Many in Sili Valley are acutely aware of it, and have been for decades. Farhad Manjoo, in a recent NYT piece, reviews another plan, to simply give everyone a monthly check for a minimal amount. The plus side is that it’s more readily achievable; the minus side is that Republicans would fight it tooth and nail, because they believe only lazy African-Americans receive welfare assistance. The plus of the above plan is that it’s a way to achieve greater equality, and it banishes poverty to history. The negative is that it is very difficult to get from here to there.

On Losing Our Souls to the Socialist Nightmare

Capitalist conservatives misunderstand the liberal desire for things like national health care, free public education, and Social Security protections. What liberals want is these things at a reasonable price.

If it could somehow become reasonable for each of these things to be affordable for working people, there would be no reason to want efficient national plans. But it isn’t reasonable, and there are several explanations for why that is so. Primary among these is the plain and simple fact that private purchase of these goods is far more expensive than collective spending for them. Private plans are more expensive than government plans because private companies must earn profit, so their product costs more. And the free market economy means that vendors can charge whatever they can get away with, which is plenty.

The ultimate in economy of scale is obtained with national plans, with the least individual cost. Health care in our for-profit private capitalist system is literally twice as expensive as the national plans that operate in every single advanced nation except ours, and insure every single person, unlike our non-system. Moreover, the national plans are well liked, and health care under national plans is better than American plans, which fail to provide health care for many millions.

The ultimate in economy of scale
is obtained with national plans.

With these goods costing so much, perhaps the answer would be to increase wages enough that such purchases would be practical. Alas, that’s really a rather stupid idea, to pay enough just so the 200% inflated cost is affordable. Why not just deflate the cost to normal? But capitalist conservatives are strongly against paying wages even above poverty level, and don’t want to pay enough for health care. They are perfectly happy with minimum wage as it stands. After all, they aren’t suffering, and don’t see why wages for others should be improved, since the problems of the poor stem entirely from their failure to work hard enough. Unfortunately, many millions can’t afford health care insurance at all, because it costs about half of what they make in a year, working full time.

Another way the poor fail is by not saving. They simply have no desire to set aside money for their own retirement, whereas capitalist conservatives are much wiser. They save plenty of money for retirement, and in addition can pass on an inheritance of millions to their progeny. The poor, of course, waste their entire minimum wage paycheck.

It’s not just the poor who fiddle away their future, but all of us grasshoppers. The wise among us who earn enough do put away money for retirement, but the need catches most of us by surprise in middle age. We are not stupid, but we lose the benefit of decades of compound interest by not paying attention early enough. Lately, the average American of fifty or sixty has almost no savings and is woefully unprepared for looming retirement because of a half century of stagnant income and the current disaster bequeathed us by Wall Street criminals. But how might it be possible for anyone earning minimum wage to save at all, when even rent of a one-bedroom apartment is beyond their reach everywhere in the US?

And by the way, the median age of people earning minimum wage is not 16. It is 35.

Bernie's wasteland

Tom Toro, The New Yorker, June 2015

The biggest mystery is how people on the right can imagine that all those countries that have the great benefit of national plans can be thought of as socialist nightmares. Everything they have is better than what we have. They have good health care and good health; no one ever declares bankruptcy for medical reasons, whereas it’s the most common reason here; their schools are either free or affordable, all the way through graduate school, and many even provide living expenses for college students; all of them provide for a retirement without privation; and all enjoy benefits in their working years like Living Wage, generous mandated paid vacation, free healthcare, paid leave after childbirth, childcare allowances, and numerous other niceties.

How can people on the right imagine
that all those countries that have national plans
be thought of as socialist nightmares?
Everything they have is better.

Ah, but taxes. Taxes! Their taxes are awful, far more than we pay. Isn’t that true?

Not really. Remember that we have millions without health care, millions who can’t afford college or who end up in debt for tens of thousands of dollars, and millions who must depend entirely on inadequate Social Security for retirement when they are no longer able to work. The plain and simple fact is that even the highest tax level in the Socialist Nightmare countries, that of Belgium, is far less than we would pay for the same services if we bought them ourselves. But we can’t afford the same services. Not even close. We don’t even earn enough to get these basic services through inexpensive national plans, let alone individually via our for-profit private enterprise.

Our pay and work laws are mostly determined by capitalist conservatives, who haven’t the slightest need for more money. They are already at the tippy point of the pyramid, up above the all-seeing Masonic eye, and have neither understanding of nor interest in the economics of the rest of us.

After all, anyone who isn’t rich simply isn’t working hard enough. Isn’t that so?

The Poor

The poor you have with you always. Therefore government should assume no responsibility for them? Some think so.

Attitudes toward the poor are emblematic of the difference between conservatives and liberals. The conservative belief is that the poor, like everyone else, are responsible for their own wellbeing. The government should assume zero responsibility; rather, the private charity of the wealthy should relieve the worst suffering of the poor. This belief, common among conservatives today, is directly descended from England’s Edmund Burke in the 18th century, who was greatly reluctant to do anything at all about the gross inequality of his day, fearing that any change would have negative consequences.

However, the rich in the US simply do not contribute significantly to help the poor. When the rich give to charity, it is far more likely to be to support the arts, a hospital, a museum, a private university, or another place that is unimportant to the poor. And more than one person has made the point that many times the great wealth they are so generous with came from corporate profits they gained by cheating many thousands of workers.

Attitudes toward treatment of the poor
is emblematic of the difference
between conservatives and liberals.

The liberal belief is that it is the legal structure of the US economy today, constantly manipulated by the rich, that has created excessive poverty, and government has a moral duty to relieve this needless suffering.

Much of the dispute between these two approaches depends on definitions and on the actual facts of poverty. I have never heard of a liberal who approved of welfare so generous that recipients don’t want to work, but that’s what many conservatives claim. Whatever level of support causes a person to deliberately avoid finding work, we come nowhere near it in the US. Our temporary support is much more stingy than, for example, the Scandinavian countries, yet the Scandinavians on assistance are eager to get back to work. But maybe the explanation is that Scandinavians are not routinely cheated when they work.

The low wages of the poorest workers in the US keep them in poverty. These are not rag pickers, but people who go to work every weekday, yet cannot raise themselves from poverty. Nor are we short of cash. We’re the richest country ever.

Not only does their hourly wage keep them in poverty, but many of the richest corporations boost profits by allowing workers only part-time hours, thus avoiding having to provide benefits. This creates havoc with workers’ lives. They have also claimed that their full time workers are “contract workers”, that is, self-employed independent agents for which the corporation has no responsibility. All those guys in brown shorts, driving brown trucks? They don’t work for UPS; they have to supply their own bennies. In short, many US corporations can be relied on to boost profit for their rich owners on the backs of those they pay the least.

Much poverty in the US
results from the low wages
of the poorest workers.

The liberal position is that this treatment of low wage workers is inexcusable, that we all have a duty to avoid undue suffering of the poor by paying them properly, and particularly by not cheating them.

Conservatives have argued against updating the national minimum wage, now worth half what it once was. A number have claimed that there should be no minimum wage law at all, or that wages should be determined exclusively by employers. Years ago, Republican presidential candidate Herman Cain managed to exempt food workers from the minimum wage law, which froze the minimum wage for them at $2.13 per hour, where it remains today.

The problem here is that many employers can be counted on to pay the lowest wage they can get away with. This includes huge, rich corporations like Walmart and McDonald’s, which pay so poorly that many of their employees qualify for government welfare. Workers take welfare—our tax dollars—to make up for the wages they don’t get. The wages they don’t get—our tax dollars—land in the bank accounts of rich owners. This is as sure a definition of corporate welfare as you’ll find. Likewise, Herman Cain’s $2.13 per hour pay forces many workers to depend entirely on tips in jobs where their official pay is a pittance, and tips are never enough to live on.

The surest way to eliminate
a large percentage of poverty in the US
is to require a true Living Wage.

Anyone who doesn’t understand the effects of such stinginess on workers should read Nickel and Dimed, and subsequent writings, by Barbara Ehrenreich, which eloquently spells out the discouraging difficulty of supporting oneself with the lousy pay that is all too common. The most telling fact is that full time minimum wage work—if you can find it—will not pay the rent for a one-bedroom apartment in any American city.

It seems very clear: the simplest and surest way to eliminate a large percentage of poverty in the US is to require, not the $12 to $15 per hour minimum wage currently being promoted, which barely makes up for inflation, but a true Living Wage, similar to what Australia and a number of other advanced countries have had for a century. Not only would this eliminate large swaths of people from the rolls of poverty at a stroke, thus saving on welfare payments and increasing tax revenue, but most of the added income would be spent on consumer goods, thus boosting employment.

Why don’t we have Living Wage already? One reason is the national failure to recognize the value of all work. All jobs fulfill a crucial role in the smooth functioning of the economy. This is at least as important a reason as misplaced faith in the wisdom of the unregulated “free market”, which is indifferent to the suffering of workers who cannot earn a sufficient wage by working full time in the richest nation the world has ever known.

Why National Programs Are Essential

We are moving toward a 20-hour work week. It is mostly unintentional, but it is happening nonetheless. This gives us an opportunity to make a 20-hour work week the standard, which potentially would improve the country in numerous ways and put us at the forefront of advanced nations. But it cannot be done without significant changes in how we pay workers and how we fund health care, retirement, and higher education. For these, only national programs can fulfill the need.

John Maynard Keynes suggested back in the 1930s that this would happen. Given advances in technology, as well as other improvements in efficiency, it is now possible to have the work week he foresaw. But getting from here to there is a big and politically difficult undertaking.

We are moving toward a 20-hour work week.

Capitalism is at once the cause of a shorter week and the thing that prevents its achievement. This is because workers cannot control their own working hours, have no stake in technology, and are usually underpaid. It is capitalists who own the machines of modernization, and Republicans who want to pay as little as possible, and for heaven’s sake, no “socialism” of national things like Medicare and Social Security.

Low-wage employers have for decades limited employee hours in order to stay under the benefits threshold. This is the McDonald’s/Walmart strategy. It has been disastrous for the poor who work these jobs, and the practice drains from government welfare programs that are forced to make up the difference between inadequate wages and crucial life needs. In practice it’s yet another transfer of wealth to the wealthy.

The McDonald’s/Walmart strategy
has been disastrous for the poor.

The economic inequality we have now came about because of the increasing misuse of wealth, and conservative insistence that minimum government and overpriced “free market” are the way to go. The many millions who are forced to survive on minimum wage are punished with poverty by this concept. Either we have to pay enough for workers to buy private health care et cetera for themselves, or we have to establish efficient government programs.

Capitalists and Republicans want it neither way. They would prefer that workers provide overpriced private services for themselves, but they have no interest in paying enough to make it possible. National programs are inherently more economical, and offer our only chance for good benefits at reasonable cost. That’s why they are found in every other advanced nation but ours.

Capitalists and Republicans
want workers to pay for private services,
but won’t pay enough to make it possible.

There is no rational objection to be made to such changes. There is only ideological political opposition, which centers around the false idea that less government and the “free market” are always better, and anything national is like Soviet communism. But those beliefs result in ever widening inequality, decline of security for wage workers, ever eroding democracy, and loss of corporate competitiveness.

Forty-hour jobs with good benefits are increasingly rare, and a big factor is that the cost of “free market” health care is literally double what it costs with superior national plans. Having to pay for private health care reduces international competitiveness for US corporations, who compete with workers covered by less expensive national care.

The three most obvious worker needs are health care, retirement funding, and higher educational financing, all of which are more efficient and far less costly under national programs.

National health care is the primary candidate, because a national plan would cut health care costs literally in half. This is the most important of the changes that would make the 20-hour week possible, and it’s hard to overestimate the value national health care would have for the country. It would greatly improve the health of the working population, which by itself would bring significant financial benefit to the nation, since every adverse health condition among the work force creates cascading public costs and loss of efficiency.

National health care
is the most important of the changes
that would make the 20-hour week possible.

Minimum wage needs to become Living Wage, and significant improvements need to be made to Social Security. SS is by default the entire retirement income of people who work low wage jobs, and would not be adequate under 20-hour Living Wage without improvements.

Education is the third underfunded major cost of life in the US. The number of advanced nations that provide free higher education is growing rapidly, and the US could easily to do the same thing. Many universities could do it immediately with no other changes. There are many benefits of high levels of education in the workforce, for workers and owners alike. 

An unrecognized consequence of good national programs is that take-home pay could be far lower, yet still adequate. Workers would pay significant sums for national programs, but in the end the cost would be lower because they would not have to pay for expensive private plans. Personal security would therefore be greatly improved.

Greater changes have been made in the past. The 72-hour work week with absolutely no benefits of any kind went the way of farming with horses and hand tools. The radical 40-hour work week that replaced it has outlived its usefulness. Improvements in technology have made a much shorter work week possible, and we should seize the earliest opportunity.

Why Republicans Hate Obamacare

The reason Republicans hate Obamacare boils down to racism, as Republican positions so often do. They hate it because they think health care is a privilege, not a right. If you can’t afford healthcare, it’s because you don’t work hard enough, or you would have enough money for insurance. That being so, the government shouldn’t be giving it to you.

They hate it because it’s “socialist”, a charge that every person living in one of the many democratic countries more advanced than we are, who enjoys superior health care at half what we pay, would find utterly mysterious. What makes it “socialist”? The fact that everyone can get health care when they need it?

The idea that anyone who can’t afford our expensive private for-profit insurance should be denied health care altogether is simply more Republican dog-whistle racism. Who is naturally lazy and inferior and unwilling to work hard? Why, African-Americans, of course. Maybe Latinos too. Everyone knows that. So why should we be paying for their health care insurance? Don’t think there aren’t Republicans who would make that claim. There are. Out loud. For the public record.

The idea that anyone
who can’t afford insurance
should be denied health care at all
is dog-whistle racism.

The argument is bogus on several counts. First, there is no evidence that African-Americans (or Latinos, or anyone else) are lazy and inferior. None. In fact, around the world, poverty itself is related to long working hours.

There is no question that blacks, and other people of color, have been the victims of hundreds of years of ill treatment by European-Americans, starting with slavery, and continuing today with frequent shooting deaths of unarmed, non-threatening black men, and far too much lack of employment opportunity in anything but minimum-wage jobs.

There is deep prejudice against blacks in every part of the country. The recent federal report on Ferguson, Missouri documents that city policies and police actions victimized blacks, essentially requiring them to subsidize the city budget, and particularly victimizing the poorest.

We also forget our sordid history of murders and lynchings of Mexicans (my nomination for the hardest working people on the planet) driven off the ranches they had managed for centuries when the US absorbed the present Southwest states, as well as the ongoing ill-treatment of Spanish-speaking immigrants.

Republicans cannot claim that all the many millions of American workers who cannot afford our expensive private health care insurance are lazy, and at the same time claim that the $7.25/hour minimum wage that so many of the poor earn is a living wage. Yet they do. Wisconsin’s Scott Walker flat-out states that a minimum wage is a living wage.

Republicans cannot claim that those
who can’t afford insurance are lazy
and also claim that minimum wage
is a living wage.

One would like to remind the governor that the present minimum wage has a third of the value it did when it became law, lo those many years ago, and it wasn’t particularly generous even then. I suppose it’s overkill to also remind him that his punitive and dogmatic economic policies have dragged Wisconsin’s fiscal condition down to its most dismal level in at least half a century.

The average minimum-wage worker is someone in her thirties, not a 16-year-old high school kid. The full time earnings of someone making minimum wage is $15,080. The average cost of insurance outside of the ACA is about $15,000 annually per family. That’s why the working poor didn’t have health insurance before the ACA. Most of the companies paying minimum wage will not allow their employees to work full time anyway. Laziness never enters the picture.

The conclusion is inescapable: the Republican hatred of the Affordable Care Act is pure hypocrisy, based on bogus beliefs about its beneficiaries that are belied by the facts every step of the way. It is this kind of thinking that keeps the working poor at subsistence level, and one step away from an illness that can easily end in bankruptcy and death, ruining the family’s finances and opportunities for generations.