In May and June, 2008, I have written and read very little. But I’m posting these three one-pagers. Barbara A. asked me to write two of them, and the one to the Morning Show came out by my own volition. Volar - volition, volar means “to fly” in Spanish, so it flew out.
I’m keeping the short What Government Can Do at the top of the site’s pages because I think it summarizes much of my thinking. Hope someone enjoys these.
About your rebate check. The head of the Federal Reserve during the FDR years was Marriner Eccles. He said that capitalism is like a poker game. At one point it cannot continue unless the winner donates some chips to the losers. (I read that at toomuch.org, you can search for it.) Those rebate checks? The winners are kicking back some chips to the losers. When 20 percent of the national income goes to the top one percent, and another 20 percent goes to the
bottom 60 percent, the economy is in trouble. In 1944 FDR in his State of the Union Address proposed a new economic bill of rights. See The Second Bill of Rights, FDR's Unfinished Revolution by Cass Sunstein, page 68 especially.
Now to my short articles for June, 2008:
To the KPFA Morning Show
Dear Phillip Maldari, June 10, 2008
I listened to your economics interview this morning with Steve Levy and Sylvia Alegretto. I’m holding Sylvia’s book in my hand now, The State of Working America, 2006/2007. The interview could have gone better.
I got the impression that the “economy” will muddle through. "Don’t sweat it. It’s just destroying our culture and society, don’t sweat it."
KPFA boasts often that it does not rely on corporate sponsors for its funding. I’ve heard you say this. But who controls the economy if not corporate plutocrats? They are engaged in a blind-lemming pursuit of low wages, high profit, and return on equity. Period.
Here are some questions you might ask next time?
1. Is it true that more than a third of the workforce labors at poverty level wages or else they simple can’t find work?
Answer: Look at State of Working America, 2006/2007, by Sylvia Alegretto, Jared Bernstein, and Lawrence Michel, page 232, and you see that the unemployment and underemployment rate is 13.1%. And on page 132 the rate of those working at poverty wage income is 24.5%. Total is 37.6% or 3 out of 8 workers surviving at poverty level wages or out of work. The workforce comprises 153 million people, and 57 million fall into the range of inadequate income and opportunity. This is a good economy? If our per capita income is so high, $39,000 per human, why isn’t it distributed better? The GDP surpasses 13 trillion, there are over 300 million citizens, so GDP is near $40,000.
The median individual worker income is less than $33,000.
2. Is it true that the incomes of the top one percent now exceed the combined incomes of more than 50% of the workers?
Yes. See page 79. The group at inequality.org states in a new study that it exceeds incomes of 60% of the workforce.
3. Why hasn’t the poverty rate come down since 1973? And the rate of deep
poverty is at all time high?
See page 283.
4. What was the value of the Bush tax cuts to families in the top 1 percent?
$44,477 a year. And to the lowest 20%? $63. Page 75. How much tax subsidy tax savings did the wealthy receive to purchase housing versus the poor? The answer: over 350 billion according to a study found in my essay A Wealth Tax to Eliminate Poverty. The top one percent increased their share of the national income from 9% in 1980 to 22% in 2008 (See inequality.org and toomuch.org.) We added $3 trillion to the national debt in 7 years, totaling $9 trillion. And the dollar is crashing. No problem?
The question about the dollar decline was good. His answer was really bad. He said something about “If we trim our spending by only 4%,” it’s like a “family decision,” then everything will be OK. This shows he has not given serious thought to the problem. He does not have any idea what he is talking about. And that is surprising because he is a good economist. I could go on. The book The Dollar Crisis by Richard Duncan says that the fall of the dollar will be the major economic event of the 21st century, and makes a very convincing argument.
Jared Bernstein, co-author of SWA ‘06/’07, interviewed on the radio with Marty Nemko on KALW, 11:00 a.m. Sunday. It will be posted on the web soon. It was a good interview. I recommend you listen to it. Bernstein has a new book, Crunched, and I bet it’s good. I read and recommend his 2005 book, All Together Now.
I recommend you interview Frank Stricker, author of Why America Lost the War on Poverty --- And How to Win It. He is a professor at CSU Dominguez Hills. He doesn’t believe capitalist economies ever, even in good times, produce enough jobs, and therefore cannot eliminate poverty. We need A New WPA, also the title to an article in Dollars and Sense magazine, March, 2008. D and S magazine is a good source for interviews. And Jeff Madrick wrote Why Economies Grow, and edits the magazine Challenge --- interview him.
Go to my blog at benL8.blogspot.com for some simple essays about a Wealth Tax to Eliminate Poverty, and What Government Can Do, and so forth.
Thank you. I’m an old fan of the Morning Show.
The Next Wave of Political Reform
The American nation was founded on the principle of fairness, “all men are created equal . . . with certain inalienable rights.” There has been a steady, but painful, growth to achieve this human ideal. The next wave of political reform I predict will be economic reform to correct our present economic injustice.
Our nation produces goods and renders services whose value amounts to over $13 trillion each year. Over 150 million people are connected to the income producing part of this economy. The average value produced per worker is close to $90,000 per year, which also equates to almost $45 per hour. I could be more precise, but this rough estimate is clear enough. Half the workers earn less than $33,000 a year, the median income. This is nowhere near the average $90,000. Doesn’t it make sense that the average and the median incomes should be roughly the same? Only a dysfunctional democracy could skew it so much. Half earn less than $16.50 an hour, instead of the $45 average. Furthermore, 50 million workers, a third of the workforce, earn less than the poverty level income, around $20,000 a year, or else they work part time, are unemployed, or have given up on looking for work. One in eight live in official poverty.
This is the simple reason why economic reform will be the next wave of political reform.
I would like to share with the readers of Campaign to Abolish Poverty some of the sources that I’ve found useful for gaining a complete picture of the nation’s economic profile.
On the web I go to toomuch.org, inequality.org, njfac.org, UFE.org, ourfuture.org, populareconomics.org, americanprogress.org, EPI.org, CEPR.org, startguide.org. The last is a listing of progressive organizations.
For general books on economics I will cite three: Economic Apartheid in America, All Together Now, and Field Guide to the U.S. Economy. There are of course hundreds more. The National Jobs for All Coalition has attracted scholars whose works bear mentioning. Frank Stricker wrote Why America Lost the War on Poverty - And How to Win It, and Collins and Goldberg wrote Washington’s New Poor Law. I sense that since no media outlet is telling the story, as far as I can see, the story will be told through books and web pages. I have written eleven essays and posted them at http://benL8.blogspot.com. One of my essays calls for a tax on wealth that then would stimulate asset ownership in low income households. Soon we will be able to connect through www.j4all.org, the coming site of the Economic and Social Justice Coalition.
Why should we put up with one in eight living in poverty? Why should 29% of families with children under 12 be unable to pay for childcare, health care, shelter and food? It’s time to agitate for real economic reform.
Economic Justice and Democracy
by Robin Hahnel
a book review by Ben Leet
Robin Hahnel’s Economic Justice and Democracy presents a new economic system. Hahnel is a Professor of Economics at American University in Washington, D.C. This is a visionary replacement of our present market-based system involving money, competitive trading and profit. He calls his system participatory economics. The allocation of resources, human and physical, are determined by rational choice arrived democratically through consumer and producer councils. The allocation of rewards is determined by personal sacrifice as determined by social consensus. He states that “economic visionaries had failed to provide a coherent model explaining precisely how their alternative to capitalism could work.” This 420 page book reworks our conceptions on how to manage our lives. The “house rules,” the etymological base for the word “economics,” are totally reconsidered.
Asking “What Do We Want?” he responds, “Do we want economic decisions to be determined by competition between groups pitted against one another for their well-being and survival. Or do we want workers and consumers to be able to plan their joint endeavors democratically, efficiently, and equitably? In other words, do we want to abdicate economic decision-making to the marketplace or do we want to embrace the possibility of participatory planning?”
Presently about 500 billionaires own more property than half of humanity.
In the U.S.A. wealth is very polarized as the top one percent own more than the bottom 91%. The problems of inequality seem to be increasing as other environmental problems accelerate. Maybe there is a better way to arrange the “house rules.” It is refreshing to entertain a new concept for self-governance and hear it passionately argued.
His book evaluates competing notions of social justice and delves into the complexities of reward. He is critical of capitalism, socialism and communism and tries to explain their historical performance. Interesting is his discussion of the Mandragon movement in 1930s Spain. He presents as well current reform efforts --- labor and environmental and consumer and anticorporate movements --- to ameliorate capitalism’s injustices and presents experimentation in equitable cooperation --- worker ownership, consumer and producer cooperatives, participatory budgeting in Kerala, India, Porto Alegre, Brazil, and Argentina.
“After carefully considering competing notions, this book concludes that economic justice should be defined as reward commensurate with sacrifice, and economic democracy should be defined as decision-making power in proportion to the degree affected.“
“If I had a nickel from every person who told me how much they liked the idea, but could not imagine any way to get there from where we are today, I would already be retired. . . . I assure them I am dead serious. . . I believe the transition will be a long one, marked more by reform victories than by capitalist breakdowns. I believe overcoming commercial values will take time, but growing awareness of the consequences of relying on competition and greed and the advantages of equitable cooperation will prove decisive.”
Published in 2005 by Routledge.