The Necessity of a Fair Economy

Cross posted from The Stars Hollow Gazette

I’ll believe corporations are people when Texas executes one” ~ Robert Reich

Economist and former Clinton Labor Secretary Robert Reich was a guest on Jon Stewart’s The Daily Show to discuss the economy, taxes, and that state of our political system. In a three part extended interview , Sec. Reich discusses taking back of our democracy from the special interests and “the conditions that he believes will lead to the formation of a legitimate third party in the United States.”

Why a Fair Economy is Not Incompatible with Growth but Essential to It

One of the most pernicious falsehoods you’ll hear during the next seven months of political campaigning is there’s a necessary tradeoff between fairness and economic growth. By this view, if we raise taxes on the wealthy the economy can’t grow as fast.

Wrong. Taxes were far higher on top incomes in the three decades after World War II than they’ve been since. And the distribution of income was far more equal. Yet the American economy grew faster in those years than it’s grown since tax rates on the top were slashed in 1981. [..]

What we should have learned over the last half century is that growth doesn’t trickle down from the top. It percolates upward from working people who are adequately educated, healthy, sufficiently rewarded, and who feel they have a fair chance to make it in America.

Fairness isn’t incompatible with growth. It’s necessary for it.

Why “We’re on the Right Track” Isn’t Enough, and What Obama’s Plan Should Be For Boosting the Economy

President Obama’s electoral strategy can best be summed up as: “We’re on the right track, my economic policies are working, we still have a long way to go but stick with me and you’ll be fine.”

That’s not good enough. This recovery is too anemic, and the chance of an economic stall between now and Election Day far too high. [..]

The President has to offer the nation a clear, bold strategy for boosting the economy. It should be the economic mandate for his second term.

It should consist of four points:  

First, Obama should demand that the nation’s banks modify mortgages of homeowners still struggling in the wake of Wall Street’s housing bubble – threatening that if the banks fail to do so he’ll fight to resurrect the Glass-Steagall Act and break up Wall Street’s biggest banks (as the Dallas Fed recently recommended).

Second, he should condemn oil speculators for keeping gas prices high – demanding that the oil companies allow the Commodity Futures Trading Corporation to set limits on such speculation and instructing the Justice Department to investigate and prosecute oil price manipulation.

Third, he should stand ready to make further job-creating investments in the nation’s crumbling infrastructure, and renew his call for an infastructure bank. And while he understands the need to reduce the nation’s long-term budget deficit, he won’t allow austerity economics to take precedence over job creation. He’ll veto budget cuts until unemployment is down to 5 percent.

Finally, he should make clear the underlying problem is widening inequality. With so much of the nation’s disposable income and wealth going to the top, the vast middle class doesn’t have the purchasing power it needs to fire up the economy. That’s why the Buffett rule, setting a minimum tax rate for millionaires, is just a first step for ensuring that the gains from growth are widely shared.

But even before any of what Sec. Reich has put forth, President Obama needs to fire Treasury Secretary Timothy Geithner and appoint Sec. Reich, Prof. Bill Black and Paul Krugman to his Economic Advisory Council.

4 comments

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    • TMC on April 21, 2012 at 2:29 pm
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    • banger on April 21, 2012 at 4:23 pm

    Obama and the Democrats cannot pursue the path you suggest. They are not the principle actors in this drama–they are brokers for power who can, at best tinker at the margins. Power is what it is–composed of people and factions who have the ability to hire political, legal, PR muscle along with (if required, real muscle). The job of politicians and the legal system is to keep things from moving into chaos.

    The situation is what it is because the American people have moved gradually away from political engagement and, in particular, to the Western intellectual tradition that has reason and science as an essential (but not the only) component.

    As long as that trend continues we can do very little. The only thing to do is establish networks and strengthen those we are associated with.  

  1. 0bummer’s strategy is

    Cry Walker, and let slip the dogs of fear.

    Oh yeah, and try to run on a track record of glamorizing RELATIVELY trivial ‘accomplishments’ while on the BIG things which mattered – where the bottom 80%++ of us got screwed – Axelrod & Rahm

    Cry Walker, and let slip the dogs of fear.

    What 0bummer should do to fire people up … yawn.

    Admit he’s a fucking sell out, a fucking liar, and a fucking disgrace and promise that his promises will NOT be cover ups for fucking disgraceful lying sell outs anymore … yawn.

    Cry Walker, and let slip the dogs of Fear!

    rmm.  

  2. How about us working stiffs get a bigger cut of the wealth we all created cuz we EARNED IT.

    We don’t have it cuz it was TAKEN by rich pigs on top who want to be on top cuz they’re pigs who want to take everything.

    “SHARE” is cutesy 4 year old and 6 year old little kiddy school nicey nice goo goo ga ga teletubby nonsense.

    Adults FORCE kids to share to try to train kids to NOT be selfish little vermin – and adults try to make it look like the forced sharing is all cooperative and mutual respect and lovey dovey … yawn.

    The concept of “SHARE” with greedy adults is like trying to explain Shakerpeare in Hindi to someone who only speaks Mandarin, on a good day – give me a fucking break.  

    On most days, asking for SHARE, you’re sounding like a whiny, sniveling pathetic worm who DESERVES to have his milk money and his lunch taken from him, so he’ll cry on the playground and all the kids can laugh at him.

    ugh.

    We demand what we earned. period.

    rmm.  

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