By Raymond Freeman
I attended the California Democratic Party’s convention in San Jose last month.
Gouty old geezers did not dominate the event. The makeup of delegates and speakers was balanced, reflecting society generally. Many speakers believed Republicans were getting nastier. Instead of retooling Reagan’s failed “voodoo economics” — the failure of which has been admitted even by conservative pundit Joe Scarborough — they’ve been doubling down. (In a twisted way, I admire how brilliantly Republicans sold their snake oil to the millions of Homer Simpsons for the benefit of the top 1 percent).
Speakers at an economic forum decried the American belief that corporations exist solely to serve their shareholders. This belief has accelerated our economic decline. (Not surprisingly, the median Canadian — your typical Canuck — is now much richer than the median American.)
Several speakers mentioned Proposition 30. It got billions to our schools in an effort to arrest our decline. It will expire in two years, however, and its extension will be furiously opposed. Billionaire Tom Steyr, a self-made techie with a heart of gold, said Democrats will “face down” the special interests promoting an “evil ideology” that opposes investment in human capital. Obviously, Silicon Valley owes its global position to its human capital.
Vice President Joe Biden mocked Republicans for not knowing where the 2008 Great Recession came from. He asked how Republicans could make America great again if they’d forgotten what made it great in the first place. Nine million jobs were lost, five million foreclosures happened, $16 trillion in wealth was wiped out, and “still they’ve forgotten.” He and President Obama had “inherited a mess.” Their first job was to “save America,” but every step was fiercely opposed by Republicans: “The GOP hasn’t changed, folks, they just got meaner!”
America is now the best place to invest. Jobs are now being insourced, not outsourced. America now has the most productive workforce in the world, thanks to its human capital.
He reminded us that company CEOs are not “job creators.” The real job creators are consumers. But the increasing concentration of income and wealth in the top 1 percent reduces consumer spending and thus the potential of the economy. Profits frittered away on stock buybacks and executive bonuses reduce the economy’s potential even more. Ominously, investment in R&D and infrastructure is at an all-time low.
Along with this myopia goes our ruinous fiscal policy. We’re squandering $1.2 trillion each year on “tax expenditures,” meaning special breaks and subsidies. Yet we hear that we “can’t afford” free community college. Plugging just one giveaway — the “stepped-up basis” for “trust fund babies” — would pay for free college and “still give us $11 billion in change.”
Historically, the U.S. has done well when the middle class has done well. There used to be a “basic bargain”: if you worked hard and contributed to the success of your employer, you shared the wealth. (Henry Ford shared the wealth and got wealthier himself — it’s not a zero-sum game). But today, the middle class makes up less than 50 percent of America. That’s because the middle class has “lost its bargaining power” as a result of weakened unions. “Unions made the American middle class,” Biden declared.
Gov. Jerry Brown said that, a few years ago, people said we should move to Texas because California was a “failed state.” Nowadays they’re saying the exact opposite.
Former Labor Secretary Robert Reich said we’re living in “the second era of American history when wealth and power have gone to the very top. That’s why people are so angry!” Median wages (for the typical worker) keep dropping. He gave the Top Ten Mythologies of American Politics:
10. Job creators are CEOs and wealthy investors; 9. Unions are bad for the economy; 8. The basic economic choice is between the free market and government control (no: it’s a blend of both); 7. The basic policy choice is between large and small government (no: it depends on who benefits from government’s policies) 6. The rich pay more in taxes than lower income people as a proportion of income (false, as billionaire Warren Buffet said); 5. Teachers’ unions are responsible for the poor state of our schools (no: funding is the issue); 4. The only thing poor people need is a job (no: they need jobs paying more than starvation wages); 3. A higher minimum wage is bad for the economy (no: the evidence demonstrates otherwise); 2. Higher taxes drive away business (no: it depends on how the taxes are spent). 1. Finally, he endorsed Bernie Sanders.
No great wisdom is needed to summarize all of this. Republicans are licensed pirates gunning for the top 1 percent, masquerading as a political party, but will lose the fight when they try to impoverish you further.