Wait what? Is the for real? They can do that what a completely broken system, "large corporations from deducting C.E.O. and other corporate compensation over $1 million unless employees got pay raises reflecting increases in worker productivity and the cost of living."
I'm about to publish "The collapse of Capitalism and the Rise of
Totalitarianism" where I ask that very question.
Totalitarianism" where I ask that very question.
Back in my college days I remember reading parts of Das Kapital by Karl Marx. It's looking like much of what he predicted is coming true. Marx argued that in the beginning, capitalism would succeed and do quite well in promoting growth by means of capital investment, new technology, and improved means of production. Everyone in the system would prosper.
However as time went on and capitalism developed, the more powerful capitalists would appropriate more and more of the profits and income from the economy for themselves and laborers would have increasingly less. Over time, capitalist economies would undergo ever more vicious cyclical swings from boom to bust. These cycles would eventually result in ever richer capitalists and ever poorer working classes, until the working classes had enough and would revolt and take over the means of production, causing Socialism to ensue as a result.
I'm not a Marxist but it seems he had a good understanding of what the power of money and greed can do to a person's (and nation's) soul.
However as time went on and capitalism developed, the more powerful capitalists would appropriate more and more of the profits and income from the economy for themselves and laborers would have increasingly less. Over time, capitalist economies would undergo ever more vicious cyclical swings from boom to bust. These cycles would eventually result in ever richer capitalists and ever poorer working classes, until the working classes had enough and would revolt and take over the means of production, causing Socialism to ensue as a result.
I'm not a Marxist but it seems he had a good understanding of what the power of money and greed can do to a person's (and nation's) soul.
2
I couldn't agree with you more Alenna. Power, a simple word that is split and divided into benign definitions of what capitalism is, does and stands for--the rich getting richer, the poor, who cares, by benign economics professors spinning the trickle down ideology. And in political science, all those wonderful checks and balances to process the people's will--instead stalling ALL PRESIDENTIAL initiatives to make a "1 term President", and a fascist leaning Scalia "SUPREME" court legislating from the bench that the US of A is by the rich, for the rich, and nothing but the rich. The purportedly democratic republic has become a land where the rich can buy anything, including gerrymandered districts to deny democracy and expose hypocrisy--republicans cannot win without gaming the system, renaming a simple majority to no longer be 50% but 60, and sanctifying discrimination in elections by another scalia rendition of the evil empire under Nero, playing while capitalism burns. Let them eat cake, right republicans?
Brings to mind the notion "you can fool all the people some of the time but not all the people all the time." If Republicans can game the 2016 election, it will be their last, as rising unemployment, poverty, and immiseration of the masses continues current republican policies. And then they will have no one's skirt to hide behind or blame. Their pants will be at their knees and the stench of truth revealed.
Brings to mind the notion "you can fool all the people some of the time but not all the people all the time." If Republicans can game the 2016 election, it will be their last, as rising unemployment, poverty, and immiseration of the masses continues current republican policies. And then they will have no one's skirt to hide behind or blame. Their pants will be at their knees and the stench of truth revealed.
The basic idea of "inclusive capitalism," minus the label, was widely proposed a few decades ago. Japan's economy was surging ahead, while America's was stagnating. Japanese firms and individuals were buying up American real estate and companies. Several observers noticed that Japan's income distribution was flatter than America's, permitting broad-based consumption as well as savings.
Of course other factors came into play to handicap the Japanese economy. But the essential point -- that a broader income distribution can enable greater overall consumption, hence greater economic growth, remains.
"Inclusive capitalism" is a new name attached to a rediscovered economic principle.
Of course other factors came into play to handicap the Japanese economy. But the essential point -- that a broader income distribution can enable greater overall consumption, hence greater economic growth, remains.
"Inclusive capitalism" is a new name attached to a rediscovered economic principle.
These are good ideas, but I'd like to see the President and others use the bully pulpit to try to persuade business leaders to do the right thing: Stop taking huge bonuses when you're laying off workers; reduce the income gap between the top earners and everyone else; support common-sense tax increases; put job security and long-term stability ahead of short-term profits. The free-enterprise system needs to work for everyone, and those at the top need to know they will ultimately suffer if it doesn't.
1
All wealth is derived from resource extraction. In the short term hoarding resources looks like wealth. In the long term resource extraction has severely damaged the environment.
If we attempt to fix the environment the effort will consume any wealth we have accumulated. If we do not attempt to fix the environment nature will consume any wealth that we have accumulated.
Enjoy the "wealth" while you can. Our children will not have the same luxury.
.
If we attempt to fix the environment the effort will consume any wealth we have accumulated. If we do not attempt to fix the environment nature will consume any wealth that we have accumulated.
Enjoy the "wealth" while you can. Our children will not have the same luxury.
.
1
Apparently, Christopher has never met a farmer or even grown a garden.
Capitalism is based on the theory that producers and consumers will act in their rational self-interest. Mindless greed, dubious economic instruments that produce nothing of value, and economic anarchy free of any regulation is not acting in our rational self-interest. Get rid of the robber barons and replace them with sane capitalists such as Bill Gates, Warren Buffett, T. Boone Pickens, Richard Branson, et. al. We all do much better when the flock is not being fleeced.
3
But you forget a key to the whole situation: we still have a viable justice system.
Were liberal dreams to come true and government was making all the decisions in the private sector, the gov't bosses would NEVER be answerable to workers or those they hurt.
Example: We are still trying to get government documents released having to do with the gun-walking scandal that has killed two Americans and hundreds of Mexicans. Imagine this applied to every business in the country.
Were liberal dreams to come true and government was making all the decisions in the private sector, the gov't bosses would NEVER be answerable to workers or those they hurt.
Example: We are still trying to get government documents released having to do with the gun-walking scandal that has killed two Americans and hundreds of Mexicans. Imagine this applied to every business in the country.
Unregulated capitalistic free market economy is self destructive in long term. By its nature, it is competitive and hence the ‘big fish eats small fish’ until oligopolies settle into their places, stifling competition, stopping risk taking, product innovation, and keeping prices as high as the ‘captive’ market can bear.
Meanwhile, productivity innovations continue because that is the most straightforward way of maximizing profits after consumer market has saturated.
High profit margins on zero marginal cost production separates majority of population from their money. This is compounded by increasing unemployment brought about through automation of routine processes.
All routine labor can be automated. US drivers and package delivery workers, chinese factory assembly workers are the next to go.
The only remaining mass employment that will be available is in the service industry. But that activity doesn't deliver food on the table, electricity, gas, heating, communications. We can all get a PhD but that will still not resolve the current economic model even if it is the best currently available.
A person cannot benefit from efficiency if he or she doesn’t own it. If you have created a machine to do your work, then you don’t have to work. If someone else created a machine to do your work, then you got a problem.
http://ideabits.blogspot.com/2014/05/job-market-pyramid.html
Meanwhile, productivity innovations continue because that is the most straightforward way of maximizing profits after consumer market has saturated.
High profit margins on zero marginal cost production separates majority of population from their money. This is compounded by increasing unemployment brought about through automation of routine processes.
All routine labor can be automated. US drivers and package delivery workers, chinese factory assembly workers are the next to go.
The only remaining mass employment that will be available is in the service industry. But that activity doesn't deliver food on the table, electricity, gas, heating, communications. We can all get a PhD but that will still not resolve the current economic model even if it is the best currently available.
A person cannot benefit from efficiency if he or she doesn’t own it. If you have created a machine to do your work, then you don’t have to work. If someone else created a machine to do your work, then you got a problem.
http://ideabits.blogspot.com/2014/05/job-market-pyramid.html
4
Lawmakers’ special treatment of Wall Street traders is apparent in the "fine print" of the bill that reduced the capital gains tax rate, about two decades ago.
The tax rate was 18%, but taxable "capital gains" were not indexed to the changing value of the dollar. This serves short term investors very well, but long term investors pay much more than 18%.
The law mandates that the IRS formulates what we owe them in capital gains tax by subtracting the “raw” dollar amount of the original investment, from the selling price. (e.g. The original investment dollar figure is NOT “indexed” to its 2015 dollar value before calculating the tax bill.) This is ethically and morally unacceptable.
Long term investors, like in the real estate sector, end up paying more specious "capital gains" taxes on inflation, rather than on “real dollar value” capital gains. In other words, this is a tax on inflation in addition to, or even in the absence of, bone fide capital gain.
Long term investments end in economic disaster for investors, who in reality, have to pay way beyond the 18% rate, even if the investment was a real long term loss.
This unindexed capital gains tax also breeds slums and inflated rents, because apartment and storefront landlords make their profits month-to-month, in lieu of upgrading and selling real estate for profit.
The way it is now, simply maintaining your property increases your “inflation tax” hidden within our present “capital gains” tax.
The tax rate was 18%, but taxable "capital gains" were not indexed to the changing value of the dollar. This serves short term investors very well, but long term investors pay much more than 18%.
The law mandates that the IRS formulates what we owe them in capital gains tax by subtracting the “raw” dollar amount of the original investment, from the selling price. (e.g. The original investment dollar figure is NOT “indexed” to its 2015 dollar value before calculating the tax bill.) This is ethically and morally unacceptable.
Long term investors, like in the real estate sector, end up paying more specious "capital gains" taxes on inflation, rather than on “real dollar value” capital gains. In other words, this is a tax on inflation in addition to, or even in the absence of, bone fide capital gain.
Long term investments end in economic disaster for investors, who in reality, have to pay way beyond the 18% rate, even if the investment was a real long term loss.
This unindexed capital gains tax also breeds slums and inflated rents, because apartment and storefront landlords make their profits month-to-month, in lieu of upgrading and selling real estate for profit.
The way it is now, simply maintaining your property increases your “inflation tax” hidden within our present “capital gains” tax.
3
Who, in their right mind, would trust these 1%s gathered in a castle to make their trusted capitalism more inclusive? It would seem that the "bottom 4 billion" would be better off by collectively turning our backs on them, and start to take things in our own hands! Collectively, we'll be better able to watch out for ourselves... and one another... rather than waiting for these take-all-losers to use their invisible hand to pull the strings that eventually always works to their exclusive advantage. I prefer to be together at the bottom, than alone at the top anyway! Inclusive my eye... just more retrograde word manipulation babble!
1
Craig could go into business himself and show those knaves and poltroons in business how to do things right!
It would do you good to talk to some people actually involved in running businesses. The size doesn't particularly matter.
It would do you good to talk to some people actually involved in running businesses. The size doesn't particularly matter.
I appreciated very much your very clear explanation of the new economical trends.
It is amazing how the “Inclusive Capitalism” principles matches with the President proposals, jointly with a better consideration for the “Forth Tier”, (which is also a big oil painting by Pellizza da Volpedo, reproduced as the picture of my NYT comments).
Inclusive Capitalism is the principle of equality or at least economic fairness, looking to the forth tier as the future consumers, if they get the wright wage and are not any more underpaid.
I think that Mr Obama is perfectly conscious that Republicans will stop him, as ironically remembers Mr Nicholas Kristof in his column “Regan, Obama and Inequality”.
But this will be the only exit of the USA economy, even if in two years America will have a Republican President. There is an “if”on that: if this new President will be smart.
Actual Capitalists, represented by Republicans, look to China as possible billions of customers, but they don't see that China is becoming an high tech country and shortly will be a lost market.
Those are the points you address with the Inclusive Capitalism principles and which Mr Obama intelligently addressed in his speech.
I believe that Mr Obama did a smart move, addressing his words on how America should be in the near future, regardless if the persisting political boycotting will not allow to transform now his words in reality, but they will not be lost words.
It is amazing how the “Inclusive Capitalism” principles matches with the President proposals, jointly with a better consideration for the “Forth Tier”, (which is also a big oil painting by Pellizza da Volpedo, reproduced as the picture of my NYT comments).
Inclusive Capitalism is the principle of equality or at least economic fairness, looking to the forth tier as the future consumers, if they get the wright wage and are not any more underpaid.
I think that Mr Obama is perfectly conscious that Republicans will stop him, as ironically remembers Mr Nicholas Kristof in his column “Regan, Obama and Inequality”.
But this will be the only exit of the USA economy, even if in two years America will have a Republican President. There is an “if”on that: if this new President will be smart.
Actual Capitalists, represented by Republicans, look to China as possible billions of customers, but they don't see that China is becoming an high tech country and shortly will be a lost market.
Those are the points you address with the Inclusive Capitalism principles and which Mr Obama intelligently addressed in his speech.
I believe that Mr Obama did a smart move, addressing his words on how America should be in the near future, regardless if the persisting political boycotting will not allow to transform now his words in reality, but they will not be lost words.
1
History teaches that capitalists run amok do not create wide-spread prosperity or anything vaguely resembling income equality- but quite the contrary as in the Gilded Age (1870-1900).
Indeed, America's most prosperous years , c. 1945-1980 were characterized by strong labor unions and government regulation of banking, finance and industry.
Can Capitalists Save Capitalism? Short answer : NO!
As much as the Mitt Romney's of this world would like us to believe, there is absolutely no "hair of the dog that bit you" cure for economic inequity.
“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”
John Maynard Keynes
Indeed, America's most prosperous years , c. 1945-1980 were characterized by strong labor unions and government regulation of banking, finance and industry.
Can Capitalists Save Capitalism? Short answer : NO!
As much as the Mitt Romney's of this world would like us to believe, there is absolutely no "hair of the dog that bit you" cure for economic inequity.
“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”
John Maynard Keynes
2
America's most prosperous years , c. 1945-1980 were before the creation of NAFTA and the other multitude of Free Trade agreements!
1
This is not new. "Don't be awful to the poor" is Marxist, Communist, Socialist, Christian...
Marxism was buried by America's self-image as an antithesis to the Soviet Union. It fell out of fashion. "Socialist" is an insult despite the fact that there are no non-socialized capitalist economies. Christians in political spotlights mostly forgot the poor.
The issue isn't our info. It's how fashionable it is. Trickle-down doesn't work, but PR against the poor is fashionable.
Many wealthy people feel entitled to cheap labor even as they bemoan entitlements (like the "entitlement" to collect Social Security benefits that you pay into all your life... working).
That the poor are actually an asset is not new. Ford paid astounding wages with great results. After repeated dire warnings on minimum wage hikes, Seattle is doing great, but no one is talking about it. The Koch brothers are fashionable, and nobody made the actual results fashionable. Salt Lake City discovered GIVING homeless people houses is CHEAPER than turning their backs on them. Cheaper and humane. Go figure.
Too much of politics is brand. Example: NRA opposes gun controls for documented psychotics. Literally insane. But... the NRA doesn't care about psychotics. They're drinking Slippery Slope Kool Aid. "We budge an inch, Obamer takes our guns." Deep-seated antagonism and poor education reinforces our inability to discuss inequality (or any "partisan" issue).
We don't need better info. We need it to be fashionable.
Marxism was buried by America's self-image as an antithesis to the Soviet Union. It fell out of fashion. "Socialist" is an insult despite the fact that there are no non-socialized capitalist economies. Christians in political spotlights mostly forgot the poor.
The issue isn't our info. It's how fashionable it is. Trickle-down doesn't work, but PR against the poor is fashionable.
Many wealthy people feel entitled to cheap labor even as they bemoan entitlements (like the "entitlement" to collect Social Security benefits that you pay into all your life... working).
That the poor are actually an asset is not new. Ford paid astounding wages with great results. After repeated dire warnings on minimum wage hikes, Seattle is doing great, but no one is talking about it. The Koch brothers are fashionable, and nobody made the actual results fashionable. Salt Lake City discovered GIVING homeless people houses is CHEAPER than turning their backs on them. Cheaper and humane. Go figure.
Too much of politics is brand. Example: NRA opposes gun controls for documented psychotics. Literally insane. But... the NRA doesn't care about psychotics. They're drinking Slippery Slope Kool Aid. "We budge an inch, Obamer takes our guns." Deep-seated antagonism and poor education reinforces our inability to discuss inequality (or any "partisan" issue).
We don't need better info. We need it to be fashionable.
This is all well and good. The ultimate evidence - commercials on American TV and advertising on TV - will the first to notice and promote it.
No, I don't mean that which is done by American Political action committees funded by unanimous contributors!
No, I don't mean that which is done by American Political action committees funded by unanimous contributors!
@WKing
Yes I quite agree. Fortunately everyone earning less than a million a year will soon be destitute and living under a bridge. Then justice will finally be served.
Yes I quite agree. Fortunately everyone earning less than a million a year will soon be destitute and living under a bridge. Then justice will finally be served.
"Developed nations 'need new social and political institutions to make 21st century capitalism work for the many and not the few,' Summers and Balls wrote."
We need unions, and a government that consistently takes the union's side over that of the boss's. That combination gave us thirty years of widespread prosperity after World War II and continues to serve the people well in Germany and Scandinavia, among other places.
Forget trying to find something new; just go back to what worked before and still works around the world.
We need unions, and a government that consistently takes the union's side over that of the boss's. That combination gave us thirty years of widespread prosperity after World War II and continues to serve the people well in Germany and Scandinavia, among other places.
Forget trying to find something new; just go back to what worked before and still works around the world.
1
It doesn't matter what the policy makers think or do, because the problem is where the rubber meets the road, people. People will always find a way to game the system in their favor. History shows that rules, regulations, agreements, laws, etc are all useless when profit is at stake.
Secondly using the term 'inclusive capitalism' is an acknowledgement that the current system is exclusive. So why did it take these people so long to supposedly want to do something about it? Because it's now news and here is a way to capitalize on it.
Another smoke and mirrors proposal to awe and distract the little people from their never ending stress and increasingly depressing lives.
Secondly using the term 'inclusive capitalism' is an acknowledgement that the current system is exclusive. So why did it take these people so long to supposedly want to do something about it? Because it's now news and here is a way to capitalize on it.
Another smoke and mirrors proposal to awe and distract the little people from their never ending stress and increasingly depressing lives.
If you recall, Obama promised to outlaw lobbyists when he first got elected. Next thing you know, he'll be the "special partner" in charge of smooching booty for Goldman Sachs. Unbridled capitalism is what ignited the downward rocket thrusters on The Decline and Fall of the American Empire.
And let's not kid ourselves, we deserve to Decline and Fall.
And let's not kid ourselves, we deserve to Decline and Fall.
2
This is all really interesting, but why is Obama proposing tax reform now? Where were the bold moves when he had a mandate and his party controlled Congress? You know, back when he picked Rubin, Summers, Bernanke, and Geithner to guide our economy. This is a sham. He knows his proposals will never see the light of day, but he wants to leave some legacy of "at least I tried".
“'We need to share the wealth,' said Senator Charles E. Schumer, chairman of the Senate Democratic Policy and Communications Committee and a leading proponent of the party’s focus on economics."
The only "share the wealth" that Senator Schumer has historically concerned himself is sharing the nation's wealth with the financial interests of Wall Street who consistently bankroll his political campaigns. No matter how corrupt Wall Street, hedge funds, so-called banking interests, Senator Schumer is there shilling for and protecting the 1%.
The only "share the wealth" that Senator Schumer has historically concerned himself is sharing the nation's wealth with the financial interests of Wall Street who consistently bankroll his political campaigns. No matter how corrupt Wall Street, hedge funds, so-called banking interests, Senator Schumer is there shilling for and protecting the 1%.
1
Individual Capitalism probably started before recorded history when a successful cave hunter returned to his cave and traded parts of his dead animal to other members of his cave clan for some fruit the other member has in his/her possession, or maybe something else of value such as a weapon or sexual services.
Foreign Trade between clans probably started when a successful hunter passing the cave of another clan might have traded some of his dead animal parts for that other clan’s things of value such as a weapons, tools or sexual services.
Traders took chances by approaching foreigners because those foreigners might have just killed the hunter and taken his possessions if the hunter was not also a good warrior to defend himself.
The hunter’s tribe would also probably descend onto foreign hunters that wandered into their areas of control and then kill them for their possessions.
Pirates also killed hapless victims on the high seas when the victims were caught by the pirates on the high seas.
During the Westward trek of the pioneers to settle the West in the late 19th century, the Mormons stopped and killed the westward pioneers and settlers that encountered the Mormons, who then took all of the traveler’s possessions.
http://en.wikipedia.org/wiki/Mountain_Meadows_massacre
Traders and other foreign travelers must be prepared to defend themselves from attack at all times from all strangers when they travel between safe harbors.
Foreign Trade between clans probably started when a successful hunter passing the cave of another clan might have traded some of his dead animal parts for that other clan’s things of value such as a weapons, tools or sexual services.
Traders took chances by approaching foreigners because those foreigners might have just killed the hunter and taken his possessions if the hunter was not also a good warrior to defend himself.
The hunter’s tribe would also probably descend onto foreign hunters that wandered into their areas of control and then kill them for their possessions.
Pirates also killed hapless victims on the high seas when the victims were caught by the pirates on the high seas.
During the Westward trek of the pioneers to settle the West in the late 19th century, the Mormons stopped and killed the westward pioneers and settlers that encountered the Mormons, who then took all of the traveler’s possessions.
http://en.wikipedia.org/wiki/Mountain_Meadows_massacre
Traders and other foreign travelers must be prepared to defend themselves from attack at all times from all strangers when they travel between safe harbors.
1
Again Mr. Edsall deserves great credit for raising issues very few in the NYTimes address, even America's Conscientious Liberal. However, it's not up to capitalists whether they "save" capitalism or not. Capitalism has its own dynamic, its own movement, its own "law of motion." Thus, saving capitalism isn't up to capitalists. They only survive as capitalists by aligning their behavior to capitalism's competitive culture.
One of the greatest economists ever wrote, "The real barrier of capitalist production is capital itself...The limits within which the preservation and self-expansion of the value of capital resting on the expropriation and pauperisation of the great mass of producers can alone move — these limits come continually into conflict with the methods of production employed by capital for its purposes, which drive towards...unconditional development of the social productivity of labour. The means — unconditional development of the productive forces of society — comes continually into conflict with the limited purpose, the self-expansion of the existing capital. The capitalist mode of production is, for this reason, a historical means of developing the material forces of production and creating an appropriate world-market and is, at the same time, a continual conflict between this its historical task and its own corresponding relations of social production."
One of the greatest economists ever wrote, "The real barrier of capitalist production is capital itself...The limits within which the preservation and self-expansion of the value of capital resting on the expropriation and pauperisation of the great mass of producers can alone move — these limits come continually into conflict with the methods of production employed by capital for its purposes, which drive towards...unconditional development of the social productivity of labour. The means — unconditional development of the productive forces of society — comes continually into conflict with the limited purpose, the self-expansion of the existing capital. The capitalist mode of production is, for this reason, a historical means of developing the material forces of production and creating an appropriate world-market and is, at the same time, a continual conflict between this its historical task and its own corresponding relations of social production."
stewarjt,
I believe that the US capitalist system previously provided the US citizens with the highest standard of living in the world until the US government created the “Free Trade Agreements” in the last twenty years that economically requires that US businesses take advantage of less expensive foreign labor and less expensive environmental compliance costs or face bankruptcy if those businesses kept their manufacturing jobs in the USA.
The only way for any nation, state or city to have enough wealth to pay for tax-supported federal, state, school district, and municipal government bureaucratic jobs, wars, infrastructure improvements, unemployment benefits, entitlements, government contracts, welfare payments, social security, national healthcare and other similar activities is for some of the national wealth that is being created by the private sector to be forcibly taken from the private sector in the form of taxes and/or to obligate the wealth-creating private sector though bonded indebtedness to create and pay for the funds to pay these government activities.
I believe that the US capitalist system previously provided the US citizens with the highest standard of living in the world until the US government created the “Free Trade Agreements” in the last twenty years that economically requires that US businesses take advantage of less expensive foreign labor and less expensive environmental compliance costs or face bankruptcy if those businesses kept their manufacturing jobs in the USA.
The only way for any nation, state or city to have enough wealth to pay for tax-supported federal, state, school district, and municipal government bureaucratic jobs, wars, infrastructure improvements, unemployment benefits, entitlements, government contracts, welfare payments, social security, national healthcare and other similar activities is for some of the national wealth that is being created by the private sector to be forcibly taken from the private sector in the form of taxes and/or to obligate the wealth-creating private sector though bonded indebtedness to create and pay for the funds to pay these government activities.
1
I don't recognize your comment as a response to what I wrote.
So large corporations get to deduct CEO compensation and other corporate perks when above $1,000,000? Stock options figure high in these compensations, especially in retirement packages (or even when fired!) That is a perverse loophole.
One of the many remedies for the wealth inequality that keeps getting progeressively worse regards CEO compensation ( and everybody else's): from the top to the bottom tier of emplyees ina ny business, all get paid in cash (of course, I mean a check!) Everyone who makes a living will pay taxes on the compensation they received on any particular year when they file income taxes for that particualr year, period end! No defered tax credits, and the other shenanigans designed to avoid taxes. If they want to buy the stock of their companies, they will do so with the money they have after paying all taxes due.
Sometimes complicated problems have simple solutions but which seem radical whenever they threaten the established satus quo which has only led to an outrageous income and wealth inequality.
One of the many remedies for the wealth inequality that keeps getting progeressively worse regards CEO compensation ( and everybody else's): from the top to the bottom tier of emplyees ina ny business, all get paid in cash (of course, I mean a check!) Everyone who makes a living will pay taxes on the compensation they received on any particular year when they file income taxes for that particualr year, period end! No defered tax credits, and the other shenanigans designed to avoid taxes. If they want to buy the stock of their companies, they will do so with the money they have after paying all taxes due.
Sometimes complicated problems have simple solutions but which seem radical whenever they threaten the established satus quo which has only led to an outrageous income and wealth inequality.
But every time government has decided that it is going to somehow ''fix'' this human trait, it ends up some version of communist or Nazi massive government running everyone's lives with ZERO freedoms.
Your argument is with humanity, not the people who have succeeded. Besides, the actual time the CEO's run a company is even shorter than pro athlete's careers.
Your argument is with humanity, not the people who have succeeded. Besides, the actual time the CEO's run a company is even shorter than pro athlete's careers.
2
Of course Republicans are mature in economics as the main target of their police always was taxes. As for the war on poverty it was lost long before Obama has stepped into office. Whatever politicians do, it is not aimed on prosperity of the majority average citizens.
Margaret, we redistributed $22 Trillion in the war on poverty - and our poor people are better off than any other nation's poor - ANY place.
The answer is letting the worker KEEP most of what he or she earns so that they can improve the lives iof their family independent of elites or a Nanny State. Time to get real, M.
The answer is letting the worker KEEP most of what he or she earns so that they can improve the lives iof their family independent of elites or a Nanny State. Time to get real, M.
1
War on poverty was launched by Lyndon Johnson in 1964 to show that capitalism could also take care of people, to oppose something to communism. Since then welfare spending has reached nearly $1 trillion a year from $200, but it just gave an opportunity to loafers live without job. Instead of creating job places for people, they just let them to be lazy.
Too bad Obama didn't put forward this agenda during the first 2 years of his presidency, when it had a chance of getting through congress. I guess this is what he has to do to insure that he has a career with the Party when his tern is over. Ditto his recent activism on immigration. Sad.
1
Profit is America's god.
He is worshipped with greed.
He is worshipped with greed.
"the chilliest of soundbites: 85 people equal 3.5 billion, an almost unimaginable see-saw of inequality, indifference, and greed. Well, this year Oxfam stated that only 80 people equal 3.5 billion. Not exactly the progress most people were calling for.
In this year’s briefing paper Wealth: Having It All And Wanting More, Oxfam added that “Global wealth is increasingly being concentrated in the hands of a small wealthy elite. These wealthy individuals have generated and sustained their vast riches through their interests and activities in a few important economic sectors, including finance and pharmaceuticals/healthcare.” It’s as if we’re playing a real-life game of Monopoly."
From CounterPunch article on equality
In this year’s briefing paper Wealth: Having It All And Wanting More, Oxfam added that “Global wealth is increasingly being concentrated in the hands of a small wealthy elite. These wealthy individuals have generated and sustained their vast riches through their interests and activities in a few important economic sectors, including finance and pharmaceuticals/healthcare.” It’s as if we’re playing a real-life game of Monopoly."
From CounterPunch article on equality
Oh! Now I get it. That would be like working at Downton Abbey, either in service or as a tenant farmer. No wonder the program is so popular with the American middle class...who identify with the residents of the House.
Not one idea to empower workers - after all, if we do that they will have more influence in government, politics and policies! How about, for example, we restore the right to organize and collective bargaining?!
The main culprit behind inequality is NOT capitalism, but rather racism, tribalism, clannish behaviour, caste system etc. Ethnic minorities tend to be discriminated against economically and form the lowest economic rung in the US, UK, France, Brazil etc. Small Scandinavian countries or Japan or S. Korea are much more homogenous ethnically and therefore have less inequality. Even in Communist Cuba, blacks (about 40% of the population) are the least prosperous - its rare to see a black doctor or professor in Havana.
As a recent piece in this newspaper by Prof Krugman on global income levels showed, there has been a massive alleviation of poverty in the third world in the past 25 years, especially since China, India and other large developing countries have liberalised and become more capitalist. Several billion people now have a better life after 50 years of socialist/communist experiment.
So don't blame capitalism for the current inequality in a few countries in the West. As an economic system, it has delivered a lot more good than any other system in the history of mankind. Instead of taxing the rich - as is the knee jerk reaction of champagne socialists such as Messrs Summers and Balls - focus on helping the disadvantaged. But they should focus on factors such as racism and tribalism as much as economic factors.
As a recent piece in this newspaper by Prof Krugman on global income levels showed, there has been a massive alleviation of poverty in the third world in the past 25 years, especially since China, India and other large developing countries have liberalised and become more capitalist. Several billion people now have a better life after 50 years of socialist/communist experiment.
So don't blame capitalism for the current inequality in a few countries in the West. As an economic system, it has delivered a lot more good than any other system in the history of mankind. Instead of taxing the rich - as is the knee jerk reaction of champagne socialists such as Messrs Summers and Balls - focus on helping the disadvantaged. But they should focus on factors such as racism and tribalism as much as economic factors.
2
And meanwhile Obama is jetting to India where, after relentless lobbying by Big Pharma, he will threaten trade sanctions if India doesn’t change patent laws which put people before profits and produce affordable drugs for HIV, Malaria and Cancer amongst others. Recent analysis shows that 1% of the World now owns more than 50% of the assets and wealth. So called 'Inclusive Capitalism' is a start but Corporate America needs a reality check on abuse of power. We in Europe await the outcome of TTIP with trepidation.
Silly me, I always thought you shouldn't exploit your fellow human beings because using other people in ways that hurt them but benefit yourself is wrong. I'm glad someone with a bigger brain explained that it's wrong because you might be able to make more money treating them decently.
Katherine Bailey,
I never thought that hiring employees and "giving them a job" was exploiting these human beings!
Before NAFTA there were plenty of other jobs available if these people did not like the terms of their employment.
Since the last three presidents created all of these free trade agreements, all employees at all businesses have now lost most of their bargaining power.
If you thought that Presidents Clinton, Bush and Obama’s existing Free Trade Agreements were destructive for US employment, relocating US jobs to foreign nations, and lowering the middle class pay scale for US workers, then you had better hold onto your hat again for when President Obama's Pacific Rim Treaty to comes into effect on a multi-nation wholesale basis!
Jobs are very important to voters, but the Democrats and the Republicans are all apparently in favor of President Obama's secret Pacific Rim Trade treaty to relocate the few remaining higher paying US manufacturing jobs to Pacific Rim nations!
I never thought that hiring employees and "giving them a job" was exploiting these human beings!
Before NAFTA there were plenty of other jobs available if these people did not like the terms of their employment.
Since the last three presidents created all of these free trade agreements, all employees at all businesses have now lost most of their bargaining power.
If you thought that Presidents Clinton, Bush and Obama’s existing Free Trade Agreements were destructive for US employment, relocating US jobs to foreign nations, and lowering the middle class pay scale for US workers, then you had better hold onto your hat again for when President Obama's Pacific Rim Treaty to comes into effect on a multi-nation wholesale basis!
Jobs are very important to voters, but the Democrats and the Republicans are all apparently in favor of President Obama's secret Pacific Rim Trade treaty to relocate the few remaining higher paying US manufacturing jobs to Pacific Rim nations!
1
Capitalism needs to saved and who else better to save it than capitalist themselves. The far left wants to bring it down, but as long as there are people who believe in what is right capitalism will not go down. The far left believe in socialism, Marxism, communism, not to mention the teachings of Chairman Mao! Yes, capitalists will save capitalism because in doing so they will save and preserve freedom. Freedom needs to be preserved. Socialism, Marxism, communism, and Maoism oppose freedom. They need to be destroyed. Ideas that oppose freedom are evil. Freedom, especially USA freedom, is good. It is not evil. America is good. It is not evil. Good is not evil. Evil is not good.
1
I doubt it. Local capitalism is a wonderful tool for improving the welfare of a community. Absentee corporate capitalism is feudalism redux, without any of the downward responsibility in medieval feudalism. Corporate capitalists will sell the rope that hangs them, to paraphrase Marx, but not before they've consolidated the factories and shipped production overseas. They have forgotten that capitalism had its origins in communitarian socialism, and they have forgotten "44And all those who had believed were together and had all things in common; 45and they began selling their property and possessions and were sharing them with all, as anyone might have need.…" That's from Acts of the Apostles, not from Marx. The strength of New England lay in the socialist/capitalist amalgam of the New England town. The common cause in our genes is how we held Bunker Hill so long against superior forces, and held Little Round Top until the surviving Rebels quit the field.
its all a part of a Washington joke of taking meaningless positions that don't matter.
Funny how something as simple as closing the "carried-interest" loophole that lets hedge fund managers avoid paying income-tax rates on their income is something the Democrats somehow can't bring themselves to do, but meaningless statements of "reform" come out in volume.
Funny how something as simple as closing the "carried-interest" loophole that lets hedge fund managers avoid paying income-tax rates on their income is something the Democrats somehow can't bring themselves to do, but meaningless statements of "reform" come out in volume.
The wealthy should care but they don't. They are addicted to short term gain in the belief that they will escape retribution while the other person pays the bill. It is clothed in their concepts of the charity game, (Strategic Giving) where instead of giving, they believe in tricking other people to give while they "free ride." It amounts to a "rule" in their social culture and is taught, at Harvard. If the manager's name doesn't appear on the gift, whether paid or not, then it has no value and if they can get a colleague to give more than they have executed a "save." The poor are "suckers" outside of their social circles. They are the Gadje, the Gaidjim, the Goy, the Jew, the Wasp and on and on in countless names for the "other" Americans than themselves. The promise of a "United" States is lost on such thinking. It's THEIR group.
The idea that the marketplace is just one area of importance to the society and that it feeds on and nourishes other areas of society --as an act of intelligence and balance -- is ignored. The idea of the value of the Arts and Humanities, as equal social sectors to the market, of a mature society are ignored. Only the generation of surplus is considered an Art and it is an "Art for Art's sake" alone and has nothing to do with society or the rest of us outside their own little reserve. Ray Evans Harrell, NYCity Artist
The idea that the marketplace is just one area of importance to the society and that it feeds on and nourishes other areas of society --as an act of intelligence and balance -- is ignored. The idea of the value of the Arts and Humanities, as equal social sectors to the market, of a mature society are ignored. Only the generation of surplus is considered an Art and it is an "Art for Art's sake" alone and has nothing to do with society or the rest of us outside their own little reserve. Ray Evans Harrell, NYCity Artist
2
Capitalism is not the problem. Capitalism is the greatest economic system in history and has brought more people out of poverty than any other system. It is not even close!
The problem is crony capitalism which gives you the military-industrial complex the globalists have created. Crony capitalism is only possible with a bloated, out-of-control, imperialistic government.
You want real change? Reduce the size of the federal government by 85%.
The problem is crony capitalism which gives you the military-industrial complex the globalists have created. Crony capitalism is only possible with a bloated, out-of-control, imperialistic government.
You want real change? Reduce the size of the federal government by 85%.
3
Just as the Democratic Party is barely recognizable as compared to itself in the 1950s, the practice of capitalism is vastly different from how we practiced it while American was becoming the economic leader of the world.
Liberal Presidents from both parties have allowed elitists, Congressional tinkerers, and wizards of smart to warp our economy and pollute the workplace with far too much regulation for what we have had since Reagan to even be called ‘’capitalism.’’
The parties agreed to a simplification of the tax code years ago, but the benefits of that change to the economy has been lost. It needs to be redone, and the regulation jungle cut back. I suggest that we suspend the regs added since the LAST boom in employment until we get the NEXT expansion going, and then start adding them back as Congress and President agree.
If too many managers can ruin any activity - if too many cooks do spoil the broth - then we can agree that regulation can kill off ANY workplace if you simply keep adding more rules and no-nos.
Liberal Presidents from both parties have allowed elitists, Congressional tinkerers, and wizards of smart to warp our economy and pollute the workplace with far too much regulation for what we have had since Reagan to even be called ‘’capitalism.’’
The parties agreed to a simplification of the tax code years ago, but the benefits of that change to the economy has been lost. It needs to be redone, and the regulation jungle cut back. I suggest that we suspend the regs added since the LAST boom in employment until we get the NEXT expansion going, and then start adding them back as Congress and President agree.
If too many managers can ruin any activity - if too many cooks do spoil the broth - then we can agree that regulation can kill off ANY workplace if you simply keep adding more rules and no-nos.
1
Lawrence Summers - Judas or Benedict Arnold? Or maybe the classic battlefield conversion?
The welfare office on Wall street, compliments of U.S. government.
Too failed to be big any more?
Lawrence was a corporate welfare worker,
and "don't pay any attention to that man behind the curtain".
He doesn't live among us little people.
The welfare office on Wall street, compliments of U.S. government.
Too failed to be big any more?
Lawrence was a corporate welfare worker,
and "don't pay any attention to that man behind the curtain".
He doesn't live among us little people.
2
At least the robber barons were loyal Americans. Today's global corporations have no morals, no state and no home. They operate for profit and against the parochial interests of any little nation. The sad part is, governments take their money and do their bidding at the expense of the workers of the world.
1
Occupy Government,
Doesn’t everybody know that maybe all the free trade agreement legislation created in the last twenty years by our Democratic and Republican Presidents and the US Congress was the main financial cause for union and non-union US located jobs for the blue-collar and the white collar working citizens of the USA to relocate to foreign nations?
As US jobs relocate to foreign nations, there is now a growing surplus of available labor created in the USA with more and more US citizens applying for each available job, so the pay scales go down and the unemployment goes up.
Why then did our last three elected presidents create all of these "free trade legislation" treaties that economically required US businesses to relocate as many US jobs as possible to foreign nations?
Were our elected presidents and congressmen ignorant, stupid, dishonest, evil, or some combination of these factors?
How do you think these free trade agreements were created?
Do you think that maybe the foreign product manufacturers that export consumer products to the USA might have paid professional US lobbyists to spend hundreds of thousands of US dollars on wine, food, women, song, pre-paid vacations in Spain, cash, pre-paid sexual services, corporate jobs for the (otherwise unemployable) children/wives/girlfriends of enough of the US senators and US congressmen plus campaign contributions to influence/entice (bribe) them to create all of that "Free Trade Agreement" legislation!
Doesn’t everybody know that maybe all the free trade agreement legislation created in the last twenty years by our Democratic and Republican Presidents and the US Congress was the main financial cause for union and non-union US located jobs for the blue-collar and the white collar working citizens of the USA to relocate to foreign nations?
As US jobs relocate to foreign nations, there is now a growing surplus of available labor created in the USA with more and more US citizens applying for each available job, so the pay scales go down and the unemployment goes up.
Why then did our last three elected presidents create all of these "free trade legislation" treaties that economically required US businesses to relocate as many US jobs as possible to foreign nations?
Were our elected presidents and congressmen ignorant, stupid, dishonest, evil, or some combination of these factors?
How do you think these free trade agreements were created?
Do you think that maybe the foreign product manufacturers that export consumer products to the USA might have paid professional US lobbyists to spend hundreds of thousands of US dollars on wine, food, women, song, pre-paid vacations in Spain, cash, pre-paid sexual services, corporate jobs for the (otherwise unemployable) children/wives/girlfriends of enough of the US senators and US congressmen plus campaign contributions to influence/entice (bribe) them to create all of that "Free Trade Agreement" legislation!
1
Each civilization has always tried to and desired to create sufficient privately owned wealth in order for governments to confiscate some of this wealth as required to create government financial resources to pay for the following services for the general public, in order to relieve the general public from being individually responsible for providing the following services:
1. Provide for the common military defense;
2. Pay for the construction of the common infrastructure elements that we all enjoy;
3. Pay for police, fire fighters, educators, and a judicial system;
4. Take care of those citizens that cannot take care of themselves;
5. Provide various nonessential government expenses such as libraries, museums, zoos, parks, hospitals, environmental cleanups, NASA, Green Energy, unemployment payments, and other nice but unnecessary feel-good services that serve the total population.
Maybe these items should be a part of the definition of civilization, even if these are just only some of the main (unwritten social contract) reasons for creating a civilization.
1. Provide for the common military defense;
2. Pay for the construction of the common infrastructure elements that we all enjoy;
3. Pay for police, fire fighters, educators, and a judicial system;
4. Take care of those citizens that cannot take care of themselves;
5. Provide various nonessential government expenses such as libraries, museums, zoos, parks, hospitals, environmental cleanups, NASA, Green Energy, unemployment payments, and other nice but unnecessary feel-good services that serve the total population.
Maybe these items should be a part of the definition of civilization, even if these are just only some of the main (unwritten social contract) reasons for creating a civilization.
1
For the USA, Russia, Greece, or any city, state, or nation (or family) to sustain a Republic, Democracy, Theocracy, Capitalism, Communism, Fascism, Dictatorship, Kingdom, Principality or any other form of government that they select and/or is imposed upon them, that nation still has to have their private businesses continuously create sufficient new national wealth (and jobs) in their nation so that there is enough wealth for the taxing authority to confiscate a portion of that new national wealth and/or profit that was created by their private sector businesses, plus an additional amount taken through income taxes, sales taxes, property taxes, tariffs, etc., and other taxes by the government tax collectors to pay for their government activities.
Hopefully this can be done by each government without borrowing wealth from other nations to pay for their various wealth consuming government activities including any distribution of wealth confiscated from the wealth creators and then handed to other tax supported citizens.
Hopefully this can be done by each government without borrowing wealth from other nations to pay for their various wealth consuming government activities including any distribution of wealth confiscated from the wealth creators and then handed to other tax supported citizens.
1
This whole article sounds like a plea to the one per centers ( yes, corporations too, they are people right?) using logic and rationality to consider " sharing the wealth". Seems to me, the writer must be the eternal optimist around this issue.
From what I see ( from somewhere in the middle-middle class ) the onepercenters are not quite ready to share anything with anyone. Why would they? Their republican machine has done a superior job of gaining the votes of those who get caught up in the emotional issues ( gay marriage etc.) at the expense of their own economic lives.
It seems to me that the population of "solid south " (and midwest) for the most part, are folks who pride themselves on "values' not economic security. I doubt they will change anytime soon...or until they find themselves in dire economic straits.
The next two years will give Obama a chance to explain to the people how ''sharing" the wealth could be a positive change for the country. He is up against a major PR machine with bad intent, but ultimately the people have to decide their own fate.
From what I see ( from somewhere in the middle-middle class ) the onepercenters are not quite ready to share anything with anyone. Why would they? Their republican machine has done a superior job of gaining the votes of those who get caught up in the emotional issues ( gay marriage etc.) at the expense of their own economic lives.
It seems to me that the population of "solid south " (and midwest) for the most part, are folks who pride themselves on "values' not economic security. I doubt they will change anytime soon...or until they find themselves in dire economic straits.
The next two years will give Obama a chance to explain to the people how ''sharing" the wealth could be a positive change for the country. He is up against a major PR machine with bad intent, but ultimately the people have to decide their own fate.
Most people around here are hardly for inclusive capitalism as Prahlad called for it. Almost all people here, and I am talking about the bleeding heart liberals and progressives now, could not care about the bottom 4 billion people in the world. Most people here only care about the union jobs, the white middle class, etc. By any measure, even the poor if the America would qualify to be among the richest of the world. But the liberals are quite anti trade, anti immigration, and anti globalization. There is a huge hatred of the Indian IT folks around here, for example - these a indian IT folks are clearly very poor by our metric when they first land here and uplift themselves and provide for their families back home. Does that not percolate the wealth into the bottom 4 billion? And yet, the liberals hate such immigrants with a passion. Ditto globalization - spreading of knowledge and usage of trade are key to lift up people everywhere, but again that is something liberals hate.
Bottomline - liberals only care about their base. They hardly care for the truly downtrodden of the globe. It is the white middle class which they care most, I.e basically people like themselves.
Bottomline - liberals only care about their base. They hardly care for the truly downtrodden of the globe. It is the white middle class which they care most, I.e basically people like themselves.
2
There are a some odd assertions in this piece. To take one, my understanding of a step-up in basis is not that it is a loophole, but that you get a step-up when you pay inheritance tax, which has historically been greater than either income or capital gains taxes. This was certainly the case for me when my mother died. I paid far more tax than I would have had ordinary income or capital gains rates applied.
You want a more inclusive society? Start by recognizing with pride that one of the primary functions of government is redistribution of wealth through tax regime. It is time the term 'redistribution of wealth' was accepted as a positive and not castigated as a negative at every turn. Own the term.
The goal should be full employment with a better than livable wage for all. Yes, we should close the loopholes for corporates and extreme high earners, but good luck with that after decades of an entire industry created to put these loopholes in place. Perhaps that's a battle for when courts change their shape.
Support higher taxes for the super-wealthy. They can't spend all the money and wealth they accumulate, redistribute that wealth to the less well-off in society, they will spend it. The more people spend, the more the money will move around and the more the general economy improves.
And, as the article (almost) seeks to point out, higher taxes on the super-wealthy is to their own benefit. It creates the demand for their products and services down the road. If only we would realize that inequality benefits nobody in the long term.
The goal should be full employment with a better than livable wage for all. Yes, we should close the loopholes for corporates and extreme high earners, but good luck with that after decades of an entire industry created to put these loopholes in place. Perhaps that's a battle for when courts change their shape.
Support higher taxes for the super-wealthy. They can't spend all the money and wealth they accumulate, redistribute that wealth to the less well-off in society, they will spend it. The more people spend, the more the money will move around and the more the general economy improves.
And, as the article (almost) seeks to point out, higher taxes on the super-wealthy is to their own benefit. It creates the demand for their products and services down the road. If only we would realize that inequality benefits nobody in the long term.
When can I stop working and then get income "equal" to those that work?
Why can't I stop working as an engineer, fire my employees, and then become an artist with the same income equal to all of the other people in the USA?
Who will pay the funds required for "redistribution of wealth?"
This can only be paid for by taking money from the working people that produce the things that are necessary to sustain life and giving it to those people that do not produce the things that are necessary to sustain life.
Why can't I stop working as an engineer, fire my employees, and then become an artist with the same income equal to all of the other people in the USA?
Who will pay the funds required for "redistribution of wealth?"
This can only be paid for by taking money from the working people that produce the things that are necessary to sustain life and giving it to those people that do not produce the things that are necessary to sustain life.
1
Can capitalists save capitalism? Well, at the very least they can help - by realising that good business leaders should cultivate their markets like a garden. Unfortunately, the 'Take the Money and Run' mentality of today's high tech corporate geniuses is a dismal failure - unless you consider 'Made in China' to be a mark of success. Given that China's Army has its very own Cyber Division, I suppose it is, if you define success as the ability to be effectively and efficiently hacked. It's really an astounding bit of mental gymnastics when you think about it. Have your stuff made by slave labour - as more and more of its potential consumers join our own army of the structurally unemployed - and wonder why it's got so many 'glitches' and security defects. Friends, did it ever occur to you that perhaps Trojan horses need not be actual wooden horses and weren't restricted to ancient Troy? Judging by their actions, it never occurred to our Lords of High Tech.
Of course, none of this was mentioned in the State of the Union Address. And neither was the reality of the Internet "Permanent Record Card' (Remember teachers threatening us with that, way back when? In those days, that threat was hollow. WAS.), which keeps making us more and more unemployable or even unschoolable or uninsurable for whatever little ways in which we diverge from some expected profile? The silence on these very real issues was truly deafening. And expecting help from the current crew, in both parties? Right.
Of course, none of this was mentioned in the State of the Union Address. And neither was the reality of the Internet "Permanent Record Card' (Remember teachers threatening us with that, way back when? In those days, that threat was hollow. WAS.), which keeps making us more and more unemployable or even unschoolable or uninsurable for whatever little ways in which we diverge from some expected profile? The silence on these very real issues was truly deafening. And expecting help from the current crew, in both parties? Right.
1
Do we really want to save capitalism?
We, human beings, are hellbent on destroying our planet, and capitalism enables, indeed drives this process.
The premise of the "inclusive capitalism" movement is to extend the emptiness of runaway consumerism to more and more people, around the world and here in America. This is certainly appealing from the point of view of fundamental fairness. To do it by clawing back some of the ill-gotten gains of the super rich and the mega corporations would be satisfying indeed. But then of course, we find most fantasies appealing.
What would be the consequences for the earth's eco-system of "inclusive capitalism" actually succeeding?
Is there any conceivable way of actually reforming our version of late monopoly capitalism to something more humane? Shouldn't we view "inclusive capitalism" as a clever ploy to forestall more radical approaches to reform. Approaches that would begin with a focus on the environment first of all, and the lessening of inequality second of all?
We, human beings, are hellbent on destroying our planet, and capitalism enables, indeed drives this process.
The premise of the "inclusive capitalism" movement is to extend the emptiness of runaway consumerism to more and more people, around the world and here in America. This is certainly appealing from the point of view of fundamental fairness. To do it by clawing back some of the ill-gotten gains of the super rich and the mega corporations would be satisfying indeed. But then of course, we find most fantasies appealing.
What would be the consequences for the earth's eco-system of "inclusive capitalism" actually succeeding?
Is there any conceivable way of actually reforming our version of late monopoly capitalism to something more humane? Shouldn't we view "inclusive capitalism" as a clever ploy to forestall more radical approaches to reform. Approaches that would begin with a focus on the environment first of all, and the lessening of inequality second of all?
4
My former employer had a program where every employee received stock options regardless of their position. While this did not make everyone rich, it did give the organization a sense of common purpose and incentivized everyone to better themselves .
Today most companies seem not to focus on building from within, people move from company to company and are viewed as tools rather than people to be developed.
Financial institutions lost their ethical grounding, and we have all paid a high price for their greed .
We need to find a solution to our lack of manufacturing in the US, even if this means a trade war with China. These folks are clearly not our friends, and we are losing our middle class because we have lost many value added jobs to Asia. Let's bring them back, even if we have to pay a bit more for goods made here!
We can do this without trying to redistribute wealth!
Today most companies seem not to focus on building from within, people move from company to company and are viewed as tools rather than people to be developed.
Financial institutions lost their ethical grounding, and we have all paid a high price for their greed .
We need to find a solution to our lack of manufacturing in the US, even if this means a trade war with China. These folks are clearly not our friends, and we are losing our middle class because we have lost many value added jobs to Asia. Let's bring them back, even if we have to pay a bit more for goods made here!
We can do this without trying to redistribute wealth!
5
Could not agree more. Lets make things, pay our workers and erect trade barriers. Globalism is the false idol of Wall St. Lets see if our elected officials will stand for their country and their constituents.
Im not optimistic. Both parties are profoundly compromised by dirty money.
Im not optimistic. Both parties are profoundly compromised by dirty money.
1
Jamie,
If your family (or your nation) makes widgets, then your family must make and then sell enough widgets to others outside of your family so that your family can accumulate enough profit and wealth to enable them to buy other things that your family needs from others that produce those other things.
Then hopefully you will then have enough left over to accumulate more wealth for any future emergencies.
Or you can live on credit cards until the lenders of real wealth stop increasing your credit limit.
Or a nation can print and sell sovereign treasury bonds and spend the proceeds on government activities.
Nations can obligate future generations to repay their national debts (Sovereign Treasury Bonds) after current citizens have their federal government spend all of this "borrowed money" on themselves.
President Obama apparently believes that there is no limit to the amount of wealth that the public sector can confiscate from the wealth-producing private sector in the USA and also borrow more wealth from industrious individuals in the wealth creating BRIC nations in order to fund wealth-consuming US government activities.
Federal government economic capability and resources are (only) created by confiscating wealth from the wealth-producing individuals in the USA via taxation, while government spending does not create any new national wealth in the USA.
If your family (or your nation) makes widgets, then your family must make and then sell enough widgets to others outside of your family so that your family can accumulate enough profit and wealth to enable them to buy other things that your family needs from others that produce those other things.
Then hopefully you will then have enough left over to accumulate more wealth for any future emergencies.
Or you can live on credit cards until the lenders of real wealth stop increasing your credit limit.
Or a nation can print and sell sovereign treasury bonds and spend the proceeds on government activities.
Nations can obligate future generations to repay their national debts (Sovereign Treasury Bonds) after current citizens have their federal government spend all of this "borrowed money" on themselves.
President Obama apparently believes that there is no limit to the amount of wealth that the public sector can confiscate from the wealth-producing private sector in the USA and also borrow more wealth from industrious individuals in the wealth creating BRIC nations in order to fund wealth-consuming US government activities.
Federal government economic capability and resources are (only) created by confiscating wealth from the wealth-producing individuals in the USA via taxation, while government spending does not create any new national wealth in the USA.
1
True, Except -- the private sector also profits from government spending and government activity. It takes a mix of government and private sector spending to make a strong economy. Without past government investment in the rail road, interstate, aerospace, computers, education, etc -- we would be a country of farmers instead of an economic powerhouse. Yes, the government gets their money by taxing individuals. But its also true that individuals and businesses have profited greatly from the government activity.
If it wasn't true -- people would build their factories in remote areas as opposed to where they can take advantage up publicly funded infrastructure. If it wasn't true -- there wouldn't be government contractors.
If it wasn't true -- people would build their factories in remote areas as opposed to where they can take advantage up publicly funded infrastructure. If it wasn't true -- there wouldn't be government contractors.
The ideas in this column are so unimportant as to defy imagination.
All the distress over inequality is nothing more than the impact of technology (communication and automation), globalization (immigration and outsourcing), and falling birth rates in developed countries on the cost of capital and labor.
We are experiencing a disruption of traditional economic classes.
Get over it and move on.
All the distress over inequality is nothing more than the impact of technology (communication and automation), globalization (immigration and outsourcing), and falling birth rates in developed countries on the cost of capital and labor.
We are experiencing a disruption of traditional economic classes.
Get over it and move on.
1
Maybe you should take a couple world history classes.
There has always been a solution to inequality -- it is known as revolution.
There has always been a solution to inequality -- it is known as revolution.
The wealthy are not "job creators" just because they have a lot of surplus wealth. Just because people have lots of wealth does not prove that they understand anything about creating a lot more wealth nor can it be expected that they will effectively use their wealth to create more jobs nor to increase economic growth. Investing is taking risk and where the odds of success seem long, most people will not take those risks. Markets are social phenomena and are no more self regulating than the people who participate in them. Markets are sometimes said to be efficient because it is nearly impossible to predict what they will do consistently which leads to the hypothesis that they tend to find the best outcomes spontaneously, and so have an inherent stability like the gyroscopic effect of the spinning wheels of bicycles. But the fact is that markets do not show any inherent stability despite being virtually impossible to predict nor to control for any significant length of time. Sometimes markets are working well and interfering with them reduces how well they work but sometimes they are off kilter and are careening towards very bad outcomes and leaving them alone simply guarantees unpredictable and probably bad results.
1
All well and good; however, for some reason I am very cynical about this. I rather imagine that a period of "inclusive Capitalism" will simply be followed by another period of Reganesque Kleptocracy. The truth of the matter, I suspect, is that the Failed Power Elite now find that the wells of wealth are more difficult o siphon off. They've already plundered the union pension funds and the Middle Class. They realize that the next meal (the Upper Middle Class who are well educated) is more difficult to digest.
So now the game changes. Let's use the energies of a large swath of people to build up a pool of wealth once more so we can steal that in the future as well. Frankly, I 'm educating my children with respect to these pernicious strategies in the hopes of immunizing them against the false memes of the Reagans and Clintons of this world. Shame on you Failed Power Elite., you are transparent.
So now the game changes. Let's use the energies of a large swath of people to build up a pool of wealth once more so we can steal that in the future as well. Frankly, I 'm educating my children with respect to these pernicious strategies in the hopes of immunizing them against the false memes of the Reagans and Clintons of this world. Shame on you Failed Power Elite., you are transparent.
2
This is an important development in capitalist policy. The key is to reverse the trend of labor productivity gains not resulting in wage increases. tax policy is important but keeping wages consistent with productivity gains will provide a floor for many and the feeling that they can spend and consume, thus driving economic activity. It only has to be giveaways if wages can't keep up with productivity. Democrats are right though in that some of the tax breaks are unnecessary for the wealthy and do nothing for the economy as a whole. If the rich want lower tax rates, they can start by supporting leveling the field of play on tax breaks as suggested by the President.
3
Inclusive capitalism:
1. Lock in a room all stakeholders -- large and small business owners, legislators, regulators, union officials, workers, bankers, investors and environmentalists
2. Don't let them out until they have come up with a way to create plenty of jobs in the US that pay decent wages and allow businesses to compete.
3. Green light all regulatory and legislative changes they require to make it work.
4. Stay out of their way.
1. Lock in a room all stakeholders -- large and small business owners, legislators, regulators, union officials, workers, bankers, investors and environmentalists
2. Don't let them out until they have come up with a way to create plenty of jobs in the US that pay decent wages and allow businesses to compete.
3. Green light all regulatory and legislative changes they require to make it work.
4. Stay out of their way.
3
The main problem with the economic ideas of republicans is that they start with the premis that capitalism is benevolent. They believe that if you lower tax rates the pie will grow. Capitalism is a very powerful force for lowering costs and allocating resources, but it tends to benefit capitalists and drive down the costs of labor (not necessarily good for the middle class).
The problem with the ideas of the democrats is that they want to make laws to benefit the middle class and or reallocate wealth by passing out benefits. too many of these policy's add to the cost of hiring people -- i.e. they add to payroll burden. Hiring an employee doesn't just include their wage -- it includes social security tax, Medicare tax, Workers comp premiums and health insurance -- not to mention wage and hour compliance and other reporting issues. On the flip side -- deploying labor saving capital comes with tax breaks such as accelerated depreciation.
The best way to benefit the middle class is to lower the cost of hiring American workers. Through tax reform, cover the cost of healthcare and workers comp and social security and medicare with broad based taxes as opposed to directly from payroll.
The presidents plan -- although well intentioned -- adds payroll burden. He wants to increase the minimum wage and require additional leave days. It will benefit some at the cost of increased unemployment and lower wages for others.
Again -- we incentivize capital. We punish labor.
The problem with the ideas of the democrats is that they want to make laws to benefit the middle class and or reallocate wealth by passing out benefits. too many of these policy's add to the cost of hiring people -- i.e. they add to payroll burden. Hiring an employee doesn't just include their wage -- it includes social security tax, Medicare tax, Workers comp premiums and health insurance -- not to mention wage and hour compliance and other reporting issues. On the flip side -- deploying labor saving capital comes with tax breaks such as accelerated depreciation.
The best way to benefit the middle class is to lower the cost of hiring American workers. Through tax reform, cover the cost of healthcare and workers comp and social security and medicare with broad based taxes as opposed to directly from payroll.
The presidents plan -- although well intentioned -- adds payroll burden. He wants to increase the minimum wage and require additional leave days. It will benefit some at the cost of increased unemployment and lower wages for others.
Again -- we incentivize capital. We punish labor.
4
'Capitalism is a very powerful force for lowering costs and allocating resources, but it tends to benefit capitalists and drive down the costs of labor".....Not necessarily. The law of supply and demand works everywhere all the time. The value of anything is directly related to the demand and inversely related to the supply. Right now the value of labor is low because of globalization (sending jobs to China greatly increased the supply of labor). The value of labor will increase when we generate more jobs (demand) at home - raise taxes and rebuild the infrastructure. It is win/win because a better infrastructure improves the quality of life for everyone.
1
Social security tax, Medicare tax, Workers comp premiums and health insurance are all tax deductible business expenses.
Depreciation is simply a way of making other business expenses tax deductible over the useful life of the purchase.
Depreciation is simply a way of making other business expenses tax deductible over the useful life of the purchase.
1
Buy only American goods and services -- put Americans to work.
Capitalism is a great engine for growth. It is obsolete and needs replacing. It doesn't take a genius to figure out that endless unlimited growth is an absurd idea and obviously not sustainable. Collectively, we have enough. The political problem is how to share the bounty. Not in my lifetime, I'm sure. Capitalism allowed to continue will expand exponentially, it has no other goal. It reminds me of something in a medical book called cancer.
7
The so-called 1% have their own Achilles' heel. They would have never been able to be in that position without the labor of the 99%. if they are not content to give back a small percentage of their fortunes to the 99%, the 99% will rise up eventually and force them to make those concessions, except this time they may bring the whole house down in the worst possible way. Every bloody revolution in the history of societies is caused by the arrogance and ignorance of the most powerful people with money. Ironically the leaders of these chaotic revolutions are the children of the very rich who refuse to budge. I hate to see that happening. I was born in a 3 to 5% household, in turbulent times we lived in fear behind steel doors, we had stones catapulted onto our house, we were escorted to and from school. We were on the kidnapping list for ransoms. This may look like an extreme scenario, it was real and it can erupt anytime if we don't something about it sooner rather than later
6
Pretty straight forward. Successful small and medium size businesses in our area that survived the great recession and have since sky rocketed higher in the recovery retained valued employees and engendered loyalty by treating them well and profit sharing such that CEO pay to employee pay ratio even came close to the CEO to employee pay of corporations. Beside profit sharing, these small and medium business employees have a retirement plan that works and works well. At the same time, businesses that were bought out by corporations and became a subsidiary while instituting the usual corporate strategies are now closing or having a difficult time recruiting labor. The side by side comparison is being writ large. Corporate CEO's and their boards of directors focus only on the bottom line and stock price and have no interest whatsoever in the employee who is treated like chattel. Republicans are totally on the side of the corporatists and have little time for the successful main street small and medium businesses that treat their employees fairly.
6
Amplification to my comment. Prior to becoming a subsidiary, the ratio of owner to lowest paid worker averaged about 10:1. After becoming a subsidiary, the ratio became 16 to one or in most cases, much higher and benefits to workers were cut.
3
The only way these ideas catch on is if enlightened business leaders see that the consumer's wealth, on which the US economy so largely depends, cannot support their business. At the moment, large, multi-national corporations are still able to make money serving overseas markets while squeezing costs (largely labor) out of their operations. When this model runs out of gas, they might begin to look at the underlying causes.
3
It sounds like ‘inclusive capitalism’ is the new code word for socialism. Only in a more soft-sale version marketing of it.
More responsible, all-encompassing capitalism is a great idea – except when it comes in the form of punishing the highest performers. This is, and has always been, the crux of the capitalist system – the drive behind the machine is capital, and therefore it is necessary to keep pushing it forward.
Nevertheless, we can work on a better system of wealth redistribution. My only question is the following: instead of cutting the ‘fat’ from the top – why not cut it from within?
Before attacking the financial markets, which seems like the most politically popular (and very POPULIST) thing to do – why doesn’t the government start by ‘six-sigma-ing’ itself and making its programs and operations a lot more efficient?
The government in it this country is not poor, but it is ineffective on so many levels, including on the monitoring and transparency of its finances.
It wants to impose on corporations something it doesn’t impose on itself.
I would like to see: transparency, reporting, streamlining and monitoring on all major government projects – including all the money coming from lobbying groups.
It is just too easy to vilify the financial system. It is a very popular way of neglecting the government’s own responsibility as a financial manager.
More responsible, all-encompassing capitalism is a great idea – except when it comes in the form of punishing the highest performers. This is, and has always been, the crux of the capitalist system – the drive behind the machine is capital, and therefore it is necessary to keep pushing it forward.
Nevertheless, we can work on a better system of wealth redistribution. My only question is the following: instead of cutting the ‘fat’ from the top – why not cut it from within?
Before attacking the financial markets, which seems like the most politically popular (and very POPULIST) thing to do – why doesn’t the government start by ‘six-sigma-ing’ itself and making its programs and operations a lot more efficient?
The government in it this country is not poor, but it is ineffective on so many levels, including on the monitoring and transparency of its finances.
It wants to impose on corporations something it doesn’t impose on itself.
I would like to see: transparency, reporting, streamlining and monitoring on all major government projects – including all the money coming from lobbying groups.
It is just too easy to vilify the financial system. It is a very popular way of neglecting the government’s own responsibility as a financial manager.
5
Peisinoe - extremely well said and much more real world results oriented than the left wing proposals for "inclusive capitalism." The more populist that messages become, the more it is clear that the message is wrong.
Peisinoe,
If "The government in it this country is not poor," then why does the US government have to borrow money to pay for it's expenses that are in excess of it's tax collections?
and, "– why doesn’t the government start by ‘six-sigma-ing’ itself and making its programs and operations a lot more efficient?"
How much monet could the US government save if it created laws to prohibit the PAY TO PLAY methods of Federal Government no-bid contract acquisition?
How do you think US government tax loopholes, tax exemptions, tax exempt foundations, environmental damage liability limits, free trade agreements, most favored nation designations, pharmaceutical liability limits, product liability limits, tax exemption loopholes, agricultural subsidies, Solyndra government money giveaways, CGI Federal government ACA no-bid contracts paying many times as much as other firms would charge for the same product, Hughes Aircraft Missile Guidance Technology export to Communist China (Chinagate), presidential pardons for federally convicted felons, and other “Pay to Play” contracts plus other laws benefiting only a few people (or a few foreign nations) were created by our elected US Congress and US Senate, and then enforced by our elected presidents and their appointed bureaucrat administrators?
If "The government in it this country is not poor," then why does the US government have to borrow money to pay for it's expenses that are in excess of it's tax collections?
and, "– why doesn’t the government start by ‘six-sigma-ing’ itself and making its programs and operations a lot more efficient?"
How much monet could the US government save if it created laws to prohibit the PAY TO PLAY methods of Federal Government no-bid contract acquisition?
How do you think US government tax loopholes, tax exemptions, tax exempt foundations, environmental damage liability limits, free trade agreements, most favored nation designations, pharmaceutical liability limits, product liability limits, tax exemption loopholes, agricultural subsidies, Solyndra government money giveaways, CGI Federal government ACA no-bid contracts paying many times as much as other firms would charge for the same product, Hughes Aircraft Missile Guidance Technology export to Communist China (Chinagate), presidential pardons for federally convicted felons, and other “Pay to Play” contracts plus other laws benefiting only a few people (or a few foreign nations) were created by our elected US Congress and US Senate, and then enforced by our elected presidents and their appointed bureaucrat administrators?
Socialism???? you mean where companies have citizenship but don't pay taxes and their investments are subsidized by taxpayer monies......and they ask for government bonds to pay for improvements that they will need in order to run an effective outsourcing effort while they keep their monies overseas and use the American Legal System and protection of the military, FBI and whatever while they are in other countries.....
that kind of Socialization.
Simple point, because it's not easy for people to think past their prejudices....since prejudices are largely beliefs....
In nature there is a diversity of responses to situations that balance each other, that's natural, that's the way things work....get over it and learn to be more scientific...
Without a socialistic response things get mucked up......but we definitely need to see if giving companies protection that make their goods overseas while not paying any taxes is a good use of government?
so there let's remove that socialistic response....in fact let's call all companies that have less than 80 perCent of their employees in-country foreign companies and don't give them any support at all.
that kind of Socialization.
Simple point, because it's not easy for people to think past their prejudices....since prejudices are largely beliefs....
In nature there is a diversity of responses to situations that balance each other, that's natural, that's the way things work....get over it and learn to be more scientific...
Without a socialistic response things get mucked up......but we definitely need to see if giving companies protection that make their goods overseas while not paying any taxes is a good use of government?
so there let's remove that socialistic response....in fact let's call all companies that have less than 80 perCent of their employees in-country foreign companies and don't give them any support at all.
Do we need Larry Summers and Ed Balls to tell us that without government intervention those in the bottom half of income distribution will not have enough to cover their basic expenses let alone add to aggregate demand with discretionary spending? Duh? How much did that report cost? Let's present it at a conference that costs another what, $10 miilion, $20, $30, 100 million and then let's forget about it for another 2 years, it's unworkable in this United/Ununited States we live in.
Want to put people to work - repair the infrastructure - unworkable. Want universal health care that everyone can really afford, single payer coverage - unworkable. Want to change the tax code, give the working man a break - unworkable. Want to make community college free for all, I'm sure it will prove unworkable or compromised to death so it doesn't really help the ones that need it the most.
Republican values are corporate fat cat values, corporations are feudal entities whose workers are modern day slaves who are forced to work themselves to death and be abused by their lords with little or no recourse. Spoken from experience.
Want to put people to work - repair the infrastructure - unworkable. Want universal health care that everyone can really afford, single payer coverage - unworkable. Want to change the tax code, give the working man a break - unworkable. Want to make community college free for all, I'm sure it will prove unworkable or compromised to death so it doesn't really help the ones that need it the most.
Republican values are corporate fat cat values, corporations are feudal entities whose workers are modern day slaves who are forced to work themselves to death and be abused by their lords with little or no recourse. Spoken from experience.
8
If the USA would somehow re-industrialized then the USA would again create national (taxable) wealth that would be available for government confiscation VIA taxation that would pay for "putting people to work," " repairing the infrastructure," "universal health care," and many other government activities.
4
Gerald - Putting people to work to rebuild the infrastructure doesn't consume national wealth; it creates national wealth.
1
W. A. Spitzer,
Taxable wealth has to be confiscated to pay for any government activities such as creating infrastructure.
Which came first, the chicken or the egg? (industry or tax paid public infrastructure)
Industry came first because without the wealth created by industry there would not be any wealth available to be confiscated by the government to create public infrastructure!
Even the early "company towns" had company provided infrastructure to support their workers.
Public funded infrastructure WAS NOT an essential part of the foundation to the creation of national wealth through industrialization.
During the industrialization period of the USA, private companies created their own company towns with conditions for workers similar to the conditions for workers in Bangladesh without any tax funded infrastructure support.
The company towns had only as much of their own infrastructure systems as they needed to support their industrial business and their employees.
These companies also printed their own paper company currency, which was only redeemable for rent in the company houses and for products at the company store.
The workers probably also used this currency for business and trade between themselves for various items that the worker's families produced and sold to each other.
Taxable wealth has to be confiscated to pay for any government activities such as creating infrastructure.
Which came first, the chicken or the egg? (industry or tax paid public infrastructure)
Industry came first because without the wealth created by industry there would not be any wealth available to be confiscated by the government to create public infrastructure!
Even the early "company towns" had company provided infrastructure to support their workers.
Public funded infrastructure WAS NOT an essential part of the foundation to the creation of national wealth through industrialization.
During the industrialization period of the USA, private companies created their own company towns with conditions for workers similar to the conditions for workers in Bangladesh without any tax funded infrastructure support.
The company towns had only as much of their own infrastructure systems as they needed to support their industrial business and their employees.
These companies also printed their own paper company currency, which was only redeemable for rent in the company houses and for products at the company store.
The workers probably also used this currency for business and trade between themselves for various items that the worker's families produced and sold to each other.
Great article. Capitalism has nothing to do with the modern reality of manipulated markets and depressed wages, however. I guess the terms for what we've got is "exclusive capitalism", because excludes everyone who'd like to make an honest wage for an honest day's work,
8
"Can Capitalists Save Capitalism?" They never have before.
It took FDR, et. al. to save capitalism. In fact, capitalists are the leading cause of capitalism's recurring failures.
It took FDR, et. al. to save capitalism. In fact, capitalists are the leading cause of capitalism's recurring failures.
8
And before FDR "saved" capitalism, so went TR- the progressives were intent on saving capitalism through the adoption of various social welfare and working condition measures in order to defuse the radical left which in the early 20 century seemed ascendant.
Obama's proposals are of a kind and for the same purpose. If more moderate measures if spreading the wealth to workers fail, then history demonstrates that eventually (although when I look around I don't seem much revolutionary energy) the workers and oppressed masses will resolve the matter in a more unpleasant manner.
The modern Republicans remind me of the Bourbons before 1792. As so they shall go.
Obama's proposals are of a kind and for the same purpose. If more moderate measures if spreading the wealth to workers fail, then history demonstrates that eventually (although when I look around I don't seem much revolutionary energy) the workers and oppressed masses will resolve the matter in a more unpleasant manner.
The modern Republicans remind me of the Bourbons before 1792. As so they shall go.
4
"You know, the only trouble with capitalism is capitalists. They're too damn greedy."
--Herbert Hoover
--Herbert Hoover
You DO know that Truman is now credited with finally ending the Great Depression, right? He cut government spending and employment zoomed.
After WWII, FDR's money guys all regretted the awful way they interfered with the economy, damaging everything they touched.
After WWII, FDR's money guys all regretted the awful way they interfered with the economy, damaging everything they touched.
The capitalist its a basic ideology who start with the growning of today cilvilitation.For its underground todays situation perhaps comes from bud use of west world to build roads and strong buildings.The provide in medical health it remain a point unmissed element.They must be and more better thhinksfrom started on education .
1
I'm sorry, all this talk about inclusive capitalism sounds like rearranging the deck chairs on the Titanic. What good does it do to increase the buying power of the bottom 70% when the unintended consequence will simply be a faster route to the complete exhaustion of this planet's ability to sustain us all? Didn't anybody read this week's reports on the death of the oceans and the record setting global warming? We're already accomplishing this without the help of the bottom 70%!
We haven't even begun to envision government "interference" in our economic system yet Just wait until we get to the point when things really start to crash. The only problem is who's going to be dictating the new rules and what are they going to be? Every minute we waste now only makes good decisions down the road less likely. When people face desperate circumstances solid thinking doesn't necessarily follow.
We haven't even begun to envision government "interference" in our economic system yet Just wait until we get to the point when things really start to crash. The only problem is who's going to be dictating the new rules and what are they going to be? Every minute we waste now only makes good decisions down the road less likely. When people face desperate circumstances solid thinking doesn't necessarily follow.
7
Ultimately, this is just symptomatic of the globalism fostered by David Rockefeller, George Soros, et al., for some decades. The oligarchs want complete freedom of movement of labor and capital, and technology today has made this practically possible.
We are left as nation states to barter with multinationals to locate within our borders and hire our people by giving them tax breaks, subsidies, etc. , while salaries have been driven down in the middle class. The USA still is (depending on whom you read) the first or second largest consumer market by spending, and we need to erect the dreaded trade barriers that force companies to locate here and produce here to sell here, and to tax outflows of capital from the US to other nations. Sure, GATT and some other misguided global treaties seek to kill this (and the word, "protectionism," strikes fear in every college economics' student's heart), but all in the name of globalism for billionaire oligarchs.
We in the USA have to decide what we want: To take care or our market and our nation and provide stability and jobs by serving and producing for each other, or to buy cheap t-shirts from China and to have unfettered access to French wine.
Let the oligarchs pound sand and let's ditch globalism. The USA is still the most stable, most predictable place to invest--let's force everyone's hand and make companies choose whether they want to invest in a Chinese future (and their civil justice system and form of government) or ours.
We are left as nation states to barter with multinationals to locate within our borders and hire our people by giving them tax breaks, subsidies, etc. , while salaries have been driven down in the middle class. The USA still is (depending on whom you read) the first or second largest consumer market by spending, and we need to erect the dreaded trade barriers that force companies to locate here and produce here to sell here, and to tax outflows of capital from the US to other nations. Sure, GATT and some other misguided global treaties seek to kill this (and the word, "protectionism," strikes fear in every college economics' student's heart), but all in the name of globalism for billionaire oligarchs.
We in the USA have to decide what we want: To take care or our market and our nation and provide stability and jobs by serving and producing for each other, or to buy cheap t-shirts from China and to have unfettered access to French wine.
Let the oligarchs pound sand and let's ditch globalism. The USA is still the most stable, most predictable place to invest--let's force everyone's hand and make companies choose whether they want to invest in a Chinese future (and their civil justice system and form of government) or ours.
6
Unfettered capitalism has the seeds of its own demise built right in: as the imbalance grows and the rich (corporations and individuals) get richer, there will first be oppression to maintain the untenable status quo. We are seeing that in the militarization of the police. Then there will be unrest/revolution which will rebalance the playing field so it's level. OR we can avoid that by constraining what Greenspan called "infectious greed" and put in place a modified capitalism combined with social safety programs like in Western Europe. We are on the brink of fascism. I'm going to say that repeatedly until others state the obvious.
4
Sadly enough we're over the brink. Mussolini who invented modern fascism defined it as corporate government. As to the possibilities of revolution, remember that the same talk occurred during the depression when "one-third of Americans are ill-clothed, ill-housed, ill-fed". Those who wondered about revolution quickly understood that things were bad but 2/3 were OK somehow. Modern revolution in a militarized police state is an exercise in suicidal futility. But...that said.. there will be rioting and ...there will be blood, alas.
1
If you REALLY want the worker to benefit her or his life with their labors, you can only implement capitalism with as little government impact on the workplace as possible. No other system can even come close.
The next step is making as many government functions as possible as local as possible. We must shrink the distance from decisions to where things are done by governments. (Unless you just liked King George III or Stalin.)
The next step is making as many government functions as possible as local as possible. We must shrink the distance from decisions to where things are done by governments. (Unless you just liked King George III or Stalin.)
Years after the fall of communism we are witnessing the collapse of capitalism under the weight of it's own greed. If Karl Marx were alive today he would probably smile and say; "I told you so."
1
Considering that those considered poor in this country enjoy luxuries that he couldn't imagine in his wildest dreams, I think he would rethink his theory.
3
General strike for $15 per hour minimum wage. See how well the capitalists do without food services, clean sheets, copy services, garbage collection, dishwashing, bus drivers, daycare providers, and all the other service jobs upon which their princely kingdoms of capital were built. Let's see how much the so-called low-skilled worker is really worth by doing without. Good grief. Minimum wage is half in real terms what it used to be. If a business owner can't make a living paying a living wage he or she needs to find another line of work. Enough with all the sighing about the structure of the economy and the loss of manufacturing jobs and all the robots. Who built those robots? Who served the coffee for the robot makers? Who cut the sheet metal? Who drove the engineers to work? Who took care of their kids? We all contributed to the increase in productivity, all workers did, not just the smarty-pants fat cats. Enough with the dribble-down, eensy-weensy half-measures. Republicans say they believe in work. Let them put their money where their mouths are and pay people who work a living wage, or let us all go on strike.
6
"General strike for $15 per hour minimum wage"....Increasing the minimum wage is a bit like taking aspirin for a brain tumor. It may make you feel better but it doesn't do anything to address the real problem.
When the ordinary person withdraws from an IRA, they pay income tax rates on the whole amount of the withdrawal, capital gain and return of capital.
4
Capitalism, in its own political and social definition, is a neo-fascist ideology aimed at destroying union workers, trampling over human rights worldwide, attacking poor people on public assistance programs, declares no respect to individual civil liberties and personal privacy rights among the masses, bribe democratic governments to create legislation aimed at corporations only, and gouge society with monetary greed while convincing the gullible to follow suit like lemmings. It also awards the ruling class with corporate profits and investment income, but the average working American gets no benefit in return to an economic system that is intentionally rigged for the wealthy. A contrast solution to combat capitalism is not allowing capitalists save capitalism for good, but to regulated the market by a government that was written for the people, by the people, and serve for the people. Our economy should be based on fairness, social justice, equal outcomes, respect to the proletariat workers, a government that cherishes consumer rights by law, and a liberal taxation system directly aimed at corporate monarchs and wealthy dictatorial tyrants who own 42% of our country's wealth. That is not hard to comprehend. The ruling classes in the United States of America have been buying our democracy at the highest bidder so they can dictate the American majority as an elitist plutocratic regime that is enforced by multinational corporations. A paradigm shift has to occurred.
1
A fundamental element of capitalism is greed. Workers work to get the basics, food, shelter, safety, and then continue to work to get "more". As the successful capitalist worker gets "more", he continues to want more still. When the worker gains a position that lets them control how much of the efforts of others they get, and how much he gets, he still wants "more". So the function of greed in capitalism is to reinforce the tendency of those in control to keep more for themselves to the degree that they can. We see this in the unrestrained growth in CEO compensation while worker at lower levels, without control of their compensation except (once unions have been broken) through leaving for another job (difficult when no excess jobs are seeking workers), workers at lower levels stagnate. The seeds of disaster are here, but the successful capitalist would rather have "more" of a smaller economy than whatever the fully-engaged economy yielded. Fundamentally, once capital gains the power to 'write the rules of the market' as it has through control of government, it will fight to keep that control. This fight is revealed in how strongly the servants of capital react to any attempt by labor to gain back some equity in the markets... capital will take all of a smaller economy rather than settle for part of a larger market, and that's where we are heading, because the successful (greedy) capitalists are running the show now.
2
“Can Capitalists save Capitalism?” Without the concerted efforts of a powerful, organized working group, of course not. Economically, we are back in the gilded age of our nation with wealth inequality at all-time highs. But, socially, we as the working 99% of our nation have been continuously bifurcated as to our common economic and political views.
Yes, Capitalism greatest failure of twentieth century almost created its complete collapse. Capitalists of the 1930s had to either comply with a new age of accountability and income distribution or suffer the wrath of the nation. I would say that at least 65% of Americans support dramatic shifts in our economic system, however, the other 35% are supported by a wealth of financial resources coupled with the determination of the owners of those resources not to go back in time to a more equitable society.
Take all financial incentives out of politics from repeal Citizens United and McCutcheon v. Supreme Court, those are good places to start.
Yes, Capitalism greatest failure of twentieth century almost created its complete collapse. Capitalists of the 1930s had to either comply with a new age of accountability and income distribution or suffer the wrath of the nation. I would say that at least 65% of Americans support dramatic shifts in our economic system, however, the other 35% are supported by a wealth of financial resources coupled with the determination of the owners of those resources not to go back in time to a more equitable society.
Take all financial incentives out of politics from repeal Citizens United and McCutcheon v. Supreme Court, those are good places to start.
1
I took a look at Van Hollen's proposals. Most of them involve tax credits that would be offset by taxing capital gains at higher rates. The problem I see with this is that it's been shown that increasing capital gains taxes reduces the amount of tax revenue. If he wants to pay for these benefits he ought to consider reducing the tax rates. But I guess that wouldn't be "fair" as liberals see it.
The apprenticeship proposal can make sense as long as it's followed by actual guaranteed jobs. I know of restaurants in France that get by with a continuous stream of apprentice waiters because a graduate of the apprenticeship costs too much in salary and benefits. I suspect this is true in other sectors as well.
Finally, the $1K/yr and $500/saving bonus Van Hollen proposes is too insignificant for low wage workers to make a difference in their retirement prospects.
The apprenticeship proposal can make sense as long as it's followed by actual guaranteed jobs. I know of restaurants in France that get by with a continuous stream of apprentice waiters because a graduate of the apprenticeship costs too much in salary and benefits. I suspect this is true in other sectors as well.
Finally, the $1K/yr and $500/saving bonus Van Hollen proposes is too insignificant for low wage workers to make a difference in their retirement prospects.
What authority convinced you that any increase of tax rates on capital gains will reduce total tax revenue from capital gains taxes?
3
The last two times capital gains rates were reduced revenues increased.
2
Where has it been shown that "increasing capital gains taxes reduces the amount of tax revenue"? Not from anything I've seen. Without a citation, I'm taking this as merely your fertile imagination at work. This is merely the flip side of the old supply side nostrum about lowering taxes bringing in more revenue, which has proven false time and again (see Reagan or W).
Finally, you seem to be ignorant of the value of saving. $1k/year saved early on can mean easily $10k by retirement. So $1k each in the first 10 years of work could add up to $100k on retirement. That may not sound like much to you, but tell that to a lower or middle class person.
Finally, you seem to be ignorant of the value of saving. $1k/year saved early on can mean easily $10k by retirement. So $1k each in the first 10 years of work could add up to $100k on retirement. That may not sound like much to you, but tell that to a lower or middle class person.
2
Most interesting was the article by Nafeez Ahmed that Mr. Edsall referenced. The capitalists ought to be worried not only about how the truthiness of their message will play out among the general population -- in colonialist terms, the fourth or bottom tier -- who experience the world differently, but also about the forces nature will increasingly unleash unless they come to terms with the limits of unsustainable growth.
Since 2000, Canada's economic policies have allowed her middle class to become wealthier than the US'. Median income in Canada has increased by almost 20% in that period, while it has remained flat here in the US.
http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no...
So, there is no mystery as to how to save the middle class in America: simply outsource our economic-policy making to Canada. Capitalism will be saved, and we'll get single payer healthcare to boot.
http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no...
So, there is no mystery as to how to save the middle class in America: simply outsource our economic-policy making to Canada. Capitalism will be saved, and we'll get single payer healthcare to boot.
2
Straight out of Picketty. One can hope.
1
Inequality is a problem it is needed to promote American governmental principles. Investment in skills (education and training incentives/credits with oversight of providers (fraud & abuse occurs with free money); improved immigration laws; investment in infrastructure and making corporate tax rates more globally competitive is needed. Reducing taxes (not referring to education/training provisions) of the middle class (currently below 60K or so) is not a good idea. Too many households no longer contribute to the needs of society (no skin in game). The unintended consequence is you will create (in not already created by prior tax cuts) a large percentage of society who receive the benefits of society but pay nothing towards them. You can say they are the same as individuals who are overtly receiving welfare. There is not much difference. Solve the problems of inequality with positive solution and not by simply transferring income/wealth from one group to another. Grow the economy and enhance income mobility is what you want to do
1
First off, virtually every working citizen in this country pays payroll and state taxes, so the 'skin in the game' argument holds no water. Secondly, most of the proposals involve aiding people who are already earning a living, albeit a meager one. That is not welfare. Ronald Reagan was a big supporter of the Earned Income Tax Credit, one of the biggest aids to working people around.
Finally, you basically suggest that 'growing the pie' is the answer. The problem is that the pie has been growing, but for the last few decades, that growth has all been 'eaten' by the 1% (e.g. since 2000 the median income has gone down even while GDP has increased). That being the case, please explain how growing the pie more is going to help.
Finally, you basically suggest that 'growing the pie' is the answer. The problem is that the pie has been growing, but for the last few decades, that growth has all been 'eaten' by the 1% (e.g. since 2000 the median income has gone down even while GDP has increased). That being the case, please explain how growing the pie more is going to help.
4
Robert,
Taking tax collected from government bureaucrats paychecks and government contractor employee’s paychecks (a portion is being taxed and returned to the government coffers VIA taxes) is not a net contribution of taxes to the government, but that is still a net drain on the government financial resources that were collected from the taxpayers and is still an overall net reduction in the financial resource capabilities of local, state and national governments.
All citizens in every nation must realize that without greedy businesses making profits that contribute to the accumulation of national wealth in that nation, there would not be any jobs, not even government jobs, or government programs, or government contracts, because without profitable businesses, their nation would not have any national wealth created by those businesses that would then being available to be forcibly confiscated from those profitable businesses and individuals as taxes in order to pay the government bureaucratic payrolls and other government activities.
Taking tax collected from government bureaucrats paychecks and government contractor employee’s paychecks (a portion is being taxed and returned to the government coffers VIA taxes) is not a net contribution of taxes to the government, but that is still a net drain on the government financial resources that were collected from the taxpayers and is still an overall net reduction in the financial resource capabilities of local, state and national governments.
All citizens in every nation must realize that without greedy businesses making profits that contribute to the accumulation of national wealth in that nation, there would not be any jobs, not even government jobs, or government programs, or government contracts, because without profitable businesses, their nation would not have any national wealth created by those businesses that would then being available to be forcibly confiscated from those profitable businesses and individuals as taxes in order to pay the government bureaucratic payrolls and other government activities.
1
Two external causes for much of the problem. As the chart shows, Labor's share of income was "roughly" the same from 1950 until 2001, then plunged. This coincided with 1) globalization, which crushed the earnings of the lowest-skilled American factory workers and 2) the rise of the Internet, which offered massive economies of scale: WalMart= $800K sales per employee, Amazon=$2900K sales per employee. We need MORE automation, not less in our businesses, but that will mean employees who are, on average, much more technically savvy. Obama's plan for free community college is a good one, but he needs to be more forthright about the costs.
2
Hooray For The Working Man!!
To the disgust of John Boehner and the (wealthy) GOP, my homeboy, President Obama, said what really needed to be said, no holds barred. It is the people that are in charge, not the corporations. Big business has managed to infiltrate so many aspects of our society, with little consideration, for the people that fill their coffers in the first place. Daring and chiding the greedy GOP, Obama finally grew up as a politician. By stating his case to help the middle class and poor, Obama has boldly pointed out the philosophical differences between the Democrats & the GOP, exposing the GOP's greedy little hearts. "Show me the way that you can support a family of four on $15,000?' How dare the GOP oppose the 90% of the country, that help this country run-teachers, social workers, nurses, manual laborers! Like the boss said, he has "nothing to lose". However, Republicans, you do. So, John Boehner, do you feel lucky? Well, do ya, punk?
To the disgust of John Boehner and the (wealthy) GOP, my homeboy, President Obama, said what really needed to be said, no holds barred. It is the people that are in charge, not the corporations. Big business has managed to infiltrate so many aspects of our society, with little consideration, for the people that fill their coffers in the first place. Daring and chiding the greedy GOP, Obama finally grew up as a politician. By stating his case to help the middle class and poor, Obama has boldly pointed out the philosophical differences between the Democrats & the GOP, exposing the GOP's greedy little hearts. "Show me the way that you can support a family of four on $15,000?' How dare the GOP oppose the 90% of the country, that help this country run-teachers, social workers, nurses, manual laborers! Like the boss said, he has "nothing to lose". However, Republicans, you do. So, John Boehner, do you feel lucky? Well, do ya, punk?
3
Larry Summers and (Wall Street) Chuck Schumer?
This is remarkable cynicism - just stunning - advanced at precisely the moment when Obama & Co. know darn well that it is impossible to be enacted into law.
Mere talking points for the 2016 campaign.
Can Democrats and media possible be this gullible?
This is remarkable cynicism - just stunning - advanced at precisely the moment when Obama & Co. know darn well that it is impossible to be enacted into law.
Mere talking points for the 2016 campaign.
Can Democrats and media possible be this gullible?
2
This article is a thoughtful restatement of while it is necessary in every generation for progressives to save capitalism from itself:
TR, the New Deal, LBJ, Clinton, and Obama.
TR, the New Deal, LBJ, Clinton, and Obama.
2
This Socialist does not expect this spoiled, under taxed and over-benefited Capitalist class to ever allow this to take effect in the USA. Capitalism naturally leans toward profit and greed and it takes extraordinary times (such as the Great Depression) and an exceptional President to force Capitalists to ameliorate their perniciousness enough to create some opportunity of advancement. The last Great Recession could have been such a time but the political will of both the Democratic Party and our current Corporatist president were bedded with the banks and not up to the task.
1
Outstanding article. Unfortunately, the present public conversation hinges on the word "redistribution." People tend to think what they receive from our economic system is fair and that any efforts to ameliorate inequality are unfair because they involve taking from the "makers" and giving to the supposedly undeserving "takers."
Our last economic downturn was so severe that it has been dubbed "The Great Recession." I propose that we start using the term "The Great Redistribution" to refer to what has occurred since the broadly prosperous post-WW2 era ended with a shift that favored the makers, to the detriment of wage earners. Clearly, to the extent national income is distributed differently these days, it is not going to the wage earners, as many suppose. By recasting the term "redistribution," we can more clearly refute the foolish argument that redistribution is somehow benefiting those who are, in reality, getting a smaller piece of the pie than they used to.
Our last economic downturn was so severe that it has been dubbed "The Great Recession." I propose that we start using the term "The Great Redistribution" to refer to what has occurred since the broadly prosperous post-WW2 era ended with a shift that favored the makers, to the detriment of wage earners. Clearly, to the extent national income is distributed differently these days, it is not going to the wage earners, as many suppose. By recasting the term "redistribution," we can more clearly refute the foolish argument that redistribution is somehow benefiting those who are, in reality, getting a smaller piece of the pie than they used to.
2
Jon,
The Free Trade Agreements, the MFN and the PNTR trade statuses that were granted by the last three US presidents economically caused US jobs to relocate to third world nations whenever possible, when US citizens refuse to work for the third world pay scales!
Which party is in opposition to relocating US jobs to third world nations? Not the Democrats! Not the Republicans!
Are blue collar US workers just now realizing that the Democrats are the first to create "FREE TRADE AGREEMENTS" that economically require that US jobs relocate to third world nations on a wholesale basis?
Presidents Clinton, Bush and Obama created many new "Free Trade Agreements," MFMs and PNTRs that were very destructive for US employment by relocating US jobs to foreign nations.
These "FREE TRADE" laws economically required lowering of the middle class pay scales for US workers in order to compete with third world nation pay and benefit scales, if US workers want those jobs to be located in the USA.
The Free Trade Agreements, the MFN and the PNTR trade statuses that were granted by the last three US presidents economically caused US jobs to relocate to third world nations whenever possible, when US citizens refuse to work for the third world pay scales!
Which party is in opposition to relocating US jobs to third world nations? Not the Democrats! Not the Republicans!
Are blue collar US workers just now realizing that the Democrats are the first to create "FREE TRADE AGREEMENTS" that economically require that US jobs relocate to third world nations on a wholesale basis?
Presidents Clinton, Bush and Obama created many new "Free Trade Agreements," MFMs and PNTRs that were very destructive for US employment by relocating US jobs to foreign nations.
These "FREE TRADE" laws economically required lowering of the middle class pay scales for US workers in order to compete with third world nation pay and benefit scales, if US workers want those jobs to be located in the USA.
2
I'm not sure what you propose. Should we bury our heads in the sand and not participate in the global economy? Should trade agreements be tilted in favor of American workers? The point is that American workers would be far better off if income was distributed more equitably. Rather than having the top 0.1% have about as much wealth as the bottom 90%, perhaps we could dial that inequality back a bit. The ratio of corporate profits to GDP is at a record high, about 70% higher than the average from 1950 to 2012. Most of the ideas discussed in this article seem beneficial to me. And yet they won't happen because so many people have been indoctrinated by anti-worker rhetoric.
1
Jon,
The train has left the train station, and I have no proposal to re-industrialize the USA as requires to bring those manufacturing jobs back to the USA.
The US government created free trade agreements with third-world nations starting with NAFTA by President Clinton and Labor Secretary Reich plus other more recent similar treaties mean that US workers must (generally) compete with third-world foreign worker pay scales, benefit packages (none), the more productive foreign labor work rules (none), foreign corporate tax rates (lower or nonexistent), property taxes (lower) and the lower environmental manufacturing costs (none) that are available in foreign countries if they want a job.
These free trade agreements removed the import tariffs that were added to imported products that made the imported product cost as much as the same product made in the USA with US labor costs and US environmental compliance costs.
The removal of those import tariffs (via free trade agreements) now requires that US workers must now compete economically with foreign workers for each manufacturing job and also US service jobs if it can be handled via telephone and/or the Internet.
The train has left the train station, and I have no proposal to re-industrialize the USA as requires to bring those manufacturing jobs back to the USA.
The US government created free trade agreements with third-world nations starting with NAFTA by President Clinton and Labor Secretary Reich plus other more recent similar treaties mean that US workers must (generally) compete with third-world foreign worker pay scales, benefit packages (none), the more productive foreign labor work rules (none), foreign corporate tax rates (lower or nonexistent), property taxes (lower) and the lower environmental manufacturing costs (none) that are available in foreign countries if they want a job.
These free trade agreements removed the import tariffs that were added to imported products that made the imported product cost as much as the same product made in the USA with US labor costs and US environmental compliance costs.
The removal of those import tariffs (via free trade agreements) now requires that US workers must now compete economically with foreign workers for each manufacturing job and also US service jobs if it can be handled via telephone and/or the Internet.
Not if democrats like Obama continue to offer intentionally inadequate political theatre gestures of a minimum wage raise to about $10/hour. When a living wage, that allows workers to live without government handouts, would be $15 - $20/hour. The reason I say "intentionally inadequate" is that the party of redistribution patronage, that essentially buys votes of the poor with other taxpayers money thinks it needs to maintain an immense underclass via low pay, mass immigration of poor people or both in order to be a powerful party. And of course many democrats as well as republicans comprise our few percent business owner nobility who think that anyone who gets a business license and hires workers has a constitutional right to the functional equivalent of slave workers. That is after all (like black plantation slavery until 1865) has been our tradition, thought by economists paid by our 1% to be necessary for the American economy/prosperity. That's what term "immigration nation" really means - a nation for centuries addicted to 10's of millions of first generation immigrant slaves. It is truly shocking, a moral horror, that Obama, a black man, has accepted this lie - that we need this equivalent of a large slave immigrant class in order to exist as a nation.
1
There is no mention here that the capitalist model of continual growth is destroying the habitat of human beings and other creatures. More growth means more energy, of whatever kind, to be trapped in the atmosphere and fuel the greenhouse which will destroy civilization in our grandchildren's and great-grandchikldren's lifetimes. The sea is rising faster than the most extreme predictions. Last week is was reported that ocean life faces mass extinction. Also last week it was reported we have now crossed four of nine biological and envrironmental boundaries scientists say must not be crossed if the world is to remain liveable.
Democrats and Republicans alike put their faith is an old model of continuous growth that will destroy us. Politicians and economists are playing and tinkering with little toys in the graveyard. Humanity must stop this blindness and adopt a model of restrained, sustainable economics that can stop this looming disaster. We must do with less or perish. Capitalism in its present form, liberal or conservative, is not the answer.
Democrats and Republicans alike put their faith is an old model of continuous growth that will destroy us. Politicians and economists are playing and tinkering with little toys in the graveyard. Humanity must stop this blindness and adopt a model of restrained, sustainable economics that can stop this looming disaster. We must do with less or perish. Capitalism in its present form, liberal or conservative, is not the answer.
5
The national wealth that is created and owned by private businesses and individuals is (almost) the only source of wealth available for the federal and local governments to forcibly take or confiscate a portion of in the form of taxes in order for the government to raise funds to pay for all of the bureaucratic employee payrolls, government activities, entitlements, government contracts, military contracts, pork barrel infrastructure improvements, pay to play business deals, political power influenced “Pay to Play” no-bid contract awards, unemployment benefits, income equalization, gigantic Lockheed-Martin type military contract(s), pork barrel infrastructure improvements, Solyndra type pay to play business deals, CGI Federal political power influenced pay to playcontract awards, wars, welfare, unemployment benefits, and other government expenses that pay citizens by expending national wealth for these non-wealth-creating activities that actually consumes and destroys the nation's wealth and national government economic capabilities.
If any nation's wealth-creating businesses leave that nation to escape taxation or go bankrupt because of taxation, then the sources for any government funding will reduce or disappear, and the government services will diminish or disappear.
If any nation's wealth-creating businesses leave that nation to escape taxation or go bankrupt because of taxation, then the sources for any government funding will reduce or disappear, and the government services will diminish or disappear.
1
You seem to be laboring under the notion that money taxed by the government is lost to the economy. This is patently incorrect. That money (except for the amount spent in foreign countries) is recycled into the US economy (payments to US citizens, purchase of US goods, ...).
You also maintain that most of the government income is 'wasted' (Solyndra, pork barrel, ...), but the fact is that the huge majority of government spending goes to Social Security and health care (Medicare and Medicaid). The later is the most cost effective medical spending in the country, and if you want to argue against the first two, good luck.
You also maintain that most of the government income is 'wasted' (Solyndra, pork barrel, ...), but the fact is that the huge majority of government spending goes to Social Security and health care (Medicare and Medicaid). The later is the most cost effective medical spending in the country, and if you want to argue against the first two, good luck.
1
To BruceS- Well I would say a good chunk of our military is wasted upon a military that is used to maintain an empire. Otherwise I agree with you.
BruceS,
The national wealth that is created and owned by private businesses and individuals is (almost) the only source of wealth available for the federal and local governments to forcibly take or confiscate a portion in the form of taxes in order for the government to raise funds to pay for all of the bureaucratic employee payrolls and other government activities!
Peggy Fikac, in the Houston Chronicle of Sunday August 14, 2011, quotes Texas Governor Rick Perry, saying,
“As Americans, we realize that there is no taxpayer money that wasn’t first earned by the sweat and toil of one of its citizens. That’s why we reject this president’s unbridled fixation on taking more money out of the wallets and pocketbooks of American families and employers and giving it to a central government.”
I like Governor Rick Perry’s statement. That is true for all levels of government! Only the private sector businesses and corporations generate taxable wealth and create non-taxpayer supported jobs for US citizens to create new national wealth for those same US businesses, and then that new national wealth is then available as business profits, private personal income, property taxes and personal inheritance to be confiscated through taxation to pay for government bureaucratic employee payrolls, government contracts, other government expenses, at every federal, state, county, and local level.
The national wealth that is created and owned by private businesses and individuals is (almost) the only source of wealth available for the federal and local governments to forcibly take or confiscate a portion in the form of taxes in order for the government to raise funds to pay for all of the bureaucratic employee payrolls and other government activities!
Peggy Fikac, in the Houston Chronicle of Sunday August 14, 2011, quotes Texas Governor Rick Perry, saying,
“As Americans, we realize that there is no taxpayer money that wasn’t first earned by the sweat and toil of one of its citizens. That’s why we reject this president’s unbridled fixation on taking more money out of the wallets and pocketbooks of American families and employers and giving it to a central government.”
I like Governor Rick Perry’s statement. That is true for all levels of government! Only the private sector businesses and corporations generate taxable wealth and create non-taxpayer supported jobs for US citizens to create new national wealth for those same US businesses, and then that new national wealth is then available as business profits, private personal income, property taxes and personal inheritance to be confiscated through taxation to pay for government bureaucratic employee payrolls, government contracts, other government expenses, at every federal, state, county, and local level.
1
What's in a word? You know the drill: a rose by any other name... Makes no difference what you call it? Elsewhere today on these pages we debate what to call the terrorism sprouting from Islam. Well, I object to the word "capitalism" used with any adjective (inclusive capitalism, enlightened capitalism, capitalism with a human face...) to describe either what our American system is, or what it ought to be.
Market economy, not capitalism, should be the core concept around which to deploy adjectives to describe our system. Choosing the word "capitalism" as the starting point of discussion prejudices our thinking in favor of capital as the key. Remember Econ 101? There are four factors of production: land, labor, capital, and entrepreneurship (which itself is basically the other three factors at economic risk in developing a new product). Clear analysis is not possible when you misidentify the primary concept.
Market economy, not capitalism, should be the core concept around which to deploy adjectives to describe our system. Choosing the word "capitalism" as the starting point of discussion prejudices our thinking in favor of capital as the key. Remember Econ 101? There are four factors of production: land, labor, capital, and entrepreneurship (which itself is basically the other three factors at economic risk in developing a new product). Clear analysis is not possible when you misidentify the primary concept.
1
Thomas B. Edsall,
I truly believe that any and all new US federal legislation or executive actions concerning any topic such as repeal of the Glass Stegall Act, Solyndra government money "Pay to Play" giveaways, CGI Federal government “Pay to Play” contracts, Free Trade Agreements that relocate US JOBS to Foreign Nations, etc., will also be written by the lobbyists’ clients, and then the lobbyists will be hired to spend hundreds of thousands of dollars on wine, food, prepaid sexual services, women, song, jobs for the congressmen's (plus their congressional aides') unemployable wives, girlfriends, and children, plus campaign contributions, and exotic vacations to entice (bribe) each of our elected congressmen and each of their congressional aides who "advise" the congressmen how to vote on each issue to enact whatever legislation (tax loopholes, criminal law repeals, legalize Wall Street criminal acts, government contracts, presidential criminal felony pardons, etc.) that the lobbyists’ clients desire.
This "Pay to Play" and the current "legislation for sale" situation probably not what the founders of this nation had in mind when they granted US citizens the constitutional right to "petition the government."
Chicago type “PAY TO PLAY” taxpayer-dollar-paid-for "Solyndra" or “CGI Federal” type "Pay to Play" US government business deals are now INSTITUTIONALIZED BRIBERY requirements required be awarded any of these US government or a Texas State Government contracts?
I truly believe that any and all new US federal legislation or executive actions concerning any topic such as repeal of the Glass Stegall Act, Solyndra government money "Pay to Play" giveaways, CGI Federal government “Pay to Play” contracts, Free Trade Agreements that relocate US JOBS to Foreign Nations, etc., will also be written by the lobbyists’ clients, and then the lobbyists will be hired to spend hundreds of thousands of dollars on wine, food, prepaid sexual services, women, song, jobs for the congressmen's (plus their congressional aides') unemployable wives, girlfriends, and children, plus campaign contributions, and exotic vacations to entice (bribe) each of our elected congressmen and each of their congressional aides who "advise" the congressmen how to vote on each issue to enact whatever legislation (tax loopholes, criminal law repeals, legalize Wall Street criminal acts, government contracts, presidential criminal felony pardons, etc.) that the lobbyists’ clients desire.
This "Pay to Play" and the current "legislation for sale" situation probably not what the founders of this nation had in mind when they granted US citizens the constitutional right to "petition the government."
Chicago type “PAY TO PLAY” taxpayer-dollar-paid-for "Solyndra" or “CGI Federal” type "Pay to Play" US government business deals are now INSTITUTIONALIZED BRIBERY requirements required be awarded any of these US government or a Texas State Government contracts?
1
Mr. Edsall,
Violent armed riots and insurrections are predictable, ala the French and the Russian Revolutions, when income inequality becomes rampant, when the majority of the people are starving and they find their situations economically hopeless.
Mass income inequality will foster the mass civil unrest, crime, anger, riots, revolution, starvation, etc. as required for starting a revolution.
Conditions for riots and insurrections are approaching because some people are beginning to find their situations totally hopeless economically.
If any future US revolution to overthrow the US government occurs, maybe to change the economic situation, where will all of the food, fuel, water, sanitation, medicine, and other necessities to support the population come from during and after the revolution?
These necessities will not exist within hours after the revolutionary hostilities start.
We are approaching that point of no return, which I will define as the point where we have sold all of our privately owned assets to foreign owners to pay for our various US government activities and also to pay our imported products that we need to consume in order to maintain life.
After foreigners own all of our wealth and US located businesses and other assets, we will no longer have any economic or intellectual resources available for re-industrialization.
I would prefer to not have to live through a revolution, but I believe that we should be prepared to survive this anarchy.
Violent armed riots and insurrections are predictable, ala the French and the Russian Revolutions, when income inequality becomes rampant, when the majority of the people are starving and they find their situations economically hopeless.
Mass income inequality will foster the mass civil unrest, crime, anger, riots, revolution, starvation, etc. as required for starting a revolution.
Conditions for riots and insurrections are approaching because some people are beginning to find their situations totally hopeless economically.
If any future US revolution to overthrow the US government occurs, maybe to change the economic situation, where will all of the food, fuel, water, sanitation, medicine, and other necessities to support the population come from during and after the revolution?
These necessities will not exist within hours after the revolutionary hostilities start.
We are approaching that point of no return, which I will define as the point where we have sold all of our privately owned assets to foreign owners to pay for our various US government activities and also to pay our imported products that we need to consume in order to maintain life.
After foreigners own all of our wealth and US located businesses and other assets, we will no longer have any economic or intellectual resources available for re-industrialization.
I would prefer to not have to live through a revolution, but I believe that we should be prepared to survive this anarchy.
2
Mr. Thomas B. Edsall,
For the USA, Russia, Greece, or any city, state, or nation (or family) to sustain a Republic, Democracy, Theocracy, Capitalism, Communism, Fascism, Dictatorship, Kingdom, Principality or any other form of government that they select and/or is imposed upon them, that nation still has to have their private businesses continuously create sufficient new national wealth (and jobs) in their nation so that there is enough wealth for the taxing authority to confiscate a portion of that new national wealth and/or profit that was created by their private sector businesses, plus an additional amount taken through income taxes, sales taxes, property taxes, tariffs, etc., and other taxes by the government tax collectors to pay for their government activities.
Hopefully this can be done by each government without borrowing wealth from other nations to pay for their various wealth consuming government activities including any distribution of wealth confiscated from the wealth creators and then handed to other citizens.
For the USA, Russia, Greece, or any city, state, or nation (or family) to sustain a Republic, Democracy, Theocracy, Capitalism, Communism, Fascism, Dictatorship, Kingdom, Principality or any other form of government that they select and/or is imposed upon them, that nation still has to have their private businesses continuously create sufficient new national wealth (and jobs) in their nation so that there is enough wealth for the taxing authority to confiscate a portion of that new national wealth and/or profit that was created by their private sector businesses, plus an additional amount taken through income taxes, sales taxes, property taxes, tariffs, etc., and other taxes by the government tax collectors to pay for their government activities.
Hopefully this can be done by each government without borrowing wealth from other nations to pay for their various wealth consuming government activities including any distribution of wealth confiscated from the wealth creators and then handed to other citizens.
1
What a reasoned, thoughtful, and articulate set of posts! Gerald demonstrates how much more important dogma is than evidence, and narrow self-interest than humanity. In doing so, he out performs even Ayn Rand, let alone bush-leaguers like Hayek and Friedman. It is great to see this in the New York times - it exposes effete readers of a different persuasion to the depth and breadth of thought out there.
1
Realist,
Where does the Federal, State, and local governments get the money that they use to pay for their government activities?
Only private businesses wealth creation activity creates new taxable wealth, and that new and existing privately owned taxable wealth is the primary source of funds to be confiscated by governments through taxes to pay for any and all government activities.
Government expenditures only consume a nation's wealth and do not create any new taxable wealth.
Government Contracts to private businesses to create infrastructure, weapons, social programs are also paid for by the taxpayers and do not create national wealth, but those activities just consume national wealth that was created by other citizens who created new national wealth that was confiscated to pay for those government activities!
Where does the Federal, State, and local governments get the money that they use to pay for their government activities?
Only private businesses wealth creation activity creates new taxable wealth, and that new and existing privately owned taxable wealth is the primary source of funds to be confiscated by governments through taxes to pay for any and all government activities.
Government expenditures only consume a nation's wealth and do not create any new taxable wealth.
Government Contracts to private businesses to create infrastructure, weapons, social programs are also paid for by the taxpayers and do not create national wealth, but those activities just consume national wealth that was created by other citizens who created new national wealth that was confiscated to pay for those government activities!
1
"Can Capitalists Save Capitalism?"
Yes, but don't look for them in the Legislative or Executive branches, 'cuz there aren't any in there.
"Inclusive Capitalism" = take wealth by force from people who earn it, and give it to people who don't. That's not Capitalism - that's Socialism.
How about: Remove all government interference in the marketplace, and let actual freedom - as opposed to freedom for some, and slavery for others - reign?
As long as the government - which is the worst example of economic stability known to man - is deciding how to create economic stability, we're all doomed.
If you want to save Capitalism, it's pretty simple: 1. Stop reading Karl Marx. 2. Stop reading JM Keynes. 3. Deport Paul Krugman. 4. Start reading von Mises, Hazlitt, Hayek, Ricardo. 5. Start learning to trade value for value. 6. Learn to do math. 7. Learn that you must produce in order to consume. 8. Remember the lesson from the playground: There is no such thing as a Free Lunch. 9. Don't let the government decide how much is "too much". 10. Don't let the government decide how to run your life.
Yes, but don't look for them in the Legislative or Executive branches, 'cuz there aren't any in there.
"Inclusive Capitalism" = take wealth by force from people who earn it, and give it to people who don't. That's not Capitalism - that's Socialism.
How about: Remove all government interference in the marketplace, and let actual freedom - as opposed to freedom for some, and slavery for others - reign?
As long as the government - which is the worst example of economic stability known to man - is deciding how to create economic stability, we're all doomed.
If you want to save Capitalism, it's pretty simple: 1. Stop reading Karl Marx. 2. Stop reading JM Keynes. 3. Deport Paul Krugman. 4. Start reading von Mises, Hazlitt, Hayek, Ricardo. 5. Start learning to trade value for value. 6. Learn to do math. 7. Learn that you must produce in order to consume. 8. Remember the lesson from the playground: There is no such thing as a Free Lunch. 9. Don't let the government decide how much is "too much". 10. Don't let the government decide how to run your life.
2
Yeah, Bill Jobs made Apple all by himself, with zero help from any of the employees (or for that matter, the teachers who taught the employees and helped make them effective). They deserve nothing! Same for Walmart, GE, ... - the bosses did everything and deserve all the credit, and money.
Right on, Karlos.
Right on, Karlos.
Is this the same Larry Summers that shot down the regulation of derivatives trading that would later bankrupt our economy when he was Undersecretary of the Treasury? The same Larry Summers that supported the Gramm-Biley-Leach Act in 1999 that allowed for the merge of commercial and investment banks into Too Big to Fail Institutions that would kick start the Great Recession? The same Larry Summers who receives millions of dollars of speaking fees from Goldman Sachs, JPMorgan and Citigroup, the very entities that oppose any sort of regulation that would hurt their bottom line? This can't be the person Mr. Edsall talks about in his article.
11
Yeah the one who should be in jail along with Phil Gramm, Rubin, and the rest of the bankster crooks.
1
Too bad Obama didn't start talking like this when he had a majority in both houses of Congress, he might have been able to accomplish something. Now with the Party of "No" in charge (who believe "compromise" = "capitulate to our will") there isn't a chance this will be more than posturing.
4
We are in a stage of nihilistic capitalism. Take as much as you can, because we are doomed anyway. Look who is Congress and how much money they got from the likes of Kochs.
2
We assume our nation will stand forever. But the simple fact is that we are quite young. Empires that last only a few hundred years are a dime a dozen.
Much of our gamble has been on the stability of a large middle class, to combat the instability that comes when wealth is overly concentrated in the hands of a few. In the last couple of decades, however, we have left that world behind.
It’s all about balance. America admires successful people and we believe they should be amply rewarded. The adjustments to the tax code that Democrats seek would be merely going back to the structure we relied on until quite recently.
Advocating that we go back to what we were doing during the Nixon administration is hardly socialist.
Much of our gamble has been on the stability of a large middle class, to combat the instability that comes when wealth is overly concentrated in the hands of a few. In the last couple of decades, however, we have left that world behind.
It’s all about balance. America admires successful people and we believe they should be amply rewarded. The adjustments to the tax code that Democrats seek would be merely going back to the structure we relied on until quite recently.
Advocating that we go back to what we were doing during the Nixon administration is hardly socialist.
6
And as a young nation, the US did not suffer through feudalism and its vestiges, and has no collective memory of that era. The same is not true of most of Europe which does remember and doesn't want to go back, even the UK, to the era to which the US seems to be hurtling.
4
I would like to first point out the implicit presumption that the economic and public policies promulgated under the rubric of free market capitalism is a intentional misnomer. In application and historical outcomes free market capitalism has proven to be not free, competitively market driven or capitalism.
At the risk of being hyperbolic, the term most descriptive of these policies and corporate practices is Cannibalistic Economics. The historical consequences evident in the increasingly disruptive and destabilizing concentrations of wealth and political power have literally devoured the middle class and governmental fiscal balances of every country.
Classical capitalism is predicated on concepts of private ownership, popular political enfranchisement and effective competition. Cannibalistic economics hallmarks are cronyism, monopolistic practices, regulatory and legislative capture by economic elites and political enablers. The tenets of inclusive capitalism as described are diametrically opposed to the practices of Cannibalistic economics and it is extremely naive to suggest peacefully engagement or transformation to a more productive and equitable economic framework.
History is replete with examples of the futility of expecting entrenched greed and hubris to be reformed by moral suasion or reason. Inclusive capitalism will need dedicated champions who will accept the reality of strenuous opposition from Cannibalistic economics' direct and indirect beneficiaries.
At the risk of being hyperbolic, the term most descriptive of these policies and corporate practices is Cannibalistic Economics. The historical consequences evident in the increasingly disruptive and destabilizing concentrations of wealth and political power have literally devoured the middle class and governmental fiscal balances of every country.
Classical capitalism is predicated on concepts of private ownership, popular political enfranchisement and effective competition. Cannibalistic economics hallmarks are cronyism, monopolistic practices, regulatory and legislative capture by economic elites and political enablers. The tenets of inclusive capitalism as described are diametrically opposed to the practices of Cannibalistic economics and it is extremely naive to suggest peacefully engagement or transformation to a more productive and equitable economic framework.
History is replete with examples of the futility of expecting entrenched greed and hubris to be reformed by moral suasion or reason. Inclusive capitalism will need dedicated champions who will accept the reality of strenuous opposition from Cannibalistic economics' direct and indirect beneficiaries.
8
My Proposal is to Do Nothing, and let this "System of Corruption" impload. Clear it all away and we will be able to see clearly then what is the disease of immorality.
2
The point is that DELIBERATE POLICY starting with Reagan created this horrible economy, and there's no way out of it until we start changing that policy. Doing nothing is a prescription for letting things get worse and worse for the 99%, and better and better for the 1%. Why would a sane society do that, or a sane person wish that on society?
2
Great article. This is the real debate we should be having, rather than say the Keystone pipeline.
3
"Inclusive Capitalism." Wasn't this formerly called the "New Deal?"
5
Capitalism, if unrestrained is little more than imperialism in a silk glove. "Oh, pardon me worker, we're only to give your job to a foreigner. It's all part of the creative-destructive practice of capitalism." Of course, you're family will starve but that's okay. Our stock prices will go up. You know, we're only looking after our investors."
5
U.S.-style predatory capitalism wears a silk glove? Only if the gloves are big enough to fit over the brass knuckles.
1
When I was a Cub Scout we learned that fire is a good servant but a bad master. Fire can cook your food and keep you warm or burn your house down and kill you. I think of capitalism in the same way as fire - its a pretty good deal as long as you remember who is in charge.
"This will be no easy task because a decisive majority of whites without college degrees has been voting against Democratic candidates for two decades, making it very difficult for the party to break what has been a Republican hammerlock since 1994."
If income stagnation continues, time is on the Democrats side. When you hold a flawed cherish belief, sometimes reality beats it out of you.
If income stagnation continues, time is on the Democrats side. When you hold a flawed cherish belief, sometimes reality beats it out of you.
7
The author forgets to mention one of the 'early advocates' of inclusive capitalizm: Henry Ford. And we all know how he destroyed the economy.
12
That was "Young Henry". "Old Henry" was not a friend of labor.
1
The readers' picks comments sounded a lot like those of our founding fathers in 1776. Even if the founding fathers agreed to some disparity, with the unintended consequences of those at the top gaming the system, like the noblemen of England did back then, I believe that they would have agreed with these proposals proffered today. Despite their economic incongruities, they wouldn't have been idle bystanders, and would have embraced inclusive capitalism, and refused to be held down by those at the top.
1
Ummm....George Washington was the richest man in the United States at the time of the revolution. The signatures to the Declaration of Independence and the Constitution were all wealthy. They set up a system in which only men of property had the right to vote. There's no evidence that these guys would have supported inclusive capitalism, and much to suggest they wouldn't. That being said, they're all long dead and we, the current stewards of the Republic they created, can insist that the system evolve to be an inclusive one.
Democrats need to redefine "free markets" away from capitalism. Consumerism , free markets, is fine. The only problem is who gets to share in the profits of consumerism, these days mostly the rich who have accrued capital. People need to understand that working people are never supposed to be paid what they're worth. If they approach that, they're laid off. So what happens to all the money working people create for others? Well, they use it to buy the technology to replace you.
Americans need to understand the concept of equity when it comes to selling their labor just as much as they understand it when they sell their houses. Workers have added value to corporations who turn around and fire them when they can be replaced or are not needed. For the corporations and those they make rich to pay extra taxes and fees is not a "soaking" of the rich, but returning to the people "forced" to make a living no matter what the prevailing wage which, for too many these days, requires government assistance to subsist. Until that same cohort guts every government program that benefits people (they cut well-fare never war-fare) as too expensive.
Americans need to understand the concept of equity when it comes to selling their labor just as much as they understand it when they sell their houses. Workers have added value to corporations who turn around and fire them when they can be replaced or are not needed. For the corporations and those they make rich to pay extra taxes and fees is not a "soaking" of the rich, but returning to the people "forced" to make a living no matter what the prevailing wage which, for too many these days, requires government assistance to subsist. Until that same cohort guts every government program that benefits people (they cut well-fare never war-fare) as too expensive.
4
That, or redefine "capitalism" so that it's not predatory, but simply a means of pulling capital together to achieve broad objectives that benefit all.
1
Right! We need to make companies to rise the quality of working conditions: to rise salary, to provide regular leave with pay, overtime premium. Unfortunately, the majority of companies tries to save on it.
1
The reason we are in this mess in the first place is "crony capitalism", the close ties between business and the government. That is distorting democracy by making politicians reliant on rich donors, allowing large companies to craft regulations that suppress smaller competitors, etc. Anything that links business and government more tightly is going to make matters worse.
The idea that workers will be better of if government gets more closely tied in the running of businesses is simply wrong. Just look at the Soviet Union or Fascist Italy! For that matter, try to find a politician who will condemn "free trade" or "globalization". They may blame the other party for exporting jobs but they will be voting for laws that hollow out the American economy at the same time. Capitalism becomes "inclusive" when employers have to compete for workers. Politicians wouldn't be talking about raising the minimum wage if everyone was being paid more than the minimum. When companies get together to agree not to hire each other's workers, force low level employees to sign noncompete contracts, and lobby for more visas for foreign workers, etc. then you know the government is not working for the rest of us.
The idea that workers will be better of if government gets more closely tied in the running of businesses is simply wrong. Just look at the Soviet Union or Fascist Italy! For that matter, try to find a politician who will condemn "free trade" or "globalization". They may blame the other party for exporting jobs but they will be voting for laws that hollow out the American economy at the same time. Capitalism becomes "inclusive" when employers have to compete for workers. Politicians wouldn't be talking about raising the minimum wage if everyone was being paid more than the minimum. When companies get together to agree not to hire each other's workers, force low level employees to sign noncompete contracts, and lobby for more visas for foreign workers, etc. then you know the government is not working for the rest of us.
1
Don B,
The USA has excess workers due to the FREE TRADE AGREEMENTS, MFNs, PNTRs that were created by the last three US presidents (Democrats and Republicans)
Excess workers mean reduced value of the workers labor, not a condition where "employers have to compete for workers."
If you thought that Presidents Clinton, Bush and Obama’s existing Free Trade Agreements were destructive for US employment, relocating US jobs to foreign nations, and lowering the middle class pay scale for US workers, then you had better hold onto your hat again for when President Obama's Pacific Rim Treaty to comes into effect on a multi-nation wholesale basis!
Jobs are very important to voters, but the Democrats and the Republicans are all apparently in favor of President Obama's secret Pacific Rim Trade treaty to relocate the few remaining higher paying US manufacturing jobs to Pacific Rim nations!
The USA has excess workers due to the FREE TRADE AGREEMENTS, MFNs, PNTRs that were created by the last three US presidents (Democrats and Republicans)
Excess workers mean reduced value of the workers labor, not a condition where "employers have to compete for workers."
If you thought that Presidents Clinton, Bush and Obama’s existing Free Trade Agreements were destructive for US employment, relocating US jobs to foreign nations, and lowering the middle class pay scale for US workers, then you had better hold onto your hat again for when President Obama's Pacific Rim Treaty to comes into effect on a multi-nation wholesale basis!
Jobs are very important to voters, but the Democrats and the Republicans are all apparently in favor of President Obama's secret Pacific Rim Trade treaty to relocate the few remaining higher paying US manufacturing jobs to Pacific Rim nations!
1
The report itself is a nice collection of policies which progressives like Kuttner, Reich, labor activists and others have been advocating for years, while many progressive economists have done the background analyses which show the business case for policies such as paid sick leave and ECE. And it's gratifying to see the Obama administration embrace them.
But there's always a huge gap between the 'should do' and the ability to do so--e.g. there's been state legislation to eliminate the stepped-up basis rule for years, to no avail, and on many of these other policies as well, wIth a few hard-fought successes in blue states. Reich at least used his time in a powerful office to advocate for these policies, Summers not so much.
Still, it's heartening that centrist Democrats have taken up the progressive cause. So, with greater access to the halls of real power, what's the strategy? It's been a weakened labor movement that has been leading the effort until now. Can we look forward to an alliance of the Democratic Party and newly enlightened business leaders to carry the broader interests of inclusive capitalism? In my (long) experience, business is short-term and narrow in its political views and has to be dragged kicking and screaming to its own self interest, which is broadening the middle class. So perhaps there's an opening here, but there's much more work to be done on strategy than there is on reiterating policy.
But there's always a huge gap between the 'should do' and the ability to do so--e.g. there's been state legislation to eliminate the stepped-up basis rule for years, to no avail, and on many of these other policies as well, wIth a few hard-fought successes in blue states. Reich at least used his time in a powerful office to advocate for these policies, Summers not so much.
Still, it's heartening that centrist Democrats have taken up the progressive cause. So, with greater access to the halls of real power, what's the strategy? It's been a weakened labor movement that has been leading the effort until now. Can we look forward to an alliance of the Democratic Party and newly enlightened business leaders to carry the broader interests of inclusive capitalism? In my (long) experience, business is short-term and narrow in its political views and has to be dragged kicking and screaming to its own self interest, which is broadening the middle class. So perhaps there's an opening here, but there's much more work to be done on strategy than there is on reiterating policy.
4
I am tired of reading academics, politicians, pundits and 'experts' with no real economic experience defining what Capitalism is. Capitalism means free market, free people, free movement and free minds. Capitalism has always been bottom up, meaning it is the opposite of top down central planning. With all the government mandates, regulations, taxes and coercion; 'inclusive capitalism' sounds nothing like the real thing.
Its not the job of corporations to save the world, do everything the pundits want them to do.. and the list is very very long. Sony's job is to make electronics, Nike: shoes, Toyota: cars, Apple: cool gadgets, North Face: outdoor gear, Microsoft: software, Nautica: clothing, UPS, shipping, etc. etc. Even if these companies did not employ 1 person, or generate $1 dollar in taxes, they would still be critically important since society needs these things. I could make my own shoes, but it may take me 800 hours and they will never be as good as what I can buy from Nike for 1 hours labor.
Herein lies the essence of the free market: normal people engaged in voluntary trade that benefits both the buyer and the seller. If government, no matter how well intended, intervenes on behalf of the buyer or seller, employer or employee.. then it is no longer a free market capitalism. They are there to ensure no force or fraud. The markets are the people and represent what the people want much better than any of these finger waggers.
Its not the job of corporations to save the world, do everything the pundits want them to do.. and the list is very very long. Sony's job is to make electronics, Nike: shoes, Toyota: cars, Apple: cool gadgets, North Face: outdoor gear, Microsoft: software, Nautica: clothing, UPS, shipping, etc. etc. Even if these companies did not employ 1 person, or generate $1 dollar in taxes, they would still be critically important since society needs these things. I could make my own shoes, but it may take me 800 hours and they will never be as good as what I can buy from Nike for 1 hours labor.
Herein lies the essence of the free market: normal people engaged in voluntary trade that benefits both the buyer and the seller. If government, no matter how well intended, intervenes on behalf of the buyer or seller, employer or employee.. then it is no longer a free market capitalism. They are there to ensure no force or fraud. The markets are the people and represent what the people want much better than any of these finger waggers.
2
Laissez-faire capitalism is not about free markets or freedom for the people.
Capitalism, left to itself, creates monopolies -- antithetical to Adam-Smith economics.
Capitalism, left to itself, redistributes wealth upwards to the wealthiest from the rest.
Capitalism, left to itself, enslaves the people as it marginalizes the wealth of American Workers --truly the road to serfdom.
Capitalism, left to itself, wages existential class warfare against working Americans.
Set aside your kool-aid and your propaganda from right-wing think tanks. Read economics and American history.
"The total absence of governmental control had led to a portentous growth of corporations. In no other country was such power held by the men who had gained these fortunes. The Government [was] practically impotent. Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth."
--Teddy Roosevelt, An Autobiography, Chapter XII 1913.
Capitalism, left to itself, creates monopolies -- antithetical to Adam-Smith economics.
Capitalism, left to itself, redistributes wealth upwards to the wealthiest from the rest.
Capitalism, left to itself, enslaves the people as it marginalizes the wealth of American Workers --truly the road to serfdom.
Capitalism, left to itself, wages existential class warfare against working Americans.
Set aside your kool-aid and your propaganda from right-wing think tanks. Read economics and American history.
"The total absence of governmental control had led to a portentous growth of corporations. In no other country was such power held by the men who had gained these fortunes. The Government [was] practically impotent. Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth."
--Teddy Roosevelt, An Autobiography, Chapter XII 1913.
6
Of course, no American believes that the tax code will be changed in a way that would help average people. Republicans have worked for decades ensuring that corporate interests trump the interests of individuals. Big money from conservatives, conservative talk radio, Fox News, conservative hacks on the Supreme Court as well as corporate lobbyists have, and will continue to ensure that average Americans get very little. Any change to the form of capitalism working in the U.S. would take Congressional action. American corporations have never been concern about the good of employees or society. That's how unions came about. The idea that higher wages, more credit, increase wealth will yield more spending by more Americans thereby benefiting corporate performance will never happen. People like Schumer and Summers have worked to aide corporate interests for years. No value can be placed in their comments. More importantly, the conservative view, it's agenda, is all that a majority of Americans ever hear in the media. Until that changes, conservatives will keep winning elections. Obama is a fox in the henhouse. He should have given this speech before the 2014 elections. Americans have to ask why he didn't.
2
One of the grievous defects of capitalism is that it creates concentrated wealth in the hands of a few, enabling them to commandeer governmental power which they will surely use to further their own interests to the exclusion of the interests of the majority. In other words, capitalism is anti-democratic.
All the talk about compassionate conservatism, inclusive capitalism - whatever you want to call it - will never be permitted to move beyond the rhetorical level by the powerful (and keep in mind that rhetoric was all that was on display last night - immediately repudiated by the other faction of the ruling class).
The fact that “unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself”, is inarguable, but when dealing with the capitalist class, we're not dealing with rational people. We're dealing with pathological hoarders of superfluous wealth who are devoid of any sense of community, aside from their highly selective and highly publicized "philanthropy".
The 1% can't control their wealth obsession anymore than a monkey can relinquish its handful of food in order to free itself from the trap. Our country is like a car full of sober people with a drunk behind the wheel - Edsall's suggestion is that we simply try help the drunk driver to stay awake.
The people need to pull the hands of the wealthy from the levers of power. Clearly, our politicians aren't willing to do this.
All the talk about compassionate conservatism, inclusive capitalism - whatever you want to call it - will never be permitted to move beyond the rhetorical level by the powerful (and keep in mind that rhetoric was all that was on display last night - immediately repudiated by the other faction of the ruling class).
The fact that “unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself”, is inarguable, but when dealing with the capitalist class, we're not dealing with rational people. We're dealing with pathological hoarders of superfluous wealth who are devoid of any sense of community, aside from their highly selective and highly publicized "philanthropy".
The 1% can't control their wealth obsession anymore than a monkey can relinquish its handful of food in order to free itself from the trap. Our country is like a car full of sober people with a drunk behind the wheel - Edsall's suggestion is that we simply try help the drunk driver to stay awake.
The people need to pull the hands of the wealthy from the levers of power. Clearly, our politicians aren't willing to do this.
6
Urizen,
Here in the USA we have recently elected the very best congressmen, congresswomen, governors, presidents and government administrations that money can buy!
These elected and appointed officials do, however, offer their services, funds from the public treasuries, Solyndra & CFI Federal inflated price government no-bid contracts and their legislative votes for sale to US citizens and foreigners at very reasonable prices!
Those benefiting from the US government multi-million dollar Chicago type "pay to play" no-bid contract awards, and etc., did buy and pay for these government contracts fair and square with campaign contributions and other “Perks” paid to our elected and appointed officials for those contracts.
The appointed officials also pass out the contracts to those campaign contributors that the elected officials direct the appointed officials to select for these no-bid contracts!
If this Chicago type of awarding government contracts at the Federal level is OK, then why cannot the State elected politicians also do the same?
Here in the USA we have recently elected the very best congressmen, congresswomen, governors, presidents and government administrations that money can buy!
These elected and appointed officials do, however, offer their services, funds from the public treasuries, Solyndra & CFI Federal inflated price government no-bid contracts and their legislative votes for sale to US citizens and foreigners at very reasonable prices!
Those benefiting from the US government multi-million dollar Chicago type "pay to play" no-bid contract awards, and etc., did buy and pay for these government contracts fair and square with campaign contributions and other “Perks” paid to our elected and appointed officials for those contracts.
The appointed officials also pass out the contracts to those campaign contributors that the elected officials direct the appointed officials to select for these no-bid contracts!
If this Chicago type of awarding government contracts at the Federal level is OK, then why cannot the State elected politicians also do the same?
1
The middle class would be much better described as consumers. It would better get the message across that increasing inequality, and the associated destruction of the middle class, i.e. many millions of consumers, is going to be an economic disaster.
2
Since to the owners of capital labor is just another commodity, any moves that significantly affect the cost that increase the cost of that commodity will be countered, and with the current congress, countering is on autopilot.
Maybe we should do an end run around consumerism and concentrate on community comfort. Tax wealth more aggressively, but instead of using the taxes to bolster consumerism and GNP, use it to improve infrastructure and services that don't discriminate between rich and poor. Transitioning Obama care to universal health care is a strong candidate for step one, a close second in transitioning to a a sustainable green energy infrastructure to avoid the catastrophes of global warming (catastrophes that the 1% can easily avoid by moving to the temperate archipelagos, as they emerge) and the meteoric rise in fossil fuel costs as actual supplies diminish . Of course lots of other thing affect community comfort, and are worthy of investment.
Capitalism can still flourish when the emphasis is off personal consumerism and on the public variety. Removing the financial burden and complexity of employer provided health care should put smiles on their faces. A stable energy infrastructure providing low cost electricity should help any company hooked up to the grid. And since the there is no indication that the public sector plans to build it s own hospitals, drug companies, factories and power plants, most of the spending goes back to the capitalists.
Maybe we should do an end run around consumerism and concentrate on community comfort. Tax wealth more aggressively, but instead of using the taxes to bolster consumerism and GNP, use it to improve infrastructure and services that don't discriminate between rich and poor. Transitioning Obama care to universal health care is a strong candidate for step one, a close second in transitioning to a a sustainable green energy infrastructure to avoid the catastrophes of global warming (catastrophes that the 1% can easily avoid by moving to the temperate archipelagos, as they emerge) and the meteoric rise in fossil fuel costs as actual supplies diminish . Of course lots of other thing affect community comfort, and are worthy of investment.
Capitalism can still flourish when the emphasis is off personal consumerism and on the public variety. Removing the financial burden and complexity of employer provided health care should put smiles on their faces. A stable energy infrastructure providing low cost electricity should help any company hooked up to the grid. And since the there is no indication that the public sector plans to build it s own hospitals, drug companies, factories and power plants, most of the spending goes back to the capitalists.
sherm,
Do you believe that the USA should follow the Greek Government economic policies of continuous Federal Government borrowing and spending money until nobody will loan the USA any more money?
Do you believe that the USA should follow the Greek Government economic policies of continuous Federal Government borrowing and spending money until nobody will loan the USA any more money?
1
Gerald Depends on the interest rate. During the first four years of the Obama administration the interest on the 10 year treasury note was less than the rate of inflation; meaning people were paying the U.S. Government to take their money.
Putting "inclusive capitalism" lipstick on a "socialist" pig produces precisely the same problems. Every time the left aims at the "rich", it inevitably clobbers the middle class.
Take a lesson from NJ. The Democrats raised taxes more than 100 times, aimed squarely at success, allegedly to provide property tax relief for the middle class. We got the higher taxes on "the rich". Curiously, the economy stinks and the Democratic promise to reduce property taxes was quickly forgotten.
It bears repeating: you cannot raise the bottom by dragging down the top. No one is poor because someone else's taxes are too low.
This proposal amounts to nothing more than changing the vocabulary to mask the same old envy and resentment based leftist policy. It NEVER produces prosperity.
Contrary to the assertion by Mr. Grove, it is impossible to improve upon freedom. For those who believe that centralized control and massive government are better than freedom, I say: come to New Jersey.
Take a lesson from NJ. The Democrats raised taxes more than 100 times, aimed squarely at success, allegedly to provide property tax relief for the middle class. We got the higher taxes on "the rich". Curiously, the economy stinks and the Democratic promise to reduce property taxes was quickly forgotten.
It bears repeating: you cannot raise the bottom by dragging down the top. No one is poor because someone else's taxes are too low.
This proposal amounts to nothing more than changing the vocabulary to mask the same old envy and resentment based leftist policy. It NEVER produces prosperity.
Contrary to the assertion by Mr. Grove, it is impossible to improve upon freedom. For those who believe that centralized control and massive government are better than freedom, I say: come to New Jersey.
2
US citizens have many years ago discovered that they can vote themselves borrowed money out of the public treasury instead of working to support themselves and their families, so they have done just that!
1
Gerald It is sometime amazing that sometimes people are so worried about debt that they won't spend ten cents to make a dollar.
The Democrats need to forcefully and relentlessly pursue this agenda. Income inequality and the effects it has on society at all levels is one of the biggest problems the world faces. The US must make an example of this. At the very least the republican resistance will brighten the spotlight on their plutocratic goals.
1
The points made in this article are evident to anyone who has played Monopoly as a child. The game ends, or the economy collapses, as soon as one player amasses all the wealth. Those bankrupted early early on sit idly by (under or unemployed) as their friends continue past GO until only one remains. Inclusive Capitalism can provide a means of perpetuating the competition, rather then one increasingly large group on the sidelines playing SORRY as a smaller, more elite, core continued around the board in a race to extinguish eachother.
4
Ah, that great, classic game of Monopoly, a wonderful exercise for inducting children into compassionate adulthood in a sustainable, orderly society.
www.endthemadnessnow.org
www.endthemadnessnow.org
1
I'm all for "inclusive" capitalism and then some. Capitalism unchecked has proved over and over to lead to a concentration of wealth at the very very top; starvation for the poor who are unable to work; poor and unsafe working conditions for the blue collar working class; and destruction of the middle class. If unchecked, this natural prograssion of raw capitalism leads to revolution, anarchy and chaos because the population in general reaches a breaking point.
We need capitalism to the extent that it rewards merit by paying those with the most talent in our societies more money than those without such talents. However, there should be limits of reasonableness enforced by graduated income tax; government ownership of key utilities; elimination of special loopholes for the rich which allow them to avoid their fair share; and most important, a solid and secure safety net of expanded social security and national healthcare. This solid safery net will allow even the most vulnerable in our society can live in dignity with enough food on the table, a rood over their head, and quality medical care. Finally, to make our nation more competitive, through increased taxation (primarily of the rich and corporations that sell products here) we should have free college education for those who demostrate academic merit, as well as career education for those who do not wish to pursue a foir year or higher degree.
We need capitalism to the extent that it rewards merit by paying those with the most talent in our societies more money than those without such talents. However, there should be limits of reasonableness enforced by graduated income tax; government ownership of key utilities; elimination of special loopholes for the rich which allow them to avoid their fair share; and most important, a solid and secure safety net of expanded social security and national healthcare. This solid safery net will allow even the most vulnerable in our society can live in dignity with enough food on the table, a rood over their head, and quality medical care. Finally, to make our nation more competitive, through increased taxation (primarily of the rich and corporations that sell products here) we should have free college education for those who demostrate academic merit, as well as career education for those who do not wish to pursue a foir year or higher degree.
1
There is a working and tested model for "inclusive capitalism" which has been quite sucessful in most market economies outside of the US - it is the "social market economy" model practiced in much of Europe. Unfortunately, virtually all US politicians and most US economists write off this model of "social market economy" as "bankrupt socialist/communist regimes".
For example, most US proposals for stemming the extreme polarization of income and wealth attempt to use the tax system and thus open themselves to the conservative bug-a-boo critique of "communist style redistribution". What is needed is a complete refocus of the role of business and corporations not just to enrich the "owners of the means of production", but that these businesses and corporations also have a real responsibility for their employees and for society in general - I'm thinking here of the German principal of "Mitbestimmung", the right of employees to have a say in setting the policies of the corporations they work for.
To make "Capitalism" work in the future - I hate that term, because it alone sets the wrong framework, that "Capital" should be the driver of everything - we need to realize that we are no longer in the age of "rugged individualism" where all people are "masters of their own destiny" and the only limit is their willingness to work and take risks. Today's globalized market economies ensure that the individual is, for the most part, just a small cog in a huge, complecated structue.
For example, most US proposals for stemming the extreme polarization of income and wealth attempt to use the tax system and thus open themselves to the conservative bug-a-boo critique of "communist style redistribution". What is needed is a complete refocus of the role of business and corporations not just to enrich the "owners of the means of production", but that these businesses and corporations also have a real responsibility for their employees and for society in general - I'm thinking here of the German principal of "Mitbestimmung", the right of employees to have a say in setting the policies of the corporations they work for.
To make "Capitalism" work in the future - I hate that term, because it alone sets the wrong framework, that "Capital" should be the driver of everything - we need to realize that we are no longer in the age of "rugged individualism" where all people are "masters of their own destiny" and the only limit is their willingness to work and take risks. Today's globalized market economies ensure that the individual is, for the most part, just a small cog in a huge, complecated structue.
4
This was clever thinking 10 years ago. With the continuing globalization and the exponential increases in automation, inclusive capitalism is way too little too late. We are automating people out of jobs as fast as we can pull those jobs back from China. No labor costs, no shipping costs; why not have US robots stamp everything "Made in the USA"? When no one needs to work any more as goods get produced and services get rendered with less and less human contribution, we are going to need a guaranteed income with heavy taxation of the owners of capital - and fewer people being born - to make it work. Thank you, Pope Francis, for asking Catholics not to breed like rabbits, but without pragmatic leadership change on birth control, Catholics are not going to have less sex and make fewer babies. Wake up world; you leaders and masters of the universe are all asleep! We are on the fast exponential slope to our deprecated human future.
2
I am still waiting for an explanation of why, with the ability to organize and assemble now at one's fingertips, nobody is out in the streets protesting their abysmal treatment under the current system? Is everyone just too embarrassed to admit their predicament to their neighbors? Instead, they continue to vote in the very people who have vowed to hamstring their futures.
1
Unregulated capitalistic free market economy is self destructive in long term.
By its nature it is competitive and hence the ‘big fish eats small fish’ until oligopolies settle into their places, stifling competition, stopping risk taking, product innovation, and keeping prices as high as the ‘captive’ market can bear. Meanwhile, productivity innovations continue because that is the most straightforward way of maximizing profits after consumer market has saturated.
High profit margins on zero marginal cost production separates majority of population from their money. This is compounded by increasing unemployment brought about through automation of routine processes.
All routine labor can be automated. US drivers and package delivery workers, chinese factory assembly workers are the next to go.
The only remaining mass employment that will be available is in the service industry, but that activity doesn't deliver food on the table, electricity, gas, heating, communications. We can all get a PhD but that will still not resolve the current economic model even if it is the best currently available.
A person cannot benefit from efficiency if he or she doesn’t own it. If you have created a machine to do your work, then you don’t have to work. If someone else created a machine to do your work, then you got a problem.
http://ideabits.blogspot.com/2014/05/job-market-pyramid.html
By its nature it is competitive and hence the ‘big fish eats small fish’ until oligopolies settle into their places, stifling competition, stopping risk taking, product innovation, and keeping prices as high as the ‘captive’ market can bear. Meanwhile, productivity innovations continue because that is the most straightforward way of maximizing profits after consumer market has saturated.
High profit margins on zero marginal cost production separates majority of population from their money. This is compounded by increasing unemployment brought about through automation of routine processes.
All routine labor can be automated. US drivers and package delivery workers, chinese factory assembly workers are the next to go.
The only remaining mass employment that will be available is in the service industry, but that activity doesn't deliver food on the table, electricity, gas, heating, communications. We can all get a PhD but that will still not resolve the current economic model even if it is the best currently available.
A person cannot benefit from efficiency if he or she doesn’t own it. If you have created a machine to do your work, then you don’t have to work. If someone else created a machine to do your work, then you got a problem.
http://ideabits.blogspot.com/2014/05/job-market-pyramid.html
2
I think we should imitate European economics. It's going so well. Right?
3
Time for some distractions... expect race and terrorism issues to be cranked up a notch or two so people are too scared/angry to expect a fair share.
4
Talk about putting lipstick on a pig. Sounds to me like the same old policies of redistributing wealth away from those who earn it. Yes, Mr. President, I did build that and I intend to keep it.
2
Excellent article, generating excellent comments. The problem? That this article is in the New York Times. Not that it's a bad place to put it. But your last sentence, Mr. Edsall, gets to the heart of it. Yes, for decades a majority of whites without college degrees has been voting against Democratic candidates, and that's what has solidified the Republican "hammerlock." The problem is that, in the category you target, who's reading the New York Times?
So on and on goes the Great Divide, with the left speaking to the left and the right speaking to the right, each congratulating itself for the way it parses its basic agreement. Meanwhile, it's the right that seems far better skilled at infiltrating that core of voters, an infiltration that serves as "education" in those shamefully underserved precincts. So: How do you - or better, we - supply an alternative world view to these voters? It's a real, and urgent, question.
It's strategic, that the Divide in education is what's keeping Republicans in power. In a time when creativity is only valued when it's applied to profit, we need to be creative - fast - in order to save the very bedrock of what once made us great: democracy, of course. Like climate change, it's very late in the game, but there still is time, and the key, I think, is education - not only the practical (though essential) kind related to jobs, but the cultivation of critical thinking.
So on and on goes the Great Divide, with the left speaking to the left and the right speaking to the right, each congratulating itself for the way it parses its basic agreement. Meanwhile, it's the right that seems far better skilled at infiltrating that core of voters, an infiltration that serves as "education" in those shamefully underserved precincts. So: How do you - or better, we - supply an alternative world view to these voters? It's a real, and urgent, question.
It's strategic, that the Divide in education is what's keeping Republicans in power. In a time when creativity is only valued when it's applied to profit, we need to be creative - fast - in order to save the very bedrock of what once made us great: democracy, of course. Like climate change, it's very late in the game, but there still is time, and the key, I think, is education - not only the practical (though essential) kind related to jobs, but the cultivation of critical thinking.
5
Taxing stock trading will slow the movement of capital from poor investments to better ones-to avoid taxes involved in trades. That's not going to help the economy. It's like high domestic corporate taxes-companies keep their capital locked up overseas instead of bringing back in to the country.
If you want less of something, tax it. Want more, subsidize it.
If you want less of something, tax it. Want more, subsidize it.
7
The real solution to bad investments is to allow more than a $3000 capital loss tax deduction. Otherwise raise the cap gain rate and tax carried interest as ordinary income
Ahmed's quote "...a parasitical economic system on the brink of facing a global uprising” reminds me of one of my college experiences. My roommate, though not a communist himself, liked to drink beer with a group of communist at the local watering hole. I asked him if it disturbed him to socialize (no pun intended) with a group who was committed to the overthrow of the U.S. government. He grinned and said that their action to overthrow the government consisted of talking politics, getting drunk and waiting for the revolution.
They're still waiting.
Politics is the art of the possible. I'm not sure if the Summers-Balls proposals are possible, but I do know that anything more extreme, definitely, is not.
They're still waiting.
Politics is the art of the possible. I'm not sure if the Summers-Balls proposals are possible, but I do know that anything more extreme, definitely, is not.
2
A pot set to boil simmers quietly for a long time and then, seemingly in the blink of an eye, the whole pot comes to a full boil and, if the pot is small enough, boils over the sides in a big and dangerous mess. Not sure when you were in college, but probably when the inequality between rich and the rest was much, much smaller (simmering). Watch what happens if things keep going the way the system has been rigged in this second Gilded Age.
Liked Ed Conlon, I was pleased to see a reference to C.K. Prahalad and Stu Hart's work, and even more so that Mr. Edsall chose the version of their article for which I served as editor. For me editing that article for strategy+business was one of the high points of my career as a management journalist who specializes in writing about multinational companies. I emphasize that I am a management journalist rather than a business journalist because I focus on what I think constitutes good management and the substance of the decisions of the executives who determine a corporation's impact on society through their practice of capitalism.
Jim Collins wrote in a 1999 USA Today opEd, "The well-managed corporation is the most significant commercial invention of the 20th century". Collins called debates about stakeholder responsibility or whether or not capitalism can be inclusive "tired." I agree. I try to reframe this dialogue around advancing the practice of management of multinationals, one of capitalism's most powerful business institutions. Lets hope that the captains of MNCs, in partnership with government, will make more decisions guided by values that make capitalism of greater value to more people.
Jim Collins wrote in a 1999 USA Today opEd, "The well-managed corporation is the most significant commercial invention of the 20th century". Collins called debates about stakeholder responsibility or whether or not capitalism can be inclusive "tired." I agree. I try to reframe this dialogue around advancing the practice of management of multinationals, one of capitalism's most powerful business institutions. Lets hope that the captains of MNCs, in partnership with government, will make more decisions guided by values that make capitalism of greater value to more people.
During the middle years of the last century, one of the most important forces counteracting income inequality was organized labor, which used collective action by working men and women to boost wages and benefits and improve working conditions. In those years, the wealth of the middle class and the nation as a whole benefitted from the work of organized labor.
For many years my wife was a labor lobbyist working on the Hill. For a few brief years, I myself was an organizer of employees of a federal agency. (We are both retired now.) In my view, one of the mysteries of the low wage economy has been the fecklessness of organized labor in working to counteract stagnant wages. I've asked my wife why she thinks organized labor seems to have been absent on the job, and I don't think I've yet heard a good answer.
It wouldn't be easy. Unions would have to counteract much previous bad publicity and renounce counterproductive past practices. They would have to use creative strategies to organize a diverse and dispersed workforce, including many "independent contractors". But I would love to see labor once again lead the way to a better deal and a better life for working people.
For many years my wife was a labor lobbyist working on the Hill. For a few brief years, I myself was an organizer of employees of a federal agency. (We are both retired now.) In my view, one of the mysteries of the low wage economy has been the fecklessness of organized labor in working to counteract stagnant wages. I've asked my wife why she thinks organized labor seems to have been absent on the job, and I don't think I've yet heard a good answer.
It wouldn't be easy. Unions would have to counteract much previous bad publicity and renounce counterproductive past practices. They would have to use creative strategies to organize a diverse and dispersed workforce, including many "independent contractors". But I would love to see labor once again lead the way to a better deal and a better life for working people.
7
The economic theory of capitalism emerged in the "bad old days" when capital was a scarce resource. That's no longer true for the American economy. Capital is actually quite abundant -- and largely sitting on the sidelines in corporate bank accounts and the trusts and offshore tax shelters of the 1%.
The reason it sits idle is that there isn't enough perceived demand to use the capital for making investments. And the reason there isn't is that wealth (and earning capacity) has been shifted ("redistributed" and/or "reallocated") from the middle class to the 1%.
It's time for a new economic theory -- and "inclusive capitalism" doesn't sound like the right one. If all are to prosper, we need an economic model the supports all the factors of a robust economic system -- perhaps "Participative Flow" -- one that provides opportunity and reward for labor, consumers, and (yes) capital.
The reason it sits idle is that there isn't enough perceived demand to use the capital for making investments. And the reason there isn't is that wealth (and earning capacity) has been shifted ("redistributed" and/or "reallocated") from the middle class to the 1%.
It's time for a new economic theory -- and "inclusive capitalism" doesn't sound like the right one. If all are to prosper, we need an economic model the supports all the factors of a robust economic system -- perhaps "Participative Flow" -- one that provides opportunity and reward for labor, consumers, and (yes) capital.
2
Banks are the naturally-evolved capitalistic institution to give everyone access to the power of money to make money. Monetary policy came into existence to stabilize banking. The more monetary policy tries to do beyond that, the less likely it will remain successfully focused on yield curve stability.
Corporations with a few exceptions have no social conscience. They are designed to make money for investor/owners. To balance their efforts to do so at any and all costs to the society that permits them to function we need a counter balance, reasonable government regulations, taxation and labor unions. Sometimes the system falls out of balance as it is at present and has been for some time but our political leadership does not have the stomach to correct the imbalance. We will continue our march toward banana republic status.
6
The answer to the question, "Can Capitalists Save Capitalism?", is no. In short, the rich now in control of the system will not permit the middle class to step forward and, through increased wages and consumer spending, save capitalism. Greed will overrule equality.
On the right, the call has gone out for Plutocrats to unite. Obama believes that self-reliance is a core value applicable to everyone. Plutocrats believe that self-reliance is a core value applicable to everyone, but then turn around and carve out an enormous, destructive exception for those few who will inherit their wealth. This privileged exception for their descendants rests, in part, on the myth of supply-side economics; for Plutocrats, its falsehood is to be forever concealed in economic jargon.
On the other hand, if Obama's tax proposal is ever adopted, give credit to Thomas Piketty's book, "Capital in the Twenty-First Century" and Paul Krugman's constant reminder that supply-side economics is an unsupportable economic theory, used by Republicans to conceal greed.
On the right, the call has gone out for Plutocrats to unite. Obama believes that self-reliance is a core value applicable to everyone. Plutocrats believe that self-reliance is a core value applicable to everyone, but then turn around and carve out an enormous, destructive exception for those few who will inherit their wealth. This privileged exception for their descendants rests, in part, on the myth of supply-side economics; for Plutocrats, its falsehood is to be forever concealed in economic jargon.
On the other hand, if Obama's tax proposal is ever adopted, give credit to Thomas Piketty's book, "Capital in the Twenty-First Century" and Paul Krugman's constant reminder that supply-side economics is an unsupportable economic theory, used by Republicans to conceal greed.
5
The top 80 billionaires control more than the combined total of 3.5 billion of the lowest income people in the world. All were hear from the Republicans though is greed is good. These folks certainly benefit handsomely from the richest with money rolling into their campaign coffers. Playing on the notion that somehow rich folks are being mistreated and their freedoms are being limited, which in turn their means their misinformed supporters are being mistreated too. The Republicans are laying the ground work for serious social dislocation and instability.
2
In an economic vacuum these ideas maybe would improve the lot of the American worker. But that vacuum of US corporate world dominance no longer exists; and hasn't for the past thirty years. The US can not dictate the world's labor relations. It cannot impose its laws, regulations, tax system, social priorities and business objectives on the rest of the world.
All these proposals fail to recognize reality; that US corporations face ever strengthening foreign competition from not just companies but from entire countries who value their companies as allies. All these proposals on the other hand are built on punishment - punishment of US companies that will render them uncompetitive in the world economy.
And that's why they should be ignored.
All these proposals fail to recognize reality; that US corporations face ever strengthening foreign competition from not just companies but from entire countries who value their companies as allies. All these proposals on the other hand are built on punishment - punishment of US companies that will render them uncompetitive in the world economy.
And that's why they should be ignored.
What is the aim (purpose) of an economic system?
Astonishingly, most economists can't answer this question. The U. of Utah economics class on youtube began with definitions of economics; all focused on resource allocation, movement and of money etc. The primary focus was on suppliers, which eventually translated into "capitalists".
Not one definition stated the primary aim of an economic system: to serve customers. And customers include future generations, and other important stakeholders (people want better QOL).
Free market capitalism serves suppliers, socialism serves workers, and until Deming's work with Japan, no system was designed specifically to serve customers.
Many economists and observers give "capitalism" credit for achievements that result from one of the two most important features of any effective economic system, "free enterprise". (The second important feature uses customer needs driven analysis to continuously improve products and system of production.)
An economic sector market can be professionally managed and improved to meet a full suite of customer needs, by a private sector entity responsible to optimize the market, but subject to government oversight and regulatory control. This unleashes an enormous tide of innovative products, services, and methods by entrepreneurs; improving the market to serve customers.
"Inclusive Capitalism" is still supplier focused. We should be using a customer focused economic system that promotes free enterprise.
Astonishingly, most economists can't answer this question. The U. of Utah economics class on youtube began with definitions of economics; all focused on resource allocation, movement and of money etc. The primary focus was on suppliers, which eventually translated into "capitalists".
Not one definition stated the primary aim of an economic system: to serve customers. And customers include future generations, and other important stakeholders (people want better QOL).
Free market capitalism serves suppliers, socialism serves workers, and until Deming's work with Japan, no system was designed specifically to serve customers.
Many economists and observers give "capitalism" credit for achievements that result from one of the two most important features of any effective economic system, "free enterprise". (The second important feature uses customer needs driven analysis to continuously improve products and system of production.)
An economic sector market can be professionally managed and improved to meet a full suite of customer needs, by a private sector entity responsible to optimize the market, but subject to government oversight and regulatory control. This unleashes an enormous tide of innovative products, services, and methods by entrepreneurs; improving the market to serve customers.
"Inclusive Capitalism" is still supplier focused. We should be using a customer focused economic system that promotes free enterprise.
1
It had been a puzzle to me for several years, why the right failed to recognize that the US economy would recover very slowly, if half the population did not have enough money to spend on things other than the necessities. The 1% do not spend enough to keep the economy expanding. Austerity cut the incomes of the lower half of earners. Cuts in needed government jobs did not spread prosperity. Lack of projects did not do much to reduce unemployment.
If one does not have enough money to get by, one does not buy a new computer or car and a house. As a result, the economy stays in the doldrums until there is a widespread benefit of earnings to finance new major purchases.
Somehow, the secrets of mathematics, the difference between addition and subtraction evaded too many in Congress.
If one does not have enough money to get by, one does not buy a new computer or car and a house. As a result, the economy stays in the doldrums until there is a widespread benefit of earnings to finance new major purchases.
Somehow, the secrets of mathematics, the difference between addition and subtraction evaded too many in Congress.
2
Neo-liberal Capitalism as has been practiced for some decades has widened the wedge that since the beginning of agriculture, existed between those surplus wealth and those without. The rise of technological prowess has widened this to unprecedented proportions. This divide is unlikely to be narrowed, despite Summer's crocodile tears. Further, we lack the resources worldwide to bring the lower classes to middle class status. The Worldwatch Institute has long written of the unsustainability of attempts to do so as these will further degrade the life support systems that the Earth requires to maintain function, let alone requisite biological diversity. This piece strikes me, as apparently it did Mr. Ahmed as a "let them eat cake" redux. We excel at isolating problems rather than looking at their solutions in the aggregate. It's reasonable to try, yes, but this is re-inventing the wheel. Ever since the New Deal, many have worked to dismantle its provisions, which, worked well for 50 years. Summers understood this when he convinced Bill Clinton to repeal Glass-Steagall, which worked amazingly well to protect the American economy and its middle class from the predations of the wealthy. And yet, he and others worked to dismantle the protections of the New Deal to further enrich the 0.1 %. A new model must emerge that finds satisfaction in endeavors requiring less of the Earth, that recognizes how fragile life is while seeking sustainable approaches to fulfillment in the human realm.
1
We can see that the lack of dialogue between citizens and politicians leads to bad decisions that adversely affect to the development of the country and the economy in particular. Guided by this Obama virtually destroyed the middle class.
1
The destruction of the middle class has been underway for the past 35 years. Check the income and wage data over that period. Obama is not to blame for this trend.
We tend to think of capital as money, instead of any and all means of production. "Pay the piper, call the tune"-- as though the piper's talent and pipe are not means of the musical production. And so on with all productions and their means.
The health, education and welfare systems; as well systems of protection--police, fire, maintenance departments are all capital too--the commonwealth; as well as all individual human and natural resources.
The idea that money-capital does and should call all tunes is the delusion of those with inherited money-capital. Just as the landed gentry's delusion was that landed-capital should call all tunes, heaping scorn on the merely moneyed as "nouveau riche" parvenus. Hunter-warriors before them had them same delusion--until their power was surpassed by the organization and power of civil society.
Ignorant, weak, disorganized and talentless--but rich--is hardly a contradiction.
The health, education and welfare systems; as well systems of protection--police, fire, maintenance departments are all capital too--the commonwealth; as well as all individual human and natural resources.
The idea that money-capital does and should call all tunes is the delusion of those with inherited money-capital. Just as the landed gentry's delusion was that landed-capital should call all tunes, heaping scorn on the merely moneyed as "nouveau riche" parvenus. Hunter-warriors before them had them same delusion--until their power was surpassed by the organization and power of civil society.
Ignorant, weak, disorganized and talentless--but rich--is hardly a contradiction.
4
"Inclusive capitalism" (i.c.) is the high road socially and economically.
The 1% will spend billions to make certain i.c. will not come to pass.
Beware of Sen. Schumer. He talks left, but when it comes to protecting his Wall Street constituency, he votes right.
We're not in Kansas any more. Were I one of Hillary's political advisors, I'd strongly suggest hanging the entire domestic-policy component of the campaign on running against Brownback and the trickle-down disaster he created in Kansas. I'd run against him in every debate, every town-hall meeting, every press op. I'd push the issue so hard, the entire right, including whomever becomes the Republican candidate, would be compelled to defend the indefensible straight into the election.
The 1% will spend billions to make certain i.c. will not come to pass.
Beware of Sen. Schumer. He talks left, but when it comes to protecting his Wall Street constituency, he votes right.
We're not in Kansas any more. Were I one of Hillary's political advisors, I'd strongly suggest hanging the entire domestic-policy component of the campaign on running against Brownback and the trickle-down disaster he created in Kansas. I'd run against him in every debate, every town-hall meeting, every press op. I'd push the issue so hard, the entire right, including whomever becomes the Republican candidate, would be compelled to defend the indefensible straight into the election.
8
The graph of income going to labor is interesting. Notice that after the 1981-82 recession, the share of income going to labor grew back to the long term average. And yet Reagan's policies are vilified. Its only after 2001 that the share going to labor really drops and the drops have continued and deepened under Obama - due to the policies of the Fed promoting easy money in the stock markets.
The share going to labor goes up in all recessions. It's not because of labor getting more income, but instead due to the rapid decline in returns to capital. Capital gains and profits are very sensitive to the cycle. 1987 was not a national recession but it was a regional recession (the "oil patch" recession.) The QE Fed policies of the Obama years were only because the Congress refused to heed Bernanke's pleas for more expansionary fiscal policies (that is, more stimulus in the form of temporary tax cuts and spending increases.)
simple answer, no!
"inclusive capitalism." What rot! And it's DOA as policy anyway. The only hope for economic democracy is bottom up, rank and file union militancy and workers cooperatives.
1
Not any job, only Green Jobs can start to move the economies of the world out of the morass. As long as capitalism has the ability to profit from polluting the commons, every “Black” job just digs the hole deeper. Only green jobs ADD VALUE to the economy and start to rejuvenate Planetary life support systems as well as the economy via distributed green energy from the renewable sector. (A cash cow in every pocket/backyard.)
"Inclusive" capitalism = reduced taxation, regulation and sound money. Allow people to create value for others in every way they know how, and then reap the full rewards of work and saving. Get the rent-seeking crony-capitalists out of the equation by shrinking the tax and regulatory code by 90%. The late Jack Kemp said it best: "Pharaoh, let my people go."
3
George Santayana "Those who ignore history are destined to repeat it."
Loosely quoted by the economic God of the right Hayak "Capital became stationary when it was most influential and progressed only when it went of the defensive".
We have entered the the second gilded age. Since the capitalists have gone on the offensive starting with St. Ronnie, the most important legislative achievement of the early 20th century have been repealed or overturned by congress and a supreme court that has no respect for legal precedent. Overturning these legislative victories from the Tilman Act of 1906 (campaign finance reform) Glass Steigel and a host of others, was a long sough goal of the corporate right.
The American public is hoodwinked by slogans of "morning in America" "government is no damn good" "the private sector works best with no government interference" "taxation is a usurpation of private property" "freedom is gained when government is reduced to fin in a bath tub" so the propaganda goes.
Since these polices have been implemented inequality has skyrocketed just as it did in the gilded age. And what is amazing the right wing arguments are no different that those during the 1920's. Shame on Bill Clinton for his role in the current deregulation cycle.
When republicans talk about freedom they do not mean freedom for citizens, they mean freedom for markets to do what ever they want regardless of the consequences for everyone else. It is past time to dust of the pitchforks.
Loosely quoted by the economic God of the right Hayak "Capital became stationary when it was most influential and progressed only when it went of the defensive".
We have entered the the second gilded age. Since the capitalists have gone on the offensive starting with St. Ronnie, the most important legislative achievement of the early 20th century have been repealed or overturned by congress and a supreme court that has no respect for legal precedent. Overturning these legislative victories from the Tilman Act of 1906 (campaign finance reform) Glass Steigel and a host of others, was a long sough goal of the corporate right.
The American public is hoodwinked by slogans of "morning in America" "government is no damn good" "the private sector works best with no government interference" "taxation is a usurpation of private property" "freedom is gained when government is reduced to fin in a bath tub" so the propaganda goes.
Since these polices have been implemented inequality has skyrocketed just as it did in the gilded age. And what is amazing the right wing arguments are no different that those during the 1920's. Shame on Bill Clinton for his role in the current deregulation cycle.
When republicans talk about freedom they do not mean freedom for citizens, they mean freedom for markets to do what ever they want regardless of the consequences for everyone else. It is past time to dust of the pitchforks.
1
In America today, if you don't have money, you don't exist, as far as American business is concerned. Your needs are irrelevant. The billionaire who "needs" another luxury home represents effective demand for today's American capitalism, but it really has nothing to offer the poor man -- neither a job that pays a living wage nor a home that he can afford. He has no money, but he has a vote. When there are enough poor people, maybe they will vote for a reform of the economic system.
3
Balls recognizes that in an open global economy, capital has dominant strategies over labor on all fronts because it is mobile, can be withdrawn, and lie dormant indefinitely. Thus, conceiving inequality as a conflict between labor and capital is a losing strategy. Better to envision ways for workers to share in the bounty as capitalists themselves. That becomes a matter of the ownership and control of capital and its attendant risks.
1
You think those at the very top who own and control so much capital would be interested in sharing any of theirs? How do you see this fantasy coming true?
It would be nice if all of the "whiteswithout college degrees" and all of the working class voters who support the Republicans would look at the graphic in this article. Look at the total income share going to labor starting with Regans "trickle down" economics that has become the backbone of Republicans economic policy. It is a very revealing statement of what Regan intended to "trickle down". Only the Clinton presidency restored some of the wealth created by workers to workers. Since then the Repubs have been very aggressive in destroying the incomes of working Americans.
And before the ignorant class begins the howling about this graphic being produced by the White House, show us facts that refute this!
And before the ignorant class begins the howling about this graphic being produced by the White House, show us facts that refute this!
In what was Czechoslovakia during the 1960's Alexander Dubcek tried to reform communism. He called it creating 'Socialism with a human face'. He failed because the Russian autocrats in charge of Eastern Europe saw it as a direct treat to their power and acted accordingly. Now the Democrats are attempting to reform today's market economy by proposing what is in essence 'Capitalism with a human face'. And they will face the same resistance from the economic autocrats who rule the U.S. economy. I hope they will have better luck then Dubcek.
3
This is the polite version of reform, conceived of and offered by well-meaning members of the elite -- but from within their elite worldview.
I think that the last eight years have told us that real reform will not come from the elite, but from the streets. It will be pushed from below, not granted from above. I don't hear anybody talking about reinstituting the 90 percent tax income rate, or reforming finance a la Glass-Steagal as in the 30s -- do I?
I think that the last eight years have told us that real reform will not come from the elite, but from the streets. It will be pushed from below, not granted from above. I don't hear anybody talking about reinstituting the 90 percent tax income rate, or reforming finance a la Glass-Steagal as in the 30s -- do I?
3
No, you don't, and for good reason. Taking 90% of someone's income is morally repugnant and an abomination. And yes, for the wealthy, marginal can come close to effective.
1
That "abomination" financed the best times the American middle class -- and America as a whole -- have ever seen.
The rich did not get richer; but they did not get poorer, either. Everybody did well. Is this an abomination to you?
The rich did not get richer; but they did not get poorer, either. Everybody did well. Is this an abomination to you?
1
In fact, economies function only when there is a demand. Sooner or later all politicians start to understand this simple formula anyways. It is impossible to maintain a meaningful economic growth with low wages and weak job market, because in that case demand inevitably collapses. Income and wealth taxes on billionaires and serial tax evaders must be implemented and executive wage theft must corralled if massive poverty on an epic scale is to be avoided. If 80 people own as much wealth as the bottom 50% of humanity all together, so isn't it about time you begin to correct the tax unfairness of the US system?
1
Some of the principles of a more inclusive capitalism may have unintended consequences. For example, it is a good thing for U.S. corporations to invest abroad -- in third world countries-- where the very poor certainly will benefit from wages that, though very low by U.S. standards, are higher than workers would otherwise receive in a third-world country. This would result in more jobs being shipped abroad -- because of relatively cheap labor costs-- and lower wages for U.S. workers. The answer would be NOT to import such manufactured products to the U.S. or other developed countries, but to manufacture these products for local consumption. This would result is what Henry Ford articulated when he raised the wages of his production-line workers, i.e., that all workers should be able to afford to purchase the products that they make. The net result, would be more lasting sustainable growth for these third-world countries, and a greater degree of independence, rather than exploitation.
Edsall writes in conclusion " ... Democrats plan to use the tenets of inclusive capitalism in the 2016 elections ... as wedge issues to force Republicans to choose between their affluent backers and their supporters in the white working class. This will be no easy task because a decisive majority of whites without college degrees has been voting against Democratic candidates for two decades, making it very difficult for the party to break what has been a Republican hammerlock since 1994."
This is an extraordinarily important point that -- astonishingly -- seems totally ignored by Democratic political strategists. And it goes back further, to the so-called "Reagan Revolution" of the early 1980s.
By co-opting shared values with blue collar whites (on such issues as patriotism, religion, abortion, gun control, etc.), Republicans have hugely eroded support in the Democrats' historical constituency. This has allowed the G.O.P. to hoodwink much of the middle and lower classes into thinking that Republicans are their buddies, easily disguising that the G.O.P.'s economic agenda favors the rich and powerful.
The continuing failure of the Democratic party under the Obama administration to even recognize current American political reality -- let alone do anything about it -- condemns to failure any attempt to use inclusive capitalism as a wedge issue in the 2016 election.
This is an extraordinarily important point that -- astonishingly -- seems totally ignored by Democratic political strategists. And it goes back further, to the so-called "Reagan Revolution" of the early 1980s.
By co-opting shared values with blue collar whites (on such issues as patriotism, religion, abortion, gun control, etc.), Republicans have hugely eroded support in the Democrats' historical constituency. This has allowed the G.O.P. to hoodwink much of the middle and lower classes into thinking that Republicans are their buddies, easily disguising that the G.O.P.'s economic agenda favors the rich and powerful.
The continuing failure of the Democratic party under the Obama administration to even recognize current American political reality -- let alone do anything about it -- condemns to failure any attempt to use inclusive capitalism as a wedge issue in the 2016 election.
2
We need a balance between the drive for profit and the maintenance of the planet and its peopled -- and if we err, in must be in favor of the latter. Democracy is about conflicts and structures that manage them. Business resists regulation and, as Adam Smith observed in the 1770s, uses its wealth & power to manipulate law. But now corporate power manipulates legislatures, courts, media and democracies themselves are in peril. It’s not about throwing away competitive economies. It's about the balance that encourages prosperity while guaranteeing survival.
Everyone simply assumes that US citizens understand how government works, who plays what role, etc. But the reality is that no message from the Left is going to have a positive effect until those deficient in basic civics can clearly articulate the distinction between the legislative and executive branches. In 2008, and again in 2012, a majority of the population thought they had 'won' because they captured the presidency. Obama's strong words about what he can do even with (in spite of) a republican-controlled congress further emphasize and solidify this myth of the imperial presidency. Thus, on off year elections the democratic base sits home, because: why bother? They think they have the presidency and nothing else matters. Republicans clean up in the legislative branch, and when nothing gets done the same cohort that misunderstands the separation of powers lays the blame at a 'king' that does not, in fact, exist (and the GOP loves and encourages this with their incessant but unsubstantiated call that Obama acts the part of emperor). If the democrats want the white working class to once again send votes their way, they best get started on educating the public as to why it matters.
2
A job is a commodity in short supply. When we send our well-paying jobs to Asia without any clue on how to replace them, it's not surprising our middle-class suffers.
2
You can sum it up this way: the Republicans are in bed with the bad capitalists, people like Rupert Murdoch, Michael Duke and the Koch bros, while the Democrats are in bed with the good capitalists, people like Eric Schmidt, Bill Gates and Warren Buffet.
1
The real question is which corrupt crony corporate plutocrat welfare king and queen capitalists we are looking to in order to " save" capitalism.
What kind of capitalism and which capitalists are we trying to save?
And what capitalist methods and policies are going to be used to save capitalism?
Our current income tax code provides deductions, credits, subsidies and lower tax rates. But only for certain select industries, sources of income, transactions, business entity structures, contracts and securities. Thanks to lobbyist who buy our executive and legislative representatives coupled with little or no regulation this sends our jobs and their money overseas.
Are we looking to the corrupt crony corporate plutocrat capitalists in Washington, D.C., Beijing, Moscow, Kiev, London, Paris, Berlin, Rome, Athens, Madrid, Lisbon, Brasilia, Tokyo, New Delhi, Mexico City, Seoul, Canberra or Ottawa?
What kind of capitalism and which capitalists are we trying to save?
And what capitalist methods and policies are going to be used to save capitalism?
Our current income tax code provides deductions, credits, subsidies and lower tax rates. But only for certain select industries, sources of income, transactions, business entity structures, contracts and securities. Thanks to lobbyist who buy our executive and legislative representatives coupled with little or no regulation this sends our jobs and their money overseas.
Are we looking to the corrupt crony corporate plutocrat capitalists in Washington, D.C., Beijing, Moscow, Kiev, London, Paris, Berlin, Rome, Athens, Madrid, Lisbon, Brasilia, Tokyo, New Delhi, Mexico City, Seoul, Canberra or Ottawa?
2
Republicans aren't interested in 'saving capitalism.' They're interested in doing in democracy to create an authoritarian government that serves the 'job creators.' It's the modern-day version of the Bourbon Plutocracy. Now all executives are Southerners.
1
It's a sad joke to hear Summers come out with an economic program to address the very problems he and Rubin were major figures in creating. Summers is the Dick Cheney of economics, arrogant, never admitting to his own dismal errors which caused untold suffering to the middle and working class and poor. Will Hilary turn her back on her Wall Street backers? I doubt it.
2
Exclusive Capitalism leads to one thing, Communism. I guess the real goal of both the White House and Republicans is to make Capitalism inclusive. I am not sure the House and Senate are really up to the task. They seem preoccupied with tax cuts, a small weaker government, and their tried and failed philosophy of trickle down.
Where was Obama and the supporters of inclusive capitalism in 2009. Something could have been done then. Funny to see schumer apparently supporting this-must have been a tv camera. Why no mention of carried interest? It is ridiculous and schumer has fought doing away with it like a tiger. A tax on financial transactions has many benefits and is a no brainer. Oh well. the people will have to wake up to get anything done. The stupid publicans are against everything but tax cuts for the wealthy.
Where was Obama and the supporters of inclusive capitalism in 2009.....Trying to prevent an economic collapse, fighting wars in Afghanistan and Iraq, salvaging a deficit that was out of control, and trying to repair healthcare. A memory is a terrible thing to lose.
1
I was excited to see this article. It is necessary to convince doubters that it is in their interest to raise the economic circumstances of those at lower levels.
Trickle Up!
Trickle Up!
Let's be sure to keep the 'American' way of life - keep the rich rich, keep the poor poor. Ensure the 'pure breed' keep all the wealth and everyone else fend for themselves.... YEAH America!!
1
Key Democrats? You mean Hillary Clinton and Neera Tanden considering they're the only people using the term "inclusive capitalism"?
"In the Soviet Union, capitalism triumphed over communism. In this country, capitalism triumphed over democracy." - Fran Lebowitz.
3
As long as the orchestrated propaganda controlled by the top 1% keeps manipulating the poor and uneducated to vote Republican we will be stuck in this self defeating trajectory. They control the media, who in turn use religion, gun control, homosexual rights, and scary words like communism to confuse and distract. Paradoxically, this is one of the of the few countries in the world in which the poor votes for the party of the rich. There is no capitalism without consumers. If we don't change course soon, our children will soon be fighting the next French revolution.
3
Of course, none of this solves what caused income inequality in the first place - the loss of well-paid skilled jobs to foreign markets with lower labor costs, a government policy of artificially low interest rates that are inherently attractive to the wealthy and tax laws that make it advantageous to keep profits out of the United States where they might be invested in new plants, equipment and training.
As reported by the New York Times, income-inequality is declining on a global scale. So while the rich may be getting richer in North America, the poor are getting middle class in a lot of other places around the world.
There are plenty of things the Obama administration with a Democratic controlled congress could have done to create skilled jobs and encourage corporations to repatriate foreign profits - they just didn't do them. And for all the prattle blaming the rich - Democrats failed for six years to close the most basic loopholes like "carried interest" that allow billionaire hedge fund managers to be taxed at extremely low rates.
Meanwhile, with Obamacare, the government re-enforced the public's long-held belief that government is basically incompetent when it comes to creating and implementing social engineering. The programs don't live up to promises and they don't work....at least not at the Federal Level.
As reported by the New York Times, income-inequality is declining on a global scale. So while the rich may be getting richer in North America, the poor are getting middle class in a lot of other places around the world.
There are plenty of things the Obama administration with a Democratic controlled congress could have done to create skilled jobs and encourage corporations to repatriate foreign profits - they just didn't do them. And for all the prattle blaming the rich - Democrats failed for six years to close the most basic loopholes like "carried interest" that allow billionaire hedge fund managers to be taxed at extremely low rates.
Meanwhile, with Obamacare, the government re-enforced the public's long-held belief that government is basically incompetent when it comes to creating and implementing social engineering. The programs don't live up to promises and they don't work....at least not at the Federal Level.
2
Oh boy, Chuck Schumer is in favor of it! Now, I know this is a cynical charade. The oleaginous "Mr. Carried Interest Loophole" demonstrates the stunning hypocrisy of Wall Street's water boys who just want to prolong the status quo for as long as possible. even if it means creating a spurious platform for 2016.
Wouldn't that be lovely. Don't bet on it.
Much in this Summers and Balls recap is Krugman redux by different words. Krugman called it a liquidity trap. This essay describes the inevitable lack of buying power on the part of the 99% when all the capital accumulates to the top 1%. Without liquidity, buying power, a monetary engine, the economic system collapses. It is a good thing if national leaders are beginning to understand this reality, be they Dems or GOPs.
37
I think the ones in the 1% or on the way (that's why they ran for office in the first place), which is a majority of them, understand it perfectly well. They know it's going to collapse, but by the time it does they'll have their wads of dough safe outside the US, so they don't really care.
We the people have allowed a system to develop in which political positions are fast tracks to the top of the economic heap, and not surprisingly that's the kind of people who are attracted to the game and get elected. They then serve their own interests. I doubt enough of the American people will wake up to this in time to turn it around.
We the people have allowed a system to develop in which political positions are fast tracks to the top of the economic heap, and not surprisingly that's the kind of people who are attracted to the game and get elected. They then serve their own interests. I doubt enough of the American people will wake up to this in time to turn it around.
The over-rewarding of speculation, financial engineering, "shareholder activism", quarterly earnings and M&A also needs to be addressed. Central to that should be a tapered capital gains tax - a reform also favored by the WSJ's CEO Roundtable. Also needed are corporate governance reform, especially in the areas of hostile takeovers and executive incentives. Anti-trust and tax barriers should be set up to discourage M&A, and the tax code should better incentivize organic growth over transactions.
1
As long as our "civil religion" is based on the founder's belief in Calvinism no such equity in our much revered "capitalist" tribalism. Our civil religion's "Bible" (Calvinist Adam Smith's social construct) militates against the Bill of Rights ever being implemented by wealth class. being poor and a have not is as much a part of "God's Plan" as "His Chosen prospering. NO matter ignoring all those "religious" values that proclaims we're all in this togther. We are not.. any Republican.. AKA Calvinist... will affirm their "celestial" authenticity of taking from the rest. That is why dealing with a Republican over a economic issue is like going to a wife swapping party... and coming home alone. What's theirs is a "celestial endowment" for being "Chosen." The have-not's aren't "Chosen" and thus not entitled to the same prosperity. Thus we continue to live in a society based on "I'm OK, you're not" and thus not entitled to the same "fruits of democracy" as they are. Doubt the validity of that assertion? Ask my Congressional Rep. Robert Hurt taking a page from Reagan's script, publicly stating his goal to abolish Medicare and Social Security and other "social" programs designed to bring "equity" to those that cannot afford even the basics of life.
1
It's a stunning revelation that the Dems, the party that used to be our de-facto 'Labour' party are now seen as proponents of inclusive capitalism.
The entire point of the early 20th century Republican reform movement and the later Democratic Party New Deal was to give some power over to the working people and at least defang to oligarchy.
That entire concept was swept away by a tsunami of Reaganism and Democratic party cowardice.
The entire point of the early 20th century Republican reform movement and the later Democratic Party New Deal was to give some power over to the working people and at least defang to oligarchy.
That entire concept was swept away by a tsunami of Reaganism and Democratic party cowardice.
1
The value of anything (in this case labor) is directly related to demand and inversely related to supply. There is a huge supply of minimum skilled labor available in the world, and globalization (sending jobs overseas) has taken advantage of this fact. The result has been that the value of labor in the U.S. has been greatly diminished. To me the obvious solution is to find more jobs (demand) here at home. We need to rebuild our infrastructure; repair our roads and bridges, modernize the power grid, develop high speed rail, expand our national parks, improve our public schools, make college more affordable, and invest in basic research. To pay for this we need to tax higher incomes as they are the ones who have benefitted most from out sourcing. A better infrastructure raises the quality of life for everyone and at the same time provides more jobs (demand) at home. Unfortunately for all of us, the brain dead Republicans in Congress are determined that a smaller role for the Federal Government is always better. It is as if they have a death wish for our country.
2
Great, now we have ANOTHER capitalism.
Just which "capitalism" is the right kind? Pick one:
a. Mercantilism
b. Social Market economy
c. Free Market economy
d. Crony capitalism
e. Social Market economy
f. Inclusive Capitalism
g. all of the above (just kidding).
There are more "capitalisms" out there but I still want to maintain some kind of perspective; Adam Smith's original proposals in "Wealth of Nations" were predicated, apparently, without the somewhat not helpful factor of "greed" as part of the equation. It appears that the sort of capitalism occurring in the 21st Century is beyond all these descriptions as the forecast is for, in 2016, as I recall, for the 1% to own more than 50% of the wealth.
That's "Capitalism" writ large with hardly a nod toward those pesky "workers" and such. Much as "Communism" was a smoke screen for "dictatorship" so too, "Capitalism" is a smoke screen for the wealthy to become, well, more wealthy.
And when one "owns" a government, the results can be plainly seen.
Just which "capitalism" is the right kind? Pick one:
a. Mercantilism
b. Social Market economy
c. Free Market economy
d. Crony capitalism
e. Social Market economy
f. Inclusive Capitalism
g. all of the above (just kidding).
There are more "capitalisms" out there but I still want to maintain some kind of perspective; Adam Smith's original proposals in "Wealth of Nations" were predicated, apparently, without the somewhat not helpful factor of "greed" as part of the equation. It appears that the sort of capitalism occurring in the 21st Century is beyond all these descriptions as the forecast is for, in 2016, as I recall, for the 1% to own more than 50% of the wealth.
That's "Capitalism" writ large with hardly a nod toward those pesky "workers" and such. Much as "Communism" was a smoke screen for "dictatorship" so too, "Capitalism" is a smoke screen for the wealthy to become, well, more wealthy.
And when one "owns" a government, the results can be plainly seen.
3
The first step toward inclusive capitalism is to stop the selling of government that supports crony capitalism The biggest asset of the 1% is the 99% of government they own.
1
"Inclusive Capitalism"?
"Inclusive Capitalism" is to "Democratic Socialism" - like "Progressive" is to "Liberal". The changing of a moniker might fool the lame-brained - but not those who can link policy positions to the ideological mother that birthed them.
"Inclusive Capitalism" is to "Democratic Socialism" - like "Progressive" is to "Liberal". The changing of a moniker might fool the lame-brained - but not those who can link policy positions to the ideological mother that birthed them.
1
I want this to happen because more money in the hands of the lower 50% means more people buying my employer's products which means greater wealth for my employer, which means more jobs and greater benefits/income for employees.
There's a correction needed here:
Third, that “Major corporations have opted to use subcontracting to perform basic functions, and many workers are not classified as independent contractors, eroding basic labor law protections.”
It should read: "...and many workers are incorrectly classified...".
Well written piece. Democrats should have championed these stands years ago.
Third, that “Major corporations have opted to use subcontracting to perform basic functions, and many workers are not classified as independent contractors, eroding basic labor law protections.”
It should read: "...and many workers are incorrectly classified...".
Well written piece. Democrats should have championed these stands years ago.
1
In order to have inclusive capitalism we need to end crony capitalism. Corporate welfare is not free markets economics. Simplfy the tax code and get the government out of the business of picking winners. Make companies in every industry compete on their own merits.
2
Not going to happen. where is any historical context have you seen the powerful give up power without a fight? I don't know any.
conclusion will be continued course of increasing inequality till the next crisis..... here's to the next crisis coming as soon as possible
conclusion will be continued course of increasing inequality till the next crisis..... here's to the next crisis coming as soon as possible
1
Multinational corporations include many shareholders who are not American. They may not be interested in the hardships many Americans face and unwilling to let their Boards act progressively. These same Boards then use their monetary influence to buy off politicians who will promote repressive policies that further erode what is left of the American Middle class.
Our political process is being harmed from within and without by corporate America. Get the money out of politics!
Our political process is being harmed from within and without by corporate America. Get the money out of politics!
2
The world has a choice: consumer capitalism or a livable planet for future human generations. It can't have both.
1
The rich rule the politicians. They only want to save capitalism to get richer. They so prepare revolutionary acts they hate so much.
I share the sentiment of those responding to this article. In fact, I was amazed by the Socrates post. He hit it on the head. What also amazing to me is that these facts are not presented to us by the media (excluding Fox, of course). The words shared here need to be shouted from every mountain and media channel.
1
This is a winner if the democrats can frame this issue correctly---not as social give aways, but a means of softening the edges of the market's hidden hand. The Republicans are in a bind on this one---their continued ideological adherence to free markets and voodoo supply side economics ties them in a knot when it comes to the now out of control decimation of the middle class by a capital formation machine that is sucking huge amounts of money out of the middle class and sending directly to the 1%. The Republicans would be smart to counter the President's agenda with a slight move to the left, using tax policies---framed at tax fairness-- to quiet the screaming that will get louder and louder as this capital formation machine turns faster and faster. It would be wide if candidates from both parties read Thomas Piketty's book, which correctly concludes that you cannot grow an economy into fairness---pursuing trickle down solutions only sends money faster to 1%. The only solution to the worldwide creation of billionaire after billionaire, is some form of redistribution--its that simple--whether you do it through taxes, or infrastructure projects, raising the minimum wage, etc. Of course the problem here, is asking millionaires in Congress to redistribute their "hard earned" nest eggs.
41
I agree with AJ and emphasize the importance of framing the issue correctly. We should not be talking about "Redistribution" being required. We should be taking about fixing the redistribution that has been going on for decades, from the lower and middle class to the 1%.
2
If the people promoting "inclusive capitalism" are going public with some of their ideas, you can bet that what they aren't telling the pubic (read: the rest of us!) amounts to how they've already figured how the end will mostly benefit them! It's the nature of capitalism... Some win, most lose!
It may be that income inequality is perfectly acceptable to many in our dumbing down nation. It certainly is acceptable to our not so dumbed down politicians who recognize a trough when they see one
1
Cows can recognize a trough. It doesn't have to be a particularly bright, intellectually agile cow.
1
I would be surprised if there are not some who will see the need for some of the proposals presented here. With the passing of the family oriented corporation tied still to original owners, into the corporation with professional management and similar board members, the connection with workers and the places of work and workers is gone. Even many shareholders know that those in leadership managerial and board relationships are more and more into harvesting profits more for themselves than for the broader participants in the corporations.
Labor is no longer someone known to the leaders of the corporation but an aggregate element in the cost structure of the corporation. Managerial and Board shareholders are the insiders, large institutional holders may be courted but not the little guy who buys into a mutual fund or is there because his college has pension plan.
We need a much larger overhaul of tax codes and not merely another pandering, take a bundle from a few insiders and share it with millions. These political slogans are near worthless. We need some serioius leadership and Obama needs to work with the congress. Utopian perhaps, but we need the president working with congress to do this work, not sneering at each other and trading insults.
Labor is no longer someone known to the leaders of the corporation but an aggregate element in the cost structure of the corporation. Managerial and Board shareholders are the insiders, large institutional holders may be courted but not the little guy who buys into a mutual fund or is there because his college has pension plan.
We need a much larger overhaul of tax codes and not merely another pandering, take a bundle from a few insiders and share it with millions. These political slogans are near worthless. We need some serioius leadership and Obama needs to work with the congress. Utopian perhaps, but we need the president working with congress to do this work, not sneering at each other and trading insults.
This meme is so much nonsense promulgated by the willfully blinkered left. The largest most backward, most anti-capitalist country in the world came to the conclusion 35 years ago that more capitalism was needed and the result more people have been lifted out of poverty than ever in the history of the world. That decision also resulted in LESS income inequality in the world as hundreds of millions of people, once peasant, subsistence farmers earning meager livings now have reached middle income for a developing country as defined by the World Bank (and can become billionaires like Jack Ma, a wonderful thing.). The fact that opening the floodgates of the economic potential to 1 billion plus people has caused incomes of low skilled workers in developed countries to “stagnate” hardly means capitalism isn’t working. To all you capitalist naysayers please answer me this: If political and economic reforms in sub Saharan Africa were to result in a many fold increase in per capita income over a few decades for the one billion people who live there, even if it meant competition for low skilled labor in this country, would it be a good thing or a bad thing? The problem for low skilled workers in developed countries is not lack of "inclusiveness", its too much "inclusiveness" from previously economically isolated countries.
2
The history of industrialization indicates that at early stages, it is relatively easy for unskilled agricultural labour to be trained for relatively unskilled industrial occupations. It is not surprising, therefore, that textiles and apparel, routine production and assembly of parts, and wholesale and retail trade are the usual staring points in the industrialization process. However, as economic development advances, the shift from relatively lower skilled occupations to relatively higher skilled ones requires increased investment in human capital, either by on-the-job training or by means of a more formal education process. For example, robots can replace assembly line workers, but the production and maintenance of robots requires higher levels of skill.The ongoing upgrading of skills required for labour force participation, in turn, suggests a commitment to provide the means for workers to continually upgrade their skills. In this context, something similar to the president's call for subsidized higher education has merit. Unfortunately, the problem faced by middle-aged workers who are technologically unemployed requires something beyond mere tuition subsidies. It is in the interest of the country, if not for internationally mobile capital, to help maintain a technologically skilled labour force: it's good for the economy, for social and political stability, and for personal happiness.
1
“Our generation has seen the decisive victory of free-market principles over planned economies...”
All the evidence seems there for Andrew Grove's statement to be true. The USSR's economy, in spite of some outstanding successes, ossified and became moribund; China resorted to state capitalism, Cuba and North Korea are even now captives of systems that often do not even function to provide subsistence for their people. Most of the capitalist West is still busy burying any hints of remnant socialist thinking, even if that means burying their own liberal reforms along with ideologies seen as more dangerous. Yet, to call what happened at the end of the twentieth century "a decisive victory of free market principles," particularly in light of the near collapse of the capitalist system in the Panic of 2008, which was in itself an early indicator of the danger to the world economy that unchecked free markets represents, is clearly a misstatement. To varying degrees, whether in China, where a huge economic machine is built on the backs of low-paid workers, or in the West, where so-called austerity programs are imposed on its own working classes in tandem with a forced march to privatize every aspect of society, even extending to schools and prisons, not to speak of what were once called public utilities, the evidence is everywhere that free markets, a. do not truly exist, and b. to the extent that they do, have an inexorable tendency to privilege the powerful.
All the evidence seems there for Andrew Grove's statement to be true. The USSR's economy, in spite of some outstanding successes, ossified and became moribund; China resorted to state capitalism, Cuba and North Korea are even now captives of systems that often do not even function to provide subsistence for their people. Most of the capitalist West is still busy burying any hints of remnant socialist thinking, even if that means burying their own liberal reforms along with ideologies seen as more dangerous. Yet, to call what happened at the end of the twentieth century "a decisive victory of free market principles," particularly in light of the near collapse of the capitalist system in the Panic of 2008, which was in itself an early indicator of the danger to the world economy that unchecked free markets represents, is clearly a misstatement. To varying degrees, whether in China, where a huge economic machine is built on the backs of low-paid workers, or in the West, where so-called austerity programs are imposed on its own working classes in tandem with a forced march to privatize every aspect of society, even extending to schools and prisons, not to speak of what were once called public utilities, the evidence is everywhere that free markets, a. do not truly exist, and b. to the extent that they do, have an inexorable tendency to privilege the powerful.
3
in the game of monopoly, representing unfettered capitalism, it takes a while but inevitably one person holds all the money. So too capitalism, where without appropriate interventions by society, all wealth accrues to the mightiest few. Capitalism can not maximize human potential without some forces demanding a sharing of the wealth in order to create consumers for the goods. without consumers, money has no meaning. America's strength over the last 75 years has been that it is the world's largest consumer (not producer). The current income inequality in our nation is sapping it of its strength.
2
It is simple economics that Republicans fail to grasp. More people with more money to spend equals more money for business.
If consumer spending amounts for 70% of the GDP then what sense does it make to try to reduce the number of people who can contribute to this 70%. Do Republicans really think that financials services can make up the difference as the the number of consumers of non-essential goods decline?
Here is an analogy that any Republican should be able to understand: the more people in a poker game the bigger the pot. Tax breaks for the wealthy does not increase consumer spending. How many times does the "trickle down" have to fail before the Republicans realize it does not work.
If consumer spending amounts for 70% of the GDP then what sense does it make to try to reduce the number of people who can contribute to this 70%. Do Republicans really think that financials services can make up the difference as the the number of consumers of non-essential goods decline?
Here is an analogy that any Republican should be able to understand: the more people in a poker game the bigger the pot. Tax breaks for the wealthy does not increase consumer spending. How many times does the "trickle down" have to fail before the Republicans realize it does not work.
68
Reactionary Republicans grasp the economic harm of squeezing every dime out of the middle class; they understand that trickle down economics was always an empty promise devised by the wealthy to deceive and placate the middle class while they robbed it of the earnings and benefits hard won following the Great Depression.
The Republican game plan was developed on Wall Street: go for the short-term gains, get every dime in the game, even if doing so will kill the golden goose.
The Republican game plan was developed on Wall Street: go for the short-term gains, get every dime in the game, even if doing so will kill the golden goose.
2
They know trickle down doesn't work. There real goal is to just lower taxes on their campaign contributors
1
Sense? You are asking the Republican's to make sense now? I am reminded of Rick Perry who couldn't name the three branches of government he intended to cut after being elected president.
2
Where was Larry Summers when we needed him? Oh, that's right. He was busy bailing out the banks and throwing the rest of us under the bus. Do we believe he means what he says this time around?
46
If what he says is correct, whether or not HE believes it is moot.
You mean giving loans to the banks that were fully repaid, with interest, that made the Treasury billions in profits? That's what I thought.
1
Maybe so. But it doesn't matter. --And the past can't be allowed to constrain what we do in the future. Think of LS as a new or different Larry Summers. ...
I don't mean my reaction to be about Summers in particular. I'm more concerned lest we continue in the bad habit of treating arguments as though they were personal. We get into a my-side-your-side frame of mind that polarizes the populace and makes for a dysfunctional government. The fact that our electoral system(s) --plural because we hold elections at almost every level democratic society-- entail voting for persons rather than positions and have winners and losers so that the inputs of minorities are obviated makes polarization almost inescapable.
"Inclusive capitalism" looks like a good idea. But it will require changes in OUR attitudes and behaviors. It would make America look a lot more like it looked in the early 19th C when de Tocqueville found 'grass roots' voluntary democratic free enterprise (not always for monetary profit but almost always for some social good) around every corner. It will need US to join unions and for US to require compensation in the form of profit-sharing. Forming co-ops where PEOPLE share their vehicles and enhance the efficiency of their transportation would be a manifestation of inclusive capitalism. Not as much inclusive capitalism will follow from a top-down approach --from legislation or manipulation of central bank policies--as would evolve from grass roots.
I don't mean my reaction to be about Summers in particular. I'm more concerned lest we continue in the bad habit of treating arguments as though they were personal. We get into a my-side-your-side frame of mind that polarizes the populace and makes for a dysfunctional government. The fact that our electoral system(s) --plural because we hold elections at almost every level democratic society-- entail voting for persons rather than positions and have winners and losers so that the inputs of minorities are obviated makes polarization almost inescapable.
"Inclusive capitalism" looks like a good idea. But it will require changes in OUR attitudes and behaviors. It would make America look a lot more like it looked in the early 19th C when de Tocqueville found 'grass roots' voluntary democratic free enterprise (not always for monetary profit but almost always for some social good) around every corner. It will need US to join unions and for US to require compensation in the form of profit-sharing. Forming co-ops where PEOPLE share their vehicles and enhance the efficiency of their transportation would be a manifestation of inclusive capitalism. Not as much inclusive capitalism will follow from a top-down approach --from legislation or manipulation of central bank policies--as would evolve from grass roots.
1
The question answers itself: of course not.
The capitalists are those who merely exploit their country and it's people. It's a cartel of the greedy. America's market is too perverted to correct it's various excesses on it's own. A mechanism of self - correction directed by consumers is paralyzed because (unbridled) consumerism has been allowed to command society. That's not the American's people's fault - quite the opposite - they happen to be trapped as victims, they are not the beneficiaries.
I beg to predict, America will be in need of assistance from abroad the put the fatal spirit of those capitalists ghosts back into the bottle. Time for rejuvenation and a common societal reset.
The capitalists are those who merely exploit their country and it's people. It's a cartel of the greedy. America's market is too perverted to correct it's various excesses on it's own. A mechanism of self - correction directed by consumers is paralyzed because (unbridled) consumerism has been allowed to command society. That's not the American's people's fault - quite the opposite - they happen to be trapped as victims, they are not the beneficiaries.
I beg to predict, America will be in need of assistance from abroad the put the fatal spirit of those capitalists ghosts back into the bottle. Time for rejuvenation and a common societal reset.
4
It is positively surreal to read about "inclusive capitalism" in the context of monetary policy that has wiped out access to the power of money to make money by economically unsophisticated thrifty people.
Inclusive Capitalism is the only way to save capitalism and maintain social stability - otherwise the breakdown of social stability will destroy the free market capitalism and create a chaos in the society. Today, the tremendous productivity benefits are totally claimed by the capital owners and labor is denied any share of it. Only arbitrage available to labou is the pure supply and demand - the higher skills are discounted by the market force. Time has come to put an internsic value to skills in addition to its market value, like MRP of the car. If a capitalist can sale cars with MRP and get better value of its quality, why not the same rule applicable to skills. Labour department should classify all jobs based on ithe skill level and the investment required to develop that skills and price them accordingly. Time has come to change the labour laws now as we are reaching close to full employment. Congress has to find mechanism to share the productivity gain of technology to labour otherwise the country will head to a economic catastrophe. Other democratic country is already moving on this direction - even the recent statement of Indian Government shows the similar policy direction.
Inclusive capitalism has its critics on the left, nicely summed up by the Guardian columnist Nafeez Ahmed. He argued last May that the inclusive capitalism movement represented “less a meaningful shift of direction than a barely transparent effort to rehabilitate a parasitical economic system on the brink of facing a global uprising.”
Where's the cake?
Where's the cake?
1
Finding ways the help people at the lower and middle levels to make more money is a great idea. Mostly, this involves staying out of the way.
Government increasing taxes in order to fund handouts will not increase anyone's productivity -- it will decrease their productivity -- and cause further increases to inequality.
Making Community colleges free is a clumsy approach to a difficult problem. This will skew the market and result in people going to school for the wrong reasons -- simply because it's free. I don't want to donate money to a bunch of bad students supposedly studying at a bad college. Get out and work. On the other hand, if there are impoverished but academically gifted students who wish to attend college but cannot, they are a good investment for society.
This is not to say that we shouldn't help those truly in need.
The inequality
Government increasing taxes in order to fund handouts will not increase anyone's productivity -- it will decrease their productivity -- and cause further increases to inequality.
Making Community colleges free is a clumsy approach to a difficult problem. This will skew the market and result in people going to school for the wrong reasons -- simply because it's free. I don't want to donate money to a bunch of bad students supposedly studying at a bad college. Get out and work. On the other hand, if there are impoverished but academically gifted students who wish to attend college but cannot, they are a good investment for society.
This is not to say that we shouldn't help those truly in need.
The inequality
The important question is can we keep capitalism from destroying democracy.
1
These ideas will only gain traction with popular support. Only then will the pols pay attention. It has to be sold very carefully in understandable English accompanied by a massive voter registration drive beginning now, not in the summer and fall of 2016. I don't know if either party wants more voters though. Sad.
1
I am against paying any more taxes myself, but it's OK with me if other people want to pay more.
2
Another willing victim for the blood-sucking capitalist vampires.
A point of view seldom considered is that each hour that the high earner is not obliged to work at producing the fundamental goods and services they require to live is an hour that the high earner can put towards their high earning activity. So, isn’t the work of lower paid individuals who work to produce the fundamental goods and services required by the wealthy also a contribution towards the work output of the high earner?
The problem with our current tax code is that it taxes income when everyone agrees we all need more income. What we need less of, what we should tax, is unproductive capital. The capital sitting in the Cayman islands, the capital sitting in Corporate coffers, the capital spent on car elevators and dancing ponies.
We need to transition from an income based tax system to a wealth based tax system. Our labor is already the most productive in the world it is our lazy capital we need to tax into shape.
We need to transition from an income based tax system to a wealth based tax system. Our labor is already the most productive in the world it is our lazy capital we need to tax into shape.
2
The author would have a much easier sell if he didn't include the chart, which shows that every recession coincided with Labor's share of Total Income RISING ! And as a corallary, every expansion occured when Labor's share [of Total Income] FELL.
Really? I think it sows just the opposite. Labor's share of non-farm income falls after every recession.
Some thoughts on an economy for the people: A basic minimum income based on a percentage of the median wage, single payer health care, free education, subsidized low cost housing, labor participation in workplace decisions, freedom from disastrous levels of pollution and publicly funded election campaigns for public offices.
Much of this is done now in civilized countries.
Much of this is done now in civilized countries.
5
Inclusive capitalism amounts to nothing more than Think Tank mumbo jumbo. None of these so called proposals are going to do anything more than tap the super rich who own America on the shoulder, and do nothing meaningful to alter the lives of the middle class and the poor.
Inclusive capitalism is a convenient phrase politicians will be able to throw into their speeches and talk show comments to make them sound like they are for REAL change when it is nothing more than "sound bite" to make them look good.
SPARE US inclusive capitalism.
Inclusive capitalism is a convenient phrase politicians will be able to throw into their speeches and talk show comments to make them sound like they are for REAL change when it is nothing more than "sound bite" to make them look good.
SPARE US inclusive capitalism.
2
No, spare us EXCLUSIVE capitalism!!! Spare us talented but woefully immature and shamefully under educated entrepreneurs and established business men/women whose moral centers have rotted.
1
"Capitalism" is an economic system that empowers people to make money from wealth. What we have now is anything but equal access capitalism.
We will still need a strong social safety net even if the titans of economic power decide to throw their workers a few more crumbs.
We will still need unemployment insurance, Social Security, Medicaid and Medicare (or better still, something like a "Medicare for all" single payer plan), programs to help impoverished children and people who are too disabled to work. Working families will still need help with daycare, and aspiring workers will still need help to be able to afford to go to college. Etc.
Is there room in "Inclusive Capitalism" for all of this?
If so, that's good news. If not, why should Democrats support it?
We will still need unemployment insurance, Social Security, Medicaid and Medicare (or better still, something like a "Medicare for all" single payer plan), programs to help impoverished children and people who are too disabled to work. Working families will still need help with daycare, and aspiring workers will still need help to be able to afford to go to college. Etc.
Is there room in "Inclusive Capitalism" for all of this?
If so, that's good news. If not, why should Democrats support it?
2
I wonder if Republicans have stopped and considered what ultimately lies ahead on this road they're taking: their policy of enriching the rich and bitterly opposing any redistribution of wealth. For decades, an ever-increasing percentage of our country's wealth and income has been going to the top. We're already at the point where the concentration is morally indefensible and beyond absurd. What happens if this trend continues? I wonder if revolution looms ahead. Maybe Ferguson is an early tremor. Wouldn't it be a delicious irony if, for all their vilification of communism, Republicans proved more effective than communists in provoking the outcome that communists desire: a violent social upheaval culminating in the public ownership of the means of production? If I were a communist, I'd vote Republican.
7
You start by saying "I wonder if Republicans have stopped and considered..." Unfortunately, Republicans will not consider anything. They were purchased into power by the top 1% with a scripted agenda. They will stop at nothing. Sadly, many Democrats are doing the same. As long as we don't have serious campaign reform, we will soon be doomed and enslaved by the super rich.
3
FDR saved Capitalism for the Capitalists, and how is that working out for us now? Maybe we can introduce some policies to take the edge off the destructive nature of Capitalism, but it won't last for long and we will be right back here again. These fixers are ignoring the elephant in the room called Climate Change. Growth that brings another 4 billion people into this type of economy will be a death sentence for us all. This "saving" capitalism also maintains the current power structure, i.e. owner over labor. Capitalism is reaching it's conclusion, hopefully in exchange for a more humane and equitable way of life. Let it go.
3
In some quarters it has long been recognized that "unchecked market fundamentalism" is a flawed idea that leads to severe economic distortions that, in turn, adversely affect both people generally and nations as a whole. In practice that fact is widely recognized, at least outside of those conservative circles that cling to economic mythology with the same passion and certainty that some do with respect to religion.
At base, the economic free market is analogous to a jungle wherein the most aggressive dominate, failure is a usual and widespread result, and any concept of equality is absent. Consequently, it ought not to be treated as quasi-theological. Indeed, most electorates in most nations reject the (economic) jungle. That's partly why we have government and such concepts as "inclusive capitalism".
At base, the economic free market is analogous to a jungle wherein the most aggressive dominate, failure is a usual and widespread result, and any concept of equality is absent. Consequently, it ought not to be treated as quasi-theological. Indeed, most electorates in most nations reject the (economic) jungle. That's partly why we have government and such concepts as "inclusive capitalism".
9
It's said that FDR saved capitalism from itself. After 50 years or so of relative humility, capitalism now shows its gratitude by working to destroy everything else its savior worked for. We need a new FDR but this time with more teeth, to ensure the whole cycle is not repeated.
14
There has been a national debate on this issue and the Republicans won. The cornerstone of the Republican party since 1968 is that it is the party of the oppression of the working poor. The working poor being defined as the people who harvest our food and stock the shelves in our super markets. People we would die if they did not do their jobs. What the Republicans argue is scarcity. There is not enough to go around. It has sold the middle class on the belief that it's lifestyle is dependent on the oppression of the working poor. Middle class white American voters believe that their lifestyle would suffer if the working poor were paid a living wage. This has been brilliant class warfare by the Republicans. The middle class fighting with the working poor rather than attacking the top 1%. The working poor are the modern day American slavery. The American middle class see its decline as a result of the country being to generous to the working poor. It is unbelievably stupid, but you hear it every day on Fox News. The call the people they have enslaved "moochers." No one ever calls them out on this. It's the people who enslave other people who are the "moochers" not their slaves.
33
Countering inequality does not equate to increasing incomes for the poor or working and middle classes. Financial capital is not a substitute for social capital.
The biggest threat facing the planetary ecosystem is unsustainably high levels of resource consumption leading to widespread environmental degradation. The last thing the world needs is increased American-style consumerism.
There are people in extreme poverty who are poorly integrated into formal market economies, and thus lack the basic protections afforded by such structures -- the group identified by Prahalad. They don't live in the USA.
Increasing the incomes of American working and middle classes will simply lead to increased consumption, increased obesity and burden of noncommunicable diseases, increased healthcare spending and reduced economic productivity.
The USA needs to focus on developing social capital, improving quality of life and happiness, without increasing per-capita resource consumption.
The biggest threat facing the planetary ecosystem is unsustainably high levels of resource consumption leading to widespread environmental degradation. The last thing the world needs is increased American-style consumerism.
There are people in extreme poverty who are poorly integrated into formal market economies, and thus lack the basic protections afforded by such structures -- the group identified by Prahalad. They don't live in the USA.
Increasing the incomes of American working and middle classes will simply lead to increased consumption, increased obesity and burden of noncommunicable diseases, increased healthcare spending and reduced economic productivity.
The USA needs to focus on developing social capital, improving quality of life and happiness, without increasing per-capita resource consumption.
7
Better late than never, but Democrats need to look at themselves in the mirror and ask why these proposals were not in place well before the 2014 elections?
GOP knee jerk opposition is to be expected and it is critical to put the GOP on the defensive by forcing Republicans to show with actual data why their opposition is not a give away to the 1% and exploitation of the 99%.
GOP knee jerk opposition is to be expected and it is critical to put the GOP on the defensive by forcing Republicans to show with actual data why their opposition is not a give away to the 1% and exploitation of the 99%.
6
The Social Democratic Welfare State model, just like Obama's State of the Union address, is a marvelous model. The issue remains, the model doesn't work. Comprehensive tax reform to make the system competitive for corporations and fair for various income tax brackets need be accomplished. With that said and the dysfunction we experience at our lawmakers level seems beyond them. Politics as dirty as the profession has always been compromise was expected, i:e cut deals in the backroom. LBJ was a master at it. Carter and Obama not very good at it.
1
The super-rich in this country spend a small fortune every year feed an industry dedicated to protecting their extraordinarily large fortunes from taxation. Corporations spend another small fortune on lobbyists trying to fashion laws and regulations to subvert markets and give them unfair advantages over their competitors and labor. The result has been a shift in the tax burden to households in the range between 70% and %95 percent of the top incomes.
Before we talk about redistribution of wealth from the top 1% of income distribution to the bottom half, we should be talking about reversing the policies that caused wage stagnation and the redistribution of wealth from the bottom 95% to the top 5%; restoring policies that enabled workers to bargain fairly in the labor market, and ending regulatory capture. If that were done, and we adopted public policies that supported parents being able to parent, ensured that all children got a good education, and everybody paid a fair share of the cost of a functional and just society, I doubt we would need redistribution of wealth.
Before we talk about redistribution of wealth from the top 1% of income distribution to the bottom half, we should be talking about reversing the policies that caused wage stagnation and the redistribution of wealth from the bottom 95% to the top 5%; restoring policies that enabled workers to bargain fairly in the labor market, and ending regulatory capture. If that were done, and we adopted public policies that supported parents being able to parent, ensured that all children got a good education, and everybody paid a fair share of the cost of a functional and just society, I doubt we would need redistribution of wealth.
11
It seems that the corporations hide behind the excuse of needing to provide maximum profits for shareholders at the expense of everything else. Strong laws and regulations need to be made which protect labor and ensure ethical practices on the part of corporations. This will only happen if a significant amount of investors vote for it both as citizens and with their financial resources.
7
Larry Summers was the genius behind getting rid of the Glass-Steagal Act, which clearly protected banking customers from having their bank deposits used for Wall Street gambling. This misstep laid the foundation for the Wall Street greedsters' manipulated housing market meltdown and the greatest transfer of wealth to the top 1% global financial elite in history. I do not trust him to do anything for average Americans. It is time for true sustainable employee-owned companies in America with no outside investors to suck off profits. Responsibility and profits are equitably shared among all employees. Families and communities are strengthened. Government, through the Small Business Association, could assist people who want to form employee-owned companies with start-up low interest loans equal to start-up investments made by employees. Sustainable manufacturing and service businesses. That's the ticket.
14
In the '50s, higher education was cheap in state-supported schools and almost anyone could get a college education without the tyranny and bondage of student loans. Manufacturing was king in this country and even low-skill workers could get a Union job and enter the middle-class. Taxes were high on the rich and upper-middle-class and they complained mightily but sheltering thier money offshore was not common or easy to do in those pre-digital days.
Capitalism put up with this re-distribulation of some of their wealth because communism and the Soviet system seemed a real alternative and threat to the capitalistic way of life.
But when the Soviet Union collapsed and Capitalism no longer had to appease the Left and the gains of progressive policies began to wither, shrink and die as the rich took back their tax gifts and righteously created a new Gilded Age for themselves.
Question: do we really have any leverage to get the 1% to give up much of their wealth?
Capitalism put up with this re-distribulation of some of their wealth because communism and the Soviet system seemed a real alternative and threat to the capitalistic way of life.
But when the Soviet Union collapsed and Capitalism no longer had to appease the Left and the gains of progressive policies began to wither, shrink and die as the rich took back their tax gifts and righteously created a new Gilded Age for themselves.
Question: do we really have any leverage to get the 1% to give up much of their wealth?
21
Leverage to get the 1% to "give" up their wealth? No. That is why the government must use it's power to take it away. And, that is why the super rich hate the government and demonize it because it is the only force in the world powerful enough to control their greed and avarice.
2
Of course, unmitigated greed will not give up any of their unearned wealth. But leverage is building in the form of revolution....why do you think this issue is finally being advanced?
2
"According to a report by the former Treasury secretary Lawrence Summers and Ed Balls, a top British Labor Party politician, unless there is serious government intervention, inequality and a lack of financial resources among those in the bottom half of the income distribution will result in “insufficient aggregate demand – too little spending by consumers and businesses to keep gross domestic product at its capacity.” Developed nations “need new social and political institutions to make 21st century capitalism work for the many and not the few,” Summers and Balls wrote."
By serious government intervention I am assuming that regulation is what is meant. Alas, regulation is the very last thing that the GOP wants. Inequality is here to stay both here and in the rest of the world as shown by recent reports from Oxfam:
http://www.oxfam.org/en/research/wealth-having-it-all-and-wanting-more
If fact, capitalism and regulation used in the same sentence might seem like an oxymoron.
By serious government intervention I am assuming that regulation is what is meant. Alas, regulation is the very last thing that the GOP wants. Inequality is here to stay both here and in the rest of the world as shown by recent reports from Oxfam:
http://www.oxfam.org/en/research/wealth-having-it-all-and-wanting-more
If fact, capitalism and regulation used in the same sentence might seem like an oxymoron.
6
such are the compromises inherent in democratic government. some see regulated capitalism as an oxymoron. others recognize it as the norm that you find in every capitalist country. once again the question is not the binary "whether" but rather the balanced "how much" issue. people who refuse to engage in the balance question are generally -- and appropriately -- excluded from power.
President Obama and all elected officials who advocate "inclusive capitalism" have the opportunity to put it into place by treating public employees differently than employees are being treated in the private sector. If the Democrats want to embrace inclusive capitalism they could do so by denouncing the de-regulation and privatization of public schools, which "broadly undermines the wages and working conditions" of those working in schools. The replacement of career-minded unionized employees with at-will teaching staff and contracted services in lieu of ancillary staff results in more job insecurity, lower wages, and, consequently, a hollowing of the middle class. The privatizers of public education"...function much less effectively as providers of large-scale opportunity" because "...their dominant focus has been on maximization of share prices and the compensation of their top employees." Privatization of public services is a rejection of inclusive capitalism and an embrace of the winner-take-all mentality that the "winners" want to see kept in place.
8
totally agree. Besides public education-- of which I am a zealot-- a true crime in this nation is the privatization of prisons. Dems should put this on the front burner. If it continues unchecked we will be truly third world. Midnight Express anyone? Also, any contracting of our military needs to be vanquished-- no more enriching corporations, no more the military brass being able to pass the buck on atrocities done in our name.
1
Unregulated free market capitalism has never worked in the energy markets. Some competent knowledgeable entity must manage the energy markets, to address all customer needs. Customers include future generations and other stakeholders.
I have submitted comments to the DOE recommending a joint private sector - public sector Energy Coalition manage the energy markets; the Coalition regulated with government oversight. The Coalition invests to improve performance meeting customer needs, and receives funding (to ramp investments) and compensation based on performance improvements. The funding is provided by a combination of a pass-through crude oil tax tied to declining oil prices, severance tax on shale gas, and possibly some kind of carbon tax.
A rapid deployment of green energy substitutes reduces energy costs from 8.5% GDP over the last ten years, to 4%, with early gains resulting from driving oil prices permanently below $40 per barrel due to substitution driven declining demand.
A customer needs driven economic system promotes free enterprise solutions better than a free market capitalist system. I call this a Deming economic system (based on work with Japanese manufacturers that formed Japan Inc in the 50s and 60s). Japanese customer focused planning methods essentially obsoleted free market capitalism by the 1990s, if applied to an economic sector.
https://drive.google.com/usp=folder&authuser=0#folders/0B6HOZyGCkCB9...
Read FAQs and Part 2 of comments.
I have submitted comments to the DOE recommending a joint private sector - public sector Energy Coalition manage the energy markets; the Coalition regulated with government oversight. The Coalition invests to improve performance meeting customer needs, and receives funding (to ramp investments) and compensation based on performance improvements. The funding is provided by a combination of a pass-through crude oil tax tied to declining oil prices, severance tax on shale gas, and possibly some kind of carbon tax.
A rapid deployment of green energy substitutes reduces energy costs from 8.5% GDP over the last ten years, to 4%, with early gains resulting from driving oil prices permanently below $40 per barrel due to substitution driven declining demand.
A customer needs driven economic system promotes free enterprise solutions better than a free market capitalist system. I call this a Deming economic system (based on work with Japanese manufacturers that formed Japan Inc in the 50s and 60s). Japanese customer focused planning methods essentially obsoleted free market capitalism by the 1990s, if applied to an economic sector.
https://drive.google.com/usp=folder&authuser=0#folders/0B6HOZyGCkCB9...
Read FAQs and Part 2 of comments.
2
There is obviouly no plan to extract only the cleanest and easiest to produce fossil fuel resources to make the transition to a post fossil fuel energy economy.
2
Unfortunately, the link didn't work. Try this link:
https://drive.google.com/folderview?id=0B6HOZyGCkCB9YTVLYWZST1ZKTm8&...
Money quotes:
Using Deming Economic Systems for selected economic sectors to introduce ‘Customers First’ energy and environmental policies.
26. This seems like a different kind of economic system, with regulated coalitions of companies in each sector managing sector performance to address customer needs. Does this economic system, or sector coalitions, have any precedent?
... A Deming economic system in place, also addresses one of the key deficiencies in the current energy markets, and related economic sectors. A management vacuum currently exists, where no one has the responsibility to ensure customers are best served by the products and services. The current system relies on free market competition and supplier initiatives and investments, and the customers are at the whim of suppliers. Customers end up forced to purchase inferior products with a very expensive total loaded cost. Since no one is in charge of the markets, to ensure customers receive the best mix of products and services, the markets underperform substantially. Establishing economic sector groups to address the energy market performance, subject to regulation and oversight and contingent on government directed funding, elevates market performance and places energy market management responsibility on an entity responsible to customers.
https://drive.google.com/folderview?id=0B6HOZyGCkCB9YTVLYWZST1ZKTm8&...
Money quotes:
Using Deming Economic Systems for selected economic sectors to introduce ‘Customers First’ energy and environmental policies.
26. This seems like a different kind of economic system, with regulated coalitions of companies in each sector managing sector performance to address customer needs. Does this economic system, or sector coalitions, have any precedent?
... A Deming economic system in place, also addresses one of the key deficiencies in the current energy markets, and related economic sectors. A management vacuum currently exists, where no one has the responsibility to ensure customers are best served by the products and services. The current system relies on free market competition and supplier initiatives and investments, and the customers are at the whim of suppliers. Customers end up forced to purchase inferior products with a very expensive total loaded cost. Since no one is in charge of the markets, to ensure customers receive the best mix of products and services, the markets underperform substantially. Establishing economic sector groups to address the energy market performance, subject to regulation and oversight and contingent on government directed funding, elevates market performance and places energy market management responsibility on an entity responsible to customers.
What a travesty and playground for con artists the "privatization" of electrical generation has become in places like Massachusetts.
Inclusiveness is just a patch on a failed system. Until there is a system that gives people agency with respect the capital that produces the rent basis of wealth, there will be no permanent change - there is simply a need for the economic culture to change. We need to make it much more democratically based.
1
Where are productivity gains coming from? Harder working, better trained labor or automation? The argument is always "increase pay to match productivity growth", but what if labor isn't a part of the productivity gains?
What happens as automation continues to make labor increasingly ill-relevant? Self-serve kiosks, self-driving trucks, 3-D printing of everything, internet based virtual goods, and drone delivery?
We are trying to answer the wrong question. We assume the system is broken because the greedy capital class isn't sharing with the labor class, and we need "inclusive capitalism" to keep labor in the game. The problem is the capital class increasing doesn't need the labor class. The question we need to address is how to structure the economy when labor isn't a scarce resource, or said differently, when the labor demand is far less than the working-age population. Creative destruction is destroying jobs fast than it creates them - this hasn't always been the case.
This is the economics of Wall-e and Star-trek. We need a different model.
What happens as automation continues to make labor increasingly ill-relevant? Self-serve kiosks, self-driving trucks, 3-D printing of everything, internet based virtual goods, and drone delivery?
We are trying to answer the wrong question. We assume the system is broken because the greedy capital class isn't sharing with the labor class, and we need "inclusive capitalism" to keep labor in the game. The problem is the capital class increasing doesn't need the labor class. The question we need to address is how to structure the economy when labor isn't a scarce resource, or said differently, when the labor demand is far less than the working-age population. Creative destruction is destroying jobs fast than it creates them - this hasn't always been the case.
This is the economics of Wall-e and Star-trek. We need a different model.
4
I suggest changing the name of this initiative from "inclusive capitalism" to "fair deal."
"Fair deal" policies will market better and be easier to rally behind than "inclusive capitalism."
"Fair deal" policies will market better and be easier to rally behind than "inclusive capitalism."
5
The conservatives are crying "redistribution." But what income taxes has the president said he wants raised? In this entire article I did not come across a single income tax increase the president is calling for.
Capital gains? Inheritance? Unearned income.
If the cons don't want the redistribution of income after its been earned, then let's redistribute the income before it is earned by taking the legal shackles off of labor so they can compete fairly, freely and openly in the marketplace against capital:
Repeal Taft Hartley
Repeal all so called state right to work laws.
Repeal all no-strike laws.
A fair fight. Then let's see how creative and innovative the "job creators" are.
Capital gains? Inheritance? Unearned income.
If the cons don't want the redistribution of income after its been earned, then let's redistribute the income before it is earned by taking the legal shackles off of labor so they can compete fairly, freely and openly in the marketplace against capital:
Repeal Taft Hartley
Repeal all so called state right to work laws.
Repeal all no-strike laws.
A fair fight. Then let's see how creative and innovative the "job creators" are.
13
Otherwise called "Trickle up economics".
4
This whole notion of inclusive capitalism sounds like the breath fresh of air the world has been waiting for until one remembers the makeup of our nation's congress: a Republican majority along with mainstream Democrats so in the hip pockets of corporate capitalism as to defy the term liberal.
The old capitalist idea, that it's my land, my building, my investment, I'm going to slice up the profit pie my way has (or should have) gone the way of the belief that the resources and environment of the earth are there for the land owners to despoil any way they choose. After all, what is labor but a resource, the human environment of the country? The huge disparity-in-income phenomenon along with the movement of capital and operations overseas we’ve arrived at is but another manifestation of corporate capitalists using up resources, not regenerating or conserving them, and dumping the waste.
No, inclusive capitalism should be the presentation to corporations and capitalists that it is not entirely their system to rig, to own, and to manipulate to their every benefit. Inclusive capitalism makes all too much sense. I’m not optimistic in 2015 given the setup of the political establishment across the land.
The old capitalist idea, that it's my land, my building, my investment, I'm going to slice up the profit pie my way has (or should have) gone the way of the belief that the resources and environment of the earth are there for the land owners to despoil any way they choose. After all, what is labor but a resource, the human environment of the country? The huge disparity-in-income phenomenon along with the movement of capital and operations overseas we’ve arrived at is but another manifestation of corporate capitalists using up resources, not regenerating or conserving them, and dumping the waste.
No, inclusive capitalism should be the presentation to corporations and capitalists that it is not entirely their system to rig, to own, and to manipulate to their every benefit. Inclusive capitalism makes all too much sense. I’m not optimistic in 2015 given the setup of the political establishment across the land.
8
"Inclusive Capitalism"
Socialism by any other name is still a failure.
Socialism by any other name is still a failure.
1
Eric
There some places or countries where "socialism" is not a failure, Sweden for example. For more on democratic socialism see:
http://en.wikipedia.org/wiki/Democratic_socialism
There some places or countries where "socialism" is not a failure, Sweden for example. For more on democratic socialism see:
http://en.wikipedia.org/wiki/Democratic_socialism
5
American capitalism occasionally fails and - when it has to be bailed out at taxpayers' expense - they call that part...socialism. Interesting, yet stupid.
Sweden is more like a large family than a country - just look at the demographics. It is slightly larger than Massachusetts - and I would contend that it is far easier to MAKE socialism work in a large family, than it is in a large country. And, by the way, have you looked at the cracks appearing in Sweden of late?
8
The notion that Larry Summers' thinking could correct this problem is in itself enough to make one cry - or laugh out loud. He IS the problem - a person who oversaw the ever-increasing wealth that is now destroying our country. Now he flips around with an obvious idea that comes from other people to pretend to solve the problem he created. The fact that anyone is still listening to an architect of this disaster is yet another symptom of why we can't fix it. Powerful men can fail and fail again and we still can't be rid of them.
We need new people whose thoughts are bigger and brighter than their egos. These same old same old guys had their chance. Enough already.
We need new people whose thoughts are bigger and brighter than their egos. These same old same old guys had their chance. Enough already.
12
I have never studied economics systematically, so I could well be utterly mistaken in this naive observation: It seems to me that it is a serious mistake to act as if the producers of goods and services (labor) are not the same people who buy them (consumers). Henry Ford (that nasty old antisemite!) didn't make that mistake: he priced his cars and paid his labor so that the workers could but what they made, and he took a cut on each transaction. That improved things for everyone and made Henry very rich.
Can someone please tell me what I am missing?
Can someone please tell me what I am missing?
7
I've just read through this article and the proposals make sense to me.
The policies aim to counterpunch capitalism. They aim to sidestep the socialist label Republicans have affixed to Democrats. New thinking. Bravo.
But like all Democratic Think Tank style thinking they are way too complicated for the average Joe to fathom and I don't mean that condescendingly.
Republicans have great at forging simple slogan mantras they repeat over and over: Job Creators. Job Killing. Failed policies. Tax and spend. Take back our country. Freedom. Soft on terror. Heck, they've even made the word liberal a dirty word forcing Democrats to rename themselves progressive.
Before the Pointy Headed Liberals who are thinking up these new strategies try them out on the public, they need to run them through a slogan meter and come up with those few word phrases that ring and sting. The average Joe who doesn't own stocks doesn't have a clue what a capital gain is or why it's unfair to pass an appreciated trust fund to along to a trust fund baby when every penny of a worker's wages are up for grabs. How about "You sweated for your money. He sat pretty."
Sure, the Republicans will call that class warfare, but it's time for the white working class poor to understand what class they actually belong to. The Democrats should steal the thunder of the Republicans. "It's class welfare when the rich hide their earnings." "It's class welfare when you don't get a raise but the CEO does."
The policies aim to counterpunch capitalism. They aim to sidestep the socialist label Republicans have affixed to Democrats. New thinking. Bravo.
But like all Democratic Think Tank style thinking they are way too complicated for the average Joe to fathom and I don't mean that condescendingly.
Republicans have great at forging simple slogan mantras they repeat over and over: Job Creators. Job Killing. Failed policies. Tax and spend. Take back our country. Freedom. Soft on terror. Heck, they've even made the word liberal a dirty word forcing Democrats to rename themselves progressive.
Before the Pointy Headed Liberals who are thinking up these new strategies try them out on the public, they need to run them through a slogan meter and come up with those few word phrases that ring and sting. The average Joe who doesn't own stocks doesn't have a clue what a capital gain is or why it's unfair to pass an appreciated trust fund to along to a trust fund baby when every penny of a worker's wages are up for grabs. How about "You sweated for your money. He sat pretty."
Sure, the Republicans will call that class warfare, but it's time for the white working class poor to understand what class they actually belong to. The Democrats should steal the thunder of the Republicans. "It's class welfare when the rich hide their earnings." "It's class welfare when you don't get a raise but the CEO does."
19
@Thoughtful
"Progressive" is hardly a rebranding of "Liberal." Anyone who doesn't know the difference hasn't been listening to enough Phil Ochs, e.g., "Love me, I'm a Liberal."
Meanwhile, the People have had and will continue to have punchy counter-slogans to counteract the bogus Republican messaging trumpeted by Faux Noise and the rest of the right-wing media machine.
If they can turn off their radios long enough to listen to the voice of their still, small political conscience from pre-Reagan days, 'regular' folks might yet be moved by "Solidarity forever," "Power to the People," "We shall overcome," and "Give peace a chance."
"Progressive" is hardly a rebranding of "Liberal." Anyone who doesn't know the difference hasn't been listening to enough Phil Ochs, e.g., "Love me, I'm a Liberal."
Meanwhile, the People have had and will continue to have punchy counter-slogans to counteract the bogus Republican messaging trumpeted by Faux Noise and the rest of the right-wing media machine.
If they can turn off their radios long enough to listen to the voice of their still, small political conscience from pre-Reagan days, 'regular' folks might yet be moved by "Solidarity forever," "Power to the People," "We shall overcome," and "Give peace a chance."
We all know the myth of St. George and the Dragon. There's a famine lying upon the land because a Dragon is hoarding all the gold. In the medieval era, it was an evil king. In the modern era, it's the capitalist corporations. They have captured the federal government and most state governments in all their branches, and they can do pretty much what they want. They have engineered this inequality because they have defeated everyone who stood in their way. Now, there are trillions in excess corporate profits (the dragon's hoard) with no place to go. People are going hungry (the famine) because their wages are too low. Thus there is no demand.
The only way to change that is by joining labor unions and putting ourselves on the line again, the way people did 100 years ago. Everything the middle class once was, it owed to the unions, not capitalism. St. George is the collective power of the workers, and the time has come to slay the dragon
through political organization and the ballot box. Not by voting D or R but by joining labor unions and forming a radical Labor party. Seize the day.
The only way to change that is by joining labor unions and putting ourselves on the line again, the way people did 100 years ago. Everything the middle class once was, it owed to the unions, not capitalism. St. George is the collective power of the workers, and the time has come to slay the dragon
through political organization and the ballot box. Not by voting D or R but by joining labor unions and forming a radical Labor party. Seize the day.
18
I truly agree. A radical Labor party is coming to America. That's the only way.
Good luck, my fellow Dems, on selling Inclusive Capitalism to those resistant, (perhaps) working-class Americans. It is, I believe, a good plan and certainly well intentioned.
But the Republicans discovered some time ago that logic and honesty are not useful tools in persuading this group; rather, one needs emotion, and some full-throated falsehoods to bring them around. So all the facts, for example, about the successes of Obamacare fall on ears allready filled with the Right's propaganda, and do not penetrate. (Try reading the comments fillowing a Paul Krugman editorial to see one of the Right's favorite targets getting taken to task.)
We need the reforms of Inclusive Capitalism, there is no question about that. We need far more, in truth. But the Democrats need to find a way to demonize the opposition, in order to sell the ideas. They need some colorful language and a repetitive cant that will resonate. Sad but true, alas.
I am pleading, here: Go for it! Seriously, the ends do justify the means sometimes!
But the Republicans discovered some time ago that logic and honesty are not useful tools in persuading this group; rather, one needs emotion, and some full-throated falsehoods to bring them around. So all the facts, for example, about the successes of Obamacare fall on ears allready filled with the Right's propaganda, and do not penetrate. (Try reading the comments fillowing a Paul Krugman editorial to see one of the Right's favorite targets getting taken to task.)
We need the reforms of Inclusive Capitalism, there is no question about that. We need far more, in truth. But the Democrats need to find a way to demonize the opposition, in order to sell the ideas. They need some colorful language and a repetitive cant that will resonate. Sad but true, alas.
I am pleading, here: Go for it! Seriously, the ends do justify the means sometimes!
5
Inclusive capitalism is another scam concocted by the shills of the super rich who sit in their cushy University endowment chairs and invent esoteric schemes to protect the super rich from the growing desperation of the world's masses. How about just raising the minimum wage to 15 dollars an hour. That would be "inclusive capitalism" that the 99% could easily understand.
2
Save us, please, from linguistic formulations signifying nothing. "Inclusive capitalism" is nothing more than diluted socialism.
The rubber now meets the road at a new intersection: the viability of the planet! Should we continue to insist that "owners" of capital be free to exploit whatever resources they own to increase profits? Too often, humans who work for a living are counted merely as resources, as "costs" to be minimized. The capitalists among us--the ones who actually "own" the capital and who think they should be calling the tune--will be the last to sign onto "inclusive capitalism" because it challenges their "rights" as "owners."
One might imagine that by this time, the battle between Capitalism and Socialism would be a subject for history classes, and in most of Europe, it is. But in America, the capitalists fight on, in league with religious fundamentalists still battling Darwin, in concert with deniers of climate change. The latter are significant because the never-ending grasp for more, more, more, the religion of Mammon, demands denial of science on all fronts.
Capitalism is the celebration of Me and of Mammon. It is a religion. It destroys all who resist, whether they be workers, or scientists, environmentalists--life on Earth! Capitalism celebrates the ascendency of Dead Things over Life; it is a death cult that will resist change to the last gasp. It cannot help itself. Read Picketty!
Time past to put capitalsim in its grave, and to stop mincing words.
The rubber now meets the road at a new intersection: the viability of the planet! Should we continue to insist that "owners" of capital be free to exploit whatever resources they own to increase profits? Too often, humans who work for a living are counted merely as resources, as "costs" to be minimized. The capitalists among us--the ones who actually "own" the capital and who think they should be calling the tune--will be the last to sign onto "inclusive capitalism" because it challenges their "rights" as "owners."
One might imagine that by this time, the battle between Capitalism and Socialism would be a subject for history classes, and in most of Europe, it is. But in America, the capitalists fight on, in league with religious fundamentalists still battling Darwin, in concert with deniers of climate change. The latter are significant because the never-ending grasp for more, more, more, the religion of Mammon, demands denial of science on all fronts.
Capitalism is the celebration of Me and of Mammon. It is a religion. It destroys all who resist, whether they be workers, or scientists, environmentalists--life on Earth! Capitalism celebrates the ascendency of Dead Things over Life; it is a death cult that will resist change to the last gasp. It cannot help itself. Read Picketty!
Time past to put capitalsim in its grave, and to stop mincing words.
6
There can no longer be discussion of this without including the effects of technology. Robots, sensors, and apps are obliterating jobs that will never be recovered unless we choose people over machines. It is also an oft mentioned issue with tech wealth that firms like Facebook make billions for a very few people, compared with more traditional manufacturing. Somehow we reward vapor. What remains is service jobs to try and fill the vacuum and they command low pay as they not specialized.
So yes by all means tax the rich and the have poor build roads, but the problem will not mitigate unless we really analyze how to redistribute meaningful work, not just money.
So yes by all means tax the rich and the have poor build roads, but the problem will not mitigate unless we really analyze how to redistribute meaningful work, not just money.
5
Given that Capitalism trumps Labor, inequities towards the middle class and the poor will continue...unless the government people elected, serves their needs in a more equitable way. For now, the system favors the 'rich and powerful'. Without a paradigm, capitalism cannot expect to save itself.
This economy is doing what all economies do. It is trending toward commodity status all over the place. When this happens capital seeks the lowest labor costs and the lowest raw material costs by moving abroad. This typically happens in a second or third world environment. The problem in the first world is excessively rapid commoditization. The zeitgeist of information technology went to commodity status right away, look at where the iPad is made for instance. The cure is two part. First, we need innovation that will being about the next economic wave which will employ first world people. Second we need to rein in globalization which is the accelerator of commoditization. Innovation is happening, but globalization is part of the secret sauce that is making the 1% even wealthier. So reining it in will take either real political courage or a calamity worse than the Great Recession. Liverpool was once the center of a global textile empire, then globalization made it a backwater.
1
Yours is, unfortunately, a non-solution. As far as the commoditization of nearly everything, you can't unring a bell. Hoping for the next big thing is wishful thinking. We have to go with what we have, and that may be a social fix to an economic problem.
FWIW, I don't think this is it, though it is a start along the right path.
FWIW, I don't think this is it, though it is a start along the right path.
This is a great first step to address the disastrous economic policy of trickle down that has become a religion to the right of this country. These people are still screaming this insane dogma through the media empire they control in this country. Obama is a sane man surrounded by crazy people who worship wealth to the point where they will destroy this country and ultimately themselves just because they cannot admit how wrong they are. This is a step that will not be taken because the right controls the agenda but hopefully the many will now see that all they care about is the millionaires and billionaires many of whom are more than willing to contribute to the welfare of this country.
2
We don't have capitalism, we cave croniesm. What happened to letting the market punish the banks when they fail? Why was the CEO of Lehman allowed to walk away with $400 million in cash? Why was Goldman Sachs bailed out?
2
The paradox that lies at the heart of this piece seems to have completely escaped the author. Capitalism, by its very definition, eliminates competitors until only monopolies or near-monopolies rule the marketplace. It ultimately can reduce wages to slave levels because in the nd-game there is no alternative employment. It finally co-opts the political process to further these ends. To paraphrase John Connor in The Terminator - "That's what it DOES."
The extant tax structure in the late 50s and early 60s inhibited this process, driving money into wages and research instead of executive bonuses. The proper role of the government should be to reapportion the text structure to re-ward distribution and punish concentration, not to invent more programs.
The extant tax structure in the late 50s and early 60s inhibited this process, driving money into wages and research instead of executive bonuses. The proper role of the government should be to reapportion the text structure to re-ward distribution and punish concentration, not to invent more programs.
10
Yes, we need another trustbuster president like Teddy Roosevelt before it's too late.
"Inclusive Capitalism" A great idea. Only about 100 years too late.
2
Bandaid on a bullet wound.
You want to see the American economy flourish? Start writing off, or forgiving entirely, huge portions of students loans. I should remind readers who think this may be "unfair" that lenders have been able to buy many private loans for pennies on the dollar, and that new loans backed by the federal government stand to make an even greater profit than their private counterparts.
No more of this political posturing over student-loan interest rates, either. Oh, so one get's to pay $650 rather than $725 a month in interest now? Big deal. That's a distraction from what really needs to happen: a massive debt jubilee.
You want to see the American economy flourish? Start writing off, or forgiving entirely, huge portions of students loans. I should remind readers who think this may be "unfair" that lenders have been able to buy many private loans for pennies on the dollar, and that new loans backed by the federal government stand to make an even greater profit than their private counterparts.
No more of this political posturing over student-loan interest rates, either. Oh, so one get's to pay $650 rather than $725 a month in interest now? Big deal. That's a distraction from what really needs to happen: a massive debt jubilee.
9
Semantics in major policy debates are critical. Using the word "inclusive" as an adjective for capitalism suggests a social welfare program rather than a fundamental shift in thinking about ways to cause free market capitalism to create mechanisms that benefit people across the entire economic spectrum.
You can bet your carried interest deduction that Frank Lutz and Fox News, among many others, have already come up with the "message points" against inclusive capitalism: it is a policy that rewards people for not working, one that chokes the American Dream, and a direction that expands social welfare programs that enable people to live off government, etc., etc., etc.
While it is still in its formative stage, the Democrats need to reposition this new policy direction, so that it doesn't die aborning. Now about "Expansive Capitalism"? That's a better description of what they have in mind.
You can bet your carried interest deduction that Frank Lutz and Fox News, among many others, have already come up with the "message points" against inclusive capitalism: it is a policy that rewards people for not working, one that chokes the American Dream, and a direction that expands social welfare programs that enable people to live off government, etc., etc., etc.
While it is still in its formative stage, the Democrats need to reposition this new policy direction, so that it doesn't die aborning. Now about "Expansive Capitalism"? That's a better description of what they have in mind.
3
Wasn't it one our greatest minds who said "you can't solve problems by using the same kind of thinking that created them". That says it all, in this case. Capitalism is a cancer, we will either remove it or it will devour us all.
2
Mr. Edsall refers to a report criticizing "trickle-down economics."
There never was an such an economic theory. The term was coined by the American humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."
It has been used ever since by liberals falsely attributing it to conservative economists.
There never was an such an economic theory. The term was coined by the American humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."
It has been used ever since by liberals falsely attributing it to conservative economists.
Semantics. This rose also goes by "Reaganomics," "supply-side economics" and a few other names.
1
'Inclusive' Capitalism? Lipstick on a pig.
6
The inclusive capitalism debate is an important debate because it address in a fundamental way the present world (dis)order that enriches the few, impoverishes the many and imperils people, species and planet.
However, the debate has to dig deeper. It has to lay bare the interconnections of the global monetary, financial, economic and commercial systems and transform them. One of the ways of doing this is to pay far more attention to the unjust, unsustainable, and therefore, unstable international monetary system. Changing that system is changing those other global systems because as glue it binds them together.
One way of transformation, not reform, of the international monetary system is proposed in Verhagen 2012 “The Tierra Solution: Resolving the climate crisis through monetary transformation” which would combat the looming climate catastrophe and advance low-carbon, climate resilient development. The Tierra system’s conceptual, institutional, ethical and strategic dimensions are updated at www.timun.net.
However, the debate has to dig deeper. It has to lay bare the interconnections of the global monetary, financial, economic and commercial systems and transform them. One of the ways of doing this is to pay far more attention to the unjust, unsustainable, and therefore, unstable international monetary system. Changing that system is changing those other global systems because as glue it binds them together.
One way of transformation, not reform, of the international monetary system is proposed in Verhagen 2012 “The Tierra Solution: Resolving the climate crisis through monetary transformation” which would combat the looming climate catastrophe and advance low-carbon, climate resilient development. The Tierra system’s conceptual, institutional, ethical and strategic dimensions are updated at www.timun.net.
Pope Francis described the "economy of exclusion" and called on governments worldwide to make sure that all had access to jobs sufficient to support a family. The term "inclusive capitalism" now used by key Democrats is aimed at the working class and "stands apart" from the War on Poverty which was directed at, "the very poor".
In terms of family wealth the top 10% own 75% of the wealth and clearly don't need any help. The next 40% (the middle class) are OK except for a slow 8% decline since 1995. It is the poorer half of the population that lost 70% of their wealth in a decades long trend that has not abated in spite of earned income and child care tax credits, food stamps and other programs. In fact, the credits have only encouraged the growth of low paying jobs that give workers maximum benefits and businesses low salaries. President Obama wants to expand hand-outs rather than focus on jobs.
A "forceful market-oriented economic agenda" was suggested by Bill Gates last March. A replacement of the job killing payroll taxes would encourage full employment and higher salaries. A 4% VAT and reduction in unnecessary business tax expenditures would also provide a better tax base for Social Security and Medicare.
The tax credit approach for workers has not helped to increase jobs or raise salaries. If payrolls were not taxed in the first place the self-defeating tax credits would not be needed.
In terms of family wealth the top 10% own 75% of the wealth and clearly don't need any help. The next 40% (the middle class) are OK except for a slow 8% decline since 1995. It is the poorer half of the population that lost 70% of their wealth in a decades long trend that has not abated in spite of earned income and child care tax credits, food stamps and other programs. In fact, the credits have only encouraged the growth of low paying jobs that give workers maximum benefits and businesses low salaries. President Obama wants to expand hand-outs rather than focus on jobs.
A "forceful market-oriented economic agenda" was suggested by Bill Gates last March. A replacement of the job killing payroll taxes would encourage full employment and higher salaries. A 4% VAT and reduction in unnecessary business tax expenditures would also provide a better tax base for Social Security and Medicare.
The tax credit approach for workers has not helped to increase jobs or raise salaries. If payrolls were not taxed in the first place the self-defeating tax credits would not be needed.
1
Sen. Orrin Hatch, chairman of the Senate Finance Committee, said, “The president needs to stop listening to his liberal allies who want to raise taxes at all costs and start working with Congress to fix our broken tax code.” Hatch is either obtuse or disingenuous. Fixing the muddled code is exactly what some of Pres. Obama's inclusive capitalism proposals would attempt to do. It's difficult to argue against an increased tax on capital gains, which has in effect been giving free billions to successful investors for decades, and depriving the Treasury every day of them. And the untaxed, unrestricted transfer of various forms of wealth from one generation to the next benefits only a tiny percentage and does nothing directly for the rest of society, from whom much of that wealth was demonstrably derived.
The entire Republican plan consists of tiny, incremental steps, taken far more to dampen the fire of opposition than as acts of altruism. I have not heard a consistent, sensible, well-argued tax or economic plan that is about Us, about day care and health care and Medicare, about generating more jobs with a genuine living wage that is not the product of trickle-down voodoo squeezed from more tax cuts for the "makers," nor about any national plan to repair and enhance transportation infrastructure, and so on. The Republican plan seems to consist mainly of two words: Status Quo. And another three: We're In Charge. I have two more words, when it comes to 2016: Forget It.
The entire Republican plan consists of tiny, incremental steps, taken far more to dampen the fire of opposition than as acts of altruism. I have not heard a consistent, sensible, well-argued tax or economic plan that is about Us, about day care and health care and Medicare, about generating more jobs with a genuine living wage that is not the product of trickle-down voodoo squeezed from more tax cuts for the "makers," nor about any national plan to repair and enhance transportation infrastructure, and so on. The Republican plan seems to consist mainly of two words: Status Quo. And another three: We're In Charge. I have two more words, when it comes to 2016: Forget It.
3
Edsall is implicitly discussing that turning point that some like Stiglitz or Thurow (forgiving him the overly-Japan focus) have argued for years. We either get a more inclusive economic order possibly championed by the Democrats, or the increasingly regressive one championed by the Republicans.
The latter instance will naturally evolve into a police state as the "1%" will want to protect their interests from the dispossessed. That groundwork has already been laid when we see backdoor federalized, militarized police that remind one of the old Soviet (NKVD, KGB) Interior Ministry troops used to put down internal unrest. Also, a domestic intelligence network to monitor dissent.
I have been praying for a new agenda around FDR's 4 Freedoms for a generation now. Otherwise, history suggests another, more frightening possibility: a modern Savonarola inciting a giant bonfire in a downfallen latter-day Venice after the fall of the Medici. That is more likely today, unless a Jeb Bush or 'Mit' Romney comes down with polio.
The latter instance will naturally evolve into a police state as the "1%" will want to protect their interests from the dispossessed. That groundwork has already been laid when we see backdoor federalized, militarized police that remind one of the old Soviet (NKVD, KGB) Interior Ministry troops used to put down internal unrest. Also, a domestic intelligence network to monitor dissent.
I have been praying for a new agenda around FDR's 4 Freedoms for a generation now. Otherwise, history suggests another, more frightening possibility: a modern Savonarola inciting a giant bonfire in a downfallen latter-day Venice after the fall of the Medici. That is more likely today, unless a Jeb Bush or 'Mit' Romney comes down with polio.
4
The problem here is that Most of the taxes lower income people pay are state not federal taxes, these taxes are sales and property taxes, even if people rent their property taxes are passed along from their landlords. Lower income people really pay very little in income taxes when the effects of refunds are factored in. So what we are doing is taxing the wealthy to subsidize lower income people. On the surface this is fine since rates of labor participation will probably remain low. But for the working poor you would be far better off strengthening labor unions and allowing a dynamism to take place which would allow for a proper level of wealth distribution to be achieved, you cut out the middleman, which is the government, which would be imposing a static rate of redistribution, and which would be based more on political realities than what is proper, and what could be had through collective bargaining.
The NYT tells us today Republicans are reporting to the Koch brothers to audition for their party's presidential nomination. The Koch brothers are two of 80 some individuals who own most of the earth's wealth.
The Reactionary Republican Party has a single mission: serve the Kochs of the world by preserving government enforced cannibalistic capitalism--capitalism carried to its extreme that means if I am wealthy and you are poor, government will protect my right to take the shirt off your back and you should support this government and be thankful I haven't taken the food out of your child's mouth...but that may come later.
Inclusive capitalism existed post WWII, but died with the inauguration of Reagan and the purchase of the old Republican Party as an agent of the super rich. Reactionary Republicans, serving the super rich, have placed America on course with a single objective: the 80 some individuals are not satisfied with owning half of the earth, they want all of it.
The Reactionary Republican Party has a single mission: serve the Kochs of the world by preserving government enforced cannibalistic capitalism--capitalism carried to its extreme that means if I am wealthy and you are poor, government will protect my right to take the shirt off your back and you should support this government and be thankful I haven't taken the food out of your child's mouth...but that may come later.
Inclusive capitalism existed post WWII, but died with the inauguration of Reagan and the purchase of the old Republican Party as an agent of the super rich. Reactionary Republicans, serving the super rich, have placed America on course with a single objective: the 80 some individuals are not satisfied with owning half of the earth, they want all of it.
3
Communism has failed. Uncontrolled capitalism cannot be stable. Socialism is not that bad. Inclusive capitalism may not be the best form of economy in absolute terms but it sure beats the extreme condition where this society and the entire planet are converging towards.
Congrats and thanks to Thomas B Edsall for a well written and in depth op ed.
Congrats and thanks to Thomas B Edsall for a well written and in depth op ed.
1
According to conservative thinkers all government intervention is bad even though history has proven otherwise (Social Security, Medicare, the building of the Interstate highway system, the G.I.education bill, etc.,etc.
Eating their children is an exercise in nutrition to the Grover Norquist tribe of cannibals.
Eating their children is an exercise in nutrition to the Grover Norquist tribe of cannibals.
1
Crony capitalism is what America has, far different than capitalism. America is also a fascist oligarchy not even close to a democracy, this country is a joke and the clueless majority don't even see that the joke is on them.
2
For those who are saying we need to destroy capitalism I ask, replace it with what? Capitalism, like democracy being the worst form of government, is the worst economic and political system except all those others that have been tried. It isn't the system, it is how we control that system.
2
Summers's ideas good for America?? You have got to be kidding me.
Summers is a main reason the Main street got none of the great payoff that went to wall street.
Summers is a main reason the Main street got none of the great payoff that went to wall street.
1
"Inclusive capitalism" is a label that looked a little wan when it came off the talking points assembly line and will be forgotten in six months. Save it for the gullible.
Run Elizabeth, run.
Run Elizabeth, run.
1
The term Capitalism is such a generality it takes many forms. The question is. Is it worth saving in the Oligarchic mode it is in now in or can it be "reformed"?
2
All the ideas expressed here have merit, but it seems to me unlikely that any of them will be implemented at a level that will make any difference. Without the intervention of a war, some sort of financial catastrophe that makes the current rich guys paupers or a violent revolution things are likely to remain the same. The current set of rich people own the country; both the government and the economy. They like the current arrangement because it is very good for them. Populist talk is great for politicians who are in the minority because they are unlikely to actually do anything that will make them suffer the paybacks that will inevitably come from actually implementing the policies that mess up the current economic owners great deal.
I'm not saying "abandon all hope". It's more like "I would be surprised to see a change of any real positive value happen in my lifetime". And when change does come, it is likely to come after a really bad disaster of some sort. It is difficult to hope for that.
I'm not saying "abandon all hope". It's more like "I would be surprised to see a change of any real positive value happen in my lifetime". And when change does come, it is likely to come after a really bad disaster of some sort. It is difficult to hope for that.
2
I love the single chart presented in this article. It shows starkly what has happened in the past 15 years that is difficult to see in the media echo chamber that is the source for most people for information needed to run their lives.
This chart and others that back up the well argued, concise argument put forward here by Mr. Edsall should be put on the placards inside subway cars, on the posters in subway stations, and in public service announcements along with the American Cancer Society's anti smoking campaign.
I'm thinking of making a tee shirt of this chart. It may be the only way people who've been blindly voting republican since 1994 will get a chance to even see it.
This chart and others that back up the well argued, concise argument put forward here by Mr. Edsall should be put on the placards inside subway cars, on the posters in subway stations, and in public service announcements along with the American Cancer Society's anti smoking campaign.
I'm thinking of making a tee shirt of this chart. It may be the only way people who've been blindly voting republican since 1994 will get a chance to even see it.
3
While I understand the gist of this the idea of inclusive Capitalism is a bit of an oxymoron isn't it? Capitalists, like proponents of all ideologies, think idealistically when they say it's all about "free markets," or "enabling the individual to do whatever, etc., etc." in some sort of conflation of Capitalism with Democracy. The truth of the matter is, at heart, Capitalism is the unleashing of human potential (true enough), but it's the unleashing towards selfish, self-centered ends and goals. The betterment of self for self and not, necessarily, for society. It allows the individual to pursue as far as possible their own particular proclivities toward greed, avarice and all the relatively narcissistic qualities inherent in all of us. This is both its great strength, juxtaposed against the other ideologies Man has invented to date, and its greatest flaw.
As a consequence I feel there can never be any such thing as "inclusive" Capitalism. All systems that strive to allow the individual maximum "play for self" ultimately end up concentrating money, power, whatever, into the few in extractive (of society), exclusive fashion. Our current era is proof of this. Indeed I suspect those who call themselves Capitalists would be reactionary towards the idea and call it any number of other 'isms" than Capitalism. And in their reactionary fervor contribute further to inequality. This is their basic blind-spot.
Just some thoughts.
John~
American Net'Zen
As a consequence I feel there can never be any such thing as "inclusive" Capitalism. All systems that strive to allow the individual maximum "play for self" ultimately end up concentrating money, power, whatever, into the few in extractive (of society), exclusive fashion. Our current era is proof of this. Indeed I suspect those who call themselves Capitalists would be reactionary towards the idea and call it any number of other 'isms" than Capitalism. And in their reactionary fervor contribute further to inequality. This is their basic blind-spot.
Just some thoughts.
John~
American Net'Zen
2
Most of these proposals are in the right direction, but the concentrate on only part of the problem--inequality. The basic fact is that we must get more money to the people who need it and will spend it. We should not only take it from those who do not need it and will use it to speculate, but we should get it directly to the non-rich.
We must keep the balance sheet of the private sector positive. More money must come into it than goes out. Where does money flow from and to?
There are two places. First, the federal government. When it spend, it adds money to the private sector. When it taxes, it takes money out. The deficit measures how much it puts in net. When we have a surplus, we take money out net. THE FEDERAL DEFICIT IS INCOME FOR PEOPLE, BUSINESSES, AND STATE AND LOCAL GOVERNMENTS.
The other place is our trade balance. When it is positive, money is put in the private sector; when it is negative, money is taken out.
The net effect of these two sectors must be positive. If we have a large trade balance, we only need a small deficit or can even support a surplus like Australia.
Today we have a large negative trade balance. We need a large deficit.
This is a simplification. There are matters I left out like once we have full employment or if we have shortages, we must cut back on spending or raise taxes to avoid inflation. Also federal spending must get the money to those who need it and will spend it, not those who do not need it and will speculate with it.
We must keep the balance sheet of the private sector positive. More money must come into it than goes out. Where does money flow from and to?
There are two places. First, the federal government. When it spend, it adds money to the private sector. When it taxes, it takes money out. The deficit measures how much it puts in net. When we have a surplus, we take money out net. THE FEDERAL DEFICIT IS INCOME FOR PEOPLE, BUSINESSES, AND STATE AND LOCAL GOVERNMENTS.
The other place is our trade balance. When it is positive, money is put in the private sector; when it is negative, money is taken out.
The net effect of these two sectors must be positive. If we have a large trade balance, we only need a small deficit or can even support a surplus like Australia.
Today we have a large negative trade balance. We need a large deficit.
This is a simplification. There are matters I left out like once we have full employment or if we have shortages, we must cut back on spending or raise taxes to avoid inflation. Also federal spending must get the money to those who need it and will spend it, not those who do not need it and will speculate with it.
3
As long as America is a continental empire whose constituent provinces, the states, can shape their own laws to be increasingly "business friendly," all this work from the top down merely plugs leaks.
The years on the labor chart that look healthy resulted from union activity on behalf of workers. Workers must have a bargaining position that is as strong as the employers'; if they don't, workers can easily be divided and marginalized.
About 50 years ago, New England mills that had been prosperous shortly before began to close. Was cloth no longer in vogue? Did the mills put out a shoddy product? No and no. The work was heading south to states like North Carolina that were (that wonderful ironic phrase) "right to work," which meant that the same machines could spin the same cloth under the supervision of a non-union worker.
As with many types of erosion, this was just the first wave. Later, the jobs in the south went overseas in search of even cheaper workers.
Corporations exist to make money. The CEO sells the corporation's product or service at the biggest possible mark-up. If she fails to do so, the Board will find a CEO who will. So, asking a company to act as a social agency is like asking a shark to babysit.
Better would be to re-empower unions and to decide as a nation that states' racing to the bottom in order to suck up to corporations must be be a relic of the past.
Jonathan Swift would have a good laugh when we ask corporations to be good citizens.
The years on the labor chart that look healthy resulted from union activity on behalf of workers. Workers must have a bargaining position that is as strong as the employers'; if they don't, workers can easily be divided and marginalized.
About 50 years ago, New England mills that had been prosperous shortly before began to close. Was cloth no longer in vogue? Did the mills put out a shoddy product? No and no. The work was heading south to states like North Carolina that were (that wonderful ironic phrase) "right to work," which meant that the same machines could spin the same cloth under the supervision of a non-union worker.
As with many types of erosion, this was just the first wave. Later, the jobs in the south went overseas in search of even cheaper workers.
Corporations exist to make money. The CEO sells the corporation's product or service at the biggest possible mark-up. If she fails to do so, the Board will find a CEO who will. So, asking a company to act as a social agency is like asking a shark to babysit.
Better would be to re-empower unions and to decide as a nation that states' racing to the bottom in order to suck up to corporations must be be a relic of the past.
Jonathan Swift would have a good laugh when we ask corporations to be good citizens.
10
"Insufficient aggregate demand" is way too bland a phrase to capture what will happen if we don't fix the inequalities. Nafeez Ahmed is more likely correct “less a meaningful shift of direction than a barely transparent effort to rehabilitate a parasitical economic system on the brink of facing a global uprising.” The middle class and poor will come to see that guns, religion and the undocumented are not the real enemies. The bad guys are Wall Street, the war machine and the fossil fuel business..(the last one will actually kill us all.) Obama is offering baby steps in the right direction.
2
Teddy Roosevelt had to hunt and bag the robber barons for the American people at the dawn of the last century. It would be too much to expect his own party to do to the same for the resurgent robber barons enabled by the installation of a Hollywood actor poser placed in the White House three decades ago.
3
"inclusive capitalism" looks like a lot more taxes, a lot more spending and a lot more government regulation of business.
This is a new idea for Democrats?
This is a new idea for Democrats?
1
And the Republican plan? Cut taxes for the wealthy and corporations. Spend lots of money they don't have and blame Democrats for not "cooperating". Then cut everything that helps people, give the rich a yacht deduction. Raise fees("its not a tax"), give helicopter deductions to the rich.
The Plan? Same as always.
Please check which party helps the economy, the people, and the country. It does'nt start with R.
The Plan? Same as always.
Please check which party helps the economy, the people, and the country. It does'nt start with R.
2
Please don't confuse calling out the transparent spin of one party with support for the other.
Not everyone is strident partisan of one party the other. Some of us think they use the exact same tactics and are that neither party holds any moral or intellectual high ground. Shocking, but true.
Not everyone is strident partisan of one party the other. Some of us think they use the exact same tactics and are that neither party holds any moral or intellectual high ground. Shocking, but true.
Capitalism is not the problem. Corporatism is. With the ascendancy of the large entities, usually with international reach, and their status as "people," the middle class in America has been flushed down the toilet or, at best, relegated to the status of "consumer" in our new Gilded Age.
I fear only a second Great Recession, which I've no doubt is coming, will lead to what will overturn our rotten system: a revolution against the very very rich and their institutions. Perhaps then the small can regain come control of what Marx rightly called "the means of production" even as he proposed the wrong answer to the problem of industrial capitalism.
I fear only a second Great Recession, which I've no doubt is coming, will lead to what will overturn our rotten system: a revolution against the very very rich and their institutions. Perhaps then the small can regain come control of what Marx rightly called "the means of production" even as he proposed the wrong answer to the problem of industrial capitalism.
55
Peak Oiler,
I doubt revolution is possible. Even in their depressed state, working people aren't that miserable. If our economy collapses again, it will be reorganized along the lines described in this article rather than in a revolutionary way.
I think something like the reforms described in the article is almost inevitable. Republicans can try to delay it, but they can't prevent it. The only question is how much America's economy and culture decline before we face the realities. We're not going to have a Marxist revolution, but we might be a second-rate economy and culture by the time we face reality.
I doubt revolution is possible. Even in their depressed state, working people aren't that miserable. If our economy collapses again, it will be reorganized along the lines described in this article rather than in a revolutionary way.
I think something like the reforms described in the article is almost inevitable. Republicans can try to delay it, but they can't prevent it. The only question is how much America's economy and culture decline before we face the realities. We're not going to have a Marxist revolution, but we might be a second-rate economy and culture by the time we face reality.
History has shown that capitalism inevitably decays into corporatism without outside forces preventing it. It was the passing of the WWII Generation which allowed this historical lesson to be forgotten.
Henry Ford understood this 100 year ago, when he doubled the wages of his workers so that they could afford the cars they produced. It is good to see the Democrats waking up at long last to the fundamental importance of this issue. Globalization in particular has shifted the balance of power away from labor and towards capital, and produced chronic stress in the economies of the industrialized nations as wage stagnation depresses demand.
6
ford motor company was not publicly held when henry ford did this. he had total control over the company and could do what he wanted. if this happened in a publicly held company today there would be a hostile takeover from one of the bigger stockholders or a private equity firm, ford would be kicked out, half the workers would be laid off and the rest have their pay cut
1
SR, true enough, and really, I think it's naive to blame indivdiual businesses for offshoring jobs. They just can't compete on price if they don't and no, the public won't buy something just because of those "Made in USA" flags. That being said, businessmen bankroll the Republicans and the conservative movement, and so ultimately they are the ones who block legislation that would protect Americans from globalization. By and large, they're a myopic lot, and more at home with microeconomic onsiderations -- how do I squeeze the most out of labor -- than macroeconomic ones. Ultimately self destructive, but it's hard to get them to see that.
No, capitalists can't save capitalism unless/until ' capitalists ' remember that taxes on the wealthiest are not redistribution/socialism - taxes are the capitalist economic tool to fix capitalism when it gets distorted, to get capital trapped at the top of the economic pyramid back into circulation.
Taxes and tax policy are a capitalist economic tool, which, in times past/passed were consider the preferable way to fix economic distortions of capitalism instead of junking capitalism entirely.
Maybe those times are indeed over, if capitalists want to demonize taxation.
Taxes and tax policy are a capitalist economic tool, which, in times past/passed were consider the preferable way to fix economic distortions of capitalism instead of junking capitalism entirely.
Maybe those times are indeed over, if capitalists want to demonize taxation.
52
It's the natural state of things. Baby vultures are born wanting there to be dead things to eat; capitalists can't see the way out of the downward spiral. We need someone who 'welcomes their hatred' to put proper taxation of capital in place. We used to call those people statesmen, but they don't come along very often.
4
Blue - indeed.
2
Ah yes..inclusive capitalism..inclusive if it all flows to the biggest capitalists and they are the ones in control. These jerks are just looking for more victims…I mean customers. Now that corporatism is a victim of its own success, now what? They own and control everything, but where are their customers? The world system stalls, because the demand is dropping. Demand is dropping because of what the corporatists created..a system that only benefits the corporation, not people. There is not need to invent "inclusive capitalism" by the elites. The bottom is doing it by themselves. Renewable energy leads the way, and is brightening humanity's path. Let it not be owned centrally but by individuals and small businesses. Get the oil and gas industries, war profiteers, the control of banks and the whole multinational control of the people of the world, out of the way. Let there truly be free trade, not controlled by these vultures. Has anyone every read about how the WWII kept going? Oil and gas sold to everyone on all sides. Business is fine and a cornerstone of all civilizations. But it has to be at the service of civilization not the controller of it.
11
The American people keep voting people into office who don't want a middle class, let the middle class fend for themselves. However, the existence of the middle class is not just happenstance. It was created, and is now being destroyed, by political policy. Everyone needs to wake up and stop voting for bank paid politicians.
10
What a rallying cry! Support the Democrats in their visionary and complex plan, a little here, a little there, very little of which will survive intact even with a Democratic majority, and You, too, can be a pillar of capitalism!
Mark Thomason is truly right on when he declares: "Government is established to advance life, liberty, and the pursuit of happiness for all our people. It is not established for better return on investment."
However worthy the ideas put forth, the justification seems to deminish us to cyphers that have one purpose - shopping; people who need a little more money to prime the pump in the marketplace. Have we lost our vision of a common good, caring for the welfare of others?
I hope the Democratic party will learn to speak with one voice, with a message simple and direct that will inspire the nation and bring about a real change in direction. Greed and selfishness has been in the ascendancy for far too long.
If Democrats deserve to govern they must inspire voters
Mark Thomason is truly right on when he declares: "Government is established to advance life, liberty, and the pursuit of happiness for all our people. It is not established for better return on investment."
However worthy the ideas put forth, the justification seems to deminish us to cyphers that have one purpose - shopping; people who need a little more money to prime the pump in the marketplace. Have we lost our vision of a common good, caring for the welfare of others?
I hope the Democratic party will learn to speak with one voice, with a message simple and direct that will inspire the nation and bring about a real change in direction. Greed and selfishness has been in the ascendancy for far too long.
If Democrats deserve to govern they must inspire voters
4
" "Government is established to advance life, liberty, and the pursuit of happiness for all our people." Better read that again. Government is not here to advance anything but to protect the right of the people to do it without government impeding and blocking those rights. Government interference with crony capitalism and picking winners and losers is the biggest impediment to people advancing their cause.
I would call this trying to polish the turd that is Reaganism and unfettered capitalism.
Sorry for the crudity of the expression, but 35 years of Reaganism have created nothing but misery and insecurity for most of the population, not to mention endless war.
Time to move past the rhetoric of market-oriented and towards the rhetoric of social justice. Viewing the poor as another market from which to gain a profit has already been done; look up payday and sub-prime lending.
As for restraining the vast accrual of wealth at the top, well, that's already a done deal.
"While the new agenda has no chance of passage in the Republican-controlled Congress, Democrats plan to use the tenets of inclusive capitalism in the 2016 elections."
This sounds ominously like Hillary's strategy and it sounds like triangulation by another name. It all sounds nice, but, like I said, it's mere polishing.
Sorry for the crudity of the expression, but 35 years of Reaganism have created nothing but misery and insecurity for most of the population, not to mention endless war.
Time to move past the rhetoric of market-oriented and towards the rhetoric of social justice. Viewing the poor as another market from which to gain a profit has already been done; look up payday and sub-prime lending.
As for restraining the vast accrual of wealth at the top, well, that's already a done deal.
"While the new agenda has no chance of passage in the Republican-controlled Congress, Democrats plan to use the tenets of inclusive capitalism in the 2016 elections."
This sounds ominously like Hillary's strategy and it sounds like triangulation by another name. It all sounds nice, but, like I said, it's mere polishing.
14
The message of “Inclusive Capitalism” is heading in the right direction, but the question remains whether the Clintons are serious or only taking us for another ride around the block.
Is it Hillary’s version of Bill’s 1992 “It’s the Economy Stupid,” which after the election turned out to be Clintons call to “Round up the Chumps?” After all, he rammed NAFTA through a Democratic majority Congress, gave most favored nation status to Communist China, and generally embraced market fundamentalism, which has created most of the economic problems we face today.
One indication that Clinton’s “Inclusive Capitalism” is another dog and pony show is that Sen. Schumer is a vocal supporter and he’s no Huey Long. Schumer’s “Share the Wealth” comments ring hollow when Schumer has repeatedly killed closing the billions in lost revenue from the carried interest tax break for a couple dozen hedge fund managers.
In politics there is one truism, like that man behind the curtain, - pay no attention to what politicians tell you they are going to do, but instead, look at what they have actually done.
In my book, the Clintons aren’t the right drivers for this message. They have taken us for a ride too many times. We need a new driver that we can trust.
Is it Hillary’s version of Bill’s 1992 “It’s the Economy Stupid,” which after the election turned out to be Clintons call to “Round up the Chumps?” After all, he rammed NAFTA through a Democratic majority Congress, gave most favored nation status to Communist China, and generally embraced market fundamentalism, which has created most of the economic problems we face today.
One indication that Clinton’s “Inclusive Capitalism” is another dog and pony show is that Sen. Schumer is a vocal supporter and he’s no Huey Long. Schumer’s “Share the Wealth” comments ring hollow when Schumer has repeatedly killed closing the billions in lost revenue from the carried interest tax break for a couple dozen hedge fund managers.
In politics there is one truism, like that man behind the curtain, - pay no attention to what politicians tell you they are going to do, but instead, look at what they have actually done.
In my book, the Clintons aren’t the right drivers for this message. They have taken us for a ride too many times. We need a new driver that we can trust.
11
"I want to pay my workers enough so they can buy the cars they make." Henry Ford
5
It's very hard to know (as was acknowledged, finally, on the front page of this paper earlier this week) how any intelligent, and even marginally moral person, can champion a system of economic exploitation that consolidates more wealth in the hands of 80 people, than is owned by the remaining half of the world's population: 3.5 billion.
We believe ourselves to be forward- moving, civilized cultures. But this world-wide condition is not the enlightenment of Solon; it is the extreme of the Pharaohs. No substantive moral arguments, no intellectually honest ones can be made for it. None.
And yet most of the world's most educated people support this kind of capitalism, and argue for its superiority over any other economic system, as if the false equivalency of the kind of perverse, inchoate totalitarian communism -- as it was once practiced in the Soviet Union and is in China today -- is the only alternative to it.
The fiction needs to be challenged. A true worker- cooperative, democratic alternative has never even come close to being tested. And it's time that it is.
We believe ourselves to be forward- moving, civilized cultures. But this world-wide condition is not the enlightenment of Solon; it is the extreme of the Pharaohs. No substantive moral arguments, no intellectually honest ones can be made for it. None.
And yet most of the world's most educated people support this kind of capitalism, and argue for its superiority over any other economic system, as if the false equivalency of the kind of perverse, inchoate totalitarian communism -- as it was once practiced in the Soviet Union and is in China today -- is the only alternative to it.
The fiction needs to be challenged. A true worker- cooperative, democratic alternative has never even come close to being tested. And it's time that it is.
14
" as if the false equivalency of the kind of perverse, inchoate totalitarian communism -- as it was once practiced in the Soviet Union and is in China today -- is the only alternative to it."
Pretty much. Yes. That is it exactly. Because Governments are not capable for being benevolent and the bureaucrats that run the government become a public sector aristocracy far worse than anything seen in the private sector because that bureaucrat has actual power with a police officer behind them.
Pretty much. Yes. That is it exactly. Because Governments are not capable for being benevolent and the bureaucrats that run the government become a public sector aristocracy far worse than anything seen in the private sector because that bureaucrat has actual power with a police officer behind them.
1
Whatever is practiced in China today seems to be working to spread the ever increasing wealth among a billion Chinese. Is that a "perverse, inchoate totalitarian communism?" I would say no.
" One Democratic goal in putting specific policies forward is to use them as wedge issues to force Republicans to choose between their affluent backers and their supporters in the white working class. This will be no easy task because a decisive majority of whites without college degrees has been voting against Democratic candidates for two decades, making it very difficult for the party to break what has been a Republican hammerlock since 1994."
The paragraph above sums up the future of 'inclusive capitalism' becoming policy in America. As long as the majority of whites without college degrees vote Republican, the notion of inclusive capitalism will be circumscribed to academics and political wonk circles in DC.
The question is: Why do whites without college degree have been voting against Democratic candidates since 1994?
After all, white blue collar workers --like everybody else -- have been particularly hard hit by domestic jobs being shipped overseas and accompanied by a drop in income and wages.
If whites --without college degree-- have been voting against their own interest since 1994, what can be done by Democrats to get them back?
The paragraph above sums up the future of 'inclusive capitalism' becoming policy in America. As long as the majority of whites without college degrees vote Republican, the notion of inclusive capitalism will be circumscribed to academics and political wonk circles in DC.
The question is: Why do whites without college degree have been voting against Democratic candidates since 1994?
After all, white blue collar workers --like everybody else -- have been particularly hard hit by domestic jobs being shipped overseas and accompanied by a drop in income and wages.
If whites --without college degree-- have been voting against their own interest since 1994, what can be done by Democrats to get them back?
7
For starters they can stop the legalization of a foreign element that entered this country from gaining the right to take their jobs. The real question here not why Blue Collar workers vote for Republicans but why do Blacks continue to vote for the Democrats who have pushed them out of the few jobs they could work in construction and the service industry. When the Feds closed a chicken processing plant here with nearly 400 illegal workers the plant closed and reopened two months later with poor Black and White workers from the area who were paid better and had benefits. The claim that these people are doing work our own won't do is specious. They will do them but not for slave labor wages and a climate of fear. The same goes to the Farmers who abandoned the H1A program and its expenses in favor of illegal cheaply paid workers. What will Blacks do when their 13% population ratio is eclipsed by Hispanic's 35% ratio?
The primary strategy of the political agents of economic elites -- in our time that role has been filled by the Republican Party -- is to convince the white working class, particularly men, that matters other than economic policy are more important to their well-being. This is a modern version of 19th-century Southern elites who stirred up racial animosity, telling poor whites that "at least they were white men," while keeping the white workers from organizing, getting higher wages, and so on. Social issues (e.g., women's rights, minority rights, immigration reform), environmental issues (remember those spotted owls that were "responsible" for all those lost jobs?), and foreign affairs (e.g., objecting to unwise military adventures is equated to not "supporting the troops") have been used to make white working class men feel threatened enough to ignore how their economic interests were being betrayed. To add insult to injury, the economic royalists call themselves "the job creators."
With increasing consensus on many issues, and with a change in demographics (a euphemism for old white men dying and being replaced with newer old white men), these "wedge" issues have a less powerful hold on the white working class. There is greater likelihood that proposals in this column may be supported by this group. Better yet, the white workers will take a more radical stand and prefer something better than half-way measures to prosperity (i.e., enough) for the 100%.
With increasing consensus on many issues, and with a change in demographics (a euphemism for old white men dying and being replaced with newer old white men), these "wedge" issues have a less powerful hold on the white working class. There is greater likelihood that proposals in this column may be supported by this group. Better yet, the white workers will take a more radical stand and prefer something better than half-way measures to prosperity (i.e., enough) for the 100%.
41
Nice try, but if the Democrats weren't just as sold out to big business as the Republicans, Obama Care would not have passed. It is the largest piece of Corporatism ever to get through Congress and turns 1/5 of the economy into a joint venture between the Robber Barons and the politicians.
The Democrats are actually more aligned with big business than the Republicans at the moment because the Republican party faces a revolt from the Tea Party which has a large small business/ small government component and that is bad for Corporatism.
The Democrats are actually more aligned with big business than the Republicans at the moment because the Republican party faces a revolt from the Tea Party which has a large small business/ small government component and that is bad for Corporatism.
1
I don't understand why Republicans support the 1%, since most Republicans aren't part of it.
4
Very simple -- Obama's plans to attack the 1% are not really that -- he fully intends to attack the 50% to 90% crowd. He will increase tax rates, the rich will find a way to avoid the taxes, and those in the 50% - 90% group will be unable to respond -- bearing the burden of the tax increase.
They do this through things like a failure to index. Remember alternative minimum tax? Designed to prevent rich people from using tax shelters. It ultimately affected a great number of tax payers.
Similarly, the attack on capital gains tax rate for carried interests. Did you read the initial proposals by the democrats? They would have taxed everyone who had ever created a business at higher rates.
History shows that any statement by the democrats that a tax will apply only to the 1% is a lie. The tax will eventually affect a far greater number of people, if only through inflation.
The democrats start with the assumption that increased spending is good (for some reason it needs to be handouts) and then look for ways to increase taxes.
I would be in favor of democrats if they could find a way to put a brake on spending, make people responsible for themselves, and still support those truly in need. The government is out of hand and letting it increase taxes is not a way to control it.
They do this through things like a failure to index. Remember alternative minimum tax? Designed to prevent rich people from using tax shelters. It ultimately affected a great number of tax payers.
Similarly, the attack on capital gains tax rate for carried interests. Did you read the initial proposals by the democrats? They would have taxed everyone who had ever created a business at higher rates.
History shows that any statement by the democrats that a tax will apply only to the 1% is a lie. The tax will eventually affect a far greater number of people, if only through inflation.
The democrats start with the assumption that increased spending is good (for some reason it needs to be handouts) and then look for ways to increase taxes.
I would be in favor of democrats if they could find a way to put a brake on spending, make people responsible for themselves, and still support those truly in need. The government is out of hand and letting it increase taxes is not a way to control it.
1
So when you combined the 28% capital gains tax with the inheritance tax you tax about 705 of a large estate. I guess you believe in confiscation. Also recall that the 28% capital gains tax that Reagan put in was associated with a 28% top income tax rate. My guess is that that rate is way too low for your liking. It is beyond me to see how destroying capital will save capitalism. The key is to develop human capital, not destroy financial capital.
2
Since your math is bad, I should just correct that and be done, but your facts are equally bad. I'll cover both.
This is how it works - or will, if the changes take place. You take the capital gains taxes that are long overdue. This leaves 72% of the gains and 100% of the capital. The inheritance exemption then removes the base (let's assume that it's $5.5 Million). The rest is taxed at the inheritance tax rate, which is not 70%. At most, it's 40%.
So wrong all around.
This is how it works - or will, if the changes take place. You take the capital gains taxes that are long overdue. This leaves 72% of the gains and 100% of the capital. The inheritance exemption then removes the base (let's assume that it's $5.5 Million). The rest is taxed at the inheritance tax rate, which is not 70%. At most, it's 40%.
So wrong all around.
First, I did not listen to the State of the Union speech. I haven't since G. Ford in 75. I remember his opener: Ladies and gents the State of the Union is not good. You can't beat an honest assessment. As far as I can tell they have been sellouts to the established order. Ok, let's deal with the Summers Plan. Taken as a whole it is a good start. But I wonder if this "paper" is nothing more than arcane academic research flogged to attempt to save Larry Summers reputation. Where was Larry Summers in 08/09? For those with selective amnesia he was at the center of the storm that saved the big banks and walked away from the working class. In closing(I could go on for days with this one) almost anything would be better than the status quo that got us here and is keeping us here. But I am sort of with the gent from the Guardian. It might just be warmed over hash. It is a meal. However the ones who got us to this sorry state are still eating caviar and sucking down designer wine. Now off to read paper in question.
7
Those Conservatives unwilling to look more open-mindedly at a so-called inclusive capitalism will find one of two outcomes looming in the distance. First, there is the very real risk of tipping into a disparate income society that begins to take on the shape of 1930s Germany. People will move toward unsavory leaders if their needs go unmet forever. Second, we end up creeping into a form of state capitalism, a la China, further enslaving labor to the ends of a nationalist elite class. We may not see ourselves in that model, but it will take the collective effort of a shared vision, top to bottom, to not fall into its influence.
When everyone is "all in", nobody gripes as much. When someone is giving their all, you cut them alot of slack. When Liberals envy the rich, it is because they feel that the wealth is unearned or wildly disproportionate. When Conservatives scoff at welfare or redistribution of spoils, they similarly recoil from aids anyone who appears to be capable but unwilling.
Let's reinstate a country that polices its own behavior. We don't smoke, because it burdens our fellow man. We don't become obese, because it sends a message that we are slovenly and undisciplined. We don't try to chisel and steal, because it is unworthy of us as Americans. And we give generously to each other, because we know we are in it together and don't need an intermediary (the government) to do what is right.
It is probably a dream, because it requires judging people.
When everyone is "all in", nobody gripes as much. When someone is giving their all, you cut them alot of slack. When Liberals envy the rich, it is because they feel that the wealth is unearned or wildly disproportionate. When Conservatives scoff at welfare or redistribution of spoils, they similarly recoil from aids anyone who appears to be capable but unwilling.
Let's reinstate a country that polices its own behavior. We don't smoke, because it burdens our fellow man. We don't become obese, because it sends a message that we are slovenly and undisciplined. We don't try to chisel and steal, because it is unworthy of us as Americans. And we give generously to each other, because we know we are in it together and don't need an intermediary (the government) to do what is right.
It is probably a dream, because it requires judging people.
Whatever we do government will always try to insert itself into the process. Is everyone giving to help others? Government will claim they aren't giving enough and mandate it. It is the nature of government to seek ever more power and short of revolution nothing will stop it from doing so.
1
Capital concentrates; it is not inclusive. Inclusive capitalism is a way to avoid saying socialism. For elected officials it is more jargon that allows them to serve the wealthy while appearing to sever the middle class. Capitalism and representative democracy are not compatible. Democracy will always lose.
6
Capitalism is not necessarily the problem.
Unbridled capitalism is the problem.
And ever since Mr. Reagan sold the Oval Office to Wall-Street, that's what we've had, unbridled capitalism and all it brings; recession after recession, financial malfeasance after financial malfeasance, and stagnant wages for decades.
Thanks again Hollywood Reagan, you were a real peach.
Unbridled capitalism is the problem.
And ever since Mr. Reagan sold the Oval Office to Wall-Street, that's what we've had, unbridled capitalism and all it brings; recession after recession, financial malfeasance after financial malfeasance, and stagnant wages for decades.
Thanks again Hollywood Reagan, you were a real peach.
2
Mandating a link between productivity growth and labor's pay will guarantee just two things: (1) steadily fewer, but higher paid, workers who manage robots and (2) more people who would like to work with their hands being out of work. Rockwell Automation and similar companies will prosper as machines replace manpower, and the social problem of what to do with underemployed and unemployed people who genuinely want to work will grow worse and worse. "Inclusive capitalism" is apparently the new "diversity"...a buzzword that conceals its goals. Won't work. Try again.
1
It is funny. Henry Ford, probably one of the greatest capitalists, practiced just this philosophy. He raised workers' salaries to $5 a day (a princely sum at the time) and pushed for social policies that would raise the lot of the working man so that they would be able to afford to buy his cars. He had the most successful company of his era -- as profitable as Apple -- and people call him a visionary. Nobody would care accuse him of being a socialist (although he was certainly an anti-Semite). People laud what a smart businessman he was for pursuing socially responsible policies, because they made Ford Motor Company ultra successful. Yet, here, people are hyperventilating calling these policies socialist. They obviously know nothing about the history of capitalism in America.
9
What no mention of the fact that the Dodge brothers as major share holders in the Ford Motor company successfully sued Ford all the way to the Supreme Court of the USA? They complained that he had illegally deprived them of the full fruits of their labour (contained in their ownership of share) by giving too much of the profits of the Ford Motor Company as wages to the labour that actually created the cars.
Henry Ford was an authoritarian: "You can have any color you like, as long as it is black."
This may be off topic but I don't understand why you had to add "(although he was an anti-Semite)" after stating "no one would accuse him of being a socialist." Are you making some connection between socialist and anti-Semite or are you just noting an irrelevant accusation made of Ford?
Sounds like pages out of Piketty and others who warn that unless the direction of capitalism changes, it will topple of its own weight.
It's evident that capitalists seem to be destroying the very basis of their wealth, consumers. Their strategy, exemplified by TPP, is to go international and create new consumers abroad. The danger here, of course, is an overreliance on foreign consumption could backfire, should political events trigger a massive world crisis.
I don't understand the employers of today. In the post-war economy, the few decades marking the middle point on Mr. Edsall's graph of "inclusive capitalism", companies valued their workers and competed for the best talent. There was a sense of shared profits, and reinvestment in businesses that ultimately benefited future workers hired from expansion.
Everything changed in the 80s and beyond, as markets seemed to get rigged by bad legislation, and a Gordon Gekko mentality set in where greed took over shared profits.
The funny thing about greed is how it can spiral out of control. The more you have, it seems, the more you think you need and the more you want to protect vast wealth from the moochers on the bottom.
Unless leaders recognize the danger of unchecked ninclusive capitalism--now dominating the pie of personal wealth per the recent Oxfam report--could easily lead to revolutions.
The solutions described in this piece are a great start--if a progressive Democratic majority can get elected.
It's evident that capitalists seem to be destroying the very basis of their wealth, consumers. Their strategy, exemplified by TPP, is to go international and create new consumers abroad. The danger here, of course, is an overreliance on foreign consumption could backfire, should political events trigger a massive world crisis.
I don't understand the employers of today. In the post-war economy, the few decades marking the middle point on Mr. Edsall's graph of "inclusive capitalism", companies valued their workers and competed for the best talent. There was a sense of shared profits, and reinvestment in businesses that ultimately benefited future workers hired from expansion.
Everything changed in the 80s and beyond, as markets seemed to get rigged by bad legislation, and a Gordon Gekko mentality set in where greed took over shared profits.
The funny thing about greed is how it can spiral out of control. The more you have, it seems, the more you think you need and the more you want to protect vast wealth from the moochers on the bottom.
Unless leaders recognize the danger of unchecked ninclusive capitalism--now dominating the pie of personal wealth per the recent Oxfam report--could easily lead to revolutions.
The solutions described in this piece are a great start--if a progressive Democratic majority can get elected.
22
People get MBAs to be mentally numbed.
1
Our hard wiring to compete with one another is among our most fundamental traits. It exists throughout nature among plant and animal alike. It is, in part, through this drive to compete that we have created iPhones, the internet and space travel. The difference is that humans don't know when to stop. We will dominate our competition to the point of upsetting a "natural order" necessary to maintain an interdependent social, economic and environmental ecosystem. What's needed is a common understanding of how much is enough and at what point accumulation of resources by the "most competitive" threatens the health and sustainability of the very system that led to the success of the outliers. And this quest is not just an American one, but a global challenge. In Africa, the "inclusive capitalism" concept is known at "Africapitalism" - the idea that the African private sector needs to play a more prominent role in shaping the continent's future as opposed to only government spending or foreign aid. The context is obviously different given the dramatically different stages of development in America versus much of Africa, but the underlying principle is the same: capitalists need to help save capitalism, no matter where they're from. The Africapitalism movement is led by one of the continent's most prominent entrepreneurs and philanthropists, Tony Elumelu. (Full disclosure: he is my boss.) Mr. Elumelu recognizes that his and the success of his peers must be shared by all.
5
One of the principal benefits of capitalism is that it recognizes the human trait of competitiveness and, yes, greed, and channels it in a way that is productive to society. Socialism and communism give too much power to government based on their assumptions that people are gentle creatures whose primary goal is to help each other. Once the government takes over, the inevitable human traits take over and you end up with one form or another of totalitarianism.
Look at Obama, on the authoritarianism scale he beats any president in generations. He cannot negotiate, refuses to compromise on anything. He acts outside the law and then cites illegitimate reasons in support of his actions.
Churchill, the intellectual nemesis of Obama, had the following to say:
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."
With regard to democracy, Churchill said, "Indeed, it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time." (Bartleby.com).
The same can be said for capitalism -- it is terrible, but far better than socialism or communism.
Look at Obama, on the authoritarianism scale he beats any president in generations. He cannot negotiate, refuses to compromise on anything. He acts outside the law and then cites illegitimate reasons in support of his actions.
Churchill, the intellectual nemesis of Obama, had the following to say:
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."
With regard to democracy, Churchill said, "Indeed, it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time." (Bartleby.com).
The same can be said for capitalism -- it is terrible, but far better than socialism or communism.
1
"Inclusive Capitalism" is a new name for a growing understanding over the past 100 years of how the economy (and our politics) should work. How do we fine tune the economic engine to work the best? Does it work well when the poorest 50% don't have money to buy stuff? Clearly not. To me, this is a course correction that the USA has needed for 30 years, and is becoming increasingly important: As software removes the barriers to service consolidation, more and more wealth drifts away from Labor and moves towards the Rentiers. If we don't regulate this engine better, we are soon going to see less wealth, fewer services, and more poor. This kind of thing should be common sense ...
23
The poorest 50% have no financial reserves at all, and are forced into the arms of loan sharks by every car breakdown, every illness.
1
In his State of the Union speech, President Obama used the word "imagine" twice. Apparently, John Lennon lives through his most famous song.
Republicans have convinced many people that business is the most important factor in the economy. It's not. People are. Without people, how would businesses operate?
We bailed out the banks and AIG recently. Nobody in the general populace that I can see got the same treatment.
What are our priorities?
"You may say I'm a dreamer...but I'm not the only one."
Republicans have convinced many people that business is the most important factor in the economy. It's not. People are. Without people, how would businesses operate?
We bailed out the banks and AIG recently. Nobody in the general populace that I can see got the same treatment.
What are our priorities?
"You may say I'm a dreamer...but I'm not the only one."
14
And the banks and AIG paid back the money that was in some cases forced on them. So successful was this "bailout" that B Of A was paying $250MM a quarter in interest until it paid it off and Treasury bragged about it. On the other hand I don't see people who got extended unemployment benefits or those who got SNAP offering to pay back anything received. I guess it was gift from the taxpayers? Did anyone who bought a car and got the rebate from "Cash For Clunkers" pay taxes on the rebate or was that more free cash from the tax payers?
No one was assisted? Do you live on Earth? The US government distributes more money to people in need than it does or ever did to corporations.
Come out of your dream.
Come out of your dream.
1
Hooey,
This is simply not true. There are myriad ways that the government helps corporations. The colonization of the Americas was founded by government assistance. Nothing has changed since.
This is simply not true. There are myriad ways that the government helps corporations. The colonization of the Americas was founded by government assistance. Nothing has changed since.
“The president needs to stop listening to his liberal allies who want to raise taxes at all costs and start working with Congress to fix our broken tax code,” Mr Hatch must stop listening to his wealthy patrons and start working for all of the American people instead of the rich. The rich want to be richer and richer and don't give a damn about the poor or the middle class because they do not know anyone who is poor or middle class. What the rich know about the poor and middle class is a story that they tell themselves about deserving their riches because they are smart or worked hard. Neither is true for most of the very rich who inherited their money. Those who earned their money themselves were lucky, and they know it, because they know people who are smarter than they are who did not become very rich.
Civilization cannot tolerate unending inequity. Democracy cannot coexist with oligarchy. Capitalism will stagnate without democracy. That is a historical fact.
Civilization cannot tolerate unending inequity. Democracy cannot coexist with oligarchy. Capitalism will stagnate without democracy. That is a historical fact.
136
I'm not rich but comfortable and I don;t consider luck to be the cause. It's the 80 hour weeks, the risk of investment in myself, the military service where I improved my trade and management skills, a wife who is a helpmate and delayed gratification. From birth to two teenagers a high school dropout succeeded and never asked for a dime from anyone. My goal was to make life easier for my descendants and remove them from the circumstances I grew up in. For the government to think that it has the right to confiscate what I've worked for after my death is outright theft.
None of the tax proposals from Republicans will help people presently living from paycheck to paycheck to accumulate the kind of savings one needs to retire.
2
Revolution, even in a police state, such as ours, is unthinkable, until it happens. Then, it will be inevitable. That is how revolutions work: people have enough and the rich plead for their lives or flee. In the end civilization either rejoins at some new equilibrium. The process begins again. In a few generations, we're at each other's throats again. When will we learn.
The ideas in this editorial are important, and it is really good to see Prahalad and Hart's ideas receive more public airing. From discussions I have had with a few uber-rich friends, a big reason for their resistance to the kind of redistribution called for by inclusive capitalism is the belief that the redistribution won't produce results. This belief stems from the premises that either the bottom half will have even less motivation to work hard if the size of the "dole" available to them is enlarged, or that government is not sufficiently competent to manage redistribution productively. In order to move the needle in favor of inclusive capitalism among those who would pay for it, each of these premises needs to be addressed in the debate. I believe they are in error, and data can effectively make that point.
56
Without Citizens United, their buy in or approval would be unnecessary. Sad that their vote now carries 1 million times that of the average citizen.
7
Agree, rich risk-taking capitalists will not be convinced of political redistribution that does not redistribute the risks along with the returns. Then those risks have to be managed by a responsive risk-management industry as well as prudent private behavior. The public sector's job is to insure that the private sector meets these needs.
1
The trouble with your rich friends is that, having won theirs by benefiting from the American support structure --- roads, education, etc., they have come to believe that American is a zero-sum game. It is not. We proved this in the 40's and 50's when America grew from a country of farmers and industrial workers to lead the world in technology. America is not a zero-sum game it is an opportunity for one and all. Since the late 70's the rich have been exploiting their status to promote themselves and this idea of the zero-sum game.
2
The answer is no. It does not depend on the will of humans. It is a process with contradictions intrinsic within its organic system (just like any other organism). The main contradiction of capital is that in rising labor productivity to unimagined heights creates mass unemployment and pauperization. Capital is not and cannot be inclusive. it is competitive. It is a process in which it coerces itself to compete to stay alive. It indeed eats its own children.
It is our duty to let it pass away before it destroys society (by destroying and altering the same nature that feeds us) and help create a more humane system. We have created enough wealth and knowledge to do so.
It is our duty to let it pass away before it destroys society (by destroying and altering the same nature that feeds us) and help create a more humane system. We have created enough wealth and knowledge to do so.
61
Inclusive capitalism is an oxymoron and only the latest
ideology -- following neoliberalism -- to disguise an
inherently predatory economic system.
ideology -- following neoliberalism -- to disguise an
inherently predatory economic system.
2
"The main contradiction of capital is that in rising labor productivity to unimagined heights creates mass unemployment and pauperization."
Huh? Evidence?
And where exactly is the successful economic model you propose in its stead?
Huh? Evidence?
And where exactly is the successful economic model you propose in its stead?
What made America great, in addition to its people, is an economic system, capitalism. Take that away and you have another socialistic country with no future. There is nothing in capitalism that provides for income equality, get use to it. or leave for another country.
5
Take a trip to Europe, Scandinavia, and Canada, and then poke around a bit in those tired towns in New Jersey and Pennsylvania,
5
Enough with the binaries. Elements of socialism, such as national health care, can exist alongside healthy private firms. Ever visited Germany? Our problem in the the US involves a bloated military-industrial complex and a tax system that skews toward the wealthy. It's a command economy in America, at the command of the rich.
6
And there is nothing in progressive policies that calls for income equality. What we simply point out is that too much INEQUALITY is bad for the economy.
Experiments are hard to come by in economics, but we have a couple in the US to look at since WWI. There have been two medium long periods of very high inequality (Gini about 0.5), the 1920's and the 2000's. Both led to periods of disastrous economics, On the other hand, there was the long period of 1946 - 1973 (Gini about 0.25) which was a period of great prosperity. Since I do not place much faith in any economic theory, this evidence makes me believe that high inequality is very bad for the country.
But I know people like explanations. So I'll give it a shot.
1. Inequality depresses demand. A non-rich person must spend a greater percentage of his income to live than a Rich one. When many people are out of work, or are underpaid, when inequality is high, the non-rich do not have enough money to buy the stuff they need or want. They may want a new car, but they cannot afford it. This means businesses are not expanding because they do not have enough customers. You cannot create demand out of thin air. It requires getting money to people to spend it.
2. Inequality encourages financial speculation. What do the Rich do when they have so much money they cannot remember how many houses they own? They speculate with it. There is a definite correlation.
What does wild speculation do? See 1929 & 2008
Experiments are hard to come by in economics, but we have a couple in the US to look at since WWI. There have been two medium long periods of very high inequality (Gini about 0.5), the 1920's and the 2000's. Both led to periods of disastrous economics, On the other hand, there was the long period of 1946 - 1973 (Gini about 0.25) which was a period of great prosperity. Since I do not place much faith in any economic theory, this evidence makes me believe that high inequality is very bad for the country.
But I know people like explanations. So I'll give it a shot.
1. Inequality depresses demand. A non-rich person must spend a greater percentage of his income to live than a Rich one. When many people are out of work, or are underpaid, when inequality is high, the non-rich do not have enough money to buy the stuff they need or want. They may want a new car, but they cannot afford it. This means businesses are not expanding because they do not have enough customers. You cannot create demand out of thin air. It requires getting money to people to spend it.
2. Inequality encourages financial speculation. What do the Rich do when they have so much money they cannot remember how many houses they own? They speculate with it. There is a definite correlation.
What does wild speculation do? See 1929 & 2008
6
A few thoughts:
1. "Inclusive capitalism" -- synonyms: "compassionate conservatism", "noblesse oblige";
2. It really takes Balls to pedal Larry Summers in polite company again; and
3. Ultimately -- and perhaps not coincidentally -- this sounds like it was coordinated with the "Davos populism" emerging at the same time from Switzerland this week.
1. "Inclusive capitalism" -- synonyms: "compassionate conservatism", "noblesse oblige";
2. It really takes Balls to pedal Larry Summers in polite company again; and
3. Ultimately -- and perhaps not coincidentally -- this sounds like it was coordinated with the "Davos populism" emerging at the same time from Switzerland this week.
68
How can Capitalists save Capitalism when the legislators who speak most of Capitalism are really talking about manipulation and a Monopoly of the Public Subsidy by a rather vast assortment of protected industries?
We have had but a pitiful attempt at Fiscal Stimulus. Wages are deflating as productivity continues to soar. Six years of Quantitative Easing has curtailed the expansion of the money supply, and it has redirected the benefits of bond purchases back into the Financial System rather than to grow the real economy.
We are approaching the end of the most dedicated market manipulation in history, and Americans have only lost out to Corporations which have no loyalty to the United States of America, but God do they like to suck up the benefits of being the exalted Citizens of the American Republic.
Right now' the weird economics of Republicans and the prerogatives of the Goldman Sachs Wing of the Democrat have replaced Capitalism with a Griftopia, which would be comic, if it didn't hurt so much.
We have had but a pitiful attempt at Fiscal Stimulus. Wages are deflating as productivity continues to soar. Six years of Quantitative Easing has curtailed the expansion of the money supply, and it has redirected the benefits of bond purchases back into the Financial System rather than to grow the real economy.
We are approaching the end of the most dedicated market manipulation in history, and Americans have only lost out to Corporations which have no loyalty to the United States of America, but God do they like to suck up the benefits of being the exalted Citizens of the American Republic.
Right now' the weird economics of Republicans and the prerogatives of the Goldman Sachs Wing of the Democrat have replaced Capitalism with a Griftopia, which would be comic, if it didn't hurt so much.
220
"Griftopia" Nice. Thanks for adding a useful new word to my vocabulary.
1
Griftopia. What a great description.
1
Unfortunately, since we now live in a world of global versus national economies, attempts to equalize income and opportunity via national legislation cannot be effectual. Jobs simply move to the lowest paid countries. Capital moves to tax havens where is not subject to social regulation.
13
Thank you Donald for as clear a statement of the party line 'a la US Chamber of Commerce' as we are gong to get. It sounds like nothing so much as the tired old doggerel trotted out by Soviet hacks in the 70's and 80's of
- a) 'the inevitable triumph of scientific socialism based on democratic centralism' (dictatorship of the party), and when the corruption and self serving rot became to apparent
- b) 'what we have is not the failure of socialism but rather the failure of some socialists.'
We are living in a situation created by plutocrats for plutocrats by the simple process of corrupting the institutions of liberal democracy. If nothing else the USA has proved that you can fix the World Series and buy all of Washington including the Supreme Court.
We are not in Kansas anymore Dorothy - we are in fact getting farther and farther away from government of the people, by the people and for the people. The establishment plutocracy driving this have no intention of going back - they are afraid of what would happen to them if they ever let control slip away again.
- a) 'the inevitable triumph of scientific socialism based on democratic centralism' (dictatorship of the party), and when the corruption and self serving rot became to apparent
- b) 'what we have is not the failure of socialism but rather the failure of some socialists.'
We are living in a situation created by plutocrats for plutocrats by the simple process of corrupting the institutions of liberal democracy. If nothing else the USA has proved that you can fix the World Series and buy all of Washington including the Supreme Court.
We are not in Kansas anymore Dorothy - we are in fact getting farther and farther away from government of the people, by the people and for the people. The establishment plutocracy driving this have no intention of going back - they are afraid of what would happen to them if they ever let control slip away again.
1
How about if corporations are only allowed "personhood" if the majority of their business is conducted in the U.S.?
1
One doesn't normally associate Tom Edsall with Chris Rock, but the notion that Democrats have appeared on the Earth full-grown from the forehead of Zeus to introduce "a forceful market-oriented economic agenda intended to counter inequality, restrain the accrual of vast wealth at the top and provide the working and middle classes with improved economic opportunities" ... is funnier than anything Chris Rock has ever said. Then, there's this softly playing Indiana Jones theme wafting through the air.
After all, Democrats first need to overcome the pronounced impression that they're two elections away from extinction.
In any event, the transformation described requires a party NOT kicked out of congressional majorities everywhere, and probably the presidency soon enough, as well.
You're going to have to come up with justifying rationales FAR more energizing than "Can capitalists save capitalism?" to convince America to put aside all remnants of individualism to adopt a vision of capitalism that largely is run by the state and by elites that really know nothing about it, except that they want what it produces but on their terms.
The notion that yet more tax decreases should be sought while the trains are kept running by an increasingly narrow slice of America's earners and producers isn't going to fly electorally even with those presumably benefiting most by this curious enslavement. Why not? Well, it requires the votes of Americans, and rich or poor, Democrats ain't got 'em.
After all, Democrats first need to overcome the pronounced impression that they're two elections away from extinction.
In any event, the transformation described requires a party NOT kicked out of congressional majorities everywhere, and probably the presidency soon enough, as well.
You're going to have to come up with justifying rationales FAR more energizing than "Can capitalists save capitalism?" to convince America to put aside all remnants of individualism to adopt a vision of capitalism that largely is run by the state and by elites that really know nothing about it, except that they want what it produces but on their terms.
The notion that yet more tax decreases should be sought while the trains are kept running by an increasingly narrow slice of America's earners and producers isn't going to fly electorally even with those presumably benefiting most by this curious enslavement. Why not? Well, it requires the votes of Americans, and rich or poor, Democrats ain't got 'em.
3
Richard,
Your reference to Athena aside, Eisenhower taxed the rich and productive at a much higher rate and America prospered. All we need to do (which won't be easy) is to help the poor part of the Republican base (who are beneficiaries of social programs that Republicans want to kill) that they are really being taken to the cleaners. "Keep your government hands off my Medicare." is a perfect example of how Republicans have fooled their base.
There are plenty of good arguments for fiscal based positions. But they don't have the votes unless they use emotional wedges to confuse the issues. That's why they divide the populace into camps that won't listen. Divide and conquer.
Your reference to Athena aside, Eisenhower taxed the rich and productive at a much higher rate and America prospered. All we need to do (which won't be easy) is to help the poor part of the Republican base (who are beneficiaries of social programs that Republicans want to kill) that they are really being taken to the cleaners. "Keep your government hands off my Medicare." is a perfect example of how Republicans have fooled their base.
There are plenty of good arguments for fiscal based positions. But they don't have the votes unless they use emotional wedges to confuse the issues. That's why they divide the populace into camps that won't listen. Divide and conquer.
3
More people voted for Gore than Bush.
In most of the recent elections, more people voted for Democratic candidates for the House and for the Senate than voted for Republican ones.
Richard supports a non-democratic form of a Republic where money votes, not people.
In most of the recent elections, more people voted for Democratic candidates for the House and for the Senate than voted for Republican ones.
Richard supports a non-democratic form of a Republic where money votes, not people.
5
Where have I heard something like this before?
Oh yeah, from the Democrats when the Republicans got a good drumming a few years ago.
Also, you do realize that we are getting to the point technologically where even with make work we still only need about 10% of the population to work, right? Even Marco Rubio admitted when he was on the Daily Show that any measure to block the minimum wage would only delay full automation.
Either we do something like this or about 90% of the population starves to death. Pick one.
Oh yeah, from the Democrats when the Republicans got a good drumming a few years ago.
Also, you do realize that we are getting to the point technologically where even with make work we still only need about 10% of the population to work, right? Even Marco Rubio admitted when he was on the Daily Show that any measure to block the minimum wage would only delay full automation.
Either we do something like this or about 90% of the population starves to death. Pick one.
2
"Inclusive Capitalism", as it has been described, is a promising start, but not a panacea.
Mr. Edsall's mention of FDR's New Deal is apropos, because the Conservatives of his time accused him of destroying capitalism, while the President himself insisted,with some evidence to back him up, that he saved it.
I see a parallel in today's Inclusive Capitalism's opponents and the antipathy faced by FDR. And like the New Deal, Inclusive Capitalism may not solve all the problems, but it may shake us from our current "ground zero" of economic inequality and political stagnation, and at least move us in the right direction.
Mr. Edsall's mention of FDR's New Deal is apropos, because the Conservatives of his time accused him of destroying capitalism, while the President himself insisted,with some evidence to back him up, that he saved it.
I see a parallel in today's Inclusive Capitalism's opponents and the antipathy faced by FDR. And like the New Deal, Inclusive Capitalism may not solve all the problems, but it may shake us from our current "ground zero" of economic inequality and political stagnation, and at least move us in the right direction.
21
Both Larry Summers and President Obama should have been making these arguments six years ago, instead they bought the conservative framing of the issues and talked about managing deficits. Now, it's easy to talk a good game, but everyone knows we're in stalemate.
45
It is great to see Democrats finally return to their roots of representing the middle class and lower wage earners. these measures will make a dent i the growing divide between the top wage earners and owners of capital the lower 80%, who wages have stagnated for the a last 40 years. the Republicans will fight back and show that they are the party representing the rich. I only hope that white middle and lower wage earners will understand these policies and not continue to vote against their interests....
17
Without consumers with the means to spend there is no marketplace. Without workers able to feed and cloth themselves there is no capitalism. Once all growth goes to profit with no growth in wealth going to wages there will be no unfettered markets to support our democratic ideals.
Are we there yet? Of course not. But look up, look up. Consider where this must end.
Are we there yet? Of course not. But look up, look up. Consider where this must end.
42
Democratic liberal luminaries like Clinton and Summers who helped the gop rw dismantle banking regulations, leading to the country being unprotected from the financial industry and thus the 08 crash?
I was shocked to see Larry Summers on cspan talking about inequality run amok and how we need raise taxes on the rich. (that’s where the money is after he helped deregulate the financial industry).
See Huff Post article....".....Summers...he’s out marketing and branding himself. The facts are there, you can’t deny them. All he’s doing is stating reality. It’s like, 'Oh, my god, there’s global warming."
Dean Baker, agreed: "My guess is he’s being political here -- he’s trying to go with the tide."
Maybe it will take a new generation of leaders to actually put this into practice.
First, stop vilifying ‘labor’ which is any salaried person. Stop seeing union bargaining as a threat to America. Stop blaming working people for their problems. A long haul after decades of indoctrination, with the media accepting the premises.
Our political culture has gone against equality for too long--everything has been turned into a profit center, from education, to health care, prisons, retirement. To reverse this is linked to anti American socialism, and hard to change voters’ minds.
And with Citizens United giving our elections to big donors looking for ROI. Now what?
Most of our laws have been passed per the wishes of the 1 percent. Are Americans even aware of that record?
I was shocked to see Larry Summers on cspan talking about inequality run amok and how we need raise taxes on the rich. (that’s where the money is after he helped deregulate the financial industry).
See Huff Post article....".....Summers...he’s out marketing and branding himself. The facts are there, you can’t deny them. All he’s doing is stating reality. It’s like, 'Oh, my god, there’s global warming."
Dean Baker, agreed: "My guess is he’s being political here -- he’s trying to go with the tide."
Maybe it will take a new generation of leaders to actually put this into practice.
First, stop vilifying ‘labor’ which is any salaried person. Stop seeing union bargaining as a threat to America. Stop blaming working people for their problems. A long haul after decades of indoctrination, with the media accepting the premises.
Our political culture has gone against equality for too long--everything has been turned into a profit center, from education, to health care, prisons, retirement. To reverse this is linked to anti American socialism, and hard to change voters’ minds.
And with Citizens United giving our elections to big donors looking for ROI. Now what?
Most of our laws have been passed per the wishes of the 1 percent. Are Americans even aware of that record?
88
I'm just glad that Summers is finally saying what he should have been saying six years ago.
Also, if you really want to change this, you're going to have to do something about globalization, which is the root of the problem. It doesn't take genius to see that if labor costs in China are a tenth of what they are here, businesses will move their factories to China.
Also, if you really want to change this, you're going to have to do something about globalization, which is the root of the problem. It doesn't take genius to see that if labor costs in China are a tenth of what they are here, businesses will move their factories to China.
Josh Hill......of course labor costs in China and other places were always low compared to ours, giving profit incentives to move mfg there. But for generations mfg was kept here, so our middle class expanded and had secure lives. Why?
It doesn’t take a genius to notice that various EU countries, like Germany etc, have kept much mfg jobs there for their workers. They accept unions which here are weakened and vilified, and they have apprenticeships, while ours have decreased. They have better general economic equality even with unemployment and austerity.
In many places steps are taken to mitigate the effects of globalization, instead of just dumping millions of people. So it’s not such a simple either/or.
This must be explained—why has the US gone to extremes in sending jobs away? And our politics accepted this? Why are there few candidates to run on changing this?
We just accept ‘globalization’ excuses. But it’s the main political issue. Our media should have been tracking and reporting on this for years, but it seems to have ignored it.
Big money in elections is one of the big answers—and we differ from other nations in this. These questions need exposure, not just –China is cheaper, end of story. So profits are exalted over the common good of the US.
It doesn’t take a genius to notice that various EU countries, like Germany etc, have kept much mfg jobs there for their workers. They accept unions which here are weakened and vilified, and they have apprenticeships, while ours have decreased. They have better general economic equality even with unemployment and austerity.
In many places steps are taken to mitigate the effects of globalization, instead of just dumping millions of people. So it’s not such a simple either/or.
This must be explained—why has the US gone to extremes in sending jobs away? And our politics accepted this? Why are there few candidates to run on changing this?
We just accept ‘globalization’ excuses. But it’s the main political issue. Our media should have been tracking and reporting on this for years, but it seems to have ignored it.
Big money in elections is one of the big answers—and we differ from other nations in this. These questions need exposure, not just –China is cheaper, end of story. So profits are exalted over the common good of the US.
1
The worst mistake Americans ever made was to allow international capitalists to export US technology, means of production and jobs overseas for greater personal profits at great expense to America and Americans.
Now we live with politicians' vain attempts to put Band-Aids on a gaping wound that is bleeding profusely. Need to stop the bleeding and sew up the wound. That cannot be done with either monetary or fiscal policy - it requires a National Industrial Policy that legally ends the export of the US economy.
Now we live with politicians' vain attempts to put Band-Aids on a gaping wound that is bleeding profusely. Need to stop the bleeding and sew up the wound. That cannot be done with either monetary or fiscal policy - it requires a National Industrial Policy that legally ends the export of the US economy.
36
Read history. US stole technology from Great Britain and other European countries to start our textile mills and cotton gins, Portland cement, advanced steel making technology and the list goes on and on. US economy soared while the rest of the developed world rebuilt after WWII. US companies thought they were invvulnerable and labor reaped the rewards as well. Now the shoe is on the other foot. Idiots have tried to stop the spread of technology and science since Galileo was sharing his thoughts with Dutch astronomers. It cannot work...never has, never will.
Let me offer one little fact.
Since labor is a small part of the cost of an iPhone, if Apple made the iPhone in the US, it would raise the cost to Apple by $10 a phone and provide thousands of jobs for Americans.
Since labor is a small part of the cost of an iPhone, if Apple made the iPhone in the US, it would raise the cost to Apple by $10 a phone and provide thousands of jobs for Americans.
6
Now that the horse has left the barn....
The author says that the Summers-Balls report addresses four major economic developments, and that there is concern about wage stagnation and the hollowing out of middle income jobs. As a Capitalist, and falling closer in-line fiscally with Republicans, I do find a ring of truth to the concerns. At what point do we address the issues of decreased corporate citizenship, technology and outsourcing and there effect on the opportunities available in America for the next generation.
7
Corporations will do anything they can to not pay a fair wage as fairness has never been their goal and never will be. Without strong unions government policies are the only way workers have to potentially create a level playing field. The solutions government might produce are far from perfect, but it is the only defense we have against predatory employers. We might debate some of the points and possible actions in this article , but it will take all the will of the people to recreate if we ever had one a level playing field for workers to reclaim their place in our society. Knowing Republican intransigence this fight will be a long and brutal one, but it is the only course that has any possibility of creating a fair society for as many people as possible. At least now Democrats have a useful plan that can counter the devastating Republican goal of destroying the middle class and catering to the greed of their rich patrons..
181
Robert, I agree that we should strengthen unions. For example, outlaw "Right to Work" laws that enable deadbeats to enjoy union benefits without paying union dues.
But there is something else we can do. We can plug the loopholes in corporate taxation and raise marginal rates on the Rich. In the Great Prosperity, 1946 - 1973, the ration of corporate taxes actually paid to GDP was 3 times as high as it is today. Marginal rates on the Rich were much high. This encouraged the Rich to not to take obscene amounts of money out of the companies and the companies to pay workers more (a business expense and thus not taxed). Thus as productivity rose, so did wages. Only after about 1973 when taxes were cut, did productivity begin to increase much more than wages.
But there is something else we can do. We can plug the loopholes in corporate taxation and raise marginal rates on the Rich. In the Great Prosperity, 1946 - 1973, the ration of corporate taxes actually paid to GDP was 3 times as high as it is today. Marginal rates on the Rich were much high. This encouraged the Rich to not to take obscene amounts of money out of the companies and the companies to pay workers more (a business expense and thus not taxed). Thus as productivity rose, so did wages. Only after about 1973 when taxes were cut, did productivity begin to increase much more than wages.
6
The rich/GOP must destroy the middle class, the poor have no assets to steal.
5
Surely, you recognize this as a ploy to win votes. The two-party system has failed.
"Democratic and liberal luminaries as Bill Clinton; Eric Schmidt, executive chairman of Google; and Summers,"
Well I can see the Democratic Party luminaries listed but none that would normally be considered liberal democrats or social democrats. Summers? not Stieglitz, a Clinton? not Warren, Schmidt the head of a Google which is being driven out of Europe for its behaviour?
The fact is that political parties have metastasized (farther and more malignantly in the US and UK but also more and more in other western democracies) and now serve no interests other than those of party apparatchiks and their paymasters.
Well I can see the Democratic Party luminaries listed but none that would normally be considered liberal democrats or social democrats. Summers? not Stieglitz, a Clinton? not Warren, Schmidt the head of a Google which is being driven out of Europe for its behaviour?
The fact is that political parties have metastasized (farther and more malignantly in the US and UK but also more and more in other western democracies) and now serve no interests other than those of party apparatchiks and their paymasters.
28
"Inclusive capitalism" is yet another economic theory promoted by those who have capital so that they may protect it, and keep it from hoards of unhappy poor who may have other ideas.
Inclusive capitalism would not have been needed had the richest people in the world, with the most capital, been allowed to fail and lose their capital in 2008. Did you know for example that without the government and federal reserve bailouts, Sheldon Adelson would probably be bankrupt? He was saved, and instead of thousands of people cropping up in his place, he controls even more money and now even elections.
The fact that Larry Summers is promoting it sounds more like a communications strategy than a serious and feasible answer to the how the bailouts created the richest 1% that human history has ever witnessed.
Inclusive capitalism would not have been needed had the richest people in the world, with the most capital, been allowed to fail and lose their capital in 2008. Did you know for example that without the government and federal reserve bailouts, Sheldon Adelson would probably be bankrupt? He was saved, and instead of thousands of people cropping up in his place, he controls even more money and now even elections.
The fact that Larry Summers is promoting it sounds more like a communications strategy than a serious and feasible answer to the how the bailouts created the richest 1% that human history has ever witnessed.
48
Now if only the Democratics can stay on point and not be distracted by other hyperbolic or meaningless arguments - just keep driving home the message that to be successful, capitalism needs to work for everyone, not just a privileged few.
10
No one can rescue a society hell bent on self destruction. Feudalism in the age of smart phones and instant messaging is just no going to work.
13
Economies cannot function without demand.
Keynes knew it, Krugman knows it and now vulture capitalism and the Democrats are beginning to learn it.
You cannot forever strangle the masses with feudal wages and a weak job market and maintain any meaningful economic velocity because demand eventually collapses.
Living worker wages are needed as a matter of law, income and wealth taxes on billionaires and serial tax evaders must be implemented and executive wage theft must corralled if massive poverty on an epic scale is to be avoided.
There is and never was any justification for 350:1 CEO:worker pay ratios and the accompanying worker wage that goes with it; executives take the money because they are sociopaths and they can get away with theft by virtue of their position and no regulation.
Greed has to be regulated...or we can let revolution do the regulating.
Keynes knew it, Krugman knows it and now vulture capitalism and the Democrats are beginning to learn it.
You cannot forever strangle the masses with feudal wages and a weak job market and maintain any meaningful economic velocity because demand eventually collapses.
Living worker wages are needed as a matter of law, income and wealth taxes on billionaires and serial tax evaders must be implemented and executive wage theft must corralled if massive poverty on an epic scale is to be avoided.
There is and never was any justification for 350:1 CEO:worker pay ratios and the accompanying worker wage that goes with it; executives take the money because they are sociopaths and they can get away with theft by virtue of their position and no regulation.
Greed has to be regulated...or we can let revolution do the regulating.
289
Recently, my thoughts have turned to revolution - strikes by workers, strikes by consumers, strikes by citizens. I don't know how else the ordinary person, squeezed between the wealthy and the poor, can survive in the future. We must get changes made and soon.
5
Take a look at the chart in the article - it contradicts everything you're saying. Increases in Labor's share of Total Income correspond with recessions; when Labor's share fell, the economy expanded. The graph is simplistic - but then, so is your cure.
2
“executive wage theft must corralled if massive poverty on an epic scale is to be avoided.”
You don’t know what poverty is. 40% of the world’s population 2.8 billion people, survive on less than $2 a day, 1.2 billion people, live on less than $1 a day. Where you don’t see poverty like that is in capitalist countries where people are free to make ungodly sums of money because to make ungodly sums of money you need to produce something of value to people.
What is considered a poverty level in the US is 2.5x the median income in the world and equivalent to the median US family income in 1950, those days the left longs for of strong unions, high marginal tax brackets and little foreign competition.
You don’t know what poverty is. 40% of the world’s population 2.8 billion people, survive on less than $2 a day, 1.2 billion people, live on less than $1 a day. Where you don’t see poverty like that is in capitalist countries where people are free to make ungodly sums of money because to make ungodly sums of money you need to produce something of value to people.
What is considered a poverty level in the US is 2.5x the median income in the world and equivalent to the median US family income in 1950, those days the left longs for of strong unions, high marginal tax brackets and little foreign competition.
2
Tom,
This is superb journalism. If our policymakers could reach your level of research, precision, and clarity, we could solve this issue.
I read the Balls & Summers paper & the sage wisdom of Andy Grove. There is also a good book, "Why Nations Fail" by Daron Acemoglu & James Robinson that addresses from an economic history perspective the significance of inclusiveness.
Clearly, we have a problem in the United States. Our challenge will be to convince our wealthy & politically influential fellow Americans that it is in their interest to adapt free-market capitalism to a better system of income distribution. The evidence shows that free-market principles have not served the total economy very well. In our stagnant wages, we seem to be losing our economic dynamism & the US share of World economic growth is shrinking. I have worked on this issue since the 80's & believe that a big actor in US slowing economic growth is related to the absence of our political sense that profits should be shared with the employees who have contributed to productivity growth. Gross unfairness in the tax code is evident & must be corrected.
There are also social rigidities that deny children an equal education including good nutrition in their learning environment. State & Local education supported by property tax is spotty. There are some great systems but there are many more school districts that are "poor" & the opportunities for the students are not close to being fair.
This is superb journalism. If our policymakers could reach your level of research, precision, and clarity, we could solve this issue.
I read the Balls & Summers paper & the sage wisdom of Andy Grove. There is also a good book, "Why Nations Fail" by Daron Acemoglu & James Robinson that addresses from an economic history perspective the significance of inclusiveness.
Clearly, we have a problem in the United States. Our challenge will be to convince our wealthy & politically influential fellow Americans that it is in their interest to adapt free-market capitalism to a better system of income distribution. The evidence shows that free-market principles have not served the total economy very well. In our stagnant wages, we seem to be losing our economic dynamism & the US share of World economic growth is shrinking. I have worked on this issue since the 80's & believe that a big actor in US slowing economic growth is related to the absence of our political sense that profits should be shared with the employees who have contributed to productivity growth. Gross unfairness in the tax code is evident & must be corrected.
There are also social rigidities that deny children an equal education including good nutrition in their learning environment. State & Local education supported by property tax is spotty. There are some great systems but there are many more school districts that are "poor" & the opportunities for the students are not close to being fair.
10
GOOD POINT, MR. EDSALL . . .
...which reminds me of the 1964 G. O. P. Convention when it was Barry Goldwater (wealthy) and Nelson Rockefeller (far more wealthy). Actually it was Gov. Rockefeller was attempting to save capitalism from its excesses.
Sen. Goldwater has integrity but was not as insightful as Gov. Rockefeller. As the then governor of New York understood that a few dashes of Liberal policies were needed...
To keep the electorate from becoming revolted ,and perhaps begin a revolution one needed to preserve as Winston Churchill had labeled as"the worst economic system except all the others" -- the government would have to enact some modifications for he wanted to keep capitalism vital.
Few on the right understood this including Goldwater.
...which reminds me of the 1964 G. O. P. Convention when it was Barry Goldwater (wealthy) and Nelson Rockefeller (far more wealthy). Actually it was Gov. Rockefeller was attempting to save capitalism from its excesses.
Sen. Goldwater has integrity but was not as insightful as Gov. Rockefeller. As the then governor of New York understood that a few dashes of Liberal policies were needed...
To keep the electorate from becoming revolted ,and perhaps begin a revolution one needed to preserve as Winston Churchill had labeled as"the worst economic system except all the others" -- the government would have to enact some modifications for he wanted to keep capitalism vital.
Few on the right understood this including Goldwater.
4
'Can Capitalists Save Capitalism?'
I don't know. Maybe the real question should be 'Does capitalism deserve to be saved?'
I don't know. Maybe the real question should be 'Does capitalism deserve to be saved?'
48
If the Affordable Care Act is any indication of future policy prescriptions from the likes of Lawrence Summers, I predict that this "inclusive" capitalism will come at the expense of middle class families earning $80-120K per year, while those raking in $8-12M a year remain completely unscathed.
4
My thoughts always return to the idea that "capitalism" was argued for in a book called "The Wealth of Nations." Now so many so called "capitalists" want to be nations unto themselves. Social Darwinism sold as capitalism is becoming feudalism.
19
But not a word on the single biggest market failure in human history, climate change?
7
Crony capitalism as practiced by this administration and large swaths of the mainstream Republicans via tax credits, carve outs, selective regulatory enforcement have made a mess of our economy. These proposals are already in place in states such as NY where ever higher costs via mandates have made startup businesses nearly impossible . Regulations for sick leave, higher minimum wages, environmental rules etc are absorbed and passed on to consumers or completely avoided by the huge corporations. These firms have political connections, are in favored industries, and have in house legal teams and experts to negotiate and avoid these financial hits. Small firms have to hire outside counsel. And experts and money that would otherwise go to expanding their businesses are instead spent on compliance. These extra costs get passed down via higher costs for every consumer, resulting in lower discretionary amounts of money for workers to spend. compare the yearly cost per household of trash removal in Dallas vs San Francisco. It's nearly 4x more in San Francisco. Those at the lower end of the economic spectrum get hit the hardest with these costs and these costs are myriad and permeate all aspects of our economy. The beneficiaries are those who manipulate the levers of government. For the rest of us, we will pay more, get less, and continue down the inequality path.
4
Inclusive capitalism is an oxymoron; just like compassionate conservatism. Capitalism is predicated on the premise of a shrinking pool of winners who win at the expense of the losers. See Adam Smith.
44
This is a capitalist country. The capitalists own it. Hence they have the right to destroy it if they choose. Sigh.
5
So far the only alternatives I have heard from the Republican Party amount to Orwellian Animal Farm parodies. Some pigs are more equal but horses can get ahead if they will just work harder.
17
An analytical analysis is overridden by the simple greed of the boardroom. They will NOT advocate anything that diminishes their share in any fashion. They have the clout to stop political action and unions have been declawed and neutered.
AS a union member I mourn that but it is a reality. I agree with David but the politicians simply will not advocate for any reform other than at the edges!!!!!
AS a union member I mourn that but it is a reality. I agree with David but the politicians simply will not advocate for any reform other than at the edges!!!!!
7
They're too busy selling the rope to hang themselves.
6
Tom, I give them credit for at least attempting to develop a set of proposals to address income inequality within the framework of the current paradigm.
The idea of making the mortgage interest deduction a credit, rather than a deduction, is appealing - but I argue that this provision must be redesigned as a housing credit, available to everyone, not merely home owners. The current mortgage interest deduction encourages people to buy property that they might not be able to afford long-term, especially in our era of globalization and perpetual outsourcing, in order to take advantage of the tax subsidy. And yet should anyone with a less than stable employment future ever consider purchasing real estate? I argue no - with memory of our recent real estate meltdown still bright. Moreover, under the current policy, renters are being forced to subsidize others purchase of property, which is outrageous.
Another provision missing is that of either full or partial deductibility of all insurance premiums paid "above the line" on IRS 1040 - thus allowing every American to buy health insurance directly and receive the same benefit as if they had purchased it through an employer. With the Republicans likely to gut the employer mandate section of the ACA, more Americans than originally anticipated will be compelled to buy their insurance direct - and yet every Americans deserves the right to pay for these premiums in pretax dollars.
The idea of making the mortgage interest deduction a credit, rather than a deduction, is appealing - but I argue that this provision must be redesigned as a housing credit, available to everyone, not merely home owners. The current mortgage interest deduction encourages people to buy property that they might not be able to afford long-term, especially in our era of globalization and perpetual outsourcing, in order to take advantage of the tax subsidy. And yet should anyone with a less than stable employment future ever consider purchasing real estate? I argue no - with memory of our recent real estate meltdown still bright. Moreover, under the current policy, renters are being forced to subsidize others purchase of property, which is outrageous.
Another provision missing is that of either full or partial deductibility of all insurance premiums paid "above the line" on IRS 1040 - thus allowing every American to buy health insurance directly and receive the same benefit as if they had purchased it through an employer. With the Republicans likely to gut the employer mandate section of the ACA, more Americans than originally anticipated will be compelled to buy their insurance direct - and yet every Americans deserves the right to pay for these premiums in pretax dollars.
8
"In a section titled “U.S. Policy Response,” Summers and Balls call for making parent companies responsible for the working conditions of employees of subcontractors"
Tom, this would be a really significant change in policy, and one that I would strongly advocate for.
For instance, I work for a major financial institution through a subcontractor, not by choice but by necessity - and I often feel myself treated as was Cinderella before the arrival of her fairy godmother. Until the NY City Council overrode Emperor Bloomberg's veto of the NYC Paid Sick Leave bill, I didn't even receive compensated sick days - despite the fact that I am forced to breathe the same air as everyone else in the building (and with it, the same germs). Before passage of this bill, if I became ill, I took the financial hit - not the subcontractor, not the firm.
And I'll not revisit the miserable excuse for a health care plan the subcontractor offered me in a cynical attempt to meet the requirements of the ACA - in comparison to the comprehensive subsidized insurance coverage enjoyed by regular employees of the firm.
And even the government discriminates against subcontractors. In the wake of the 2008 financial meltdown, a special program was put in place that made available up to $13,000 to separated employees of 19 major financial institutions; however, if you were a laid-off long-term subcontractor at one of these firms, you were only eligible for a maximum of $3,800!
Tom, this would be a really significant change in policy, and one that I would strongly advocate for.
For instance, I work for a major financial institution through a subcontractor, not by choice but by necessity - and I often feel myself treated as was Cinderella before the arrival of her fairy godmother. Until the NY City Council overrode Emperor Bloomberg's veto of the NYC Paid Sick Leave bill, I didn't even receive compensated sick days - despite the fact that I am forced to breathe the same air as everyone else in the building (and with it, the same germs). Before passage of this bill, if I became ill, I took the financial hit - not the subcontractor, not the firm.
And I'll not revisit the miserable excuse for a health care plan the subcontractor offered me in a cynical attempt to meet the requirements of the ACA - in comparison to the comprehensive subsidized insurance coverage enjoyed by regular employees of the firm.
And even the government discriminates against subcontractors. In the wake of the 2008 financial meltdown, a special program was put in place that made available up to $13,000 to separated employees of 19 major financial institutions; however, if you were a laid-off long-term subcontractor at one of these firms, you were only eligible for a maximum of $3,800!
3
The common refrain is taking more wealth away from the wealthy makes us all poorer. We see threads on this theme constantly, that the wealthy create jobs is one of them.
But a search of the wealthy does not show us where the great majority of them, have created any jobs, or made us all wealthier. There are a few exceptions, but in many case what we find are the wealthy just making their friends wealthier. Notice the recent increase in"Activist Investors." These are people who buy 5%--6% of the stock in a compny, get their people on the BoD, and break up the company, making the stockholders wealthier, but not the little stockholders. They get bought out, lose their equities and dividends, and many workers are laid off.
Then there are the heirs to fortunes like WalMart. Alice Walton's daily income is $1,200,000 a day from dividends. Now tell us has she built any factories, brought goods manufacturing beck to the U.S? Mitt Romney and Bain Capital sent Delco to China.
But these GOP retrogrades would have us believe someone who's income is $10,000 or $20,000 a day, would miss $2,000 of it, if their tax base was raised. $1,000,000 a year is $2740 a day income.
I once worked for Howard, he gave us all benefits you can not get today, and he still had more than anyone else. You can not find anyone who does not think that was the best company they ever worked for.
But a search of the wealthy does not show us where the great majority of them, have created any jobs, or made us all wealthier. There are a few exceptions, but in many case what we find are the wealthy just making their friends wealthier. Notice the recent increase in"Activist Investors." These are people who buy 5%--6% of the stock in a compny, get their people on the BoD, and break up the company, making the stockholders wealthier, but not the little stockholders. They get bought out, lose their equities and dividends, and many workers are laid off.
Then there are the heirs to fortunes like WalMart. Alice Walton's daily income is $1,200,000 a day from dividends. Now tell us has she built any factories, brought goods manufacturing beck to the U.S? Mitt Romney and Bain Capital sent Delco to China.
But these GOP retrogrades would have us believe someone who's income is $10,000 or $20,000 a day, would miss $2,000 of it, if their tax base was raised. $1,000,000 a year is $2740 a day income.
I once worked for Howard, he gave us all benefits you can not get today, and he still had more than anyone else. You can not find anyone who does not think that was the best company they ever worked for.
54
"But a search of the wealthy does not show us where the great majority of them, have created any jobs, or made us all wealthier."
I am wealthy, although (unfortunately) not nearly as wealthy as Mitt or Alice. I am certain that I have made few, if any, wealthier.
So what?
Since when did people like me have an obligation to be a "job creator", or a "wealth creator"?
I am wealthy, although (unfortunately) not nearly as wealthy as Mitt or Alice. I am certain that I have made few, if any, wealthier.
So what?
Since when did people like me have an obligation to be a "job creator", or a "wealth creator"?
Re: Michael Steed's comment that "more Washington tax hikes and spending is the same old top-down approach we've come to expect from President Obama that hasn't worked," when exactly has it been tried? What certainly hasn't worked is the same old GOP trickle-down approach. That's the one that brought this nation to the brink of financial catastrophe and it's the one they intend to try again.
191
It was tried in 1946 - 1973 and was a huge success.
7
So, instead, you think building a trough, filling it with other people's wealth, and letting those completely unable to demonstrate economy value feed at it is a better idea? All that does is encourage the growth of the bloated incompetent cohort in society that is a couple of decades away from becoming obsolete courtesy of automation and robotics. A better policy approach would be to give this cohort a choice: evolve, through education, initiative, and/or training programs, or perish.
1
QED: Education and training programs (along with long-term uninsurance benefits) are some of the things that will be flushed down the john if the GOP continues to shave government spending for the sake of tax cuts for the wealthy.
2
This approach abandons even talk about labor or its issues.
Instead, it is all about the interests of capital. It claims capital would be better served by a larger consumer base.
Maybe capitalism would be more profitable for capital if demand were manipulated a bit in ways that benefit capital. However, that is very much not the reason we have governments established among our people.
Government is established to advance life, liberty, and the pursuit of happiness for all of our people. It is not established for better return on investment.
It may be that for this moment capital and people have interests running in parallel. However, their interests are not the same. Both in emphasis now and for when they diverge later, it matters very much that the whole focus is on the interests of return on investment rather than the quality of life of the population.
We matter so little in modern politics, even the Democrats have given up even talking about us. It is all how the rich can earn more, even when it is paying us.
Instead, it is all about the interests of capital. It claims capital would be better served by a larger consumer base.
Maybe capitalism would be more profitable for capital if demand were manipulated a bit in ways that benefit capital. However, that is very much not the reason we have governments established among our people.
Government is established to advance life, liberty, and the pursuit of happiness for all of our people. It is not established for better return on investment.
It may be that for this moment capital and people have interests running in parallel. However, their interests are not the same. Both in emphasis now and for when they diverge later, it matters very much that the whole focus is on the interests of return on investment rather than the quality of life of the population.
We matter so little in modern politics, even the Democrats have given up even talking about us. It is all how the rich can earn more, even when it is paying us.
141
You nailed it. I really liked "legislation to pressure corporations to increase pay to match productivity growth". What does that even mean?
6
Mark Thomason wrote:
"This approach abandons even talk about labor or its issues."
Actually this approach is about our economy, is this economy to be driven by billionaires and banks as a return to the glided age of 100 years ago or by consumer demand which drove the economy for decades after WWII and created the middle class.
The Great Recession of 2007 gave us bailouts for the billionaires, banks and bankruptcy for the middle class. At this point we'll be looking more like Russia if you had your way.
"This approach abandons even talk about labor or its issues."
Actually this approach is about our economy, is this economy to be driven by billionaires and banks as a return to the glided age of 100 years ago or by consumer demand which drove the economy for decades after WWII and created the middle class.
The Great Recession of 2007 gave us bailouts for the billionaires, banks and bankruptcy for the middle class. At this point we'll be looking more like Russia if you had your way.
3
Well, there are two ways to look at that:
1. Owing to the appalling stupidity of the masses (Republicans are better for the economy?), the government is essentially controlled by capital. One must therefore convince the capitalist that it is in his interest to redistribute income if that is to occur.
2. A functioning capitalist system is in the interest of the masses. This latter would be closest to my own personal view; socialism didn't work very well, so the best option is what I sometimes think of as "captialism with a human face" -- the mixed, progressively taxed, safety net, floats-all-boats economy that we remember from the progressive era.
1. Owing to the appalling stupidity of the masses (Republicans are better for the economy?), the government is essentially controlled by capital. One must therefore convince the capitalist that it is in his interest to redistribute income if that is to occur.
2. A functioning capitalist system is in the interest of the masses. This latter would be closest to my own personal view; socialism didn't work very well, so the best option is what I sometimes think of as "captialism with a human face" -- the mixed, progressively taxed, safety net, floats-all-boats economy that we remember from the progressive era.
4
Mr. Edsall,
Research has shown that the US income tax system increases inequality rather than reduces it.
This was largely accomplished by persuading the masses that capital needs to be taxed at a lower rate than labor to exist.
This is nonsense.
Corporate billionaire "persons" pay taxes after expenses like indulgent travel, private club fees, lodging and dinners in the finest restaurants.
They have the right to spend unlimited money to corrupt politics in the name of "free speech." Their religious rights rise above their thousands of workers, in some cases.
But these corporate persons suddenly become just passthroughs for income tax purposes.
Take gross revenues, deduct indulgent expenses, allow for transfers of income to tax dodges, and tax shareholder receipts of dividends and capital gains at preferential rates to labor.
Some shout double taxation to support preferential tax treatment of capital over labor.
But when I pay my CPA or lawyer, my wages are fully taxed and my CPA's and lawyers' income are fully taxed again. So double taxation is ever present in the real world.
Meanwhile, the vast middle class pay taxes on GROSS income with a standard deduction that doesn't begin to cover essential costs.
80 people own as much wealth as the bottom 50% of humanity combined.
When exactly would you begin to correct the tax unfairness of the US system, Mr. Edsall?
Research has shown that the US income tax system increases inequality rather than reduces it.
This was largely accomplished by persuading the masses that capital needs to be taxed at a lower rate than labor to exist.
This is nonsense.
Corporate billionaire "persons" pay taxes after expenses like indulgent travel, private club fees, lodging and dinners in the finest restaurants.
They have the right to spend unlimited money to corrupt politics in the name of "free speech." Their religious rights rise above their thousands of workers, in some cases.
But these corporate persons suddenly become just passthroughs for income tax purposes.
Take gross revenues, deduct indulgent expenses, allow for transfers of income to tax dodges, and tax shareholder receipts of dividends and capital gains at preferential rates to labor.
Some shout double taxation to support preferential tax treatment of capital over labor.
But when I pay my CPA or lawyer, my wages are fully taxed and my CPA's and lawyers' income are fully taxed again. So double taxation is ever present in the real world.
Meanwhile, the vast middle class pay taxes on GROSS income with a standard deduction that doesn't begin to cover essential costs.
80 people own as much wealth as the bottom 50% of humanity combined.
When exactly would you begin to correct the tax unfairness of the US system, Mr. Edsall?
205
Unless the acquisition of shares are original investment in a company, ownership of shares should not have any special treatment because they did not contribute to the company's capital and therefore should not be sheltered by arguments of double taxation - at that point, stock ownership is an asset and not a contributory investment in the earnings of a company; the shareholder is only the beneficiary of earnings generated by someone else's labor and capital.
15
Increasingly the wealth of this world is in numbered accounts and in corporations in tax haven countries -- that are subject to no taxes and whose stockholders names are kept secret by local law. Our central banks could break up that situation in an instant by refusing to permit transfers between banks within those tax havens and the banks in the major trading nations. They do not! Until they do changing tax laws in the U.S. will have minimal effect of the Super Rich.
Likewise increasing the minimum wage in the U.S. has minimal effect when so many jobs -- factory and clerical -- simply can be transferred to the lowest wage, least regulated nations and those goods and services exported here.
Those are the facts of life in 2015 -- political rhetoric aside!
Likewise increasing the minimum wage in the U.S. has minimal effect when so many jobs -- factory and clerical -- simply can be transferred to the lowest wage, least regulated nations and those goods and services exported here.
Those are the facts of life in 2015 -- political rhetoric aside!
6
The new word i see is inclusive,
The Kochs et al find this intrusive,
To shrink down the gap
Is pap for a sap,
They want their wealth to be exclusive!
The Kochs et al find this intrusive,
To shrink down the gap
Is pap for a sap,
They want their wealth to be exclusive!
72