Okay, please try again. I don't honestly understand how this will work. Why not just add some Federal taxpayer money to the paycheck of every working American so that they will live at a minimum standard? Of course, this begs the question of how long those who are paying US taxes will refrain from transferring their money and other assets outside of the United States. Isn't that what we're seeing with all those non taxpaying Europeans and Chinese and Russians buying fancy real estate in New York and London?
14
The root cause of inequality of income in the US is inequality of education and actual knowledge. The professionals who make high salaries really do know thousands of times as much as those chopping potatoes in the kitchen.
In the past 50 years, education for average people has gone down the tubes in terms quality. The average high school graduate from 1960 likely to be better educated than today's "college graduate".
This has a major impact on work, employment, and wages. For example, if you read news stories about union organizing today, it is highly educated upper-class volunteers who are trying to organize unions for poor workers, and not the workers themselves, who are treated as helpless pawns of the system. This is pitiful. If you don't know enough to advance your own interests, relying on good-hearted volunteers isn't going to cut it.
This is epitomized by Warren herself. She is a highly-educated professor from Harvard Law School who is going to help the poor and ignorant. I predict this will not be effective; if poor people are going to get higher wages and better working conditions, they're going to have to do it themselves. That is how the world works.
39
@Jonathan
Union leaders, the "highly educated upper-class" are not volunteers. They are highly paid union officials who are looking for a new revenue stream to pay their own salaries, to be extracted from the poor masses. the pawns are not going to be better off.
She was a highly paid professor: that's $375,000 for 90 hours of classroom time per year which left her free to consult for even more money.
She was highly paid as a double credit affirmative action hire, the first Native American professor of law in addition to being a woman.
21
Now, where are the billionaires with the integrity to support this?
16
"We need progressive taxation to narrow the income gap and to generate revenue for public investment." We already have progressive taxation, have for quite some time now. The more you make, the more you pay. Not just in absolute dollars, but as a percentage of those dollars earned. The top 10% pay 80% of the taxes paid. And the bottom 47% pay no taxes, at least when it comes to Federal taxes. Many that pay no tax at all, also receive tax credits - they receive money from the Fed that they never earned or contributed to! And the number of people under-reporting earnings is out of control; many work off the books, posting a meager tax submission just to get the tax credit! This is a problem in Europe as well - it is considered a national requirement to not pay taxes. There are many in this country that are just surviving on their pay, working there butts off. But there are many more that are gaming the system. Dems don't like to admit this, and Reps act like it is the sole problem. Neither really fix anything, just talk and divide us into us and them. Rich and poor, female and male, gay and straight, white and black (excluding hispanic whites), rural and city dwellers, etc. etc. etc. We do not need more government, we need better laws, a tax code devoid of loopholes, and leadership that is actually held accountable. We need less, but better, government.
9
According to the federal income tax returns uploaded to the "Elizabeth Warren for Senate" website, here is Warren’s declared income per year for the past ten years as a sitting US Senator: (Senate pay: $174,000 per year)
2008: $831,021.00
2009: 980,670.00
2010: 954,721.00
2011: 616,181.00
2012: 424,993.00
2013: 1,070,909.00
2014: 1,607,114.00
2015: 1,173,829.00
2016: 762,785.00
2017: 972,654.00
Declared Income for the past ten years: $9,394,877.00
Average Income Per Year: $93,948.77
The median Massachusetts income is about $77,000 ($60,000 for the nation as a whole).
Why do people believe that a member of the economic "1%" will do anything to bring about wealth and income equality? That's like pinning your hopes for losing weight on a book called: The Marlon Brando Sure-Fire Weight Loss Diet.
https://emcphd.wordpress.com
12
What this article is talking about is pure socialism. If it walks and talks like a duck, you can bet it's a duck.
9
What's Warren's position on reforming our campaign finance system, which majorities want? That's the issue to be solved before any reforms. The US is unique among democracies in turning elections over to the richest mega donors to finance candidates and parties.
Once our highest court defines mega donor money with constitutionally protected 'free speech', the mass of citizens are effectively shut out of influence on govt, since they can't compete.
As a Republican, Warren said she was worried about the strain on markets and a government that was too activist.
What precisely is her thinking on that now? And how does it compare with other candidates with consistent views who were life-long Democrats?
3
@Meredith
ALL Democrats strongly campaigned for campaign finance reform for years already.
Hillary, Nancy Pelosi and of course Warren want to end the SC Citizens United ruling and pass a law that would strongly limit campaign donations once again.
And the bill already exists too. It's called the "Government by the people Act", and would have been HR1 this week in the House if it weren't for the fact that Trump shut down the government, so that opening it again is now priority number one.
In case you're interested in campaign finance reform, this is a must read:
https://theintercept.com/2018/12/02/public-campaign-finance-hr1/
5
Move to Russia.
This country was founded and built on individual and minority rights, and property rights, including income and wealth. A dynamic economy, one that creates jobs and wealth, depends on the entrepreneurs and risk takers, not those that want "redistribution".
7
@Brad Byron
You're confounding a dictatorship and a democracy.
And no, Western social-democrats aren't pro dictatorship at all. As soon as you'll start doing your homework, you'll see that they are CAPITALISTS, and capitalists who want to make sure that a wealthy minority doesn't start limiting access to decent jobs, healthcare and education to their own buddies through using the power of the government to make laws.
Warren's CFPT for instance has already shifted millions of dollars in fraud from big banks to ordinary citizens.
That means capitalism (the CFPT isn't trying to get rid of big banks at all, quite on the contrary, it allows them to continue to exist by making sure that they do their job properly), and WITHIN capitalism making sure that criminals who betray their own clients get punished, EVEN when those clients belong to the middle class and as a consequence don't have millions of dollars to pay for the most expensive lawyers out there, as big banks have.
The USSR has never been capitalist. It was a dictatorship that used the structure of the feudal society in order to take control of a rural economy. So it's situation was and is totally incomparable to America's.
Finally, as you may know, those who earn most money in the 21th century economy are no longer those who "create jobs" or "create wealth" or are "entrepreneurs and risk takers". It's those who play on Wall Street by merely selling and buying financial products rather than "real stuff"...
10
But how far will she go to stop inequality in these dangerous times? The GINI Index shows the US lags many countries in upward mobility. We are stuck.
Warren quote from 2011 article in The Hill--- " Liberal favorite Elizabeth Warren admits she was a Republican.”
“I was a Republican because I thought that those were the people who best supported markets. I think that is not true anymore," Warren said. "I was a Republican at a time when I felt like there was a problem that the markets were under a lot more strain. It worried me whether or not the government played too activist a role."
Warren admitted though that she voted for both Democrats and Republicans.
But she declined to say whether she voted for Ronald Reagan in either his first presidential campaign or his reelection campaign.”
I admire Warren’s support of consumer protections from the big banks. But I wonder if we will get a confused platform from her. Confusion is the last thing we need to counter the Trump reign.
We need politicians committed to what she called an ‘activist govt’. That's govt elected by the people to get representation for their rights, and to counter dominance by big money corporations in our elections.
Don’t want a Reagan voter. That should be clear.
1
It seems like people opposing pre-distribution like to make arguments that wildly over-simplify economics and history. China did not manage to draw jobs and investment away from the US based on lower labor costs - that history is much more complicated. It took labor-hostile, ideologically driven policy to overcome the 'cluster city' (to borrow from Tom Friedman) advantages the US had - nearby parts manufacturing, local universities providing educated workers, transportation and other infrastructure, etc.. Investment in China was subsidized. The competitive advantages that make China's lower labor costs worth it were created over time to strengthen a totalitarian state pervaded by red-brown corruption that used a variety of practices - many illegal even under Chinese law - to empower corruption, repress democratic political potential by force, and ensure the ability to exploit workers. Claims that checks and balance exist in the US system to prevent 'the mob' from voting themselves benefits display an attitude that ludicrously diminishes and falsifies Constitutional law and the thinking behind it. The cry of 'state socialism' is not made on behalf of capitalism, but on that of tolerating corruption, abuse of power, and corporate crime. Why exactly do we tolerate people sitting on each other's corporate boards, voting upper management compensation into the stratosphere, regardless of the health of the company? And who thinks that it's not ethically slimy - at best - to do so?
5
I am interested in the concept of pre-distribution and would favor a requirement that in exchange for limited liability all business organizations must limit all compensation to a reasonable multiple of the least compensated employee. The obvious impediment to such a scheme is the global economy and the ability to circumvent US rules and regulations by forming business entity in another jurisdiction.
2
There’s no bigger inequality than Elizabeth Warren making $350,000 to teach one class while her students go deep into debt to pay her salary
10
@Larry
1. She voted multiple times already for bills that increase taxes for people like her.
2. She has been a staunch supporter of student loan reform for years already.
Now what have you done to put America first, except for tax evasion ... ?
14
So who says professors can't have smart ideas? This sounds like a rethink of capitalism; Capitalism 2.0, or holistic capitalism.
But turnout is the key, so can she sell it? Ms. Warren needs to out-Trump Trump. She needs to go deep into Trump country and get them on board.
If she can sell them, she can sell anyone. And I think she can do it.
7
the challenge that Warren and the democrats have when it comes to income inequality/equality is the failure to understand that most people appreciate their political views right to the point where it starts to effect them. "Oh ya, the rich people need to pay more but not me." says the working professional making $100,000. which by the way is safe to say probably in the top 20% of income earners. Hard left liberal views usually benefit the very rich or the very poor; not so much the middle. IMO, what the government should support, and again, IMO, America at its best should is an equal opportunity to be unequal. If one individual works harder than another in a similiar industry why shouldn't they deserve the excess profits they create? I would agree that most people think they should. Anyone in who wants to pursue business ownership in this country can, or pursuing a career of corporate excellence can. Of course it doesn't guarantee prosperity. it might guarantee heart break and misery. However, then again. This thing Warren says "Well, you didn't that on your own." Well, Senator, let me ask you this; when was the last time Tom Brady won a game throwing a touch down to the referee? A referee, that is all the government is. It the American people that play the game. we all need to play at a higher level, and encourage those around us to do the same.
2
It should be a simple idea evoking wide agreement: free markets are not unregulated markets but markets that are free for access to all. If there was real faith in the unregulated (Republican) idea, why are so many markets as regulated as they are--like Social Security in the retirement market? Surely it's because we want to make them work practically by making them accessible to more, if not all.
Why do Democrats have such a hard time challenging Republican propaganda about free markets? Formulating basic values for the public square seems to challenge so many in the only party that still believes OUR government can do good things for us.
4
@Tom
Democrats are having such a hard time because the GOP's propaganda machine Fox News is flooding Americans with fake news 24/7, and GOP politicians are literally taking over these lies on a daily basis.
And indeed, deregulation just doesn't make any sense.
Nobody would want to go back to organizing our cities in such a way that there are no trafic rules or policemen at crossroads to enforce them.
It's precisely because those things are in place THAT we can circulate freely and reasonably safely.
Abolishing these rules and their enforcement (which is what dismantling the CFPB does, for instance) simply means allowing the biggest trucks to monopolize the road, to the detriment of the 99%.
All that Warren is proposing here is to stop distorting the rules of the game in such a way that only trucks can drive how and where they want, no matter how many citizens they kill on their way.
8
@Ana Luisa My question was a bit rhetorical. Your argument is needed from the mouths of so-called progressive pols here in the US, who have a strange reluctance to wax philosophical on such things as free markets and real "law and order". I have no basic problem with Sen Warren's proposals. I just wish pols and media types like Steven Vogel--who's a bit dense with this talk of pre-distribution--could explain their proposals in a simpler, more sellable way. The so-called GOP here does much better with much less value for their ideas.
@Tom
My comment wasn't a criticism, just a further elaboration of yours.
I do believe though that the truth will always be more complicated than bumper sticker slogans, that's why the corrupt GOP is both lying and using simplistic, easy to sell rhetoric.
So where we disagree is when it comes to "messaging".
Fox News is literally creating an "alternative facts" bubble 24/7, with fabricated crises, which GOP politicians then "solve". THAT is how they fire up their base, all while selling the country out to the highest bidder.
Democrats cannot possibly imitate such a "communication style", as their goal is to truly improve things for the 99%, and you can only do so when you honestly explain your analysis of what is going wrong today, and what you believe can help, because that is how ordinary citizens can then think about those solution and give crucial feedback.
In other words, if you want a government for the people, it has to be by the people, and that will only happen when ordinary citizens start to be interested in having a real conversation, rather than waiting for bumper sticker slogan and then hoping that somehow miraculously politicians will know what they need and do the hard work for them.
3
Absolutely! Now that Romney is back on the scene, we need to remember the claim from his presidential bid that the fortune he amassed (via a monetary shell game without producing anything tangible) was all completely legal. That is exactly the point, and it what we need to rectify.
4
I love Warren's plans for pre-distribution of wealth. For starters, I commend her for even using the term, which is politically neutral and covers so much essential ground. For 50 years, I practiced and taught management and fund-raising in the US and Caribbean, from the grass roots to university levels, and published articles about my work in professional journals. In management, a significant thing I taught was employee and constituent representation on boards of directors. This maintained accountability and ethics for all operations, including pre-distribution decisions. Lack of this representation was destructive to employees and society. In Germany, businesses are required by law to have this representation, and research shows it works well. Second, the principle of redistribution has resulted in the nonprofit sector being completely co-opted by the charity industry. Fund raising as a competitive sport is antithetical to healthy social outcomes. Big foundations become a cover for a few hyper-wealthy individuals to control social policy globally. For these two reasons and many others, pre-distribution makes so much sense.
3
Yes, call it right---rigged, PRE-distribution---all legalized, normalized and rationalized with misleading labels by those who benefit.
It’s systematic. First, our elected lawmakers allowed corporate monopolies to send US jobs out to low wage countries, depriving millions of a living.
They let big business call the shots to protect profits in tax havens.
They reduce taxes for the financial elites.
Our politicians then compete for corporate donations and let the big donors set the limits of lawmaking in their favor.
We legally turn over our elections to mega donor domination, shutting out the voice of average citizens. Our politicians then share in the increased profits with donations from corporate privilege.
These are the politicians we have to stand in long lines to elect. Even the more public spirited candidates have been forced to take part in this rigged system.
Now some candidates are rejecting PAC money and using small donations from average citizens to run.
See PBS Newshour—The Rise of the Anti Pac Democrat.
Not a peep about this on 24/7 cable TV news.
Our media needs to publicize this to inform the public.
We need to build a WE THE PEOPLE TOO movement.
4
We need an article on how Eliz Warren started out as a Republican and switched party affiliation. What made her change? How has she changed? This is a crucial factor in judging her outlook and intentions now.
Jochen Bittner needs to talk to a few people in the UK and not spout EU-led statements. It is absolutely crystal clear what the main sticking point for the majority of MPs as well as Brexiteers: the open-ended, EU-favouring Backstop. It suits Europeans to say our wishes aren’t clear but they absolutely are. Move on this one point and things might go well. But EU intransigence means they won’t and are using very thin excuses to hide the truth. And it’s this sort of behaviour which is exactly why the UK needs to get out of this club.
Yes, the crucial point that our media must start publicizing:
"It is not about rigging the system to benefit the poor and the middle class, but about unrigging it from benefiting the wealthy and the powerful.....shaping markets to allocate returns from economic activity more fairly in the first place rather than trying to correct inequities after the fact."
Corporate mega donors to our elections set up a system rigged in their favor---and they use rhetoric to identify this with Americanism, freedom, private property, anti socialism, etc.
Then they claim paranoid victimization to those who object to their confiscating the resources of our national productivity.
The fruits of our economy has already been redistributed---upward. And millions of US jobs sent to low wage countries, with congress sharing in the increased profits by campaign donations.
This has to be concretely spelled out in our media to counter self serving arguments of the elites who dominate the conversation, and dismiss their opponents as 'too left wing'.
Now we need columns on how to reform our campaign finance system, which majorities favor, and so do many politicians.
Otherwise any other reforms are an uphill battle.
6
Taxes are continuous, so how do you distribute before taxation? I think the predistribution folk have logical, rather than temporal, priority in mind, but what does that even mean?
I think, at an abstract level, there's some conceptual confusion involved in the distinction between predistributive and redistributive proposals. At a concrete level, it's fine to talk about things Hacker, et al, call "predistribution." I would suggest, though, that taxes are a much more powerful means of achieving a desired level of income or wealth inequality in many cases.
To be fair, "redistribution" is also misleading. It's not like a completely tax free economy bakes a pie, it gets divided up unequally, and then the government takes little bits of some of the larger pieces away and adds crumbs to the plates with smaller pieces. In reality, the economy is a nexus of transactions that are always being taxed, and taxes-and-transfers shape the kinds of transactions that are made.
@Pierce Randall
As this op-ed explains, pre-distribution means giving workers access to decent wages and a decent amount of participation in the decision-making process in their own company, BEFORE the company starts paying part of the profits made by those same workers to the government in the form of taxes.
Example: 20 states just raised the legal minimum wage to between $12 and $15. That distributes the wealth produced by workers directly to those workers, whereas taxes take part of the money produced by workers and then re-distribute that money back to them in the form of public education, ER care etc.
As Warren explains, today both are necessary.
2
Fairness in INCOME OPPORTUMITY depends on education and training to a huge extent and one that government can readily improve. (Social constraints to income opportunity is a more impacted problem.) We need to STOP subsidizing private universities (at obscene levels) and redirect the savings to public universities AND trade and technical schools. We need revitalize our apprenticeship programs along with revitalizing our infrastructure. Massive infrastructure improvements, like public transportation, would also tighten the safety net and balance things out. But we should try to design, administer and execute these projects at LOCAL levels. If CCC and WPA projects occurred today the fraction of the budget going to administrative/overhead costs would likely be ridiculous. For every person with a hand tool there would be five with pens and keypads! (And if Elizabeth Warren "predistributed" things, this number might be double.) And of course, basic health care could be another responsibility of the government that would promote fairness in our opportunities earn a living.
In general, IMO, we need to DECREASE the role of government at the federal level and greatly INCREASE the role of government at LOCAL levels. This would be more effective and more popular - and promote sustainability. Getting our house in order in a way that promotes activity/commerce on a scale that humans clearly NEED can not be accomplished, unfortunately, with undefined and fully-open borders.
2
@carl bumba
The good news is that it's precisely Democrats who support all that you're saying here, whereas the GOP blocks it - it even blocks bipartisan comprehensive immigration reform, which is the only way to concretely increasing border security, and as such it's the GOP alone that is making our borders much more "open" that what would be the case if they'd start to become serious about national security (Obama manage to get such a bill through the Senate in 2013 already, and with 68 votes, but the GOP House didn't even allow a vote on it, whereas once again the GOP did NOTHING on this issue during the two years that they've now controlled DC).
Just one example of decentralization: Obamacare. It allows each state to set up and manage its own exchange market, AND to replace Obamacare with something better (= covering even more people, at even lower costs) as soon as a majority in that state would vote for such a plan.
2
@Ana Luisa
As long as it's of utmost importance to our party whether or not a sound proposal comes from a Democrat or from a Republican, our party will REMAIN shunned by most of the country. Again, there are far more Independents than there are either Democrats or Republicans. Unity is the key, not division. (If this involves a degree of nationalism we may need to accept some imperfection for the sake of the good.)
3
@Ana Luisa
Also (thanks), Obamacare is, IMO, a poor example of "decentralization", at least in terms of its administration. The administration of the "marketplace" is entirely funneled through their website. The various plans vary, of course, by state and regional participating providers and the their offerings. But this level of "decentralization" existed before (and was even greater) Obamacare. Obamacare has helped to drive the consolidation of insurance providers and hospital networks, at the expense of both ACA and non-ACA medical consumers. I was a microscopic marketplace consumer for three long years - it was horrendous. I still can't get free of their email solicitation. (They seem to extend their "deadlines" for political purposes; it's a little spooky.) I don't pay much attention to anyone praising Obamacare who hasn't USED it themselves.
2
Just because this is sound policy does not mean it will be adopted, unless Warren can convince voters that she is the only one who will get this done. She already has had a huge success with the Consumer Financial Protection Agency . Her design of this agency structure and its policies was nothing short of brilliant.
Imagine what other structural changes that benefit most of the voters would happen under a Warren Administration.
I have been and still am a huge Bernie fan. I feel his talents and passion are wonderful. If Warren is elected President, she could name him to anyone of the Cabinet positions and he would be fantastic.
Here is hoping that we voters vote on issues, not whether or not the voice is shrill, or not beautiful or handsome, charismatic or not.
We need substance and we need it badly.
Here is hoping that the media and the voters will concentrate on substance this time around.
10
The focus continues to be transfer wealth from wealth creators (including the middle class that are always squeezed by both the left and the right) to those who are life long wealth consumers. At what point in time do we focus on personal responsibility and equality of efforts? Should a teenager who drops out from school and then is a life time dependent on tax payers required to not indulge in activities that would make him/her a dependent on others? Why is the focus never on any sense of personal responsibility. What about parents? Do they have any responsibility in raising children to be good citizens?
3
@Ben
Can you please explain how Obamacare, which allows children to stay on their parents' plan until their 26, covers the 110 million Americans with pre-existing conditions so that they don't have to sell their home, go bankrupt or call a kid back from college when they get ill anymore, and curbs cost increases somehow would NOT seriously help the middle class but instead even "squeeze" it .. ?
And how did the Recovery Act "squeeze" the middle class when it turned an economy that was shedding 700,000 jobs a month into a decade-long steady job growth and record low unemployment rate, more precisely?
Or let's take Warren's CFPB, which shifted millions in fraud committed by big banks back to ordinary citizens, or the Dodd-Frank Wall Street regulation law: how do they squeeze the middle class?
Imho, you've simply not been paying attention to who does what in DC ... ;-)
4
Would be nice if politics worked by objective facts, and it maybe outside the intended scope of the article, but all the grand majority knows about Warren is the lying propaganda pushed out by Republicans and the right, and dutifully repeated by all the rest of the press. All the considerable tools of public manipulation at the disposal of the political right have been brought to bear on burying any proposals or legislation from Warren. Even the moderate press, like NYT, has helped. Right now I'm willing to bet that all most of your readers have heard about Warren are the lies that she's been using claims of Native American ethnicity to boost her career.
The lesson to be learned here is that if you want to fix income inequality and corporate malfeasance you can not ignore the targeted corporate lies.
5
“What could be the problem with that?”
Duh. American business, which according to Gordon Gekko, is built around the organizing principle of greed, sees the Trump administration as fulfilling the promise of institutionalizing that greed. They are four square behind de-regulation and will not be happy about increasing regulation in the name of fairness. They could care less about fairness.
And, to be evenhanded, there would undoubtedly be issues around implementing increased regulations in such a way as to insure positive rather than negative outcomes. As with any bureaucracy, the effort would have to be guarded against both misuse and unintended consequence–no small matter.
This is not to say these are bad ideas, only to point out that suggesting there wouldn’t be problems is incredibly naive.
Before it starts huh? Warren is a little late to the game I’d say.
Plus, a professor making 500 a year is hardly in a position to pontificate on the haves and have nots.......ughhhh
2
@There
I see.
And of course, conservatives who reject wealthy people don't suffer from "envy" AT ALL, as soon as those people happen to be Democrats, I suppose? ;-)
3
"Predistribution" sounds like a campaign gimmick to me - a new and improved take on 'redistribution'. This fresh spin only reinforces negative stereotypes about socialism. In truth, the country today is VERY open to traditional platforms of European-style democratic socialism - and even socialism, itself, to some extent. What I like about Bernie is he's true to himself; he has true convictions that the country is only now ready for. The numbers of Independents and young people in the US have skyrocketed, and they are NOT as fearful of socialism as are old school republicans. It's only old school democrats who are trapped into thinking that socialism is some great liability. Warren appears to be rebranding liberal policies as a defense against an out-dated issue and, in general, trying to act fresh or hip, herself (presumably to get elected).
In my view, our country is VERY ready for income opportunity to be distributed fairly.
Liberals should embrace this and not play defense which, in the process, only reinforces old notions in old-timers that government will take money earned by person X and just give it to person Y, for doing nothing at all.
2
@carl bumba
Allowing workers to vote on which political party will receive a campaign donation by their own company, rather than the current law, which allows CEOs to use that money no matter how they want, has nothing to do with re-distribution, and simply gives workers more power over how the profits that their hard work is making will be used, BEFORE taxes are paid and the wealth is being distributed.
"Pre" simply means "before".
There is no other Democrat proposing something like that, and after the SC Citizens' United ruling totally distorted elections in the US, giving disproportional campaign influencing power to the wealthiest CEOs, this new idea would merely level the playing field a little bit again.
So I don't see how any ordinary citizens could reject this as "socialism" .. ?
4
@Ana Luisa
Also, I understand the meaning of "pre" and uses here of taxing as the time reference. My point was that "predistribution" is a PLAY on (and thereby reinforces) "redistribution", which has a lot of political baggage. The country is finally ready for the ACCESS to earning potential to be "distributed", spread, etc. FAIRLY. Bernie is the only one currently equipped to make this point. This other stuff appears to be tactical, half-measures - when the country is ready (if we don't vilify to much of it) - for the full program.
1
@Ana Luisa
Sure, this could only help. But it's a bit like lipstick on a pig (that might be presented as much more on the campaign trail). Germany's successes, IMO, are more due to it's large, corporate-scale and America- or China-like role WITHIN Europe, i.e. at the expense of smaller, less organized European countries.... it's a big fish in a small pond. Progressive rules on boardroom activity will likely have modest effects while surely aggravating the other 60% and other republicans - not a good bang for the political buck. It's looking a little like a PR stunt.
2
I’m a democrat and she’s to far left for me. The dems are gonna blow
2020 with to many horses in the race. After Individual-1 i’de vote for
any man or women with character and honesty, an anti-individual-1 if you will.
The exception would be a divisive crusader I’m sick of those people.
@Jim
And what exactly is "too far left" for you in these policy proposals, and why ... ?
1
Works for me!
2
Ms Warren, hope you're reading your comments here. I like all the reforms mentioned here, but there's one area not addressed:
Ban the "Right to Work" (ha!) laws. Instead, pass laws that make sure a corporation must follow procedures aimed at keeping employees on the job. Procedures like timely evaluations from Day 1 of employment, (not starting after a 3-month trial), with agreed-upon goal-setting to improve the employee's performance, if need be.
Or first-in-line re-training if a certain job is being phased out of the company.
Current procedures encourage the use of employees like Kleenex. Use once, then discard. (Thus making it harder for the employee to obtain a new job, too, since being fired is no recommendation.)
I'd like to see a REAL right to work law for all citizens, in every state.
7
The biggest problem Warren has is that too many Americans can’t handle a women as a leader. The details aren’t pretty - and the press is not helping.
Digby lays it out: https://digbysblog.blogspot.com/2019/01/using-word-that-others-fear-to-utter.html?m=1
Look at Facebook comments on any news story about Warren, and you’ll find a cess pool of knee-jerk hate.
7
@Larry Roth:
"The biggest problem Warren has is that too many Americans can’t handle a women as a leader."
The old "Everyone I Disagree With Is A Sexist" canard.
You will never win over people by insulting them.
(FYI - we don't elect leaders. We elect representatives.)
https://emcphd.wordpress.com
2
Good luck with that. Between the corpocracy worship of the brainwashed middle-class and the fascist and almost cult-like right wing in America...you ain't gonna get anything done.
The only thing that gets done in America is what rich people want. The rich have ensured this through propaganda and brainwash.
3
@Mogwai
That's why before Warren, or anyone else for that matter, can go to work on these necessary laws and policies, we need 'Citizens United' overturned and/or new strong campaign finance reform. Personally I'm in favor of mandatory public financing of campaigns, elimination of PACs, a $500 limit on contributions from any individual or other entity (corporations, labor unions, etc.), mandatory free airtime for debates, a strict time duration limit on campaign activities / events to 60 days before the first primary (and a limit on how early the first primaries may occur).
In short: less campaigning - more governing.
2
Today in Le Monde : 40 % of the cash money of big corporations is hidden in fiscal paradises .
https://www.lemonde.fr/paradise-papers/article/2017/11/07/40-des-profits-des-multinationales-sont-delocalises-dans-les-paradis-fiscaux_5211527_5209585.html
And in 2017, Google succeeded at moving 20 billion euros to the Bermudes from Ireland via Singapour.
https://www.lemonde.fr/economie/article/2019/01/04/optimisation-fiscale-google-evite-des-milliards-d-impots-en-deplacant-toujours-plus-de-profits-aux-bermudes_5405079_3234.html
2
Sorry but for a smart woman she made a stupid mistake. She was baited by Trump by taking the DNA test.
@Peggysmom
She has proven him wrong when he claimed to be certain that she had no native Indian blood at all.
That's not a "stupid mistake", it's called fact-checking and debunking racist lies.
It's also why the vast majority of Native Americans continue to support her and all the good that she's done for their community.
Fake news is fake news, period. Nobody should be afraid to point that out just because the one spreading it is happens to be the president of the US.
2
Sounds to me a lot like how regulations work in most western European nations.
To these policy proscriptions I would also add actual enforcement and real punishments for breaking the law.
1
Anti-trust, labor,(and corporate governance), finance. Look at the issues of managers relentlessly changing workers schedules around at the drop of a hat, for a variety of reasons, often self serving. This obviously plays ongoing havoc with workers' lives and makes it far more difficult for them to just hold on in their lives, while it sabotages things they might do to advance their lives, by arrogating control of their whole life's schedule to the company. Look at the recent article in the NYT on instances of managers requiring pregnant employees to do physically heavy work all day long, even when they have a doctor's note stating that this endangers their health. In a wide variety of ways, throughout corporate America, (not that corporations in the US necessarily have any loyalty to the US, even as it subsidizes them) corporations insist on doing substantial damage to workers on the grounds of benefits to the corporation that are proportionally minor in the short term and costly to both the company (arguably) and to society (certainly) in the longer term. This is motivated by pervasive ideology and, often, the individual manager's responding venal careerism. On anti-trust, monopoly 'capitalism' enables abuses of power so vast that it brings into question whether or not we even have a capitalist economy. On finance, look at the 2008 credit default disaster, the savings and loan disaster, etc.. 'Pre-distribution' is really about reducing corporate crime and abuses of power.
2
Um...you don't think Democratic votes are not bought and paid for? C'mon!!! If we keep demonizing the other side we are not going to get anywhere!!!!!!! Neither of us is white as the driven snow!!!! We need to get rid of lobbies, or highly control them, in order to "lift the boat". We need to work on getting "Citizens United" reversed, to "lift the boat". Why not get the information and publish how much money each Congresperson is getting from whom? Publish the information alongside the votes cast! THAT would be good government, and might give us a chance to "lift the boat". Make the Dems stop dancing in the aisles about impeaching Trump -- is that likely to get bi-partisan cooperation to "lift the boat?" I'm sick of them all!!!!!!
@sacques
If "we the people" would have given the Democrats full control of DC in 2016, Citizens United would have been reversed for two years already.
As to campaign donations: just go to opensecrets.org, and you'll find all the information you asked for.
You'll also see that big banks systematically count for most of the GOP's top five donors, whereas that's not the case at all for Democrats. And you'll see that the fossil fuel industry is mainly financing GOP campaigns, not Democrats. And so on and so forth.
Finally, it's Obama who managed to get Romneycare through Congress and signed into law (and there's no way to be more bipartisan than that, including a year-long public debating process and incorporation of more than 100 GOP amendments), and to get bipartisan comprehensive immigration reform through the Senate (by a 68-vote majority).
The ONLY ones systematically being bipartisan for more than a decade now are the Democrats. As soon as you start paying attention to who's doing what in DC, you cannot but notice that there's no equivalency between both parties at all.
3
Amen.
1
I don't trust her. She's a liar. She pretended to be "a woman of color" and took advantage. She's a phony. I just don't trust her.
2
Once upon a time, there was a theory that home ownership was the foundation on which American families could build some wealth. That was supported by the government through Fannie Mae and Freddie Mac. It wasn't a bad idea though obviously it got messed up and entangled in the 2008 collapse.
I read that black households have a median wealth one tenth of white households. Household wealth is mostly measured by the equity in your house and your stock ownership. There are clear structural problems built into the system. Any pre-distribution plan must address this. Warren started well with the Consumer Financial Protection Bureau and this should be rebuilt from the damage done by Trump, but our best minds should think very carefully about how to intervene in the housing market to reduce structural barriers. In every growing city in the US today, from Seattle to New York and Denver to Austin, there are problems with half the population being priced out of the housing market. Many houses are bought by investors and some even sit vacant, having been bought by people long-distance, sometimes even foreigners.
In Denver, when I was last looking for a house to buy, I found one I liked but was told by my realtor that a group of New York investors were looking to buy it and they had deep enough pockets that any offer I made would be beaten. These people have so much money, they don't know what to do with it and are wrecking the market for everyone else.
4
And how did socialism fare in the Soviet Union where there was supposed income equality? A complete failure as this proposal would be.
3
@Rich
The Soviet Union has NEVER been socialist.
First of all, contrary to the US it was a dictatorship. That means, contrary to the US Constitution, no separation of the three branches of government, no free press, no political parties, no freedom to vote, no civil rights, etc.
Secondly, "socialism" refers to allowing workers in a capitalist economy to participate in the profits their work is producing, and in the decision making process when it comes to how to use those profits.
The USSR was a feodal rural subsistence economy, not a capitalist economy at all, and they never allowed workers to participate in the decisions made by their own companies.
As to Dodd-Frank or the CFPT: that merely prevents big banks to take enormous risks or commit fraud in such a way that it destroys Main Street. Such measures are normal in any thriving capitalism, because without them, you simply have a monopoly of the wealthiest, rather than a truly free market.
What the GOP does to the government is passing law after law that gives the wealthiest that kind of monopoly.
That's like eliminating all police officers on busy crossroads so that the biggest trucks can rush through it, no matter how many motor cyclists they'd kill, just because having trafic rules and people to enforce them would "limit" people's "freedom".
Don't you see how utterly absurd such reasoning is?
4
People complain "the government doesn't understand working people!" but then they elect millionaires like Senator Warren - and actually believe that these millionaires will correct our current "Gilded Age"-sized wealth gap.
They say the rich cannot be bribed because "millionaires don't care about money." Okay. If a person had 100,000 baseball cards, who would dare say "This person doesn't care about baseball cards"?
Rich people are addicted to money. Look how the billionaire Martha Stewart went to prison over a few thousand dollars. History shows that the rich will do anything to get more money.
This cognitive dissonance among the electorate lies at the root of the present income inequality problem. I, for one, never vote for rich people.
https://emcphd.wordpress.com
1
@Rev. E. M. Camarena, PhD
It's absurd to believe that somehow money would turn no matter whom into a bad person.
Imho comments like these are actually coming from self-declared conservatives who imagine that Democrat voters must "hate the rich" and then hope that comments like this will encourage people not to vote for wealthy Democrats who sign bills that benefit America as a whole into law, so that the minority of conservatives in this country can then elect wealthy Republicans who sign bills that benefit the wealthiest international elites only into law.
3
@Ana Luisa: Absurd? Check this out.
How Wealth Reduces Compassion
As riches grow, empathy for others seems to decline
https://www.scientificamerican.com/article/how-wealth-reduces-compassion
Or from the NY Times:
As for Empathy, the Haves Have Not
https://www.nytimes.com/2011/01/02/fashion/02studied.html
Please take the time to go beyond what you mearly believe.
https://emcphd.wordpress.com
1
To summarize the leftist position, Big Government Great Society welfare state has been a complete failure. So the only solution is Bigger Government socialism
1
The people who have power and money will fight this idea tooth and nail. They are not going to give up control of an economic system that guarantees them wealth and political influence, while allowing them to write laws to benefit themselves. They'll hire spin doctors to come up with sound bites discrediting this idea as "socialism" or some other "anti-American," "anti-free-market," "anti-capitalist" concept, and then send their promo people out to every media outlet they can to spread their talking points. They have the money and power to control the type of information that reaches most people's ears, and they'll have the average American voter scared to death of "socialists" long before the election takes place. How else do you think that amoral, cold-hearted people like Mitch McConnell stay in power forever? Because he and guys like him are willing to do the dirty work for the wealthy kingmakers pulling the strings behind the scenes.
2
And here's another idea whose time has come: The Financial Transactions (Tobin) Tax. Ordinary people pay sales tax when they buy a toaster oven or lawn mower or car or TV. Rich speculators, on the other hand, can (and do) buy and sell millions of shares of stock -- sometimes in a matter of seconds -- without paying a cent in any kind of sales tax on their transactions. Anyone can see that this is not fair. Furthermore, most of these transactions are ephemeral and are the opposite of investments. They generate vast amounts of money for speculators based on extremely short-term market fluctuations. They destabilize the market by accelerating "mini trends" and are unrelated to any sort of true value or worth of a company. They simply generate money for people who already have a lot of money and access to high-speed computer networks and speculation software.
Putting a tiny tax (say 1/2%) on each such transaction (much smaller than the sales tax many of us pay on appliances or furniture say) would generate a large amount of money -- to pay off some of the deficits generated by tax cuts for the rich for aexample -- and make the economy a lot fairer and the markets run a lot more smoothly.
4
@MB
Spot on.
This country is $22 trillion in debt, with trillions of underfunded entitlement promises of trillions in the next 20 years. Everyone must share the debt, as there will be little left for an overpopulated, and overweight society that s consuming most of it's dollars in healthcare costs. Only, an ignorant, and overindulged society believes the answer is more overindulging! Good luck with that one.
1
@MaryKayklassen
And what has "overindulging" to do with a Consumer Financial Protection bureau that already shifted millions of dollars in big bank fraud back to ordinary consumers ... ?
The only way to get rid of the debt is:
1. to pass the pay-as-you-go rule (= no bill will be signed into law that isn't fully paid for), so that new bills don't add a dime to the deficit.
2. to cut the current, structural deficit.
3. Once the deficit is eliminated, to start increasing government revenue in order to pay back the debt.
Democrats SYSTEMATICALLY do so a soon as thy control DC. Republicans systematically do the exact opposite, indulging in passing big government hand outs to the wealthiest international elites without even thinking to pay for it.
Obama for instance cut Bush's structural $1.4 trillion deficit by two thirds. After only one year in office, the GOP already doubled the deficit again.
So can you please explain why tax cuts for the wealthiest, which add $1.9 trillion to the deficit, would somehow then be paid by ordinary citizens ... ? Any good excuse for this overindulging?
1
Elizabeth Warren truly cares about people. That caring and her empathy will disqualify her as the Democratic candidate for president. Democrats, as they did with Bernie Sanders and others in the past, will choose a celebrity or a retread political hack, shooting themselves in the foot, and our children and future generations will suffer greatly for that folly.
Socialism has failed every time and everywhere it’s been tried. The only hope the socialists have is to rebrand themselves (liberals, progressives, Democratic Socialists) and their failed ideas (inequality, pre-distribution, Green New Deal).
1
@Larry
Please give us ANY example of socialist policies in Western democracies that have failed?
The 5-day working week?
The 8-hour working day?
The couple of weeks of paid holidays?
The legislation that makes it illegal for a CEO to fire an employee without a good reason?
The access to public education?
Or Warren's CFPB, which already shifted millions in fraud committed by big banks to ordinary citizens?
Anything else?
2
If Elizabeth Warren is so interested in redistribution of wealth she’s free to start redistributing her millions right now
1
@Larry
Like all wealthy Democrats, she already did, each time she voted for tax increases on the wealthiest Americans under Obama, remember?
So no, not all wealthy Americans are people who've "Left Chicago's High Taxes" ... ;-)
1
Anyone who doubts Warren’s hardcore socialist, redistributionist, central planning beliefs need only look at her crazy plan to have Big Government takes over generic drug manufacturing in America. As another poster correctly pointed out, Elizabeth Warren is dangerous!
2
If we magically gave every American family 1 million dollars, inequality would be the same.
And no one would complain because even the poorest would be millionaires. Because the issue is not inequality, it is poverty.
How to help the poor not be poor. The answer is as it always has been: get an education, get married, wait to have children until you are married. Even the NYTimes knows this: https://www.nytimes.com/2017/06/28/opinion/millenials-marriage-children-poverty.html
1
@profwilliams. And if Big Government gave everyone $1 million, many would be broke again within month
1
@profwilliams
Wait to have children until you are well off, you mean. Education a commitment to honestly caring about both the person you are having children with and the children themselves are worthwhile things, but the structural issues involved in enabling corporations to treat workers abusively and to warp the whole economy to their advantage and the broader population's disadvantage are also relevant.
1
@TPM Did you bother to read the article at the link? Not well off. Just married. It's fascinating that much of the answer to poverty is as simple as family planning.
But your comments about big corporations makes little sense considering the employment rate, wages improving, and how flexible workers are compared to the past. [Or you could believe that "workers" are minions with no choices.]
Why not just ask for a pink fluffy unicorn dancing on a rainbow? Let’s get real. Fascism is going to raise its ugly head, it’s already half way there, and we will see another massive war within our lifetimes. All because the train left the station the day that Citizens United decision was rendered. It’s too late. Things will get a lot worse because the wealthy have us on our knees. I’m going to sign my nine year old daughter up for Russian and Farsi language courses because frankly the biggest employer when she grows up is going to be the military, spawned by all the hate that comes when wealth gets out of wack. Hopefully learning foreign languages will prevent her from being shipped off as cannon fodder. Btw the wealthy make tonnes of $ from wars.
2
Just want to mention this Atlantic article.
Why Is Trump Spouting Russian Propaganda?
https://www.theatlantic.com/ideas/archive/2019/01/trump-just-endorsed-ussrs-invasion-afghanistan/579361/
I think we can guess the answer to that question.
Another note for Mueller report.
Same with Montenegro...you probably remember how he shoved the Montenegro PM at the NATO meeting in such vulgar manner, now he is saying that they will start WWIII.
Sounds crazy right, but considering that all this rhetoric, along with rewriting history of war in Afghanistan is coming directly from Kremlin revisionist narrative...it begs the question how many times he talks to Putin in his secretive one on one chats.
Seems bizarre, but by all accounts Putin is definitely in charge of this WH.
WAPO...
Trump's bizarre history lesson on the Soviet Union, Russia and Afghanistan
Aaron Blake · Jan 2, 2019
3
To summarize:
Pre-distribution has a precise old name, state socialism.
But I guess so do sanitary engineers, though they are neither sanitary nor engineers.
But garbage is still garbage. Wherever you find it.
10:56 am Friday
2
Alternatively we could buy AR-15s and just have it out.
How much chance is there with Cry-Baby Kavenaugh now on a Supreme Court that already brought us Citizens United and the emancipation of corporations OVER people ?
Sen. Elizabeth Warren has her heart in the right place. But she is not the right candidate in our current political milieu. I hope she goes beyond the spectrum of her base. But she cannot win with her narrow base. Just like Bernie Sanders. Socialists we are not and we will not be for decades to come. Instead, I hope she will rally her base to support a Candidate who is just left-of-center - like Joe Biden!
1
@NNI
That's not how a democracy works.
The only question here is whether a majority of the American people support her agenda or not.
If yes, it's up to "we the people" to get the vote out, and if we manage to do so, she'll win, and we'll have a government for the people because we'll have a government by the people.
As to your idea that only a minority would support extremely centrist things such as Dodd-Frank, the CFPB, and a fair minimum wage: any evidence to back up such a claim?
2
@Ana Luisa
Unfortunately, that is exactly how Democracy works. The larger the numbers of voters who vote for you, the greatest likelihood to be the winner. And only the winners have the clout to achieve anything, good or bad. Just ask the Republicans!
2
@NNI
You forget that 50% of the American people don't vote.
That's how an idea (true or false) that only a minority supports can nevertheless dominate in DC.
It's also why Western democracies where not voting is illegal tend to have much less income inequality that the US.
So rejecting all good ideas just because in the current situation, half of the American people are too politically illiterate to understand that they have to vote, is not a solution at all.
We will only have a government for the people the day we'll have a government by the people.
So when a clear majority supports Warren's CFPB and then most of those people don't vote, THEN of course we end up with the GOP in DC and the dismantling of the CFPT.
The solution isn't to give up serious, science-based, really good ideas, but to start working hard to increase political literacy and finally get the vote out.
1
This op-ed presents a false dichotomy. It's not "too late" for wealth redistribution—in the short term, it's vitally needed to ease suffering. I agree with the author that in the long run, "pre-distribution" is a far more sustainable solution and that Warren would be smart to embrace it. But not at the expense of initiatives like free public college, federal jobs programs, and debt clemency.
Senator Warren’s strength as a candidate President is her biggest weakness, and probably an argument for her remaining in the Senate where she can be most effective as an investigator and legislator. Bottom line, she is a brilliant policy “wonk” who understands how the economy works and how it works to the benefit of business interests over ordinary folks. If Democrats regain control of the Senate the team of Pelosi and Warren could change the course of our financial future.
5
These are all good ideas. Sadly, I fear none of them will ever see the light of day. Republicans will never support policies that aren't weighted to favor the 1% and Democrats will never support policies that reward workers. Democrats favor a welfare state precisely because it creates dependence on government largesse. That in turn lets them drive their base into a frenzy at the prospect of losing their precious benefits, but bake economic wellbeing into economic participation, and the role of government, ironically, decreases.
@JP
In real life, Democrats turned Bush's -8% GDP economy, which was shedding 700,000 jobs a month, into a decade-long solid job growth and GDP growth, remember?
You don't seem to know a lot about the economy - nor have ever talked to a Democrats voter, apparently?
4
People forget that American-style democracy was once a bold experiment. Its checks and balances were designed to protect individual liberty such that a public mob could not simply rise up and confiscate the freedom and wealth of disfavored groups. With American economic primacy in decline and growing numbers of Americans failing to keep pace in a globally competitive economy, the American experiment is being tested.
Enter Senator Warren. Her ideas are not new. They are simply a repackaged version of the wealth confiscation/redistribution schemes progressives have pushed since our first Constitutional convention. She makes them seem attractive because she claims they are necessary to fix a rigged system. Facing the "new normal" in America of broken and weakened families, declining educational attainment and social pathologies like drug abuse, some Americans are quick to blame anything other than ourselves. Those Americans are happy to relinquish their liberty to politicians promising solutions that do not require sacrifice, effort or personal accountability. To Mr. Trump, America cannot be great again until we are once again a country of great Americans.
Ms. Warren and her ilk represent the defeated psyche of Americans who believe that we can no longer grow the pie and must now focus on redistributing it. Unfortunately, history has proven time and again that punishing success to subsidize mediocrity only hastens societal decline. SHE IS DANGEROUS.
2
@AR Clayboy
You clearly didn't read this op-ed.
This is about PRE-distribution, rather than RE-distribution.
Pre-distribution means that you end a system where federal laws allow CEOs to rule their companies as little dictators who can exploit their employees as much as they want because employees have no legal alternative.
In the current system, we've collectively given up our freedom to have anything to say about how the profits made thanks to our hard work are used by the CEO and stock holders, and THAT is what pre-distribution changes, you see?
By the way, it's precisely the political party that proposes a fairer re-distribution and pre-distribution that ALSO changed Bush's -8% GDP into a decade-long solid GDP growth and historically low unemployment rate.
That proves that instead of "punishing success", it's Democrats and they alone who know how to CREATE success in the first place. And you do so by putting science and AMERICA first, rather than doing what the GOP does and which merely puts fake news and the wealthiest 1% first.
They seem to have forgotten though that you can fool some people some of the time, but not all people all of the time ...
3
@Ana Luisa
Actually Ms. Luisa, I read this editorial quite carefully, as well as two of Ms. Warren's books and her recent commentaries on what the next President should do. I stand by my assessment that she is a dangerous anti-capitalist heretic.
Ms. Warren proposes to confiscate 40 percent of the voting power in private corporations. She wishes to give communities and other non-owners the power to influence corporate decisions. She wishes to substitute her views about the value of corporate executive contributions for those of the shareholders. These are all acts of confiscation and redistribution.
You obviously have a problem with the notion of private property, as does Senator Warren.
1
Wow, what a wonderful op-ed and idea!
I always knew Warren was "the real thing", but ignored most of what this op-ed mentions.
This is EXACTLY what we need today, both as ordinary citizens, and from the point of view of getting rid of the corrupt GOP in DC.
Re-distribution is a bold and new idea, and that's what you need to fire up enough people to make them vote (and if 80% rather than 50% of the American people would vote, the current high level of corruption in DC would never have been possible in the first place).
It's also entirely science-based, rather than purely ideological, so we're on familiar Democrat ground here, where policy proposals so often achieve exactly what they were designed to achieve precisely because they're written by serious, competent experts and are verified and fact-based.
Third, it's obvious that just like Warren's Consumer Financial Protection Bureau, which already shifted millions in fraud from big banks back to ordinary citizens, this cannot but truly put AMERICA first, rather than putting the wealthiest global elites first, as a GOP agenda systematically does.
And fourth, coming from a former Republican like Warren, it's obviously as radical in its novelty as it is modest politically: this is just plain common sense policy, not "socialism".
Add to this what the HP just showed (= that the Cherokee nation would reject her is merely fake news), and I'm really looking forward to hearing more about Warren in the coming days!
GO LIZ!
2
Thanks for this article, it’s excellent. And it’s the reason I want Elizabeth Warren to run for president; to get a real discussion going. I like it and hope others explore this line of thinking as well.
Trickle Down, Tides Raising All Boats, He’s a Busnessman, He’ll Solve All Our Probems, Government Is The Problem, can be called, politely, nonsense. And that would be enough of a discrimination, if it weren’t so harmful.
4
The comments about the Native American “controversy” make me want to scream. It’s a totally fake controversy. Warren has Oklahoma roots and a distant Native American ancestor. So what? Love her or hate her based on her policy ideas, not on this phony controversy.
A ridiculously huge deal was made about Al Gore “inventing the internet.” The bulk of the 2004 campaign was dominated by the completely phony Swiftboat controversy, pushed by crazy conspiracy theorist Jerome Corsi, who now is likely to be indicted by Robert Mueller. Then Hillary Clinton’s emails. The mainstream media bears a huge responsibility for letting these phony stories dominate the airwaves. The result: Trump, a man with a real scandal every day.
Are we going to to let another highly qualified candidate with thoughtful ideas about how to help ordinary working Americans go down over a made up scandal?
Seriously, are we going to do this again?
5
In recent decades the pendulum has swung in favor of executives, corporations and the wealthy. The result of it is a larger and larger segment of our population scrapping
to get by. The price of everything the poor, working poor, lower middle class needs keeps rising without mercy squeezing larger profits for the wealthy. It seems a
daunting and impossible political task to turn the pendulum back a bit, but it is necessary if we want to avoid
social unrest and chaos in the future (a la Paris.)
Lets party on!
2
"We need all of the above to combat the rampant inequality of wealth and power in the United States today. We need progressive taxation to narrow the income gap and to generate revenue for public investment. And we need government support for child care, medical care and other services to support those who cannot work and to empower those who can."
All of these Band-Aids having been applied since Lyndon Johnson's failed War on Poverty, wouldn't it be wise to return to the free market, which made Americans the wealthiest people on Earth for all times? Taxes, regulations and redistribution have essentially killed the entrepreneurial spirit that depends on freedom and accounted in the past for most of the material wealth the world enjoys today,
Government produces nothing. It can only take from some to give to others. Furthermore, in its role of providing protection for the free market and security for the people it has become a counterproductive force to both of those so-called responsibilities. Because government as we know it to day is a violent construct dependent on force and coercion for virtually everything it does, and because it is axiomatic that violence begets more violence, government is no longer useful in the roles folks assume it should fulfill.
Voluntary government substituting the Golden Rule for the rule of law, which once sounded far fetched, is attracting more and more thinking people with open minds to conclude it would be far better than the statis quo.
3
I'm intelligent, but my brain shuts down out of boredom when reading stories about money, finances, taxes, etc. (which may explain why I don't HAVE very much money. :))
I think the points in this article have strong merit. To be pervasive, though, there needs to be a succinct way to get this populist message to the populace. Sanders' (and others') call for "higher taxes on the rich" is brief, to the point, and doesn't require much explanation to the huddled masses. So I hope that some marketing minds are beginning to develop a mantra that is palatable for short attention spans (or people like me who just hate to think about money).
The summary toward the end of the article is heading in the right direction:
"[The pre-distribution agenda] is not about rigging the system to benefit the poor and the middle class, but about unrigging it from benefiting the wealthy and the powerful. It is about shaping markets to allocate returns from economic activity more fairly in the first place rather than trying to correct inequities after the fact."
@Patricia, I agree, great ideas and needs to be explained simply and directly. The market needs to be efficient AND fair to survive.
Equality: Forcing, by threat of fines or imprisonment, an individual to give up to the state a portion of the monetary and/or property assets that they have worked for, and the subsequent gifting of those assets or their monetary equivalent to someone who did nothing to earn them, until their net wort is equivalent to those who did work for them.
Sounds fair to me.
3
@Objectivist
Of course that's not fair. It also has nothing to do with what taxes or redistribution is all about, contrary to what you're suggesting here.
In the current system, government laws are keeping wages artificially low, so that ordinary citizens work VERY hard (unemployment rate lower than 4%, remember?) all while barely being able to make ends meet.
That's not good for the economy (low wages means not a lot of money to "consume" stuff, and without consumers you cannot have serious capitalist economic growth), and it's obviously not good for 99% of America either. So it's the OPPOSITE of "putting America first". It simply puts those who were born with a silver spoon in their mouth first.
And that doesn't sound fair to me at all.
Taxes are a way to slightly correct this distortion of the market. They also allows us to invest in what we collectively decide to invest in (roads, bridges, a strong military, a serious VA, and of course decent healthcare and education for America as a whole).
Pre-distribution means correcting the system before any taxes are paid, by making sure that people who work hard can finally live with ease too, JUST because they work hard, rather than to limit a decent, financially doable life to those who were born into it alone.
In other words, without real pre-distribution, there is no American Dream at all, and merely Ancient Regime wealth heritage all while putting America itself last.
4
@Ana Luisa
Your first 3 paragraphs paint a false narrative.
The low wage problem is entirely due to the loss of manufaturing jobs to othe rnations precisely because the Democrats turned the tax laws against ourt own nation.
Low wage jobs are all that's left.
Your comments on taxes and infrastructure are specious because that has nothing to do with equality. That is a normal function of government.
"Pre-distribution" guarantees that wealthy leftist elitists like Elizabeth Warren can tilt the rules toward her constituents to the detriment of all others.
In short, Baloney.
1
It sounds like something new, but "pre-distribution" is just a re-branding of the same old socialist concepts that try to keep power over the economy in the hands of the government. Many of these measures will hobble the American economy by insuring it moves at a glacial pace, and loses the flexibility it needs to innovate. Instead of enabling labor, it would simply insure that we're all going to be poor together. I would prefer the chance to be wealthy rather than the sterile workers' paradise envisioned by this former Harvard professor.
1
@David Godinez
"...concepts that try to keep power over the economy in the hands of the government."
The secret is that the power over the economy BELONGS in the hands of the government, a government "of the people, by the people, for the people."
I would like to be wealthy too, but I believe that a society in which EVERYONE has at least the opportunity to be comfortable is a stable base for a fast-moving, innovative, engaging society.
I want the ability to vote for or against the people that will run my life, not settle for the most successful dog-eat-dog corporate overlords.
6
@David Godinez
How can you believe things like that IF you're read this op-ed ... ?
Didn't you read that this is about giving workers more power over and in the company their spending their entire lives working hard for?
Can you please explain how a law that stipulates that CEOs can pay extremely low wages and nevertheless not see their employees go away because the law makes it financially impossible for them to do so is somehow NOT "trying to keep power over the economy in the hands of the economy", whereas laws that mandate CEOs to treat workers fairly somehow is ... ?
Because THAT is what we're talking about here, you see?
1
@tomP. In a free market economy power does NOT belong in the hands of Big Government. In Venezuela or Soviet Russia you’re correct. Adam Smith’s invisible hand is never wro
1
The usual argument against taxing or regulating corporations is that they are the ones who make the jobs. This ignores the millions of small businesses with under 50 employees who actually make most of the jobs.
It also ignores that if We The People are earning more fair wages, possibly with guaranteed healthcare via Medicare for All, more of us will have the resources to invest our time and energy into creating our own businesses.
The Democrats need to make the arguments to promote the general Welfare.
1
@Jacob Sommer if you want higher wages it’s your responsibility to increase your value to an employer. Showing up with a masters degree in transgender social justice and a list of demands including $15/hr for work that’s worth$9/hr and for free everything else is a beeline to automation. I know education is expensive when Elizabeth Warren gets $350,000 for teaching one class, so talk to her about that
2
This article is so wrong on so many levels, I wouldn't know where to begin to criticize it. The scary thing is, people will nod in agreement to it because it makes them feel good, and then they will vote for people who propose to do these things.
3
Employees electing 40% of corporate board members?? That is a one-way ticket to being noncompetitive in a globally competitive world. If that's what Warren advocates she will not have my support. In fact, I will actively support another candidate, and I am decidedly left of center!
2
ms. warren has no business seizing the mantle of inequality when she has clearly attempted to gain favor through genetic subterfuge. such hypocrisy.
8
@pierre. Warren tells us to play by the rules when she hasn’t! Another millionaire socialist...
1
@pierre
If that’s the worst thing she ever does, I’m good with her for Prez.
1
Why are there no taxes on Wall Street speculation? From National Nurses United website:
"A Financial Transaction Tax of 0.5% (one half of one percent) on Wall Street trading could generate billions in revenue to help our ailing economy, stimulate job growth, re-fund essential services, and discourage the reckless, high-volume/short-term profit computer-driven Wall Street gambling....."
https://www.google.com/search?q=tax+on+every+wall+street+transaction&ie=utf-8&oe=utf-8&client=firefox-b-1
5
Fine-tune capital gains holding periods.
Right now realized short-term gains are taxed as ordinary income, and the tax rate drops dramatically for gains realized after a year.
Tax millisecond gains at near 100% of the gain, allowing for market making and share handling costs.
Tax one-day gains at at least 75%. Such short term holds are as good as speculation and do little to secure the market.
Day traders are speculators, almost by definition.
1
@gw. What a lie. Capital gains are heavily taxed. Here we have a bald faced lie and a socialist “solution” put forth by someone who clearly has no idea how the economy or Wall Street work yet demands limitless power to totally control both. This’ll end well!
1
The onerous regulations on PRIVATE corporations proposed by Senator Warren bring to mind the quasi-socialism of the German government prior to World War II. Hitler dismissed the Bolsheviks' brand of socialism as ridiculous because it put fanatical, incompetent idealogues in charge of the production and distribution in the Soviet economy. (By this time the disasters caused by such an approach were clearly evident.) He lauded himself for allowing the capitalists to remain in charge as long as they contributed to the re-birth of the nation and allowed the government to control the economy without owning the economy.
In other words, what we see is creeping fascist economics wherein the big old benevolent government encroaches on the rights of corporations and small businesses to regulate their businesses through the actions of often nameless bureaucrats regardless of how destructive they might be to the health of the corporations and small businesses.
Trump has just succeeded in repealing a whole raft of such regulations and the economy has responded in part because of it. The regulations listed above under the cute moniker of "pre-distribution agenda" are blatantly unconstitutional, invasive of property rights, and contrary to good business sense. The "one-size fits all" tone of these onerous and coercive proposals is typical of government over-reach in the past century, over-reach that Trump fully understood and has partially reformed in the past two years.
5
Excellent article. Government is there to protect us against the thieves and grifters who live under a rock named neo-republican.
5
When statistical full employment fails to result in wage increases, there are non-market forces suppressing wages.
Warren’s courageous attempt to recast government as a force for managing resources to the benefit of all citizens, instead of our current system of ceding public resources to an increasingly over-compensated oligarchy, may be an answer.
1
Redistribution starts with a few getting it all, and then fighting them to get back some crumbs.
We need something like we had when we were a more successful country, in which everyone shares in the success, a rising tide lifts all boats. Right now, it only lifts a few really big yachts.
51
@Mark Thomason
Bam—you nailed it Mark Thomason. I always appreciate your comments.
3
@Jeffrey Cosloy -- Okay, not all of us. However, a lot more of us than now. We've gone in the wrong direction. That is the substance of my point. In the correct direction, we'd have included those other people too, instead of excluding more and more.
6
At what point in our history was there a lifting of all boats? You might say the post-war period felt that way but many were shunted aside, think of black Americans and Indians. Their stories did not usually make the news or the big screen.
32
The dishonest Elizabeth Warren would sell snake oil to fulfil her gigantic size ambition.There is nothing wrong with ambition if you have the ability and character to support it.Her talent however is in fabrication and manipulation.
5
One way to help Sen. Warren's approach along is to eliminate the long and strong patent and copyright protections which cause goods like prescription drugs to cost many times what they would in a free market. For this and other like suggestions read Dean Baker's book "Rigged" which is available for free by typing "Dean Baker Rigged" into your search engine.
2
@Stanley Kelley. In other words, have Big Government ban the development of new drugs and diagnostics
1
@Larry No. The government, through the National Institutes of Health, the Department of Defense and other branches, already finances a great deal of the existing research on these matters. It could finance a great deal of any additional research Read Baker's book for more information.
Indeed, such a knowledge-hoarding "intellectual property" mindset destroys all non-corporations' ability to economically benefit.
Even worse, such "protections" ultimately destroy the very knowledge they claim to protect, so don't call them that! Columbia has moved much of their coat industry overseas partly to save on tariffs (especially during Tariff Boy's tantrum!) but also because Americans have FORGOTTEN HOW to make things! https://www.nytimes.com/2018/11/23/business/economy/columbia-sportswear-trump-trade-war.html
When megacorps "protect" what should be public knowledge anyway, and then implode, we all lose.
Let's promote free software, cripple Mickey Mouse zombie copyrights, and END THE PATENT instead.
So the battle will be over regulation. How many lobbyists will this create? That's all that will matter not innovation or efficiency only who can influence the regulations and game the system. Senator Warren used such a system to here advantage and embarrassment.
Germany seems to look pretty good to me.
German unemployment rate is 3.4%.
Germany is known for high-tech manufacturing.
Their unions and management seem to be much more working together.
They have better education for the working class. Look are some of our schools for poor inner city blacks and poor rural whites.
They don't have the poverty we have.
They have universal healthcare. We have parts of the US with infant mortality rates the same as a second world country.
After 35 years of trickle-down Reaganomics, we got an opioid crisis.
2
Warren’s idea to nationalize every large corporation would create a depression of unspeakable depth and duration
3
"Embracing Warren" demonstrates that character and honesty is meaningless in our elected representatives.
Her dishonest claim to being Native American was self promoting.
That misbehavior in our politicians is the problem, not the solution.
3
A program that takes nearly all control of a business away from it's owners is the ONLY thing I have seen any major Democrat propose that would cause me to vote for Trump.
Trump both damages America's economy and threatens its survival as a free society. Senator Warren's proposal is the same type of existential threat.
America needs to do better in both parties.
1
Warren and all candidates would be wise to consider The Second Income Plan suggested by the late Louis Kelso, inventor of the Employee Stock Ownership Plan - ESOP - used by 11,000 companies.
Substantial Second Incomes would be available to almost everyone and sharply reduce inequality.
A Universal Basic Income can be included, as it would only be temporary, to provide immediate purchasing power.
The combination would have no net cost to the treasury!
For more information see: SECOND INCOMES at aesopinstitute.org
This is a program that can appeal to almost everyone, as it will provide additional income for 99% of the population.
As much as I supported and voted for Bernie Sanders, and still think he is formidable candidate, I for once would like to see a powerful woman warrior at the front.
I can't comment on intricacies of “pre-distribution” vs. "redistribution" but my direct reaction it should be done for all the obvious reason.
Income inequality reached grotesque proportion, just like imaginary medieval wall that will separate us from the world, this amoral morass and utter stupidity must be stopped in its tracks.
Yesterday's look on the newly elected congress gives a sliver of hope for better future.
Don't go centrist democrats, stay humble, and work, work, work, work, work, work. ...
Pave your own path and be fearless. most of the country is there for you.
3
Elizabeth Warren will not win the Presidency nor will any radical liberal that runs.The middle class that she is depending upon , elected Trump, & will so again.The largest block of votes are the white working class that used to support the Democrats are now lost forever, as demonstrated by Trumps victory & make up his base.They are fed up with their taxes going to dead beats that use the system for their own benefit,
5
Dr. Vogel’s approach can be summarized as an attempt to level the playing fields within societies. The old-fashioned approach was to have the “nanny” State control everything - own everything - tell everyone what to think. That did not work out to well for Eastern Europe! China is an experiment in creating a “1984” (Orwell) style paradise.
I believe that ordinary folks living all over our small and endangered planet want the “same things” - Food, Medical Care, Security, a good Social Fabric (clean water, air and energy), affordable dwellings and transportation. We all know how well control from the top down has worked out on our planet; enrichment of just a few and the death of many. Infra-structure, Health care, Education are societal needs - and that’s what taxes are for!
So, how to move forward in a rapidly changing world, where AI - robotization of menial tasks will eliminate drudgery? How will we pay for a society - where folks will continue their education, provide care for the old and sick, work at building an equitable social fabric (yes, it will be a nanny state)?
1. As you work for a private company - you become an owner... ESOP’s ... with a direct investment in your companies customers well-being.
2. Any monies earned from any source be taxed the same. No special rate for “unearned” income, profits on real estate, etc.
3. VAT on all goods and services (infra-structure investment) - higher on imports.
4. Fees on Carbon - A Dividend to all citizens
1
An outstanding program by Warren. Now her problem is to "dumb down" this excellent idea to single catchy phrase so that it can be grabbed and understood immediately by the average voter whose attention span is not long enough to really understand the difference between distribution and the ignominious "redistribution." Trump is a master of this. "Build the wall." is one of the great campaign slogans of all times. It covertly encapsulates every idea from racism to nativism to economic security.
Warren opens the exact discussion we need to be having. No flowery language or feel good exhortations. Nuts and bolts prescription for digging ourselves out of the systemic morass we have been sinking in for decades. Something that has been missed election cycle after election cycle by both parties as they simply stuck more plaster over the cracks. Because they did not understand. But Elizabeth Warren is someone who does and can articulate it and has proposed solutions.
Bernie Sanders has done miraculous work in creating a framework here, about systemic inequality and unequal oppprtunity, the devastating consequences of big money subverting democracy. Warren is a perfect complement and extension of this important campaign for the American soul, with her intellectual and scholarly vigor trained on developing a detailed path forwari that is not simply an expedient campaign hook, but a life's work. They both hold the seeds to grow the hard work toward a better future here.
Elizabeth Warren does not offer empty promises and lies about American oppprtunity, but truth telling about problems we face and the real changes we need to fulfillfull our promises as a Nation. God speed, Elizabeth Warren.
1
“...For example, the government should revise labor regulations to strengthen employees’ bargaining power, which would give them a fairer share of corporate returns...
https://en.wikipedia.org/wiki/Cargo_cult
“...Cargo cults are marked by a number of common characteristics, including a "myth-dream" that is a synthesis of indigenous and foreign elements; the expectation of help from the ancestors; charismatic leaders; and lastly, belief in the appearance of an abundance of goods...
1
Sen. Warren's history shows that she always thrusts herself into the news cycle when she has a new book to promote. We'll likely hear about it shortly.
These book deals are the latest way corporations skirt the law to enrich pet politicians.
It's how Bernie Sanders raked in over a million dollars a year for the past two years.
https://www.newsweek.com/bernie-sanders-makes-one-million-dollars-second-straight-year-book-deals-992845
The most egregious of the book deals as payoff was Andrew Cuomo getting $700,000 for a book that sold so poorly... his "royalties" came to about $245 per book sold:
https://www.politico.com/states/new-york/albany/story/2017/04/cuomo-has-now-been-paid-245-for-each-copy-of-his-memoir-sold-111330
This latest form of corporate bribery must be stopped.
https://emcphd.wordpress.com
2
I wonder if she has read this piece. It shows when and why we have created the great inequality. She is going to have to change minds AND actions of men who father children and leave the woman as a single mother.
She's on the right track, however, the change needs to start in uteri. See second and third URL's on why.
http://www.huffingtonpost.com/stan-sorscher/inequality---x-marks-the_b_7881768.html?imm_mid=0f5cef&cmp=em-business-na-na-newsltr_econ_20170901
https://www.yahoo.com/news/two-brains-both-belong-three-120608571.html
http://www.nytimes.com/2014/02/15/opinion/single-motherhood-poverty-and-kids.html?ribbon-ad-idx=9&rref=opinion&module=Ribbon&version=origin®ion=Header&action=click&contentCollection=Opinion&pgtype=article
It is hard to get people to focus on inequality because most of us underestimate its extent: https://www.metrowestdailynews.com/article/20150501/OPINION/150509171/0/
We do need to Make America Great Again--great like it was when we had higher taxes on the wealthy, better unions, and therefore a thriving middle class.
What made America Great was good old fashioned progressivism and old school blue collar liberalism.
1
YES. On all counts. The time has come. And by the way, l remember a few years back there were focus groups comprised of republican women who felt favorably towards Elizabeth Warren. Though l really apreciate Bernie Sanders and all he's done for the American people, l never felt comfortable with scorched earth wholesale redistribution efforts he proposed because of both the backlash they would trigger, and the superficiality of their nature.
I deal with entrepreneurs and the ones I really enjoy speaking to are the French (where the author lived as a journalist). Spend an hour or two with some French business entrepreneurs (like I have) and you'd see that we would be wise to avoid overreaching like this. When you go down the path of over manipulation things only get more entrenched and tangled...there's always an adjustment or a tweak or a reform the government (read those in power at the time) must make to "ensure" things be more fair, better, equal. Ideas like this always degenerate into control and power.
The author puts up a straw man argument that non-compete provisions are rampant and cripple workers in the market. That is an obfuscation used to grease his round peg, square hole argument. Not only are non-competes virtually untenable (and unenforceable in most states) but when they do exist (typically for sales positions where clients might be ported) the company has to pay the person garden leave, meaning pay them to not work. As a multi-state business owner I can tell you this arrangement is the exception not the norm.
Academics like the author and Sen. Warren have no practical experience beyond their good-natured (but ill conceived) ideas.
We must disavow people of the notion of equal outcomes. It does not exist, anywhere.
2
@Goldie the notion of equal outcomes has never and will never be achieved anywhere at anytime. It is counter to human nature
2
@Goldie
This is a good reply because it goes to how the author is just throwing out a bunch of left wing platitudes without any deeper dive into the issue of income inequality.
On non-competes specifically, they are not enforced in California. In other states, as you say, they must meet a variety of legal tests (like they don't apply if the employee is terminated involuntary without cause, the employer must pay severance equivalent to the wages during the non-compete period, the geographic scope must be reasonable, etc.)
Now on the topic of income inequality, who do you think is more likely to be required to sign a non-compete? An unskilled factory worker or a highly compensated executive married to another high income earner (marriage sorting being a large driver of household income inequality)? Well here are some stats:
"For example, research by one of us finds that 43 percent of engineers had signed a non-compete in the prior decade. Other researchers have found that 68 percent of CEOs at public firms report having entered into a non-compete. And slightly fewer than half of physicians (45 percent) are subject to a non-compete. Even low-income workers are affected: 12 percent of those with less than $20,000 in annual earnings and 15 percent of those with $20,000-$40,000 in earnings report having a non-compete."
Without doing a lot of further analysis, I think the burden is on the author to show how non-competes exacerbate income inequality (and not the opposite).
2
@Larry here, here.
1
The NFL has a Competition Committee that reviews the rules of the game each season to make changes to the rules to make the game better and more fair. When we talk about changing the rules of the economic game to make it better and more fair we are called socialists or worse when we just want to make the game better.
Insanity is doing the same thing over and over and expecting different results.
2
@Ronny socialism has failed every single time it has been tried. Thinking socialism will work this time meets your definition of insanity.
What do NFL rules have to do with economic rules? Claiming that because the NFL regulates the actions of teams and players who choose to play in the NFL means Big Government can control every action of its citizens without consequence makes no sense. The NFL competes against MLB, the NHL, the NBA, movies, live theater, etc and the NFL is trying maximize the amount of entertainment dollars spent on the NFL. They’re not trying to make sure every team goes 8-8
1
Prof. Vogel leaves out the cronyism, nepotism and union boss exploitation of worker rank and file political exploitation. In some countries like the Atlantic Canadian provinces, including Quebec, unions like CUPE, in police, public works, and government bureaucracies act as unelected legislators and often decide elections. Members often complain to no avail that their dues are used to fund candidates for office selected by Union leadership.
Part of Elizabeth Warren’s myopic focus on the income and social benefits inequality of the free market is a major problem and weakness of her theories. She has no real world experience or model of how the tax burden of a democratic government works for all that “governs best when it governs least “ (Henry David Thoreau) of a capitalist economy . She proposes socializing wealth which sounds good to anyone. In any distribution scheme she has proposed, however, with more laws and regulations restraining enterprise, while strengthening government and unions, her schemes would be very costly to individual freedom of workers, in fact aiding the concentration of wealth in mergers and standardization of demand and supply. How do we know this? Look at Canada’s tax rates.
She seems to want state sponsored enterprise, so regulated that innovation would have to be preauthorized before profits exist for predistribution to occur. Americans would suffer excessive taxation, cronyism, nepotism on the scale of Canada and other weaker economies.
@Bayou Houma interesting response...thanks for sharing from a Canadian perspective. Quick thought as it relates to regulation and welcome your thoughts.
As a case study in regulation it will be interesting to see what happens to Canada's early mover status in the cannabis industry. I believe regulation is necessary for this industry because of the products nature and uncharted territory it brings. However, as often the case with regulation, the people who devise and implement it become invested in it. The regulation (as is most) is rigid in it's very nature where market forces (consumers, demand, product, etc) are every dynamic.
I wonder how quickly Canada will be left behind due to it's controls on production and sale in this industry after the US declassifies it as a schedule one. It will be interesting to watch. Again, I believe in regulation for such a new industry but curious to see how dynamically regulators can react.
I'm by no means an expert in this arena so I welcome some thoughts.
@Goldie
Regulators of sports games as administrators and enforcement referees also cannot be players in the games to be rewarded with the winners. But Senator Warren and newly elected barista U.S. Rep. Ocasio-Cortez (Dem.-NY), you are reminded of British historian and philosopher Hilario Belloc’s accounts of the economy in the Middle Ages, where everyone supposedly worked for the Crown and the Church, taxed for their benefit by the Sheriffs.
In Canada’s Provincial and Federal governments, politicians have long ago regulated Canada’s vice industries (& in Quebec the province regulates the pornographic academies for “actors” in pornographic films). The provinces virtually took over the liquor industry that was once just regulated under privately owned distributors. Now all liquor stores have provincial semi-government staff and facilities. Supermarkets, convenience stores, and private tobacco outlets no longer may serve any liquor, wine or beer. New Brunswick taxes liquor purchases in Quebec or across the provincial lines. (No Commerce clause in Canada). Provincial and federal regulators have also taken a cut of the take from provincial lotteries, casinos, and now canabis sales, which government also regulates and staffs.
How does any political authority decide how to enforce laws dependent on taxes for enforcement of politically fair collections without accumulating exclusive power and privileges? Authoritarians show us the answer. Warren doesn’t.
Complicated, though possibly sound, ideas such as this are the reasons why Warren should remain as a constructive Senator but would never be elected as President.
2
Most of these ideas can be implemented today, without government mandates. People are free to work for, trade with, and invest in businesses that would follow more social goals. Abundant publicity, through both advertising and news, would make clear which companies match people's morals.
The answer to crony capitalism is not crony socialism.
2
@Bob Krantz
Yep! And markets are efficient, consumers are rational and the tooth fairy is always on time.
2
As a registered independent and a progressive I agree that Ms. Warren's approach would be more palatable to voters versus the Sanders approach. In the time of large budget deficits instituting a more equitable tax system and raising taxes on the wealthy and some corporations has more appeal to voters than the transfer of payments creating, or at least giving the appearance of, someone getting something for nothing.
2
During Ronald Reagan's first term he and the GOP controlled Congress lowered the top income tax rate from 70% all the way down to 50%. Well, if 50% was good enough for Reagan, it's good enough for me. Progressive taxation may be re-distributive but I'm all for it.
My taxes would go up, but we'd all be better off for it.
1
@J Jencks
Middle Class wages reached their peak in 1968 and have been declining ever since. JFK cut top tax rate from 91% to 70%. That was the beginning of the end.
@J Jencks you’re free to pay higher taxes right now but you don’t, which leads me to believe even you don’t believe in higher taxation. More empty words from the Left
1
There is another word for this process of redistribution that will mentioned at the end of this paragraph. Everyone, including the well-off, should pay their fare share of taxes. Of course, the rub is determining what is a fair share. A person saves their money and invests in a small business(which collectively generate 75% of all new job growth). That person's money is at great risk because about 80% of all new businesses fail. But despite the odds against, this person succeeds and creates new jobs. Now that this person is making a better living, his or her family will have a better life until the redistribution comes, which is stealing by any name you wish to call it.
7
@dudley thompson - This person you describe cannot have "a better life", without a functional, safe country in which to live. How do you propose that all the costs associated with operating a nation are financed?
You never actually answer the question of what is a "fair share" of taxes, unless you mean to imply it as 0% (or a flat tax?) in your final sentence.
Is it 0%? I won't bother to counter-argue that.
Is it a flat tax? Give this a thought. Suppose someone earns $10 annually, deep in poverty, and the person is expected to pay, 10%. Cutting out $1000 from that person's miniscule income is going to cause that person huge pain.
Now suppose people earn $100K and pay $10K in taxes. They can still get by without pain, nicely, on $90K.
Now suppose people earn $1 Million and pay $100K. $900K is still a VERY comfortable income.
So, is a flat tax "fair? Are all people hurt equally by a flat tax? Or are some hurt more? And who would those be?
So what's your idea of a "fair share"?
1
This idea makes much more sense than redistribution. There is no "market" without a government to enforce and protect it's rules. Our rules should reflect our values and one these our current rules to not protect well is the value of peoples work. There is a cost to business to be supported by the US government: infrastructure, legal protections, wealth protection (military, police, fire), etc. To benefit from this companies should pay significant corporate tax. Companies can offset this tax with deductions for every US employee they hire and pay a wage that is large enough to keep them off government assistance. This helps value labor in our system, which now is sorely lacking.
1
Trying to legislate corporate goodness towards their workers is laudable but mostly unworkable. Corporations and business is trying to make a profit by any means necessary. Whether they recognize that their employees are the ones creating the goods that make a profit and share that profit with employees is another story altogether. The real core problem is equal opportunity at birth to succeed (which no longer exists in America). Just one example is education. An equal opportunity for an equal quality education regardless of the circumstances of your birth does not exist.
A corporation should recognize more stakeholders than just the stock owner. It used to back when we were a mostly closed market that didn't have to compete with China and, back then, Japan, but your 'pre-distribution' blather is just a veiled argument for the European model of a heavy government hand of forced stakeholder recognition, with all the sclerosis of the economic system that causes when one government 'solution' is applied to all. Maybe I read the wrong news sources, but I the amount of innovation coming out of the EU pales to that coming from the US, so tread carefully.
4
@Doug you couldn't be more on point in your assessment. I deal with entrepreneurs and the ones I really enjoy speaking to are the French (where the author lived as a journalist). Spend an hour or two with some French business entrepreneurs (like I have) and you'd see that we would be wise to avoid overreaching like this. When you go down the path of over manipulation things only get more entrenched and tangled...there's always an adjustment or a tweak or a reform the government (read those in power at the time) must make to "ensure" things be more fair, better, equal. Ideas like this always degenerate into control and power.
The author puts up a straw man argument that non-compete provisions are rampant and cripple workers in the market. That is an obfuscation used to grease his round peg, square hole argument. Not only are non-competes virtually untenable (and unenforceable in most states) but when they do exist (typically for sales positions where clients might be ported) the company has to pay the person garden leave, meaning pay them to not work. As a multi-state business owner I can tell you this arrangement is the exception not the norm.
Academics like the author and Sen. Warren have no practical experience beyond their good-natured (but ill conceived) ideas.
We must disavow people of the notion of equal outcomes. It does not exist, anywhere.
The fact is capitalism is based upon brutal competitiveness. Like nature, it rewards those at the top of the food chain. And like nature it penalizes those who fail. Those who aren’t up to compete, myself included, need to accept that fact instead of attempting to hobble those who can compete. Life is not all rainbows and unicorns. The very same freedom and market forces that make Jeff the world’s richest will also allow millions to be homeless. Since all other economic systems have eventually failed, we need to understand that even with its flaws, capris the only sustainable economic model. In fact, we have penalized and dumbed down and regulated and taxes success so severely that Andrew Carnegie, as the world’s wealthiest of his day was worth three times today’s wealthiest in inflation adjusted terms.
3
Unfortunately, the good ideas in this piece (5 year vesting of stock options, reform of non-competes, PAC donations and anti-trust) are mixed with failed Utopian Socialism (40% of directors elected by employees - as if that helped VW which I believe is governed under that model). The other problem is that Warren is running as a Democrat, and whether she agrees or not, will be forced to adopt the party's overtly leftist agenda. Given the penchant of politicians to lie (see Obama, Trump) and be unable to distance themselves from the party agenda (see Obama) I don't see much here. I strongly support creating a new political party, with an agenda that supports the middle class, honest business investment, the two-parent family, ends affirmative action, and an opens a discussion of America's role in the world to include secure borders, a China policy that is fair to American workers, requiring Europe to foot more of its own defense bill, and energy independence through both traditional and renewable sources. Some of Warren's platform fits. Honestly, so does some of Trump's, for which he deserves much more credit than he has gotten. So did Obama's campaign rhetoric, although for sure not his policies once elected. Vogel is right that independents elected both Obama and Trump. We are disgusted with what the Swamp did to both. Millions of us would embrace a new party that actually represented our interests, and would change the country for the better.
3
@Paul Please! The "swamp" didn't do it to Trump, he created his own; and it is by far the most vile in modern American history. He deserves abject disdain not "credit."
@Paul
I get it, a lot of people are feeling the heat on Trump. I wish I had better news for them, but the temperature is going to rise. Climate change will be part of it but Trump and the republican penchant for trickling down
on people they have absolutely no regard for ie: the middle class.
So the weird, self destructive, economically disenfranchised Trump voter will finally see the light. They will join the rest of the country once they fully realize that they have been lied to, big time, for decades.
By the republican party.
I, for one, would welcome them back.
No hard feelings.
Not even the Trump thing...
This seems like a path to reduced American productivity and lower innovation. Policies that hinder the ability to create wealth will reduce the pie that can be distributed.
5
You’ve got it backwards. The current incentives encourage rent seeking and monopoly. Neither of these is conducive to expanding wealth. Your comment assumes that the people running the largest corporations are Randian “heroic capitalists,” who create new products for their own enjoyment and individual wealth. The truth is that new products require the input of all kinds of entrepreneurial people including people pursuing basic science, creative finance, marketing, managing supply chains, and product design. It takes a village to make an iPhone. Yes, a guy like Steve Jobs is also required, but he’s a necessary and not a sufficient condition for innovation. The point is that the returns from a product like the iPhone should be broadly shared instead of concentrated in the hands of C-level corporate officers and the people who lend them money.
@John
Hmmm...
But I just want someone to help stop people who keep reaching into my pocket and removing whatever they can get away with. That shouldn't hurt the economy or take the pie out of peoples mouths. Unless they are eating my pie. The pie I worked for. The pie my wife and kids depend on...right?
1
“The pre-distribution agenda, while rooted in the minutiae of government regulation, actually has a simple core message. It is not about rigging the system to benefit the poor and the middle class, but about unrigging it from benefiting the wealthy and the powerful….
restrict mandatory arbitration clauses in employment contracts….
pre-distribution means fair pay rather than government largess….
government should reinforce the Dodd-Frank rules that constrain financial institutions from padding profits via risky trading….
It should bolster consumer protection, not gut the Consumer Financial Protection Bureau. And it should enhance the fiduciary rule, which requires investment advisers to put their clients’ interests first, not refuse to enforce it….
government should be warier about corporate mergers, and more aggressive in stopping dominant firms from squashing their competitors.”
If Elizabeth Warren, whom I respect, could support and enact this agenda, I would vote for her in a heartbeat. I would donate to her campaign and proudly display her campaign sign on my lawn.
3
I'm a conservative, and I agree. The system is "rigged". Crony capitalism whereby those with the most money can afford to buy influence and curry favor from the Federal leviathan win. This type of reform would be truly beneficial - and revolutionary. However, it hits big business and the crony capitalists where it hurts. This is why I don't think you will see establishment dems or republicans in support. In fact, they will play lip service and then block it behind closed doors, in smoky rooms. Mitch, Chuck, and the heads of industry will not let such things pass. If Warren is truly anti-establishment, and willing to go this route, she could build a popular coalition. However, I fear her ridiculous Native American narrative is truly her Dukakis moment and she is probably D.O.A. in the primary field.
1
Elizabeth Warren would make a great president -- not for the US, but perhaps for a country like Venezuela, where she could put her ideas into practice. She might find a good position in Cuba as well. [No, I'm not a Republican.]
5
Natural resources exist to sustain human life, not to make the few wealthy. It’s a crime that anyone owns more living space, coal, farmland, oil etc. than they personally need in a nation full of homeless, hungry people struggling to survive.
1
Jacob Hacker lists “worker empowerment” as a major pillar of pre-distribution. Where have we heard that before?
In the preface to “Let us Now Praise Famous Men,” James Agee placed an epigraph from the Communist Manifesto: “Workers of the word unite and fight. You have nothing to lose but your chains, and a world to win.” But in a footnote he wrote, “These words are quoted here to mislead those who will be misled by them.” Age explained that despite the “average reader’s tendency to label” that “these words nor the author’s are the property of any political party, faith or faction.” Still many Americans will wonder whether Warren is pursuing the Democratic Party nomination or the Workers World Party nomination.
Most Americans agree something must be done about income equality. But Americans are fearful of neologisms such such as pre-distribution. Attempts at micromanaging the macroeconomy have often produced disastrous results. Venezuela is the latest example. So Warren will have to overcome American voters’ fear of neologisms and their tendency to label.
Frankly this is the only way Democrats can win. These are exactly the kind of issues that can displace identity politics and isolate the economic libertarians who messed up the economy in the first place. I have a hard time believing that the persuadable Trump voter will prefer protecting the thieves who steal their wages to candidates focused on insuring that the bounty of this great land is more fairly shared.
@Martin Kobren
Even if the Warren candidacy fails, her campaign might trigger some reforms. Collective bargaining, eight-hour workdays, minimum wage laws and Social Security are products of advocacy by groups like the Industrial Workers of the World, or “Wobblies.” The preamble to the IWW constitution said, “The working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of the working people and the few, who make up the employing class, have all the good things of life.” Te established staved off the Wobblies by offering concessions.
I was tremendously impressed by Warren's proposed legislation, which is sweeping in its scope, timely, and a possible corrective to the overwhelming power of corporations. Power that is loathed by Trump's base and progressives alike.
But there are problems....the first is the complete absence of media coverage or discussion of her bill. It doesn't bleed so it doesn't lead. Who wants to hear about crackpot Harvard wonky ideas? Besides...she's just like Hillary...so unlikable and so uppity. Another problem is that understanding this article or the bill's proposals requires a certain kind of critical thinking and analysis which is almost nowhere to be found in our journalism, cable news, social media and of course, Congress. I need not mention the Executive branch.
1
welcome senator W. no doubt in my mind, if uyou continue, this practice, by 2020election find yourself in pensylvania.Happy new year ms warren.
I sincerely hope that Elizabeth Warren's pre-distribution ideas become the law of the land!!! It will serve to strengthen our economy and democracy.
1
There are some good points here (especially as to reviving antitrust), but the notion of a federal charter for all large firms smacks of communism. Just because you are large and successful, you get to have to toe under to a federal overlord? Yikes, say Cargill, Koch, Albertsons, Deloitte, PricewaterhouseCoopers, Mars, and Publix (the seven largest private companies in the U.S., in order). So Ms. Warren and this Berkeley wing man Professor Vogel would require that these firms have "at least" 40 percent employees on their boards? I'll admit that it would be interesting to see embittered lowly bean counters telling the CPA partner auditors how and when to spot (or ignore) financial trouble. Sounds like a recipe not unlike the one cooked up in China's devastating Cultural Revolution.
Senator Warren has gone beyond the pale. She will be toast in a national election.
4
Elites have no interest in formative changes to economic power distribution.... It is the very present day rules which gave them power!
The first step to reduce inequality would be to stop taking in millions of poor people from all over the world.
4
Wow, an article about Elizabeth Warren that doesn't follow the Trumpian dangling carrot of her Cherokee ancestry, and actually discusses a topic of substance - her policy ideas. Imagine that.
But hey, just for a moment, about that carrot ...
Let's talk about Trump's and his father Fred's claims - for DECADES - that they were Swedish. Trump's father Fred was conceived in Germany, born in New York. Fred's German-born German-speaking mother was heavily involved in the real estate company for 50 years, dying when Donald was in his mid-20's. Methinks he knew his grandparents were German.
Fred Trump knew that if he wanted to sell or rent property to Jews, it was a disadvantage to be German. Like his son, he didn't let the truth get in his way, he told everybody he was Swedish. And then Donald, knowing it to be untrue, perpetuated the lie in his book "The Art of the Deal." It wasn't until someone checked the family tree and proved the Trumps were 100% German that he gave up the lie.
Donald Trump lies about FIFTY PERCENT of his ethnicity and is proved a liar yet he calls Elizabeth Warren a liar even after she proves (via DNA) that she was telling the truth all along about having a distant Cherokee ancestor?
I think she should start calling him a Scamdinavian. And offer him $1 million if he can produce a DNA test showing he has even one drop of Swedish blood - let alone 50%.
3
First, a jump start via a global net worth tax. Coupled with a reduction in the number of Supreme Court justices to seven...effected through seniority. Those ought to get us going.
Interesting ideas but in the age of the sound bite and election slogan this will put the voter to sleep before the candidate has the chance to explain the concept.
Not to mention the fact that increasing the amount of government bureaucracy that businesses must deal with will not be embraced by successful businesses.
Wonderful, utopian idea and one that, if promulgated by any Democratic candidate will assure a win by Trumpians in 2020...in an ideal world, sure; but in reality, let's hope any Democratic candidate doesn't even broach the concept.
I'd like to see Warren become Senate Majority Leader in 2020.
Intelligent and clear and hopeful.
This so funny. We still have people ,here in the NYT , who think that you make money by abusing others , or other countries . This is deeply embedded in the American ideology .
2
Let’s reward more people “who cannot work.” Unless you’re a quadriplegic - you can work. Great to hear more parasites will be enjoying the fruit of my labor.
7
@James. Work and salary are your reward for contributing to society. The Left wants to create an elite who enjoy the fruits of society’s labor without contributing any labor.
2
Whatever Warren is trying to sell, I can assure you tens of millions of people are not buying it. She reminds me of a tinhorn dictator from South American wanting what she wants and will do anything to get it. Unfortunately, about 98% of it is incredibly bad for us citizens.
5
Or, maybe, the government should not steal from citizens who generate income and wealth that you're jealous about.
6
It is an undeniable fact that free market capitalism has created an economy and lifestyle that our ancestors could only dream of and is the envy of the world! Insane plots by evil millionaire socialists like Sanders and Warren to redistribute income earned by brilliant capitalists have failed every time they’ve been tried. Creating a welfare state for bums who contribute nothing to society except begging for the fruits of others’ labor drags everyone down
5
Great article and great ideas. While I don't think Senator Warren is our best shot at defeating the Republicans for the WH in 2020, I believe that her thinking on social and economic justice is spot on. Her candidacy will bring these ideas to the forefront.
Just as Bernie led the charge - establishing health care as an American right, not a priviledge - Warren could make economic justice a mainstream idea. Kudos.
Also notice, I didn't mention who the GOP nominee might be. I think that is a question unanswered and becoming more uncertain daily.
You can read a number of very researched thesis from Princeton or Columbia about the Triangular Trading commerce from the 16th to 19th century , that provided economical growth to the European colonies of America by offering free labor ; but where is the analysis of today's quadrilateral trade benefitting North America, by giving it cheap labor from South America and China and laundering the money by selling the products in Europe without paying any contribution ? The stash of amassed cash becomes as large as the deficit of some states. Nobody sees or say anything...
It all must start with the repeal of Citizens United and resumption of anti-trust laws, and a strong reconsideration of the Electoral College. Otherwise the development of this new feudal society will continue and we will cease to be citizens, and become indentured servants.
1
Increased regulation will not help. See Europe with more benefits but higher unemployment rates at baseline. We have seen how unions, particularly in the auto industry, failed to negotiate anything except their own demise. They were complicit in using SUV production for profit while then throwing newer union members under the bus with a two tiered wage system. I am not saying that unions do not have a roll, but given globalization, unions are under pressure everywhere (see France, Spain as recent examples).
A better solution is a basic safety net of cash distribution. This will allow workers to be able to withhold labor and actually negotiate with employers. Some call this a basic income, but it would be means tested. In the age of automation where jobs disappear, many of these predistribution ideas won't work.
3
@Steve
Germany seems to look pretty good to me.
German unemployment rate is 3.4%.
Germany is known for high-tech manufacturing.
Their unions and management seem to be much more working together.
They have better education for the working class. Look are some of our schools for poor inner city blacks and poor rural whites.
They don't have the poverty we have.
They have universal healthcare. We have parts of the US with infant mortality rates the same as a second world country.
After 35 years of trickle-down Reaganomics, we got an opioid crisis.
1
Mr. Vogel and Ms.Warren advocate socializing profit. Does that also mean risk will be socialized? TARP, GM bailouts, doesn’t that neutralize risk? Socializing risk makes it less of an impact and a drag on success. Imagine the Government bailing out Amazon, or an Apple. Most startups fail. How does Vogel account for that?
How many bailouts can the Federal Deficit withstand? And who determines the winners and losers? Senator Warren? Or will it be the donor class of Corporations that survive.
1
Mr Vogel,
Excellent article. Markets are human creations. Markets produce the results that are designed into them. This is a key truth which needs to be explained again and again so the average Jane and Joe understand changing market rules to produce the desired results is necessary. This is the way forward in making our economy work for everyone.
2
@Mark Brakke. Free markets produce the best results for everyone. Money will flow to where it earns the highest return. These truisms apply to everyone everywhere. Socialists don’t understand these facts of life and wrongly think Big Government can change basic human behavior. Socialists have failed every single time their ideas have been imposed
2
Stopping inequality before it starts has always been the traditional progressive agenda. It was the foundation of the New Deal and it produced the equality that is the hallmark of the 50s and 60s.
Bernie Sanders and Elizabeth Warren embrace the same traditional progressive agenda. Bernie did not campaign on redistribution. He asked why the establishment of the Democratic Party had abandoned the traditional progressive agenda.
Elizabeth Warren and Bernie Sanders are the future of the Democratic Party.
November 3, 2020
2
I just finished reading the chapter from Doris Kearns Goodwin's book on Leadership where FDR's response to the depression was described. FDR was faced with extraordinary problems in the first 100 days of his administration. He responded with a radical series of programs, which slowed the depression. FDR had support only because of the desperate state of the Union. It was pure reaction, which is typically how human beings act.
Warren's ideas are proactive and will be attacked from all corners for many reasons, not the least of which will be the free marketer's. BUT, we should seriously consider these ideas and try to prevent another 2007 financial disaster, which is likely just around the corner. Trump et al are systematically deregulating again, which will not do well for us soon.
6
@Gordon Alderink. The housing crisis of 2007 was caused by Big Government regulations. This is a fact proven by the science of economics. It was Big Government that forced banks to lend money for political gain to people everyone knew would never pay the loans back. Deregulation has always boosted the economy to the benefit of all Americans.
4
Elizabeth Warren has been studying and fighting for the middle class for decades. She's the real deal and she understands how the deck is stacked against the middle-class who apparently are the only remaining tax payers in this country. Citizens need to read her books to become familiar with her work. The Two-Income Trap is an excellent book to start with. I fully support Senator Warren and her proposals.
5
Warren's plans sound great, and I'm all for it.
However, with those like the Kochs, Ulines, Ricketts, Schwabs and their buddies, with Trump at the helm, and the rest of .1% already in control, they will never cede their advantages, nor their assets.
They will continue to find ways to stop equality and continue to enjoy their "unearned" financial benefits, not the least of which will be the "new" Supremes" with their extreme viewpoints.
Thank you Mr Vogel for a rare example of journalism. We need to deeply minimize the corrosive horse race reporting (which is not meaningful journalism) and focus on pieces like this. Thanks. I hope your colleagues in every medium take note.
3
For nearly four decades both political parties have tried to attract voters by making it easier for private enterprise to make money. Their thinking was that less regulation would result in more profit and capital formation. They reasoned this would increase jobs and, apparently, result in a better life for all.
We've always been susceptible to the argument that the way to make life better for everyone is to grow the economy. But what happens if the increased wealth isn’t shared with everyone?
Business is the way our society supports itself. It must support everyone.
In America, business now supports a select few very well and everyone else barely. Aggravating this condition, the well-off use a relatively small portion of their wealth to gain control of our politics. They then pass laws to protect and further enhance their position.
The rich getting richer and everyone else living more and more precariously is neither sustainable nor desirable.
Other countries have recognized everyone is entitled to the necessities of life (e.g. universal healthcare, low cost or free college education, mandatorily funded, fully vested, movable pensions) and passed laws accordingly, the United States has not and our people are suffering for it.
American politicians' strategy has been to give business full rein and hope that, as a side effect, the economy took care of the people. This strategy hasn’t worked. After forty years, it’s time to re-evaluate it.
12
@Robert C. Hinkley
You are absolutely spot on with this analysis.
1
Just how much more "progressive" can a tax system be than one when about half the population doesn't pay income taxes? Liberals have finally attained 1984, and discovered it doesn't work. We do indeed need a radical restructuring of our tax system, starting with a 20% one-time tax on all college endowments over $1 billion, and a 15% tax on all subsequent endowment income. Linked with a thoughtful maximum lifetime of perhaps 25 years for all foundations such as Ford, Getty etc...with remaining funds 100% taxed by the government...a meaningful amount of tax receipts would flow to the government.
3
Half the population doesn't pay income taxes because they don't have enough income. Our society has decided that being poor is OK, but starving is over the top.
3
@JPE. It’s an immoral disgrace that half of “Americans” pay nothing in income taxes. Everyone should pay something.
1
I appreciate mention of the influence of corporations on politics. That brings to mind 2 thoughts.
1. We don't have to wait for new rules to start forcing the change. Industries spend billions to pay professional lobbyists to work FULL TIME on their behalf in the halls of Congress. OUR representatives encounter them every day. In fact, Industry is doing what good citizens should do. We should all be as active in communicating with our representatives.
So phone, email, and best of all WRITE letters on paper, sent via USPS, to your representatives. It takes all of 15 minutes to write a good, 1 page, 1 topic note, stuff it in an envelope and drop it in the mailbox the next time you go shopping. Do that every weekend and you will discover that your representative will start to recognize your name and pay attention.
2. We need to FIGHT the notion that corporations have the right to donate money. We have laws that prohibit non-citizens from donating to political campaigns. The logic is that, even though they are legal persons, they don't have the right to vote. Therefore they don't have the right to exercise the "free speech" of a campaign donation.
It is now established that "corporations are people too, my friend." However we have not, as yet, given Exxon the right to cast a ballot. So long as that is not the case, we need to fight for using the same logic to forbid them from donating corporate money to campaigns. The CEO can donate personal funds. But nothing corporate.
2
It has been my opinion for many decades that the social goals professed by the Republicans that I knew , such as individual responsibility, were admirable, however, their governing policy resulted in the opposite results. This has been studied and noted often times before. Most Americans hold lofty ideals but take actions that produce the opposite results of those ideals. It just occurred to me that perhaps what we need most is a new religion. One that does not worship a divine deity, but worships the common good, not just mankind's, but all of the earth's bounty of life and resources. This religion needs to be taught as a lifestyle motivator that prioritizes the simple pleasures of life, and the appreciation of the gift of being alive on such a beautiful planet. I have no idea how to accomplish this. I was a business owner for 4 decades, who hired and trained hundreds of employees. For reasons that I was never able to understand, I had only a small amount of success in teaching the ideals to others that I believed were responsible for my success. Our culture focuses on individual success at the expense of the group success. A wealthy land owner, who's wealth comes from inheritance, hard work, or luck, has more land than he/she can farm. So they employ others to farm it. What happens next is that the landowner takes so much of the harvest that the employees can never save enough to buy their own land. What is the point of owning land that you cannot farm yourself.
4
"As the Democrats ... slog toward the 2020 primaries, their party is also debating its economic policy vision for the future."
Well how about that! They're not just campaigning. They're debating policy as well. Will wonders never cease!
Actually, THANK YOU very much for this reporting. Mr. Vogel, we need much more of it. It's not the DEMs who are promoting the horse race of campaigning. It's the media, which thrives on the non-stop reporting of which horse is a nose ahead or a length behind.
In my dreams, for the next year this is the kind of reporting we read, in depth on policy specifics, as proposed by a range of politicians. This is the only sensible basis on which differentiate future presidential candidates. So let's get to know their policy views in detail.
Thanks again.
Editors, if you are reading this, I'm looking at you.
8
@J Jencks - J Jencks, I agree and all too often have to wonder if Editors read the comments since it is so difficult for us to reach Editors directly. This is especially true in certain important areas, one of which is renewable energy, an area for which the Times has no editor or columnist. The result in that field is that the Times knows only two words, wind and solar, and never tells readers about renewable in the Nordic countries.
I agree that we want more clear presentations of policy, not endless reports on Trump fro whom policy is a foreign word.
Only-NeverInSweden.blogspot.com
Citizen US SE
4
Pre-distribution through fairer pay and greater say (photo caption) is a bell that rings just right if it can be developed by Elizabeth Warren into examples that can be understood.
Add to that, as the author does, this phrase - "And we need government support for child care, medical care and other services to support those who cannot work and to empower those who can." and we seem to be talking about making the USA more like the two countries many Americans cannot distinguish - Switzerland (see Tony, Reader Pick no. 1) and Sweden (from which I write).
I look forward to seeing Elizabeth Warren and others develop ideas that if implemented will bring the USA into the 21st century instead of the 20th or 19th where it now finds itself.
Only-NeverInSweden.blogspot.com
Citizen US SE
3
I am seeing a lot of attempts at comparing this with what happened in Venezuela. Venezuela's collapse had less to do with their socialistic policies (also redistribution, not pre- as discussed in this article) and muuuch more with the fact it was funded in petrodollars - one basket, oil barrel eggs.. I don't agree with what was done there, but the comparison is specious at best.
Also, for those who insist one cannot legislate greed, I absolutely disagree. It's called using carrots and sticks.
For example, if a company wants to have their executive compensation higher than a determined level, go ahead. But your after tax profits - and more importantly - that compensation is taxed at a higher rate. If you decide to have 50% (or whatever the % is) of your board set by your employees, you get a lower tax rate.
There are many ways, and lots of combinations of carrots and sticks to use, not necessarily these two examples.
2
@Texan in Umbria. Amazing how other nations dependent on petrodollars didn’t collapse like socialist Venezuela.
1
Unfortunately equality does not work.
Soviets tried and failed.
8
Tuco,
These proposals are not "socialist" It is a common sense approach to corporate management. I have had many different jobs with many different companies over the years. I have seen many unfair practices and accounting games played on company employees in the name of the market. Employees sharing in the management of a company is a great idea. We have tried the old method of greedy capitalism, with an adversarial relationship between labor and management, for many years and the results are mixed at best. The worst is the extreme over compensation at the C-level of corporations. Many of the upper tier do not deserve the compensation they receive, a board that includes employees would bring a healthy balance. They could also put the brakes on risky strategic moves, such as Ford deciding to produce only pickup trucks. When gas prices rise, as they inevitably will, and consumers turn to buying smaller cars, Ford's decision will look reckless. They would have to buy whole cars from another car manufacturer or possibly shut their doors.
7
I tried and failed fixing my bike yesterday = fixing bikes must not work.
@Tuco
Wow Tuco! This is a new high in scientific thinking and logical inference.
Here is another one for you:
Democracy doesn’t work. We tried it in America and we ended up with Donald Joseph Trump.
1
One thing I see is more Democrats not taking corporate money.
We will never see that with Republicans.
5
Those ideas will do virtually nothing to help the average worker, but just provide greater money for plaintiffs' lawyers and professional busybodies who never actually make or provide jobs or anything productive.
3
Equitable distribution used to occur naturally with the rise in productivity. With free-floating currency started in 1971 these curves began to diverge.
Use the tax laws to bring things into sync again. Require that the maximum CEO compensation (all of it) be some multiple of the average salary paid. Anything above that and the tax is steeper until it is prohibitive. Then watch as wages come more into line.
4
So now Sanders doesn’t believe in “pre-distributive” policies, like promoting the rights of labor? That’s farcical, given the fact that he has been - by a Grand Canyon sized chasm - the single most outspoken advocate of workers rights, minimum wage increases, healthcare for working families, and the right to unionize in the entire federal government.
But The NY Times is not interested in actually vetting their editorials for truth or accuracy. Only in ensuring that a good pro-capitalist liberal who will lose to Trump is the Democratic nominee.
5
The structure of your government defines how government deals with inequality. Unfortunately for the USA government the share market defines everything in the USA and even how people will vote. All government services are subcontracted out to private businesses and Insurance agencies for medical etc. How can the government change to a universal health system for everyone and a government pension system for everyone, if share prices fall and that affects private shareholders. The way the USA government is privatised makes it almost impossible to change to a universal government system without it affecting peoples investments and the economy.
5
I simply don't trust government bureaucrats to engineer complex networks of minute regulatory changes that would affect where earnings end up. It's not transparent and simple enough for the electorate to understand and support - a problem for democracy. With education, I think the voting public would, progressively, be more willing to support policies that DISTRIBUTE (not "redistribute") INCOME OPPORTUNITY (not "wealth"). ("Redistributing wealth" is a mischaracterization of democratic socialism.) IMO, democracy needs to grow. It depends on a public that has an INCREASING base of knowledge and social values/altruism. Government organization should grow in parallel with this, IMO. "Pre-distribution" might create more of a Kafkaesque separation between the people and their supposedly, caring government. I believe that people will voluntarily share wealth to a great degree (if their basic needs are met). IMO, the government should directly and transparently fund basic safety and infrastructure projects, like the New Deal - but preferably administered and performed at more LOCAL levels, to support LOCAL (and sustainable) commerce. The trick is to MINIMIZE the bureaucratic role of large-scale (e.g. federal) government involvement (the opposite of Warren's approach). If we tried CCC and WPA projects today, just imagine how much money would go to support administrative costs (despite computers). We need fine-grained public works projects, IMO. Bernie (of VT) seems to get this.
4
There needs to be equal opportunity. Trying to force equal outcomes is doomed to fail. At the same time we need to help those who have been hurt by the changing business world. We do it for bankers, we need to do it for bakers and busboys. Remember the millions who have been displaced have one over riding asset. . . Their votes. They might not have money but their votes determine who has power in the country. Both parties forgot that in the last election, Trump was the result.
I am not sure they have learned the lesson yet.
3
This is what is wrong with the Democratic Party, instead of thinking of ways to increase the economic activity and help the private sector create good paying jobs all this thinking goes to device forms to spend, increase taxes, and regulate corporations. This just reminded me why I left the Dems after 20 years..
8
@Alan
Sounds like you should campaign for Elizabeth Warren.
Income inequality has been reasonably steady since the 1980's. In the 50 years before that, income was distributed much more equitably.
There is no apparent correlation between equality and the party in power. And so there is no apparent reason to believe that Ms. Warren's efforts to achieve equality will have any success.
I have never believed that the distribution of income is controlled by the President. Instead, economic trends seem to correlate with economic events, like recession and growth, that are not controlled by political factors.
I don't believe that Warren can make us rich or poor, equal or unequal. Economic factors out of the President's control are far more likely to make for poverty or wealth, and equality or inequality.
3
@michjas
Sorry but you are wrong. First off, income inequality has not been steady since the 80's, it has been steadily rising - much worse.
The problem is that the Democrats over the last 30 years have mostly been centerist corporate Democrats who were afraid to rock the boat. Also to be fair, it's only in the last 10 years or so that the situation has become so bad as to demand action, and the Great Recession required saving the economy first.
Try reading Robert Reich (just about any of his books, but Saving Capitalism is a great start). The corporate rules have changed over the last 30 years and need re-adjusting.
9
@BruceS
See inequality.org. Inequality has peaked 3 times since the 80’s at essentially the same levels.
michjas,
Your comment that the president and politics does not affect the economy is incorrect. The recent drop in the stock market due to the reckless and impulsive moves by Donald J. Chaos & Co belie your point. Insulting close allies, creates instability. Arbitrarily canceling trade pacts and replacing them with new trade pacts that are almost identical, is farce on a grand scale. Threatening nuclear war on North Korea does not make for a stable stock market.
Trump is not a "stable genius" He is a impulsive moron. Our large corporations are scared to make large investments, which would lead to positive economic growth, because of this.
Vogel got two things wrong. Flee markets or bazaars are the only pristine free markets. Every other market in an unregulated environment becomes a means for the greedy to fleece others at peace. Honest business owners or CEOs understand well-treated employees create their success not the other way around, especially if employes have a stake in management.
Public education from preschool through college or trade school and public health insurance equally available for all regardless of employment are fundamental human rights that fit the pre-distribution thesis. Essentially we can become self-insured as a nation for medical care and embrace free, public education that Thomas Jefferson knew was essential for stable democracies.
You go, girl.
6
Thomas Goodfellow | Albany, NY
The only way to achieve income equality is to mandate living wage compensation. Fair compensation is the great moral question of our time. The question goes back to slavery's roots and as you seemed to quickly brush off is a moral dilemna. Fair trade as well as domestic laws need to incorporate living wages for all workers globally. Capitalism died a long time ago for various reasons. Income inequality is one of them.
3
Here are two more ideas she should pursue:
- statutory extension of minimum warrantees. I’m sick and tired of planned obsolescence, of beautiful Apple products that are designed to be impossible to repair.
- require manufacturers to be responsible for the disposal of their products
These reforms will encourage corporations to make products that will meet their customers needs for more years, rather than designing junk that is killing our planet. Costs may be higher in the short term, but will pay for themselves over the life of the product.
16
The only way to achieve income equality is to mandate living wage compensation. Fair compensation is the great moral question of our time. The question goes back to slavery's roots and as you seemed to quickly brush off is a moral dilemna. Fair trade as well as domestic laws need to incorporate living wages for all workers globally. Capitaism died a long time ago for various reasons. Income inequality is one of them.
3
Ironically, pre-distribution is more socialistic than so-called Democratic Socialism, which is often little more than rebranded liberalism, because it deals directly with issues of labor and the marketplace, rather than the amelioratory policies of mainstream liberalism. The big problem, either way, is the corporate stranglehold on American politics.
8
Thank you Ms. Warren! We've been sliding backwards towards feudalism since Reagan, taking away workers' rights and granting unlimited power to big business, who decided they can make up the difference from beggaring their workers by selling overseas or moving their operations overseas to pay slave wages and pollute at will. It was only 100 years ago that progressive taxes, trade unions and workers' rights came into mainstream being in the USA, and even with the incredible results (good public schools, excellent infrastructure, clean water and widely available electric power, and the creation of a vast, affluent middle class) the business elites worked to crush it. They want it both ways, educated work force (but cheap and disposable at will), protection from black market competition (but no laws governing THEIR behavior), great infrastructure (but low taxes), and the ability to operate anywhere in the world without fear of foreign intervention (expensive military but not on MY dime, staffed by poor people's kids). We need to turn this ship of state around, and she's just the woman to do it.
24
@JP, wonderful comment, thank you! Warren is exactly who we need to turn things around.
2
@JP
I hope you're right. She strikes me though as a bit of an opportunist, a stereotypical politician. If this is the case, I doubt that she could convince much of the working class in the middle of the country to vote for her.
1
@carl bumba, maybe the working class needs to wise up after electing an utter and complete con man as leader.
I believe that the country works best when it works best for most. The bottom 10% performers will always bring down the many.
On another note, rather than preaching victimhood at every turn, telling people that it is the system that brings or holds them down, or prevents them from moving up, democrats should be preaching individual responsibility, the pride that comes from paying one's way, and the example that it provides for others. Surely, a nation founded upon persons who look to themselves for answers, rather than blame others, will grow strong, and the converse is otherwise.
9
@Bryan, if others are not being respectful (and many business elite are not), then it's necessary to confront them about what they're doing. I agree with you that it's admirable to take responsibility for yourself, and for me, that responsibility includes not letting short-sighted robber barons destroy society and the natural environment.
6
Bryan,
How is requiring employees have a seat on corporate boards "victim hood?" There would be many benefits to corporations and the economy with this approach. The main reason it is not common practice now is greed. The upper tier are way over compensated and this approach would be a corrective.
2
@joe parrott what about the fact owners are the ones with right to steer corporate ship. Thebrights u speak of are ownership rights, not employee rights. Why be a shareholder with money at risk if not only stakeholders but employees with no money invested can hurt my investment. I’d prefer the labor rep on board
Somehow, I don't believe that a whole bunch of new regulations is going to solve our problems. Primarily because you cannot regulate or legislate GREED. Enlightened Self Interest is our only hope of achieving a stable, equitable society, because understanding that extracting every bit of profit from an exchange destroys the momentum the free exchange has created.
Workers who are paid the minimum allowable wage have little or no disposable income, and so they create very little new economic activity. Workers who receive twice the minimum can afford goods and services, and the consumption of those adds more momentum to the economy.
When capital views labor as an adversary, then inequality is going to be rampant. We must have a sense of community, a feeling of being included, to make our lives worthwhile, no matter how wealthy we are. Inequality destroys community, puts all the sacrifices on the shoulders of workers, and impedes the growth and development people seek.
Making things better for everyone will make things better for you, too.
3
Scott,
You dismiss the main points in the piece in a general way, then recommend workers hourly rates be doubled. Who on the corporate board is going to push for doubling the employee wage?
2
@Scott Holman
This sounds like Bush Sr.'s gentler, quieter nation.
@Scott Holman
Sorry but you are wrong. What do you think the SEC, the FDA,... do but regulate greed? There have always been rules, because markets do not work without rules. Even capitalists know this. The problem is, who do the rules favor. They used to be balanced between investors, workers and consumers, but now are very biased in favor of investors.
But you are right in that it helps a lot if everyone sees all of us in the same boat. That was true after WWII and one of reasons that the economy worked so well for everyone then.
"In essence, it is about giving consumers more value for their dollar and workers the wages they are due. What could be the problem with that?" Everything if one is part of the Koch Brothers extensive web of organizations that are against anything that helps anyone other than themselves and the 1%.
The GOP has created an atmosphere in America that has people afraid to share, afraid of being compassionate, and afraid of change. They have played the race card, the "hated other" card, and turned a blind eye to the needs of 99% of Americans for decades. And the Democrats have been unable to counter them. There are people out there who are convinced that universal access to health care is going to ruin the country. Others are firm in their belief that any immigration is bad. And more think that having a dark skin color is a reason to call the police on a person.
Correcting inequities is a start. But we need to do more because if things continue to go downhill when it comes to race relations, religion (and the separation of church and state), our crumbling infrastructure, and the lack of affordable housing for working people there won't be a country to fight for.
It's a sad day to realize that the country that wrote the Declaration of Independence is home to politicians and people who are afraid of recognizing new human rights and even more afraid of improving things for all citizens, even those who didn't vote for the current occupant of the White House.
5
Very similar to early Hugo Chavez plan, worked with spectacular success from '06 to '08 with 10% growth. then they ran out of rich people.
Economists Stiglitz and Krugman notably endorsed the plan. Admittedly Venezuela does now have income equality and generous government subsidies to the poor.
11
I agree that the uber wealthy have taken too much of the pie, largely through social, educational, political and data access and management advantages.
However, what Elizabeth Warren seems to not understand is that people will risk capital only where they can reap the benefits of its returns. The idea that anyone will invest money only to have the first pre-tax returns given to people who did not make any investment or take any financial risk is wrongheaded. People will simply find other investment options, including in other countries.
We need to find ways to equalize opportunity and open doors, rather than discouraging investment. This kind of proposal will result in nothing but unintended consequences.
15
Jack Sonville,
Your comment is too narrow. You imply that investors take all the risks in business. That is not the case. Investors take a larger risk, but employees also take risks. When you work for a company you take the risk that the company will pay you for the work you do. The risk that they will run the company in a responsible way. That they will not break laws and endanger the existence of the company. The risk that management will deal with you fairly.
The adversarial approach is not working for employees and it is time to try a new approach.
@joe parrott
Joe, I understand and agree. Labor needs to be fairly compensated and is entrusted to ensure the sustainability of the enterprise. If they are not satisfied with the sharing of the benefits, they can seek another job. However, my point relates to how the investor class—those with the capital—look at things from a financial standpoint. Most, if not the vast majority, believe that labor’s sharing is that they get paid. Unless and until a cultural shift occurs to convince people with billions of net worth (think Koch Brothers, Mercer and Schwartzman) that labor should share in the returns of capital they risk beyond their paychecks, the idea won’t work. They will seek investments of their capital where they can keep the most of the returns. In other words, they truly believe in the notion of selfishness and that they do the most good by looking out solely for their own best interest. Sad, but true. I’ve spent my entire career around these kinds of folks and that’s the way it is.
@Jack Sonville
Do you have examples of particular regulations that have discouraged investment?
I agree that the uber wealthy have taken too much of the pie, largely through social, educational, political and data management advantages.
However, what Elizabeth Warren seems to not understand is that people will risk capital only where they can reap the benefits of its returns. The idea that anyone will invest money only to have the first pre-tax returns given to people who did not make any investment or take any financial risk is wrongheaded. People will simply find other investment options, including in other countries.
We need to find ways to equalize opportunity and open doors, rather than discouraging investment.
6
Redistribution or predistribution should not be in money but in friction. The friction to gaining in supporting oneself is much greater than the friction in making people wealthy. High progressive taxes are the wrong approach because it is more of the same. High tax rates always are abused by those who are more wealthy. The make opportunities to hoard wealth so it doesn’t have to work for the benefit of others. It’s often advertised as progressive but there are easy workarounds.
Wider based taxes and lower rates provide fewer opportunities to hide money and allows the economy to adjust to rapid changes. Equalizing benefits to representatives at the same level that the median citizen of the state will put them more in touch. Universal national service with money towards a house equity when completed and drug free will put people of different backgrounds together. Make every dollar of income be taxed equally for SS and Medicaid. Recognize that the percentage of family income going to housing costs is unsustainable. These things people will understand. Don’t force corporations to give board membership to employees but give very low tax rates whose employees own some level of the stock do that median employee gets dividends and stock ownership that can support them for a year shoulda company move this way the employees, not the union has the power. Transaction taxes on stock sales will slow trading and 1% taxes on wealth can justify lowering LTCG taxes to almost 0.
I find Vogel's essay to be much easier to understand than Warren's fire breathing speeches and more pragmatic and down-to-earth than i read from other columnists (eg, Krugman). What he is proposing is not "pretax allocation of economic gains" as much as optimization of societal productivity. In my view this is a model that benefits everyone, the big fish and small.
3
This is exactly the right path! In essence we need to un-do the financial and economic policies that underlie "trickle down" economics.
One other key element that needs to be changed is to increase taxes on short term profits and lower them on long term capital gains. This would create incentives for creating jobs and investing in R&D and business expansion, creating more jobs.
In short, we need to make capitalism work for EVERYONE, not just the wealthy and investor class, call it "capitalism with a conscience", the way it used to work from the New Deal until Reaganomics.
Ms. Warren has the right idea.
5
Bureaucratic socialism is nothing new.
11
@Chris
I hope you don’t mind the socialism of your water district, or your fire department or public library. Sounds like in your world there is only purity: pure capitalism, and anything is socialism. Nothing like either/or thinking.
This ‘pre-‘ vs ‘post-‘ tax ‘redistribution’ is a total canard. It is actually far simpler: there are policies that help workers and policies that help bosses. ‘All of the above’ is the only way we even have a chance of returning to the broad prosperity of the trente glorieuses.
Also, to act like Bernie is against so-called ‘pre-tax’ methods....a man who has done more to fight alongside organised labour than any other sitting member of the Senate....is just crazy. The NYT will never, ever miss an opportunity to try to malign Bernie.
8
If this country had any brain cells still functioning and was not 40% brainwashed by Fox News, Elizabeth Warren would be our next president.
In other words, pretty unlikely.
3
@Gustav
Please don’t underestimate the ability of human beings to wake up and change things when idiocity becomes the modus opererandi of government. 1789 and 1917. Against all odds! So you percentages give me hope!
1
A higher tax scheme
5
Oh, Steven Vogel--you know nothing of revolution histories. We are only one "let them eat cake" from storming the one-percenters, so spare me--what can you three million do against three-hundred million? Read up on "swarm attacks" and you'll see how powerful we are in reality--remember that concept? You will...
1
You left wingers are gonna create a lot of right wingers. I am a centrist but won't be for long as I read the idiotic things that come out of the left, and look at their proposed candidates. Kamala Harris? Oh, does affirmative action now apply to presidential elections?
13
@bryan- blow that whistle any harder and you’ll have a pack of dogs in your living room my dude. Kamala Harris, affirmative action? Just come out and say it, we all know what you mean.
2
@Jared Yeah, here's what I'm saying. Who are these people running for president? What are their qualifications? For the left, if they're black, they're in. I don't do political correctness. that is for weak people who can't think independently and who need to be accepted by the group. Just keep going left and you will assure another Republican in office
Just FYI- the dashing Mit Romney, the new UT Senator recently in the news, had a career before politics that was the antithesis of all these progressive economic ideas. He got rich by buying companies, sucking the capital out of them and laying off their workers. His forte was destroying companies through greedy opportunism. Please keep that in mind, CNN and the beltway journalists itching to make him the new hero.
6
Sounds like Warren's plan is to Make China Great Again. Idiotic socialist attempts at central control destroy wealth and prosperity. See Venezuela.
21
@jaco: Or see China, which has long-term economic plans that are centrally controlled.
1
I guess these ideas are nice; not sure they will really result in less inequity. Employees on the BoD can be just as corrupt as anyone else.
The simple fact is that companies exist to provide a return on investment to shareholders and investors. Period. All they do, regardless of whether it's dressed up a "corporate citizenship," works to that end. Trying to make them like "citizens" is either naive or misleading. It's why we regulate the damned things, and should do a more effective job of it.
If we focus instead on what drives companies and their senior management, and work on the incentives that are in place, we'll get real results. For example, rather than spend money on innovation, new products, or heavens forbid - pay and benefits, trillions of dollars are allowed to be spent on share buybacks to artificially inflate share prices. That used to be illegal (until the 1980s). Put those profits to real work and we'll get growth and more opportunity. Even more, put incentives in place to make profit-sharing a basis for distributing retained earnings to rank-and-file workers.
2
I don’t know about Ms. Wallace, but her fellow socialist, Mr. Bernie Sanders publicly apologize today for his own 2016 campaign’s sexual harassment issues and pay disparity complaints. Mr. Sanders himself became a millionaire since─ he himself becoming what he was campaigning against! The best and the most realistic way to change the world is to become the change that you like to see in the world, yourself─ without baiting the gullible and exploiting the vulnerable ─ often for their voters, a standard practice among the elite, liberal, socialist or progressive politicians.
3
I agree with Warren and Sanders. Let's research all fronts to make this society more equal for all. After all, inequality is the root cause of the global instability.
Let's also think about the huge cause of inequality - inheritance. The root cause of the wealth inequality is the fixed pattern of rich get richer while the poor stay poor. Why is it fixed? Because a vast majority of the wealthy parents pass on the wealth to their children.
As we live in a capitalist economy - unlike communist or socialist which have failed to motivate people to work hard - rewarding hard work is good for our society. On the contrary, inheritance rewards even those who are less productive as long as their parents are wealthy.
All the while, the fixed pattern of poor stay poor is so rigid that most children of less fortunate families can’t dig themselves out of the hole.
Loving your child is indeed a wonderful feeling.
However, if that love is reserved only for your child without regard to others, then it will shape itself into an act of selfishness.
In lieu of monetary wealth, leave your child a wealth of heartful memories from the highs and lows shared together.
And then, as for the monetary wealth that remains even at the end of your life, return it to the wider society for the benefit of those who are less fortunate. In the form of estate tax or, better yet, donation to those in need.
5
Finally, someone who understands that the ease with which big money begats even bigger money, as long as people can pass on billions of dollars to their survivors, inevitably 0001% of the people will have 99.999% of the wealth.
This isn’t difficult to grasp, and must be the basis of any effort to prevent the eventual accumulation of all money - and all power - into the hands of a few dozen people.
3
"In essence, it is about giving consumers more value for their dollar and workers the wages they are due. What could be the problem with that?"
Looters in suits who view Mobutu Sese Seko as a role model would find big problems with that. Too many members of the country's wealthy minority don't even see a country when they look at the United States. They just see a rich place from which wealth can be extracted, which is what Mobutu saw when he took over Congo as dictator in 1965.
Until rich people in America condemn and repudiate utterly the zero-sum, developing country mentality of "apres moi le deluge" then the U.S. will continue to have really serious problems.
1
The author throws around the word "Fair" as if everyone agrees with his definition. However, everything proposed here is the very definition of unfair. For example, the title suggests stopping inequality before it starts would somehow be a good thing. However, equality is by its very nature Unfair.
Take for example basketball players, they all do the same job, but some are paid vastly more than others. Should all NBA players, regardless of points scored, be paid the same? Should all actors be paid the same for the same hours worked, regardless of box office success? Should terrible developers, lawyers, doctors, skilled tradesmen all be paid the same as excellent ones for the sake of equality? How do you force equality in schools; should the best and brightest students dumb themselves down to be more average for the sake of academic equality.
The most equal societies are the most unhappy, because at their very core, people want to succeed. They don't want to be average, they want to be better than everyone else. Governments that enforce equality are generally the worst. In Cuba, everyone makes $50 a month, everyone is technically equal; but does that make anyone happy?
And why should employment equal ownership of a company? When I hire someone to work on my house, I don't transfer partial ownership of the my home to that person. As long as the employer and employee agree to the terms, government should keep their noses out two party transactions. All bad ideas.
14
@Ayaz
I don't believe the issue is having everyone paid equally at the same rate. The issue is to design strategies that help all workers attain a 'fair' livable wage -- a wage that allows them to pay for decent housing, food, education, etc. Skills, educational credentials, experience and performance would factor in to raise salaries above that basic level. Yes, NBA players are paid based on their performance but even the lowest-paid player receives a respectable salary. The incentive to earn more and be more productive would remain but a floor would be provided to ensure the individual and collective health (financial and physical) of all citizens. No adult person's labor should be valued as not worth a decent living standard.
4
@Ayaz
Please don't use straw man fallacies like "Warren thinks everyone should be paid the same," because they prevent coherent discussion.
There is nothing about the pre-distribution system described here that prevents competition. Individuals would still compete with individuals, and companies would still compete with each other. There is nothing that prevents talented people from becoming rich or the incompetent from becoming poor.
I'm sure you know that middle class wealth has been stagnant for over forty years and the equality gap has grown enormously, with dire consequences. This isn't because the middle class is any less capable than it was 40 years ago, it's because people are paid less for the same kind of work. It's because corporations like Walmart pay enormous profits to their shareholders while paying their employees so little they have to rely on government assistance.
I would turn your question "why should employees have ownership of a company" around and ask you "why should we, as citizens, allow the existence of companies that don't benefit my society?" Why should we have to subsidize Walmart's shareholders through our tax dollars?
5
@Josh Wilson "Why should we, as citizens, allow the existence of companies that don't benefit society". This underlines the fundamental flaw of self aggrandizement common among 'progressives'. People, things, entities ... everything exists, not because of you, but in spite of you. If you didn't create it, you have no right to destroy it. So companies exist because someone willed and worked them into existence. And these companies obviously provide value, that is why people willingly turn over their money to them.
And must every company meet your narrow view of 'benefit' everyone. Does Budweiser beer a 'benefit' to society? How about Porn? How about my climbing ascenders that only .2% of society would buy; do these tiny corporate benefits to society count?
There is nothing wrong with safety net programs. The government should look for innovative ways to uplift the poor and disenfranchised. But that does not require the heavy hand of regulatory government Warren is proposing.
Its not your place, or that of Elizabeth Warren, to determine how people spend the earnings of their labor. The market is way more democratic than government; and more moral (no force). You may vote every couple of years, but you are making spend decisions multiple times a day. Producers should not be dictated to by clueless politicians. Anytime a politicians comes along saying they can spend your money better than you can... don't vote for them. Unless of course, you believe they can.
With a lot of these large corporations, the fox is watching the hen house and maybe some of these proposals would work. The executives who run the companies get enormous raises and bonuses and the average worker gets nothing. These executives have no loyalty to the companies they raid. They never really actually do anything innovative to warrant their outrageous salaries. I see this at my company. Every year a new big deal swooshes in with all these big plans that fall flat, they take the million dollar salary and leave in less than a year. It's like at a certain level in these companies they are all in on it. 90% of these executives are just leeches.
3
If Ms. Warren wants to stop inequality before it starts, she has to assure that people take the consequences of their life-style decisions.
11
"Elizabeth Warren Wants to Stop Inequality Before It Starts"
Before? It is already here and well underway. This is not a secret. It is in fact well known.
It would take decades to reverse current levels of income inequality to reasonable levels without also using post-income redistributive tax policies. Both approaches are necessary!!!
2
I'm not sure what it will take for the wealthy class to fully comprehend what the "working class" is providing for them, day in and day out...day after day after day? (Many of them working full-time without making a living wage.)
Let's just imagine for a moment that for 3 days every child care provider, fast food person, waiter, waitress, or barista, telephone or online customer service representative...takes a hiatus.
Add to that every hospital orderly, valet, garbage person, street-crossing guard, teacher's aide, and senior home attendant.
Add to that...Facebook goes down for 3 days.
(There's more, but I think you get the picture...)
Imagine this. Now, take a look at your "quality of life," and tell me...what is the "value" of these people in your life?
2
@Kelly Grace Smith Yes, imagine what would happen if all air traffic controllers walked off the job? People would be stranded throughout the US, planes would fall out of the sky, and the economy would collapse.
Hmmm...actually, all of the air traffic controllers were fired and nothing went wrong. If we can lose all the highly trained and well paid air traffic controllers without any downside, loss of unskilled labor would produce little difficulty at all. Those jobs would be filled in a week.
The civilian members of PATCO were summarily replaced by their supervisors and military air traffic controllers who worked unmanageable hours for several years after Reagan fired them.
This is a very wonkish article, by an individual, in effect, serving as a mouthpiece for the Presidential ambition of Elizabeth Warren. Some of the ideas are sensible, but wonkishness has absolutely no appeal in the American political landscape. Leaders running as policy wonks become roadkill: look at Jeb Bush.
This is Elizabeth Warren's Achilles Hill. An over-emphasis on policy.
Pure emotion and invigorating rhetoric is what appeals to the American electorate, not high-minded policy meditation and nuance, and if Elizabeth Warren runs as the Democrat Party's policy wonk, she will suffer the political guillotine just like Jeb.
1
The redistribution or pre-distribution schemes for equity regarding wealth and power represent a non sequitur from inception. Ms. Warren’s interest is political power, not equitable distribution of wealth generated from capitalism and the marketplace. This academic Marxist ruse cloaked in terminology is more about loss of freedom married to lack of effort in determining outcomes, then couched is egalitarian double talk.
All paths lead to different outcomes as change is the only constant and each choice made leads to a separate and distinct consequence. Equality is an ideal not to be realized by government control. For the Democrat Party to adopt Socialism and Communism as their chosen narrative for change is to invite tyranny with equality never realized as it was not ever intended to deliver it.
7
So, the New York Times comes up with a socialist ( I prefer the more accurate term Marxist) from Cal-Berkley to support redistribution and theft of what people have earned. The politics of envy and greed by those on the left is scary, as history has shown us that it doesn't end well. Just to give one example, why should labor have a spot on a corporate board? It isn't their money at risk if the enterprise fails. It's that of investors such as myself.
No wonder a leftist wants to limit conservative political contributions, as it serves his left wing aims. Would Mr. Vogel support a proposal that 75% of union membership must support a candidate for a union to make a political contribution? I doubt it. But his proposal would give labor a veto over any corporate political contribution. Since labor is uniformly left-wing, no conservative would get funded. Political speech is free speech, and free speech also seems to be something that the left wants to limit at every turn. It's scary that the New York Times thinks this is a worthy proposal.
6
Good grief!
How is it, why is it, that these self-baptized "Progressives" cling forever to the absolutely unfounded and perpetually falsified belief that if only they could pass the right laws, tinker with the right regulations, appoint just the right "czars," that they would be able to remake the world into some kind of paradise of legislated equality? Warren and Vogel are merely the latest in a very long line of enemies of freedom, all in the name of their delusional conviction that they simply know better than any of us how we should live our lives.
Spare me.
Please.
8
@HMI
Yes those socialized libraries, fire districts, water districts, and Medicare have just ruined the freedoms in America. NOT.
@Michael
And Progressives persist in proclaiming that opposition to Big Government must be opposition to All Government.
Get yourselves a new fallacy.
Didn’t it already start?
Hold on to your wallets. If Elizabeth Warren ever becomes president, she will come after your money and give it to those who want a free ride. She wants to take it away from those who work hard and give it to those who do not.
6
The best column I’ve read in years! I agree 100%... These are smart policies based on facts and empirical evidence of what works and is also in the end friendly to the private sector. It’s not price controls, it’s the kind of regulations that actually help the market operate more efficiently not less. A hard sell politically I suppose, but marketed properly not impossible.
2
Very interesting, but there will be pushback because Warren and the author don't address some of the abuses (or at least perceived abuses of unions and the like). The "Regulation" he speaks of is an even more scary R word than Redistribution to some people. Assuage those people's fears that these worker council's won't stop hard workers from getting promoted or have seniority protect lazy workers. Or force business to hire people just to fill out paperwork. All those concerns can be addressed and then I would think you could persuade a lot more people to consider pre-distribution.
1
I was all-in for Warren until I read about her vote not to increase the cap on charter schools in MA. Wow. That vote flies directly in the face of all her reasoning on why monopolies are bad and why antitrust is a "central" proposition for her--except when it comes to our children's education??
This is an issue that is completely Democratic. A traditional school district (monopoly) vs. a marketplace of publicly funded options (competition). Without the latter, children get a lesser quality product that costs more money. Great teachers get less money because the monopoly ensures that poor quality teachers and top heavy administration take dollars that should be going to great teachers.
Elizabeth, if you are truly about antitrust, shouldn't this be an easy one??
9
Warren will be taken seriously as not just a left winger beating up on corporations but a real reformer if she comes out and states that corporations will be restricted from donations to politicians in exchange for government employee unions being restricted from funnelling money to the representatives they elect.
Fair is fair
6
Corporations and labor unions are already prohibited from contributing to political candidates (52 U.S.C. 30118).
1
Cute - but not cute enough. Corporations flood PACs with money so that the PACs support the candidates.
@Christopher Arend
Note I said 'funnelled'. Like corporations most unions use PACs. Unlike corporations, there are also cases of dubious legality such as programs to train and pre-sponsor candidates, directed GOTV and other labor activities that come down perilously close to in-kind donations.
Pretty blatant about it, too
http://www.njaflcio.org/labor_candidates_program
https://www.opensecrets.org/orgs/list.php?id=
A pox on both their houses -- and if Warren claims something else she is looking for one-sided power, not reform.
Capitalism needs a makeover. That will only happen through legislation that produces strong, balanced regulations enforced by sufficient numbers of regulators. A monumental change of direction but without it there is little long term hope for our system.
1
I disagree completely with the notion that inequality is a big problem. Inequality is inevitable in any society that rewards people according to their efforts and talents. What is important is ensuring that people have the chance to rise according to their efforts and talents, and perhaps more importantly, ensuring that their children will have better lives than they do. That requires economic growth and lots of it. That's what's missing, entirely, from the program of Elizabeth Warren and the other leftist Democrats.
15
@Douglas
So Mr Douglas from Greenville, Maine, if you are born with a disability or a couple of disabilities into a dysfunctional family with genetic disadvantages you are in your own. The society should not regulate and redestribute to give you a decent life.
Capitalism even in its blindest and most disgusting decades produced social democrats among it’s political and moral philosophers who disagreed with your crass and honestly disturbing egoism.
I hope you or your loved ones don’t need the help which would be provided by fair and just regulation and taxation.
I for my part find coexisting with people who think like you extremely difficult.
5
@Douglas
It may be that you don't see inequality as a problem because you haven't bothered to look the mounds of evidence that show:
1) inequality results in worse health outcomes for everyone, even the rich, especially in regards to lifestyle diseases like addiction;
2) inequality is the most significant predictor of crime and violence;
3) inequality is inherently undemocratic and promotes corruption (which is why the most unequal societies are the most corrupt);
4) historically high levels of inequality precede catastrophic economic collapses (see Great Depression, see Great Recession); and
5) countries that rank the highest on social metrics (health, longevity, happiness, cohesiveness), have lower levels of inequality.
Also, please explain how "economic growth" is the solution when after 10 straight years of record corporate profits and strong economic growth the bottom 50% of Americans are struggling.
6
@Douglas: That might be true, if we were actually a society that rewarded people for their "efforts and talents," but we don't do that. We rewarded a man of inferior intellect & talent with the presidency, merely because he is a bully. We admire aggression, strongmen, white-collar criminals who don't pay taxes because that "makes them smart." We reward people who ruthlessly shove others aside & undermine their colleagues; we reward those who are tireless liars & self-promoters, regardless of what their merits or accomplishments may or may not be. The best jobs go to those who already have connections & money. We have a system where entering desirable professions requires people to attend unaffordable schools & work in unpaid internships - & only the already well-off can afford to do that. Don't kid yourself that we live in a system that rewards hard work & intelligence. That's about as far from the reality of today's America as anyone can get. If we really rewarded hard work & talent, there wouldn't be millions of Americans scraping by with two or three jobs, or cobbling together a living with multiple freelance or contract gigs. We wouldn't have PhDs earning ten bucks an hour doing adjunct work, great actors hustling as bartenders, or inventors battling corporations for the rights to their own patents. We also wouldn't have idiots running the country, pretending to be "stable geniuses," when in reality they are arrogant, spoiled, narcissicistic bullies.
1
No corporate C.E.O., or other upper management employees, should make more than a prescribed multiple of the average earnings of non-management personnel. Studies reveal that the difference in income between these groups have grown to Grand Canyon-like proportions. It is way past time for labor to share significantly more in the profits generated from its productivity.
8
The one thing that would "pre-distribute" wealth as well as the totality of all these suggested reforms is universal, government-sponsored health insurance. The reason being that employer-subsidized group insurance is a lock on workers, especially those of middle-age with children. These are the same employees who have skills, ideas and experience that make them valuable to other employers who would pay them more, treat them with more respect, and offer them more opportunity for advancement. The freer valuable workers are to change jobs and relocate, the more bargaining power they have. They are less vulnerable to abuses involving pay and hours, legal rights, health and safety, professional ethics, changes to pensions and other benefits. Private employers retain almost total power to hire and fire at will, with exception of anti-discrimination laws which are poorly enforced, while individual workers are in the "take it or leave it" position. Leaving a job that provides your family health insurance and pays most of the premium is hard, especially when pre-existing conditions are involved. A single-payer system would empower all workers to work where they can get the best pay, the best terms and conditions. and the best opportunities to grow, professionally and personally.
6
@Socrates
Predistributional and redistributional action are both needed on that order.
We need policies that will first maximize the minimums (the worst off in society) before we maximize anyone else’s utility.
Currently we only maximize the utility of the top percentile and hope for the best for the rest.
Clinton and Obama maximized the top percentile’s utility but threw a bone to the rest of the people (e.g. Obamacare).
Warren and Sanders or Sanders and Warren are the dream tickets. I am indifferent of the order.
Good people, for the people.
4
Thanks Mr Vogel. Excellent and extremely timely clarification of the differences between Sanders and Warren.
Predestribution via regulation is first order and redistribution via taxation is second order. Both needed but in that order.
We need to get to a Rawlsian Justice equilibrium where we are indifferent on who we are before we go to sleep every night and who we wake up as. Intelligent regulation and taxation where the objective is to maximize the minimums (the most unfortunate) before we maximize everyone else’s utility is key. Our current system is maximizing the maximums (the most fortunate or the 1 percenters) and pretty much stop at that (look at the faces of Steven Mnuchin and Donald Trump for visual help).
Bernie and Elizabeth or vice versa is the right ticket. Please people, it is doable, let’s do it.
6
Is this even constitutional? We tend to forget that the states are sovereign entities, conceding certain enumerated powers to the federal government. States clearly have the power to charter business entities such as corporations. Can Congress take that power away from the states? Does the commerce clause allow Congress to prohibit us from doing business without getting permission from the federal government? Will partnerships have to play by the same rules as corporations, especially as regards embedding employees (non owners) in governance? That will be an interesting fight in the Supreme Court.
6
"The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function." - F. Scott Fitsgerald.
Collective and individual effort need to work together to create a functioning society. A society built all for the collective or all for the individual will not be a good place to live.
Warren represents the collective, especially in cases where individuals finagle and cheat to become wealthy. Don't imagine for a minute that she wants a society where you cannot become wealthy through the right combination of luck, skill, hard work, and doing something useful.
4
@mlbex
Agreed--as she herself has done (become wealthy) through her own hard work, intelligence, and focus. Reading these comments I see that many want to discredit her ideas as "socialist" or "communist" without even considering how current rules benefit the oligarchy. I can't for the life of me understand how having the rich rule over everything, own the politicians, and continue to rig the game in their favor (even though they are already benefitting the most) has somehow become equated with down-home love-it or leave-it Americanism.
11
Inequality is the natural end state of an unregulated system. Success begets success until a few entities control everything that matters.
In order to prevent that outcome, you have to design the system to prevent it, and break it up when the prevention measures fail to stop it.
The people who are busy taking control are doing a great job of convincing us that this is un-American. It isn't necessarily so, but they've been doing it for more than 100 years. When the conditions become so bad that the people finally overcome that brainwashing and resist effectively, the powers that be will send in the Pinkertons and the National Guard, only the name Pinkerton will be replaced by Blackwater. It has happened before and it will happen again.
2
@mlbex Sounds good in a closed society/economy with no alternatives. An open society/economy offers alternative choices which you cannot ignore like lower taxes, lower labor costs, cheaper inputs, and so on.
@DL: You have to hold two opposing thoughts at the same time to make sense of governance. We need some openness and some closedness, and they need to be applied in the right places. All of one or all of the other always makes for a lousy society. The socialists and the libertarians both have a case.
The average American voter will not discern the difference between the "pre-distribution programs" suggested by Elizabeth Warren and the "redistribution programs" suggested by Bernie Sanders.
It's downright hilarious how Stephen K. Vogel expects the average voter to split these hairs and to engage in nuanced debates about pre-distribution vs. redistribution.
That simply isn't going to happen.
The average middle-aged white voter is a Baby Boomer who will deem both Warren and Sanders to be card-carrying Communists. They will vote en masse for Donald Trump while muttering "better red than dead." They will then return to watching Bonanza reruns on cable television and to complaining about how Millennials are entitled kiddies.
5
@Sándor
I'm sorry to say that I agree with you. But I'm not sure how much longer that voter is going to rule the swing precincts.
3
@Sándor: "They will vote en masse for Donald Trump while muttering "better red than dead." "
Heard the same thing shouted by progressives years ago.
sandor,
Sanders or Warren will be successful in the primaries depending on which of their campaigns can make sophisticated economic approaches simpler to understand. For example, "A seat at the table, to make better decisions for the company as a whole," or "The whole team together, rather than the team captain going one way and his team going the opposite."
I'll wait and hear what Warren has to say on this, for I'm not sure that Vogel is either accurately presenting her opinion or that Vogel is accurately depicting either the pre- or the re- of distribution.
I am aware though, that Vogel's decades long economic expertise has been concerning Japan. Last week I read an article on Japan's collapsing population. It seems that no one can afford children because 2/3rds of the younger workers are temps. They must work 'overtime' and be on-call 24/7. That makes it impossible to date, to marry, to have children. The solution proposed was to cut 'overtime' to less than 100 hours a month.
Right.
That'll solve the problem.
We, too, are a temp nation.
There is no expectation of a pension, a retirement or even, if Mitch gets his way, Social Security, to be there for our young.
I'm not sure where these 40% board member workers are to come from.
I'm not even sure what your proposal is for the difference of a private company, those employed by the government or the self-employed.
However, I will make one point: "Government largess" in this country is non-existent. Perhaps you need to study the numbers of how many homeless there are or how much a person's food stamps has been cut in the last 20 years?
But, frankly, sir, any government that ISN'T interested in "rigging the system to benefit the poor" isn't worth spit.
In the "tax cut" the poorest had THEIR taxes RAISED by 20%. Everyone else got a "cut".
Why don't you start there, sir?
4
Senator Warren is an excellent Senator from Massachusetts. Whoever could put lying demagogue trump in place , I am all for them.
This is an open field and trump is going to disintegrate whoever is going to challenge him.
We need someone who has a solid reputation and backbone who could stand tall inspite of trump.
2
@B.Sharp
Actually, i'm afeared that she's thrown Massachusetts under the bus for this run for potus. I can support her candidacy while simultaneously being mightily irritated that we're most likely going to have a part-time at best Senator for the next couple of years.
1
Sadly, we have lost the intended vision of the senate as a place for philosopher kings from about the country to come together for the good of the country with less focus on their home states and more on the common good. We have been pushing for more and more advantage by turning senators into representatives on steroids, instead of being above the bring-home-the-bacon fray. If Warren is indeed worthy, Mass is not losing advantage, it is justifiably contributing to the overall good of the country.
@Mike Pod
Then she could well have declined to run for the Senate to focus on running for potus, no?
Just when you've given up all hope for America Elizabeth Warren comes along. Mama mia we should be so very fortunate to have her as our leader! BRAVA
4
Is Prof. Warren going to set an example? You know, divest part of her $4 million stock portfolio? Give up her BMW? Sell her multimillion dollar Cambridge home (bought, by the way, with a 0% interest loan from Harvard)?
Didn’t think so.
14
@John Ramey
When did she state that anyone else should do what you suggested? Cite a specific quote of hers.
1
@John Ramey: the only positive i can see from her running is that the scrutiny will reveal she is a another phony "richie rich" type multi-millionaire and not the poor girl from Oklahoma she claims she is!
1
Professor, you better be able to reduce your very thoughtful ideas to bumper-sticker length, preferably with a fear-based kicker, otherwise Senator Warren begins her quest having already lost almost half of our dim-witted electorate.
3
It's not REDISTRIBUTION folks, it's pre- distribution. Maybe read the article before dusting off your 'I hate Socialism ' comments.
As for 'big government ' I don't know what that means anymore. Does it mean taxpayers forking over 700 billion $ to save Big Banks who went bankrupt after deregulation like we did in 2008. Does it mean going from no debt in 2000 to trillions of $ in debt in 2009 to pay for wars? The big spenders are the Repubs, not the Dems.
3
Excellent piece. A must read for digital NYT subscribers. "This would not undermine the capitalist economy; it would enrich it" quote in this piece, I disagree. Karl Marx painstakingly described the natural history of Capitalism. The ever present abysmal gap between capital and labor. His Volume One presents most relevance today than it was first publish in 1867. No need to be a Nobel Prize Economics laureate like Paul Krugman. Elizabeth Warren has become aware of these contradictions. She is the Darwin of politics, governance and maybe economics.
1
64% of Americans can't name all three branches of government -- I don't think its very likely that they'll be able to distinguish between "redistribution" and "pre-distribution."
She might want to think about some other term.
4
@Scott: "64% of Americans can't name all three branches of government "
Perhaps they've taken lessons from the progressive, Alexandria Ocasio-Cortez.
5
The more Elizabeth Warren talks, the more I become enthralled with her program. Pre-distribution, a synonym for fairness, is a giant step toward an equitable future for the working man & woman. Capital will get on board just as they functioned & thrived in the pre-Reagan years.
Elizabeth Warren- 2020!
5
The economic agenda of unrigging corporate welfare makes sense and will lead to a more prosperous and stable America. Elizabeth Warren is a smart economist; Trump and the GOP leadership are not.
One should never forget that America did very well in the 50s and 60's when taxes rates were highly progressive and corporations paid their fare share. Ronald Reagan's and successive GOP initiated tax cuts created growing budget deficits and an ever increasing gap between the few top earners and the rest of America. Trump's tax were nothing but con-job that caused a steep rise in federal deficits, while giving huge (and unnecessary) tax cuts for the super-rich. Trump inherited a strong economy, but it took him only a couple of years to initiate a major downturn.
4
@Konrad Gelbke:"One should never forget that America did very well in the 50s and 60's ..."
Your mixing cause and effect.
We could afford that golden age because of our robust manufacturing base. You don't give up, for example, half of the domestic auto market to imports without there being tangible effects on the middle class jobs machine - automation notwithstanding. The same holds for almost every durable goods category.
Unionized burger flippers won't bring back the wealth to the blue collar middle class.
The middle class started losing wealth in 1973. But hanging it on Reagan does make for a better polemic.
2
Everyone believes their money is hard earned; they don't want it taxed and redistributed. It is better to limit excessive earnings.
5
So you missed the entire point of the article. Too bad.
1
We are in an age when private companies are doing the work that needs to be done. Think of Tesla, Space-X, Virgin. Government is lagging on innovation and exploration. Limiting private wealth could affect this healthy trend.
This is the first article I've read that puts Warren's economic views in a larger context and makes sense of them. And, for the first time, I'm inclined to like Warren for it. What she needs to do is to emphasize that these proposals won't necessarily affect the corporate bottom line. Instead, they reflect the need for more openness and, more and greater shareholder and worker input in the board room; and more long-term commitment from senior executives. Those who scream, "Socialism!" don't understand that these are CAPITALIST initiatives.
3
Several DNC Politburo banners, it seems, but same ad nauseam quest--The Grand Collective.
Didn't work for Stalin, so not much hope it will work any better for them.
9
@Alice's Restaurant: Stalin was a monster working a system in a failed state with a tradition of lousy governance, that was under constant military invasion. Warren is not a monster, the USA is not (yet) a failed state, it has a tradition of somewhat good governance, and is not being invaded by numerous foreign military forces. Stalin's government took over by force. Warren's, if it happens, will take over by election.
Those are whopping big differences.
@mlbex
Historical analogies never are. But the truth: Warren is without question a cultural Marxist--close enough for debate. Equally important, Stalin's Grand Collective began benign, or is it begin the beguine--"What moments divine, what rapture serene,/Till clouds came along to disperse the joys we had tasted"? Give the DNC Politburo time and "a monster" will appear, for certain.
1
@Alice's Restaurant: Get rid of the collective and you don't have a country, you have anarchy. A country is a combination of collective effort with room for individual movement. It is a legitimate discussion to argue where to place the bar, but it is disingenuous to apply negative labels to bias the discussion in your favor. To balance out negative effect of the "cultural Marxist" label, I could call the right wing economic neo-fascists, and I would be equally accurate. Then we are acting like two monkeys throwing sticks at each other over the local water hole.
A good article and a good policy proposal
It didn't work for Ed Miliband!
1
All excellent ideas. All will be derided by the disgusting GOP.
2
Bernie comes off like an old horse that has been to one too many rodeos and Warren has that ditzy look about her like the favorite aunt rocking away on the front porch offering one platitude after another to whomever will listen.
Perhaps a better choice might be one of the DNC's Star Chamber grand inquisitors--Harris or Booker to take on Trump in 2020.
1
Alice's restaurant,
It is hard to take your frivilous comments seriously. Both Sanders and Warren are passionate intelligent people, I don't think their looks should really be a major factor in their electability.
First, try paying people not to breed until educated and employed instead of rewarding irresponsibility that lingers for decades and is a failed value passed to the offspring.
7
I like this Neo-Capitalist Liz, too bad it is all a charade.
4
How about post-distribution where the Bloombergs, Sulzbergers and Bezos' fortunes are also put into the communal pot?
Leave them a fair amount to keep up a decent lifestyle for the duration of their lives. Nothing for the kids.
Eliminate the privilege of birth even as you eliminate the advantage gained by the vision and application of the founders of the next Google, Amazon or Facebook.
Each according to needs vs ability.
Elizabeth Warren on the 'per-distribution' plank ought win more states than George McGovern did in 1972.
3
You live in a capitalist society; not some fantasy Marxist economy. Why would anyone work hard, build businesses or take the time to study and invest? To support others who choose not to or are less talented? These ideas will get you 4 more years of Trump. The economically moderates like me are uninterested in a socialist based party. Remember what Einstein said about the definition of insanity.
7
As Maggie Thatcher said, it all works well until you run out of other people's money
17
@My Aim Is True -- Examples of those who have other people's money: Corporations/Executives that don't pay workers their fair share of production/profit; Big Pharma/Industries that create ostensible monopolies or cartels that charge their customers more than a reasonable market would allow; Insurance that collects customers' money, then charges again when the customer makes a claim or simply denies the claim.
Talk about wholly disconnected from reality.
It's that kind of wholesale market re-engineering that gives the Trumps of the world a piece of propaganda to work with.
"Pre-distribution" to be done properly, must focus on inequality of education. On public schools funded by local property taxes rather than all of the taxpayers in the state.
On competent teachers and not unions who care nothing about the kids. On focus on STEM rather than made up subjects which do not improve their skills of the real world.
Leave the corporate regulation out of it (other than prohibiting political activity). It's sheer lunacy to handicap companies in such manner.
Only someone preaching from the ivory towers of Berkeley could come up with such a plan.
11
The pendulum has swung too far towards deregulation, so far indeed that the direction for the past couple of decades has strayed away from deregulation towards opportunism, cronyism, exploitation and, under the current federal administration, reckless incompetence and corruption.
The ideas presented here strike me as a sensible way to correct for recent policy missteps, not by going back to past regulations that were often inefficient and over-oriented towards special interests, but by means of new rules and policies that are more practical, judicious and socially justifiable.
5
I wonder if Warren believes there is any moral limit to the level of reappropriation from the wealthy to the poor that can be justified, and if private property has any meaning to her at all.
8
@Kyla
On my private road of 7 homes, 1 of us is having trouble with his business. So when it came time for road repairs, the other 6 of us covered his share as a gift. I wouldn't care if tax policy basically accomplishes the same end. I love private property and I'm not a socialist. But I don't think those of us who are in the top 10% (me included) should rig the game in our favor, pay only 15% on capital gains instead of 30% if those high dollars gains were income, and own all the politicians. That's not the America I believe in.
6
Uh; no. She will go down like the Hindenburg in the the middle of the country and fla; and that is where it matters.
I'm too old to care about this. I am not wealthy or rich. I am blue collar and we live with our means, pay our credit cards off in full each month. And manage to put some money into savings each month. We have done this of and on for the last 40+ years.
What I just read in the story and in the comments smacks of socialism. Call it what you want. I don't like it. Redistribution or pre-distribution. Leave me alone.
17
@old sarge You are wrong. What you read is about making markets fair and making sure everyone is treated fairly. Socialism is government ownership of the means of production. Without regulation, markets would run amuck and people would be taken advantage in many of their transactions. No one is trying to affect you with these policies. There is no thought of raising taxes or giving what you have to others. It is all about corporations not taking advantage of people like you, their employees or their customers. Read it again. You were too quick to draw a conclusion.
5
Been to Italy , France , or parts of Europe lately?
See all the able bodied young people on the streets during working hours without a job?
Their unemployment rate is around 10%
Is this what you people want?
Our unemployment rate 3.7%
I like that better...hmmm.
19
Last year, Paul Allen passed away at age 65 of Hodgkin's lymphoma. All his billions couldn't buy him an extra day. But, he gave enormous amounts of money to philanthropic causes. Money, that if more equally distributed, would have been spent at retail stores buying a bunch of useless junk. Look at how much money Bill and Melinda Gates and Warren Buffet are giving to charity. Do you think if that money was spread out that it would end up being spent on cancer and AIDS research or eradicating polio?
6
There are so many newspaper writers, editors, media people, TV talking heads, news anchors, university professors, teachers, talk show hosts, governors, congressmen, senators, civil-rights lawyers, supreme-court judges, political candidates, political consultants, reformers, social and community activists, even TV comics─ whose livelihoods are dependent upon the existence of discrimination. And not excluding Ms. Wallace’s political career. I wonder ─is Ms. Wallace, inadvertently trying to put herself out of business?
1
Rules. Rules. Rules. All well intended, but they pile up.
whatever the Dems want to propose in 2020, they need to keep it as simple as possible.
Until then, nothing like this has a chance of clearing the Senate, so let's get real.
Let's start her Robin Hood Policy at home: According to CNN, Warren’s net worth was estimated to be between $3.7 million and $10 million in 2015.
13
@Johnny dangerous Which only shows that she's willing to put her money where her mouth is.
1
@Johnny dangerous
Good for her! Unlike our President and his band of cabinet sleaze, Warren uses her privilege to try to make the playing field more fair. Good luck getting Mr. Trump University interested in that project.
4
@Johnny dangerous
So, she's clearly willing to raise her own taxes - in order to build a better America for her children and grandchildren.
Sounds like a patriot to me.
3
Socialism, and that is just what this is, requires lock step obedience. What's going to happen when people don't obey?
8
No redistribution doesn't work. Taking money from school teachers and passing it to Koch Brothers is a recipe for disaster.
3
Headline translation:
Elizabeth Warren wants to tax people who work hard and play by the rules to give that money to those who do not.
14
@EGD: It sounds to me like she wants people to work hard to have more say in their affairs, and to tax the heck out of people who cheat. I'll double check before I vote for her though.
1
@EGD
So, according to your "rich people deserve it" mindset, the 75% of Americans who haven't benefited from the economic growth post 2008 don't deserve it, and the hedge fund managers and investment bankers who caused the recession deserve more wealth because they're "playing by the rules?"
So teachers, police, soldiers, nurses, construction workers, farmers, bus drivers, and pretty much everyone else who does the necessary work that keeps the country running don't deserve to have comfortable lives? You're describing a plutocracy.
3
@EGD
Wrong.
Elizabeth Warren wants CEOs to realize that their companies would not be nearly as successful without the value-adding contributions of their workers.
Fortunately there’s an infinite supply of other people’s money.
12
Somehow this all reminds me of J.R.R. Tolkein's Golum. "My precious!"
It intoxicates and is never enough. There seems to be no end to the Hobbes-like desire for wealth, power.
3
Institutions which serve to equalize societies have been under severe attacks from liberals, communism and socialist for close to a century: the family and the church. Ms. Warren offers more of the same and that's not healthy. Her ideas are based in that government is better equipped to achieve a better outcome in the equalization business because government is not based in ...wait for it: Dogma.
Has anybody been paying attention to the current liberal movement? Pure unadulterated dogmatic orthodoxy. Just listen to any speech or argument from any junior congressional class. Stripped from platitudes and cliches and you will hear the blind faith in government.
They are thoroughly convinced that the "Federal Bureau of Fairness" will be able to capture all inequalities by creating laws and policies to disadvantage a particular group (the rich, the tall, the white, the black the brown, take your pick, a law is coming for you) in order for another group to gain an advantage.
The vanity to believe this nonsense is Seven Deadly Sins level of vanity. Pun very much intended.
7
Lots of pie in the sky ideas that even if she were to be elected, likely wouldn't get implemented. We have no shot of cleaning up the rampant corruption in Washington DC unless the pay to play environment from both corporate and labor interests is eliminated and anyone working in government in any capacity (including contractor) agrees to a lifetime ban on ever working in any lobbyist capacity. Elizabeth Warren and anybody else advocating that would instantly become a leper in DC, so pigs will be airborne before even the far left advocates that government associated lifetime employment (direct or related) dries up for current denizens. There is a very good reason that the Washington DC area shows up as having a net inflow of fresh faced new residents every year, and it isn't because they relocated there to see that their fellow citizen's interests are protected, and they are getting a better deal. Maybe the prime selection criteria for both parties next presidential candidate should be that Washington DC comes off the list as a preferred moving destination, surely with the current unemployment rate, meaningful work can be found elsewhere,
4
"Bolster," "enhance," why not fluff? That's what this article is: fluff.
Americans have been drawn into a state where not only do they not own a fair say in their economy, they don't own or express their own natural variety of ideas. Rather, they regurgitate the corporate ideologies fed to them like pablum from a very narrow and unlearned popular media culture paid astronomical wages to not think for themselves. Political ideas in America are more narrow spectrum than in any comparable Western democracy, and we are trained to look down on England, France, Germany or even Canada because they have broad politics compared to ours. The notion that progressive taxation is properly described in the negative as, "redistribution" when half the country can't afford an emergency, while some financiers make $100 million in a yearly bonus, is ludicrous. The fact that most Americans now buy that terminology is dismaying.
If you read US history in depth you must see that the range of ideology of the American citizen has never been narrower or less attuned to the little guy (and thus less healthy) and this is why it appears we are at odds with each other. You can be catcalled a radical (by your fellow liberals!) for wanting better schools or an end to endless worthless war. This is the opposite of America in say 1900.
A nation flourish via a marketplace of ideas, not just the free economic market. The American market of ideas is crashed and more deeply depressed than stocks in 1929.
5
The type of regulation Sen. Warren is talking about would create hundreds of thousands of jobs for the bureaucrats needed to enforce the new regulations. Since bureaucracy inherently increases the opportunity corruption, even more bureaucrats would be needed to police the enforcers in order to prevent corruption. The loss of economic efficiency and innovation, the loss of individual freedom and the huge waste of resources are unacceptable. Sen. Warren would in effect put a damper on the economy in a vain attempt to "stop inequality". There would still be inequality, with those individuals who have political connections and know how to play the bureaucracy amassing fortunes, while the rest of us would pay the price in the form of higher taxes and prices for goods and services. Sen. Warren's policies would only create a "super-swamp".
4
A very wild guess would be that the increase in inequality is not primarily tied to the dynamics laid out here. Rather, it mainly originates from the lack of education that some children receive in their household. A way to fix that problem is to invest heavily in elementary and middle school after-school programs that focus primarily on academics (read: "home"work) rather than sports or other activities. Those investments should be targeted in schools where the outcomes are the worst. By leveling the household education playing field, society would provide for a much more balanced equality of opportunity, at which point we don't need programs that are focused on equality of outcome.
3
And along with improving educational opportunities, the US and all other developed countries need to adopt a far more aggressive stance toward non-democratic countries that we have with TPP. Trade levels should be a function of democratic ideals and social safety measures, coupled with open access laws. When we trade so much with countries that don't share our social safety and democratic values, we sell them out.
4
Dean Baker has coined the term: "Loser Liberalism".
Dean points out how many of the policy changes since 1980 have had the very predictable effect of redistributing pre-tax income and wealth upwards.
- Decades of chronic trade deficits reducing demand.
- The erosion of the minimum wage. The *minimum* wage of 1969 would be well over $20 today, if adjusted for inflation and productivity growth. And in 1969, the *starting* wages for many low skilled jobs were well above minimum wage.
- Competition with ultra low wage workers in foreign nations, with the very predictable effect of lowering wages here, below subsistence level.
- Insufficient aggregate demand leading to unnecessary high unemployment, which lowers output, and drives down wages.
http://cepr.net/blogs/beat-the-press/
Dean also talks about patent monopolies, and other methods of upwards redistribution. I don't agree with all of Dean's recommended policies, but no one is better than Dean at making economics understandable, and debunking the torrent of economic misinformation flowing from mainstream news outlets, think tanks, and donor influenced economists. We have been doing more of the same wrong supply side remedies (Austerity) for too long.
It is long past time that we have truly had a two-sided discussion of economic policy, and the opportunity to do as FDR did, with great success:
"It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something."
5
"And corporations would have to get approval from 75 percent of their shareholders and 75 percent of their directors to make political campaign donations."
But of course unions, with no permission, will still be able to take members' dues without permission and send them to Democrats, including Elizabeth Warren.
15
How equal should outcomes be? 80-20 seems to hold in many domains: land ownership in Italy, healthcare costs, peas in pods, talent, power/clout, books written. The re/pre-distribution crowds would be more effective/honest in their aims if they mentioned inequality after transfer payments. A family on Medicaid ends up with what would cost $30,000 in the ACA marketplace, or $15/hr full-time. They should also think a lot about the 2nd and 3rd order effects. "First, do no harm" should be used in economics too, especially economics.
4
I don't know Warren's position directly so I can comment only on Vogel's description.
A tiny flaw in the entire concept is that the elements of "pre-distribution" mentioned here would do virtually nothing for citizens who are most in need of a safety net. Rather, it would complicate life for corporations and PERHAPS give workers a bigger share of the pie produced by those corporations. But it would do essentially nothing for those who aren't working for those corporations.
Personally I favor some of the ideas mentioned, and am scared of the effects of many of them. But in any case, proponents of such a program should be aware of what it doesn't even pretend to do.
3
joel bergman,
If the changes proposed by Warren have the desired effect, a fairer wage for workers, the resulting increase in tax revenue will benefit people in need.
Well said, as it seems to reflect faithfully what Ms Warren has in mind. The inequality has become so ingrained that it may be mighty difficult to put a dent on it, But, without the will, any hope for change is doomed. We all know that, once the will is cemented, it shall require courage, hard work and perseverance, given such a job will take longer than any guess, no matter how educated.
3
I agree with your thesis but how can we do that with globalization? Companies that can move will move to countries where they can make a higher profit margin. Only companies that can't move (e.g. retailers, hospitals) will stick around. I haven't heard anyone address this problem.
141
@Robin Schulberg then why are there plenty of companies in other western democracies with higher taxes and regulations. Europe, Canada and Australia are the best comparisons. They all still have companies and people make all kinds of money. Even in the manufacturing sector, there's more to fear from automation that companies fleeing.
69
@Robin Schulberg
Yes, this is the essential problem and most politicians have ignored it. The odious Donald Trump is one of the few who has done anything about it -- and he's met a united wall of opposition not just from the right, but from liberals who seem to think that first world workers can prosper when they're competing against low-wage third world workers in unregulated environments, who are actually favored by our trade deals.
It's absurd.
22
@Robin Schulberg: To maintain our lifestyle, we have to have something that prevent exactly what you're talking about. Otherwise we slip down to the global average.
That might be the appeal of Trump's wall: to those who support it, it is a symbol of a barrier that will keep us separate from that part of the world that will drag us down to its level.
12
I’ll vote for just about anybody other than Trump, even Senator Warren whom I respect and whose law review articles I studied years ago in law school
However, the idea of forcing corporations to become federally-chartered with 40% representation of workers on Boards is a recipe for slow/no growth – it would turn the U.S. economy into a European economy, like France’s and the pie to share would be much, much smaller. Moreover, suggestions like restricting arbitration clauses won’t make us collectively better off – it will just lead to more litigation, a deadweight loss to society.
To be sure, some of Mr. Vogel’s ideas here make general sense – like limits on non-compete clauses, the fiduciary rule, ensuring banks are properly capitalized. And, yes, some regulation is necessary for the market to work, yes, special interests (capital and labor) work to rig the system and yes, something (consistent with the 1st amendment) should be done about further regulating money in politics.
However, the devil is in the details – we need to be judicious in the new laws we pass - particularly regarding small and large businesses, so that these businesses can grow and not be strangled by regulation (yes, it happens). Moreover, there is the law of “unintended consequences” – 150 years ago, someone in Illinois thought that having more than one branch/bank was a dangerous concentration of power – today, no large financial institutions are based in Illinois.
8
@SR
Please enumerate the spate of provable, demonstrable remarkable outcomes when business become "unstrangled" .. and I will happily show you the mess that accrues. Deal?
1
@JH
Jimmy Carter deregulated the airlines in the 1970s – flying is cheaper now than ever. Telecommunications was deregulated in the 1980s and 1990s – now long-distance calls are practically free. Amazon – and other internet sellers – were not forced to comply with the thousands of sales tax codes throughout the U.S. – and their business were able to grow. JH – if regulation and government oversight is such a good idea in all circumstances, how could these results have happened? Simple fact – per capita income is created when productivity rises – spending time and money to comply with regulations doesn’t increase productivity – regulation should be used sparingly and only when the societal benefits outweigh the economic costs.
sr,
Millions of workers are not paid a fair wage. Our economy is very low growth due to insufficient demand. You can't buy more stuff if you don't have the money. Those millions of workers pay a lot in taxes, leaving less to spend on new stuff. Corporations were given a tax cut, they wasted it on higher dividends and stock buybacks--- economically, junk food. The rich were given a tax rate cut, where is the trickle down effect? Greed has taken over our economy and its everything is good if they are getting more money, the rest of us can eat cake.
US capital markets, much like politics, are complicated. Both need reform—whether it’s pre, re, de- distribution or some combination.
However, elections are won on simple messaging from believable candidates. It remains to be seen if Elizabeth Warren can get that done, particularly with voters who understand the magnitude of her recent follies with identity politics.
1
@Len
It is Trump who put her in an impossible position, damned if you do, damned if you don't. Given the recent decline in Warren's position, I would also suspect that Putin's cyber army has been on the job, along with Republicans. It's because she's too good, not because she is not a genuine advocate for real people and attacking the looting/exploiting/cheating tactics of Republicans in power.
1
@Len Her "recent follies with identity politics" were nothing more than Trump demonizing her just like he id Hillary Clinton. He will demonize any opponent. Warren did nothing wrong.
1
And the Trumps claimed to be Swedish. Disqualified!
What needs saying here is that the way the laws currently slant was because of a series of choices and that these have a history, not just the correct idea that there is no pristine market. This history was formerly slanted a little teeny bit more toward workers in the boom years of the 1940s-1980, and then there was Reagan.
8
@Daniel Mozes: "e a history, not just the correct idea that there is no pristine market. This history was formerly slanted a little teeny bit more toward workers in the boom years of the 1940s-1980, and then there was Reagan."
The middle class started losing wealth in 1973.
During Reagan imported cars gained a foothold, and for good reasons. The difference being that non globalism is a central plank in the Democratic Party's platform. Who'd have thought?
1
Elizabeth Warren's proposals make eminent sense, and a number of them have been proven to work in place like Germany, which continues to be an industrial and economic powerhouse with huge trade surpluses.
She is far from a socialist - on the contrary, she is a strong believer in capitalism, but with market rules that are actually enforced by government and create a level playing field, rather than the de-regulatory agenda that both parties have pursued to the detriment of employees.
It's very interesting to go through the comments in this thread - it's almost as if the Heritage Foundation and Cato institute have unleashed their goons to misrepresent and malign Ms.Warren's ideas. Clearly the right wing status quo feels terribly threatened by her ideas!
33
@Sambam
Haha, yes, it sounds like they are engaged in "coordinated inauthentic behavior" to "foment discord."
No matter, it's okay for corporations and think tanks to spend billions of dollars lying to us.
2
@Sambam:"which continues to be an industrial and economic powerhouse with huge trade surpluses. "
Trade surpluses? That has been deemed as minor by Krugman. You see, dollars flow off-shore by the purchase of imported goods but the dollars flow back as bond and real estate purchases.
Trade surpluses indeed.
These sound like excellent ideas. Just one question - how will our government implement them when many Republicans votes are bought and paid for by the very corporations such ideas will affect? And, by extension, by the judges and Justices appointed by those Republicans?
It's great to say that "government should revise labor regulations to strengthen employees’ bargaining power...should crack down on noncompete clauses...and should restrict mandatory arbitration clauses in employment contracts." I couldn't agree more. But the only way those things will be accomplished is by ramming them through if Democrats hold the Presidency and both the Senate and House. And even then, the corporate-friendly Supreme Court would likely overturn such regulation or legislation. After Citizens United, it's clear the the Court thinks corporations should have unrestricted access to our political system. Like the imbalance in the markets Mr. Vogel discusses, in "free" speech, some voices count more than others.
If Senator Warren (or any other candidate) is serious about these ideas - and they ought to be - it's critical to get to the root of the problem: dark money in politics, and campaign finance reform.
378
@jrinsc
"...how will our government implement them when many Republicans votes are bought and paid for by the very corporations such ideas will affect?"
It's not just the Republicans, really. Have look at the donors for Democrats as well. Then look at their votes.
41
@jrinsc 'We should not let the perfect be the enemy of the good.' B. Obama (referencing Voltaire, Confucius and, no doubt, others). Elizabeth Warren is plenty smart to get some of these things done, or at least steer us in the direction of getting them done.
Once the American people understand the consequences, they will have her back.
34
@jrinsc
Do you really suppose that Democrats in Congress are immune to corporate influence?
The mandatory arbitration ruling was based on sound reasoning. That said, the arbitration should be at the employee's place or work, not the corporate headquarters.
12
It is about time that all governmental, charity and large corporate spending be public and online. The citizens of this country should be informed of our economic reality. Inequality has gotten out of hand because the deck is now stacked in favor of the wealthy and putting too large a burden on workers. Soon, many of the bright entrepreneurs that made a fortune will turn over their largesse to their entitled progeny and then the country will really be in trouble.
3
"It would be perfectly reasonable for the government to require corporate boards to include labor representatives. This would encourage corporations to maximize profits by investing in their workers rather than by cutting labor costs." The author, a political scientist, thinks he knows better than the companies themselves how to "maximize profits" (but notice how you maximize profits, in his view, by adopting his preferred policies). This is absurd and the kind of thing that becomes popular in places like Venezuela and eventually leads to economic collapse. We hear a lot about stupidity on the part of Trump and his supporters (and a lot of it is true), and then we get this type of discredited nonsense from the left.
11
A classic ad hominem attack with an arbitrary reference to Venezuela, without ANY specific critique of what is "discredited" or "nonsensical" about these ideas. You seem to take as gospel that corporations exist to maximize short term profits. This has led to economic boom-and-bust cycles, extreme inequality, and depressed wages. Not every alternative that might make markets and corporations work better is "socialist" - perhaps you should inform yourself and refrain from uninformed knee-jerk responses.
1
People do not have enough money to buy stuff. We have just have 2 studies that showed if the typical American family had a real emergency & had to come up with some money, they couldn't do it. One said about half the people couldn't come up with $400 & the other that 2/3rds couldn't find $1,000.
Now businesses are not going to produce stuff people can't buy. So they have to keep prices low, & they can't pay workers well & still keep the big profits they have become used to. If wages were higher, people would have the money to buy stuff, but that's a chicken & egg problem.
BUT we have a way to break out of this circle. Its called the federal government. It can create as much money as it needs out of thin air. It can then get the money to the people who need it & will spend it by simply doing stuff that needs to be done, e.g. fixing roads and bridges, helping with education, research of all kinds, a new power grid, efficient transportation, etc., etc., etc. Thus we can break the circle & improve our lives at the same time.
What about inflation? Prices are proportional to the amount of money in the economy (times its velocity), but INVERSELY proportional to the dollar value of the stuff we can produce. So if the money is spent doing good things, it will produce enough stuff to soak up the money.
If it is spent the wrong way, it will not help. Tax cuts for the Rich, for example, do not get much money into commerce. They just encourage financial speculation.
1
Socialism will be the downfall of this country. It de-insentifies hard work and doing more. Warren and the rest like her are real threats to America. God help us find some sanity before it’s too late. Such sanity will surelynot come from those in the other party that have let Trump loose on us. We need a meaningful 3rd party to rein in the other 2 parties.
12
@J F Dulles
Warren is not a socialist, she's a defender of the style of capitalism that used to exist, before Ronbo went to Washington and voodoo economics became all the rage in the Republican party.
1
Many of us would be all in for Warren if her economic message and unparalleled experience in that field were all there was to consider. She is falsely labeled as an economic leftist when her beliefs are no more left wing than Romney's father's beliefs were. But she has been aggressively playing footsie with identity politics since she decided she needed to run "on the left" rather than carve out the niche, as protector of the middle class, that rightfully belongs to her based on her past government service. And today we read that she agrees with the insane pullout from Syria, which will leave the Kurds, who fought on our side, to be slaughtered? Regretfully, I will have to look elsewhere.
2
There is a glimmer of ideas, but most are painfully misguided and reflect the view of people who have never worked in the private sector. For those not paying attention, please look at the slow unwinding of the EU "utopia" as driven by the arrogant bureaucrats of Brussels.
3
If we're actually going to take a run at re-writing the corporate charter rules; I have some suggestions.
1) Make corporations subject to a "death penalty" for egregious crimes; like, oh, say, bribery of a government official. When ordered by the courts, such corporations would be seized by the government; all parts sold off; all creditors (including retirement funds) paid from proceeds, remainder going into US Treasury.
And - so corporations are "persons"? Ok - then-
2) All corporations shall be subject to "the draft" in times of national emergency. They shall then work at government direction; and at cost (not cost+) for the duration. (Just watch the wars go away when there's no profit in it.)
Seriously. Only fair.
8
Government institutions are as corrupt, wasteful and selfish as Corporations.
All these Government-funded entities where 20% of the workers do 80% of the work and taxpayer money is wasted by the millions...
Phasing-in rules and regulations to Corporations as you suggest here is impossible. It'll never happen. Even if you try they'll find ways around the rules.
Get rid of our government waste and there'll be plenty of money for the social safety nets...although another big fight will loom there for who gets what: healthcare, housing, childcare...?
7
The "root cause" of inequality in America is the central bank printing trillions of dollars from nothing in order to prop up a vast pyramid of debt and inefficiency. There is a very simple solution to excessive financial inequality: Let over-levered financial institutions, private equity pyramids and bloated shadow banks FAIL. Bankers and bureaucrats, the nexus of which is the Fed, are fat and happy knowing that the Fed has their back in the form of an inviolable inflation "floor" of 2% per year. They welcome this giant annual skim like a toddler on Christmas morning, and the rest of us are poorer for it.
2
Is there any responsibility by those who cannot actually afford to raise children to have no children or fewer children in this utopian scheme? Or is society simply at the mercy of whatever reproductive outcomes emerge from those individuals?
7
@CHM
Be wary of using reproduction as the economic boogeyman. Slowing or halting reproduction among the poor is not the economic panacea you may think.
https://www.visualcapitalist.com/fertility-rates-dropping-economy/
https://www.cbsnews.com/news/dropping-birth-rates-threaten-global-economic-growth/
https://www.cato.org/cato-journal/springsummer-2018/demographics-their-implications-economy-policy
"root causes of inequality"
The "root causes of inequality" are differences in genetic makeup of people, resulting in some having much greater intelligence, much greater physical ability, much better physical appearance. Inequality is built into the natural environment we live in and it cannot be controlled by our wannabe Marxists. Venezuela is a prime example of what happens when Marxists have political power.
12
I heard Elizabeth Warren on Rachel Maddow last night. I like her. I think she is a fierce warrior and she is on the right side of things. I also think she is not electable.
Why? Because she is divisive. Way too black and white about issues. Also, because in listening to her, she sounded like she could give everyone an excuse about their own victimization, and that's never good. So I could not vote for her.
But I appreciate her. Any social movement requires people to push, make a fuss, kick up some dirt and she is willing to do that. Good for her.
5
@Gwe: She's playing the only had she knows.
Citizen’s United and all the associated political funds that control our elections and laws since 2010 must be sidelined. The wealthy have control of our government way beyond the “usefulness” measure. The voter needs more power. The political parties are not supporting their responsibility to protect our democracy by keeping outliers/populists such as Trump out of the mix. His inexperience, incompetence, boorish personality and lack of respect for our political protocols of the past 100 years is destructive to our future national health and welfare.
3
This is why she will not get elected. Her passion night be real but it is so out of touch with what the public is thinking about. If this is her main platform when most people are sick of Trump lying, sick of tax breaks for corporations while they cut costs without merit, sick of white collar crime without real punishment, and sick of the drug problem that is plaguing our country, then go ahead and dream that she will win. Set the right strategy and you have a real chance , set this type of abstract intellectual strategy and get about 37% of the vote.
1
I don't think you should be mischaracterizing her ideas as "redistribution". The only redistribution that has been going on is the ultra-wealthy redistributing the nation's wealth (via tax cuts) into its own pockets, leaving us average folks to pay for everything. They are pillaging the nation's coffers and Trump is the right there at the head of the pack.
1
Ms. Warren's record of irresponsibly maligning America's corporate partners in favor of those who exploit America's land of opportunity is disturbing and contrary to economic productivity and fostering collaborative change, sans "creative" destruction. Take GE as one example. The international technology and energy innovation powerhouse was vilified by Ms. Warren. It's Jamie Dimon single digit stock price finally realized. GE bonds trade well under par. It's pension a time bomb. JP Morgan and Morgan Stanley are bigger than ever. Both institutions strategically building out their consumer, wealth management and personal investing platforms, with leverage at historic highs. Banks so big, they too can't fail. But visit a newly gentrified Boston based park, filled with the aimless, homeless and lost. No new Massachusetts economy was created by Warren to replace hemorrhaging GE's promise. Just dope. Ms. Warren could have engaged the institutional knowledge inside GE, to develop wind farms off the coast of Massachusetts. Storing and reselling green energy to the entire NE corridor, repurposing already deployed hard assets and people, retaining value and profit inside MA. But no, Ms. Warren's assault didn't help lead GE to reengineer itself for the benefit of Massachusetts and America's sustainable future. Instead, an EU based company will have that benefit. Ironically, when it came time to select a new corporate headquarters, GE didn't choose Norway. GE chose Massachusetts.
4
Reality check, folks: Sen. Warren will not be the next president of the US. She is much too far left and socialist to get the nomination. And that's no matter how many beers she drinks on television.
Here is the interesting question: her base shares much in common with Sen. Sanders', and she will thus split that vote, but to whose benefit? Is she helping Sen. Harris? someone else?
The professor who has written the article ignores much of how the world works, but he well represents the Republic of Berkeley, where he might get elected to something.
8
These are all good ideas, but running another elite white woman with complex policy ideas against Trump is not going to get Trump supporters who would benefit from those policies to vote for Trump. The best bet democrats have is to find a male with a military background with a good amount of charisma and a clean personal life. All the Trumpsters see when they look at someone like Elizabeth Warren is their 7th grade English teacher that suspended them for writing dirty words in their books. Clearly, what we learned from Trump is that personality trumps ideas among his supporters.
1
As a socially liberal but fiscally conservative democrat who has been in nearly all different tax brackets, I can say with some authority that this opinion piece is unadulterated nonsense. Further, it showcases why Elizabeth Warren should not be the standard-bearer for the Democratic party.
Wealth is created by producing things, not by sitting in an Ivy League tower talking about it (having attended one of those colleges, I know).
We already have an aggressive redistribution of wealth built into our progressive tax system. It is manifest in the simple fact that somewhere around half of the people pay nothing in Federal Income Tax, excluding SS and Medicare payments. Further,, the Alternative Minimum Tax assures that most deductions completely disappear for higher income earners.
Finally, the assertion that stock grants are unearned windfall income is, simply, nuts. Having gone nearly bankrupt several times paying for the 'luxury' of holding nearly worthless stock to keep a public company afloat (meanwhile paying full taxes on same), I can assure the general reader that stock/option grants are an important way to reward employees for the often considerable risk of supporting a company, through both good and bad times. People like Warren and this author focus only on the 'good times', while paying no attention to those who have lost their wealth and income in trying, but failing, at doing same.
The system is already hugely punitive to stock holders.
Stop the nonsense.
13
@dmckj
They pay nothing in federal income tax because they don't make enough money. Sixty percent of Mitt Romney's 47% had incomes less than $20,000 per year.
That's why they pay no income tax--they're poor.
It would barely dent the rich if the wealth we create producing all sorts of things things were spread around a little more.
I've owned stock in companies I've worked at that diminished drastically in value, but I own far more stock in companies where I do nothing but collect dividends. I certainly don't feel like the system is out to get me. The stock market has done quite well for the vast majority of lucky people like me who can actually afford to buy stocks.
4
Amen. Some sanity.
1
@dmckj Finally, some sense
1
Let's start with legislating the Citizens United ruling out of existence.
Then term limits on Congress and the Supreme Court.
Baby steps.
Then, move up to some of these other ideas if they're still needed.
Some people might ask what the big deal is with income inequality. A big problem is that the more inequality, the more that only the wealthy are crafting legislation to benefit their own kind and those with very little have no voice.
3
@Jane And that is different from all of human history how?
I dislike unfairness and I want people to have easier, happier lives, but socialism turns me stomach. I run a lot, and I run fairly fast. Sometimes, unhealthy looking people tell me to slow down. I'm not sure why? Envy? To me, that's what socialism is. I have an almost Randian adoration of the individual, but I think Reagaonomics is evil. To get my support, warren will have to phrase her ideas in a way that doesn't sound like class rage and that sounds like a celebration of individuality. I think few Americans truly embrace the idea of community (except after disasters). You ca't appeal to an American's sense of community or solidarity. You must, I think, appeal to an American's sense of fairness. I think Americans believe strongly in fairness, but have little warmth for community. Can Warren make pre-distribution sound like Ayn Rand (all about individual opportunity)?
4
@richguy
I think liberals put too much emphasis on equality. I believe in equality, but the concept is almost metaphysical. All souls are created equal. Democrats should start to stress fairness. Children don't think much about equality, but children seem to have an almost innate sense of fairness. It seems like one of Platon's inborn ideas. More nature than nature. To a child, almost nothing is more scandalous than an unfair situation. To the kids I've met in my life, fairness is really important, and it seems almost like a guiding principle for living. When a child says,
"it's not fair," s/he is almost saying the whole foundation of living is in jeopardy. Nothing is more American than fairness and nothing is more central to Democracy. Equality is concept for a deity to contemplate. Fairness is the backbone of Western democracy.
The idea of requiring businesses to give employees 40% voting rights for board seats, and any other government-prescribed method for achieving "fairness", will turn dynamic corporations into plodding, government-like entities. The problem is a complete lack of fairness of opportunity. You can't regulate your way to a dynamic economy. You can, however, dramatically improve the imbalances created by "unfair starting points", whereby some people start with huge advantages over others in the race for wealth. That is the problem to be attacked.
2
She wants workers to control corporations, and that isn't socialism? This is a somewhat, uh, confused analysis.
6
Senator warren is well meaning, but suffers from the typical 'zealous convert' syndrome. She began her political career as a Republican. Upon becoming a Democrat she pulled hard populist - preachy.
Her voice and ideas should be welcomed by the Democratic party. However, she, as all zealous populists, true believers, regardless of political party, should be avoided as leaders because they place ideology above reality & practicality.
4
@Jim
"...the typical 'zealous convert' syndrome."
Or as this former Dem (and now longtime Indy) puts it - ex-smokers are the worst.
Look at all the places in the world that do not work under schemes such as these. Think about all the major developments over the last 100 years. There is a reason the vast majority started in America or if they did not start in America they were truly commercialized and made available to everyday people by American companies.It is called capitalism which includes economic incentive.Think Microsoft,Apple, Tesla Ford GM IBM and many others.American companies own the world.Elizabeth Warrens ideas sound good on the surface but deeper down they are a complete failure and the earth is littered with countries who have tried these methods.The NYT just published an article on how the Chinese are catching up in space. Now that we have recently commercialized space the Chinese will never catch up.Now that there is profit to be made the rest of the world will get to be spectators to the development of space.American companies will rule this segment.
5
The only way to stop inequality before it starts is to take all children from their parents at birth and raise them communally.
How many voters think that is a good idea?
3
Good luck explaining all this to a typical voter who would much rather hear and respond to lock-her-up and build-that-wall even while their lunch money is stolen in plain sight.
2
After the existential challenges of climate change and the possibly exisistential presidency we’re suffering, nothing may be more important to us than the ravages of dramatic income inequality. We suffer from a diabolical social Darwinism: wealth proves superiority, so give the wealthy more! (Clearly, political influence proves this!) From the farm fields and slaughterhouses to the high tech hubs, the weight of concentrated wealth is crushing us. Just think what energy and economic activity would be unleashed by fairness. Just think how many more Americans could have healthy, secure lives.
Jack Fenn
Ghent, NY
3
God help us comes to mind reading this article. Don’t they teach history any more. Or basic economics. Now that we’ve created a nation that offers higher standards of living for larger numbers of people than ever before realized these readicals want to “undo our blessings” and bring in tyranny.
After nearly 250 years maybe our time “under the sun” is due and the radicals will undo what our enemies could not.
4
Maybe it's time also to revisit Citizens United.
2
Logic says that the only way to eliminate inequality before it starts, is to remove all children from their parents at birth and raise them communally.
Is this the society American voters would prefer?
4
If these half-baked ideas actually become the Democratic position, Trump will be re-elected.
5
Let’s just take away any incentive to work hard and be successful. Sounds like Lizzie.
5
I wish France's Macron would study this approach. It could help him get out of the tight spot he finds himself at this (low) point of his presidency.
The pickle that Mr. Macron is in is a direct result of implementing the policies that Miss Warren is advocating.
1
@Steven Williams
Can you specify any relevant Macron's policies?
Democrats' biggest problem is messaging. Notwithstanding all their Hollywood and Madison Avenue supporters, Democrats can't seem to come up with a slogan, like The New Deal, that works.
Start here. DON'T use any word that has "distribution" in it, including "pre-distribution" which sounds like predestination and reminds me of the nonsense word "pre-boarding." Also, why would anybody want to call a new approach to social and economic planning a name, the "Accountable Capitalism Act," whose initials are the the same as the Affordable Care Act, a/k/a Obamacare? I loved Barack Obama and Obamacare helped millions. But conservatives have jumped all over it and sullied the name and its initials.
Keep this in mind: If it doesn't fit on a bumper sticker Americans won't read it.
2
Well, we know one thing for sure, if the GOP wins in 2020 it is highly doubtful any of those 'goodies' proposed by Warren are going to happen. Both parties will have to buy into these recommendations for it to happen, and so much of it really does make sense. If it keeps being put off, then people are going to stop voting, and starting going to the streets. Too much unfairness with income distribution and taxation has been going on for too long.
1
Excellent essay. But, as to its final, rhetorical question - the answer is to be found in the equally excellent "Winners Take All: The Elite Charade of Changing The World" by Anand Giridharadas. This approach makes perfect sense, except to those with something to lose, and the power to thwart it. Which of course they always have, and likely always will. Hate to be so cynical, but that's where I am.
I have worked for more than one financial regulator, and I strongly support Elizabeth Warren to become the next President. I have hoped for a long time that a Presidential candidate would address the issues described here. Enforcement of existing laws is just as important, probably more so, than creating new legislation, and each candidate will differ in how he or she enforces the law.
Unfortunately, few people care about these matters. As apparent from the story about the Sanders campaign, people are still more concerned about arguing about Sanders and his supporters than about these issues that significantly impact them. In addition, most people, including those that claim to be informed, have little understanding of how regulatory enforcement impacts them. As an example, how many people are aware that the CFPB has a division devoted to fair lending to address discrimination against women and minorities? Is having to pay a higher interest rate on a loan, due solely to discrimination, less important to you than a comment made by someone online who you will never meet?
3
Being a male I was suspect Hillary and Warren might begin with higher negatives. I no longer believe assertive women start a campaign against a head wind versus men. Secondly, a gaggle of candidates guarantees nothing. Republicans produced the "deepest field of candidates" and produced Trump.
Policy ideas, lively debate of the options, like Warren's ideas on unrigging the system, or health care, taxes, and environmental issues deserve rigorous examination. So, Democrats rather than anointing someone should open the process so that voices are heard and respected in a unrigged system of vetting and selecting a candidate.
3
All well and good, but this presupposes such systems would have any more chance of being enacted than progressive taxes. If you can’t get workers to vote even for their own unionization, that is their own interests, why would they find the wisdom to support pre. Big money can always sway them.
5
"It would require large corporations to obtain a federal charter of corporate citizenship. Employees would elect at least 40 percent of board members."
There's lots of great stuff in the proposals you mention here, from cracking down on non-compete clauses to stronger labor and financial regulation. But this is the kind of socialistic proposal that trashes the fundamentals of the market economic system, harming everybody.
I've long been an admirer of Warren's, but if she can't understand the economic system that, ultimately, is the source of our prosperity, I don't see how I'll be able to support her, as opposed to Bernie Sanders, who for all of his decency, does understand and respect it.
Very disappointed.
@Josh Hill
She understands it Josh--she is an economist and professor. She just understands it differently that you do.
Be careful as your mansplaining is showing.
And she’s run what? Built what? Administered what? Academics sit around an espouse ideas without practical experience. Hmm. Sounds like a lot of politicians.
3
As a stockholder I applaud all these suggestions, and appreciate the mention of Jacob Hacker.
As inequality grows, those with capital--including large cap companies--have less incentive to take risk with it. Why take risk when you've already got most of the money and can command "rents."
Thus, less money is invested in risk-taking R&D, which leads to less innovation, and ultimately less growth.
Take, for example, the Pharmaceutical industry. In the recent past, much of the risk and R&D that goes with developing new drugs has been shouldered by micro-cap biotechnology companies. When a drug looked promising--say after a successful Phase II trial--a large Pharma would partner with the company for further Phase III development, or would buy the company outright.
But now it seems like Big Pharma has its boot on the neck of the small caps, and finds it more profitable to meet the little guy in bankruptcy court, where it buys up all the drug assets at fire-sale prices. For an example, look to the collapse of Synergy Pharmaceuticals, and the Bausch/Valient bankruptcy buy-out of their drug assets. All Bausch/Valient had to do was refuse to make a deal and then wait a year or two until the cash-starved company fell.
This is why so many small companies are staying private, with deep-pocketed individual investors to capitalize them. Retail investors find it increasingly difficult to reap the rewards of growth.
Bring on Elizabeth Warren, we need her.
12
There is a lot to be said about economic transparency. Working for an alleged non-profit as a nurse more than 20 years ago, I accidently discovered I was paid 13 dollars for a visit that Medicare reimbursed 72 dollars.
Yes, there were expenses, but somebody was making money, somewhere.
8
All of Warren's proposals would be improvements on our present situation, but none of them are adequate to the crisis that confronts us. The distinction between redistribution and "pre-distribution" is wordplay that will fool nobody. Is raising the minimum wage predistribution or redistribution? It doesn't really matter because the 1% who dominate our political life don't want to pay for it and won't unless they are forced to.
The real difference between Warren and Sanders is that Warren thinks that the obstacle to dealing with inequality is the absence of a sufficiently clever policy proposal while Sanders understands that it is the political disempowerment of poor and working class people.
The policies that Warren proposes will go nowhere so long as the Democratic Party remains under the effective control of Wall Street. Sanders won 43% of the primary vote in 2016 on a tilted field because he wasn't afraid to openly call out that problem. Warren has been far more cautious, refusing to endorse Sanders in 2016 when it would have helped a lot, and now positioning herself as a defender of capitalism when more rank and file Democrats express a favorable view of socialism than of capitalism.
Warren is better than Biden, Beto or Harris, but she is bringing a Power Point presentation to a gun fight. I'll be voting for Bernie.
4
@Christopher In the interest of fair disclosure, I think people who advocate redistribution and the like should disclose if they will be on the receiving end or the payment side. Its very easy to vote other people's money when you are going to benefit or even if you will just be watching other people pay for what you advocate. One of the root problems with liberals is that they believe all men are created equal. They are not. And it isn't everyone else's job to lift them up. Ask not what your country can do for you. Ask, liberals, for a change, what you can do for your country.
6
More anti-Sanders smears from the Radical Centrist contingent at the NYT.
Warren and Sanders agree on almost all points around economic policy and moreover are both on-board with Modern Monetary Theory (MMT) which assumes that well directed deficit spending on social policy is simply money in the pockets of citizens who've contributed their production to the overall economy.
Would be great to see them both on the ticket.
5
That would be be peachy. Four more years do trump
There are a number of worthy proposals interspersed throughout this article, such as the restriction on binding arbitration awards.
Unfortunately, for me, those good ideas got enveloped by the details of a concept I find very unnerving. The totality of regulation which would be placed on businesses would discourage me, and probably millions of others, from even bothering to consider an entrepreneurial venture. From mandating the makeup of a corporations board to a requirement for a federal charter, all I see is oppressive government involvement and regulation.
The article seems to embrace a fundamental premise that corporations are inherently bad and need their activities curtailed. I disagree. The overwhelming majority of our citizens earn their living from employment by private business. Wealth is created by the growth of private business, the initiation of new businesses, and the jobs resulting therefrom. Business entities, entrepreneurship, and and productive employment have produced what is thus far the largest economy in the world. if China ever catches up, it will do so because it has well over a billion people buying goods and services.
What the author proposes is an idealistic exercise which would wreak havoc in the real marketplace. I acknowledge his intellectual ability and achievement as a professor at Berkeley. However, I believe that he would have a far different practical outlook if he engaged in an entrepreneurial business enterprise.
14
@Gino G I think you missed the main point the author is trying to make about corporate citizenship. In order for a corporation to exist and to benefit from things like limited liability you need government involvement. Limited liability doesn't occur naturally. It is government "involvement and regulation" that creates it in the first place.
The idea behind corporate citizenship is that if the gov't is going to involve itself in the market by allowing market participants to shield themselves from risk behind artificially created entities (i.e. corporations) then it should do so for the benefit of everybody (the workers and consumers) not just a select few.
The current system privatizes profits and socializes losses (corporate profits go to corporate shareholders, but corporate liabilities are "limited" and shareholder private assets are shielded from those losses so the public has to pick up the tab for the liability). Why not provide the benefit of corporations to a broader sector of society?
Put it another way - if you don't like gov't "involvement and regulation" then you can't have a corporation shielding your house and cars from your business liabilities. If you want your private assets to be shielded by the gov't then you have to also accept that these benefits won't just accrue to you alone.
11
This is the most absurd comment I have read. This the most litigious country that exists in the world. Corporations have been sued and paid several trillion of dollars of damages to individuals over just the last thirty years. Additionally, everything that provides you the type of life you have today, the food you eat, the clothes you wear, the home you live in, even the newspaper that you are reading was made by a corporation. None of this was made by the government. If you want to see what life is like if Ms. Warren’s ideas are fully implemented go down to Venezuela.
2
@Steven Williams I'm assuming your comment was directed at mine. To respond, I think you've conflated a "business" with a "corporation." A corporation is a specific legal entity, the hallmark of which is limited liability. That's why people form corporations in the first place. This benefit is one that is provided by the government. Thus, all the author is saying is that if you want this benefit from government then you also have to accept certain conditions which will spread the benefit out more evenly to everyone involved in the corporation (not just the owners).
Not everyone is an employee of a large corporation and there often is large turnover. People now are gig workers, live on Social Security, run their own tiny businesses or work at non-profits. This plan would create further inequality and motivate business to move elsewhere. A guaranteed annual income and free tuition would help everyone.
1
I have to say, the more I learn about Warren and the details of her proposals, the more I like her. I was leaning towards Sanders this go around but Warren is making this a contest for me.
14
For some of this proposal to work, the 3 key processes that must function better within corporations than they do currently in our public elections are a) The voting process to put 40% of the labor force onto the board, b) The voting process to get 75% approval of shareholders for political contributions, and c) All the voting activity by directors and employees in managing the corporation.
Will corporations pattern their systems after our publican election systems? Must there be all the fuss over registration, voting windows, proof of citizenship, voter ID, voter purges, etc.?
Will they instead use their existing systems as used for choosing directors and modifying charter amendments?
Or will they perform voter suppression in whatever form management can? How about also modeling after our Electoral College, where shareholders and employees in lower populated areas get extra weight to their votes? And be sure to have at least 50 different styled ballots for each state where employees reside.
Hm, will we learn to model our public voting systems after any of the existing corporate systems where it appears every vote is counted correctly, privately, and can be verified if required, and "shareholder suppression" is against the law?
What an irony, to impose accurate, open and fair voting systems on corporations while our public systems stumble and stagger to produce inaccurate tabulations in what still seems like rigged systems.
3
"It is not about rigging the system to benefit the poor and the middle class, but about unrigging it from benefiting the wealthy and the powerful. " I like it. It is a great shame, as I see it, that she and Trump never got together. Sad that there is so little there there on both sides. I see Trump's flaws in her. Warren has almost no clout as a senator. One can't really imagine her getting any place with this and it's not because it's such a bad idea. The fact is that the Ivory Tower mentality shares a lot in common with the Trump Tower state of mind. Lots of hot air, little talent for moving people, none for real negotiation. Great speeches, great positions, but almost no ability to reach compromise and get things done. We need Warren, but she wants the wrong job. If she would spend more time in the Senate and less of it on dreams of Iowa, she might have some success.
1
The wisdom of Warren’a ideas are a blueprint for the direction the country should aspire to, but they run the risk of being buried by the raging battle to prevent these concepts from ever becoming reality—fought by those who already have a tight grip on the reins of power. Required would be a return to a democratic society, which is in the hands of the voters—and far more potential voters would benefit from supporting, fighting for, and voting for these solutions than would be hurt. The 1% don’t have many votes. America really could be great again.
9
Democracy doesn’t mean mob rule: the 90% outnumber the 10%, so it’s okay to take their wealth and redistribute it. It’s hypocritical for any of the 47% to vote for a platform that includes confiscating the wealth of the 1% in order to pay for the benefits enjoyed by the 47%.
3
If it even begins to look like she would win the stock market would crash, 401k retirement savings would vanish.
5
@jaco
Thank you for the mindless fearmongering and scaremongering; you must feel quite accomplished.
But if you're looking for stock market crashes, you might want to lift your lazy conservative head and look at the Trump stock market crash-in-process....or if that's too much of a strain, perhaps you can look up the Bush-Cheney-GOP 2008 Great Depression stock market collapse.
Democratic President are historically much more beneficial for the economy and for a stable Wall Street.
Good luck with reality.
71
If it crashes in "response" to Warren it'd be thanks to a sludge-fund cartel who'd happily salt the earth of retirement accounts as they did of workers' rights in the past, and a pirate-equity cartel whose sole apparent goal is to buy control of corporations to kick out union workers and make the companies (somehow) even MORE evil. (Thanks, Icahn and Lampert!)
Worker and customer (NOT as Warren and the CFPB unfortunately call normal people, "consumer") protections are her bread-and-butter—and to your benefit whether you're grateful for them and realize that or not.
3
@Socrates
The Trump (aka King Minus) agenda is simply one of wealth transfer, reverse Robin Hood style. Once he fails at that (as in everything else), he will no longer be tolerated by his masters in the banking boardrooms and he will disappear.
So this crash may have a beautiful silver lining after all.
2
While Elizabeth Warren is on her crusade, why not burn the United States Constitution? The subtitle of the article reveals its bankruptcy: Warren and the author are intent on "redistribution" of assets, meaning making sure that the proletariat receives equal shares. Requiring a five year holding period for company stock issued in non qualified compensation plans? Requiring a shareholder super majority vote to make political contributions? Thankfully the Fifth and Fourteenth Amendments, as well as the First Amendments, stand as immutable bulwarks to these ideas. The surest way to insure that more can participate in our technological economy is to insure that educational opportunities are more open. We should be insuring that public educators are held to their promises, even if it means that charter schools are used as a carrot;and providing university opportunities to more kids.
9
@Christopher Rillo
Your solution is for everyone to go into more debt by buying more higher education then try to pay it off with jobs that don't pay squat while the CEOs and already rich folks take all the economic gains? No, no, no. The surest way to get more people participating in our economy is to be sure we all have enough money to actually participate.
23
Estimates from December suggest that in 2018 suggest that in an environment with real wage growth at the highest level at a nine year high, with the lowest unemployment among all groups for decades....
Aprrox 76.4 million or 44.4% of Americans won’t pay any federal income tax in 2018, up from 72.6 million people or 43.2% in 2016.
Maybe we should be aiming for two-thirds of Americans paying no Federal Income tax? Go Liz Go!
11
@SteveRR
Yeah, aim at people like Jared Kushner, who not only doesn't pay tax, he gets a refund. THAT's something to get behind.
1
I wonder if this election in 2018 was the first real Post Reagan election in the US. Maybe the shenanigans of Trump was the catalyst we needed to shake America out of it' Reagan slumber.
9
Thanks for mentioning forced binding arbitration clauses. So many people have no idea that they are signing away important legal rights, for eternity, on "behalf of themselves and all their heirs". These agreements have come back to bite people in retirement. At that point they have absolutely no legal right to defend themselves, even from blatantly illegal collections. A little organizing would help a lot (i.e. a webDatabase, that list which companies are requiring what level of signaway) would help a lot, but there should also be regulatory discouragement of this practice.
13
You claim that "pre-distribution is less costly than redistribution because it mostly entails regulatory reforms rather than big spending items." As an example of pre-distribution regulation, you assert that "the government should revise labor regulations to strengthen employees’ bargaining power, which would give them a fairer share of corporate returns." How is that substantively different than taking the money out of a corporation's pocket and giving it to its employees? Your distinction between "pre-distribution" regulations and the direct "redistribution" of profits does not hold up.
12
The subtitle indicates that "Redistribution is important, but it comes too late." My concern is that as a political agenda it is pre-distribution that comes too late.
I am not sure how one could write a column on this topic without once mentioning the most significant pending threats to the paid workforce - automation and AI. If the economy will require fewer "employees" in the foreseeable future - which may well be the case - pre-distribution will have no affect on the potentially millions who become unemployed by virtue of automation of their jobs. One might argue that pre-distribution policies could restrain the introduction of robots to do the jobs now performed by humans - but that seems to be an unworkable solution in a global economy where international competitors may not be playing under the same restraints. Unless pre-distribution encompasses the idea of entitlement to "ownership" of the productive capacity of society by virtue of one's very citizenship, I'm not sure it can provide more than a short term solution. And there are those who will argue that at the point where we are all "owners" the distinction between redistribution and pre-distribution would be a distinction without a difference. It may be time to start distinguishing value adding work from paid jobs and to take a hard look at the author's unstated assumption that there will forever be plenty of the latter to go around.
2
The writer & the responses live in a fantasy world where they believe Big Government can solve all problems.
They are badly mistaken.
Central control of economies has always failed.
Why can't NYC efficiently run a subway??
Why is California's High speed train a disaster?
Why are almost all State public worker pensions & health care grossly underfunded?
Europe has more regulation than the US and has consistently experienced weak economic growth and lacked job opportunities of the past 50 years ??
Name the top 100 new companies and an extremely high percentage of these are US.
And guess what..these new companies create high paying & challenging jobs that Americans want.
Wake up and face reality.
Big Government is the wrong answer.
29
@Peter
Perhaps the problem is that all of those who are against "Big Government" ( and too many who are for it) don't hesitate to steer contracts to businesses on the basis of influence peddling. There still has to be reform in campaign financing , and elimination of revolving government/private business doors to clean up corruption. Or would you prefer privatizing every service now provided by the government-- without campaign finance reform?
5
@Peter--No one is talking about "central control." That is your first mistake. And there are about six more. You are an Ayn Rand nut case and will not listen to any new ideas. Millions of American live paycheck to paycheck and the wealth disparity in this country is rotten to the core. The distribution of wealth to the middle class has stagnated for decades. You missed the whole point of this excellent article. Raw capitalism is a nightmare. You need to take some real economics courses; don't forget to read some Karl Marx. Throw your Ayn Rand books away; she was a kook. People work for about 1/3 of their life and it is controlled by the authoritarian, profit only Board of Directors -- a small group of horrid selfish men with only money on their minds. They have rotten values and humanity suffers because of it.
6
@Peter
Bi Government is doing a good job with Medicare, the military, national parks, airport and port security, national highways, disease and epidemic control, food safety, and so on. While I agree that Big Government is not the right answer to every issue, it is probably the right answer to redressing income inequality and basic opportunity for all.
7
If she's going to restore the home mortgage deduction- she has my vote.
3
@Aaron
The home mortgage deduction is still in place, it was never eliminated.
However, the pre-distribution logic would eliminate it. Tax benefits from the deductibility of home mortgages accrue almost exclusively to the top 15% of income earners. The cost to the Treasury far exceeds the cost of housing subsidies for the poor. It would go a long way toward properly redistributing wealth if the rich lost the deductibility of mortgages and those funds were re-directed to the poor.
Be careful what you wish for. Try to avoid voting for people in the hopes of personal gain, particularly if you are not familiar with the tax code.
8
@ebmem Hello? I ave never been in the upper 15% of income; more like the median. Now below that, and I have used the home mortgage deduction for years. I think you don't know what you are talking about. The 2017 Tax break for the rich, with no appreciable job creation Act, not only eliminated the mortgage deduction, but was suppose to pay for itself in job growth and economic growth. How's that working so far? Looks from here like the markets are tanking; due partly to skyrocketing debt asa a result of the tax giveaway, but no one trusts the 8-yr old in the White House.
1
@ebmem
Trump and Co. had it capped at $10K.. it used to be up to $120K
1
Great article. Inequality needs to be stopped. When 8 men own 50% of the world’s assets it is clear that the rules governing corporations need to change.
I’ve always liked Warren as a protector of the people not as a president.
3
@Denver7756
Was much better in the Stone Age when there wasn’t much of anything to “monopolize”. GW Washington reportedly was the new nation’s wealthiest individual. But it seemed to work out pretty well subsequently.
1
Senator Warren's proposed policy shift if enacted would make life for the vast majority of US citizens and residents prosperous and secure. To accomplish enactment, mpre of the likely beneficiaries would have to chuck their cynicism and passivity and elect representatives who will vote for these changes. Election campaign coverage would unmask those wrapping themselves in the flag and shouting "freedom" and "liberty" (i.e. most of today's Republicans) as nothing but willing tools of corporate power.
8
In many regards this pre-distribution thing sounds much like what we have in place in Germany. Just for the record: It works. The economy is strong. Inequality is moderate compared to the US. The successful still get rich, but that's what successful people deserve.
17
@Andre
What percent of Nasdaq 100 Tech companies are German ??
Why has German economic growth been much slower than US economic growth over the past 50 years??
4
@Peter
In terms of GDP per capita Germany is almost on par with the US
5
@Andre. What a sad definition of success.
If we really want a radical restructuring of the economy, why can't we have a candidate who supports both "pre-distribution" and redistribution? The only reason Dr. Vogel gives is that a hypothetical swing voter will view Bernie-style redistribution as "government largess", but this same voter will somehow favor Warren's regulations in favor of empowering workers and restricting corporate power.
Where is the evidence for this claim? Does our hypothetical swing voter exist in the real world? If so, who are they? And what does Dr. Vogel mean when he says redistribution "comes too late"? I support all of Warren's policies listed here, but this article is far too vague in making its point.
61
@Patrick
I'm also curious about who the swing voters are. In my experience, the "undecided" are undecided about whether they want to vote at all. Everyone I know who is set on voting is pretty clear on who they want to win elections.
6
@Patrick swing voter = Me.. i am not a fan of more government programs or free college. I am a fan of govt. helping to lower the costs associated with life, housing, college, health care, food. I think that if a college takes federal money, they need at add more classes every day and they need to utilize their overhead to the maximum to make college more affordable.
i think that govt. should regulate big pharma, they get lots and lots of benefits by being an American Company or selling in our markets and 7%-10% increases on Jan 1st is absurd. No other industry can increase prices like that outside of insurance and energy and they are regulated and need to prove the need.
I think that housing needs a new idea on zoning to make it cheaper.
I think that FEDERAL govt. programs waste and are inefficient in many cases and that they are too large. I think the money should be spent and taxed at the state level where it is seen and felt more by the voter/citizen.
I am your swing voter who would be more apt to agree with Warren over Bernie
8
@Tarek
Tarek, What about those of us that are "moderates"?
Moderates are those not voting for Trump (recently, or always); and do not want the role of the Federal Government into 'fine tuning' the capitalistic system (anymore than already).
Who will distribute the pre-distribute?
That once was called 'bribes', 'pay-to-play', etc.; was it not?
3
To paraphrase Thoreau, for every thousand people striking at the top of the weed, there is one striking at the root. Keeping the super wealthy from writing self-interested rules for themselves, is precisely what we need in the US--good luck Elizabeth Warren!
320
Maybe we can start by regulating professors' compensation that exceed $190k annually. After all, we know better then the market, right?
12
@Jeff C
Elizabeth and her husband were each earning $385,000 to teach 90 hours per year of classes. That's in addition to her consulting income.
While Obama was Senator, his wife was paid $350,000 by a charity hospital for a part time job as director of outreach. Her pay doubled from the $175,000 she was paid when he was just a state legislator. They did not find it necessary to replace her when she moved to DC.
While you are imposing wage controls on professors working for charity universities, how about also including wage controls on all charities? Do we really need sinecures?
7
@Jeff C
But then those people will go into the private sector. Anyone who can makes 200k/yr as a professor can make two to three times that in the private sector (unless they're teaching Renaissance history). Is 190k/yr a high income in Chicago? Here in Manhattan, it's not enough to send one's kid(s) to the schools where these people teach.
4
@richguy
Where is the hurt?
If people don't want to teach 90 class hours at Harvard Law School for $175,000 per year, someone else will show up offering to take the job for $175,000 and will teach 180 hours per year. That's four times the productivity of Elizabeth Warren.
Elizabeth Warren can get a law license and hang out her shingle defending bankruptcies. Or she can get a job defending corporate interests against consumers, if that pays more. Or take up creating Native American tourist items.
Great editorial, but please stop using these antiquated, loaded terms when talking about inequality here in the U.S.
It is not redistribution.
It is a rearrangement of our corporate dominated, plutocratic,
almost feudal economy, successfully slanted
or so funneled so that "the rich get richer" and corporations
pay little or no taxes.
As Krugman noted, Wall street is for the upper 20%.
Most of us don't have the assets to invest in stocks.
The key word is fairness, not redistribution.
It does not require a phd in economics to read the stats
and understand where we are and how we got there.
But "redistribution" makes the hair stand up my neck.
It tastes of Communist propaganda, and not just for me,
for plenty of us out there.
Just basic fairness for the middle-class,
appropriate, proportional taxation without the pork
and the subsidies, and a healthy workplace
with strong organized labor, and the rest will fall into place.
Warren's proposals are a great beginning.
11
Warren’s plan, at best, would give workers an elected minority role on corporate Boards. Corporations have been crushing unionization elections, that would give workers a much more meaningful voice, through high-power legal and illegal intimidation. Her plan is wonky and top-down, and would end up a fig-leaf for corporate power. Over four decades America’s wealth has been concentrated in banks and corporations, who’ve used lobbyists, PACs, and personal influence to dominate legislation, elections to all levels of government, and judicial decisions. The gut feeling of Americans on both the left and right that the system is rigged has been validated by studies that show politicians systematically vote with the corporate class against the majority of people on raising the minimum wage, expanding Medicare, raising taxes on the wealthy, opposing corporate bail-outs and tax breaks, as well as on social issues such as reasonable gun control and gay marriage. We need a New Deal type massive transfer of wealth from the corporate class to the three-fourths of Americans who live paycheck to paycheck. We get it by voting and more critically by empowered participatory democracy—strikes, demonstrations, and civil disobedience.
If you don’t OWN a sufficient number of shares to be able to exert some control over a publicly traded corporation, you have no business dictating who is on the board.
5
"Let me be clear: We need all of the above to combat the rampant inequality of wealth and power in the United States today. "
The author makes this statement prior to exploring all of the neo-socialist ways in which to hamper the US economy, the better to permit us all to experience the wonders of Venezuela.
But, the above quote caused me to remember a statistic from another article in today's Times; that about 70% of Americans pay little or no federal income tax at all. The article was noting that these people are waiting for their tax refunds, which may be delayed due to the partial government shutdown.
So, I suppose one of the premises of the article is correct. There is economic inequality.
The middle class takes it up the gazoo while the lower 70%. and the wealthy, do alright.
What are the Dems going to do for the middle-class, and can they be trusted?
6
The idea that anyone, Democrat or Republican who takes PAC money is tainted, needs to be drummed into the heads of every voter; that's the only way we'll every achieve the objectives outlined in this piece. Both parties are bought, particularly as you go up the seniority ladder. Chuck Schumer is just as much a puppet as Mitch McConnell.
95
@stan continople Really? So the only difference is that Schumer has decency? I'll take that difference every time.
7
@stan continople
Yes. This is an essential point. The salaries of our congress members should be greatly increased with the caveat that campaign finance is reformed to the point that lobbyists and PACs have much less influence.
Interesting that one of the only members of government who is not on the dole of these special interest groups is so villified across 90% of MSM. Brainwashing on a massive scale me thinks.
7
@Michael
Are you kidding? Trump hotel in DC is doing great because of all the favor seekers stay in it. Ivanka Trump got a great deal from China because she is Donald's daughter. Trump charges all the use of his facilities, like his golf courses, when he stay in them to the government. No he is not beholden to any special interest. He is THE SPECIAL INTEREST and is directly siphoning our tax dollars to his bank accounts. Thank you for such a brilliant analysis.
9
Thank you for this.
One of the reasons that I enthusiastically support Elizabeth Warren is that she is not a "socialist", but is instead seeking to reform capitalism, to the degree that it can be reformed.
That approach is going to be infinitely easier to sell to swing voters in 2020 than anything tarred with the "socialist" label.
That approach is also more centered in a realistic appreciation of human relations.
To return to a favorite paraphrase of Madison, if men were angels, socialism would be naturally embraced by every man and woman as nothing but common sense.
But men are decidedly not angels - and are not likely to become more like angels any of our lifetimes. Hence, the need for a realistic reformist rather than an idealistic, Utopian approach.
Elizabeth Warren understand this - and IMHO her common sense reformist approach will be eminently more salable in January 2020 and beyond.
To successfully change the world, one has to first understand it (and the individuals who populate it) - warts and all.
17
@Matthew Carnicelli
Calling socialism capitalism doesn't make it so, except for Gruberized voters.
If you put directors elected by workers in 40% of the seats on the board of directors, they are going to follow the same profit maximizing strategies of the existing board members and are not going to allocate a bigger portion of the companies profits to workers.
Elizabeth Warren's common sense does not involve reducing the cost of higher education by reducing the pay of full professors who teach 90 hours of classes per year below $375,000.
Somehow, her redistribution scheme will not involve income testing for herself or her colleagues in the Congress.
2
The legal advantages of incorporation come with responsibilities to promote the common good, not just that of the share holders.
How about wage distribution regulations that require a corporation to pay it highest paid employees no more than 20 times the wages and benefits of it lowest paid workers? There is no common good that emerges from Chief Executive Officers earning 300 times more with golden parachutes at the time of severance.
10
For all her experience and expertise, it would benefit Elizabeth Warren if she moved beyond the Senate and the "middle class" to make a deep and sincere immersion in those who have not -- as Bobby Kennedy did -- to his enlightenment.
She should establish a strong advisory group interested in the survival and resurrection of Rural America and of the many enclaves of poverty and homelessness so ever-present in the nation.
Doug Giebel, Big Sandy, Montana
2
Ms. Warren, like all her fellow travelers on the left, has a rooted desire to make economic decisions through the political process. Proposals to turn a substantial share of corporate decision-making over to unions and workers is just thinly veiled, creeping expropriation of private wealth by government and its pals. it's an open sesame to corruption and growth of leftist political hegemony placed mostly beyond the control of, and largely out of sight of, law and public scrutiny (elections), disguised as an innocent concern for the welfare of workers. Union leaders, minority political activists, and Democrat Party fundraisers must be salivating at the prospect.
8
@Ronald B. Duke "just thinly veiled, creeping expropriation of private wealth by government and its pals". Yes, that is pretty much the definition of (p)redistribution. It serves to make people who are too rich less rich, and people who are too poor less poor: to reduce inequality. And it is a very important function of government. My point is, I don't know what your point is. Unless it is that inequality is good? For that, you will not find much support.
18
@noname; The point is that it places economic decision-making in the political sphere which, by its nature, pushes considerations of economic efficiency to the back of the bus. It is also breathtakingly inflexible; notice how hard it is to reform government entitlement programs once put in place? To run the entire economy like that, even with the best of intentions, guarantees ultimate collapse, both economic and political--Soviet Union, anyone?
4
@Ronald B. Duke : Very well written (no irony in that), but sounding a bit fearful. Maybe a look at Germany can ease your concerns a little. Big corporations have a 50:50 share of votes on their supervisory boards, equally devided between workers and share holders (Parität). I always hated that idea and denounced it as socialist, but it turned out to actually stabilize the economy and make it stronger. In terms of GDP per capita, Germany is almost on par with the US. Capitalism has many faces.
3
Mr. Vogel offers a cogent essay on the causes and cures for our inequality of wealth and income. Enacting the measures he describes would help, but let’s not forget that it will also require equal access to the voting booth.
Democracy works when everyone can exercise one vote per citizen. (Just to be clear, corporations are not citizens, nor is money speech.) The free exercise of the franchise is a fragile thing requiring constant vigilance and protection. The Democrats are introducing a new voting rights act to restore and expand the protections we need to achieve equal access to vote.
Our thinking on who can vote has expanded to include all adult citizens. Let’s now work to take our thoughts and make them the reality.
10
"Pre-distribution focuses on how the seemingly arcane rules of the marketplace — like labor and financial regulation — affect who profits most from economic activity in the first place."
And yet Warren is a Reagan Republican who voted to in fact redistribute the wealth of average workers to the very wealthy.
She only grew up and started voting for corporate Democrats like the Clintons in the mid-1990s when they espoused much the same redistribution of monies away from the poor and middle class.
That Warren is not as extremist as W or Trump isn't really material here.
I've never known her to reject the presumptions of Reaganonmics.
Additionally as a poor single mom in the 1970s, she benefited from welfare and inexpensive public college but effectively voted against such things for others with her support for Reagan.
2
@Yaj
Actually, Warren switched from being a Republican when researching bankrupties. She found that her Republican assumptions with regard to the causes of bankruptcies were all wrong, and that it was circumstances like unexpected medical issues, job loss due to globalization and other causes, divorce, and other unforseen circumstances that in fact caused the majority of bankruptcies. And that the problem was with the system more than with the individual.
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@Yaj
Thank you for bringing up that Elizabeth voted for Republicans in an earlier phase of her life.
Should she win the nomination, the narrative that Warren once voted for Republicans can help her win over swing voters ready to abandon the insanity of the contemporary GOP.
You win elections not by demonstrating how pure you have always been, but by persuading swing voters that you understand their concerns, and may have even shared them at an earlier time.
4
@rtj:
"Actually, Warren switched from being a Republican when researching bankrupties."
Not true. She switched in the mid-1990s, not the mid-1980s when she started that research.
"She found that her Republican assumptions with regard to the causes of bankruptcies were all wrong, and that it was circumstances like unexpected medical issues, job loss due to globalization and other causes, divorce, and other unforseen circumstances that in fact caused the majority of bankruptcies. "
Yet she continued to vote republican for another 10 years or so.
1
I am on board with all of this. Anyone paying attention understands the role inequality plays in degradation of our democratic institutions. Big corporations have more influence than ordinary citizens in pushing every agenda that matters. With politicians’ acquiescence, we have returned to some of the worst abuses of the gilded age. It’s time for this to end.
22
It is fine for bourgeois academics to proscribe what measures "should" be taken to lessen our society's savage inequality. But realistically, what motivation would the American rich have, to lessen their hegemonic political control? A history of class conflict in the ancient world noted that, in 1000 years, no oligarchy ever gave way to democracy without violence. Similary, the only times of major social reforms in our country were the 1930s and the 1960s, when the US elite truly feared lower class revolution. Capitalism is the dictatorship of the rich. . . . .
Surely Mr. Vogel understands that for Socialists, as opposed to liberals, the capitalist does not make his profit in the marketplace (which is merely an exchange of equal values) but at the point of production (when the workers are paid less by the capitalist than the value their labor produces). The exploitation of labor is the essence of capitalism. There can be no "Capitalism with a human face." The young workers of America are more and more realizing this. And when our social system does flip, it will be their work.
8
@Red Allover Exactly so. But in lieu of Gritty et al seizing the means of production (not a bad idea, but unlikely in the near future), much can be achieved by simply taxing unearned income or rents at a much higher rate than wages for productive work. This would be especially effective now, when the world is awash in capital with no place to go and nothing to do. Tax it away and build some infrastructure with renewable energy and paying wages that equal the value of the product labor produces.
4
Mr. Vogel's analysis suffers from a misclassification of the candidates' ideological frameworks.
Warren, "a capitalist to her bones" nonetheless proposes some policies properly denoted as "social democratic" and others more traditionally "progressive." Sanders, a "social democrat" consistently mislabels himself a "democratic socialist." Left to right, this slice of the political spectrum looks like: Democratic Socialist <- Social Democrat <- Progressive <- Liberal.
In our current system, critical systems like those needed for food, healthcare, and education are owned by a wealthy upper class who may choose how they operate and whom they serve. In practice, they delegate those choices to a managerial class who decide based on market profitability.
Democratic Socialists believe these means of production rightfully belong to the workers who make create and operate them and the people who rely on them, who as such should democratically control how they operate and who they serve.
Social Democrats leave the current arrangement in place, but favor universal welfare programs to offset the fact that markets only responds to the needs of people with money.
Progressives accept the ownership arrangement and see markets as an unruly but tameable (see the CFPB) engine for the public good.
"Pre-distribution" is redundant by these lights. I agree with Mr. Vogel's assertion that inequality happens long before we all get paid. Some of us believe the solution goes far beyond taxes.
4
@Jonathan Examining history since the Gilded Age, it strikes me every attempt at reform (and there have been many positive ones), gets co-opted in subsequent elections by the donor class ownership of future politicians. CFPB under Mulvaney or his appointee--surely you jest.
3
@tennvol30736 I was only speaking to the intent of CFPB, not the reality, where you and I are in much more agreement on how these things play out.
Excellent ideas in Vogel san's essay.
During the House of Representative inaugural session earlier today, Minority Leader Kevin McCarthy took the podium for his introductory remarks and blathered on nonsensically about 'free-dumb' and the Grand One Percent's proud opposition to 'big government'.
These profoundly empty right-wing Republican cliches that will be replayed a million times by the Grand Old Propaganda industrial complex in the right's endless campaign to impoverish average Americans.
Any fool who votes for the Reverse Robin Hood party really needs educational therapy and decompression in order to re-enter the reality-based atmosphere.
Republicans have made the income tax code a 0.1% Christmas buffet, campaign financing a 0.1% cesspool of Robber Baron corruption, healthcare a for-profit corporate racketeering syndicate, Wall St. an unregulated ticking time bomb, the streets, sidewalks and schools unsafe from gun anarchy, worker wages and rights evil, the air, water and earth a dumping ground for Republican sewage, and they have effectively destroyed the Voting Rights Act in America.
Democrats have their imperfections, but they are not the enemy of the people which the Republican Party has clearly demonstrated it is.
So hats off to the great Senator and public servant Elizabeth Warren.
She works for the people, not for Greed Over People.
This country has been radically hijacked by the right since 1980.
Let's put a stop to Russian-Republican oligarchy.
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@Socrates
Great reply, as always .
I very much appreciate your comments and viewpoint.
Run for office.
Thanks.
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@Robert
Whoa, excellent idea—I second it! I read Socrates' comments as soon as I see his name. Based on what I read of his opinions, he would be an excellent representative of progressives anywhere. I would volunteer on his campaign.
25
For those who think superb writers and researchers like Socrates, Gemli, and many other NYTimes favorites, please understand that the work can be used to support others who represent us well. Sometimes public service can support the people who are in a position to bring the hopes closer to reality.
22
This is an intriguing premise, and as I read it I found myself at first reacting with "but, that would be an unfair advantage to the worker", when finally, I realized that what was being suggested merely attempts to neutralize what have been unfair advantages to the corporations all along.
Bravo!
10
Some of these regulations curtail the free market, a keystones of American economic success for decades. Therefore I oppose anything that negatively impact the "freedom" of commerce. Regulating that corporate Boards "must" include employees is a move towards socialism. Putting a cap on CEO compensation is the role of shareholders acting through the Board. Warren's formulas are in my view dangerously close to a move towards government control of the free market. Then it is no longer free.
22
@Frank Leibold
Please think again Mr. Leibold.
The current system is indeed rigged in favor of the owners of capital. Moves to dismantle this rigging may be perceived as "anti-free-market", but they in fact give more power to the actual workers who both create and consume the goods. That's all good.
9
@Frank Leibold Regulation on how corporations operate is not a government control anymore than a cross walk is a government control your ability to drive. You can still drive, but you can't run over pedestrians. Without that regulation, you may be inclined to stop anyway, but others might not. That's chaotic. Government's primary job is to set regulations so we're all operating by the same rules.
14
@Anine
And to expand on your point, clear guidelines that keep a level playing field are good for responsible businesses. That is, non-monopolistic industries will usually have some players that push legal and ethical boundaries and other players that seek profits by other means, e.g. branding or providing value. The less there is grey-area for pushing boundaries, the less the responsible companies are competing with boundary-pushing companies in an uneven game. Tight tax codes and regulations can cost margin, but in the long-term, the winners will then be companies that can make margin without pushing (labor, environmental, tax) boundaries. Beware a company who says they "can't" operate in a tightly-controlled arena.
...Unfortunately, the way the U.S. opened to globalization without having some amount of protectionism for U.S. manufacturing is an example of the opposite of an even playing field.
2
She is a good politician, occasionally even great. She still is the wrong person to run for President. The Dems - i.e. my party - needs someone that can mobilize those who have given up on the political process - and who also keeps them interested during a term.
3
@CitizenTM
I might agree with you regarding Ms. Warren's suitability for the POTUS job (time will tell), but the D party must find and present all of the best positions that will best advance the genuine interests of the people of this wonderful country. And some of the policy ideas made here are (IMO) excellent.
1
Some of these regulations curtail the free market a keystones of American economic success for decades. Therefore I oppose anything that negatively impact the "freedom" of commerce. Regulating that corporate Boards must include employees is a move towards socialism. Putting a cap on CEO compensation is the role of shareholders acting through the Board. Warrens formulas are in my view dangerously close to a move towards government control of the free market. Then it is no longer free.
4
@Frank Leibold The Scandinavian countries are capitalist but limit capital's power. The quality of life there is much better than here, where financial anxiety is always in the background even for the presently comfortable. I don't see many Scandinavians -- including capitalists -- fleeing despite their cold and gray winters.
2
@Frank Leibold The Germans have worker representation on their boards of directors--it doesn't seem to have curtailed their economic success. The fact is that workers invest a lot when they decide to work for a company. They have a greater interest in its long-term success than shareholders who can rapidly get out of their investments. And shareholders, btw, are not realistically represented by board members anyway.
Corporations have become quasi governments. By exercising market power over both their customers and their workers, they control our lives in ways never intended at their creation. Where we live, what we wear, what we say and when we say it are all dictated by corporations. The goods and services to which we have access are dictated by corporations.
The modern corporation is a product of, not the creator of, our market economy. That economy pre-dates corporate entitlement legislation.
Corporations do not exist in nature. They are, in every respect, a creation of the state.
It is about time that we wrestled this leviathan to the ground and made it clear that we don't exist for the benefit of corporations, we allow the corporations to exist for the benefit of people.
3
@Frank Leibold
I do not want to live in your naive world, a place where corporations get to do whatever they want, with no restrictions on greed, while the rest of us barely scrape by. Any restriction, however sensible, is considered a step toward "socialism." You are simply parroting back Fox News talking points dating to Milton Friedman and Ayn Rand, economic ideas that are simply not true (with data to prove it). Read the books of behavioral economists like Daniel Kahneman ("Thinking Fast and Slow") or Thomas Piketty ("Capital in the 21st Century") if you're willing to challenge your beliefs.
If workers don't own a corporation but simply have a say in its governance, how is that "a move towards socialism"? If CEOs have to hold stock compensation for five years to avoid duping investors and inflating their own portfolios, how does that manipulate a "free" market?
If you've already decided Senator Warren is a dangerous "socialist," then nothing she says - other than let business do whatever it wants - will change your mind. But voters like me also get to decide about the future of the country we both love. And I don't think reasonable restrictions on corporate greed amount to the United States creating Soviet-style agrarian communities and worker-owned companies.
3
Many firms (particularly partnerships) pay their executives with the expectation that they will make political contributions (they do). That will not require 75% approval.
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German workers, represented at 50% on every board, voted 20 years ago to reduce union power and sacrifice real wage growth in the face of high unemployment and low growth in Germany. The far right is now the largest opposition party in parliament.
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Non-compete clauses should require employers to pay employees their full wages for the duration that they want the clause to apply, including any bonuses, and at full time hours for any part time employees. Honestly, I don't see how non-compete clauses are even constitutional. That's the one incontrovertible good idea in the legislation; many Republicans see the need for it.
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The history of pre-distribution regulation is that it produces a lot of unintended consequences. The latest batch of financial regulations have made it impossible for any but the most huge banks to cope with them, hollowing out the middle of the finance industry, and making it in some ways less stable. Look at France, where excessive regulation has driven unemployment and the cost of living so high that the working poor are burning cars on the Champs Elysee, complaining that they can't afford to eat each month. History and other countries show there are no easy solutions through regulatory tinkering, and I don't believe most of Senator Warren's are likely to do much good.
7
The right to bear arms is sold through fear as individual power and the elevation of property (the gun) over society (the people).
The right to free association is embraced by brave workers willing to confront the boss, demotes individualism to benefit the group, and promotes people (workers) over property (capital, wages, money).
Which right is more worthy of passion?
7
I actually disagree with the premise of this Op-Ed.
Anyone who has read Warren's "Two Income Trap" book (or any of the massive critique it received in academia) knows Warren is not seeking equality, she's seeking redistribution.
The book is based in the view that a two-income family is not workable and a "trap" set by those who fall for it.
It is true that the federal tax and benefit code, and many state constitutions discriminate against two-earner (and especially two-parent families). There are massive debt-financed tax and benefit subsidies to patriachal/SAHM families (whether married or not), who pay 1x taxes for 2x benefits. Warren is illiterate in these issues, however.
I will take Warren more seriously when she begins with a focus on how the Oklahama state constitution violates the U.S. Constitution in discriminating in rights and responsibilities on the basis of sex and establishing religion. That's where she grew up. She appears to be so identified with her mother, and so unidentified with herself or her children that she is unable to develop sufficient literacy in these systems to be effective.
9
Professor Vogel's analysis here reminds me of Robert Reich's book, Saving Capitalism, and of course, they're colleagues at Berkeley. I very much like this focus on pre-distribution as opposed to redistribution.
I also like Warren's wonkish-ness on this stuff. It's one of the reasons that I think I prefer her to Sanders. He does a great job outlining the problems, but sometimes I question whether he really has a handle on the nuts and bolts policy fixes that would be required to fix them. The issue for Warren is that I'm not sure the U.S. of 2019 and 2020 is a place for wonkish-ness.
11
And just to respond to some of the posts bemoaning the thought of government interference in the free market...
I think the point that Professor Vogel (and Robert Reich) is trying to make is that the opposition between government regulation and the free market is a false dichotomy. Markets can't function without government regulation.
For instance, markets need to have an agreed upon definition of property rights to function. We see that this is not a trivial thing to figure out with some current issues in intellectual property, and the market depends on governments to provide rules about what really counts as intellectual property and what to do when the right to that has been violated. And, of course, the big example as others have mentioned is the whole idea of a corporation. That is a legal creation that is central to how economies function today, but is not an inherent feature of markets absent government intervention.
So it's more a question of what regulations we want to put into place so as to make the market economy beneficial to the widest range of citizens rather than trying to keep government regulations out of the markets entirely.
4
Senator Warren is exactly right. Capitalism at its core is a distribution system that distributes the fruit of labor and capital to all its participants according to rules and the preferences a society has established.
Democracy is supposed to be the antidote to any lopsided distribution that is inherent in unregulated capitalism - assuming that the many (as in majority) will elect leaders that maximizes the benefits among all.
We must establish rules that
* inccreases the value of labor over the value of capital
* that decreases the benefits of inheritance (which does not provide value to society)
* that rewards skills in typical blue collar activities (why for example must a lawyer be accredited but a roofer not?)
If you look closely at the success of for example the German capitalistic/democratic system it is exactly because they have embraced what the author calls pre-distribution.
The challenge for Mrs. Warren will be to articulate her vision to the people so voters understand it. And that is extremely hard because of the regulatory complexity it involves and the long-term nature of the results.
27
Why not a multi-tiered progressive tax? Tax people who make money from having money at a much higher rate than those who do not. Keep individual taxes below about $100,000 low. Tax progressively higher as income increases above that level.
4
@Dan Bruce This is what we have now. The tax-cheat friendly Republicans have created countless loopholes that allow the wealthy to avoid paying their share of these progressive taxes.
This is the first time I have heard the concept "predistribution." It make a lot of sense to me. Lack of regulation and enforcement were the cause of the Great Recession. If the Republicans were to continue to unregulate financial markets, as they want to do, you can be sure it will be the cause of another recession.
If the markets are to work properly, regulation is required to make sure the asymmetry of information and power between companies and customers prevents exploitation of customers as well as employees and the environment. I like the idea of providing more power to workers, improving corporate governance, and definitely providing more power to the CFPB.
This is intelligent policy-making. I don't know, with the power of corporate lobbyists, whether this will happen. This country has a well established record of selecting policies that exacerbate our problems, like wealth inequality and all its attendant consequences. At least this new congress will have a chance to put brakes on Republican hypocrisy while Elizabeth has a chance to explain her ideas.
12
Some of this makes sense, but a lot of this is inconsistent dorm room socialism.
What makes sense is that our tax system is already highly progressive. As anyone who lives in NYC can tell you, you pay nearly half your gross earnings in taxes and that hasn't resulted in income equality and never will.
So what kind of structural reforms make sense?
Of the two inconsistent arguments about corporate governance presented -- the first advocating for employee board representation and the second lamenting the rise in executive compensation at the expense of shareholders -- I tend to see the latter as a greater problem. Corporate executives dominate boards. And boards re-nominate themselves and are insulated from liability. And we've seen the rise of super-voting stock held by powerful founders like Mark Zuckerberg. It's arguably an absurd system from the perspective of shareholder rights.
Do I see the need for the first policy proposal (adding labor representation to boards)? That is a fairly idiosyncratic approach taken basically only in Germany and France (not in the U.K. or Italy or Japan, etc.). I think that boards should answer to investors, who put their money at risk. That's how we incentivize productive investment. Employee board representatives will just engage in rent-seeking--higher wages without commensurate higher productivity.
12
@Mmm
Most investors are already rich, so what's the point in having the board answer to them rather than making them answer to the employees who actually do the vast majority of the work in any corporation while getting paid ever-decreasing wages?
2
As to super-voting stock as an abuse of the concept of publicly held companies, you need look no further than where Mr. Vogel’s essay was published — The NY Times.
Do as I say, not as I do, too often the modus operandi of the wealthy Blue metropole.
4
End Citizens United if you want a "fair" distribution of money and responsibility. Corporations being seen as individuals yet clinging to the corporate status when it comes to taxes, let's them play whatever side is beneficial to them. I, an individual, can't do that. And corporations don't vote. More proof they are not people. End Citizens United!
10
I’d go further and work for a constitutional amendment banning all money (corporate, union and personal funds) from our campaigns. CU made a bad situation much worse, but the bad situation won’t magically disappear with CU long gone. Go for broke, fight hard, and address the roots of the problem is the way to go. That said, I’m all for overturning CU!
1
I support Senator Warren's vision to help Americans have a fair playing field. Let's hope that Democrats and Independent voters consider this:
"But the Democratic Party would be smart to embrace Senator Warren’s approach and a broader pre-distribution agenda as its next big idea because it deals with the root causes of inequality in America and therefore the voter frustration that helped make Donald Trump president."
Warren 2020
8
I would simply like to see the market work unfettered. It is correct to say that the regulations passed by government only benefit the wealthy. How about we subtract government from the equation and let the productive power of the people thrive. Just a thought
2
@Chandler Stepp
Democrats would never let that happen.
It’s all about control.
I fear the road Warren is taking is simply expanding the power of labor to commit suicide by claiming so much ownership in corporations that they ship out to Mexico or China or Bermuda or Ireland or wherever the mecca of white collar corporations will be.
Factories moved because they were easy to strike against because they are immobile in the short term. In the longer term they moved offshore.
I favor moving the floor up, not the ceiling. I feel those gains are attainable by showing that they are not only morally preferable but favor the business climate as well. E.g., cheap broadband is a tax cut for everybody and good for just about all businesses. Clean energy isn't as expensive as many think when you consider the health benefits. A rational health insurance scheme would work better than what we have and act like a tax cut. The government could take over student loans and refinance based on treasury interest rates and free up a lot of latent purchasing power in the economy.
When you tote up the savings that can be realized in many areas, it means you have "pay as you go" social welfare programs which benefit all. I am not in favor of reviving the "us v. them", labor v capital storm the ramparts and take over the factory type of platform for progressives. It's a loser. Sorry, but that's a fact.
3
Sounds like pre-distribution just means stronger unions and better regulation of industry.
Seems reasonable enough.
8
I agree with it all except for, "So it would not provoke many Americans’ deep-seated mistrust of big government as much as calls for redistribution would."
Oh, please. I would be surprised if Rupert Murdoch, Rush Limbaugh, Sean Hannity, and Mitch McConnell have not been briefed by some Koch Brothers "think-tank" on how to frame this in a way that will induce a caravan-at-the-border frenzy.
These are great ideas and worth proposing, but I would not rate policy prospects on how the essence of a plan will prompt Trump followers to react. The right wing will react negatively to anything that actually reduces income inequity, because the GOP donors will figure out a way to tell them to do so. The one consistent agenda that the GOP all agree on, every year, are legislative and regulatory ways to increase income inequality.
17
I can't help but to wonder whether there will be any jobs at all, after all these regulations.
22
@Mark91345 More regulatory enforcement creates jobs in compliance. In addition, a company is not going to stop selling a product or service if demand continues to exist. Finally, what evidence do you have that compliance costs are too high for businesses to operate?
7
It's important to stress that corporations are not people, are not created by God, and are mere creatures of government. Therefore, the government that creates and sustains corporations has full power and authority to regulate them in the public interest. Government, as the representative of the people, can and must direct and restrain corporate actions as necessary to promote the public good, which is not at all the same as maximizing private profits at the expense of the public.
26
@Eleanor. So basically you want everything to be run by the government. Do you know what that’s called?
1
@Eleanor Important to stress that people are not created by god either.
1
@Jackson -- In a democracy, the people are the government.
2
In re to: "Pre-distribution is less costly than redistribution because it mostly entails regulatory reforms rather than big spending items, like free college or job guarantees. "
To be fair to Elizabeth Warren, it should be said that she supports both debt-free college and a federal jobs guarantee.
4
If I’m going to make the same amount as others, can I work less and do poorer work under this plan?
24
@ABC123
Exactly. This author and Ms Warren are largely arguing for an end to meritocacy.
1
@ABC123
No one is saying that. Yours is a straw man argument.
The balance of power is tilted towards those who have the most power / capital already. The ideas presented here are about strengthening the power of those who are under-represented -- the workers. Since unions have been severely weakened, we have to work together to give workers a fair wage. They've lost so much bargaining power at this point.
Setting a fair wage for employees addresses minimum wage requirements for a US employee's time. (That is, what is the minimum worth of someone's hour they're hiring out to a company? That is, showing up for the job, clean, in proper attire, willing to do what the company tells them to for the time they're devoting to the job.) Accomplishments above and beyond are still rewarded and promotions will still go to the workers who distinguish themselves.
If you think a higher/fair salary will give minimum wage workers an excuse to be lazy, think again. If wages are fair, there will be higher competition for those jobs, and a lazy employee will still get fired for under-performance.
Just compare minimum wages from the 60s or 70s to today's minimum wage adjusted for inflation. (Type "inflation calculator" into a search engine and see for yourself.) Today's minimum wage is far below where it should be. It's time our country addressed this.
1
@Leah
1. Please define “fair wage.”
2. What will happen to all of the businesses who, if they must pay higher wages to all employees, will no longer be profitable (including many “mom and pop” small businesses too... not just the “big, bad, greedy and mean” ones).
3. When those businesses must close due to no longer being profitable, their newly “former employees” will then have a wage of $0. How would they be able to live on that (unless they receive government assistance... paid-for by the taxing of the people who have made money)?
The best government is a limited one, where the free markets are allowed to work without interference. Regulate for safety conditions, fraud, contracts, etc but otherwise, step out of the way and allow employers and employees to set wages where the supply (of workers) and demand (for workers) intersect.
It’s no different from government meddling with rent controls... another complete failure.
Just look at all of the failed socialist countries. It’s a path America should not go down.
I strongly support Elizabeth Warren and would like to interject a couple of ideas:1) almost everyone can work doing something. We must find a means for them to enjoy the dignity and sense of accomplishment, the pride in knowing that their life had meaning in making that contribution. I have a bright, blind cousin, 50ish who never worked. How tragic. 2) As a former banker, I think her assessment of banks is largely correct. Why not have publicly owned banks--for the poor, making loans for contractors to build affordable housing (workers rehab from prisons), transportation infrastructure; investments in families, communities both person, family and infrastructure. We completely overlook the value of public investment in products, services and people.
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@tennvol30736
"We must find a means for them to enjoy the dignity and sense of accomplishment, the pride in knowing that their life had meaning in making that contribution."
Pair Warren with Sherrod Brown and that just might be a combo that could work. And even win, maybe.
8
@tennvol30736 The important point here with public banks: the investments we make in communities, the least fortunate, the individuals we are developing to grow, continued personal growth of our citizens, --an INVESTMENT FAR MORE IMPORTANT TO OUR FUTURE THAN ANY FINANCIAL TRANSACTION.
5
@rtj I think we develop each individual that builds into communities, public at large in accordance with Maslow's Pyramid along with instilling discipline. Having been through Army basic training, I've seen it can be done. It is amazing how some can become solid citizens in a matter of weeks. ha! Once they're on course, we make the investments which offer positive returns for each person and our nation.
1
Pre-Reagan tax rates protected the country from the excesses of capitalism for decades, by redistributing money to the general economy. Restoring those tax rates would be the easiest way to reduce inequality and reverse the economic polarization resulting from inequality.
6
@RC
No one actually paid those exorbitant rates as there were since the end of WWII beaucoup endless personal and business deductions + tax shelters.
Actually, Reagan is the one who ended most of those tax shelters once the catastrophic 1970-1984 inflationary recession finally petered out. A lot of folks weren't happy with that, thus this was the beginning of many middle and lower middle incomers playing the real estate game, trying to strike it rich by buying, selling and using their home as a casino. We know how that ended up in 2008.
2
There is something in the inequality debate that is quite strange. You would think that folks who do not live in the U.S. would thank their lucky stars that they are blessed to not be here. According to Gallup, the U.S. is far and away the most desired destination for immigrants. To the outside world, the U.S. looks pretty good. Yet, we are tying ourselves in knots trying to convince ourselves how bad we have things. I fear that when we are through with this exercise, we will be an undesirable destination. At least it will solve the immigration challenge.
16
@Robert, It's hard to generalize about the desirability of living in the U.S. to those outside. Would-be immigrants to the U.S. are largely coming from very poor countries with low economic prospects and poor governance. For them, anywhere but home would so, and the U.S. is the closest, most desirable target.
But now ask people living in countries with lower inequality, such as Canada and the more stable countries in Europe, and I'll bet the majority would stay put. They have decent economic prospects and a stronger social safety net.
And finally ask people in the U.S. who have not benefited from the last decade's economic recovery whether inequality is a problem. Many of them would say yes, and they voted for Trump out of frustration that the U.S. system was rigged against them. Trump was the candidate who pledged to drain the swamp and put the average citizen first. Hasn't worked out - 2017 tax cut anyone?
22
@Ken L That does not answer the question why the U.S. is overwhelmingly the first choice.
6
@Ken L
Just about anyone can do well in the U.S. with a decent education, marketable skill and personal habits that delay mortgage debt and babies till those can be afforded. The smart never go into credit card debt or sink themselves by craving depreciating assets.
1
I came to this article fearing that Warren would be charting a course along the lines of identity politics; thankfully, that doesn't appear to be the case, and it has spared me the angst of yet another self-destructive turn for the democratic party. Everything here looks more than reasonable and very "European" in nature. If she doesn't deliberately or inadvertently marginalize the working stiffs and remaining middle class in this country she just might have a chance. I wish her luck.
12
@robW
German workers, well represented on boards, sacrificed union power and real wage growth to reduce unemployment and poor economic growth 20 years ago in the Schroeder administration. The far-right is now the largest opposition party in parliament.
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The French working poor are currently burning cars on the Champs Elysee, complaining that they can't afford enough to eat in their over-regulated economy which has led to a high cost of living, and 10% unemployment. They are objecting, in part, to Macron trying to make the French economy more German.
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Making the economy more European will introduce as many problems as it solves. There are no easy answers.
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Making progress on this issue requires some education of the population, which denies or rejects doing anything about it. Mindless protection of the rich is no virtue!
Why does inequality matter? At the 1979 (pre-Reagan) income distribution, the bottom 99% of households would be getting $7,000+ more per year in income. If we just reallocated the income from the top 1% to the bottom 80%, that goes to $11,000 per family.
That's serious coin, when nearly 40% of Americans would struggle to come up with cash for a $400 emergency.
By shifting money from the top 1% (who tend to save it and bid up asset prices for stocks, art and housing) to those more likely to spend it, we boost GDP and thus incomes for everyone. Recall that your spending is my income.
Yes, we can do pre-distribution strategies like those Dr. Vogel advocates. But let's not forget the one virtue of incredible levels of inequality, and that is you don't have to tax many to solve the problem.
The top 1% get $300 billion/year in tax breaks ("tax expenditures), such as lower rates for capital gains and dividends. Going back to Clinton marginal rates for just the top 1% is another $100 billion. Removing the cap on the payroll tax (affects the top 6% of workers and just their income over $128,400) is another $200 billion.
That would make our budget deficit sustainable (below 3% GDP) while funding universal higher education and social security, without raising taxes a dime on the bottom 94% of workers.
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@David Doney
I see states going after some/lots of that newly-transferred $$$ in the form of SALT. Public workers in states and counties clamor for more wages and bennies every year where I live. Then there are the underfunded pensions...
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Organizing markets to favor median income households is a sensible idea. Most people resemble the middle closely enough on one side or the other. Policy designed for the middle is naturally going to benefit the greatest number of people.
Vogel is a little early out of the gate though. The discussion of how to reorganize markets is premature at this stage. The good professor is already calling the best batter when the coach hasn't even posted the lineup yet. This conversation is entirely too wonk-ish to have right now.
We agree inequality is a problem, yes? Okay. We'll decide how best to solve that problem a little later. Vogel is pulling a Hillary Clinton on Elizabeth Warren's behalf. Voters don't care about the details. They just want inequality fixed and they want it fixed fast.
That's the biggest argument against this proposal anyway. Your children's children won't experience inequality like we do today. However, reorganizing markets will take generations before it has any noticeable effect.
It took 40 years to get here. It'll take 40 years again if we hike out by the same trail we hiked in. Most voters don't have that sort of patience. That's point in Sanders' favor. You can borrow for redistribution. You can't borrow for pre-distribution. The economy has to work its magic.
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Thanks for this cursory look at and analysis of some of Warren's policies. Correct you are about Warren being the lone (afaik) potential candidate who does indeed get to the root causes of inequality, as opposed to merely providing band-aids. She has some other policies, and some rather novel solutions that deserve a good look as well. One is her Housing bill - the American Housing and Economic Mobility Act. Another is her proposal for the government to manufacture or contract out manufacturing generic pharmaceuticals - The Affordable Drug Manufacturing Act.
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I think you’re right to a point, but as you suggest, inequality in the US is far worse. We’ll never right the ship without Bernie-style redistribution. That said, I don’t see why “pre-distribution” and redistribution don’t complement each other. We can, and should, do both.
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@Jeff
Agreed. (Just for the record i wrote in Bernie in '16.) We need more than just redistribution though, we need to be able to create jobs, good jobs. And / or get the system rejiggered and enough safety net in place to facilitate entrepreneurship and create our own. As far as i can figure, Bernie's main plan for job creation is infrastructure. Of course it's vitally important, but we need a lot more than that. Warren is talking about rejiggering the entire economic system to support more equitable capitalism. And she has not just one idea, but a whole slew of them.
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Incredibly dumb headline. Please revise.
Inequality has already started. Warren has policy ideas that are not entirely re-distributive, but are still dealing with the current inequality.
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Warren's proposals resemble how things currently work in Switzerland, in many ways. Of course other factors are at work, like far higher social capital, but the fact is that there is essentially no poverty (unemployment is close to 0%, the de facto minimum wage is roughly $25 per hour, and unlike the rest of Europe and the US inequality is growing less), taxes are lower than in the United States (including for the highest earners), and the economy is often ranked as the most pro-business in the world. Pre-distribution works.
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@JDV My thoughts exactly!
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@JDV
Switzerland, in fact, has one of the highest proportions of non-native residents in the rich world, and it is higher than the US. It is far from homogeneous. Given the size of its economy, it spends massively on its military - and famously so. Yes, Switzerland is small, but that is neither an advantage nor a disadvantage. India is populous and poor; the US is populous and rich; Malawi has a small population and is poor; Luxembourg has a small population and is wealthy. Population size, in other words, has nothing to do with it. We can compare the US to Switzerland because they are both industrialized, multi-ethnic, multi-lingual societies with some shared cultural and historical roots stretching back several millennia and that are both subject to many of the same global capitalist forces. Switzerland has very robust social-welfare provisions, but is also quite parsimonious in areas and has a strictly regulated economy. In short, Switzerland does most things right, and that is largely because its people are well-educated, are directly engaged in the political process through a direct democracy model, are mindful of the broader world because they're surrounded by it, and cautious in its politics and economic regulations. That said, it is also extremely racist and hyper-conservative on social issues.
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@MW
I agree with most of what you've said about the reasons of general Swiss prosperity, but very much oppose the gratuitous claims of "general" racism and hyper-conservatism. Switzerland is a confederation of many cantons that retain much greater autonomy than the states in the U.S. - in fact, cantonal taxes are frequently much higher than the federal income tax. Some cantons are very liberal and cosmopolitan (like Geneva that hosts all kinds of international organizations) with high levels of interracial marriage, etc., whiole some others are very conservative with few foreign born residents.
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Thought provoking ideas! How about we start at the university to set up an example for rest of the country. The adjunct lecturers will comprise at least 40 percent of all department and university policy meetings and vote on financial decisions such as the great disparity in theirs and Prof. Vogel’s salary and benefits. 75 percent approval from all faculty including temporary and teaching assistants will be required for all financial decisions and policy decisions such minority hires like Professor Warren at Harvard.
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@Barbarika
Given that adjunct lecturers are to the university what seasonal employees are to Walmart (needed when needed; needed when enrollment demands require them), what a strange response. Although I sorta see the parallel that you are making between how the tenured professors and full-time faculty enjoy benefits in a system that is rigged in their favor, just like the rich enjoy increasing benefits in the tax code, it seems to me that the analogy does not work. Tenured faculty have earned their privileges through the accumulation of knowledge, degrees, and experience. In what manner have the wealthy earned the right to pay 15% capital gains tax on income that would otherwise be taxed as, say, middle class income at 22-30%? That 15% cap is merely a privilege bestowed by the oligarchy to the oligarchy. What's wrong with constantly striving to make all systems fairer to all--tax code, education, courts, prison, wages, health care? Why is striving to make the rule of the game more equal bad, even if many times it doesn't work. I say, "keep trying."
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@Michael
I see that financial education seems to be lacking in California. Those capital gains are not generally risk free, and the premium for assuming risk is the tax premium. Remove it and access to risk capital plummets.
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@Barbarika..to use the words management skill and academia in the same sentence is hilarious. Professor Vogel is a product of his environment, an environment that still thinks it's the 14th century. (Let me guess....UW-Madison right?)
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I'd like to see further expansion of the Earned Income Tax Credit in addition to implementation of the good professor's recommendations. The poor more than anyone are suffering in this country and most of them are already working as hard as they can and getting next to nowhere in our rigged economy. This government program is generally thought to be a cost-effective and prudent means of addressing poverty by many people on both sides of the political divide. I imagine the professors recommendations will take a while to take hold given the resistance it will surely generate in the well propertied, their think tanks and Fox News. Thus in the short-term the Earned Income Tax Credit will provide greater relief and greater expansion of the greater good.
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Power helps. The level of sophistication in Washington is up! Facts are getting attention. Policy is discussed on twitter. Congress is more transparent, its process explained. Its diverse voices have widened. Media sees this growth as a fight, a division. It’s not. It’s new harmony, a new process and structure, new vision, a national vision. With goals and numbers and facts.
Speaker Pelosi effected a comeback after an eight year gap as Democrats lost the White House. Now her House is the most diverse, widely dispersed Representatives in America’s history. Many of whom took seats from Republican incumbents, including every seat in the Republican stalwart Orange County, CA, a early haven for conspiracist, anti-communist groups.
Today’s conservatives embrace Russia! American diplomacy and troop withdrawals follow Russia’s template to a tailored tee!
Pelosi's father a Baltimore mayor, taught her to see politics as local, to build collaborative leadership. She embraced legislation. Now she has troops on every flank.
She began by reminding the nation of the constitution, Article One, it establishes the Congress/the House; she is second in succession to the Presidency. Her House picked up 40 Democratic seats.
Americans voted for Democrats and their common issues of healthcare, wages, debt, housing, justice. Here is the momentum. Where is Warren on this template? And where did Trump celebrate the religious rites of Christmas?
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I wish more people would use "protections" instead of "regulations." Take a cue from conservatives and use terms that help your cause instead of impede it. (Hat tip to George Lakoff.)
As for the larger idea, I've long wondered why Democrats don't focus on pretax measures like these.
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We need progressive taxes? The top 1% pay 40% federal income tax, the top 20% pay 90% of them, while the bottom 45% pay nothing. I'm sorry if that isn't progressive enough for the author and his redistributionist brethren but by any objective measure it is pretty progressive. All the European nations with generous social safety nets have higher top rates but the bulk of their revenues come from dramatically higher rates on the middle class. Taxing the rich is a great slogan but their just aren't enough of them for the levels of revenues required for the government programs envisioned by the left. And when the middle class realizes they will be on the hook for the cost let's see if these ideas still have support.
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@Todd
Your numbers change by quite a bit when you include social security, medicare, state and local taxes. Also, you list the historical, nominal tax rate, not the paid rate and not the rate after the 2018 tax law changes.
Keep in mind it isn't the number of rich folks, it's the income they earn. And they do earn enough so that a progressive and inclusive tax structure can fund much more than just a military larger then the next 10 countries combined (or whatever is the current excess.)
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@Todd
Yup. We need progressive taxes. And when the top 1% of households own 40% of the nation's wealth, what's so surprising about your federal income tax statistics?
Also, that federal statistic is misleading, as it leaves out the multitude of regressive taxes at both federal and state level that every economic tier pays, largely negatively impacting on the poor.
You obviously don't believe that changes to tax policy can help correct anything, yet today's tax policy redistributes wealth away from the lower economic tiers to the upper tiers. This has been shown by data time after time.
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@Todd
Misleading statics. You omitted all of the regressive taxes, and you don't point out that the top 1% make 20% of our adjusted gross income. Their marginal rate (which of course they don't pay in full) has been repeatedly slashed from 90% in the early 60s to less than 40% now. In other words, people who earn millions, when all is said and done, are paying no more of their income in taxes than people who are struggling to get by.
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How might she even think that anything she or government could do would result in that. Now perhaps genetic engineering making all future people consistently capable might do that. Nothing else will make say a person with an IQ of 180, lots of drive, and a family that supports them have an equal result with a person with much less capability. If you used government to do that the capable will leave.
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I watched Elizabeth Warren on Rachel Maddow last night, and it reminded me why I love her (Warren).
She has been for the little guy, doing her possible, all her life. She doesn't look much different than she did in her 20s.
Talk about coming from a poor background and doing good to do well.
Wonderful!!
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@Susan Anderson Also saw the interview, was so impressed with her.
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"What could be the problem with that?" Every single elected Republican who will do everything possible to TKO that plan because they, themselves, are bought and paid for by corporate lobbyists. I'm not saying that Democrats don't listen to corporate lobbyists, but I am saying that Republicans are fine with corporations growing ever larger while workers are treated like a problem (how to reduce benefits, how to reduce wages) rather than as assets to the companies. Most Americans spend a great deal of time at work. It's beyond time for corporations to stop treating people as disposable.
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@Nina RT
Agreed - Look how healthcare was turned into death panels.
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@Nina RT
Trump not only listens to the lobbyists, he put them in charge of every government agency.
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@Nina RT
The Democrat leadership will also want to knock her out, just watch. Don't be confused by their description as "Democrats" - they are Republicans heart and soul. They haven't been Democrats for decades.
Ms. Warren will have to do a Trump and run against them also. It's impossible to successfully get corporate money out of politics by focusing on just half the swamp.
Attacking both sides will give her credibility and better media coverage. The People will respect her as an Independent, and Independents outnumber both Republicans and Democrats.
Only as an Independent can she win with her anti-Establishment platform - since both parties are the Establishment.
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Professor Vogel: A thought-provoking piece. I assume that as part of pre-distribution, you and your colleagues such as Ms. Warren herself in academia will agree to eliminate "tenure" for the professariat, as "tenure" clearly has the intent and effect of artificially increasing the pay and benefits available to tenured professors well above the median or average income of $50,000 or so in the United States, and of course, most tenured professors have an excellent benefit package as well, which should be counted as additional compensation with a monetary value.
Let's start with you. Let us know when you decide to voluntarily relinquish tenure. Thanks for listening.
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@hula hoop, biases notwithstanding, tenure is still earned and I suspect you would have gladly taken it were it offered. I work in biomedical academia and, for us, tenure increasingly means one is not fired and may continue paying one's own salary from a combination of grants, clinical, teaching, admin, ... Guaranteed salary for tenured professors is well under $50,000. I hope someday to earn tenure not because it will come with a salary bump (it won't) but for the academic freedom it (decreasingly) affords.
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@Skut - I'm with you. Not only is hula hoop making an ad hominem attack on Vogel, but it seems he wants to kill the messenger. I too am a tenured prof at a large public university. Like Vogel, I studied for many, many years, spending (in fact borrowing) tens of thousands of dollars for my education. Who would do such a thing with no chance of gaining tenure? I am neither a billionaire nor a powerful corporation, just someone who likes teaching and decided to dedicate my life to it.
Hula hoop also engages in distorted rhetoric when he speaks of the "intent and effect of tenure." Tenure was designed, and functions, to bestow academic freedom, the right (and obligation) to speak out on controversial matters without fear of retaliation. I have often called out administrators at my university when they engage in demonstrably illegal or unethical behavior. Without tenure, I'd never be able to do so, and they could do whatever they want with impunity.
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@hula hoop
If you think attacking other middle class jobs is the way to help inequality you are not seeing the true problem and instead are trying to create a problem so you can say you came up with a solution. Stop giving the ultra rich what they want, a weaker middle class.
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I have a serious question: why do corporate owners get Limited Liability for FREE? It's just insurance, why not charge people based on the risk, just like any insurance.
Usually when people pay for what they get, the market works a lot better.
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@J c They get that because it is thought that it is best for our citizens to have a corporate structure with those elements.
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@vulcanalex
What? That's like saying it's like that because that's what we do. That's not really an explanation.
I'm looking for a rational, economic, or moral (I'd prefer all three, but I'll take just one of any) reason to give something for nothing.
Pay for what you get. I thought that was the point of markets.
@vulcanalex
The 'citizenry' did not invent limited liability corporations. Capitalist-wannabes did.
And your use of the passive voice ("it is thought that it is best") masks how even you purport that the invention came about.
In order to succeed, Senator Warren's approach has to be coupled with efforts to reduce the corrupt influence that large corporations and billionaires have on our elections, our political leaders, and our regulatory agencies.
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@Ken And that's exactly what she's done by challenging other Democrats not to accept corporate and large donor contributions in the primary and by proposing that corporations not be allowed to contribute to any campaign without 75% shareholder approval.
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@Ken The CFPB, which Warren helped create, had a Director who was extremely effective and not influenced by large financial institutions. Rich Cordray did not come from the industry and large bank CEOs were unable to talk him out of pursuing enforcement actions. Warren has stated that “personnel is policy.” It helps when an agency is led by someone who is independent from the regulated industry.
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@Ken the Dems could have done this years ago, but they opted not to. They'd rather publicly condemn the practice and privately fill their campaign pockets. To believe otherwise is pure fantasy.
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A very compelling analysis.
Thinking about it, this sounds somewhat like the way life was in the 60s.
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