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Posts Tagged ‘inequality’

Most of the discussion I’ve seen of wealth and income inequality has focused on trends in the USA.  Now comes the annual report from Credit Suisse, one of the world’s largest financial institutions, on wealth and inequality worldwide.  The picture looks familiar:  a small number of individuals control most of the globe’s wealth. 

Among their findings released October 14:

  • The number of millionaires worldwide is likely to increase from 35 million to 53 million in the next five years;
  • The USA is “the undisputed leader in terms of aggregate wealth;”
  • The USA, Switzerland, and Hong Kong are the most unequal “developed countries;”
  • Countries labeled as “emerging markets,” especially China, can be expected to grow their shares of global wealth in the next five years.  But there, too, inequality is rising.

Credit Suisse, which no doubt wants to handle those millionaires’ accounts, also finds that the USA leads the world with 14.2 million millionaires, 41% of the members of the worldwide millionaire club.  Credit Suisse  refers to them as ‘high net worth” or “HNW” individuals.

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Above the HNWs on the ladder are the UHNWs, the “ultra high net worth individuals,” those with with more than $50 million in net assets. The Global Wealth Report says this group has 128,200 members, 49% of whom live in the USA.  

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“The number of HNW and UHNW individuals has grown rapidly in recent years, reinforcing the perception that the very wealthy have benefitted most in the favorable economic climate,” the report says.  Indeed.

“HNW and UHNW individuals are heavily concentrated in particular regions and countries, and tend to share more similar lifestyles, participating in the same global markets for luxury goods, even when they reside in different continents,” the authors observed.

Here’s more numbers:

  • The poorest 50% of the global population owns less than 1% of the world’s wealth.
  • The wealthiest 10% (those with more than $77,000 of net worth) owns 87% of the world’s wealth. 
  • The top 1% (more than $798,000 of wealth) owns 48.2% of the world’s wealth.
  • The world now has 35 million millionaires, less than 1% of the population.  Together they own 44% of the wealth.

Figures such as these demonstrate that the world’s wealth is in the hands of a very small group of individuals. The figures don’t, by themselves, tell us anything about trends in wealth distribution.  But this topic has finally gotten the attention of policy makers and bankers, even those whose clientele is ultra-rich.

“The changing distribution of wealth is now one of the most widely discussed and controversial of topics, not least owing to Thomas Piketty’s recent account of long-term trends around inequality. We are confident that the depth of our data will make a valuable contribution to the inequality debate,”  the report’s introduction says.  

Credit-Suisse also says, “During much of the last century, wealth differences contracted in high income countries, but this trend may have gone into reverse.” 

It may be significant that the Global Wealth researchers find that while the top 10% has seen its share of the global pie rise from 67% in 1989 to 72% in 2007 and topped 75% in 2013, the share in the pockets of the top 1% has “shown little upward movement for the past two decades.” 

For the USA, however, they find that shares held by the top 10% and the top 1% have held steady, at about 75% and 38% respectively.  This finding contrasts with that of Emmanuel Saez and Gabriel Zucman, who recently wrote

“Wealth inequality [in the USA] has considerably increased at the top over the last three decades.  By our estimates almost all of the increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012.

The conflict may result from differences in methodology or from Saez and Zucman’s attention to the top 0.1%, a smaller sliver than Credit Suisse studied. Nevertheless, both reports add to a body of evidence that the economy is doing just fine for a tiny class of people while just about everyone else is getting left behind. 

It wasn’t long ago that economists generally avoided discussion of the distribution of wealth.  Even if they now differ on some fine points, it probably represents progress when economists working for an institution like Credit Suisse are adding their weight to a call for a change of direction.

“In mature economies,” they conclude, “policies to address wealth inequality are receiving increased attention and can hopefully be designed to avoid unwanted effects on growth or economic security. Among emerging markets, policy makers would be advised to study countries, such as Singapore, which have tried to ensure that wealth gains are broadly shared, and which have succeeded in keeping wealth inequality in check.”

[Note: There’s a link to the Global Wealth Report pn the Credit Suisse publications page, but the link did not work for me.  Instead, I contacted the bank’s New York press office, where I found someone to send me a copy.]

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Janet Yellin is not the only one with a new analysis of the growing chasm between the ultra-rich and everyone else  If you can handle some dense economics (or like me willing to skip past the fancy equations), take a look at a new paper by Emmanuel Saez and Gabriel Zucman on “Wealth Inequality in the United States since 1913.”

It seems that reliable data on wealth is not easy to come by.  So Saez and Zucman had to do some fancy calculation to figure out who owns how much and how the proportions have changed over time.   They find

wealth inequality has considerably increased at the top over the last three decades.  By our estimates almost all of the increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012.

That’s a level of inequality comparable to the early 1900s, before the Progressive Era.

Occupy movement, if you’re still out there, take notice. 

“Wealth concentration has followed a U-shaped evolution over the last 100 years,” they write  “It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then.”

(You can see the U-shaped curve and other charts at:  http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf.)

The top 0.1% is just 160,000 families whose wealth rose at 5.3% per year from 1986 to 2012. In the same period the bottom 90% saw its wealth stagnate. 

The key factors driving the wealth gap, Saez and Zucman conclude, is a surge in labor income among those at the tippy top and a decline in savings for those in the middle class.  That leads the authors to a set of recommendations.

First and perhaps most obvious, they recommend progressive income taxes and estate taxes.  

“Yet tax policy is not the only channel,” they say.

Other policies can directly support middle class incomes—such as access to quality and affordable education, health benefits, cost controls, minimum wage policies, or more generally policies shifting bargaining power away from shareholders and management toward workers.  [emphasis added]

It’s good to see a solution that deals with the cause of the problem.  Janet Yellin take notice.

 

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Fed Head Takes on Inequality

Diagnosis unmatched by prescription

Janet Yellin, who chairs the Board of Governors of the Federal Reserve System, delivered an unusual and important speech two days ago about the growing gap between the richest Americans and everyone else.   

Speaking at a conference at the Federal Reserve Bank of Boston, Yellin  offered “Perspectives on Inequality and Opportunity from the Survey of Consumer Finances.”  She said,

It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.

It’s fair to assume that was a rhetorical question and the answer is, no, the widening gap between the ultra-rich and the rest of the population is a threat to democracy and the economic futures of most people.

While the trend of wage stagnation for working Americans goes back to the 1970s, Yellin focused on the most recent period of economic history, 1989 to 2013.  This is useful because it includes the recent economic meltdown as well as the so-called “recovery.”  

Yellin illustrated her talk with an obligatory set of graphs (she’s an economist after all), including this one depicting changes in net worth (i.e. wealth) for the wealthiest 5% of Americans, the next 45%, and the bottom half of the population.   

As the chart makes obvious, the wealthiest 5% of Americans saw their share of the nation’s wealth climb from about 55% to about 65%, while the next 45% saw its share go from from 45% to 35% and the share held by bottom 50% approaching zero percent.   

It’s good to know the nation’s top economist is alarmed. 

The second half of Yellin’s speech concerned what she called “four building blocks of opportunity,” access to early education, access to higher education, ownership of private businesses, and inheritance.  The first three could be useful ways for individuals and families to do better in a time of widening inequality, but do not affect tax policy, deindustrialization, political and business attacks on organized labor, and the growth of the finance sector’s share of the economy, i.e. the factors driving the equality gap to historic highs. 

For a more incisive analysis of what went wrong, I recommend the latest issue of Dollars and Sense, especially an article by Gerald Friedman on “What Happened to Wages?”  He writes,

From the dawn of American industrialization in the 19th century until the 1970s, wages rose with labor productivity, allowing working people to share in the gains produced by capitalist society.  Since then, the United States has entered a new era, in which stagnant wages have allowed capitalists to capture a growing share of the fruits of rising productivity.

I recommend examining Friedman’s charts alongside Yellin’s.  And try to follow Yellin’s fourth piece of advice:  inherit a fortune.  

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Writing in the New York Times, Thomas Edsall assembles an impressive array of facts that illuminate the realities of wealth inequality in America.  

Citing Federal Reserve figures, Edsall reports that household net worth, corporate profits, and the value of real estate have been going up at an impressive pace.  If you think that sounds like evidence of recovery you’d be mistaken, at least if you equate “recovery” with economic conditions that are improving for most workers.   

“The September Federal Reserve Bulletin graphically demonstrates how wealth gains since 1989 have gone to the top 3 percent of the income distribution,” he writes.  “The next 7 percent has stayed even, while the bottom 90 percent has experienced a steady decline in its share.”

It’s not just wealthy individuals getting wealthier; it’s also the corporations they own and run.    Citing statistics from Goldman Sachs, Edsall says corporate profits rose five times faster than wages last year.  And he quotes an article from Business Insider that stated,

“America’s companies and company owners — the small group of Americans who own and control America’s corporations — are hogging a record percentage of the country’s wealth for themselves.”

Edsall asks, “Why don’t we have redistributive mechanisms in place to deploy the trillions of dollars in new wealth our economy has created to shore up the standard of living of low- and moderate-income workers, to restore financial stability to Medicare and Social Security, to improve educational resources and to institute broader and more reliable forms of social insurance?”

It’s the right question. 

For answers he turns to a bunch of economists, who provide data about tax rates, labor force participation, the declining growth of well-paying jobs, globalization, and the reduction of labor’s share of profit relative to capital in a time of rising productivity.  

My answer is a bit more straightforward:  America’s companies and company owners — the small group of Americans who own and control America’s corporations — are hogging the political system.  This is nothing new, but in the legal environment created by recent Supreme Court decisions (Citizens United and McCutcheon in particular) it is becoming easier for corporate interests to wage class war and win.  Simply put, the people who make the laws and set the policies have their receptors tuned to the frequency where the corporations are broadcasting. 

Edsall notes survey data that reveal corporations are not so popular in the USA and other so-called “advanced countries.”   He asks if the legitimacy of free market capitalism in America is facing fundamental challenges.

My gut response is to say “I hope so.”  But the dynamics described by all those economists are not the workings of “the invisible hand.”  The market is operating under a set of rules established by those who already have more than their fair share of power, wealth, and privilege.  The legitimacy of our corporate-directed political system must be challenged as well.

#GUI

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A quiet country road from Dublin to Hancock, New Hampshire was the site of the New Hampshire Rebellion’s latest “Granny D Walk” to end the influence of money in American politics.P8230046 (2)

Granny D was the public moniker for Doris Haddock, a long-time Dublin resident who set out from California a few days short of her 89th birthday to walk across the USA and publicize the need for campaign finance reform.  She had just turned 90 when she reached the nation’s capital on February 29, 2000. 

The path of today’s walk was one she used to train for her historic pilgrimage, which ended at the US Capitol on February 29, 2000, a month after she turned 90.

Few people reflect the strength of conviction demonstrated by Granny D, observed Larry Lessig, the writer and Harvard Law School professor who launched the Rebellion last year.  The group conducted a winter march from Dixville Notch to Nashua in P8230054

January and another along the New Hampshire seacoast in July. 

Today forty people, aiming to make breaking the money-politics link a central issue of the 2016 presidential nominating contest, continued Granny D’s quest.  Walking through a wooded area with no pedestrians and barely any cars, there weren’t many people to educate and convince.  But perhaps that wasn’t the point.  P8230045

There’s a long history of walks, marches, and pilgrimages intended to bolster movements for social change.  Gandhi’s march to the sea, the 1965 march from Selma to Montgomery, the United Farm Workers Union’s 300-mile march from Delano to Sacramento, and the regular peace walks led by the Nipponzan Myohoji monks come to mind as examples.  Yes, they are expressions of political views, but they also embody spiritual power. 

When we sing “we won’t let nobody turn us around,” we aim to capture that same spirit.  When musicians Leslie Vogel and Fred Simmons treated us to “Just a P8230063 Walk with Granny D” before the march, I felt the spirit in motion. 

Part of the point was also to get to know new people, Dan Weeks said at the walk’s outset.  Dan, who was recently appointed as Executive Director for the NH Coalition for Open Democracy (NH COD), says his own activist inclinations began when Granny D visited his high school.  At that time the impressionable 15-year old learned from his elderly neighbor that companies which profited from selling tobacco had a heavy hand in writing the nation’s laws through their political involvement.  Children were dying because of the nation’s twisted approach to campaign finance, Granny D explained.  Dan was hooked, not on cigarettes, but on money & politics activism.  “The systemP8230109 excludes so many of our people,” he says. 

To put it another way, if money is speech, then those with the most money get the most speech.  And as the distribution of wealth becomes increasingly skewed, inequality of speech becomes a profound political problem for a country where government of the people, by the people, and for the people is supposed to be imperishable.

From Dan’s perspective, a walk in the steps of Granny D is a statement that we have not given up hope.

Two hours after setting out, clusters of walkers arrived in the center of Hancock, a town with a population of fewer than 2000 people.  There we were greeted by volunteers and treated to ice cream donated by Ben & Jerry’s.  The crowd had grown to about P8230117 60 people, now including Jim Rubens, a Republican candidate for the US Senate who has made campaign finance reform a plank in his platform (and who says he’s the only Republican in the race who is speaking out against the third Iraq war).  

When the ice cream had been eaten, Dan Weeks introduced Professor Lessig for a short speech by the gazebo on the Hancock Common.  Lessig apparently didn’t feel a need to educate the assembled dozens about the corruption caused by the billions of dollars in the political system, nor did he choose to restate the strategy of the NH Rebellion.  He chose instead to exhort the small crowd about the importance of action, something he says our country has become unaccustomed to taking. 

“We’ve just gotten through a century of very passive politics, where we were told to shut up and listen to the commercials and just show up to vote,” Lessig said.

“That’s the only thing we were to do. We weren’t to organize or to get people out in P8230104

the streets.  We weren’t about ordinary citizens trying to lead.  We weren’t practiced in that kind of politics.”

“But that’s the kind of politics this will take,” he continued.  “Neither the Republican nor the Democratic Party leadership like this issue.  Neither of them are going to make this transition happen on their own.  It will only happen if we force them.”

Plans are already being hatched for another walk next January, timed to coincide not only with Granny D’s birthday but also with the fifth anniversary of the Citizens United court decision. 

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Chuck Collins, whose latest book is 99 to 1: How Wealth Inequality is Wrecking the World and What We Can Do About it, spoke to the Henniker Peace Community yesterday. 

Chuck Collins didn’t come to Henniker to “foment antagonism or class warfare,” he said, but instead to encourage people to do some “simple math.”  It’s pretty much the same thing.

The richest 44 households in the USA hold more wealth than the poorest 95%, for example.  The wealthiest 1 percent controls 36 percent of US wealth and more than 42 percent of all financial assets. 

It hasn’t always been that bad.  According to Collins, there’s been a “dramatic upward redistribution of wealth” in the past three decades.  That was no accident, but followed policy changes in which the rules of the economy were “rigged” to benefit asset owners over wage earners.  “These are the folks we need to defend ourselves against,” he told an audience of more than fifty people at the Henniker Congregational Church.

Historically, Collins said Americans have been comfortable with wealth and income inequality as long as they thought the rules were fair.  But that has shifted since the 2008 Wall Street meltdown.  Now, 70 percent of Americans believe extreme henniker 11-3-13 005 inequality is a problem.

It’s a problem that can be addressed with three types of policy changes:

1) “Raise the floor,” through a higher minimum wage and a stronger safety net;

2) “Level the playing field,” through reforms of the political process, such as overturning the Supreme Court’s “Citizens United” decision; and

3) “Break up concentrations of wealth and power.” 

It’s that third point that would meet the most resistance from the natural persons, organizations, and corporations where power and wealth are unfairly concentrated.  But there are specific steps to advocate, such as restoring the progressivity of US income taxes, raising the estate tax, closing loopholes that enable corporations to evade taxes by assigning profits to overseas subsidiaries, breaking up the megabanks, and imposing a tax on financial transactions.    Some of the One Percenters even agree.

One place we can take this message is into the presidential campaign, now warming up in both major parties.  New Hampshire and Iowa may soon be awash in candidates.  Let’s tell them what we think.

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Author Hedrick Smith Tours New Hampshire with Answers and Proposals

That wages for typical U.S. workers have been stagnant since the mid-1970s is not breaking news to anyone who has paid attention, nor is the rise of wealth and income inequality that makes us the most unequal country in the so-called “developed world.” 

Forbes reported last month, “Five years after the financial crisis sent the fortunes of many in the U.S. and around the world tumbling, the wealthiest as a group have finally gained back all that they lost. The 400 wealthiest Americans are worth just over $2 trillion, roughly equivalent to the GDP of Russia.”  Such reports have gained more attention since the Occupy movement drove the concept of the “1%” into the national consciousness. 

Lawrence Mishel of the Economic Policy Institute says “A key to understanding this growth of income inequality—and the disappointing increases in workers’ wages and compensation and middle-class incomes—is understanding the divergence of pay and productivity.”  [see chart]  Growth of real hourly compensation for production/nonsupervisory workers and productivity, 1948–2011

But what was it that detached productivity from wages in the 1970s?  What started a trend that has continued pretty much unabated through all the booms and busts of the past five decades?  That’s the major theme of Who Stole the American Dream?, a new book by Hedrick Smith, the Pulitzer Prize-winning journalist who toured New Hampshire last week.  With a pace that might have made observers wonder if he’s running for president (he’s not), Smith spoke at three college campuses, one high school, 2013 10 24 NH AFL CIO 001 the NH AFL-CIO, the office of the NH Democratic Party, and community groups in Exeter and Amherst.  He also appeared on NHPR’s “The Exchange,” recorded an interview with Manchester Community TV, and joined me for an interview on WNHN-FM.

Smith told an audience that packed the Peterborough Unitarian Universalist Church that he set out to write a book on “the American dream at risk.”  That was until he did his research and concluded that the concentration of wealth and power in the hands of a wealthy elite was more extreme than he had realized. 

Smith attributes the beginning of the “bosses’ revolt” to an obscure memo written by Lewis Powell in 1971.  At the time the future Supreme Court Justice was a well-connected corporate lawyer, worried that the “the American economic system is under broad attack.” 

“Powell’s intention was to spark a full-scale political rebellion by America’s corporate leaders … to change the political and policy mainstream in Washington and to put the nation on a new track, a track more favorable to business,”  Smith writes in the opening chapter. 

“The over-riding first need is for businessmen to recognize that the ultimate issue may be survival – survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people,”  Powell warned the US Chamber of Commerce, the body that commissioned his paper.  His prescription gave particular attention to the mood on college campuses and the need for business to take charge of the intellectual environment, but above all called for business leaders to “be far more aggressive than in the past.”

Business responded.  “After having kept government at arm’s length, the business community massively expanded its physical presence in the nation’s capital,” Smith writes.  “In a few short years, more than 2000 companies set up Washington offices.  The number leapt from 175 in 1971 to 2445 a decade later.”  Leaders of the biggest corporations formed The Business Roundtable, the heaviest of the heavyweight business lobbies.  New think tanks, notably Heritage and Cato, sprang to life, and the American Enterprise Institute ballooned in size and influence.  The National Federation of Independent Businesses, the most powerful advocate for small business groups, grew from 300 members in 1970 to 600,000 in 1979. 

“By the late 1970s,” writes Smith, “business interests had mustered such a hugeconcord 10-23-13 008 force that they outnumbered Congress 130 to 1.  They had 130 lobbyists and advocates for each of the 535 members of Congress.”

Big business flexed its muscles big time during the 1977-78 Congressional session.  The business lobby took on Ralph Nader’s consumer movement and defeated the proposal to create a consumer safety agency.  They went head to head with organized labor and defeated plans for labor law reform.  They pushed for de-regulation of transportation, a new bankruptcy law that kept corporate leaders at the reigns of companies they had driven into debt, laid the groundwork for the decline of the defined benefit pension plan, and most important, won cuts in corporate and capital gains taxes.  The new tax law “gave the economic benefits of tax law primarily to the economic elites that were now exercising increased economic power,” says Smith. 

One aspect of this development is especially worth noting:  the revolt of the bosses began in part as a reaction to moves by President Richard Nixon, who Powell thought was overly sensitive to public pressure.  And the first big wins for the new business lobby came when Jimmy Carter was president and Democrats controlled both houses of Congress.  Ronald Reagan carried the Powell prescription forward, but it was already gaining bi-partisan momentum when Reagan gained the White House. 

Hedrick Smith’s strongest chapters are in the sections called “Dismantling the Dream,” “Unequal Democracy,” and “Middle Class Squeeze.”  With a blend of stories from downwardly mobile middle class workers and solid descriptions of the specific policies promoted by the business lobby, Smith provides ample details to explain why the bosses are winning. 

For example, he describes how Dirk Van Dongen, President of the National Association of Wholesaler Distributors, led the backroom lobbying that enabled George W. Bush and Karl Rove to push through another round of massive tax cuts benefitting the rich.  Despite public opposition, Van Dongen and his Gang of Six – the US Chamber of Commerce, Business Roundtable, National Association of concord 10-23-13 015 Manufacturers, National Federation of Independent Business, National Restaurant Association, and Van Dongen’s Association of Wholesalers – organized thousands of CEOs, district by district, to lobby for the tax cut.  “With a full court press by the Gang of Six reinforcing the White House push, the Bush tax bill, offering $1.35 trillion in tax cuts over a decade, passed the House by 240 – 154 in May 2001.”  The bill then cleared the Senate 58 – 33. 

“When economists did the numbers,” Smith writes, “they found that 52.5 percent of the Bush tax cuts went to the richest 5 percent of U.S. households.”  When joined with the off-budget trillions for the wars in Iraq and Afghanistan, the tax cuts are the major contributor to the federal deficit that has right-wingers calling for cuts in Social Security and Medicare.  

Who Stole the American Dream also gives great descriptions of the shift from defined benefit pensions to largely self-funded 401-k plans, and the resulting insecure retirement faced by the baby boom generation.  In addition, the book has a good chapter on the housing bubble and sub-prime banking crisis that touched off the 2007 financial meltdown.  It details Wal-Mart’s decision to outsource production to China and the ripples this has sent through the US job market.  Smith also describes the outsourcing of knowledge-sector jobs to China and India.  Given that these are the jobs we were told would replace blue collar manufacturing, the implications are stark. 

That NAFTA is not mentioned at all and the World Trade Organization is mentioned only as a body that might help the U.S. improve its trade relations with China leads me to wonder what Smith thinks of the approach to global commerce brought to us by the same corporate lobbyists.  Likewise, I wonder how he sizes up the impact of Paul Volcker’s tight money policies during the Carter years.   Attention to the link between race and poverty would have provided valuable depth to Smith’s analysis.  But those quibbles aside, Hedrick Smith has answered his own question; we can read who stole the American dream and how they did it.

Smith confessed at a couple of talks that as a journalist he was somewhat reluctant to offer a prescription for middle class resurgence.  “Changing America’s direction will not be easy,” he writes at the beginning of his concluding section.  “It will happen only if there is a populist, grassroots surge demanding it, like the mass movements of the 1960s and 1970s.”  That’s hard to argue with.

Instead of a bold plan to reverse the agenda foisted on the country by Lewis Powell, Dirk Van Dongen, and their legions of corporate lobbyists, Smith offers a conventional set of proposals to rebuild the infrastructure, rebuild American manufacturing, cut military spending, and protect the safety net.  Those are all admirable objectives, but Smith then states that progress is being held back by “partisan extremists,” as if the Left somehow shares responsibility with the Right for the rise of plutocracy. 

Instead of a resurgent Left, Smith calls for a resurgent “center.” Step 9 in his ten-2013 10 24 NH AFL CIO 005 point plan is “to regenerate the centrist core of American politics both by rejecting extremist candidates in both parties and by opening up our political process in every state to give more influence to moderate and independent voters.” 

This left me confused.  Smith understands and states clearly that “Democrats have been dragged toward the right by the gravitational pull of the Republican Right.”  That means the “center,” a function of political geometry, has moved right as well.  That’s the wrong place to look for inspiration and answers.  Throngs chanting, “What do we want?  Moderation!  When do we want it?  Now!” won’t worry Dirk Van Dongen and his Gang of Six. 

Writing recently in The Nation, Gar Alperovitz starts an article on “Renovating the American Dream”

Everyone knows the United States faces enormous challenges: unemployment, poverty, global warming, environmental decay—to say nothing of whole cities that have essentially been thrown away. We know the economic system is dominated by powerful corporate institutions. And we know the political system is dominated by those same institutions. Elections occur and major fiscal debates ensue, but most of the problems are only marginally affected (and often in ways that increase the burdens).

The issue is not simply that our situation is worrisome. It is that the nation’s most pressing problems are built into the structure of the system. They are not unique to the current economic slump or the result of partisan bickering, something passing in the night that will go away when we elect forward-looking leaders and pressure them to move in a different direction.

For Alperovitz, whose latest book is What Then Must We Do?, the answers come from building democratic economic institutions, such as worker-owned enterprises, state-owned banks, and a state-by-state transition to a single-payer health insurance system.   When combined with active resistance to plutocracy, that route is promising.

Alongside his plea for a resurgent “center,” Hedrick Smith also calls for a mass uprising against the plutocrats,

“an army of volunteers prepared to battle for the common cause of reclaiming the American Dream.  Occupy Wall Street and its spin-offs in more than fifteen cities around the country began that process, focusing more of the national dialogue on the hyper-concentration of wealth and power in America – the costly divide of gross inequality between the top 1 percent and the other 99 percent.  But for significant long-term impact, either Occupy will need to mature or some new movement will need to emerge with broader participation, better organization, more clearly articulated goals, and specific policy targets.”

Bring it on!

 

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