But at the end of April I left my position as a “Senior Fellow” at Campaign for America’s Future, and haven’t written much since. I’ve started working at the Center for Media and Democracy and will start writing regularly there at same point. But right now I’m having a problem writing.
The problem has a few causes (I think).
I’m overwhelmed with incoming crap, mostly about bad things Trump does. But also so much breaking news about investigations, corruption, collusion with Russia, things like that. So things are moving so fast. I feel like by the time I finish writing a piece, it’s irrelevant.
I can’t even imagine how it is for people who produce a show like Chris Hayes’ or Rachel Maddow’s. They book guests in advance, do a lot of research to prepare, and then 10 minutes before the show Trump does something really bad or really stupid, or some news breaks about some new connection between Trump and Putin… and all that work is down the drain.
A feeling that whatever I write it won’t do any good. I spent year writing warnings that we are on a path that could lead to a Trump. Now we’re there, no warnings are needed. I’m not sure how we get out of this.
Those are the main reasons. I’m still doing lots of radio shows, and those are just fine. It’s not like I don’t have anything to say.
My friend (known as) Meteor Blades suggested trying to write small pieces. So this is a small piece about having trouble writing.
Friday, April 28 was my last day at Campaign for America’s Future / People’s Action and the OurFuture.org blog. After a break (and assuming Trump hasn’t killed us all) I will be writing at the Center for Media and Democracy, the organization that investigates and exposes corruption. You know them for ALEC Exposed, KOCH Exposed, SPN Exposed, SourceWatch and other incredible investigative work they do. I will be writing about corruption and democracy.
The problem with impeachment is it doesn’t really solve our problem. The problem we have goes so far beyond just Trump and into flaws in the the design of our system.
George Washington established rule by “norms” when he declined to run again for President, saying we are not a nation of kings. So it became a norm that presidents hand over power. In the years since we developed a system of democratic norms instead of laws that can be enforced, with systemic mechanisms to ensure enforcement.
So now we have a president who has no interest in norms or rule of law, and we have no laws and no systemic mechanisms to do anything about it. He and his cronies are destroying our system of democracy and rule of law.
These clowns got into office illegitimately and we have no mechanisms to stop the destruction of all the “public structures” We the People own and treasure, from our public land to our public schools to our public infrastructure to our system of checks and balances to our democracy itself.
They got into office illegitimately using a corporate-and-billionaire-financed propaganda machine (and possibly non-US “dark money” funding sources) spewing lies at us 24/7/365 for decades, massive voter suppression, possible election-rigging, the electoral college designed around maintaining slave states, lies (“I will drain the swamp”) and all the other things they have done.
And beyond the presidency we have the gerrymandering lock, states populated by cows but with two senators, and other ways they maintain a grip on power when they can’t get the votes.
All impeachment does is move the incompetent, loathsome Trump out of the way, after he signs the things they want and they are through with his usefulness. But the entire fraudulent crowd will still maintain illegitimate power.
What we need is a Truth and Reconciliation Commission that can sweep away all the corruption, illegitimacy and lies and find ways to restore democracy and return Power To The People.
Over the weekend The Zero Hour with RJ Eskow interviewed economist Dean Baker, co-director of the Center for Economic and Policy Research, to talk about “A New Way to Make Corporations Pay Their Fair Share.”
If the tax reformers are serious, and I hope they are, here’s one simple way to largely eliminate the gaming opportunities that have made these people rich.
Instead of traditional taxes, the government could require corporations to turn over a portion of their stock, say 25%, in the form of non-voting shares. The government would benefit from any dividends or share buybacks but would have no voice in running the company.
This system would eliminate almost all opportunities for gaming since a company would not be able to deny the government its share of profits unless it also withheld profits from its other shareholders. And we would not call that “tax avoidance” but outright theft – the sort of thing that gets people sent to jail.
This government (We the People) share of corporations would replace taxation, because the government would collect dividends or the value of the share would increase along with the profits (formerly taxable) of the corporation. The government and corporate tax-accounting bureaucracies would be unnecessary. Our democracy would receive revenue so it can do things to make our economy and lives better.
Why should the government (We the People) have a share of corporations? People generally do not understand what a corporation really is, and this common misunderstanding works to be benefit of those who make money off of them.
Corporations are entirely creations of government. They don’t exist without government. A corporation is a package of laws designed to accomplish a public purpose.
Individuals do not generally have the kind of capital available to accomplish large-scale projects like building a series of factories to make cars or airplanes. It’s also risky to sink so much of one person’t holdings into something like that so those with sufficient resources might not do it.
So government (We the people) created corporations to enable pooling of capital and reduction of individual risk. We (through our government) grant these entities the right to enter into contracts, write checks, hire people, borrow money, file lawsuits, etc. as if they were a “person.”
A common misconception is that shareholders “own” corporations. They do not, but shareholders do elect the Board of Directors, which hires people to manage the corporation according to the Board’s instructions.
People tend to think of and talk about corporations as sentient entities. But corporations do not think or decide or act or anything else. The managers of the corporation do that. For example, “Wells Fargo” did not “decide” to commit fraud against their customers, the corporation’s executives — people — did that.
Another common misconception is that corporations are required by law to do whatever they can to make profits for the shareholders. In fact this is a relatively recent concept that flourished as people’s understanding of the purpose of corporations diminished. In fact government does much to limit what corporations can do while seeking profits. They cannot (aren’t supposed to) kill or injure people to increase profits, cannot poison the air and water, cannot commit fraud, etc.
So the idea that government should keep their hands off of corporations and not hold some percent of them for the benefit of We the People is really preposterous. This thinking misunderstands what a corporation is, how and why it exists and what its purpose is.
The goal of Baker’s idea is to create a system where corporations are paying their share to We the People, without all of the incentives to come up with schemes to avoid taxes. Baker’s idea accomplishes that goal. Baker suggests that government hold 25% of corporate shares, but the tax rate has already dropped from 52% to 46% under Reagan to 35% today, and the corporate share of the overall tax burden has fallen from 32% to only 10%. SO perhaps a higher share would be appropriate for restoring revenue and democracy.
Republicans are proposing a huge, huge cut in corporate tax rates. They are also proposing to let giant, multinational corporations keep much of the taxes they already owe on profits they are keeping in “offshore” tax havens.
Lower tax rates mean higher after-tax profits, which increases the value of stock holdings.
Who owns corporate stock, and therefore receives the benefits of these tax cuts?
Do We All Benefit From Corporate Stock?
Lets look at just who owns corporate stock.
Republicans like to pretend that all of us are invested in the stock market, if not by directly owning stocks, then through “our” retirement plans. This is usually written by and believed by upper-level, comfortable people that actually do have retirement plans.
But 45% of Americans have no money for retirement at all. Only 44% of Americans put anything into a 401K if their company offers one — and this number includes workers with only $100 in the plan. Only 18% of Americans are putting money in an Individual Retirement Account (IRA), ehich may or may not hold stocks. Only 4% of private-sector workers have only a “defined benefit” plan, usually called a pension.
So much for “our” retirement plans. Aside from retirement plans, a 2016 Gallup survey found that only 52% of Americans own any stocks at all – down from 65% in 2007.
So Who Does Own Stock?
Here is a chart of who owns corporate stock (and therefore pays those taxes.)
As of 2007, the top 1 percent owned 50.9 percent of all stocks, bonds, and mutual fund assets. The top 10 percent owned 90.3 percent. Things have only concentrated upward since 2007.
People talk about an “upper class” that holds most of the wealth in our society now. Maybe the thinking on this needs to change from a “class” of people to just a few people.
It is these few people who are the beneficiaries of corporate tax cuts. As tax rates drop the value of their stock holdings rises. The rest of us lose our ability to have good schools, roads, health care, courts, scientific research and all the rest of the things our government tries to do to make our lives better.
This is who we are talking about when we talk about corporate tax rates. It’s not anonymous, nameless corporation, it is people — just a few people.
After 8 years of complaining about “Obama deficits,” Republicans are proposing huge, dramatic, unprecedented tax cuts, especially for corporations. President Trump wants the rate cut from 35% down to 15%, denying the government $2 trillion of revenue over the next decade. He is also proposing dramatic income tax cuts for billionaires like him.
Republicans call corporate tax cuts “pro-growth,” saying they will give the economy a boost. Trump’s Treasury Secretary says the plan will “pay for itself with economic growth.”
So now they’re for “stimulus”?
But here’s the real question: do tax cuts actually boost economic growth?
This report attempts to clarify whether or not there is an association between the tax rates of the highest income taxpayers and economic growth. Data is analyzed to illustrate the association between the tax rates of the highest income taxpayers and measures of economic growth.
And what did the study find?
There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.
In fewer words: There is no evidence that tax cuts bring economic growth, but they do cause income to concentrate at the top.
But wait, it’s worse than that. Tax revenues build roads (and bridges and airports and rail systems and and water systems…), educate the population, conduct scientific research, run the courts, enforce regulations, standardize (and enforce) weights and measures, and about a million other things that make businesses prosper.
If you cut taxes, over time the business environment necessarily gets worse because those roads deteriorate, people are not as well educated, scientific research declines, courts clog up, regulation enforcement declines, along with about a million other things that businesses rely on. If you can’t get educated employees, can’t move goods on crowded and deteriorated roads and your competitors can get away with cheating, your business just isn’t going to do as well as it could.
Tax cuts defund all of those things that boost the economy and make our lives better. Over time the economy necessarily gets worse.
Are Taxes Theft?
Republicans say “taxes are theft.” They say “taxes take money out of the economy.” They say it “takes from those who work and earn and giving to those who don’t.” They say taxation “extracts wealth.” The idea behind this is that government is illegitimate and “uses force’ to “take people’s money” so “they” can have it instead. They argue there are “producers” and “moochers” and the moochers outnumber the producers and take from them.
These are all actually arguments against democracy. Substitute the words “We the People” for the word “government” in their arguments and you’ll see how this works. The “they” in their arguments isn’t some “other” that grabs the money, it is We the People. The idea of democracy is that We the People have a government and we decide how to allocate the resources of our economy to make our lives better. That means taxing and spending.
Democracy is taxing and spending. And by definition government sending is on things that make our lives better.
Are tax cuts theft? Or are they really about theft of democracy from We the People?
The American Social Contract: We, the People built our democracy and the empowerment and protections it bestows. We built the infrastructure, schools and all of the public structures, laws, courts, monetary system, etc. that enable enterprise to prosper. That prosperity is the bounty of our democracy and by contract it is supposed to be shared and reinvested. That is the contract. Our system enables some people to become wealthy but all of us are supposed to benefit from this system. Why else would We, the People have set up this system, if not for the benefit of We, the People?
… The American Social Contract is supposed to work like this:
… But the “Reagan Revolution” broke the contract. Since Reagan the system is working like this:
Tax cuts eat the seed corn of our prosperity. We shouldn’t fall for yet another Republican con, this time from the con-man Trump.
The things that come out of President Trump’s mouth seem to depend on who he talks to or what he sees on TV in the minutes immediately preceding his mouth motion.
Based on his recent switchbacks, Trump has been spending a LOT of time talking to the alums of Wall Street powerhouse Goldman Sachs who now form his inner circle.
“Changed His Tone”
Trump has reversed himself on policy after policy, sometimes days or even hours after reaffirming positions he then reversed. The New York Times describes this phenomenon:
But Mr. Trump has changed his tone and backtracked on pledges and policies he supported days earlier. The shift suggests that the moderate financiers of Wall Street brought to the White House are eclipsing the populists led by Stephen K. Bannon, the president’s chief political strategist.
The Washington Post’s Daily 202, written for DC-area insiders, describes this new direction as “Trump’s lurch toward corporatism, globalism.”
● He reversed his position on NATO, saying, “It was once obsolete; it is no longer obsolete.”
● He reversed his position on labeling China as a currency manipulator, after saying last week that China is “the world champion” of currency manipulation.
● He reversed his position on Fed Chair Janet Yellen, after having said she and other “global special interests” had ruined life for middle America.
● He reversed his position on interest rates, saying “I do like a low-interest-rate policy, I must be honest with you.”
● He reversed his position on the Export-Import Bank, saying now, “It turns out that… lots of small companies are really helped!”
Why all these sudden switches?
A Goldman Sachs Administration
Most of these reversals bring Trump’s positions as president nicely in line with the interests of Wall Street, the Chamber of Commerce and the giant investment bank Goldman Sachs.
Is it just a coincidence that this comes after Trump has lined his administration with former Goldman Sachs executives? Headline after headline explains that Trump has hired “yet another” veteran of the firm.
One of the latest, with very high influence, is Gary Cohn, Goldman’s former President and CEO, now chairman of the National Economic Council. According to Mother Jones, Cohn left Goldman with “an estimated $285 million severance package.”
Damian Paletta at The Washington Post writes about Cohn capturing Trump’s ear:
The growing strength of Cohn and like-minded moderates was on display this week as Trump reversed himself on several high-profile issues – including a less confrontational approach to China, an endorsement of government subsidies for exports and the current leadership of the Federal Reserve. The president’s new positions move him much closer to the views of Cohn and others on Wall Street, not to mention mainstream Republicans and Democrats.
It was the clearest sign yet that an alliance of moderates in the White House – including Cohn; senior adviser Jared Kushner, the president’s son-in-law; and another influential Goldman Sachs alumnus, Dina Powell – is racking up successes in a battle over ideology and control with hardcore conservatives led by chief strategist Stephen K. Bannon, who held sway at the start of the administration.
Goldman Sachs? You might remember (or tried to forget but haven’t yet) how Trump reviled their influence in his now-notorious “closing” TV ad. It featured images of Wall Street, stock tickers, Lloyd Blankfein, the Chairman and CEO of Goldman Sachs, and financier-philanthropist George Soros.
In the ad, Trump says ominously:
It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.
That was then. It worked; he got the votes.
This is now. Yes, Goldman Sachs.
Why does this matter? Matt Taibbi’s great 2010 article for Rolling Stone described how Goldman Sachs manipulates our economy for the benefit of its executives and investors. The Great American Bubble Machine begins,
The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
Taibbi includes the warning,
…a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.
In a democracy, We the People are in charge. We are the boss of the corporations. At least that’s how it’s supposed to work.
Apparently, that isn’t so much the way it is anymore. The United States used to regulate corporations to protect people from concentrated power. Now concentrated power has taken over our government, which fights the people for the benefit of corporate profits.
Or, to paraphrase John Kenneth Galbraith and a Soviet joke: In democracy, We the People regulate corporation. In deregulated America is other way around.
The Face Of Deregulation
This is literally the face of deregulation of corporations:
This is what can happen to you now in the United States if you get in the way of something a corporation wants:
We’ve all seen the videos. A guy gets beaten and dragged from his paid seat on a United Airlines flight because, in essence, he was interfering with corporate profits just by being in the seat. The airplane was full, the corporation decided it could make more money by moving some employees to another town, and a passenger was in the way.
Airlines used to be regulated in the U.S. as a public utility that served citizens. They competed with each other by offering better service.
Then in 1978, airlines were deregulated and passengers were considered consumers instead of citizens. The airlines argued that more competition would bring benefits. Instead, as time passed, airlines did what corporations tend to do.
They consolidated, reducing competition. They reduced and reduced and reduced service to reduce costs. They cut employee wages and benefits. They changed routes to “hubs” for their convenience, causing passengers to have to wait hours in crowded airports. And they write contracts that said you can’t use their (essential) service without signing away every right you have.
Since deregulation, airlines intentionally overbook many flights. They scrunch as many people into smaller and smaller seats just inches from the next, and sell you more legroom. Instead of serving food, they sell it. They charge you if you travel a suitcase. They charge you to bring a travel bag on the plane.
Soon, they will put a large spike in the seat and charge you to shorten it.
It’s not just airlines. All kinds of corporate deregulation have been harming We the People. There used to be regulations requiring broadcast media to act in the public interest in exchange for use of publicly-owned broadcast frequencies. Now, obviously, there isn’t.
“Arbitration clauses” are now used in all kinds of contracts and agreements to keep you from being able to take corporations to court. “Tort reform” laws also restrict access to courts when people are harmed by corporations.
You get the idea.
Corporations complain that regulations are “burdensome.” They complain that regulations cost them money.
Of course, regulations that stop corporations from polluting streams place a “burden” on them to properly dispose of waste. Of course it costs money to require them to not just dump waste into rivers, streams, and the air we breath.
Carmakers used to complain that rules requiring seat belts in cars were a “burden.” Tobacco companies used to complain that stopping them from selling cigarettes to kids “cost money.” So far, government regulation has protected us from these abuses-for-profit. But for how long?
Who Is Our Country FOR?
Americans have lost our understanding of the meaning of democracy and of the powers democracy brings us and duties it places on us. We have become consumers instead of citizens and we think that markets should make decisions for us instead of our votes.
In a democracy, We the People are supposed to be in charge. In a democracy, our government by definition exists to serve us, protect us, and do things for us that make our lives better.
A democracy regulates corporations to protect people from concentrated power. If we let concentrated power make decisions for us, we end up getting dragged off of airplanes because the corporation decided the seat we paid for would make them a bit more profit.
Corporations should be regulated to serve the public interest. Why else would We the People want to allow these things called corporations to exist at all?