WWDD — What Would a Democracy Do?

Crossposted from Imagine Democracy

Here is a question to ask yourself when you are looking at something the government is doing: “Would a democracy do this?”

When cutting regulations (protections) on corporations, “Is this something a real democracy would do?”

If Congress is working on a tax cut, look at it and ask, “Would a real democracy do this?”

A general rule, ask if a democracy would really do it.

On Trump’s Steel/Aluminum Tariffs And So-Called “Trade” Generally

I agree with the tariffs, but not the way it is being done. It should have been planned, phased in, coordinated with US industry and, most important, part of a comprehensive US economic/trade/industrial policy. The latter just isn’t going to happen under Trump nor under a Wall Street dominated economy even with Democrats running things.

Trump’s tariff doesn’t come out of nowhere. This is the result of an actual process. It comes after our Commerce Department ruled on a case that started under Obama that China is dumping steel.

Here is an example of the problem. China increased its capacity dramatically during their infrastructure boom (which is how they got through the recession). Then internal demand dropped as the infrastructure projects wrapped up, but the steelmaking capacity continued because they don’t want to lay a lot of people off. So they are selling the steel wherever they can at prices lower than cost. The rest of the world suffers. Esecially the US “rust belt” workers. But also our country’s ability to make steel as needed. Imagine a conflict with China and they cut off steel to us, after this “dumping” has closed what’s left of our production capacity.

From April 2016’s CAF post, The Big Fight Over Chinese Steel,

When China’s growth was very high, and China was building tall buildings and high-speed rail all over the place they needed a lot of steel. Then their economy slowed. Now China is making more steel than they need.

Meanwhile countries around the world are fighting their own slow growth with austerity policies that literally take money out of their economies – like cutting back on infrastructure maintenance and modernization. And their slowing economies mean less steel use.

… So there is less demand for steel in China and around the world. Current global overcapacity is estimated at 700 million tons – more than seven times what U.S. steelmakers can produce. This is expected to get worse.

But Wait, There’s More – Cheap Labor

OK, now the bigger picture. Economists will tell you about the benefits of trade. I should have said Wall Street economists.

“Trade” is supposed to be about “comparative advantage.” This means a region that grows bananas has an advantage doing that compared to Iowa. But Iowa is great at crowing corn. Iowa trades corn for bananas, etc.

However currently discussion of “trade” really just means using “trade” deals for moving American production out of the country to low-wage places. The “comparative advantage” involved is cheap labor. (The factories aren’t even already there, they are moved there.) Wall Street likes to argue the benefits of lower prices resulting from using what amounts to slave labor outside the US but the real benefit they get from this and the rest of the trade regime is pressure on US wages, which means people have to take what they can get (or drive for Uber) and labor cannot demand a larger slice of the pie.

When they say trade agreements “increase trade” remember that moving a factory across a border and bringing the same goods back here “increases trade” because now they cross a border. “Trade”?

Even More – “Expanding Markets”

There is another part of what we call “trade.” They say trade “opens up markets for US goods and services.” As if those markets are not already being served? What it does is open up “markets” for exploitation by the largest, ost powerful competitors, wiping out whatever has developed locally. There AND here. Look at how “trade’ has wiped out OUR textile, electronics, etc producers. And OUR giant monopolies like to use their power to wipe out local industries elsewhere.

So “trade’ is currently being used by giant multinationals to consolidate their power.

It Doesn’t Have To Be This Way. Imagine Democracy.

It doesn’t have to be this way.

Imagine if the US had full-employment policies, so everyone who wants a job has one. This is in fact easily done.

Imagine a democracy with rule of law and sensible coherent structures for determining policy. (Those policies would include breaking up monopolies and reducing the power of big companies.)

Imagine a government that offers a job to anyone who wants one, with reasonable above-poverty pay and benefits. There is so much that needs doing, like child care, elder care, retrofitting buildings to be energy efficient, fixing up parks, teaching — you know, the list of things that a democracy would put resources into to make people’s lives better.

So imagine a system where everyone has the ability to get by, and the opportunity to do work that does good. Imagine how jobs would change if employers had to compete to get people to do the jobs they need done. That competition would involve offering jobs that actually do make the world a better place, because people would be able to choose to do that.

This Creates A New Economic Problem – A NEED To Outsource Production

Never mind the societal reckoning full employment policies would bring, with its higher wages, increases in labor’s power, etc. (That’s another discussion…) There would be a new economic problem: Our economy would have trouble finding enough labor to get things done. In other words, the economy would be prevented from running at full capacity by a demand for labor. What to do?

THEN it makes economic sense to move production elsewhere. But then it could be done non-exploitively, bringing higher pay and prosperity to the places we outsource to as well as here. Then trade becomes the benefit it is supposed to be, benefitting everyone. This is how democracies would do it.

And immigration. (But that’s also another discussion.)

In an economy designed to be of, by and for We the People outsourcing production could be good for everyone.

Imagine an economy designed to be of, by and for We the People. Wow.

Republican Deficit Fear Strategy

Driving up deficits and then using deficit fear to stop spending on things that We the People want and need has been open Republican strategy since Reagan. Google “strategic deficits.”

Tom Wicker explained in the NY Times in 1985, in IN THE NATION; A Deliberate Deficit,

To hear Larry Speakes tell it, President Reagan emerged from anesthesia righteously demanding action on the budget deficit ”this week.” That sounds fine – except that it now appears that the deficit was deliberately created by Mr. Reagan in order to do away with Democratic social programs dating back to the New Deal.

Who says so? David Stockman, the departing Budget Director, at second hand, and Friedrich von Hayek directly. He’s the Nobel Prize-winning economist who’s been a guru of Reaganomics.

… After the Budget Director’s resignation last week, Senator Moynihan of New York said Mr. Stockman had told him that even in 1981 Mr. Reagan knew the tax cuts would mean loss of revenue, but that the President had accepted the resulting rise in the deficit in order to bring pressure on Congress to cut spending.

That sharply contradicts what Mr. Reagan then publicly argued – that cutting taxes would expand the economic base and increase revenues. In his 1980 campaign, he even contended that the increase in revenues resulting from the tax cut would pay for the military buildup he also planned.

But Mr. Moynihan said Mr. Stockman had told him that in 1981, ”the plan was to have a strategic deficit that would give you an argument for cutting back the programs that weren’t desired. It got out of hand.”

Reagan used tax cuts and spending increases to goose the economy. A good economy gets votes. Then under Dems the entire Republican media machine blasted us with deficit/debt fear to force cuts in the things government does to make people’s lives better. Cuts are bad for the economy (and people), so voters not happy with Dems.

So everything people think they uderstand about deficits and debt is just the result of decades Republican “family budget around kitchen table” propaganda.

REPUBLICANS understand this and use it. The Federal budet is NOT like a family budget.

Republicans understand our government issues its own currency. It CAN NOT go “bankrupt” because it can just issue more currency. It CAN NOT “go broke.” We can issue currency to pay for the things We the People want and need. The additional currency is money in the economy.

If we issue too much currency (too much money in the economy) we end up with inflation. So taxes soak up the excess.

Taxes are not “revenue” that is used to “pay for” spending. Taxes are useful to redistribute, rebalance the economy.

Taxes redistribute and rebalance. Is inequality rising? Raise taxes on the rich. Are billionaires and corporations exerting influence on government? Tax them back down to size. Etc.

Deficit fear is just a tool to move votes to Republicans, make the rich richer and keep We the People down.

This post is based on this Twitter thread.

Progressives Should Focus On Russia

Too many on the “left” say progressives should not be focusing on the Russian interference in our democracy. They say it is just an excuse to allow the failure of Clinton and Democratic leadership to offer the public good policies that help people instead of just helping corporations and the rich slide. Some even say it is just old 1950s-style “red-baiting.”

Criticism of Russia is not related to previous pre-1990s criticisms of communism or socialism. Russia is not that. Today it is a kletocracy run by one guy and a bunch of oligarchs, sort of the perfect Koch/Thiel/Trump/corporate state that Republicans are trying to bring about here.

They Did It

The Trump campaign did do this and the Republican Party is running cover for it, just so they can continue to loot us with tax cuts for the rich and taking away the things our government does to make our lives better.

Its better for progressives if the spectrum of power goes from the left to centrist Dems, instead of from centrist Dems to the far right as it does now. Using Russia to get lots of Rs out of power and move that spectrum left only helps us obtain an environment in which Medicare-for-All, free college and university, allowing everyone to vote, restoring taxation and regulation on corporations, breaking up monopolies, bringing racial and gender justice, ending privatization, finally fighting climate change and all the other things needed to heal the country and planet are possible to achieve.

We need the public to understand that conservative/Republican/corporate rule is anti-democracy and not legitimate. Focusing on Russia helps us get there.

The Russia Story Isn’t Going Away

It’s not like the Russia story is going to drop from the news, allowing other things to be discussed. So ride the wave instead of fighting the tide.

The Russia story actually gives us an opportunity to talk about good policies instead of policies that hurt the country, by tying that discussion to Russian efforts to hurt us. All the talk about Russia gives us the opportunity to tie Republican anti-government policies to the ways Russia hoped to benefit from their interference in our democracy. Russia helped put them there in an effort to hurt the country and Republican policies hurt the country.

The Russia story delegitimizes Republicans by exposing their lack of legitimacy. (Along with voter suppression, gerrymandering and other ways they are not legitimately in power.) The more they and their policies are delegitimized the more progressive policies fill the vacuum.

Note how Medicare-for-All is being widely discussed, even while the Russia story dominates.

All the talk about Russian interference in democracy offers us a chance to remind people of what democracy means. erference in our democracy.

We Do Not Have Legitimately Elected Officials

Do we have legitimate governance, with the consent of an informed electorate?

If a voter makes a choice based on a campaign that is based on lies, disinformation, promises that are never meant to be fulfilled, incorrect assumptions and premises, psychological manipulation, intimidation, well-funded mass propaganda and the rest of the entire modern Republican operation — is there a legitimate outcome? Are votes that result from that legitimate votes?

What about a candidate who just lies, saying “what the voters want to hear” with no intention of doing what was implied in the campaign? Are those “legitimate” votes?

A “legitimate” election requires a properly informed electorate given adequate and correct information upon which to make a decision. Trickery, misinformation, lies, misdirection, manipulation, financially outshouting, and all the things we understand as modern “elections” actually mean the results are not legitimate and anti-democratic.

Never mind mass voter suppression, gerrymandering and the other ways our system has become “rigged” against allowing democracy to function. Never mind possible tampering with voting machines. Those things are also for real. But alongside those, this general non-functioning of democracy has become “normalized.” We do not even expect candidates to just tell the truth about issues that are important to us anymore, and when they do they are considered to be “outside the mainstream.”

Look at the extent to which our supposedly democratic system has been de-legitimized. This is not just about Trump, this has become systemic. Saying what is needed just to get votes is a violation of democracy and de-legitimizes the outcome. Tricking people, lying, manipulating, outspending all de-legitimize the outcome.

How can we restore truly functioning, free, informative news media combined with an attentive, educated electorate? How can we restore legitimacy to our entire democratic process? The first step is to call it out, stop accepting it, see it for what it is and say it for what it is.

Thoughts On Russia Election Systems Hacking Report

Here are some thoughts on the report that Russia was trying to — or did — hack into our election systems before the election.

1) Why was this a secret? Who from? Obviously it wasn’t a secret to Russia. Maybe they’re keeping the idea that they detected it a secret? (And this tips Russia or whoever off to what we did not detect, by the way.)

Continue reading

Impeachment Is Not Enough

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.

An Innovative Solution To Corporate Taxation

While we’re talking about taxes…

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.”

The idea is, as Baker wrote last week in the LA Times, Instead of taxes, make corporations give the government stock,

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.

(See Lynn Stout’s The Shareholder Value Myth for a deeper dive into what and why a corporation is.)

Tax Cuts Defund The Very Things That Boost The Economy

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?

What Tax Cuts Actually Do

In 2012 the Congressional Research Service looked at the data from past tax cuts and the effect they had on the economy, and issued a report titled, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945. The summary explained,

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?

From Tax Cuts Are Theft,

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.

United Incident Shows Why We Need To Re-Regulate Corporations

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.

Airline Deregulation

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.

And you can’t do anything about it. You can’t even complain without risking being considered “disruptive” and dragged from the airplane and jailed. And be careful how you dress.

Not Just Airlines

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.

Pollution rules are being deregulated. Pesticides that harm children are being deregulated. The list is long.

“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.

“Burdensome” Regulations

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?

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This post originally appeared at Campaign for America’s Future (CAF) at their OurFuture site. I am a Fellow with CAF, a project of People’s Action. Sign up here for the OurFuture daily summary and/or for People’s Action’s Progressive Breakfast.