Answering Kennedy’s Call

Vice Presidential candidate Kamala Harris made a promise at this year’s Democratic Convention. She would create programs that give every American the opportunity to better themselves.

“I see an America where we hold fast to the fearless belief that built our nation and inspired the world. That here, in this country, anything is possible. That nothing is out of reach. An America where we care for one another, look out for one another and recognize that we have so much more in common than what separates us. That none of us — none of us has to fail for all of us to succeed.”

Equal opportunity hasn’t been available to many Americans, even though it is part of the American Dream—America is the land of opportunity that is taught in schools and heard by immigrants.

Why? Because it is also part of a larger truism that not all Americans have accepted: Equality Is Good for Everyone. It should be self-evident, a statement of common sense. The more equality of opportunity among us, the more we can better ourselves, become more productive citizens, which in turn increases our national wealth (and lowers budget deficits).

It was certainly the dream of immigrants, such as my mother, a British citizen born in Jamaica.

But there are times, such as today, when many Americans don’t believe it is possible, which is why we are living in another Gilded Age with the worst income inequality of the developed world. It is on a par with developing countries in Africa and has been the major cause of recessions, including the Great Recession.

Many have bought the counter narrative by those that don’t like equality, the privileged few at the top of the income ladder who want us to believe they are the most qualified to create greater wealth for the rest of us.

This Gilded Age was formed from supply-side, trickle-down economic policies, because enough Americans believed it, believed government was the problem and cutting taxes the solution, believed that equality is not good for everyone because we live in a zero-sum world with limited resources. What is given to one must be taken from another.

The conservative position espoused by 1970s Economist Arthur Okun, for instance, was that greater equality meant less market efficiencies to produce and so fewer incentives for greater wealth, since leveling the playing field meant leveling out the opportunity for large profits.

But that has never been the case. There has always been copious evidence that the opposite is true; that overly large profits have led to diminished household wealth.

One can measure inequality with such as the CIA’s World Factbook that ranks inequality among nations. Those with the greatest equality also have less violence, greater freedoms, greater health, and guaranteed vacations!

Richard Wilkinson’s TEDx lecture and book with Kate Pickett, “The Spirit Level” is one of the best studies of the dire effects of income inequality on the quality of life. The most important factor, and a sign of dire consequences when inequality has approached the level of the Great Depression, are the US violent crime and incarceration rates, which Wilkinson discusses at length. The U.S. is by far the most violent country in the world—worse than any other developed country with the highest incarceration rates.

Efforts to reverse such inequality have begun on the local levels, even if congressional conservatives have blocked raising the miniscule minimum wage of $7.25 per hour.

I wrote in 2011 that the state of Massachusetts was the first to raise their minimum wage to $10 per hour, California is raising it to $8.25 over 2 years, with New Jersey and other states to follow. It was the beginning of a return to greater equality that has continued.

And there is an increasing awareness of the income disparities, such as the fact that corporate CEOs now earn more than 300 times the income of their employees, and certain hedge fund managers have reported an annual income of $1 billion.

The Center for American Progress launched the Washington Center For Equitable Growth, which aims to deepen the economic critique of inequality. It was set up by Berkeley economist Emmanuel Saez, among others, who is known with his partner Thomas Piketty as the first economists to historically research the history of income distribution over the past 100 years.

As the mission statement of the Center says:
"New research suggests that growing inequality in the United States may have broad social and economic effects -- by reducing stable demand for goods and services, dampening entrepreneurialism, undermining the inclusiveness and responsiveness of political and economic institutions, limiting access to education, and stunting individual development. Yet our understanding of how these mechanisms interact with the broader economy is limited."

Kamala Harris said as much in her acceptance speech: “opportunity is not available to everyone. That’s why we will create what I call an opportunity economy, an opportunity economy where everyone has the chance to compete and a chance to succeed.”

A majority of Americans and a majority of Electoral College votes must agree with her for this to happen in November.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Make America More Equal Again!

 Answering Kennedy’s Call

Piketty-Saez

I have a suggestion for a campaign motto I first wrote about in a 2017 Huffington Post piece that could give a boost to VP Harris’s presidential campaign.

Instead of Trump’s slogan, “Make America Great Again.” let’s “Make America More Equal Again,” just as it was in the 1960’s and 70’s, when we had a thriving middle class in which children could hope to exceed their parents’ station in life.

It was our thriving middle class as portrayed in the above graph of pre-tax income that kept the more extreme elements of both political parties and persuasions at bay, so that Republicans and Democrats talked to each other. A middle class will only thrive where there is less income inequality, something that most well-meaning Americans support.

But that was then and we live now, when most children of the baby boomers retiring do not hope to exceed the economic status of their parents, as income inequality has worsened to levels last seen in the 1920s.  Household incomes have stagnated since the 1970s, and the top income earners since the Great Recession now have garnered almost all the increase.

The Great Recession was brought on by the deregulation boom of the Clinton and GW Bush presidencies and a greater inequality that peaked in 2012 per the Piketty-Saez graph. So why not create programs that Make America More Equal Again?

That is why two out of three Americans are dissatisfied with the way income and wealth are currently distributed in the U.S. This includes three-fourths of Democrats and 54 percent of Republicans, according to a Gallup poll.

Overall, the share of Americans living in middle-class households has declined from 61 percent in 1971 to 50 percent, reported a 2015 Pew Research study. The hollowing out of the middle class has been a source of consternation among many economists, politicians and the public at large, says those surveyed. They say as Americans move toward the economic extremes it is harder to find common ground, and a common sense of what it means to be an American.

Much of that inequality is in the Midwestern rust belt states that lost blue-collar manufacturing jobs during the globalization and multi-nationalization of US corporations that President Trump promised to bring back again.

President Trump was no dummy in recognizing this fact. Then how could Democrats become so blasé and oblivious to this fact among their former supporters? Everyone saw it coming; the disenfranchisement of whole segments of working-class voters that had descended into depression and drug use in those formerly blue and Democrat-voting states.

There were many suggestions of how to bring back higher-paying jobs during Trump’s term, but he only succeeded in enriching the top 1 percent of income earners with his tax cuts. He couldn’t pass an infrastructure bill, did slightly alter NAFTA by drastically raising import tariffs (even on Canadian lumber and dairy products, which raised their prices); built very little wall but imprisoned immigrants seeking asylum at the southern border in camps, and separated immigrant mothers from their children.

Trumps was also unsuccessful in recalling Obamacare that has benefited more than 20 million Americans.

VP Harris has a much better record to run on. For instance, Biden’s Inflation Reduction act is expected to fund $800 billion in green-energy projects, invest $50 billion to foster building computer chip factories, and $1 trillion to fund infrastructure projects that modernizes our public infrastructure; from roads and bridges to our energy grid and water and sanitation facilities.

There are many reasons for Democrats and even truly populist Republicans to support programs that increase income equality in the coming years. But they can’t be about building more walls. A robust and more politically temperate American middle class must include Americans of all nationalities and ethnicities.

A good start would be to bring back the Child Tax Credit that was first enacted in 1997. A better version recently passed the House with a huge majority but its renewal is now stalled in the Senate by Republicans.

The American Rescue Plan Act of 2021 temporarily expanded the child tax credit for the 2021 tax year to $3,600 per child younger than age 6 and $3,000 per child up to age 17. The expanded child tax credit reached over 61 million children in more than 36 million households, and funds were primarily used for child care, food, housing and other basic needs. In 2021 child poverty fell to its lowest level ever in America, but in 2022 Congress did not renew CTC expansion, and child poverty surged by 41%.

Bringing back the middle class is a slogan of the Harris campaign. A corollary can be, "Make America More Equal Again.” Renewal of the CTC that decreases child poverty is perhaps the best way to boost our middle class; by giving hope to our youngest that they might again be able to better their lives.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen