Economy

37 Ways to Reform the Economy So It’s Not Rigged for the Rich, According to Progressive Economists

Unlike the presidential candidates, Joseph Stiglitz, Elizabeth Warren and the Roosevelt Institute offer specifics.

Photo Credit: AFP

A new report written by scores of progressive economists has laid out a detailed agenda to dismantle, reverse and fix how the laws and policies governing the American economy are rigged to benefit the wealthiest individuals and largest corporations.

The report, “Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity,” has just been released by the Roosevelt Institute, where Sen. Elizabeth Warren and New York City Mayor Bill de Blasio joined chief economist Joseph Stiglitz at a press conference.

“The American economy no longer works for most Americans… What is causing this dysfunction?” the report opens, then answering the question and makes dozens of specific law and policy changes (listed below).

“Some point to technological change or globalization,” it said. “Some posit that government has shackled the free enterprise system and hobbled business. Some say that our economy is simply rewarding the risk takers and job creators who have earned the riches coming their way... None of these arguments gets it right.”

“Skyrocketing incomes for the 1 percent and stagnating wages for everyone else are not independent phenomena, but rather two symptoms of an impaired economy that rewards gaming the system more than it does hard work and investment," the report states. "The roots of this dysfunction lie deep in the rules and power dynamics that have prioritized corporate power and short-term gains at the expense of long-term innovation and growth. The outcomes shaped by these rules and power dynamics do not make the economy stronger; indeed, many make it weaker.”

What follows are 37 specific laws and policy changes to restore fairness and balance to the economy without undermining American capitalism, from the Roosevelt Institute's report.

Fix the Financial Sector

1. End “too big to fail” by imposing additional capital surcharges on systemically risky financial institutions and breaking up firms that cannot produce credible living wills.

2. Better regulate the shadow banking sector.

3. Bring greater transparency to all financial markets by requiring all alternative asset managers to publicly disclose holdings, returns and fee structures.

4. Reduce credit and debit card fees through improved regulation of card providers and enhanced competition.

5. Enforce existing rules with stricter penalties for companies and corporate officials who break the law.

6. Reform Federal Reserve governance to reduce conflicts of interest and institute more open and accountable elections.

Incentivize Long-Term Business Growth

7. Restructure CEO pay by closing the performance-pay tax loophole and increasing transparency on the size of compensation packages relative to performance and median worker pay and on the dilution as a result of grants of stock options.

8. Enact a financial transaction tax to reduce short-term trading and encourage more productive long-term investment.

9. Empower long-term stakeholders through the tax code, the use of so-called “loyalty shares,” and greater accountability for managers of retirement funds.

Make Markets Competitive

10. Restore balance to intellectual property rights to encourage innovation and entrepreneurship.

11. Restore balance to global trade agreements by ensuring investor protections are not prioritized above protections on the environment and labor, and increasing transparency in the negotiation process.

12. Provide healthcare cost controls by allowing government bargaining.

13. Expand a variant of Chapter 11 bankruptcy to homeowners and student borrowers.

Rebalance the Tax System

14. Raise the top marginal rate by converting all reductions to tax credits and limiting the use of credits.

15. Raise taxes on capital gains and dividends.

16. Encourage U.S. investment by taxing corporations on global income.

17. Tax undesirable behavior such as short-term trading or polluting and eliminate corporate welfare and other tax expenditures that foster inefficiency and inequality.

Make Full Employement the Goal

18. Reform monetary policy to give higher priority to full employment.

19. Reinvigorate public investment to lay the foundation for long-term economic performance and job growth.

20. Invest in large-scale infrastructure renovation: a 10-year campaign to make the U.S. a world leader in innovation, manufacturing and jobs.

21. Expand public transportation to promote equal access to jobs and opportunity.

Empower Workers

22. Strengthen the right to bargain by easing legal barriers to unionization, imposing stricter penalties on illegal anti-union intimidation tactics, and amending laws to reflect the changing workplace.

23. Have government set the standards by attaching strong pro-worker stipulations to its contracts and development subsidies.

24. Increase funding for enforcement and raise penalties for violating labor standards.

25. Raise the nationwide minimum wage and increase the salary threshold for overtime pay.

Expand Access to Labor Markets and Opportunities for Advancement

26. Reform the criminal justice system to reduce incarceration rates and related financial burdens for the poor.

27. Reform immigration law to provide a pathway to citizenship for undocumented workers.

28. Legislate universal paid sick and family leave.

29. Subsidize child care to benefit children and improve women’s workforce participation.

30. Promote pay equity and eliminate legal obstacles that prevent employees from sharing salary information.

31. Protect women’s access to reproductive health services.

Expand Economic Security and Opportunity

32. Invest in young children through child benefits, early education and universal pre-K.

33. Increase access to higher education by reforming tuition financing, restoring protections to student loans, and adopting universal income-based repayment.

34. Make healthcare affordable and universal by opening Medicare to all.

35. Expand access to banking services through a postal savings bank.

36. Create a public option for the supply of mortgages.

37. Expand Social Security with a supplemental public investment program modeled on private Individual Retirement Accounts, and raise the payroll cap to increase revenue.

Steven Rosenfeld covers national political issues for AlterNet, including America's democracy and voting rights. He is the author of several books on elections and the co-author of Who Controls Our Schools: How Billionaire-Sponsored Privatization Is Destroying Democracy and the Charter School Industry (AlterNet eBook, 2016).

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