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5 Obscene Reasons Why Richest Americans grow Richer As Middle-Class Declines

The super-rich have learned a new lesson: it is far better to take than to make.

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Unfortunately, it’s hard for us to trust government in part because we live in a surround-sound world that incessantly blares out anti-big government ideology. As a result, many believe that a government job is somehow less worthy than a private-sector job. But is a teacher employed at a private school somehow more valuable than a teacher in your public school system? Is a private security guard more worthy than a policeman? You can try this kind of thought experiment up and down the occupational ladder and you’ll find millions of jobs that are done better in the public sector.

But that’s just a start for retooling our minds. The biggest breakthrough comes when we finally realize that after a major financial crash, it’s just not possible for the private-sector economy on its own to produce the jobs needed to put our people to work. We’ll be waiting decades to get back to full-employment if we rely solely on private-sector expansion. It won’t expand until demand increases, and demand won’t increase until we expand, not contract, public employment.

If you want to see a vibrant middle-class, then we should be creating vibrant middle-class jobs in the public sector – more teachers, more social workers, more workers rebuilding our infrastructure and weatherizing our buildings. (And yes we can fund private contractors to help out as well.) Instead, we are doing precisely the opposite: we are gutting public employment –about 650,000 good-paying federal, state and local government jobs were eliminated over the past two years, all in the name of debt reduction.

A simple reform

We don’t need to run up debt to put our people to work.

All we need to do is make those who caused the crash pay to clean it up. Here’s a simple reform program that neither party has the guts to implement:

1. A financial transaction tax on Wall Street on each and every trade, especially on risky derivatives.

2. Eliminate the special tax rate for capital gains.

3. Institute a 3 percent yearly wealth tax on anyone with a net worth of $10 million or more.

Collectively this would produce revenues in access of $300 billion per year which could readily create 6 million new public-sector jobs both directly and through contractors. (And if we do it right every new job could be green and reduce our carbon footprint.) Add in a multiplier, and our economy would soon reach full-employment.

We are at a clear fork in the road: either we create the jobs we need right now by taxing Wall Street and the super-rich, or the rest of us will suffer several decades of stagnation, while the private sector continues to mint a surplus of financial billionaires and a deficit of decent jobs.

Les Leopold is the executive director of the Labor Institute in New York, and author of How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (J. Wiley and Sons, 2013).

 

 
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