We Desperately Need a Vision for a New Economy That Serves All
In The New York Times recently, the paper’s former Washington bureau chief, the veteran journalist Hedrick Smith, asked an important question: “Can the States Save American Democracy?” Smith, who traveled the country to write his latest book, Who Stole the American Dream?, also serves as the executive editor of the Reclaim the American Dream website, where he keeps a keen eye on efforts to revitalize politics closest to where people live. In his op-ed essay he answered his own question by reporting that “a broad array of state-level citizen movements are pressing for reforms… to give average voters more voice, make elections more competitive and ease gridlock in Congress.”
There’s a lot of energy stirring in the states, including efforts to create a fairer economy. Unlike our paralyzed and polarized Congress, state legislators — those with eyes to see and ears to hear — know the walking-wounded casualties from the long campaign against working people conducted by Big Business and rabid free-marketeers over the past three decades. Among the stunned and shell-shocked are millions of survivors barely hanging on after the financial crash of 2008 and the Great Recession that followed. They live down the street and around the corner, a mere few blocks from the state capitol.
Here at BillMoyers.com, just as Hedrick Smith’s essay appeared last weekend, we were finishing a small book — 95 pages — by one of those state legislators: Minnesota’s David Bly. After teaching in the public schools for 30 years he retired and ran for the Minnesota House of Representatives, where he is now serving his fourth term. What he’s seen close-up prompted him to write We All Do Better: Economic Priorities for a Land of Opportunity.You can order a copy from the publisher’s website. It is short in length but not of passion. Here, with permission, is an excerpt:
Not so long ago, the words “Land of Opportunity” really meant something for all Americans. We pretty much took it for granted that each and every one of us should have the opportunity to develop our God-given talents to reach our greatest potential. This didn’t mean that everyone would choose to use that opportunity, or that anyone would be forced to use it. It did, however, mean that everyone had that opportunity…. As the late Sen. Paul Wellstone once said, “We all do better when we all do better.”
Things are changing, and not for the better. All too often, we hear stories of families evicted from their homes when unemployment runs out, or senior citizens who must choose between buying groceries and life-sustaining medications, or the single mother who can’t get a job because she must spend her time nursing her invalid son. We open the paper to read yet another story about the achievement gap in our schools. We watch the news and are shocked to learn that the United States is the world’s leader in putting its citizens behind bars.
These kinds of thing don’t happen, or at least shouldn’t, when there is a nationwide commitment for everyone to have what they need to develop their potential. This commitment goes beyond lip service and political speeches. It involves deliberate policies that maintain what I call a “middle-class economy.” A middle-class economy is not one in which every single person makes a certain amount of money. Even in a middle-class economy, some are rich and some are poor. But most of the people have most of the money. Most of the people can take care of themselves and fully develop their potential. Those that can’t take care of themselves for any number of understandable reasons can count on the rest of us to get them through the rough spots.
Right now we are in the process of losing our middle-class economy. We know this from news stories, and far too many of us know it from bitter personal experience. This loss of our middle-class economy and the resultant shift to a “winner-take-all” economy of rich and poor are behind most of the problems with which we struggle as a society.
The Spirit Level by Richard Wilkinson and Kate Pickett helped me see how and why this is so. The authors demonstrate in powerful terms how growing inequality is crippling both our society and our economy in ways that will make it harder to address critical problems we face as a nation. Page after page of graphs illustrate how we have fallen behind other developed nations in the things a well-functioning economy must provide. Wilkinson and Pickett make a solid case that it is not so much the average income of a society that matters. More important is how that income is distributed. Countries that have the most equal income distribution do best on health and social indicators.
According to Wilkinson and Pickett, who are epidemiologists, income inequality is related to “lower life expectancy, higher rates of infant mortality, shorter height, poor self-reported health, low birth weight, AIDS and depression.” They collected data from dozens of other rich countries on health, level of trust, mental illness, drug and alcohol addiction, life expectancy, infant mortality, teenage birth rates, obesity, children’s educational performance, homicides, imprisonment and social mobility. “What is most exciting about our research is that it shows that reducing inequality would increase the well-being and quality of life for all of us,” the authors say. Today we have a choice: use public investment to reduce inequality or pay for the social harm caused by inequality.
Wilkinson and Pickett also believe: “Modern societies will depend increasingly on being creative, adaptable, inventive, well-informed and flexible, able to respond generously to each other and to needs wherever they arise. Those are societies not in hock to the rich, in which people are driven by status insecurities, but of populations used to working together and respecting each other as equals.” Any search for economic salvation that is motivated and driven by the greed of its individual participants is bound to fail.
Ours is the oldest modern democracy, but present-day policies and court decisions are undermining our basic democratic principles. Immense power has been ceded to a cadre of financial elites who have figured out how to buy their way into control of our government. The past 30 years have seen two related trends: (1) an unraveling of benefits and opportunities for the vast majority of Americans, and (2) a massive increase in wealth for a relative handful of people. Leading economists assure us that if we don’t take decisive action, we can expect more of the same. Economist Emmanuel Saez has carefully analyzed the shift toward a rich-and-poor economy. He says, “The market itself doesn’t impose a limit on inequality, especially for those at the top.” His partner in research, Thomas Piketty, has further documented and explained income inequality in his book Capital in the 21st Century. As I write this, the very wealthy are enjoying a good recovery from the recession of 2008 while the vast majority of Americans fall further behind.
Our descent from an economy that provided for all of us to one that provides for only the few has been no accident. Nor was it inevitable. The story of how government has gone from limiting greed to encouraging it is chronicled in several recent books. Kim Phillips-Fein in Invisible Hands: The Businessmen’s Crusade Against the New Deal; Paul Pierson and Jacob S. Hacker in Winner-Take-All Politics; and Hedrick Smith in Who Stole the American Dream? tell much the same story in different ways. When the Supreme Court determined that money was speech in 1976, things began to change quickly. The super-rich suddenly gained an advantage in their campaign to silence the power of people and weaken our democracy. Today, with the Supreme Court decision on the Citizen’s United case, corporations are “people,” and even misinformation and lies spread by these strange new “people” are protected speech.
Economic value is created by law. We often use the words “free market” to describe our current economic system, but that system, as much as any other, rests on a set of legal rules and a system to enforce those rules. So it matters who writes the laws or what interests those laws serve. Similarly, the distribution of wealth and the flow of capital can flow one way or the other with the stroke of an official pen. Property rights and the distribution of wealth can deny liberty to some just as easily as they bestow it on others. Amartya Sen, a Nobel Award-winning economist, argues that hunger is not a product of the shortage of food. Instead, hungry people lack rights (the entitlement) to eat. The law decides, or as Sen puts it, “The law stands between food availability and food entitlement. Starvation deaths can reflect legality with a vengeance.”
Chief Justice Charles Evans Hughes, who served 1930-41, argued that the Constitution protects “liberty in a social organization which requires the protection of law against the evils which menace the health, safety, morals and welfare of the people.” Beginning with the founding of our nation, we have a rich tradition of concern for equality and protection from the abuses that wealth, poorly distributed, can bring about. As America waged war with Britain for independence over 200 years ago, the revolutionary patriot and journalist super-patriot Tom Paine advocated that public employment be utilized to assist those needing work, that a system of social security should provide for retirement at age 60, and that the state should provide funds so that poor families could educate and care for their children. In another example, the end of the Civil War saw the passage of amendments to the Constitution that banned slavery and limited the degree to which states could discriminate against their citizens. These amendments, in turn, broadened democracy and set us on a path that eventually resulted in the establishment of voting rights for blacks and women.
So, how do we build and maintain an enduring middle-class economy? In my judgment, every middle-class economy must be built on these five foundations:
- Quality education for everyone
- Health care for everyone
- A world-class transportation system
- Energy systems that maintain a clean and safe environment
- Living wages for working people
Each of these is being challenged today by anti-democratic forces. Budget cuts are wreaking havoc at all levels of education. College is harder to afford, increasingly results in crippling debt and does not guarantee job prospects.
We hear that we have the best health care in the world, but the numbers tell us differently. Our health outcomes do not measure up to the rest of the developed world because our system, even with the advances made with the Affordable Care Act, does not assure universal access.
Prosperous economies require that goods and people can move around easily. Investment in transportation infrastructure is essential. We all feel the cost as roads, bridges and public transportation are neglected.
Environment, energy and land use go hand-in-hand in a middle-class economy. A clean, safe environment supports good health and quality of life for everyone. Instead of moving forward on clean energy and correcting harmful practices, we continue to rely on fossil fuels and to live with the economic and environmental consequences.
The fifth foundation of a middle-class economy is living-wage jobs. Generations before us took for granted that hard-working Americans would share in our prosperity. We have abandoned that understanding. Wages for most Americans have flatlined in spite of continuing pressure from rising costs of life’s essentials. In a 2014 survey by the Pew Foundation, over 10 times as many respondents said their incomes were falling behind the cost of living than said they were getting ahead.
The last 30 years have seen a corporate war against American workers. Corporation after corporation shipped middle-class jobs to Third-World countries. Now, politicians across the country invariably meet out-of-work industrial workers who ask them what they can do about the sell-off of jobs in America. All too often, the politician has no response and no idea what to do. Some extreme free-market ideologues even say that what is happening to so many works is actually a good thing, something that in the long run will make our economy better off. Of course, many of those making such claims have high-paying jobs, stable jobs representing the interests of the financial elite.
Here in Minnesota wages for new hires, adjusted for inflation, have been heading downward since 2006 and fell to $11.64 in 2011. The minimum wage went from one of the lowest in the country to $9.50. A family three (the average family size in Minnesota) would need an hourly wage of $16.34 to make it. How can anyone feel secure and support a family with that kind of discrepancy? People working full-time deserve the dignity of a living wage, but our policies are moving us in the opposite direction. The Minneapolis Star Tribune, for example, tells of a 59-year-old truck driver who lived well on the 41-cents-a-mile he made 16 years ago, but now he is making the exact same amount in the face of much higher living costs. He works six days a week instead of the five he used to and still can barely make ends meet.
These are by no means isolated cases in my home state or elsewhere. Economist Robert Reich wrote this about the battered middle class: “Having been roughed up, they face years of catch-up to get to where the once were. They feel poorer because they are poorer. They feel less secure because they are less secure. The crisis’s severity — and the fact that it surprised most ‘experts’ — shocked them. The large income and wealth losses compounded their sense of vulnerability.”
How do those of us in public office respond?
Former Sen. Byron Dorgan of North Dakota tells the story of the working man who was standing in line to pay his last respects to President Franklin D. Roosevelt. “Did you know the president?” a reporter asked him. “No,” the man said through tears, “but he knew me.”
That is our obligation today — to close the distance between the governed and the governing by rebuilding a middle-class economy. The five foundations of that economy have this in common: they are all “we” concepts. We all benefit when they are in place, and we all suffer when they crumble. When we work together toward our common good, we grow a middle-class economy. When we work against each other as individuals, we are on the road to becoming a Third World economy. As much as I hate to say it, this is exactly the path we are on.
Much of my book is concerned with my home state of Minnesota, where I serve in the state legislature. But I’m sure you will also see that much of what I say about my home state applies just as much to yours. We are all in this together. We all need to get our state and federal spending priorities focused in a way that will make a difference. That way is the way of rebuilding our middle-class economy and opportunity for all.
Excerpted with permission from Levins Publishing. All rights reserved.