Saving Capitalism: For the Many, Not the Few
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Read between September 25, 2019 - April 19, 2020
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If a democracy is working as it should, elected officials, agency heads, and judges will be making the rules roughly in accordance with the values of most citizens.
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as long as we remain obsessed by the debate over the relative merits of the “free market” and “government,” we have little hope of seeing through the camouflage.
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The law allows pharmaceutical companies to pay doctors for prescribing their drugs.
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Drug companies pay the makers of generic drugs to delay their cheaper versions.
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Between 1980 and 2014, the financial sector grew six times as fast as the economy overall.
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economic prowess and political power feed on each other.
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Social work, teaching, nursing, and caring for the elderly or for children are among the lowest-paid professions, yet evidence suggests that talented and dedicated people in these positions generate societal benefits far out of proportion to their pay.
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the worth to society of many CEOs, hedge-fund managers, investment bankers, “high-frequency” traders, lobbyists, and high-end corporate lawyers may be less than they command in the market.
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the current incentives for the working poor are not nearly large enough to get them to do what society expects of them, while providing them some measure of dignity. Meanwhile, the financial incentives for the non-working rich are far greater than can be justified by any measure of their contribution to society.
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Overall, CEO pay climbed 937 percent between 1978 and 2013, while the pay of the typical worker rose just 10.2 percent.
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Stock options and restricted stock grants have become by far the largest portion of CEO pay.
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discovered that the 150 companies with the highest-paid CEOs returned about 10 percent less to their shareholders than did their industry peers. In fact, the more these CEOs were paid, the worse their companies did.
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Since 1979, the nation’s productivity has risen 65 percent, but workers’ median compensation has increased by just 8 percent.
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Reducing the bargaining power of the middle class has also entailed shifting the risks of economic change to them.
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To attribute this to the impersonal workings of the “free market” is to ignore how the market has been reorganized since the 1980s, and by whom.
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Some continue to believe that the poor remain poor because they lack ambition. But what they really lack is opportunity and the political power to get the resources needed to realize that opportunity.
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The “self-made” man or woman, the symbol of American meritocracy, is disappearing. Six of today’s ten wealthiest Americans are heirs to prominent fortunes.
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nation’s assets into the hands of a small number of people who have never had to work for their incomes and have no idea how average people live and what they need. It is also increasingly dangerous to our democracy, as dynastic wealth inevitably and invariably accumulates even more political influence and power.
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only about a third of “charitable” giving is targeted to helping poor people.
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Because of the charitable tax deduction, the amount of government subsidy to these institutions in the form of tax deductions is about one out of every three dollars contributed.
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The meritocratic ideal with which our form of capitalism has been justified does not match the reality in which most of us live and work.
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This debate hides a larger reality: the necessary role of government in designing, organizing, and enforcing the market to begin with.
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a task that never ceases because ongoing changes in market conditions as well as innovations and technological advances continuously require that new choices be made and old ones be reconsidered.
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Democrats soon achieved a rough parity with Republicans in contributions from corporate and Wall Street campaign coffers, but the presumed dependence of big corporations on the Democratic
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Congress and the consequential bipartisan generosity of such firms proved a Faustian bargain.
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While the Democratic Party of Franklin D. Roosevelt’s New Deal had devised financial regulations to constrain Wall Street, Clinton and his allies in Congress eliminated many of those same restraints.
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Obama pumped hundreds of billions of dollars into Wall Street in order to save the Street (and the U.S. economy) from imploding after the
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crash of 2008, created a stimulus program that avoided another Great Depression, and enacted a broad-based health care law that enriched insurance and pharmaceutical companies.
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the party of nonvoters.
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Only 58.2 percent of eligible voters cast their ballots in the 2012 presidential election.
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those who do vote have tended to express their discontent by careening from one wave election to another, each one replacing the dominant or controlling
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The only way back toward a democracy and economy that work for the majority is for the majority to become politically active once again, establishing a new countervailing power.
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Moneyed interests do not want the curtain of the “free market” lifted because that would expose their influence over the rules of the capitalist game and reveal potential alliances that could countervail that power. They would prefer the bottom 90 percent continue to preoccupy themselves with tendentious battles over government’s size (or that it war over noneconomic issues such as same-sex marriage, abortion, guns, race, and religion) than
Maureen E.
Here's the crux of the problem that people need to understand.
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while a college education has become a prerequisite for joining the middle class, it is no longer a sure means of gaining ground once admitted to it.
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According to political economist Peter Barnes, interest, dividends, capital gains, and inheritances account for one out of every three dollars of income received by Americans—and almost all of that goes to the richest 1 percent. Meanwhile, the estate tax no longer kicks in until a couple’s estate is worth more than $10.68 million,
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assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself,
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would likewise reduce people’s dependence on private employers, thereby freeing them to express their views without fear of retaliation.
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New market rules that cause wealth eventually to revert to the public domain rather than compound for future generations that had nothing to do with creating it, and be used instead to finance a minimum guaranteed income for all citizens, is one way to avoid this fate.
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alternative would be to provide every citizen a tiny share of all intellectual property awarded by the patent office and protected by the government.
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Another alternative would be to give every child at birth a basic minimum endowment of stocks and bonds—a “share” in the future economy, which, as the economy grew and the value of the endowment compounded, would become a nest egg
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capable of producing a minimum basic income.
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The critical debate for the future is not about the size of government; it is about whom government is for. The central choice is not between the “free market” and government; it is between a market organized for broadly based prosperity and one designed to deliver almost all the gains to a few at the top.