Turn a few sacred cows on their heads. Think about the aphorisms that support our concept of American society. The place where meritocracy determines your fate.
Anybody can get ahead, right? The great gift of our free enterprise system. Competition brings out the best in us and the cream rises to the top. If you start at the bottom, you can just pull yourself up by your bootstraps.
Capitalism is an unsurpassed financial engine. It is the great generator of wealth. A rising tide floats all boats. All of us bobbing together in the big safe harbor of American exceptionalism.
If we strengthen the climate for corporate success, loosen bothersome regulations, keep interest rates very low and corporate access to capital easy, and — this is absolutely sacrosanct — cut taxes to the lowest rate possible, then everyone will benefit. Business will prosper, profits will be invested, and more jobs will be created.
Unfettered capitalism means fat times for all. That’s what we’ve been told for a long time now. That’s the altar where we’ve worshipped for the past 50 years, the Temple of Trickle Down Economics. If we just let the rich be rich, we’ll all be fine. They’re the cream in our coffee, don’t you know? That’s the story.
What if it isn’t true? What if trickle down economics accomplishes none of that and, rather, it simply showers even greater benefits on the rich? Here.
What if, in fact, it has exacerbated social inequities, made the American dream less accessible, and created a playing field that is tilted at a very steep angle in favor of them that already gots?
The loans are made by banks who borrow these funds from the Fed at 0.25% interest and even lower. So, interest on the average credit card debt is roughly 64 times the cost to the banks of borrowing it. Maybe even more.
If you’re a bank, a paragon of capitalism and modern business ethics like Wells Fargo, for instance, that creates false accounts for unsuspecting “customers,” destroys their credit ratings, and even sells them insurance, without their knowledge, of course, to cover the losses; if you’re Wells Fargo, you know what creative capitalism has come to look like. Here.
If you’re a major U.S. corporation, you’ve long since had your marching orders: deliver value to the shareholder. It doesn’t say, “You owe nothing to the community.” But it might. It doesn’t say, “Build a wide moat around the company and make it as absolutely impervious to competition as possible.” But that’s the goal. It doesn’t say, “sit on all that cash and horde it like Midas.” But that’s the way it’s done if you’re successful. Here.
And it sure doesn’t say: “now that you’re successful, now that you’ve sucked up tremendous amounts of dollars from the public for your products and services, you can take pride in all the taxes you’ve paid to support that same community from whom you made all that money.” It doesn’t because, if you’re a successful businessperson in America today, one thing you don’t do is pay much in taxes. Here.
This is what we’ve allowed our economic system to become because we believed a fantasy about money trickling down from the rich to the rest? How could we do it differently?
We shower banks and corporations with money when we want to stimulate the economy. We give them generous ways to avoid taxes and squirrel away their cash. We assume they are deserving because this is a meritocracy and they appear to merit it. Why don’t we give that money to the poor instead?
Capitalism as a financial system has been a great success, so much so that we no longer need to operate it like a zero sum game. There’s plenty of money to go around. The problem is that it isn’t going around. It’s going up from the mass of people to the very most skilled practitioners of the art. They get it, they avoid taxes, they sit on it.
Money doesn’t trickle down. It never has. It flows upward from the masses to the rich. That is the way redistribution of wealth actually happens. Where else does all that money come from?
What we’ve been missing for far too long is a tax code that reliably returns some of that money to the people who do circulate it. The people who need basic goods and services, and who spend their money to acquire them. That is where economic stimulus should be focused.
As Will Rogers knew back then and we know all the better today, the same people will end up with the money no matter how we spread it around. They want it more than the rest of us and are better at getting hold of it.
What we need to do is convince them that everyone would benefit from what Robert Reich calls “build-up economics” here. What would happen if we invested in basic income as a way of seeding our annual money crop?
We are facing an unprecedented crisis in America today. There is critical need to get money to millions of people, some of whom are suddenly out of work, some of whom are chronically impoverished, all of whom are part of the American community.
Our free enterprise system has made some people very, very rich and others pretty well off. It has failed to lift millions more out of poverty. That disparity can be resolved by concentrating our resources where the need is greatest. We can pay for it with a fair and transparent tax code that reseeds the community capital with cash where it does the most good.
We can afford it and we shouldn’t any longer accept anything less. The evidence is clear: trickle down economics is nothing but welfare for the rich. We can do better. Now’s an opportune time to begin.