Monthly Archives: November 2008

Progressive Infrastructure To Renew The California Dream

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Markos, in a post today about the state of progressive infrastructure compared to the right’s, Building machines,

[. . .] But that battle is no longer one-sided. Their machine may be bigger, but we have something. And that’s all we ever needed — a hint of a partisan progressive media machine, fed by research and investigative reporting from the likes of ThinkProgress and Talking Points Memo, to begin delivering our message in the face of their vast media machine, as well as ineffective CW[conventional wisdom]-meisters like Maureen Dowd, Mark Halperin, and David Broder.

Look what we have been able to get done in this country with only the smallest, minimally-funded hint at an infrastructure of organizations and media outlets working to counter the right that has been built up since we started this fight. We fought back against the conservative machine and got the Democrats to start fighting back themselves. We took the Presidency, increased our numbers in the House and maybe, just maybe took enough senate seats to stop the filibusters.
Now, imagine what we could do if we actually started funding serious progressive infrastructure organizations and building an ecosystem in which our writers and advocates could actually make a living, sell enough books to start receiving advances, get paid reasonably to write articles, receive speaking fees from organizations and some of the things right-wing advocates take for granted… Imagine tens of thousands of young activists being trained every year. Imagine progressive non-profits having the budgets to pay people more than minimum wage and provide benefits and get things done. Sheesh.
Imagine what we could get done in California if we put together solid organizations that could reach out to all of the public and explain the benefits of progressive values and policies. I mean progressive policies like good, well-funded public schools and low-cost universities, a health care system that works for the people, help with child care, a transportation infrastructure that gets people where they want to go in a timely manner, energy alternatives that cost less and do not pollute and employment rules that bring us reasonable wages and benefits in good jobs that also give us time to have fulfillment in our lives. These are all possibilities, in fact these are all things that we were within reach of obtaining in California not too long ago. These are things thaqt we can dream about again.
Barack Obama was able to raise millions of dollars in small donations, and this has helped the country to start to restore democracy. We can do this in California, by sending $10 or $100 or more to help organizations like Speak Out California and others, and doing this as often as you can.
It is time for us to begin to renew the California Dream.

They — It Affects Our Thinking

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I want to caution about the use of the word “they” in current policy debates. This use of “they” leads to a kind of understanding in our brains that might just be short-circuiting our ability to make rational decisions. How we understand a problem has huge implications for how we decide to solve those problems.
Let me use the current debate over providing a loan to the auto companies as an example of what I mean. Some people say that “they” – the auto companies – did bad things. “They” opposed higher CAFE standards. “They” pushed SUVs because SUV sales led to higher profits in the short term. “They” made cars that were not as good as Japanese cars. Therefore “they” deserve what they get.
But who is the “they” here? What happens to your thinking about policy solutions if you instead understand that SOME executives of these companies were able to get their hands on the resources of the company, and did things that increased their own personal fortunes, even as their actions harmed the long-term profitability of the companies? In fact THOSE particular executives might have already fled with the loot they got for themselves, leaving the car companies behind.
Do you see what I mean? In that first use of “they,” where you think of a company as some kind of a sentient being, a monolithic entity that makes decisions, you are led toward one kind of solution. Namely to let “them” fail and let “them” deal with the consequences of “their” decisions. The companies “deserve” to fail because “they” did certain things.
“Let them fail” ignores the millions of jobs at stake, the communities that those incomes support will be seriously affected, and that the country’s manufacturing infrastructure will be further degraded if the auto companies fail.
But if you think about it the other way, where certain individual bad actors were able to make personal fortunes off of their access to company resources and their control of company decision-making (and lobbying), we are led to very, very different conclusions about how to fix the mess we and our economy are in. In this mindframe the solution that presents itself involves dealing with the bad actors, and setting up rules that keep future bad actors from being able to cause companies to harm themselves and the country in their pursuit of personal gain.

We Prosper From Higher Taxes, Not Lower

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I came across the article, Why the Economy Grows Like Crazy Amid High Taxes, by Larry Beinhart, and it says some things that the people of California should hear.

Beinhart make some very good points. first, he points out that if you look at the periods of higher taxes, you see that these are the very periods when the economy does much better. He writes,

Examples include World War II and the Truman-Eisenhower years, when it
was around 90 percent, and the Clinton years, when it was high relative
to the preceding and following administrations.

He also points out that big tax cuts are often followed by bubbles and crashes, like the big crashes of 1929, 1987 and 2008.

Beinhart says that one reason for this is that low taxes encourage businesses to distribute profits rather than reinvest them in their companies. When taxes are low the owners have incentive to grab all the cash they can out of the company.  But when taxes are high every dollar they take out of the company is immediately reduced.  If the money stays and is reinvested in the company the company’s value grows and can later be taken as capital gains.  As a former business owner I understand how this works. 

Beinhart writes,

With high taxes, the only way to retain the bulk of the wealth
created by a business is by reinvesting it in the business — in
plants, equipment, staff, research and development, new products and
all the rest.

The higher taxes are (and from 1940 to 1964 the top rates were around 90 percent), the more this is true.

This creates a bias toward long-term planning.

If
a business is planning for the long term, it wants a happy, stable work
force. It becomes worthwhile to pay good wages and offer decent
benefits.

So low taxes cause companies to only think a few months ahead and sacrifice their long-term good for short-term gain, instead of planning to be in business year after year.  Also, low taxes encourage a fast-buck climate in which takeovers and disruption rule.  Beinhart writes that when the Reagan tax cut era took over,

It was no longer enough for a business to be a reasonably good business, making steady, reliable profits.

Indeed,
that became a very bad condition for a business to be in. It made it a
target for takeovers by people who were willing to milk them of their
profits.

There is a lot more over at the article, so go read the rest.

This holds important lessons for Californians.  Along with Beinhart’s observations, there are other reasons to think that low taxes harm the economy.  For one, it is the nature of our economic system that a few people can come into possession of huge shares of the wealth.  This dries up the economy because regular people don’t have enough of a share of the wealth to allow them to spend much on consumer goods, etc.  We are seeing this happening today.  On top of that we are seeing the government forced by tax shortfalls to lay people off just at the time we need more people to be able to buy houses, cars, etc.  Taxes provide jobs and redistribute the wealth in multiple ways, so that regular people CAN buy houses, etc.

But in California we have rules that don’t let us raise taxes, even though we can see that we need the income so that the state can keep teachers, firefighters, roadworkers, etc. employed!  We as citizens actually tolerate rules that keep us from asking corporations and wealthy people from pitching in to help fix the economy!  It is time for us to start looking at how to fix these rules that hobble us during times of economic emergency.
 

News From California Progress Report

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There is news from the California Progress Report:  The California Progress Report Will Have a New Publisher and Editor–Frank Russo to Become Chief of Staff to Assemblymember Nancy Skinner.  From the post,

Good Sunday morning, readers of the California Progress Report. I
have major news–and although it is strange to write about oneself in a
headline in the third person, I am in transition, and so is the
California Progress Report.

On December 1, when the new California legislature is sworn in and
after Assemblymember Nancy Skinner takes the oath of office, I will
officially become her chief of staff. This will be my third trip
working under the Capitol dome in Sacramento–having worked in the 70’s
fresh out of law school as Administrative Assistant to an
Assemblymember and in the 80’s as Legal Counsel to the Speaker of the
Assembly where I reviewed the work of the Judiciary and Public Safety
Committees among other matters.

. . . I also have the good fortune to announce that a California nonprofit
organization will be shepherding the California Progress Report from
being published, edited, and written by me to a consortium of different
organizations who see the value of having a daily reporting of
California state news and opinion in this age of the decline of the
established media. We will have more details about that coming out
during the week.

Congratulations to Frank.

Thought Experiment On The Meaning Of Government

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Try this: Every time you read the word “government” substitute the appropriate variation of the term “We, the People” or “democracy” and then see how you feel about what is being written.  Use the same substitution for the term “the state.”

This is especially fun when reading anything written by a conservative or a right winger.

Ronald Reagan’s famous phrase, “Government is not a solution to our problem, government is the problem” takes on a whole new meaning, doesn’t it?  He was saying that “democracy is the problem” — and here we are 25 years later seemingly living under corporate rule instead of democracy.  How has that turned out?

When conservatives complain about government or “the state” they are complaining about control of decision-making by the people rather than by a few.  Never forget that.