Bold Liberalism

It’s time for percolate-up economics for the middle class.”

—Senator Tom Harkin defending the “Rebuild America Act

his post may separate those of you out there who think you are liberals from those of you who really are.

From philosopher John Rawls I learned the “difference principle,” which essentially states that social justice entails creating the kind of society in which the worst among us are as well off as possible. The key to understanding this concept of social justice is to note the phrase, “as well off as possible,” and not mistake it for, “as well off as everyone else.”

My personal application of this idea is that certain social inequalities can be tolerated so long as we have striven to eliminate them in the context of keeping the engine of capitalism running. This implies that restrictions on capitalism are necessary, and that there is a need for redistributive polices, in order to ensure wealth doesn’t become too highly concentrated in the hands of a few.

As a liberal, I’m not afraid of stating that notion openly and defending it not only on the grounds of justice or fairness, but on the grounds that a society whose abundance is not shared by most of its citizens cannot long endure as a stable entity.

Having said that, here is an excerpt from The Nation:

Senator Tom Harkin announced today a broad economic plan that he will introduce shortly in the Senate—one well to the left of the current White House proposal and aimed directly at reviving the middle class.

Harkin’s legislation, which he dubs the “Rebuild America Act,” touches on virtually every area of American economic policy: it revamps the tax code, initiates a wide array of public spending meant to goose the economy, pushes for fair trade laws, and retools laws and regulations that affect middle-class families.

Here are some proposals in the bill, which is divided into “three basic categories”:

Economy and Job Boosters:

  • $300 billion (over ten years) for roads, bridges, sewer-water systems, levees and rural infrastructure
  • $20 billion (over ten years) in school modernization funding (From Harkin’s summary: “Grants are distributed to states based on poverty and population and States must describe how they will consider the impact of potential projects on job creation and give priority to eligible entities that use green practices and serve the largest percentages of low-income populations, among other things.”)
  • Boosts funding for agencies that regulate trade in order to better enforce fair trade policies
  • Helps states fund the hiring of teachers, public safety workers and other public employees
  • Provides a formula for matching grants to the states for “the modernization, renovation, and repair of early childhood education and care facilities, k-12 public schools, and community colleges
  • Establishes a program to help local communities “in efforts to undertake comprehensive energy systems renovations strategies” for the 21st century which will “enhance energy security and lessen environmental impacts”
  • Provides competitive grants for ensuring that Americans “obtain the skills and credentials needed to enter into and advance in high-quality jobs”
  • Provides loan guarantees so small manufacturers with work orders can get loans to expand

Middle Class Stabilizers:

  • Increases child care subsidies for working parents and grants to the states to “encourage the development of high quality child care programs”
  • Ensures that workers, particularly white-collar workers categorized as independent contractors, earn time-and-a-half overtime pay
  • Raises the minimum wage to $9.80 over two and a half years and then indexes it to inflation; raises the minimum wage for tipped workers “to 70% of the federal minimum wage”
  • Requires employers to offer workers paid sick days
  • Strengthens the National Labor Relations Act, making it easier for workers to join unions and increasing penalties on employers for blocking unionization.
  • Improves benefits “for current and future Social Security beneficiaries” by changing the method of calculating the benefits, which “when fully phased in” would increase benefits by $800 per year; also the law bases future increases on the Consumer Price Index for the Elderly rather than the Consumer Price Index for all Urban Wage Earners
  • Phases out the Social Security tax cap on wages

Tax Changes:

  • Raises the capital gains rate (to 28% for higher-bracket earners) and closes the carried interest loophole
  • Institutes the “Buffett Rule,” which ensures that Americans “with annual income over $1 million, pay no less than a 30% effective tax rate”
  • Creates a Wall Street “speculators tax” of three basis points on common financial securities trades
  • Acquires “$65 billion over 10 years from large financial institutions…that received emergency financial assistance” through TARP
  • Ends tax breaks for companies that “ship jobs overseas”
  • Protects workers’ pension funds by strengthening the Pension Benefit Guaranty Corporation and by adding protections for workers who pensions are threatened by bankruptcy

As The Nation’s George Zornick points out, Harkin’s legislation overlaps much of the recently announced “Budget for All” from the House’s Congressional Progressive Caucus.

Now, everyone knows that the chances of getting this or similar legislation passed is exactly zero. But that’s not the point. Too often Democrats start with a compromise and give more and more until we are essentially debating Republican proposals (see: the Affordable Care Act).

It is time we start the conversation on our own terms.

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3 Comments

  1. ansonburlingame

     /  March 30, 2012

    To all,

    Might I intrude in your “own discussion”, meaning I suppose a liberal one, with a broader view from a conservative?.

    Some of you know that I have read and blogged on a recent and compelling book, for liberals and conservatives about huge global forces in play today that far exceed American domestic policies. The author of the book calls them “tectonic”, not to be denied by “governments” forces.

    NO government can thwart a “tidal wave” once the tectonic forces set such a wave in motion. And we are in the midst of seeing one on the horizon, actually many and coming from all sorts of directions. Scoff if you like at such, but……..

    If American domestic policies of the future do NOT take into account such geopolitical forces now very much in play, then America is going to be much worse than we already are, today.

    Such has NEVER happened before in America. Either through first isolationism and then becoming a superpower, we have always been the masters of our own fate(s). NOT now I say as does the book laying out such thoughts.

    It is “just great” to imagine how we can “tax the rich” to improve the plight of the poor in America today. But that is simply a drop in the bucket on a geopolitical scale of money, a mere drop.

    We might well “improve conditions for the poor” for a (geopolical) moment in time. But then……. what happens when the Yuan replaces the dollar, as just an example, or China gains acess to most of the gold on earth (as they seem to be trying to do so), or India, or Russia…. or proliferation of nuclear weapons around the world, or all sorts of other possibilities that COULD happen.

    Want to see if “we”, Americans are winning or lossing that geopolitical battle, then just keep your eye on Americaqn debt and deficits. THAT, in my view is a daily report from the “battlefied” of geopolics. Debtors lose such battles, throughout history. And for now we are the biggest debtor in the world.

    Anson

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  2. Seems clear that Harkins’ budget proposal meshes well with Rawls’ philosophy. That’s the kind of society I want to live in, one in full compliance with sunshine laws and a vigorous Fourth Estate promoting the kind of government that is just that, kind to all its citizens. Purely unregulated capitalism, it seems to me, would look a lot like the early days of the Industrial Revolution – Charles Dickens’ London for example, or the times of America’s Robber Barons and sweat shops.

    I hope nobody is arguing for one extreme or the other, but rather where to draw the line in economics, a line which has no natural resting point. Hence, the wisdom of the founders in a dynamic three-part government.

    Nice to know you haven’t gone all wishy-washy on us, Duane.

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  3. Does the Rawl’s criteria boil down to:

    1. Increase share of production by the top tier of producers (however defined) taxed for distribution to the worse off
    2. Evaluate the incentive effects (if any).
    3. If the share of production taxed and distributed to the worst off is largel repeat step 1; and if not return to the taxation rates prior to the last implementation of step 1.

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