- Bill Barclay, CPEG and Ventura DSA
As I argued in my first “Taming Capital” post, the political landscape defined by the 2018 midterms has reinvigorated the discussion of economic inequality and what we can or should do about it. The problem of inequality was a focus of the Occupy movement. It was also the core 2016 campaign message of Bernie Sanders – who just announced he is running for president in 2020. Like Warren’s wealth tax, Sanders understands that the obscene levels of economic inequality in the U.S. today cannot be countered simply by raising the minimum wage or a more progressive income tax structure. The concentration of wealth must also be addressed. And Sanders has put forth an important proposal for doing so – but also one that has a long history in the U.S.
Making the Estate Tax Real: Bernie Sanders
The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes.
- Theodore Roosevelt, 1910
Over a century ago under urging from Theodore Roosevelt, Congress created the modern estate tax.[i] TR understood the need for an estate tax in terms that apply equally or even more so today: the problem of an inherited aristocracy based on private capital accumulation, arising from some combination of good fortune, innovation and, very importantly, coupled with institutional supports that allowed an individual to amass large amounts of wealth in a single generation. As TR argued, such inheritances were, for the next generation, free and unearned money. Not only were the inheritors of the next generation no more deserving of this wealth than any other citizen, TR believed that they would all too often fritter in away in lavish living – think of Paris Hilton, the $37 million dollar ranch that Bill Gates bought his daughter Jennifer because she likes to ride,[ii]etc.
Taming Capital? - Part 1
- Bill Barclay, CPEG and Ventura DSA
The midterms have not simply given the Democratic Party a majority in the House; they have visibly expanded the range of political discourse, the so called "Overton Window". This impact is particularly marked in terms of the issue of economic inequality. In the past few weeks, three major progressive - perhaps even socialist? - initiatives have been proposed. In chronological order, these are Elizabeth Warren's wealth tax, Bernie Sanders changes to the Estate Tax, and HR 1000, guaranteeing a job to all willing and able to work, a true "right-to-work." Each treads on what has been seen by the right as the prerogatives of capital. For those of us on the left, each raises the question of to what extent it is possible to intervene in the market allocation of wealth and income in a capitalist political economy, perhaps even altering the dynamics of capital accumulation and use the resulting revenues for social rather than private ends.
In this first post I'll look at Warren's for a wealth tax. The next two posts will analyze Sanders Estate Tax revisions and then HR 1000.
An Annual Tax on Wealth: Elizabeth Warren
Because it is unique in U.S. political discourse - and probably doomed whatever small chance she had of being the Democratic nominee for president - Warren's wealth tax proposal
could be considered the most radical of the three. The idea behind the proposal is conceptually simple: she calls for an annual tax on wealth with two rates: 2% on household wealth over $50 million and less than $1 billion and 3% on wealth over $1 billion. This is an unprecedented proposal for a nationally known political figure, because it places wealth, rather than income, at the center of the problem of extreme and growing inequality in the U.S.
There are several things to like about Warren's proposal.
National DSA, through the NPC, has initiated a process to begin considering the endorsement of a candidate for U.S. President. The process seems structurally sound and open. Here
North Star welcomes DSA’s new caucus, Socialist Majority. We agree with you on many issues and look forward to working with you to discover new strengths and then build a diverse, democratic, DSA.
Yours in Solidarity,
DSA North Star
The caucus for Socialism and Democracy
AOC’s Achievement: Making Americans’ Progressive Beliefs Politically Acceptable. Of all the reasons that Representative Alexandria Ocasio-Cortez is driving the right crazy, one of the most important is this: She’s advancing presumably radical ideas (by the right’s standards, anyway) that actually have massive public support.
Green New Deal? Fuzzy though its meanings may be, it brings together regional development policies for the huge region of the country that private capital has long since abandoned, climate change policies in a nation where climate-change apprehension is at an all-time high, full employment and decent wage policies for a nation where even voters in Republican states are casting ballots for higher wages and better jobs. Before AOC, whose radar was a Green New Deal even on? Since she joined the protestors in Nancy Pelosi’s office, a far-flung majority of Americans now see it as a way to address all manner of problems.
Likewise with taxing the rich. When AOC made the case for a 70 percent tax rate on annual income over the $10 million threshold, CNN’s Anderson Cooper responded as if she’d just called for collective farms. Now that Senator Elizabeth Warren is proposing a wealth tax that would compel the rich to pay an even fairer share of their bounty to support the common good, pundits are beginning to notice that the public has been supporting much higher taxes on the rich for a very long time. Since 2003, Gallup has annually asked the public whether they believe the level of taxes the rich pay is too high, too low or just right. The percentage saying “too low” has been in the 60-percent-to-70-percent range every year.
So it’s not hard to see why AOC is driving the right crazy. Forget the dancing, not to mention the racism and sexism that underpins many of the right’s complaints. It’s that she’s giving voice to progressive ideas that the public actually supports but that have long gone unvoiced by nearly everyone in power who has a megaphone they could use. She’s game-changingly brilliant at promoting progressive public policy. To the right, if I may steal from the Bard, such women are dangerous. ~ HAROLD MEYERSON
Photo Credit: Gretchen Dohart
If there is a heaven, and it reserves a place for virtuous skeptics, I imagine the late Michael Harrington looking down with celestial satisfaction at the recent growth of Democratic Socialists of America, having played such an essential role in its founding 35 years before.
Harrington, who would have turned 90 in February 2018 but who died too young at age 61, was born in St. Louis and moved to New York City in 1949 to become a writer. In 1951, he began a life-long commitment to radical politics when he joined Dorothy Day’s anarchist-pacifist Catholic Worker movement.
Mike soon shed his anarchism as well as his parents’ Catholicism, and in 1952 left Day’s community for the Young People’s Socialist League (YPSL), youth affiliate of the battered remnant of the Socialist Party (SP). YPSL counted 134 members nationwide that year. And it was about to get smaller, because Mike joined a faction that split away to form an even fringier group, the Young Socialist League (YSL), whose adult mentor, Max Shachtman, had a long history of radical in-fighting.
In the late 1950s, the Shachtmanites rejoined the SP. As newly appointed YPSL national organizer, Mike hitch-hiked across the country, visiting campuses from Brandeis to Berkeley to recruit young socialists (among those who joined in those days was an undergraduate at the University of Chicago named Bernie Sanders). Tom Hayden and other campus activists, in the process of creating Students for a Democratic Society (SDS), were among those Harrington influenced. Mike famously wound up quarreling with Hayden and other SDSers at their founding convention in Port Huron, Michigan, in 1962, over some serious issues (the Cold War, the Soviet Union, anticommunism), but also over unspoken generational tensions. It was a rift he later deeply regretted.
In the mid-1960s, following the publication of his book The Other America, Mike became famous as “the man who discovered poverty.” He was invited to take part in planning sessions for President Lyndon B. Johnson’s War on Poverty in 1964 and advised Martin Luther King Jr. on the civil rights leader’s plans for a Poor People’s Campaign in 1968. Like King, Mike wrestled with the political and moral dilemma posed by LBJ’s escalation of the Vietnam War, reluctant to sever ties with an administration that, domestically, had been so committed to a progressive agenda. King’s breaking point came in 1967, when he publicly denounced and marched against the war. Mike, for complicated reasons including ties to the comrades of his youth, the increasingly right-leaning Shachtmanites, took much longer to do so. It was probably the costliest political mistake of his life, among other results undermining any remaining influence he had over the New Left in the later 1960s. Mike never abandoned his opposition to communism as the antithesis of his own democratic socialist beliefs. But, through painful experience, he learned from King’s example that a morally consistent politics also proved, in the long run, a pragmatically sound politics.
By the early 1970s, the old SP was hopelessly divided over the war in Vietnam and other issues, and in 1973, Mike and others, breaking with the right-wing Shachtmanites, created the Democratic Socialist Organizing Committee (DSOC), which grew to several thousand members. Nine years later, in 1982, DSOC merged with the New American Movement (NAM), which had been founded some years earlier by former New Leftists. The new Democratic Socialists of America (DSA) represented a partial healing of old generational/political divisions.
Now that they are in Congress, both Tlaib and Ocasio-Cortez will almost certainly develop broadened political bases largely independent of DSA. Organized labor and liberal advocacy groups will be in their camp now. The Congresswomen may, out of conviction or good will, continue to pay DSA dues, and show up for rallies, fundraisers or other socialist gatherings, as Dellums and Owens did. But it’s unlikely they’ll have the time or inclination to devote much more in terms of direct involvement. If they are going to do their jobs right, serve their constituents—and get re-elected—they are going to be very busy and in a much bigger arena.
Volunteer power from DSA, however, did help both Tlaib and, perhaps more so, Ocasio-Cortez, win their contested primaries. That involvement shows what kind of an impact the organization can have on electoral races, and will likely inspire other insurgent candidates to seek DSA’s endorsement in future races. And as more politicians begin to adopt the label of “democratic socialist”—while advancing the values and policy priorities of the group, DSA will continue to grow in power as a player in American politics.
It is this growth that is more important for the organization’s continued success than discussions of strict accountability to DSA. After all, as elected representatives, Tlaib and Ocasio-Cortez are accountable to a number of different groups that helped elect them, and first and foremost—and rightly so in a democratic system—to the voters of the districts they represent. And as a matter of practicality, DSA currently needs Tlaib and Ocasio-Cortez more than either of them need DSA.
This reality is worth remembering if the newly reenergized DSA is to help expand the socialist caucus in the House of Representatives beyond the two it currently counts.
Maurice Isserman, a charter member of Democratic Socialists of America, is the author of The Other American: The Life of Michael Harrington (2000)
This post is dated. We intended to post it back in November, however our blog was not functioning at that time.
“Michael Harrington.” It’s a name that gets tossed around by members of DSA, sometimes in negative and derogatory ways. But simply put, DSA, as an organization advocating democratic (as opposed to authoritarian) socialism, that fights for free, honest and open elections for achieving socialism based on democratic self-determination and for transformative change for the here and now, is Harringtonist to its core. Harringtonism is the guiding ideology of democratic socialism in the US, and the basic set of political principles that separates DSA from the authoritarian, totalizing, and revolution-fantasy nostrums of anarchism and Marxism-Leninism.
by Leo Casey
1) How should the left approach the 2020 elections? Here are my thoughts. The paramount objective must be the defeat of Trump & the retaking of the Senate from GOP. This is the ‘prize’ on which we must keep our eyes.
2) If we do not win this ‘prize,’ the elections will be catastrophic for American democracy, those targeted by Trump’s authoritarian populism & the left. But much of the discussion on left twitter and facebook takes place within a political vacuum, as if context was irrelevant.
3) There will be a vigorous campaign over which presidential candidate would be the best standard bearer in that all important battle. But the very breadth of the current field means that there are many authentic progressives who are credible prospects.
4) Rather than rush to anoint a particular candidate as the one and only prospect, it makes much more sense for the left, at this early point in the campaign for an election two years down the road, to be focused on promoting issues that it wants the Democratic Party and whomever is the candidate to embrace.
5) Alexandra Ocasio Cortez’s ability to put the #GreenNewDeal on the agenda before she was even sworn in illustrates what the democratic left can – and should be – doing to advance an agenda that will address critical issues such as climate change and economic inequality & set the stage for 2020.
By Max Sawicky
Ferment inspired by the execrable Trump presidency and Republican Congress has returned Democrats to a majority in the House of Representatives, but their incoming leader, Rep. Nancy Pelosi (D-CA), is maneuvering to squelch that ferment with a new “rules package” that will discourage progressive legislation.
The two moves in question are reinstituting a “PAY-GO” restriction on legislation, and neutering a new committee dedicated to advancing the Green New Deal (GND).
PAY-GO, short for “pay-as-you-go,” requires any proposal for new spending or tax cuts to be accompanied by offsetting measures that preclude any increase in the federal budget deficit over the ensuing decade. Under this rule, a bill violating this requirement is subject to a “point of order” on the House floor. That immediately interrupts consideration of the bill, which can then be killed absent consent by the Democratic leadership, meaning Nancy. It is possible for the restriction to be waived, but that would require buy-in from you guessed it, Nancy, so it will be her way or no way.
In practice, of course, a speaker who has the support of her caucus has dictatorial control over the House. She or her can block any bill at any time. What PAY-GO does is give Pelosi an excuse for letting something die before it has a chance to get a vote by the full House. Her fingerprints on the blockage are not as obvious. Instead of the headline being, “Nancy says she doesn’t like this bill,” it will be, “Green New Deal falls afoul of PAY-GO rules.” Meanwhile, the new committee dedicated to advancing the GND, besides being hampered by PAY-GO, would lack subpoena power. So compared to other Congressional committees, it will be like the kids’ table at Thanksgiving.
Why, oh why, would the great San Francisco liberal be doing this? A few possibilities come to mind.
The worst is that she is committed to the same nostrums of fiscal responsibility that have helped the Democrats lose political battles since Walter Mondale in 1984. If you’re old, you may remember Mondale’s bold announcement in his presidential campaign that he would raise taxes to fix the deficit. That November, he lost 49 states to the addled Ronald Reagan. In 1993, new president Bill Clinton rammed through a deficit-reduction-minded budget deal that was followed in 1994 by Democrats losing both the Senate and the House, the latter for the first time in forty years. In 2010, Barack Obama promoted a health care reform that, out of deficit concerns, was insufficiently funded, among other deficiencies, resulting in a plethora of difficulties in operation of the new law, and some impact on flipping the Congress to the Republicans. There’s a pattern here.
The wonder about mainstream Democratic affection for PAY-GO is that the deficit fears upon which it is premised are no longer subscribed to by Democratic economists, even relatively moderate ones such as Larry Summers, Obama’s chief economic adviser, or Jason Furman, head of Obama’s Council of Economic Advisers. Summers has written of his worries that the economy is in a long-term rut of “secular stagnation.” Furman recently acknowledged in the Wall Street Journal that deficits resulting from Trump’s tax cut had a positive boost for the economy, albeit limited and temporary.
There is a reasonable case for higher deficits even now with a low unemployment rate (and many remaining labor market drop-outs). Moreover, there is no reason to expect current conditions to persist for a full decade. In particular, policies that strengthen the “automatic stabilizers” in the budget (i.e., those that automatically increase spending and cut taxes when the economy slows down) would be beneficial for the long term.
As a general matter, it makes sense to finance infrastructure — investments that provided benefits over an extended period of time — with borrowed money, as business firms often do. Defraying the interest on such debt is the real pay-as-you-go. Denying such investment is just cutting your nose to spite your face.
We might also linger on the thought that a reduced national debt would not be much consolation after the advent of irreversible, catastrophic climate change. Investment will be one of the pillars of addressing this threat.
Deficit reduction politics by now should be recognized as a gigantic loser for Democrats. Republicans are never constrained by deficit impacts in any of their proposals. Either they are ignored, or measures like the Trump tax cut are magically transformed into deficit-reducing miracles.
On the Democratic side, any “fully-funded” spending bill provides opponents of the bill with a nice array of groups negatively affected by the offsets upon which to base a counter-mobilization. Knowledge of the PAY-GO obstacle will strangle potential progressive initiatives in the crib.
Nancy’s rules are probably designed to restrain the energized progressive contingent of House Democrats. She’s smart, after all; she can’t be unaware of the impact of her rules. However effective she was in mobilizing her caucus behind Obama’s initiatives in 2008 and 2009, her vision of political possibilities does not seemed to have evolved with the times. She reminds us of defeated Senator Claire McCaskill, who wondered how someone like Alexandra Ocasio-Cortez had become “the new, shiny object.” Something is happening and she don’t know what it is.
One rationale for stifling discussion of social legislation is to keep the spotlight on toppling Trump. While there is no reason not to unleash the full fire and fury of the House majority on our vicious, kleptocratic administration, there is a pragmatic reason to maintain attention on the issues that arguably flipped the House: meat and potatoes stuff like health care, the minimum wage, etc.
It is true that no progressive initiative is likely to make it through the Republican Senate, much less Trump’s White House, but that’s the cynic’s view. Proposing hopeless initiatives is the beginning of providing some hope for them. Republicans seem to understand that better than Democrats.
It’s always possible that the commitment to PAY-GO, like most other decisions, is more an artifact of what wealthy donors have indicated they prefer, rather than ordinary voters. Or as Nancy says, “We’re capitalists, and that’s just the way it is.”
Reposted from Jacobin blog with the permission of the author.
Max B. Sawicky is an economist and writer living in Virginia. He has worked at the Government Accountability Office and the Economic Policy Institute.
Ed note; Congresswoman Alexandria Acosio-Cortez was one of 3 Democrats to vote to oppose the Pay-Go rule.
The opinions expressed here are those of members and allies of DSA North Star Caucus meant to educate, inspire discussion and encourage comradely debate.