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A NEW NEW DEAL?

September 23, 2018

A NEW NEW DEAL?

Professor Sheila S. Kennedy in her blog of a few days ago alluded to a bill by Senator Sanders in re minimum wage and, like I, thought it was a good idea but one that could not be implemented given the present state of affairs where wage inequality has become policy, a wrong-headed one, but policy nonetheless in these days of tax policy leading to trillions more in debt via further enrichment of the already rich and further impoverishment of working Americans and the poor. She asked for commentary and the following, slightly edited, was my contribution.

Bernie has the right idea but Sheila is right on with her askance at implementation. As my fellow commentators know, I constantly rant about wage inequality, and if we had had wage equality in tandem with the Dow (which we had beginning with FDR and until Reagan) the median wage now would be just short of $24 per hour, so I have an idea. Compromise where the wage should be and settle for a $20 per hour minimum wage (to play catch up from where we have been and still are since 2009 at a minimum poverty-enhancing wage of $7.25 an hour) AND come up with a formula that ties increases in such minimum to increases of a mix of the Dow and the cost of living, computed and effective monthly.

Can’t be done? Will drive businesses into bankruptcy? Some will fail, of course, but these are likely the ones on taxpayer welfare whose business plans depend upon such largesse, as in, why should you and I pay for food stamps for WalMart employees while Sam’s devisees have more wealth than the lower 40 percent of Americans? Corporations don’t create jobs; aggregate demand does, and when you think WalMart’s trademarked statement of “always low prices” has any validity, consider that the retail price you pay for their Chinese goods is only a down payment. You are paying hidden costs in varying amounts that go straight to the stock options of corporate executives and dividends and capital gains opportunities to their shareholders and Sam’s devisees, who are laughing at us dummies all the way to the banks, banks which are, in turn, “too big to fail.”

Detect a plot? You should, because this is not capitalism; it’s theft. Let’s legislate for people and let the corporations either come up with business plans that work in this new wage environment or flee to Chapter 11, merger or go under, just as hundreds of thousands of their employees go to Chapter 7s each year, 41 percent because of medical bills they cannot pay and which their employers will not underwrite.

Currently we have a “system” where taxpayers support corporate success; let’s reverse that process, starting with an end to wage inequality and then going from there on to statutory requirements of workers on corporate boards etc., all of which would greatly stimulate aggregate demand, the sole arbiter of economic growth. Such forward looking aids to economic growth will not be accomplished by the Republican Party, which has long since been bought out by the rich and corporate class and, more specifically, libertarian interests such as the Kochs, Mercers and others. Let’s bring this charade to a screeching halt this November and join the rest of the civilized world in fairly and equitably distributing the fruits of our mixed economy.

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