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December 11, 2019



Professor Kennedy in her recent blog wrote on the antics of the American Legislative Exchange Committee (ALEC) in keeping a lid on wages and corporate taxes, among other efforts to represent their business clients, clients (my observation) such as Eli Lilly, for instance, whose insulin profits are stratospheric and who received tax cuts via the Trump-Ryan giveaway of billions to add to their coffers and our long term deficit. I responded to her blog, slightly edited, as follows.

ALEC has done a good job in writing up model legislation for Republican politicians who crow that it is their own while waving the flag and putting down labor and liberals as socialists in order to soften public opinion when the resulting bills are heading up for committee hearing, and there appear little countervailing models from underfunded labor unions and liberals to stanch such a well-funded torrent of money and propaganda designed to align public opinion with corporate bottom lines.

It’s working, and the infamous Powell memorandum to his friend (a vice president of the U.S. Chamber of Commerce) in 1971 opened the door for the formation of such right wing lobbying groups as ALEC a few years later, an event which, when added to the subsequent election of union-hating Reagan in a perfect trifecta marked the end of the New Deal, an era where wage increases matched the Dow.

Right to work laws then proliferated, and net corporate profits zoomed (along with the Dow) with ALEC tax-shielding amendments to the internal revenue code while median wages for minimum wage earners (as adjusted for inflation) actually went down, thus leading to a crippling externality to aggregate demand, the arbiter of economic growth.

So what to do? Elect Democrats to state legislatures, repeal right to work laws, send ALEC’s efforts back to their writers, and in general create a legislative atmosphere more favorable to labor via a doubling of the minimum wage (a wage that hasn’t been increased for more than a full decade) etc. Can’t be done? That’s what Republicans said when FDR came up with the Wagner Act, the Social Security Act, an end to bank runs, etc. With a drastic change in legislative personnel in state houses around the country, we can match or exceed the success ALEC has enjoyed since 1973 by making this economy work for all of us, not just corporate shareholders and executives. So when do we make our move? Yesterday.      GERALD         E

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