Monday, February 8, 2016

Franklin Roosevelt's Second Bill of Rights

On January 11, 1944 President Franklin Roosevelt's State of the Union Message to Congress set out his vision of what a post-war America should look like. He called it an "Second Bill of Rights." The "Democratic Socialist" platform of Bernie Sanders is remarkably similar to FDR's plan.

President Roosevelt said:

"This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.
As our Nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.
We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. "Necessitous men are not free men." People who are hungry and out of a job are the stuff of which dictatorships are made.
In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries or shops or farms or mines of the Nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
All of these rights spell security."
Bernie's Platform Is Designed to Reduce Economic Inequality while Increasing Opportunity, Economic Security and Personal Health.
- Provides greater support to unions so that there can be more collective bargaining to gain higher wages.
- A trillion dollar infrastructure program that will create 13-million good-paying jobs.
- A $15 "Living" minimum wage.
- Guaranteed vacation and sick time, maternity leave and equal pay for equal work.
- Health Care as a right, not a privilege with Medicare for all, eliminating the need for employer or personally financed health insurance. Lower prescription drug prices.
- Strengthening Social Security and increasing payments to the elderly and disabled.
- Cancellation and/or revisions of trade deals to provide greater protection of American jobs from imported low-wage products.
- Free public education through four years of college.
- An extensive program for improving rural life and to increasing the incomes of family farms. Included is use of the anti-trust laws against dominant agribusiness and food corporations and revisions in farm subsidies, nearly all of which go to big corporations.
- Programs paid for with a tax on Wall Street transactions, elimination of corporate tax breaks, tax reform, restoring the progressive income tax with higher rates for higher income families and individuals, increasing the Inheritance tax for large estates, lifting the cap on Social Security, increasing employer medicare payments as well as employee withholding.

Wednesday, December 16, 2015

Republicans calling for more defense spending is insane.

The most wasteful spending of the federal government is the defense budget. Huge sums of money - tens of billions of dollars - are blown up - truly blown up. What if that money were invested in the country?
What I found most disturbing about the Republican debate last night was the harping by so many of the candidates - maybe all of them - on how we need to spend more on defense. And they were not challenged by the CNN folks. Our basic defense budget is more than $600 billion. That doesn't count veterans benefits and I don't believe it includes the cost of maintain our 5,000 (!) nuclear weapons - weapons we really can never use and far more than we need for deterrence.
Here is a chart that shows our defense budget is equal to the TOTAL defense expenditures of the seven countries that spend the most on defense other than us. How can any rational person justify spending more?
SOURCE: Stockholm International Peace Research Institute, SIPRI Military Expenditure Database, April 2015. Data are for 2014. Compiled by PGPF. NOTE: Figures are in U.S. dollars, converted from local currencies using market exchange rates.

Saturday, December 5, 2015

It's Time to Raise the Minimum Wage to $15.00 an hour.

Why the Minimum Wage Should be Increased to $15.00/hour

By Dan Riker

We have an economic crisis in the United States today. We need a major increase in the incomes of most Americans. And there is one simple way that can be done - make the minimum wage a living wage. Raise it to $15.00 an hour.
We have the worst economic situation in the U.S. since the Great Depression. We have enormous economic inequality, a lack of upward mobility, and declining economic opportunity. Our economy is growing but nearly all of the growth is going to the top 10% and much of that to the top 1%.
Despite the fact that the GDP has tripled since Ronald Reagan was President in the 1980s, average wages have not increased at all. A Portland State University study just released this past week reported that the average income in Portland actually has declined.  Reagan's economic policies, which generally have been followed by every President since, caused millions of good-paying jobs to be shipped overseas, millions more to be eliminated by corporate mergers and millions more replaced by automation. Many of those jobs have been replaced by jobs that pay what the government classifies as low wages - an average of $12 an hour or less - not living wages.
Add to this the loss of most of the home equity American homeowners had because of the sub-prime mortgage crisis and while the banks were bailed out, homeowners were not and many lost their homes or still are stuck with mortgages greater than the value of their houses.
Recent studies reported that only 29% of Americans have more than $1,000 in savings and nearly half have none at all. Most Americans today have no money to spend on anything but necessities and are one job loss or serious illness or accident away from destitution - and they know it and they hate it.
This economic crisis has contributed greatly to our present political crisis.  Across the country right-wing politicians are being empowered by the hatred, fear and resentment of millions who are struggling to stay out of poverty and who get little government assistance themselves.
Many lower middle class whites, particularly in the South and in Rust Belt areas, already held racist views and had begun to vote Republican after the Civil Rights laws were passed in the 1960s, but the Republican Party today is vastly different from the one they joined a couple of generations ago. Voting Republican today is irrational and self-destructive. Right-wing Republicans not only don't want to do anything to improve the economic circumstances of the lower and middle-middle class - they actually want to take away or at least reduce what few benefits they may receive - such as Social Security, unemployment insurance, Medicaid and Medicare.
This self-destructive behavior was just seen in Kentucky. This state, that had one of the most successful roll-outs of Obamacare that provided medical insurance to hundreds of thousands of its residents for the first time, just elected - with extremely low voter turnout - about 30% -  a right-wing Republican governor who promised during the campaign to abolish the program.
And if there wasn't already enough evidence that millions of people are losing their minds - now we have the fascist, racist and bully, Donald Trump, as the leading contender for the Republican Presidential nomination.
Government at all levels is losing support. Fewer and fewer people are voting and increasing numbers of those who do - no longer believe in the social contract - the duties that we have to each other to preserve freedom, democracy and equality of opportunity.
What can we do about this? One simple thing will make a huge difference.
Raise the minimum wage to at least $15.00 an hour over a three-year period and index it to inflation.
We must look past the fact that less than 4 million people are working at or below the minimum wage, to the fact that more than 50 million are working for low wages - for less than $12.00 an hour on average - including 25% of the workers in Portland. And it is projected that 45% of new jobs in Oregon in the coming years will be low-wage jobs.
Think about it. Nearly one-third of all full-time workers in the United States currently are working for less than what they need to live and that number is likely to grow. What is this if not a form of slavery?
In order to survive, in order to support a family, millions work more than one job. Many also have to utilize the Earned Income Tax Credit, Food Stamps and other programs in order to feed their families and provide a place to live. There is no way these people can go to night school to improve their skills and get better work. There is no bootstrapping one's way out of this slavery.
Walmart and other corporations are employing the modern version of slavery to earn billions of dollars in profits and make their owners among the riches people in the history of the world. Walmart employees receive more than $6 billion in government benefits to make up for their low wages. Walmart also is the major beneficiary of Food Stamps because so many are cashed at their stores, especially by their own employees. If Walmart increased its minimum wage to $15.00 over a three-year period it could cover the cost with about a 5% increase in prices and maybe not that much.
We spend $133 billion on the Earned Income Tax Credit and Food Stamps. What if a substantial portion of that money could be used to repair our highways and bridges, reduce the cost of education, provide more aid to small businesses and fund increased scientific and medical research? Tens of thousands of good paying jobs would be created.
Raising the minimum wage to $15.00 will cause a major expansion in the nation's economy, improve economic and educational opportunity and dramatically reduce poverty.
And that will happen because of simple economics.
Increasing the minimum wage to $15 helps far more people than the four million who work for it now.  Increasing the minimum wage to that level will drive up the wages of tens of millions of workers - the 50 million who now are low wage and others up the line as their incomes are adjusted.
The people will spend this new income on consumer goods and that will propel the economy to grow faster than it has in many years. Consumer spending represents 71% of our economy - our Gross Domestic Product - of $18 trillion annually. I have computed that this will increase the GDP possibly by as much as 5% - twice the current growth rate - effectively tripling the growth rate. And a multiplier effect would set in, driving the GDP even more.
People would buy more houses, cars and consumer products of all kinds. Millions of people would be able to seek technical and collegiate education. Health would improve. People would be happier and the nation would prosper as companies expanded to meet the increased demand, creating even more and better jobs. 
Some argue that such an increase would cost jobs. There is no significant historical evidence that increases in the minimum wage have had negative effects on employment. In fact, right now there is plenty of evidence that the much higher minimum wages in effect in Seattle and elsewhere are stimulating their economies and creating more jobs - not fewer. However, as a society we must take the position that if a business can only survive by turning its workers into virtual slaves that business does not deserve to exist.
We can and must end this modern slavery. We can change America dramatically for the better - we can reduce the bitterness and resentment of tens of millions of people near the poverty line - by deciding that no full-time job can pay less than a living wage. 
And a living wage today is a minimum of $15 an hour.

Friday, October 16, 2015

Progressives Must Teach History to the American People

Americans know very little history and, increasingly, a lot of what they know is being doctored to fit ideological agendas. Progressives must work to educate the public about what progressives have done for the U.S. in the past. Virtually every government program and activity that benefits the general population was initiated by progressive governments in the three brief periods in the 20th Century when progressives had control of the national government. 

The first period was during the presidencies of Theodore Roosevelt, William Howard Taft and the first term of Woodrow Wilson, 1901-1917. Roosevelt and Taft were Republicans, but they also were progressive, Roosevelt more than Taft, but Taft more than he usually gets credit for. That's when women got the right to vote; food and drug inspection began; federal regulation of corporations began; unions began to get legal rights; federal regulation of banking was initiated; the progressive income tax and the estate tax were adopted.

The second period was during the presidency of Franklin Roosevelt, a Democrat, who came into office at the height of the Great Depression. His "New Deal" completely changed the relationship of the federal government with the people. He assumed command of the economy. No President had ever done that before in peacetime. The reforms he initiated turned things around. They included Wall Street regulation; increased bank regulation; Social Security; the minimum wage; limits on hours' child labor laws; the FHA to provide financing of home purchasing; the Works Progress Administration, which oversaw thousands of construction projects across the country; the CCC, which gave work and support to tens of thousands of young people across the country; and much more.

The third period was the brief time of Lyndon Johnson's Presidency, 1963-66 before the escalation of the Vietnam War brought him down. With more than a two-thirds control of both houses of Congress following the 1964 election, Johnson initiated "The Great Society," which resulted in voting rights for blacks; the end of institutional/legal segregation in housing, public accommodations, schools, and employment; Medicare and Medicaid; Head Start; various anti-poverty programs. The poverty rate in the U.S. by 1970 had dropped by 50%. Since 1980, the election of Ronald Reagan, it has increased by 50%.

On the other hand, Republicans have nothing in their modern history of horrible performance in government except wars, stagnated wages, damaged economies, enormous deficits, destruction of unions, and efforts to suppress the rights of women and of minorities. Republicans are terrible managers of government.
The people must learn this history and we must teach it to them.

Monday, September 21, 2015

The Misinterpreted 10th Amendment: It Doesn't Do What Many Think it Does

In last week's Republican debate there were several mentions of the 10th Amendment to the Constitution and how it confers rights to the states. Several of the candidates said they believed in that Amendment and would enforce it and by that they clearly meant they believe in limiting the powers and actions of the federal government. However, their interpretation of the 10th Amendment is wrong.
Even though neither this Amendment, nor any other provision of the Constitution conveys the right, some of the Founders, including Jefferson and Madison, as well as Southern leaders such as John Calhoun, believed that the 10th Amendment gave states the power to nullify acts of Congress and that it limited the power of the federal government. The Civil War and Supreme Court decisions settled the question whether there are any Constitutional bases for either secession or nullification. There are not. However, there still are legions of people - and many websites - that promote the idea that the 10th Amendment limits the powers of the federal government and creates states' rights.
There is little doubt that the 10th Amendment was intended to preserve some state powers, and their role in the federal system. While considering the ratification of the Constitution, all thirteen states proposed some version of what became the 10th Amendment. Only eleven years had passed since the states were separate colonies, operating quite independently of one another. Having fought to get free of English authoritarianism, they were wary of giving up too much power to any other government.
This was a particularly sensitive issue in the South because of slavery. A number of northern states wanted slavery abolished. Southern states would not have joined with the northern states in creating the United States if slavery had been abolished, or if they believed the federal government could abolish it without their consent. The 10th Amendment was one of the compromises intended to preserve some state powers and put some limits on federal power. The 10th Amendment reads:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Those who drafted it were very clever. The principal authors of the Constitution intended for the United States to have a strong national government. They were trying to solve the problems that occurred under the Articles of Confederation that did not provide for a strong central government. They also did not want individual states to have veto power over the federal government as they did under the Articles.
Not enough attention has been given to the exact wording of the Amendment, in particular, the last clause: “OR to the people.” In fact, the Supreme Court, as recently as in its voting rights decision in 2013, misstated the words of the 10th Amendment, and that was not the first time.
The authors of the Constitution were experts in the use of language, and in the construction of legal documents. Under any form of statutory construction, the use of the comma followed by the word "or" presents an alternative to the previous phrase. And the Constitution also clearly differentiates between the states and the people. The use of the word "people" in that last phase presents an alternative to the powers of the states - the power of the people, not of individual states.
The use of the word “people” in the Constitution, from the “We the People” of the Preamble on, means all the citizens of the United States separate from whatever identity they may have with individual states. There was a draft of the Preamble that used the words, "We the States," but it was changed to emphasize the nature of he Constitution and its effects. The Constitution was intended by the founders to be a compact among the people of the United States, not between the federal government and the state governments, or among the state governments. The people are citizens of the United States, not of individual states.
Ratification of the Constitution was required to be done by state conventions representing the people, not by state legislatures.  The authors of the Constitution clearly intended that the citizens of the United States bind themselves, their descendants, and their states, together, forever, in the compact, the Constitution. This appears to have been recognized by a number of Southern states when they seceded from the Union. In several states, the act of secession was done through conventions of citizens, “the people,” not by the state legislatures.
There is another problem with the idea that powers not specifically granted to the federal government are reserved to the states. That problem - and it is a big one - is the "necessary and proper" clause, the last paragraph of Article I, Section 8 of the Constitution. This section enumerates numerous powers of Congress, and after specifying those powers, that paragraph reads:
"To make all laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
When Alexander Hamilton's proposal for a national bank was opposed by Jefferson, Madison and Adams on the grounds that Congress did not have the specific power to create a bank, Hamilton's response was a memo to President Washington in which he argued that the "necessary and proper" clauses gave the federal government the implied power to create a bank because it had the express power to regulate commerce. He wrote that any express power carried with it, out of necessity, all legitimate implied powers necessary to exercise that power.
He went even further, turning the entire opposition argument upside down. He argued that rather than having limited powers, that in the areas of federal responsibility, the “necessary and proper” clause essentially gave the national government the power to do almost anything not specifically prohibited, or illegal.
In 1819, Chief Justice John Marshall relied on Hamilton's memo in the landmark case, McCullough v. Maryland, in which the Supreme Court ruled that Congress had the power, under the “necessary and proper” clause to create a national bank. That decision is one of the most important in the history of the Supreme Court and that interpretation of the "necessary and proper" clause remains in effect today. The only specific limits on the power of Congress are those in the Constitution and those that the Supreme Court has found to exist on various occasions.
Thus the assumption that the 10th Amendment gives powers to the states if they are not expressly granted to the federal government is wrong. It also does not limit the power of the federal government.
The Constitution provides for the states to maintain some rights and responsibilities, but none that can trump those of the federal government. The Constitution clearly states that it, and federal laws adopted under it, are the supreme law of the nation. The Constitution provides for no means of changing it except by amendment; no means of dissolution of the union; no right for any state to withdraw from the union; no right for any state to wage war against any other state; no right for any state to engage in foreign affairs; no right to determine, or grant, citizenship; no separate citizenship of states; no right to restrict the rights of citizens to vote.  
That last phrase of the 10th Amendment means that the reserved power is shared between the states and the people. It does not create a body of absolute “states' rights.” It means that states have the power to act where the federal government has not, and when such acts will not conflict with federal laws or responsibilities.
However, it also means that the people have the right to take action under similar circumstances.
Since the people, the citizens of the United States, elect the Congress and the President of the United States, this clause gives broad power to the people to act through their elected Congressional representatives, not just through their states.  In other words, it permits the people, acting through their elected representatives, to decide that the federal government should have a power not expressed, or implied, in the Constitution.

Tuesday, August 25, 2015

Lincoln's Economic Adviser on Competing Economic/Political Systems - Compare to Today's

"Two systems are before the world. One looks to increasing the necessity of commerce; the other to increasing the power to maintain it. One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level. One looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world."

Henry Carey, Harmony of Interests, 1851

Henry Carey was one of the most influential American economists of the first half of the 19th Century, a strong supporter of Henry Clay's "American System," and an adviser to Abraham Lincoln. Lincoln often said he was a disciple of Clay, perhaps the most powerful and influential American political figure other than Benjamin Franklin never to become President. 

Clay's "American System," which he mostly borrowed from the ideas of the nation's first Secretary of the Treasury, Alexander Hamilton, had three main features: High tariffs to protect American industry; Federal government investment in "internal improvements," (what we call "infrastructure" today); and a national bank to establish a viable monetary system. 

Congress adopted the tariff in 1815 and the second Bank of the United States. Strong opposition, mostly from Southern interests blocked any substantial funding of "internal improvements. When the tariff - which was the prime source of revenue for the national government - was increased in the 1820s, South Carolina nullified it and threatened secession.

President Andrew Jackson, a bitter enemy of Clay and an opponent of the "American System" because he was a follower of Jefferson's belief in a limited federal government, nevertheless was a strong nationalist. He threatened military action against South Carolina and wrote perhaps the strongest argument ever against any state's right to nullify a national law or to secede from the union, calling such action "treason." He reached a compromise by lowering the tariff.

Jackson refused to fund much in the way of "internal improvements," and he stopped construction of the national highway that had been built from Cumberland, Maryland to the state border of Kentucky, Clay's home state. He was the last President to pay off the national debt and when the federal government had a surplus, instead of spending it, he wanted to return the money to the states.

Jackson vetoed Congress's approval of the rechartering of the Bank of the United States, and killed the powerful bank. He viewed the bank, which had virtual control of the nation's money supply as a tool of an Eastern elite that did not operate in the interests of most of the people. His veto statement is one of the earliest arguments against banking that became a key plank in the program of the Populist movement late in the 19th Century. He did not like paper money, which in those days consisted of notes issued by banks, supposedly convertible into gold. The only money issued by the federal government was coinage. There often were many more notes than could be converted into gold. There was a "musical chairs" aspect to this monetary system. Whoever was the last to use a failed bank's note to pay for something was liable for its value, and whatever property was purchased with it could be foreclosed on if that person or business could not make good on the note. Jackson lost his home when he was young because of a bank failure and he forever after hated and distrusted banks.

Without a national bank controlling the issuing of paper money, and effectively the number of state banks, banking at the state level expanded dramatically as did the supply of bank notes. With much more money in circulation the growth of the economic accelerated. Of course, so did inflation. The first result was a crash and a long and vicious depression in the late 1830s. However, without a national bank's controls, much more competition developed among state banks helping to fuel dramatic economic expansion and technological development in the 1840s and 50s, led by the new railroad and telegraph systems.

When Lincoln became President in 1861, the key features of Clay's "American system" no longer could be blocked by the South, which had seceded from the Union. Instead of creating one Bank of the United States, Lincoln created a system of chartered "national banks" giving them the power to control the monetary system. He also raised the tariffs dramatically, and he supported the federal government helping to finance the Transcontinental Railroad, among other things. 

Lincoln's vision of an activist federal government that was inspired by Clay, who had gotten most of his ideas from Hamilton, ended with his death. The Presidents who followed him for the rest of the 19th Century were conservative, and generally passive in governing. Once Reconstruction ended in 1876, the South returned to significant power in Congress with essentially the same position of limiting the functions and power of the federal government. 

Things did not change much until an assassin's bullet in 1901 brought Theodore Roosevelt, and his progressive views and enormous political skill, to the Presidency.