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Hullabaloo


Monday, January 06, 2014

 
Here's what it means to actually deal with inequality

by David Atkins

Yesterday I derisively responded to the new "revelation" that Democrats are going to double down on income inequality issues by focusing on unemployment benefits and the minimum wage. I noted that while those are crucially important issues, they don't begin to address the real inequality problem which extends far beyond the most downtrodden members of society. It's a 99% versus 1% issue, and wage versus asset issue. It's also an issue of reorienting the deal between society and its people for a 21st century characterized by globalization, mechanization flattening and deskilling of the labor market, which is something I've been writing about for some time now.

There has been some good thinking about these issues in some of the more innovative corners of the left. Over at Rolling Stone, Jesse Myerson has a good set of five proposals that seem the most promising at the moment. Here's the first:

1. Guaranteed Work for Everybody

Unemployment blows. The easiest and most direct solution is for the government to guarantee that everyone who wants to contribute productively to society is able to earn a decent living in the public sector. There are millions of people who want to work, and there's tons of work that needs doing – it's a no-brainer. And this idea isn't as radical as it might sound: It's similar to what the federal Works Progress Administration made possible during Roosevelt's New Deal, and Dr. Martin Luther King, Jr. vocally supported a public-sector job guarantee in the 1960s.

A job guarantee that paid a living wage would anchor prices, drive up conditions for workers at megacorporations like Walmart and McDonald's, and target employment for the poor and long-term unemployed – people to whom conventional stimulus money rarely trickles all the way down. The program would automatically expand during private-sector downturns and contract during private-sector upswings, balancing out the business cycle and sending people from job to job, rather than job to unemployment, when times got tough.

Some economists have proposed running a job guarantee through the non-profit sector, which would make it even easier to suit the job to the worker. Imagine a world where people could contribute the skills that inspire them – teaching, tutoring, urban farming, cleaning up the environment, painting murals – rather than telemarketing or whatever other stupid tasks bosses need done to supplement their millions. Sounds nice, doesn't it?
Also on the list are Social Security for all, sovereign wealth funds, public banks, and a land value tax. The land value tax is particularly intriguing for those of us who see the shift in public savings from pensions to real estate as an incredibly misguided, destabilizing and destructive force:

Ever noticed how much landlords blow? They don't really do anything to earn their money. They just claim ownership of buildings and charge people who actually work for a living the majority of our incomes for the privilege of staying in boxes that these owners often didn't build and rarely if ever improve. In a few years, my landlord will probably sell my building to another landlord and make off with the appreciated value of the land s/he also claims to own – which won't even get taxed, as long as s/he ploughs it right back into more real estate.

Think about how stupid that is. The value of the land has nothing to do with my idle, remote landlord; it reflects the nearby parks and subways and shops, which I have access to thanks to the community and the public. So why don't the community and the public derive the value and put it toward uses that benefit everyone? Because capitalism, is why.

The most mainstream way of flipping the script is a simple land-value tax. By targeting wealthy real estate owners and their free rides, we can fight inequality and poverty directly, make disastrous asset price bubbles impossible and curb Wall Street's hideous bloat. There are cooler ideas out there, too: Municipalities themselves can be big-time landowners, and groups can even create large-scale community land trusts so that the land is held in common. In any case, we have to stop letting rich people pretend they privately own what nature provided everyone.
Until and unless Democrats start addressing these sorts of proposals, as well as specifically definancializing ones like a transaction tax, they're not really focusing on the sickness at the heart of the modern economy. They're just playing a neoliberal game to slightly improve the lives of those who have been pushed to the very margins, which in turn helps conservative to wedge the middle class against the destitute.


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