The following is an excellent excerpt from the book “DIVIDED: The Perils of Our Growing Inequality” edited by David Cay Johnston from page 8 on “Inequality and Democracy – President Barack Obama” and I quote: “Building a Prosperous Future – The world is shifting to an innovation economy and nobody does innovation better than America. Nobody does it better. No one has better colleges. Nobody has better universities. Nobody has a greater diversity of talent and ingenuity. No one’s workers or entrepreneurs are more driven or more daring. The things that have always been our strengths match up perfectly with the demands of the moment.
But we need to meet the moment. We’ve got to up our game. We need to remember that we can only do that together. It starts by making education a national mission—a national mission. Government and businesses, parents and citizens. In this economy, a higher education is the surest route to the middle class. The unemployment rate for Americans with a college degree or more is about half the national average. And their incomes are twice as high as those who don’t have a high school diploma. Which means we shouldn’t be laying off good teachers right now—we should be hiring them. We shouldn’t be expecting less of our schools—we should be demanding more. We shouldn’t be making it harder to afford college—we should be a country where everyone has a chance to go and doesn’t rack up $100,000 of debt just because they went.
In today’s innovation economy, we also need a world-class commitment to science and research, the next generation of high-tech manufacturing. Our factories and our workers shouldn’t be idle. We should be giving people the chance to get new skills and training at community colleges so they can learn how to make wind turbines and semiconductors and high-powered batteries. And by the way, if we don’t have an economy that’s built on bubbles and financial speculation, our best and brightest won’t all gravitate towards careers in banking and finance. Because if we want an economy that’s built to last, we need more of those young people in science and engineering. This country should not be known for bad debt and phony profits. We should be known for creating and selling products all around the world that are stamped with three proud words: Made in America.
Today, manufacturers and other companies are setting up shop in the places with the best infrastructure to ship their products, move their workers, communicate with the rest of the world. And that’s why the over one million construction workers who lost their jobs when the housing market collapsed shouldn’t be sitting at home with nothing to do. They should be rebuilding our roads and our bridges, laying down faster railroads and broadband, modernizing our schools—all the things other countries are already doing to attract good jobs and businesses to their shores.
Yes, business, and not government, will always be the primary generator of good jobs with incomes that lift people into the middle class and keep them there. But as a nation, we’ve always come together, through our government, to help create the conditions where both workers and businesses can succeed. And historically, that hasn’t been a partisan idea. Franklin Roosevelt worked with Democrats and Republicans to give veterans of World War II—including my grandfather Stanley Dunham—the chance to go to college on the GI Bill. It was a Republican president, Dwight Eisenhower, a proud son of Kansas, who started the interstate Highway System and doubled down on science and research to stay ahead of the Soviets.
Of course, those productive investments cost money. They’re not free. And so we’ve also paid for these investments by asking everybody to do their fair share. Look, if we had unlimited resources, no one would ever have to pay any taxes and we would never have to cut any spending. But we don’t have unlimited resources. And so we have to set priorities. If we want a strong middle class, then our tax code must reflect our values. We have to make choices.
Today that choice is very clear. To reduce our deficit, I’ve already signed nearly $1 trillion of spending cuts into law and I’ve proposed trillions more, including reforms that would lower the cost of Medicare and Medicaid.
But in order to structurally close the deficit, get our fiscal house in order, we have to decide what our priorities are. Now, most immediately, short term, we need to extend a payroll tax cut that’s set to expire at the end of this month. If we don’t do that, 160 million Americans, including most of the people here, will see their taxes go up by an average of $1,000 starting in January and it would badly weaken our recovery. That’s the short term.
The Role of Taxes – In the long term, we have to rethink our tax system more fundamentally. We have to ask ourselves: do we want to make the investments we need in things like education and research and high-tech manufacturing—all those things that helped make us an economic superpower? Or do we want to keep in place the tax breaks for the wealthiest Americans in our country? Because we can’t afford to do both. That is not politics. That’s just math.
Now, so far, most of my Republican friends in Washington have refused under any circumstances to ask the wealthiest Americans to go to the same tax rate they were paying when Bill Clinton was president. So let’s just do a trip down memory lane here.
Keep in mind, when President Clinton first proposed these tax increases, folks in Congress predicted they would kill jobs and lead to another recession. Instead, our economy created nearly 23 million jobs and we eliminated the deficit. Today, the wealthiest Americans are paying the lowest taxes in over a century. This isn’t like in the early ’50s, when the top tax rate was over 90 percent. This isn’t even like the early ’80s, when the top tax rate was about 70 percent. Under President Clinton, the top rate was only about 39 percent. Today, thanks to loopholes and shelters, a quarter of all millionaires now pay lower tax rates than millions of you, millions of middle-class families. Some billionaires have a tax rate as low as 1 percent. One percent.
That is the height of unfairness. It is wrong. It’s wrong that in the United States of America, a teacher or a nurse or a construction worker, maybe earns $50,000 a year, should pay a higher tax rate than somebody raking in $50 million. It’s wrong for Warren Buffett’s secretary to pay a higher tax rate than Warren Buffett. And by the way, Warren Buffett agrees with me. So do most Americans—Democrats, independents, and Republicans. And I know that many of our wealthiest citizens would agree to contribute a little more if it meant reducing the deficit and strengthening the economy that made their success possible.
This isn’t about class warfare. This is about the nation’s welfare. It’s about making choices that benefit not just the people who’ve done fantastically well over the last few decades, but that benefits the middle class, and those fighting to get into the middle class, and the economy as a whole.
Finally, a strong middle class can only exist in an economy where everyone plays by the same rules, from Wall Street to Main Street. As infuriating as it was for all of us, we rescued our major banks from collapse, not only because a full-blown financial meltdown would have sent us into a second depression, but because we need a strong, healthy financial sector in this country.
But part of the deal was that we shouldn’t go back to business as usual. And that’s why last year we put in place new rules of the road that refocus the financial sector on what should be their core purpose: getting capital to the entrepreneurs with the best ideas and financing millions of families who want to but a home or send their kids to college.
Now, we’re not all the way there yet, and the banks are fighting us every inch of the way. But already, some of these reforms are being implemented.
If you’re a big bank of risky financial institution, you now have to write out a “living will” that details how you’ll pay the bills if you fail, so that taxpayers are never again on the hook for Wall Street’s mistakes. There are also limits on the size of banks and new abilities for regulators to dismantle a firm that is going under. The new law bans banks from making risky bets with their customers’ deposits, and it takes away big bonuses and paydays from failed CEOs, while giving shareholders a say on executive salaries.
This is the law that we passed. We are in the process of implementing it now. All of this is being put in place as we speak. Now, unless you’re a financial institution whose business model is built on breaking the law, cheating consumers, and making risky bets that could damage the entire economy, you should have nothing to fear from these new rules.
Some of you may know, my grandmother worked as a banker for most of her life—worked her way up, started as a secretary, ended up being a vice president of a bank. And I know from her, and I know from all the people that I’ve come in contact with, that the vast majority of bankers and financial service professionals, they want to do right by their customers. They want to have rules in place that don’t put them at a disadvantage for doing the right thing. And yet, Republicans in Congress are fighting as hard as they can to make sure that these rules aren’t enforced.
Look Out for Consumers – I’ll give you a specific example. For the first time in history, the reforms that we passed put in place a consumer watchdog who is charged with protecting everyday Americans from being taken advantage of by mortgage lenders or payday lenders or debt collectors. And the man we nominated for the post, Richard Cordray, is a former attorney general of Ohio who has the support of most attorney generals, both Democrat and Republican, throughout the country. Nobody claims he’s not qualified.
But the Republicans in the Senate refuse to confirm him for the job; they refuse to let him do his job. Why? Does anybody here think that the problem that led to our financial crisis was too much oversight of mortgage lenders or debt collectors?
Of course not. Every day we go without a consumer watchdog is another day when a student, or a senior citizen, or a member of our Armed Forces—because they are very vulnerable to some of this stuff—could be tricked into a loan that they can’t afford—something that happens all the time. And the fact is that financial institutions have plenty of lobbyists looking out for their interests. Consumers deserve to have someone whose job it is to look out for them. And I intend to make sure they do. And I want you to hear me, Kansas: I will veto any effort to delay or defund or dismantle the new rules that we put in place.
We shouldn’t be weakening oversight and accountability. We should be strengthening oversight and accountability. I’ll give you another example. Too often, we’ve seen Wall Street firms violating major antifraud laws because the penalties are too weak and there’s no price for being a repeat offender. No more. I’ll be calling for legislation that makes those penalties count so that firms don’t see punishment for breaking the law as just the price of doing business.
The fact is this crisis has left a huge deficit of trust between Main Street and Wall Street. And major banks that were rescued by the taxpayers have an obligation to go the extra mile in helping to close that deficit of trust. At minimum, they should be remedying past mortgage abuses that led to the financial crisis. They should be working to keep responsible home owners in their home. We’re going to keep pushing them to provide more time for unemployed home owners to look for work without having to worry about immediately losing their house.
The big banks should increase access to refinancing opportunities to borrowers who haven’t yet benefited from historically low interest rates. And the big banks should recognize that precisely because these steps are in the interest of middle-class families and the broader economy, it will also be in the banks’ own long-term financial interest. What will be good for consumers over the long term will be good for the banks.
The Role of Citizens, Parents, and Business Leaders – Investing in things like education that give everybody a chance to succeed. A tax code that makes sure everybody pays their fair share. And laws that make sure everybody follows the rules. That’s what will transform our economy. That’s what will grow our middle class again. In the end, rebuilding this economy based on fair play, a fair shot, and a fair share will require all of us to see that we have a stake in each other’s success. And it will require all of us to take some responsibility.
It will require parents to get more involved in their children’s education. It will require students to study harder. It will require some workers to start studying all over again. It will require greater responsibility from home owners not to take out mortgages they can’t afford. They need to remember that if something seems too good to be true, it probably is.
It will require those of us in public service to make government more efficient and more effective, more consumer friendly, more responsive to people’s needs. That’s why we’re cutting programs that we don’t need to pay for those we do. That’s why we’ve made hundreds of regulatory reforms that will save businesses billions of dollars. That’s why we’re not just throwing money at education, we’re challenging schools to come up with the most innovative reforms and the best results.
And it will require American business leaders to understand that their obligations don’t just end with their shareholders. Andy Grove, the legendary former CEO of Intel, put it best. He said, “There is another obligation I feel personally, given that everything I’ve achieved in my career, and a lot of what Intel has achieved. . . were made possible by a climate of democracy, an economic climate and investment climate provided by the United States.”
This broader obligation can take many forms. At a time when the cost of hiring workers in China is rising rapidly, it should mean more CEOs deciding that it’s time to bring jobs back to the United States—not just because it’s good for business, but because it’s good for the country that made their business and their personal success possible.
I think about a company based in Warroad, Minnesota. It’s called Marvin Windows and Doors. During the recession, Marvin’s competitors closed dozens of plants, let hundreds of workers go. But Marvin’s did not lay off a single one of their four thousand or so employees—not one. In fact, they’ve only laid off workers once in over a hundred years. Mr. Marvins grandfather even kept his eight employees during the Great Depression.
Now, at Marvin’s when times get tough, the workers agree to give up some perks and some pay, and so do the owners. As one owner said, “You can’t grow if you’re cutting your lifeblood—and that’s the skills and experience your workforce delivers.” For the CEO of Marvin’s, it’s about the community. He said, “These are people we went to school with. We go to church with them. We see them in the same restaurants. Indeed, a lot of us have married local girls and boys. We could be anywhere, but we are in Warroad.”
That’s how America was built. That’s why we’re the greatest nation on Earth. That’s what our greatest companies understand. Our success has never just been about survival of the fittest. It’s about building a nation where we’re all better off. We pull together. We pitch in. We do our part. We believe that hard work will pay off, that responsibility will be rewarded, and that our children will inherit a nation where those values live on.
And it is that belief that rallied thousands of Americans to Osawatomie—maybe even some of your ancestors—on a rain-soaked day more than a century ago. By train, by wagon, on buggy, bicycle, on foot, they came to hear the vision of a man who loved this country and was determined to perfect it.
“We are all Americans,” Teddy Roosevelt told them that day. “Our common interests are as broad as the continent.” In the final years of his life, Roosevelt took that same message all across this country, from tiny Osawatomie to the heart of New York City, believing that no matter where he went, no matter who he was talking to, everybody would benefit from a country in which everyone gets a fair chance.
And well into our third century as a nation, we have grown and we’ve changed in many ways since Roosevelt’s time. The world is faster and the playing field is larger and the challenges are more complex. But what hasn’t changed—what can never change—are the values that got us this far. We still have a stake in each other’s success. We still believe that this should be a place where you make it if you try. And we still believe, in the words of the man who called for a New Nationalism all those years ago: “The fundamental rule of our national life,” he said, “the rule which underlies all others—is that, on the whole, and in the long run, we shall go up or down together.” And I believer America is on the way up.”
“Barack Obama was elected president of the United States in 2008 and 2012.”
(THIS IS A GREAT EXAMPLE OF WHY YOU CAN’T HAVE INEQUALITY BECAUSE EVERYBODY NEEDS NECESSITIES, OTHERWISE, YOU CREATE HIGH CRIME RATES AND EVEN CIVIL WARS. JUST THINK ABOUT WHAT THIS SEGMENT CALLED “NECESSARIES” BY ADAM SMITH ON PAGE 30 AND I QUOTE:
“People who deny that inequality is a problem in America often deserve that more poor people own a color television and many own cars. Defining what is necessary is cultural, as Adam Smith explained in his 1776 book “An Inquiry into the Nature and Causes of the Wealth of Nations,” from which this is excerpted.
“ By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people even of the lowest order, to be without.
A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-laborer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.
Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted. In France they are necessaries neither to men nor to women, the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted.
Under necessaries, therefore, I comprehend not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people. All other things I call luxuries, without meaning by this appellation to throw the smallest degree of reproach upon the temperate use of them. Beer and ale, for example, in Great Britain, and wine, even in the wine countries, I call luxuries. A man of any rank may, without any reproach, abstain totally from tasting such liquors. Nature does not render them necessary for the support of life, and custom nowhere renders it indecent to live without them.”
LaVern Isely, Progressive, Independent, Overtaxed Middle Class Taxpayer and Public Citizen and AARP Members