Rothman At-Large

A Billionaire Ban? No. Tougher Regs and More Taxes? Yes.

December 1, 2019

Billionaires are not always the most lovable people.

 

Remember the Silicon Valley venture capitalist who said wealthy Americas were victims of persecution, just like Jews in Nazi Germany?

 

Oh, the horrors! Our super-rich are so jeopardized that only three billionaires, Jeff Bezos, Bill Gates and Warren Buffett, are together wealthier than the lower half of our population if we go by a 2017 study. Their fortunes now total about $300 billion.

 

Highlighting the wealth issue is the entry of yet another billionaire, Michael Bloomberg, into the Democratic race. Bloomberg already is gearing up to spend tens of millions, which will hardly dent his $50-billion-plus.

 

In the worst way, we’re in another Gilded Age. The sheriff of Nottingham might as well have cooked up the U.S. tax system in cahoots with Gordon Gekko. The 400 richest American families in 2018 actually paid a lower rate in combined local, state and federal taxes (23 percent of incomes) than did the bottom half (24.2 percent). Compare that to 47 percent in 1980.

 

What to do? An outright ban on billionaires, as if that could happen, would be a Soviet-level mistake. I’ll explain why while arguing for tougher regulations and higher taxes on the billionaire class. I even favor a small wealth tax, a much-milder version of what Bernie Sanders and Elizabeth Warren have called for in the spirit of AOC’s thoughts on billionaires. And if we could limit the percentage of our economy that each billionaire and his or her family could own or even control via corporations or otherwise—well, that would be wonderful.

 

Just the same, I respectfully disagree with the wish of Sanders, and others, that billionaires shouldn’t even exist someday. I’ll demur on the “de-Billionairization” plan of Rob Kall, editor of OpEdNews, who has articulately channeled the thoughts of many understandably furious progressives (here and here). Ahead are my arguments for the continued existence of billionaires, albeit much-better taxed and regulated ones:

 

Different people respond to different incentives

 

Commentators like Rob Kall are personally driven by creativity and idealism. But creativity can take different forms.

 

Kall presumably would focus on the work product—a life-saving drug, better, cheaper electric cars, better solar cells, a worthwhile political manifesto, a poem, a novel, a movie script, or the stress-monitoring device that he invented. But so many of the world’s most dynamic business people see the acquisition of wealth itself as at least one form of creativity. They do count their billions and are competitive about it. Elon Musk, Tesla CEO, nailed down a deal that could net him $55.8 billion in a decade.

 

Can we wave a magic wand and instantly change the business culture to kill off this obnoxious way of keeping score? Likely not.

 

Remember, we’re not the only country where ambitious would-be billionaire-innovators can go. Even the Chinese would love to get in on the action. Chinese Premier Li Keqiang presumably was joking when he offered Musk a green card, but in the case of less established innovators, Beijing can be a lot more serious.

 

Let us remember, too, the philanthropy that great wealth makes possible.  Where would American libraries be without the robber baron Andrew Carnegie?

 

As a co-founder of LibraryEndowment.org, calling for the establishment of a national library endowment funded by the super-rich, I’m eager for the next Carnegies to come along even if I’m hardly a fan of his darker side.

 

Now, I’ll add some major caveats in my enthusiasm for philanthropy from those most able to afford it. Despite the famous Giving Pledge, for example, the super-rich aren’t giving nearly as much as they could, especially to causes for the non-elite. Billionaires often favor elite universities and other causes that directly benefit them and their children. Harvard’s endowment of about $40 billion dwarfs the several billion or so total of public library endowments and equivalents. That’s hardly the only issue here. Either voluntarily or if need be through laws, the largest philanthropic efforts should include a wider range of board members who aren’t wealthy or from the philanthropic elite—for example, well-informed advocates for the poor.

 

Done right, especially when certain social-services budgets are tight, philanthropy can fill major gaps that will be inevitable even if the Democrats regain control of the Senate and White House. Government at all levels isn’t as responsive as it could be, and competing demands abound. Too often, for example, the issue for local politicians is, “Librarians and books vs. police and firefighters.” And thousands of school libraries have closed for lack of funds. No, billionaires couldn’t and shouldn’t pay for everything. But they can help—both through cash and by not lobbying for outlandish tax breaks at any level of government.

 

Capital allocation

 

At least in money and material things, imagine how much richer we are than our ancestors, thanks to inventions ranging from the electric light and television to the automobile and the cellphone. We are healthier and live longer, too, partly due to drugs and medical technology that required many millions to develop. The creation and growth of wealth needn’t be a zero-sum game. The benefits of inventions and research go far beyond the elite.

 

In a related vein, here’s a question to ponder. Would we have been better off if, say, Thomas Edison had had to rely on some Central Economic Coordinating Committee? Even the Chinese government, the ultimate collection of control freaks, in recent years has let tech billionaires and others flourish as long as they pay due obeisance to The Party and the right corrupt people within it.

 

The Hive Mind and groupthink have their limits. I want geniuses such as Jeff Bezos and Elon Musk to be free to develop their own space companies. Where would the United States be if we’d simply depended on NASA alone to advance the technology? Now we have competing vendors with visions of Mars settlement and other examples of long-term thinking. The grand plans may or may not succeed. But I’m glad the billionaires are persisting, given the desirability of finding possible new homes for the inhabitants of Planet Earth amid all the apocalyptic possibilities in the long term.

 

While never forgetting the need for tough regulations—whether in drug-price control, worker-safety protections, antitrust law or guaranteed political freedoms for future Mars settlers—we should be grateful that certain billionaires are around. I’m not saying to bow down to Bezos and Musk three times a day or exempt them from regulation. It isn’t as if they are saints. They are simply doing what comes naturally, often with surprising benefits for society when they act on their better instincts.

 

Bezos, for example, rescued the ailing Washington Post, one of the major bulwarks against the aspiring dictator in the Oval Office. Remember, he bought the Post as an individual. The purchase didn’t make full sense for the usual corporations in this area, with the possible exception of greedy hedge funds more eager to milk the Post dry rather than reinvigorate it. Bezos even has turned the Post into a profit center. I wish he were more enlightened toward the unions there and paid certain people better, but at least the Post has survived.

 

Alternatives to a billionaire ban

 

Instead of a billionaire ban with, say, a 100 percent tax on assets above that amount, let’s bring on:

 

Carrots and sticks to encourage billionaires to invest at least a certain percentage of assets in at least potentially productive ways within the U.S. The wealthier the billionaire, the higher the percentage.

 

Much higher estate taxes on the super-rich as well as restraints such as tougher banking, securities, occupational-safety and anti-monopoly laws, not to mention campaign finance reform. Should Michael Bloomberg be able to finance his Democratic primary campaign without other donors? Above all, we need to kill the Supreme Court’s loathsome Citizens United decision. It let billionaires’ money and others’ pollute our elections to the point where plutocrats’ needs so often come ahead of other Americans’.

 

–The aforementioned wealth limits—far more sophisticated than simply a billionaire ban. The five richest Americans are now worth more than two percent of our GDP. Perhaps too high? Maybe not. But look ahead. Suppose breakthroughs in artificial intelligence or other areas allow individual inventors or companies to squash the competition in a way and to an extent harmful to the average citizen. Then a percentage-based wealth limit could make sense to account for weaknesses in anti-trust laws or interpretations of them. Better to be proactive and pass such a measure when the political climate permits—no small detail in regard to other ideas here, too.

 

–Prohibitions on companies exceeding a certain ratio between total compensation for CEOs and the average pay for the workforce.

 

–Tough laws to protect labor’s right to organize in the U.S. while pressing as much possible for similar measures globally.

 

–Legally required worker representation on the boards of at least the very largest companies, even privately owned ones.

 

–A carefully phased in universal basic income, at least eventually, in the spirit of proposals from presidential candidate Andrew Yang and others. The more automation, the more desirable a UBI will become not just for workers but for also enlightened business people who want to expand the market for their goods. Marvels such as artificial intelligence and nanotechnology could multiply the total size of the pie in time, leaving billionaires far wealthier than today, while the rest of society participated in the gains.

 

A $12,000 annual guaranteed income, the amount proposed by Yang, might be too high today. But sooner or later, it could be just a fraction of an affordable UBI. Far better a basic income than a stiff, productivity-sapping tax on robots and artificial intelligence. Meanwhile, if nothing else, we should increase Society Security and medical benefits and otherwise improve the economic stability of the nonwealthy.

 

Not all billionaire-control measures need come from the government. Business professors and others on campus should take ethics more seriously, including those required of prospective donors to universities. And assuming that the Social Register and local versions in D.C. and other cities still count, an oft-iffy proposition, here’s to more deletions of billionaire crooks and near-crooks!

 

Still, the real goal shouldn’t be to ban or otherwise afflict billionaires, but rather to improve the lot of the rest of us.

 

About the image: Billionaires for Wealthcare satirized Barack Obama’s healthcare plan, suggesting that it didn’t go for enough and that billionaires should pay more taxes to meet Americans’ health needs. CC-licensed photo by Will O’Neill.

 


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Rachel Maddow's ‘Blowout’ Book Plumbs the Toxicity of the Oil and Gas Industry

November 3, 2019

In Blowout, MSNBC’s Rachel Maddow plumbs the toxic influence of the oil and gasoline industries on the economies and governments of Russia, the United States and other countries.

 

Energy companies free of constraints can be harmful to your homeland’s economic and civic health, and Vladimir Putin’s Russia just might be Exhibit Number One.

 

Here’s a country of 145 million people with an economy smaller than that of Italy (around 60 million). Untainted national elections don’t exist. Putin flunkies boss major newspapers and broadcasters. All the better for oil and gas companies.

 

Under Putin-style dictators, it’s clearer whom to bribe; and uppity civic activists who value their lives are less likely to speak out against filthy air and water. What’s more, who cares if average citizens don’t share the wealth in a major way? Or if the authoritarians focus on extractive industries at the expense of more sustainable economic development benefiting all—or the fight against climate change? Those are among the major points that emerged as I read Maddow’s book and related writings from others.

 

Clearly, although the extents of the outrages vary, this isn’t just a Russian phenomenon. Take Equatorial Guinea, where most people live in poverty while, thousands of miles away, the dictator’s son could splurge $700,000 on a boat rental to impress a rap-star date. Then there’s Oklahoma; the local fracking moguls bullied the state seismologist and tried to cover up the connection between their industry and the spike in the number of earthquakes. Also, it goes without saying that oil and gas interests here in the United States have been among the foes of campaign finance reform and solar and wind power.

 

Maddow’s Blowout book impresses me as more of a follow-up on earlier exposes than as original reporting on Big Oil and Gas, and she could have explored the campaign-donation issue and some other topics more thoroughly, but it’s still a good, compelling read—full of Maddow’s entertaining snark to help you get through the scary subject matter. For the most part, Blowout masterfully connects the dots. It’s the oil, stupid! And the gas, too.

 

Oil and gas gushers inspired Blowout’s title. Maddow’s metaphor especially sums up Russia’s many energy-related woes. Washington talked of free-market capitalism in the former Soviet Union. Instead, free of adequate regulations and enforcement, a kleptocracy seized control of state-owned and formerly state-owned companies. Putin and his sidekick Igor Sechin turbocharged the process in the energy industries and elsewhere. More gushing of cash for the favored! “For my friends, everything,” was Putin’s motto in effect. “For my enemies, the law.” Phony tax evasion and embezzlement charges were among the specialties of the Putin crowd.

 

When accomplished Russian business people managed energy companies well, Putin’s thieves stole the fruits of their labor. The result was less efficiency, less productivity, less innovation. None other than Morgan Stanley promoted investment in Rosneft, the Putin-controlled energy corporation, after it miraculously swallowed a larger competitor. ExxonMobile executives had earlier cozied up with the other Russian company but ended up focusing instead on Putin and friends.

 

Alas, a little complication transpired: Russia ripped off a chunk of Ukraine. International economic sanctions ensued against the annexation of the Crimean Peninsula, thwarting the Putin-ExxonMobile dream of American know-how and investment revving up Russian energy output.

 

Needless to say, the sanctions enraged Putin, who saw Rosneft and other energy companies not just as a way to enrich his circle and retain power, but also to help restore Russia to the glory of the old Soviet Union. Europe and even the United States would thirst for Russian oil, no? Anxious to see the sanctions killed off, Putin used social media, Wikileaks and other means to try to manipulate our 2016 elections. Hatred of Hillary Clinton, the likely winner, was far from the only reason.

 

An obvious question, broached by an Amazon reviewer of the Maddow book, arises. How could sociopaths fare so well in government offices and corporate suites in energy companies and elsewhere? It’s one thing to tell how Putin and others pulled the levers to get their way. It’s another to unravel the root reasons of why they succeeded.

 

Surely, Ms. Maddow, more than a few nonsociopaths had to go along. My own theory is that sociopaths rise and remain in power because, while lacking empathy, they somehow can win over corporate boards or read the mass mind at election time. Plenty of sociopaths stay out of prison, and even the worst can come with their own positives. The masses often go for glamor and showmanship. Putin obliges, complete with images of him bare-chested on horses. Trump, the orange-skinned reality show alum, is our carnival-barker-in-chief. Both conjure up memories of their respective nations at the peak of their power.

 

The energy business itself has been the territory of colorful crooks and conmen almost from the start, despite protestations to the contrary; and nostalgia can be powerful snake oil. Even if bribed and blackmailed by the Russians, Trump is drawn to Putin as a kindred spirit, a fellow liar, sociopath and control-freak who likewise sees democracy as an inconvenience to the extractive industries.

 

Here’s something else that the two men share, as I myself see it—alliances with religious fundamentalists. The Trump Foundation has donated to the Rev. Franklin Graham, for example, and eagerly courted the right-to-life faithful with the appointments of right-wing judges, while Putin, of all people, has aligned himself with the “family”-minded Russian Orthodox church. Isn’t it a paradox—to be in favor of “life” and families while encouraging the growth of fossil fuels: the cause of so many pollution-related deaths, not to mention the damage from climate change? Oil and gas, of course, do have their biblical side. Has not the Almighty favored both countries with their presence? Far be it for the faithful to question this divine design.

 

While I wish Maddow had deeply delved into the fundamentalist angle in an energy-industry context and more thoroughly explored the campaign-finance horrors from Big Oil and Big Gas, let me emphasize my overall enthusiasm for Blowout. If you wonder whether Maddow’s story-telling gifts on MSNBC have found their way to print, too, the answer is a decided “yes.”  She deftly weaves back and forth between Oklahoma, Moscow and the other crime scenes and teases you with intriguing minor facts that pave the way for her to make her major points.

 

This is Maddow’s second book, by the way, the first being Drift: The Unmooring of American Military Power, telling how the executive branch nudged us into wars in Vietnam, Iraq and Afghanistan. I haven’t read it, but, given the energy industry’s importance in American foreign policy over the years, I wouldn’t be surprised if some of the same characters show up at the expense of openness and democracy.

Blowout: Corrupted Democracy, Rogue State Russia, And The Richest, Most Destructive Industry On Earth. Hardcover, audiobook and ebook formals. 406 pages. Published by the Crown imprint of Penguin Random House. Available locally or through online stores.


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The Wealth Gap and Two Other Anti-Trump Themes: How Dems Can Woo Young Voters in Critical States

September 26, 2019

Oh, the fickleness of Trump-era news cycles! I was going to write about how the Democrats could defeat Donald Trump in part by wooing young voters in critical Electoral College states. And then along comes the Ukrainian bombshell raising serious questions about whether Trump will even be around to run against.

 

But let’s suppose Trump’s political and PR fixers can deflect the accusations well enough for Republican senators to disregard the probable impeachment findings in the House. What’s more, even if Mike Pence or someone else is the GOP Presidential candidate instead, the young could still matter. So how can the Democrats win over enough young Americans, especially in places where their votes will most count?

 

Polls say far more young people will vote in the 2020 elections than in previous years. But the popular vote by itself will mean squat—it’s the Electoral College, of course, that matters. Democrats should woo young voters everywhere but lavish special loving care on those in Electoral College swing states that put Trump over the top in 2016. Just 107,000 more votes out of the 14 million in Michigan, Wisconsin and Pennsylvania—and 120 million in the U.S.—could have sent Hillary Clinton to the White House. The trick is to remember that issues appealing to young voters in Michigan may not always be the same as the ones of greatest importance in Louisiana. Or they may require special geographical twists for optimal results.

 

Ahead, in no particular order, because the political landscape is ever shifting, are three anti-Trump themes to use with young voters in mind in the upper Midwest and Pennsylvania. I’m simplifying. Swing states exist outside the region. But this is the part of the country where geographical sensitivity might make a major difference in winning over the young.

 

THEME #1: THE WEALTH AND INCOME GAPS

 

The percentage of young people living with parents is the highest in 75 years. Half of Americans born in the 1980s earn more in inflation-adjusted dollars than their parents–compared to 92 percent of those born the year before Pearl Harbor. Donald Trump now owns the economy or at least has claimed to. Haunt him with the old Reaganism: “’Are you better off than you were four years ago?”

 

So what might this mean in campaign commercials aimed at the sons and daughters of factory workers in places like Ohio and Michigan?

  1. Whether it’s bringing broadband to the rural Midwest or growing jobs for young people in new fields like solar energy and electric cars, Democrats need to talk up concrete proposals. Depict Trump by contrast as a trog of a claimed billionaire caring only about his fat-cat donors from the oil and coal industries. Mix hopeful economic and environmental messages. But geographical sensitivity, please! A Brookings Institution study tells how median household income in Democratic congressional districts zoomed between 2008 and 2018, while income in Republican districts—so many of them in the American heartland—declined. A headline over a Washington Post column gets it right: “Our deepening economic divide is fertile ground for Trump’s demagoguery.”
  2. Remember, the upper industrialized Midwest has traditionally been union territory. Accurately portray the current crop of Republicans as union-busters and call for the inclusion of union representatives on the boards of the very largest corporations. Vow to reverse the anti-organizing measures that have blighted American companies. A Nation article gives hope that unions may actually be starting to come back among the young. In ads and commercials, sell the idea of unions. It is no small coincidence that the decline of the Democratic Party overlaps with the rise of government-tolerated union-busting. Time to update the Labor Management and Reporting Act of 1959 (also known as the Landrum-Griffin Act), tilted in favor of corporations. Refresh young people in union history, and remind them of all the risks taken and sacrifices made toward a middle-class lifestyle. Time to reclaim it!
  3. Go after the student loan issue and related ones. Remind young people that many factory workers could once afford to send their children to four-year colleges without sacrificing retirement security or taking out onerous loans. But today? Outstanding student loans now total a whopping $1.6 trillion and may help bring on the next recession. The Trump administration is complicating matters by, for example, making it harder for young people to enjoy loan forgiveness for public service work. Betsy DeVos, Trump’s secretary of education, is a callous plutocrat from Michigan–the very face of the problem.
  4. Don’t forget the tariff wars. Trump is the villain. It could take years for certain agricultural and manufacturing markets to recover from the damage Trump has done–everywhere in the U.S. but especially in Midwestern agricultural and blue-collar areas. Imagine all the family farms in peril. Granted, farmers are a smaller percentage of the population than in the past. But they have friends and relatives.

Democrats can make all those points for young people while still attacking the Republicans on general economic issues that are not geographically related. Consider the Robin-Hood-in-reverse tax cuts that enriched the super-wealthy at the expense of the rest of us. Donald Trump’s attack on Obamacare, which allows young people to be covered on parents’ health insurance policies up to their 26th birthdays, is yet another assault on young Americans everywhere.

 

THEME #2: THE ENVIRONMENT AND CLIMATE CHANGE

 

As a hyper-loathsome villain, Trump is at his most cartoonish on climate change and other environmental issues even though his cruelty toward migrants comes close.

 

The Democrats should go all out on the Green Deal vision and push for clean-up deadlines much earlier than what Joe Biden has in mind. Al Gore and like-minded people for years have gotten it right. The clean-up effort is a chance for economic growth in solar and other areas. Don’t wimp out! Tell how Trump’s policies, by contrast, would increase the number of pollution-related deaths in the upper Midwest and elsewhere.

 

What’s more, damage from climate change won’t just threaten New York, L.A. or Miami–a point that campaign ads and commercials could make. Two scientists at the University of Michigan write: “Rapid changes in weather and water supply conditions across the Great Lakes and upper Midwest are already challenging water management policy, engineering infrastructure and human behavior.” As reported in the Bulletin of Atomic Scientists, high water levels in Lake Michigan “almost completely submerged two of the sandy beaches that line the city’s lakefront. Condo buildings and other properties that abut the water are shelling out for reinforcements of their own.” Of course, events could unfold in the other direction, with the Great Lakes at least temporarily receding. But either way, weather extremes caused by climate change could inflict many billions in damage.

 

Among Democratic voters inside and outside the Midwest, climate change may be as big an issue as healthcare. With the number and severity of storms and other unpleasant surprises multiplying, even nonDemocrats may feel the same. Certain young Republicans are begging Trump to reverse course on environmental and climate change issues.

 

“Recent surveys,” reports the activist publication Grist, “suggest that Generation Z and Millennial Republicans care about the climate much more than their elders–and, get this, maybe as much as younger Democrats do.” In a mere five years, the number of 18-34 Republican voters concerned about human-created climate change increased by 18 percent. Today 67 percent worry. Do Americans of any age—Republicans or Democrats—really want their grandchildren to hate them?

 

THEME #3: TRUMP AS A STRESS-MULTIPLIER IN OTHER WAYS–PRO ASSAULT RIFLE, PRO RUSSIAN, PRO CORRUPTION–ESPECIALLY HIS OWN

 

With Trump in the White House, are you sleeping better at night? That’s the question Democratic campaigns need to ask young people and parents–at full volume, in social media, on TV, in newspapers, magazines, everywhere. The environmental and economic threats stand out, but other reasons also exist, particularly those pertaining to his fitness or lack of it for the Presidency. What to say about a commander-in-chief who leaned on the Ukrainians to investigate Joe Biden if they wanted military aid?

 

Young people will be wondering about the gap between the ugly reality of Trump and the presidency as depicted in school. Politicians in the Midwest are hardly angelic (just look at the horrid governors that super-rich GOP donors helped install in Wisconsin and Michigan before the voters caught on and revolted). But traditionally Wisconsin has been a reform citadel rather than a center of divisive politics. Trump is a scary letdown for many young people there and elsewhere. That’s especially true of nonwhites in places like Detroit who know he is a genuine bigot-in-chief, enamored of police brutality. Target ads and commercials accordingly!

 

In a coincidentally related vein, John Della Volpe, director of Polling for the Institute of Politics at Harvard Kennedy School, mentions the sheer stress of politics in Trumpian times. He says that “for the first time, we now have evidence that the state of our politics is contributing to the mental health challenges millions of young Americans already face. To empower young voters, to persuade them to vote requires candidates willing to share and align their values with this emerging generation—and understanding the stress inherent in our politics today is a critical first step.”

 

While the stress can come from confrontation between generations, classes and regions, not just the craziness of an orange-haired wack job, let’s consider the Trumpist and GOP policies and practices which have aggravated this and which could be the target of youth-oriented campaign ads and commercials in the Midwest and elsewhere:

 

—Gun violence. In 2019 so far, at least 1,219 people have been injured and at least 335 have died in mass shootings–a total of 1,554 victims. “Do we really want a president in the pocket of the National Rifle Association?”

 

—The Supreme Court and federal judges. “Should elderly bigots deny you the right to abortion when you can’t afford to have a child? Trump is shamelessly kowtowing to the anti-abortion crowd in his judicial appointments.”

 

—Increased chances of nuclear war. “How safe are we with a narcissistic nut in the White House?”

 

—Anti-LGTBQ bigotry, especially in judicial appointments. This on top of the contempt for nonwhites!

 

BEYOND JUST THE ISSUES

 

Of course, the most wisely chosen issues in the world won’t help if the Democrats stint on voter registration or pick the wrong candidates

The Democratic presidential favorite, as I write this, is still Joe Biden, 76. Significantly, the Harvard researchers have found that 18-29-year-olds overwhelmingly distrust the baby boomer generation of politicians–saying they just “don’t care about people like me.” Biden is even older than the boomers.

Elizabeth Warren and Bernie Sanders might be exceptions to many young people’s age-related fears. Biden isn’t, and he’ll have to keep that in mind in coming up with stands on various issues. In an earlier Georgetown Dish column, I mentioned the possibility of Kamala Harris as a running mate for Biden to create some racial and gender diversity. At 54 she may still not be young enough for optimal results, and I wish she were far more progressive. Still, as a pragmatic way to complement Biden, she is probably a better possibility than alternatives.


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