My Progressive Principles

As we near the election -- although those of us with progressive leanings may lose -- I thought I would document the political principles I believe in. What the heck?

- The welfare of the human race and real people can never be measured in dollars and cents. The welfare of one human life is worth more than billions and billions of dollars.

- Money is "distributed" by a marketplace that is far from perfect and rewards disproportionately to people's contributions -- sometimes exponentially.

- Markets make great servants, but terrible masters.

- Tax breaks to the rich rarely pay for themselves. Government spending creates jobs.

- America was founded by immigrants and is a country of immigrants. That is its strength.

- Socialism is the ownership of all means of production by the state. Social Democracy is a system of government where private industry, the govt, the unions and other social organizations cooperate for the welfare of society. We could use a little dose of Social Democracy now and then.

- A person's accumulation of dollars should not determine the size and volume of his/her voice in the political process and government.

- The value of the next marginal dollar to a billionaire is far less than the value of that same dollar to society as a whole.

- The poorest persons access to healthcare, education, food and shelter trumps the richest person's access to his or her next dollar.

- Our nation has been polluted by people trying to discredit the source of messages contrary to their views instead of by addressing the issues themselves. These people are outright vile, mean spirited, and untruthful. I call this "Rovian Propaganda" and it is one of the very worst practices in our political arena and one of the biggest threats to our liberty.

- "Progressive" and "Liberal" are tremendously good words. Jesus Christ, Ghandi, Franklin, Lincoln, Galileo, Einstein, Mother Theresa, FDR, Martin Luther King and many more -- that's pretty damn good company and I'm proud to be counted as one of their followers!!!!

Are the top US tax rates too high?

I was recently asked whether I thought the top US income rates are too high. Here is my answer:

First of all, my issue is more with wealth accumulation than income. However, the two are pretty closely linked. Nonetheless, I will address the issue from more of a wealth perspective than an income one.

In order to address the issue, there are several basic questions to ponder, among others:

1. Is our society inherently fair? Do virtually all Americans have access to the services that will "level the playing field" (i.e. food, shelter, education, healthcare). Are entrepreneurs fairly incented to provide growth and innovation? Do all Americans have access to "life, liberty and the pursuit of happiness"?

2. What is the current skew of income and wealth in the US? What are the long term ramifications of this skew? If negative, what can be done address it?

3. What is the value of an incremental dollar to one of the wealthiest Americans vs. the value of that incremental dollar to society as a whole?

Okay, here's my short answers to those questions (I could probably write a book on them, but this will have to suffice for now):

1. Is society inherently fair?

I'd have to say no. Too many people don't have access to health care. Too many people are falling below the poverty line. Too many people don't have adequate retirement funds. Too many of our schools do not provide the quality of education necessary for our kids to have a shot at the "economic brass ring"

On the flip side, are entrepreneurs fairly incented? I would say yes and would also note that our economy seemed to do pretty well in terms of innovation and growth when the top tax rate was still significantly higher.

In terms of life, liberty and the pursuit of happiness, I would have to say that those at the very top have the opportunity to more fully experience life and participate in our society. With skads of money in the bank, one has more opportunity to take financial risk, drive up prices of "cherished goods" like housing, land, automobiles etc, and the freedom to pursuit almost anything their heart (and ego) desires.

I think even at the middle end, this access to LLPH is constrained -- not only in terms of material goods, but also in our ability to participate in our government. How many millionaires are there in the congress and senate (as a percentage of the total compared to the percentage of millionaires in the US as a whole)? Is it an oddity that the very richest person in NYC is mayor (this is not a criticism of Bloomberg whom I think is great, just a statement of fact)? Does a plethora of dollars from the very wealthy during elections "crowd out" the voices of a concerned majority?

Obviously, there are major inequities here.

2. What is the current income/wealth skew and what are its ramifications?

I know I'll sound like a broken record on this one, but the top 1% controls 42% of financial wealth (36% of total wealth, including housing). The average salary of a CEO today is 400 times that of an average worker vs. 40 times in the 1960s.

If we allow this to continue unfettered, the skew will only get worse. With middle income families only earning enough to "scrape by" and the very high end families having the luxury to save because of their high income (I read an interesting article by an economist comparing savings to a luxury good), I think it's pretty easy to read the tea leaves.

The ramifications? As more and more wealth gets concentrated in the hands of an elite few, we run the risk of becoming a "high tech banana republic." If that ever happens (and I hope not), the masses will begin to feel economically ostracized and will conclude that if the "rules" of society are unfair, why should we follow them? The rest is self evident.

3. The marginal ultility/value to a wealthy individual vs. society as a whole?

I think it's fair to say that the incremental utility/value of the "next dollar" (or million) to a billionaire is much lower than the utility/value of that dollar to society as a whole. To the billionaire, that dollar just represents "monetary gravy" and incremental cushion (to a certain extent encouraging risk, which is a good thing). Given a society with the healthcare, poverty, education and retirement issues that we have today, I would say that that incremental dollar could be put to much greater use.

So, yes, I believe that we do not tax enough at the high end.

My solutions:

- I'd rather tax wealth than income. A dual income household might only make the top income category for several years in their lifetime, after having worked very hard to get there for years.. They should have the right to use it to share in the bounty of our economy/society and just to pay for necessities like college education. However, once their savings accumulates to a certain point (incremental utility of dollar to them < incremental utility of dollar to society as a whole), there should be some sort of taxing mechanism, including, but not limited to an estate tax.

- I would eliminate the corporate income tax completely to spur investment

- I would lower the payroll tax to increase employment opportunities.

- I would surtax any funds earned in the US by US citizens that are transferred overseas.

I can't tell you what is the appropriate mix of these things and what their optimal levels are, but those are the types of economic overhauls I would consider

Battle Hymn of the RepublicansII.mov

To My Fellow Democrats and My Independent Friends

I want to urge you to get out and vote Democratic this year. Why? Number One: we need to support our President. Number Two: after 8 years of the Bush/Cheney "reign of terror" we finally have a President we can be proud of. Think about it: he's made more legislative achievements since anyone named LBJ. Were they controversial? Yes. Were they beneficial to middle class America? A resounding Yes. And he's been subjected to more ridicule, subterfuge and mistruths than any President in my lifetime.

Let's examine the issues. Is govt "taking over" healthcare? No. But today children with pre-existing conditions are covered and soon adults will be. Was the stimulus effective? Not as much as it could be, but the only reason is, is that the tea partiers have been on this crusade to say that deficits are "bad" in general. Are they? No. (someone please study Macroeconomics and, please read Keynes) When you build new infrastructure, you hire construction workers, architects, engineers, surveyors, who, in turn, spend their money at supermarkets and dept stores, who, in turn, need to hire more people and buy more inventory etc etc. The only problem with the stimulus, is it should have been significantly more. (Think about it in simpler terms. When your parents took a mortgage for $40K to buy a $50K house, they were probably nervous; when they sold that house for $150K 20 years later, the now reduced 40K mortgage was not that big a deal)

Has Obama been perfect? No. IMHO he should have held out for the public option and the stimulus should have been bigger. But you know what? With the party of NO saying NO just for the mere sake of saying NO, it wasn't easy. After two years, was Bill Clinton the Bill Clinton most people admire today? No. After two years, was Ronald Reagan the "saint" conservatives revere today? Of course not.

Democrats need to vote this November to give Obama some tailwind. Independents: I ask you this question? Despite the bad economy, do you really think the GOP and tea partiers have real answers. No! Their policies (i.e. reduce the deficit NOW and repeal Healthcare) will only make things harder for the middle class and, therefore, most of America.

Again,finally we have a President we can be proud of. Despite the vengeful rhetoric, we need to support him.