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Tax Profits, Not Labor!

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Are you properly compensated for your work? As we discussed previously, between 1947 and 1973 worker’s salaries accounted for half of Gross Domestic Product (GDP). There was a solid if unspoken agreement that labor and capital split the spoils of the free market equally between them.

But what of output per worker? Is it possible that workers are slacking off and don’t deserve the same arrangement they had in the immediate Post WWII era? An analysis of productivity, or output per worker, shows some interesting trends that may point to more unspoken agreements that the various markets for capital and labor expect. These trends follow business cycles, and as such point to some important changes that are necessary as we move ahead into the next cycle in the next few years.

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Broken Social Contract

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Are you better off now than you were so many years ago? It was a question first raised in the 1980 campaign, a motto used to defeat President Carter. The answer then was a rather sure “No!” and the voters responded, blaming the man in charge. But are you better off now than then? And was it fair to blame Carter or any President for the state of the economy?

A few graphs showing the state of workers in the Postwar Era (1947-today) shows how the problem persists. Sen Sanders has often said that the last 40 years have been a slow retreat for workers, and he has a point. But who is to blame?

Let’s leave blame aside for a moment and check out the numbers first.

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A New Democratic Platform

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Robert Reich is a great leader in the Democratic Party.  After serving as Secretary of Labor from 1993 to 1997 he became a fixture in thoughtful magazines, speeches, and talk shows.  He is currently a Chancellor’s Professor at the Goldman School of Public Policy at UCal, Berkeley.

Reich has recently collaborated with moveon.org to create a series of short videos describing “The Big Picture” – things which need to be done to transform our economy into a more dynamic, fair, and productive new economy for a post-depression world.  Taken together, I believe these make up a new platform for the Democratic Party which must be a central organizing piece for the elections in 2016.

Whether or not you agree with Reich, he and this platform are a force to be reckoned with.

Since I have yet to see them presented together in one place as a coherent work, I have taken the liberty of doing so myself.  Each item is presented here with the title as a link to the original post on Reich’s blog, with the short video above it.  Please follow the links for more information in Reich’s own words.

Initially, this project was billed as “Ten Ideas to Save the Economy”.  There are now 12 videos in the series, branching out a bit into political reform.  If there are more they will be added later.

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Smaller Government, Peaceful Government

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“Get government off our backs!” It’s a chant we’ve heard a lot of over the last few years, usually in the deep, gruff voice of those old enough to remember the heyday of our parents and grandparents. It’s a call to a simpler time when there was less government, less taxation, and more to go around. At least, that’s the story we are told.

But an analysis of the size of our Federal Government as a share of the economy shows that while it is a shade bigger than it used to be, it’s way below its maximum. There are peaks in Federal Government size which fit not to an increase in social benefits or productive spending, but the very expensive line item that has been pricey enough to bring down governments and cultures for centuries – war.

In short, it’s time for the progressive left to embrace “smaller government” of a kind and to show that world that peace is not idealistic but practical.

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