Vote 99

My excuse for scant posting to this blog recently (and tweeting not at all) is that my head has been focused on writing a short e-handbook (21 pages in print format) about today’s critical political issues which divide conservatives from non-conservatives and reduce Congress to impotence.  The book, cover shown below, is dedicated to the 99 Percent and seeks their participation in an effort called VOTE 99 to elect candidates for Congress who are pro-99% on the issues and are not beholden to the 1%.

The ultimate goal, which I imagined in my first blog post last October and which will take multiple elections to accomplish, is a Congress controlled by members who refuse large individual campaign contributions (over $200 per contributor, or even less) which, as the Center for Responsive Politics concluded here, here and here in the 2009-2010 election cycle, are predominately made by “business executives and professionals”—that is, the 1%.

The book discusses 12 issues presented as questions for Congressional candidates followed by a short explanation and hyperlinks for further information.  Here’s the first issue in its entirety.

Candidate Question #1

Which is more important in 2012—creating jobs or cutting the deficit?

The right answer for the 99% is creating jobs.  Here’s why.

According to mainstream economists, problem #1 today is lack of jobs.  During 2000 when the economy was booming, 81.5 percent of working-age Americans between 25 and 54 years of age were working.  In 2011 only 75.1 percent were working.  Although the percent improved in early 2012, our economy still employs 6 fewer people per hundred than it should.  

The US government has a lot of public debt, but what’s keeping the economy in a deep slump is all the private debt that many homeowners took on during the recent housing price bubble.  (Two-thirds of 99% households own their homes.)  When housing prices collapsed along with the value of retirement savings invested in the stock market, homeowners began worrying about their finances and started saving more and consuming less.  Since our economy depends on consumer spending, businesses responded by cutting back on production and construction and laying off workers.  Then consumers worried about jobs and spent even less, causing more layoffs.

The fastest way to create jobs in a deep slump is by government spending.  Cutting the government’s budget deficit does just the opposite—it eliminates jobs.

The best way to cut the budget deficit is to restore full employment and full production, thereby increasing the government’s tax receipts from workers and businesses and reducing unemployment compensation and slump-related safety-net spending.  If more adjustments are needed to balance the budget, that’s the time to make them—during the economic boom created by full employment and production, not during the slump.

Links for further information

Economists saying jobs are #1 concern include Nobel winners Stiglitz and Krugman

US Bureau of Labor Statistics data on working age employment to population ratio

According to Keynes, the boom, not the slump, is the right time for austerity

4 million lost their jobs in 1937-1938 when the New Deal cut spending to reduce deficit

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Historically, US voter participation has been terrible, declining from 80 percent of adult citizens in 19^th century Presidential election years to hardly more than 50 percent today.  If we can interest some significant margin of the 99 Percenters—and I’m thinking especially of those in the 18 to 29 year old age group—in the issues that divide those who believe in Social Security, health care for all, unemployment insurance, food stamps and school lunches from those who believe in cutting taxes to the level where they support a strong military and little else, then perhaps more of the 99 Percenters will become regular voters.

If that happens, the day will come when we’ll able to replace a corrupt Congress beholden to the 1% who buy favoritism from its members with a new Congress beholden to the 99% who don’t.  And then we’ll have the power to end needless subsidies of Corporate America and the 1% who control it, restore free-market capitalism with appropriate regulation to keep it transparent and competitive, balance the budget with a fair tax system, insure economic freedom for all, take care of the only planet we have to live on and recover the democracy that our Founding Fathers entrusted to us.  VOTE 99 can change the world.

The book, when I get it converted to the proper format, will be published as a 99 cent Kindle book and possibly later in other formats.  Aaron Nickles is developing a model web site as an integral part of VOTE 99 for local organizers to provide voters with information on the candidates running in their election district and present local requirements for registering to vote and for voting.  When the site is ready, it will include a copy of the book that can be read online for free.

Any suggestions for implementing VOTE 99, including how to locate local organizers and qualify them for licensing (which will be without charge) will be appreciated.  You can reach me by e-mail here.

Politics of Despair

The New York Times has commissioned Adam Davidson to write a column for its Sunday magazine “to demystify complicated economic issues – like whether anyone (C.E.O.’s, politicians, people running for the presidency) can actually create jobs.”  Lest you not read the later columns, he tells you how they’ll come out: “The fact is that creating [jobs] in a far-too-sluggish economy is practically impossible in our current capitalist democracy.”

In one of his own columns and also in the New York Review of Books, the Washington Post’s veteran Washington analyst Ezra Klein has come to a similar conclusion about the Obama administration.  Given the opposition of the Republican party and the Democrats’ tenuous control of the Senate, Obama did pretty much all he could have done to stimulate job creation.  His stimulus package helped forestall another 1930s-type depression and lowered the unemployment rate by several percentage points, but now unemployment is stuck at nine percent and nothing further can be done.

The politics of despair has taken over.

Let’s not forget, however, that there is a way to create jobs in a sluggish economy:  government spending.  The New Deal did it in the 1930s.  During its iconic 100-day (reconvened) session in 1933, the 73^rd Congress financed two job programs (the Civilian Conservation Corps and the Public Works Administration) as well as relief for the poor and unemployed and the refinancing of residential mortgages to avoid foreclosure.  After Congress had adjourned, FDR created the Civil Works Administration (CWA) under which the government itself hired four million people for what turned out to be a very bitter winter.

CWA led in 1935 to the more permanent WPA (Works Progress Administration) that over the course of the next eight years spent 11 billion dollars employing 8½ million different people on well over a million projects that rebuilt the country’s infrastructure.  None of these programs cured the unemployment problem, but they did create jobs for workers that the private sector wasn’t hiring.  They put money in the empty pockets of previously unemployed people who promptly spent it, thereby stimulating the private sector to create more jobs to sell the products that the people who were temporarily employed by the government bought.

That as I understand it is what Keynesian stimulus is about.  During a recession reinforced by reduced spending on the part of insecure and out-of-work consumers, if the Federal Reserve has lowered short-term interest rates as much as it can, meaning close to or at the “lower bound” of zero percent, without inducing the private sector to produce enough output and create enough jobs to restore full employment, the economy is caught in a “liquidity trap.”  The surest way out is government spending not only to compensate for the inadequacy of private sector spending but also to stimulate the private sector to spend more.  During a liquidity trap, government can borrow at dirt-cheap rates and spend without driving up inflation or “crowding out” private sector spending.  It therefore makes economic sense for government to utilize idle workers to improve the economy’s infrastructure, as WPA did, while seeding the economy’s recovery to full output and employment.

Of course, FDR had advantages that Obama didn’t.  One was that the depression was much worse than our current recession and had lasted much longer when FDR took office.  As a result, he had overwhelming Democratic majorities in both chambers of Congress and a strong public mandate to do something – anything – to make things better.  Having served four years as Governor of New York that included the depression years and several years during World War I virtually running the Navy Department, he had experience and confidence that Obama lacked.  And while FDR was as fiscally conservative by nature as Obama seems to be, his concern for the needs of working people was greater than his conservatism.

FDR capitalized on these advantages and took swift and decisive action.  By the end of the 100 days, although economic conditions had actually gotten worse, “the feeling everywhere was so much better,” one of his close advisors wrote, and “good will [for FDR] spread like a benison over the land.”  Although FDR never got unemployment below ten percent until the huge stimulus of World War II, average Americans came to feel that FDR was trying to do something for them and stopped despairing.  The Democrats’ reward was long-lasting.  Voters kept them in control of the government for 18 of the next 20 years and in control of the House of Representatives for 58 of the next 62 years.

I suspect that the next opportunity for a Newer Deal, if it comes, will not occur before 2016.  By then the 99 percent will have suffered through eight years of despair and stagnant recovery and resistance to change by the one percent.  If they vote, they will control whether the country changes direction or stays the course.

Changing Congress

To get into the subject of this, my first blog post – changing Congress -- let me run through a few assumptions without stopping here to explain them or defend them.  As expounded in Federalist Article #39, written by James Madison in 1788 as he argued for the adoption of the Constitution, the United States of America is a “government which derives all of its powers directly or indirectly from the great body of the people,” making it (by design) a democracy, and is “administered by persons holding their offices during pleasure, for a limited period, or during good behavior,” making it (by design) a democratic republic.  Members of Congress and the President are administrators elected by the people for a limited period.

But Madison also recognized in Federalist #10 that “men of factious tempers, of local prejudices, or of sinister designs, may, by intrigue, by corruption, or by other means, first obtain the suffrages, and then betray the interests, of the people.”  In 2007 Martin Gilens of Princeton concluded from an extensive study that “whether or not elected officials and other decision makers ‘care’ about middle-class Americans, influence over actual policy outcomes appears to be reserved overwhelmingly for those at the top of the income distribution.”  If government of, by and for the great body of the people is (by definition) a democracy, government of, by and for those at the top of the income distribution is a plutocracy.

The US today is a plutocratic republic.  Members of Congress are addicted to nonstop campaign fundraising, and almost all of the funds are raised from those at the top of the income distribution.  As Ken Silverstein pointed out several years ago in Harper’s, “the most lavish benefit of winning a congressional campaign is, ironically enough, the right to keep on campaigning – and therefore to keep raising and spending donor money.”  Although Congress is not the sole cause of our drift from democracy to plutocracy, I agree with Lawrence Lessig and Joe Trippi that we should strike at the root of the problem and fix Congress first.

Fixing Congress means electing members who have “an immediate dependence on, and an intimate sympathy with, the [great body of the] people” (Madison again) rather than just those at the top of the income distribution.  The hard way to get there is to persuade incumbent members of Congress to cure themselves of their addiction.  Lessig believes that we have to go for a Constitutional amendment, which has to be initiated by a two-thirds vote of both the House and the Senate or by the approval of two-thirds of the States for a Constitutional convention.  Approval of an amendment in either case requires the approval of three-fourths of the States.  Tough sledding, especially for a Constitutional convention, which has never been tried.

I like a third approach – putting up candidates who are committed never to accept donations over a certain amount, like 100 dollars per contributor per year.  This is the scheme proposed by the Fair Elections Now Act, a bill now before Congress to provide public financing for Congressional campaigns.  Getting Congress to pass the bill is also tough sledding, although (perhaps) not as tough as a Constitutional amendment.  A nice feature of FENA is forbidding candidates who sign on to it from using any money in the campaign – including personal or family wealth – that is not raised by personal contributions of 100 dollars or less or by matching contributions under the Act.

Imagining a Congress controlled by members beyond the reach of the plutocrats makes sugar plum fairies dance in my head.  But what really energizes them (the fairies) is another thought: what if the 99 percenters became regular voters?  What if they came to believe that the surest route to economic freedom is through exercising the political freedom that they already have to vote for candidates who don’t accept large donations?

As  I indicated in my (also first) tweet today, if only 99 percenters became regular voters in elections and primaries.  They could change Congress, 50 States & the World.