In the first installment of Supercapitalism Redux I listed what I thought were Robert Reich’s key correct findings. Here are my suggestions on what we should do in Virginia about those findings for the common good in the Commonwealth.
Everyone has more money and stuff than 30 years ago. Our American poor are richer, materially, than they were three decades ago. They are considerably poorer, spiritually and in quality of life, than the poor from the 70 years ago – because of the destruction of the family.
Yet, the middle class has thinned out considerably. The squeeze increased the number of upper middle class and wealthy (is rich a better term?) folks. Likewise, the number of lower middle class people increased. If these folks don’t get new competitive skills or go into business, successfully, for themselves, they will not progress to the middle class. Ever.
What to do for the people at the bottom economically?
First, don’t destroy capital. Reich agreed (p. 4) that “Capitalism’s role is to enlarge the economic pie.” Build capital. Build capital as fast as it can – grow the economy just shy of cross-over point of inflation. Tax capital once – period.
The 3% growth in total tax burden in Virginia since the 70s means about $157 a month for the median family (earning $51k in ROVa and more in NoVa). Lower personal taxes.
Expand the supply of energy, as much as Virginia can, to lower the price. The cost of rising oil prices destroys the discretionary income – and even pushes into mortgage failure – too many working families. Build the double refinery capacity at Yorktown, build new nukes, build sea-based tide and windmills, etc.
Provide individual supported by community, not government, opportunities for the big expenses – health, retirement, job insecurity, and education – that will break marginal income families. I wrote in Bacon’s Rebellion about Commonwealth Trust Accounts for lifelong individual savings. Return the bogus $1.5 B sales tax increase (2004) into individual accounts ($200 @)) for all 7 million Virginians. Give generous tax cuts for folks who contribute to other folks’ accounts.
Elect Representatives and Senators to the Federal government who will morph Social Security into individual, personal accounts. Elect politicians who will morph Medicare, Medicaid and the drug benefits into sustainable health insurance accounts. But, don’t wait for the Federal government to reform to take action in Virginia.
The social pathologies that plague families of every income can’t be solved by government. Government shouldn’t promote the pathologies, like welfare did.
Coming up next…what to do about corporate excesses.