Shifting Back to Progressivism and Away from Trickle-Down

It is the system of ultra-pure capitalism that creates greater and greater wealth for fewer and fewer individuals. Once an individual reaches a certain point, their wealth increase has nothing to do with them anymore. The system simply gives them more and more wealth (as shown in the illustrations from the previous sections.) They do nothing more to merit this enormous gift that the rest of us bestow upon them. Whenever they do sell some assets and pay a capital gains tax, they are simply paying taxes with a small percentage of the money we have given them, through this system which automatically pays them more and more. This is, in effect, a tax on us. Additionally, the amount of actual tax they pay never even comes close to the amount of money they are receiving from us. 

This is not to take away from anything they may, or may not, have done to position themselves at the mouth of this eternal money spout. They may have done wonderful things of merit to get there. They may have done questionable things to get there. But once there, they don’t have to do anything else in order for all of the rest of us to chip in at giving them 24 million or more a day (for the individual in the example from my earlier post, it would really be more like 50 million a day; I used an extreme underestimate for their rate of return in that post). And again, it’s really our money, not theirs. We just created a system that automatically gives it to them.

I believe we need a paradigm shift in philosophy—a shift away from this trickle-down system back to Progressivism. We had a paradigm shift in the wrong direction in 1981, after 48 straight years of forward, progressive movement, from 1933 to 1981. 

A return to the philosophy that considers working people first, rather than continuing with this philosophy in which our first concern is for the extremely wealthy, seems to me to be an easy choice and one in which a large majority would agree, if they knew what was happening. So, I believe that making sure all are aware of this extreme overcompensation for a very few already extremely wealthy folks is the first step toward more agreement amongst Americans. The second step is to understand what it’s doing to us all economically and socially. 

I think most of us would also agree that, in addition to considering working people in our economic model, it is also correct to include consideration for those who are unable to help themselves. In other words, the emphasis should be on creating an economy for all. 

So, I believe it is this trickle-down system, the system which creates this extreme and ultimately dangerous misdistribution of wealth and resources, that needs to be changed, if we want to have a healthy economy for all. We need to correct the misdistribution. We have an earlier American model to follow that worked incredibly well. It retains the good characteristics of capitalism while discarding its negative traits. It builds from the workers, up, rather than from those who have managed to position themselves at the outputs of the money spouts, down. 

As stated in an earlier post, this is not intended to turn us against the wealthy, as people. I use it simply to show that the system that produces this situation is not the best when trying to build an economy for all. Work is extremely undervalued in this system and many, if not most, workers are underpaid.

We must also understand that this ultra-capitalist system, that grossly overcompensates already accumulated wealth while underpaying work, is no more natural than any other human economic system. The Progressive system is a much more balanced approach in which the needs of all are at the core of the philosophy. It is designed to build an economy for all and leave no one out. It is worth repeating, the needs of all are at the core of the philosophy.

It is also important for us to recognize that those with extreme wealth are just as good at eliminating jobs as they are at creating new jobs. Maybe even better. Corporations are great at saving themselves money by employing new technology to replace human workers, thus reducing their payroll while forcing many people to have to search for new careers in the middle of their working years.

I believe we must have stronger Social Security, and stronger additional social securities, better and more affordable healthcare, affordable college education—in effect, an economic system that works for those trying to make their way in this world. This can be accomplished if we return to the New Deal approach—the Progressive approach. In the 1980s we turned away from that approach and mostly returned to the model that created the Great Depression. Thankfully, we already had Social Security and Medicare and other Progressive era programs in place to keep it from leading to all out depressions again. 

There is a point of diminishing return on the concept that keeping taxes down, particularly on the wealthy, creates a better economy for all. There is no perfect formula for finding that point of diminishing return, but the best gage is to see the effect on those who are simply trying to make ends meet and make enough money to pay rent, pay their health insurance premium, buy groceries, buy a car, save for a downpayment on a house, save for their kids college education, etc. If making ends meet is getting harder and harder for a larger number of people, then the system needs to be adjusted. We have a beautiful precedent to follow.