Robert Reich, writing in the New York Times, recommends that we use the tax system to transfer wealth from top earners to earners in the bottom two-thirds of income.  Reich says, “The binge seems to be over. We’re finally reaping the whirlwind of widening inequality and ever more concentrated wealth. The only way to keep the economy going over the long run is to increase the wages of the bottom two-thirds of Americans.”

Specifically, Reich is calling for, “a larger earned-income tax credit, financed by a higher marginal income tax on top earners.”

Reich says, “We’re sliding into recession, or worse … normal remedies are not likely to work this time, because this isn’t a normal downturn.”  He says, “The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy, is to give middle- and lower-income Americans more buying power — and not just temporarily.”

Excerpts from the article:

• The underlying problem has been building for decades. America’s median hourly wage is barely higher than it was 35 years ago, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Most of what’s been earned in America since then has gone to the richest 5 percent. The problem has been masked for years as middle- and lower-income Americans found ways to live beyond their paychecks. But now they have run out of ways.
• The first way was to send more women into paid work. Most women streamed into the work force in the 1970s less because new professional opportunities opened up to them than because they had to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970 — to more than 70 percent. But there’s a limit to how many mothers can maintain paying jobs.
• So Americans turned to a second way of spending beyond their hourly wages. They worked more hours. The typical American now works more each year than he or she did three decades ago. Americans became veritable workaholics, putting in 350 more hours a year than the average European, more even than the notoriously industrious Japanese.
• But there’s also a limit to how many hours Americans can put into work, so Americans turned to a third way of spending beyond their wages. They began to borrow. With housing prices rising briskly through the 1990s and even faster from 2002 to 2006, they turned their homes into piggy banks by refinancing home mortgages and taking out home-equity loans. But this third strategy also had a built-in limit. With the bursting of the housing bubble, the piggy banks are closing.
• The answer is not to protect jobs through trade protection. That would only drive up the prices of everything purchased from abroad. Most routine jobs are being automated anyway.  A larger earned-income tax credit, financed by a higher marginal income tax on top earners, is required. The tax credit functions like a reverse income tax. Enlarging it would mean giving workers at the bottom a bigger wage supplement, as well as phasing it out at a higher wage. The current supplement for a worker with two children who earns up to $16,000 a year is about $5,000. That amount declines as earnings increase and is eliminated at about $38,000. It should be increased to, say, $8,000 at the low end and phased out at an income of $46,000.
• Over the longer term, inequality can be reversed only through better schools for children in lower- and moderate-income communities. This will require, at the least, good preschools, fewer students per classroom and better pay for teachers in such schools, in order to attract the teaching talent these students need.
• These measures are necessary to give Americans enough buying power to keep the American economy going. They are also needed to overcome widening inequality, and thereby keep America in one piece.

From the New York Times, “Totally Spent,” by Robert B. Reich, a professor of public policy at the University of California, Berkeley, author, most recently, of “Supercapitalism.”

There seems an interesting debate between John McCain and Mitt Romney as to who is the most reliably conservative.

McCain was recently quoted as saying, “And I promise you, if I am so fortunate to win your nomination, I will work hard to ensure that the conservative philosophy and principles of our great party _ principles that have done so well by the country we love _ will again win the votes of a majority of the American people, and defeat any candidate our friends in the other party nominate.”

George W. Bush wants to present himself as a conservative. But, I don’t think that true conservatives could possibly believe that he is. Didn’t conservatives use to rail against interfering in the affairs of other nations, didn’t they use to rail against the whole concept of “nation building”? Didn’t conservatives at one time obsess over the importance of fiscal responsibility? Isn’t a true conservative appalled by much of what George W. Bush has wrought?

George W has marched us in to over $3 trillion of additional debt, how is it possible that anyone could think he is a conservative? No wonder there is such confusion as to what conservatism actually is.

You would think that a philosophy of conservatism would be a philosophy that agreed with original principles that founded our nation, a philosophy that shared the original vision of our nation. A philosophy of conservatism, you would think, would adhere to the radical notions of the nation’s founders — that in this country all are created equal and that there should be freedom and justice for all.

But conservatism, as I hear it from the Republicans, isn’t all that concerned about justice, economic justice, anyway, and seems eager to worship a market system that blatantly unfairly distributes wealth — a system that causes a large segment of citizens to be working poor, bereft of one of the most important freedoms that every citizen should be guaranteed: freedom from want.

The thought that stands out, if one discovers true conservatism, does one discovers liberalism?  But I’ll save that thought for another time.

The current debate in the Republican Party is: What does it mean to be a conservative? John McCain is being accused of not being a true conservative. This web-site says, “Ann Coulter took aim at McCain’s positions — particularly his fervent anti-torture stance — and said he and Clinton differ little on the issues.” Is this saying that, according to Coulter, if you are a true conservative you should have a pro torture stance? But the conservatism that Coulter advocates for Republicans, that justifies torture, is strikingly at odds with traditional conservative principles. Here is an interesting post that tells the thinking about torture of someone of impeccable stature, whom I assume is accepted by the Republicans as a true conservative, George Washington.

The above article also says, “McCain has been at odds with some of the conservative base for his support of campaign finance reform legislation and his vote against President Bush’s tax cuts.” So, it appears, according to the Republicans, advancing conservative principles means rejecting campaign finance reform and cutting taxes in time of war.

Since when is a vote against tax cuts automatically a vote against conservatism? Since when is it a conservative principle that taxes should be cut, regardless, even if spending runs amuck?

The conservatism of Republicans, as revealed by the McCain / Romney dispute, is showing itself to not be a well thought out philosophy at all, but rather it is revealing, to anyone paying attention, that it is simply a term used to confuse and manipulate the public. Tell me once again: What does it mean to be a conservative?