“There are two ways to fight the long stagnation in living standards for most Americans. The first is probably the more obvious and the one I spend more time writing about: through government policy.The government can raise the minimum wage. It can increase the Earned Income Tax Credit, which is effectively a wage subsidy. It can cut taxes on the middle class. It can spend more money on education, child care and health care. All of these are good ideas.But they’re not the only way to lift living standards. For much of the past century, another approach has been even more important: As the economy grew, American companies paid workers their fair share of the growth.”
“A half-century ago, a top automobile executive named George Romney — yes, Mitt’s father — turned down several big annual bonuses. He did so, he told his company’s board, because he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today).
He worried that “the temptations of success” could distract people from more important matters, as he said to a biographer, T. George Harris. This belief seems to have stemmed from both Romney’s Mormon faith and a culture of financial restraint that was once commonplace in this country.Romney didn’t try to make every dollar he could, or anywhere close to it. The same was true among many of his corporate peers. In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month.”
Excellent op-ed. Thank you David Leonhardt. Here is a popular comment I endorse.
When a nation refuses to invest in itself it rots. The American society of engineers gives our overall infrastructure a D rating. The corps of engineers says our infrastructure is close to failing. We’ve been at war for nearly two decades and our national deficit for 2018 is estimated at $440 billion dollars. Income inequality is the at the highest level since the 70’s and our students owe an average of $1.4 in student loans. We’re not the land of opportunity any longer.
At some point we’re going to need to raise taxes to invest in our country. Otherwise our best and brightest are going to start looking abroad for opportunities.
If you look at the happiest countries they have strong social safety policies and have invested in infrastructure and education. Denmark’s top individual tax rate is 60.4%, Sweden’s is 56.4% and Norway’s is 39%. These countries have government sponsored college education, paid parental leave, universal daycare, and universal healthcare. They only tax businesses at 25%.
Cutting taxes, especially for the wealthy considering how nicely they did after the recession is irresponsible. Hopefully our politicians will choose responsiblity and fairness but I doubt it.
“Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University found that in policy-making, views of ordinary citizens essentially don’t matter. They examined 1,779 policy issues and found that attitudes of wealthy people and of business groups mattered a great deal to the final outcome — but that preferences of average citizens were almost irrelevant.“In the United States, our findings indicate, the majority does not rule,” they concluded. “Majorities of the American public actually have little influence over the policies our government adopts.” ”