Hope, the Final Frontier

In the spring of 2014, an 89-page study released by Britain-based advertising giant WPP found that two-thirds of that nation’s population believes that China is becoming an incredibly powerful global economic and political power. Almost half the population of the People’s Republic also believes that, within the next ten years, Chinese will catch up to the per capita economic quality of life of average Americans. Chinese see their nation’s overall power and their individual well-being as “interdependent.” The trend lines show a constant and growing sense of optimism towards a better life in China… a stark contrast to Western feelings about life and hope… particularly here in the United States.

As recently as 2009, a New York Times poll showed that 72 percent of Americans believed in the American dream: hard work generates wealth. The recession, the failed steps in the Middle East and Afghanistan, a rather obvious trend that money buys political power directly these days, the shrinking middle class, the reduction in the earning power of the new jobs being created and the rather extreme change in the degree of economic polarization (tilting the playing field totally in favor of those who already have the wealth) have changed these “statistics of hope” rather dramatically.

“Despite an improving economy and jobs picture, the public is more pessimistic than it was after the 2008 financial crisis that it is possible to work hard and become rich, according to a New York Times poll… The poll, which explored Americans’ opinions on a wide range of economic and financial issues, found that only 64 percent of respondents said they still believed in the American dream, the lowest result in roughly two decades.” New York Times, December 10^th. 

64% would seem to be a pretty good number, but it isn’t that number that is troubling. It’s the direction of the trend line. Down. As Americans slowly let go of their hopes and dreams, when higher education becomes unaffordable and jobs provide lower satisfaction, pay and stability, it’s time for politicians on both sides of the aisle to sit up and take notice. The majority of Americans are willing to experiment with less governmental regulation as an economic panacea, but looming over everybody is this huge cloud of growing privileged inequality that seems to be accelerating. Indeed, with the top 400 American families controlling half of this nation’s wealth, a very recent change in our economic balance, something is very wrong.

For one thing, Americans do not trust our financial institutions according to the NY Times poll: “Still, almost six years after the height of the financial crisis, Americans’ wariness about the banking industry that was at its center remains. Only 4 percent of respondents said they had ‘a lot’ of confidence ‘in Wall Street bankers and brokers,’ though 31 percent said they had ‘some’ confidence in Wall Street. Nonetheless, 44 percent said they trusted their own bank ‘a lot,’ and 37 percent said they trusted their banks ‘some.’” NY Times.

Another huge unfairness is a tax code that clearly favors those who make money through owning assets and investing over those who get paid for their labor. Perhaps the most interesting commentary on this subject comes from an unlikely source, Dr. Tom Coburn, U.S. Senator (Republican representing Oklahoma, pictured above) who is retiring at the end of the year for medical reasons. He splits with the majority of Republicans in Congress who have championed loopholes for the rich and big business.

To Coburn, who has prepared a 320 page report on tax reform, these tax breaks are simply outrageous “giveaways” that need to be terminated. Rejecting simplistic tax zealots like Grover Norquist and his “no new taxes pledge,” Coburn sees necessary and obvious changes that need to be made to our tax code. Closing loopholes makes common sense and should not be viewed as raising taxes, he believes.

As noted in the December 9^th CNN.money.com: “Among companies, tax breaks don't provide a level playing field. ‘[F]or every tax break claimed by one company or industry other businesses across the country must pay more,’ according to Coburn's [report]. ‘They ... bear a disproportionately high effective tax rate, because Washington politicians have handed out targeted tax breaks to the well-connected.’…

“Another sports tax break on Coburn's must-go list: Nonprofit status should not be given to professional sports leagues, which take in billions… ‘Taxpayers should not be asked to subsidize sports organizations that are already benefiting widely from willing fans,’ the report said…

“Coburn, who is leaving office after 10 years in the Senate, does not spare the rich either. The tax code, he argues, should not spend billions of dollars ‘subsidizing the upscale lifestyles of the well-off’ -- including mortgage interest deductions for vacation homes and yachts.

“The Oklahoma senator also takes aim at Wall Street, saying he favors taxing what's called ‘carried interest’ as ordinary income… Carried interest is a portion of compensation earned by managers of private equity and venture capital funds when those funds turn a profit. It is treated as a capital gain and therefore taxed at a much lower rate, even if the manager has not invested his own money in the fund. The rationale: The manager invests his time, effort and reputation choosing and managing others' investments that may not turn a profit or at least not do so for a long time.

“‘If time, effort and risk are capital investments, then all income should be taxed as capital gains,’ the report argues.” Ritualized and immutable unfairness, a violent tilt in the playing field, is a brutal killer of hopes and dreams. We seem to have institutionalized that unfairness in our tax and regulatory schema and declared that all who challenge those shibboleths as un-American. If we want to keep this country, we need to revitalize hope and reverse our depressing trend lines. Fairness needs to be a primary focus for each and every elected official.

I’m Peter Dekom, and I still wonder why those at the top prefer to ignore what history has done to those at the top of seriously unfair systems of government.