Rather than Dumping Unions, Democrats Could Shake Off Their Upscale Hard Core Anti-Market Stance
Published: 03 November 2016
This could start with abandoning their position, especially in trade deals, to make government granted patent and copyright monopolies longer and stronger. These anti-market interventions are affecting an ever larger share of the economy (in prescription drugs alone patent related protections likely increase the costs by more than $350 billion annually). They directly redistribute income from ordinary workers to the relatively wealthy minority in a position to earn rents from these forms of protectionism.
The Democrats can also abandon the licensing restrictions that protect doctors, dentists, and other highly paid professionals from both domestic and international competition. Our laws prevent doctors from practicing medicine unless they complete a U.S. residency program. This is about as blatant a protectionist barrier as you'll find these days. It allows doctors in the United States to earn on average more than $250,000 a year, twice as much as their counterparts in other wealthy countries like Germany and Canada. This protectionism costs us around $100 billion a year in higher medical costs.
We could also subject the financial sector to the same sort of taxes as other sectors of the economy pay (e.g. a financial transactions tax). This market based reform could eliminate more than $100 billion a year in waste in the financial sector that ends up as income for bankers and hedge fund types.
There is a long list of market-friendly measures that would help to reverse the upward redistribution of the last four decades. (Yep, this is the topic of my new book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.) Anyhow, supporters of this upward redistribution do their best to turn language on its head and deny that these forms of protectionism are protection. They pretend that patent and copyright protections are the free market or that they never heard of restrictions on foreign doctors. Unfortunately, this group of deniers includes most of the people who write on these issues. But, there is always hope that they can learn.
Blurb from his bookRigged
How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.: There has been an enormous upward redistribution of income in the United States in the last four decades. In his most recent book,
Baker shows that this upward redistribution was not the result of globalization and the natural workings of the market. Rather it was the result of conscious policies that were designed to put downward pressure on the wages of ordinary workers while protecting and enhancing the incomes of those at the top. Baker explains how rules on trade, patents, copyrights, corporate governance, and macroeconomic policy were rigged to make income flow upward.
http://cepr.net/blogs/beat-the-press/
AMY GOODMAN: Let’s talk about this fifth anniversary of the collapse of Lehman Brothers, the beginning of the recession and who has profited in this last five years. It has certainly not been bad for everyone.
ROBERT REICH: Oh, no. In fact, Emmanuel Saez, my colleague at Berkeley who has really done the pioneering work on determining who’s got what and looked at income tax records, he’s just came out with a new study showing that since the recovery almost all the gains have gone to the very, very top. People who are in the top 1 percent are doing better than they did even before the Great Recession, better than they have done since 1928. Remember what happened after 1928: We had a great crash. Remember what happened after 2007, which was the last peak in terms of inequality: We had another crash. We can get back to why there is a relationship there, but most Americans are on a downward escalator. The median wage in the United States, adjusted for inflation, keeps on dropping.
AMY GOODMAN: You use the image of a suspension bridge to talk about inequality in the film.
ROBERT REICH: Because up until—this new study shows that 2012, actually, is the new peak. The old peaks were 1928 and 2007, which is interesting because in 1929 and 2008 we had crashes. And I think it’s not coincidental, because when so much of the nation’s income and wealth go to the top, the rest simply don’t have the purchasing power to keep the economy going at full employment.
AMY GOODMAN: Talk about what’s happened to everyone else.
ROBERT REICH: What’s happening to everybody else is not only wages eroding and a very large number of discouraged workers, who basically are never going to be able to find jobs, but economic insecurity. Most Americans today, even if they have jobs, even if the jobs pay fairly well, are much more insecure than Americans have ever been at work before, at least in living memory, because we have a huge number of contingent workers, huge number of part-time workers, huge number of workers who can’t know what their paychecks are going to be because they’re paid on a contingency fee—bonuses, you know, working hours, billable hours. That means that they cannot plan, and have to live, to some extent, from paycheck to paycheck. That insecurity, Amy, coupled with declining wages, coupled with more and more concentration of income and wealth at the very top, has led to a very—an economy that is very vulnerable and a democracy that is also very vulnerable, because all of that money at the top is being transformed into political power every day.
http://www.democracynow.org/2013/9/13/inequality_for_all_robert_reich_warns
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