[Mb-civic] A Society of Owners

[Michael Butler]

A Society of Owners

By Robert B. Reich, TomPaine.com
 Posted on September 7, 2004, Printed on September 7, 2004
 http://www.alternet.org/story/19784/

You didn't hear much at the Republican Convention about jobs and wages,
because job growth has stalled and wages are stagnant. But you did hear
about something Republicans are now calling the "Ownership Society." The
notion is to expand private ownership through more tax cuts on capital
investments, tax credits for saving and privatized Social Security.

Sounds nice, but here's the problem: The Republican rhetoric assumes most
Americans can save and invest. The reality is, most Americans are deep in
debt. Before they can join the "Ownership Society" they've got to pay their
credit card bills, their rising variable-rate mortgages and their auto
loans. After that, there's no money left because jobs are in short supply
and wages are stuck in the mud.

The Commerce Department reported this week that personal incomes rose a
measly one-tenth of one percent in July, the lowest rise in almost two
years. And ­ given rising prices for food, fuel and health insurance ­
consumers spent more than they earned. So last month, Americans went even
deeper into debt. The result: Less ownership, not more.

It's true that more than half of American households now own stocks in
corporations. But for most, it's just a few thousand dollars worth. And the
total value of their current portfolio is less than they invested. They got
lured into the stock market during the late '90s when stock prices were
pumped up with accounting steroids.

The fact is, an Ownership Society based on the stock market would be a
casino. The Bush administration would like you to put your Social Security
payments into the stock market, but beware. If your timing is bad, you could
find yourself retiring in a bear market. It's happened before. That's one of
the reasons Social Security ­ as social insurance ­ was invented.

Face it: The Republican "Ownership Society" is hokum. Ownership of America
is now more concentrated than since the days of the Robber Barons of the
19th century. The richest 1 percent of America owns more than the the bottom
90 percent put together.

There are only two ways to reverse this trend, neither of which the Bush
administration will support. The first is to enact a progressive tax on
wealth ­ say, one-tenth of 1 percent per year, on those who own the most.
Right now, the only wealth that's taxed is real property. The property tax
is often regressive because poor and working-class families tend to cluster
in their own communities, which means they pay through their noses for
schools and local services.

A fairer system would tax total wealth, and it would be administered
nationally. Revenues could be distributed to communities on the basis of
population ­ enabling poor communities to have good schools and better
services. If George Bush ever suggests this, I'll eat my spinach.

The second way to reverse the concentration of wealth in America is with an
educational system that assures that every American can make the most of his
or her God-given talents and abilities, and become rich one day if that's
what she wants. But that's not what Bush has done. The administration has
left the "No Child Left Behind Act" woefully underfunded, so states don't
have enough money to respond to children who are left behind in lousy
schools. And the administration has cut funds for job training, making it
even harder for today's workers to get the skills they need to get ahead.

I'm all in favor of a real Ownership Society. But that's not at all what
Republicans are selling.

This commentary originally appeared on Marketplace, public radio's only
daily business news program and is reprinted via a special arrangement
between TomPaine.com and Robert Reich. Marketplace is produced by Minnesota
Public Radio and is heard on 322 public radio stations nationwide.  

 © 2004 Independent Media Institute. All rights reserved.
 View this story online at: http://www.alternet.org/story/19784/
By Robert B. Reich, TomPaine.com
 Posted on September 7, 2004, Printed on September 7, 2004
 http://www.alternet.org/story/19784/

You didn't hear much at the Republican Convention about jobs and wages,
because job growth has stalled and wages are stagnant. But you did hear
about something Republicans are now calling the "Ownership Society." The
notion is to expand private ownership through more tax cuts on capital
investments, tax credits for saving and privatized Social Security.

Sounds nice, but here's the problem: The Republican rhetoric assumes most
Americans can save and invest. The reality is, most Americans are deep in
debt. Before they can join the "Ownership Society" they've got to pay their
credit card bills, their rising variable-rate mortgages and their auto
loans. After that, there's no money left because jobs are in short supply
and wages are stuck in the mud.

The Commerce Department reported this week that personal incomes rose a
measly one-tenth of one percent in July, the lowest rise in almost two
years. And ­ given rising prices for food, fuel and health insurance ­
consumers spent more than they earned. So last month, Americans went even
deeper into debt. The result: Less ownership, not more.

It's true that more than half of American households now own stocks in
corporations. But for most, it's just a few thousand dollars worth. And the
total value of their current portfolio is less than they invested. They got
lured into the stock market during the late '90s when stock prices were
pumped up with accounting steroids.

The fact is, an Ownership Society based on the stock market would be a
casino. The Bush administration would like you to put your Social Security
payments into the stock market, but beware. If your timing is bad, you could
find yourself retiring in a bear market. It's happened before. That's one of
the reasons Social Security ­ as social insurance ­ was invented.

Face it: The Republican "Ownership Society" is hokum. Ownership of America
is now more concentrated than since the days of the Robber Barons of the
19th century. The richest 1 percent of America owns more than the the bottom
90 percent put together.

There are only two ways to reverse this trend, neither of which the Bush
administration will support. The first is to enact a progressive tax on
wealth ­ say, one-tenth of 1 percent per year, on those who own the most.
Right now, the only wealth that's taxed is real property. The property tax
is often regressive because poor and working-class families tend to cluster
in their own communities, which means they pay through their noses for
schools and local services.

A fairer system would tax total wealth, and it would be administered
nationally. Revenues could be distributed to communities on the basis of
population ­ enabling poor communities to have good schools and better
services. If George Bush ever suggests this, I'll eat my spinach.

The second way to reverse the concentration of wealth in America is with an
educational system that assures that every American can make the most of his
or her God-given talents and abilities, and become rich one day if that's
what she wants. But that's not what Bush has done. The administration has
left the "No Child Left Behind Act" woefully underfunded, so states don't
have enough money to respond to children who are left behind in lousy
schools. And the administration has cut funds for job training, making it
even harder for today's workers to get the skills they need to get ahead.

I'm all in favor of a real Ownership Society. But that's not at all what
Republicans are selling.

This commentary originally appeared on Marketplace, public radio's only
daily business news program and is reprinted via a special arrangement
between TomPaine.com and Robert Reich. Marketplace is produced by Minnesota
Public Radio and is heard on 322 public radio stations nationwide.  

 © 2004 Independent Media Institute. All rights reserved.
 View this story online at: http://www.alternet.org/story/19784/