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Source: Foreign Policy Magazine  

Source: This piece was originally posted at The New Democrat Plus

I read this article called It’s Time To Found a New Republic from Daren Acemoglu and Simon Johnson over at Foreign Policy Magazine. And it wasn’t just the title of the article that caught my attention. It’s Time To Found a New Republic, if they spent more time on the title maybe they would’ve called It’s Time For a New Republic, Time To Create a New Republic, The New American Republic. When something is found you don’t need to fine it, because it’s already there.

But getting pass the wording of the title of their piece most of their article was about American history and the progressive movement. Starting with the Progressive Era of the early 1900s and going up to the New Deal of the 1930s and the creation of the our national infrastructure system of the 1950s. And then towards the end they were had some policy proposals.

Ranging from a national basic income, which I disagree with, to ending partisan, racial, and ethnic gerrymandering which I’m in favor of. When I saw the title of their piece I’m, thinking maybe they were talking about creating a new form of American government. That the problem with American society (as they might see it) is the structure of our government all together. Perhaps they don’t like our Federal system based on limited government and would propose replacing that with a unitarian style of government that you see a lot of in Europe. Where most of the governmental power in the country is based with the national government. Instead of spread out between the national, state, and local government’s.

Just to comment on Daren Acemoglu’s and Simon Johnson’s economic proposals. I don’t believe the problem of income inequality (if you want to call it that) has to do with our government structure and how power and responsibility is spread out. Not that they were arguing that either necessarily. But it has to do with the skills gap and opportunity gaps in the American economy.

If you live in rural America and grow there, or you’re raised in a rough part of an inner city your chances of doing well in America are far lesser than if you come from a middle class neighborhood in a city or from the suburbs. Also if you have parents or even one parent who are doing well in life, not necessarily rich but doing well enough for you to be raised right and have you what you need to do well growing up, your chances of doing well in America are much better if you come from a low-income family in a low-income neighborhood, where your parent or parents are just struggling to survive.

So you want to reduce income inequality (again, if you want to call it that) you have to reduce the inequality that’s part of our education system and have an education system where more Americans can simply get a good education. Regardless of where they live and where they grow up and who their parents are. And of course regardless of their race, ethnicity, or gender. Which should go without saying anyway.

As well as having an adult educational system in this country where low-income adults whether they’re currently working or not, can advance in the American economy by finishing and furthering their education and getting themselves a good job that leads them to economic independence.

As well as having that system available for workers who already have a solid education. High school diploma plus some vocational training and perhaps a college degree, but now find themselves working in a field where those jobs are disappearing or where they’re no longer able to make the money that allows for them to live comfortably. And allow for them to further their education perhaps even in a new field for them.

The problem with the American economy has nothing to do with our form of government. Or our Federal Government is too small, our state and local government’s, have too much responsibility, or middle class Americans are undertaxed and have to much personal and economic freedom and have to make too many decisions on their own.

The problem with the American economy and why we have income inequality (if you want to call it that) has to do with education and skills. We need to move pass the idea that schools should be funded based on the property values of the people who live in those communities . Which has to do with property taxes. And sending kids to school based on where they live, instead of what’s the best school for them.

And get pass the idea that if you start at a low-wage low-skilled job because you’re low-skilled, that you’re stuck working jobs like that indefinitely. Because you can’t afford to go back to school or simply don’t have the time for it, because you’re working multiple low-wage jobs just to try to survive.

You close the skills and education gaps in America, you reduce poverty, because you’ll not just have more Americans working as long as you have pro-growth economic policies in place that promote economic development and growth, but you’ll also have more Americans working good jobs. Which will also improve your long-term economic and financial outlook of the country. Because you’ll have fewer Americans on public assistance.

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Source: RCO 64

RCO 64: The American Form of Government

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Source: The Independent Institute 

Source: This piece was originally posted at The New Democrat

According to Wikipedia the definition of social justice is, “justice in terms of distribution of wealth, opportunities, and privileges within society.”

People let’s say on the farther left (Social Democrats/Democratic Socialists) take the definition to mean that there should be distribution of wealth in society. That wealth should be distributed based on what people need to live well. Not based on what people earn. And of course the central government usually a unitarian government in most social democracies (one large government for the entire country) will collect most of the wealth in the country and dish it back out in the form of welfare state payments to the people based on what the government believes people need to live well in society.

So the people not just living above poverty, but living somewhat comfortably, but short of being wealthy and perhaps even upper middle class. Socialists (democratic and otherwise) don’t believe in rich or poor. They want equality of outcomes where no one is wealthy or poor, but able to live well. This type of economic system is how Scandinavia operates and the states there and to a certain extent even in Britain. (Even when the Conservatives are in charge)

The libertarian notion of social justice is to put it in plain terms is that what’s mine is mine and what’s yours, is yours. To paraphrase Libertarian Economist Walter Williams. Meaning what the people make for themselves is exactly that. And shouldn’t be subjected to taxation especially to help pay for the people who don’t have much to live on and are in living in poverty as a result.

To go back to the Wikipedia definition of social justice. Liberals (in the real and classical sense) concentrate on the opportunities portion of social justice. Liberals believe in an opportunity society. Where everyone has the ability to make a good life for themselves. Where everyone has access to a quality education even if they live in poverty. And if they live in poverty that their parents or parent, has the ability to finish and further their education so they can get themselves a good job and make a good living.

Get off of public assistance, buy a nice home and live in a nice community where they don’t have to worry about being physically harmed when they go to the grocery store, or are coming back or going to school. Where they have a basic fundamental sense and reality when it comes to their own economic and physical security. And then what the people make for themselves financially, they’re able to keep most of that and pay back in taxes what it takes for the government to function effectively and to do only what we need for government to do well for us, that is also consistent with strong economic and job growth so people are encouraged to be productive and make a good living for themselves and their families.

And yes you need an effective government to invest in what makes economies strong so as many people can benefit from capitalism and private enterprise as possible. Not to run the economy or to run business’s, or tax and regulate private business so much that the government essentially owns and runs those companies.

But to see that everyone can get a good education. Where kids aren’t sent to school simply because of where they live, but what’s the best school for them even if that might mean a charter school or private school all together.

Where economic development is encouraged so you don’t have ghost towns essentially where the only people who live there are people who can’t afford to live anywhere else. Where gangs and organize criminals run the communities.

Where you have an modern infrastructure system so companies can get their products to market (to use an old phrase) and also to encourage more private economic development.

A responsible regulatory state to protect consumers from predators and worker from abusive employers.

And a limited effective safety net (not welfare state) that serves an economic insurance system for people who are out-of-work, or lack basic skills to get themselves a good job. But also empowers low-skilled individuals to get themselves on their feet by finishing and furthering their education and learning a trade so they can get themselves a good job.

Where Liberals separate from Socialists has to do with government’s involvement in the economy. Socialists want government to take most of the national income and dish it back out based on what they believe people need to do well. Where Liberals differ with Libertarians is that Liberals believe that the people should be able to to keep most of what they earn. But that Liberals believe there is a real role for government even in a free society and that being part of a free society is like being part of a club. Where you end up paying for the services that you consume and even some of the services that don’t personally benefit you.

Independent Institute: Kyle Swan- Social Justice in The Classical Liberal Tradition

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American Economy
Source: This piece was originally posted at The New Democrat

I know this is going to sound like a copout and trying not to take a hard stand and everything else, but the answer to why the American economy does better under Democratic presidents than Republican presidents to put it simply, is both. Democratic presidents tend to have better economic policies which I’ll get to later than Republicans. And when a Democrat is President many times they become President just right before the economy is about to take off. Jack Kennedy, Lyndon Johnson, Bill Clinton are perfect examples of that. Harry Truman would be another one and Barack Obama and Jimmy Carter are unfortunately the exceptions to that.

As far as policies Democratic presidents both liberal and progressive tend to want an economy that works for everyone. Sure Republican presidents I’m sure believe in the same thing. But Democrats put in the policies that make that economy come about. Which is why they focus so much on education, infrastructure, job training for low-income workers and unemployed workers whether they are educated or not, encouraging companies to invest in low-income areas.

Republicans tend to believe in what George H.W. Bush called when he ran for president in 1980 ‘Voodoo Economics’, that some others call Trickle Down Economics. “You cut regulations and taxes for employers and individuals and the economic activity that will come from those business’s and individuals that now have that extra money will now be invested in other business’s and that economic activity will benefit everyone as a whole”. That is the theory anyway, but the results have been at best mixed for thirty-five years or so ever since the policy was introduced in Congress by then Representative Jack Kemp and Senator Bill Roth.

As far as the lets say good luck, yes Democratic presidents have inherited economies that were just about to take off. Bill Clinton comes to mind in 1993 with the Cold War just ending and with the start of the Information Technology Revolution just getting under way around 1990-91 with all the cell phones and laptop computers now online and of course the internet just getting under way. The Clinton White House had their own website under way from the start and had email as well.

So yes Democratic presidents happen to of become President when the economy is just about to boom. But they’ve also have pushed policies that empowers all workers to be able to take advantage of economic booms. Economic booms do nothing for people without the skills to take advantage of them. Which is why education is always so critical for any economy to do well. And Democrats tend to push those polices more than Republicans.
PBS: Washington Week- Does The Country Do Better Under Democrats or Republicans?

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Source: This piece was originally posted at The New Democrat

 

I would describe capitalism, or private enterprise, meaning private businesses and wealth controlled by individuals or groups of individuals, not by the state, as the worst type of economic system in the world, except for all the rest.  Actually, as has been pointed out on this blog many times, what I call liberal capitalism is capitalism designed to include everyone, where everyone has economic freedom and is not controlled by the special few or by government.  This is the worst form of capitalism, except for all the rest.

I mention that because there are several forms of capitalism, and all developed countries and rapidly developing countries, large countries like Mexico, Brazil, Russia, China, India, and Pakistan, have one form or another of a capitalist economic system. And the beauty of each of these different types of capitalist systems is the idea that your competitors cannot just outclass you but also put you out of business. So in this system, you must deliver the best services possible at the most affordable and competitive prices or be driven out of business.

The disadvantage of capitalism is that some people do very well for whatever reason, for example, starting off very rich along with getting the best education possible, or simply coming from modest roots but working very hard and productively and reaping the benefits so they are more than capable of caring for themselves and their families.

But on the other side, there are people at the bottom who, for whatever reason, either through bad personal choices, such as not finishing their education or having children before they were ready to raise them properly, or coming from a low-income family without access to a decent education, now find themselves living in poverty as adults and perhaps raising children as well.

That is where social insurance, or the safety net, jumps in to help the people at the bottom, where they are ignored by the private market or did not take advantage of the opportunities presented by the private market to make a good life for themselves. The safety net covers temporary financial assistance for people living in poverty and not currently working and provides access to education and job training, which provide the tools needed to achieve economic freedom by finding a good job with a living wage.

UMass Economics: Social vs Private Insurance

 

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Source: The Film Archives

Source: The Film Archives: Paul Krugman vs George Soros- Debate on Capitalism- 1997

The real debate is not whether or not we should have capitalism (in other words economic freedom) that comes with property rights and protections. To go along with workers rights and so-forth. Even though some Conservatives and Libertarians are certainly not fans of workers rights but view workers as employees who are a cost of doing business and are lucky to be working and making any money at all. Or whether we shouldn’t have capitalism and have a state-owned economic system without private enterprise at all. Even Socialists in Europe as well as in America, South America and Asia believe in at least a certain level of private enterprise and economic freedom. But the real question is what type of capitalist economic system that we should have. Continue along the lines that America has been moving the last ten years or so with fewer workers protections and regulations of private enterprise.

Or should we look at the Scandinavian socialist model with a high deal of private enterprise. But where the state holds a large responsibility to see that their people are getting the social services that they need to live well. Things that perhaps capitalism falls short in and shouldn’t be for-profit, in a Socialist view. Like with health care, education and few others. Or should we move to a different capitalist system all together, which is where I come down.

Again we need a capitalist system, private enterprise, economic freedom and so- forth. But for capitalism to benefit as many people as possible, certain regulations and protections for workers, consumers and business’s as well for the system to work as well as possible. Otherwise the people at the top will always have most if not all of the power. With everyone else struggling just to survive with no real help of being able to move up in the world.

So no I’m not arguing for what is called wealth redistribution something we already have anyway. But applying that to the wealthy and giving that to government to take care of everyone else. I’m not arguing for that, but creating a capitalist economic system that has a foundation. Where everyone has a solid opportunity to do well in life. Built around education, infrastructure and a tax system that promotes economic and job growth. To go along with economic success, but that also comes with a regulatory system that protects workers, consumers and business’s and a safety net that helps people who fall down in the economy. By helping them get by in the short-term while it also empowers them to get themselves up.

What I’m in favor of is liberal economics a liberal economic system based around economic freedom for executives, owners, workers and consumers. That comes with an effective regulatory system that protects everyone from predators. And an education, infrastructure and social insurance system that promotes economic freedom and economic success. Rather than just giving most if not all of the power to government or corporations and the wealthy. And hoping for the best.

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