Take Notes

from the NYTimes article on unemplyment by Bob Herbert The Horror Show :

The first comment by Jumper, South Carolina

What you say is true and the other part of the story is that corporations are racking up record net profits during the same period. They are sitting on roughly 1.4 Trillion dollars. The spin they give media, and too often repeated by the gullible media, is that the future is too uncertain for them to hire.

They have exactly the situation they want: workers just grateful for a job, not asking for raises and willing to be put on salary and "volunteer" ten or 20 hours a week to the company. If they don't, they may well be out the door. It's the same squeeze we've seen since at least 2000.

In grad school I had a one-on-one lunch with an Assistant Secretary of Labor. Who taught me an important lesson. When you have a need, even an important need, be sure to have an answer for the question, " "How do you pay for it?"

So, let's find some serious money to get this re-employment going.
I first wrote several months ago the great entitlement program for this Nation's wealthiest is the huge personal income tax reduction started by Reagan in 1981, dropping the top tax rate from 70% down to 50% for four years and then down again so it has averaged 37% since. It needs to be put back up to 63% as it was during the worst year of the Great Depression, in 1932, from a low of 25%.

Let's justify this. In 1894, Congress passed the first peace-time income tax. However, it was designed to only tax the wealthiest 10% of U.S. households. The reason was to make up for revenue lost due to tariff reductions. 1894 was a time of economic depression; considered the worst until the Great Depression. Let's take note.

Notice it was felt that taxing the upper class wealth would not inflict harm on an economy already in a depression. That's historical precedent for now when the President wants to keep the tax cut for the middle class but let it expire for the wealthiest Americans. Take note.

Another important period is WW I. The top tax rate was raised to 67% and then went up to 73% until 1921. Why? To pay for the war expenses. Take note.

Starting in 1922, the top tax rate then dropped to 46% within three years, and then down to 25% from 1925 through 1931. Why? We had three Republican Presidents from 1922 through 1932. The top tax rate plummeted from 73% to 25% and into the Great Depression.

In the depths of the Great Depression, in 1932, the top tax bracket was raised from 25% to 63%. It remained at that level until 1936. Keep in mind that recovery occurred during this period when the top tax rate was at 63%. That revenue is part of what paid for the public works programs that re-employed the people industry would not hire. Take note.

From 1936 through 1941 it averaged 80%.

Then came WW II. We paid for those war years with top tax rates that averaged 91%. We raised taxes to pay for that war. Take note.

The taxes dropped to about 80% until 1950.

Next came the Korean War and a full-fledged Cold War. The top tax rate was again raised to an average of 91%. Take note.

91% lasted through the last years of Truman, through the Eisenhower and through the Kennedy Presidencies. Those are considered some of the most prosperous years in U.S. history. Take note.

Then from 1964 through 1981, the top tax rate averaged 70%. Those were turbulent social times but still times of prosperity - for the most part.

And, then ... we get to the Reagan era of don't tax the wealthy, let the middle class bear the expenses if they want a decent standard of living.

Since the start of the Bush Presidency, the top tax rate has been 35%.

Bush II started two wars, jacked up the military budget, negotiated a Medicare drug deal where Medicare is not allowed to negotiate drug prices, and included an 800 billion dollar TARP bailout for the Wall Street banks. Never were taxes raised.

History tells us how to get us out of this dilemma. Increase taxes in a graduated fashion until the top tax bracket is 63%. Personally, I'd say 80%. We have two wars to pay for and a huge deficit. During the accumulation of that huge deficit, mostly under Republicans, the wealthiest Americans made, total, trillions of dollars while the middle class bled. Of course they should help bear the expense of keeping our nation economically stable.

For those who doubt we are indeed in a serious depression, take a look at the unemployment figures for 1894. Our unemployment numbers mirror those of the depression in 1894.

That's where the money is to fund our re-employment programs. History tells us it won't have any negative effect on the overall economy. It should be easy. There are more of us than of them.

The second comment from Steve Hull, MA

What to do:

1. Develop solar and wind energy, and rebuild the power distribution grid.

2. Underwrite development of more efficient vehicles, and the replacement of the existing fleet. Build the infrastructure to support new vehicle modes as needed.

3. Build high speed rail networks connecting all major markets. Rebuild in rural areas all the obsolescent airports now plaguing city locations; connect them to the urban areas with high speed rail.

4. Turn internet development into the interstate highway program of the 21st century. Build the facilities it takes to make wireless internet distribution available to all at nominal cost.

5. Take public education seriously, reform it and fund it.

6. Repair the nations' roads and bridges

7. Rebuild the federally owned infrastructure, such as the trail systems and interpretive facilities in the national parks.

8. Support the domestic economy by ending globalism and penalizing the export of jobs which support sales in the American market. Rebuild domestic manufacturing with tariffs.

9. Impose a temporary moratorium on all immigration, and enforce border security.

Pay for it by:

1. Slashing military spending for new weapons systems and overseas bases. Cut to a minimum obsolescent military capabilities such as aircraft carrier battle groups. End the wars in Iraq and Afghanistan. Get rid of costly mercenary contractors, and replace them with regular military personnel.

2. Slashing the out-of-control national security state budget.

3. Taxing people who have money, and taxing financial transactions.

4. Eliminating the ceiling on Social Security contributions.

5. Reducing national medical costs by implementing single payer national health care.

6. Borrowing money if necessary.

Do those things and you can expect a return to a thriving capitalist economy, although obviously not to laissez faire. If politicians wait before acting for the docility of the economic victims to end, they will wait too long. Don't do those things, or something similarly scaled and targeted, and it's the whirlwind.