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Al Carroll

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Name: Al Carroll
Gender: Do not display
Hometown: San Antonio
Home country: US
Current location: VA
Member since: Tue Apr 22, 2014, 10:33 PM
Number of posts: 113

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Proposed Constitutional Amendment, Limiting Idle Wealth

Also at http://proposednewconstitution.blogspot.com/ and http://www.dailykos.com/user/Al%20Carroll.

Article 14-Limiting Idle Wealth

“1. Large concentrations of idle wealth are inherently dangerous and inhumane. All income from any and all sources greater than 100 times the median national income and all wealth of an individual greater than 100 times the median national wealth shall be seized, unless it is reinvested or donated to charity.”

Wealth is power and any accumulation of power is dangerous and undemocratic. But the strongest critique of inequality is one that US conservatives should heed because it speaks directly to the deepest beliefs of the great majority of them:
It is un-Christian.

Inequality and concentrations of wealth are against every Biblical principal, the expressed word of Christ, and for that matter, against the central precepts of most major world religions, and most minor ones too. Christ raged against money changers in the temple. He intoned that it was easier for a camel to be threaded through the eye of a needle than for a rich man to enter Heaven. For two millenia, the church has maintained the idea of Holy Poverty, that the poor are especially close to God, that the church should be especially concerned with their fate, that we are all our brother's keeper, and that materialism and attachment to possessions are unhealthy spiritually. After all, Jesus lived an ascetic life, one concerned with the fate of “the least of my brothers,” not a life devoted in any way to financial profit or accumulating wealth.

Much of modern conservatism ignores these central messages of Christianity, instead being far more concerned with what people do with their genitals. To paraphrase George Orwell, they are only Christians from the waist down. Another portion of conservatism is devoted to putting personal profit over the public good. Bizarrely, some libertarians and conservatives admire Ayn Rand, whose philosophy inspired no less than the Satanic Church. America as a nation could gain much by returning to that original Christian message.

Wealth being power, it is also dangerous unless limited, far more inefficient than its admirers admit, and destructive to a nation and society to let it gather and remain idle. In Latin America, there were wars and revolutions fought for nearly two centuries over latifundias, huge estates larger than most US counties, kept idle while much of the public had no land at all, solely because the size of the estate brought prestige to its owner.

But US elites have long been even more conspicuous in their obscene displays. The public saw William Randolph Hearst buy entire castles in Europe to be reassembled in California. The Astors held a multimillion dollar party at the height of the Great Depression. Elvis would charter a jet just to get peanut butter and jelly sandwiches. Aaron Spelling lived in a mansion covering over 6 acres, with rooms devoted just to wrapping presents. Michael Jackson had his own private zoo and amusement park with roller coasters and carousels. Numerous CEOs insist on private jets that cost millions to buy and maintain, while downsizing their companies and keeping employee wages low. Nike CEO Phil Knight became an international symbol of inequality at its most odious, accumulating over $24 billion while paying his Indonesian workers 14 cents an hour in unsafe sweatshop conditions. (It took over a decade of protests and boycotts to bring partial reforms to Nike.)

Such examples are part of a larger pattern. American elites have far more wealth and pay compared to their workers, more than anywhere else in the world. There is far more inequality in the US than in almost all other developed nations. Only Russia and Slovakia are more unequal. A Japanese CEO makes slightly less than 70 times what one of their workers do. In the US, a CEO makes over 350 times an average worker's pay. Such inequality even horrifies noted conservatives like commentator George Will, who once said American CEOs are doing what Karl Marx was unable to do, discredit capitalism.

Such concentrations of power must be ended for the damage they do to society and democracy. It is hardly a secret that money buys elections, and elites purchase favorable laws written for them by a congress dependent on their support. Barring the use of elite funds in elections is not enough, for there is no practical way to end lobbying without limiting or ending the right to petition. Remove the excess wealth, any wealth that is not devoted to investment or charity. That way elites will not have funds not only for a lifestyle that holds the middle and working classes in contempt, but to influence public sentiment any more than any other person.

The standard used for this proposal is very generous. A full 100 times the median annual income of slightly under $27,000 is currently a little under $2.7 million. 100 times the current median wealth of slightly over $81,000 is slightly over $8.1 million. If any elites or their apologists complain this is too harsh, let them try to convince a waitress or bus driver that elites “need” more than $2.7 million a year to live on, or “need” a home worth over $8 million.

There is absolutely no way that a CEO is worth 350 times more than an average worker. It defies logic and basic morality. If anything, the pattern is the opposite: Having more wealth makes one less capable, not more. For the cushion of wealth makes one soft, out of touch with the world and the people within it. It is also morally numbing. As one study pointed out, the obscenely wealthy have far less empathy for the average worker, the greater the wealth they have.

The effect of penalizing idle wealth will not be to “punish success.” Most wealth is either inherited or created by a combination of luck and favorable government laws. Penalizing idle wealth spurs investment and charitable donations. In Europe, the ideal of noblesse oblige says that nobility must give one sixth of their income to charity. In Muslim tradition, alms for the poor is one of the central pillars of the faith, requiring the giving away of up to a tenth of not just your income, but all your wealth.

But American elites as a group are not very generous. As income in America goes up, the proportion given to charity generally goes down. Phil Knight, for example, had as his sole “charity” to have a sports stadium and business school built at his old university named after him. Let this proposal become the American version of noblesse oblige, an obligation for elites to do good instead of self aggrandizement, more power, and ever increasing unequal wealth.

“2. All attempts to conceal wealth to avoid taxes shall result in prosecution as grand larceny, full seizure of not just concealed wealth but all wealth, and long prison sentences which may not be suspended. Separate white collar prisons, or other prisons that are less arduous or harsh, are forbidden, and all white collar criminals must be punished and imprisoned with all other prisoners.”

More than $21 trillion in concealed wealth is hidden overseas, about one and a half the value of the entire US economy. And that's the low estimate. The highest is $31 trillion. American wealth is roughly one tenth of that, $2.1 trillion.

Over $2 trillion in untaxed wealth is a theft and crime that Pablo Escobar could only dream about. Most hidden wealth is not from criminals, but from “respectable” sources. Nearly three fourths of the Fortune 500 top corporations routinely hide huge amounts. Apple alone hides over $180 billion. American corporate criminals, were they to pay up, owe the nation up to $620 billion. That loss weakens the nation and society, treats with contempt the average honest person and the system we all live under. The wealthiest in America clearly show they have always been the least patriotic of people.

Such concealed wealth should be immediately declared by elites and taxed, so that they may avoid having it all seized and then having to serve a lengthy prison sentence. If they fail to, then the entire $2.1 trillion should be seized outright, and elites hunted down wherever on the globe they hide out, and then imprisoned. Al Capone was sentenced to 11 years in federal prison, serving much of that time in Alcatraz, for evading income tax on perhaps $100 million. There is no just reason similar elite criminals cannot serve similar sentences for concealing similar amounts, and do equally similar hard time. Elite thieves should be tracked down by the likes of the US Marshals, no different than other criminals.

Treating wealthy elites differently from other criminals once they are imprisoned also must be ended. Some current white collar prisons have wooded parks in them. Prisoners get routine net access and email. Most get generous visits from family, with prisoners getting to choose a prison close to their family. Some white collar “prisons” allow prisoners to spend their days outside the facility. One in Pensacola even allows prisoners to go to a local movie theater.

This is obviously unjust. Let the fear of hard conditions, including the fear of other prisoners, become one more deterrent designed to make wealthy elite criminals honest. Let us stop the practice of being soft on crime when it is being done by those in $20,000 suits. Wall Street criminals should face justice no differently than those on Main Street.

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Al Carroll is Assistant Professor of History at Northern Virginia Community College and the author of numerous articles and books, among them Presidents' Body Counts and the forthcoming A Proposed New Constitution.
http://alcarroll.com

Proposed Constitutional Amendment, No Special Treatment for Wealthy Elites

Also at http://proposednewconstitution.blogspot.com/ and http://www.dailykos.com/user/Al%20Carroll.

Article 13-No Special Treatment for Wealthy Elites

“1. Government assistance only goes to those in need and corporate welfare is forbidden. No person or corporation, nor any trust or legal entity used by a person or corporation, shall receive government assistance or funding unless they make less than double the median national income and possess less than double the median national wealth.”

Quite a few wealthy elites, and quite a few with passionate hatred for the working class, argue that poor people receiving government assistance suffer from dependency, laziness, and a lack of a moral code. The most hateful depict those in poverty as leeches, bums, and bloated off of a few hundred dollars a month in aid to live. Yet seemingly none or at least few of the same people make the same argument about wealthy elites, especially corporations. If welfare supposedly is morally harmful to a single mother, what about CEOs? Bankers? What about entire corporations dependent on government? How is that not far more offensive, obscene, counterproductive, and useless?

Such an argument must be turned on its head: Those with the wealth to already support themselves get no government aid, ever. Only those in need do. The Green Party platform has long included a variation on this proposal: No corporate welfare, period. But their proposal does not prevent wealthy or well off individuals from receiving such welfare. It also prevents small business loans, which provide far more jobs than the giant corporations. Blocking all corporate welfare would also include loans or tax holidays to infant industries, where innovation most often begins.

Government should not be used to redistribute wealth upwards, from the middle and working classes to the already wealthiest elites and others who are at least well off. There should be means testing, and the simplest test is that aid only goes to those in need, best measured by wealth and income. It's best, though, to err on the side of caution. Thus the proposed standard, double the median (not average) income and median wealth as well. Since wealth and income in America are both distributed very unevenly, using the average would skew the numbers high.

Sports stadiums, built at public expense that benefit already wealthy team owners, would be barred in the future unless the team owners pay for them entirely. Current team owners would have to repay every penny of public money spent for stadiums on their behalf. Agribusiness subsidies to not grow food come to an immediate end, unless they were part of the shrinking number of small family farms. The auto industry loans, both the entire US industry in 2009 and of Chrysler in 1979, would also have been barred.

Incompetently run industries should be allowed to fail, or the government buy them out very cheaply at market rates and then either sell them off in pieces, or make them publicly owned and run for public purposes, not for profit. (For example, the US auto industry could have been put to researching and making cheaper autos run solely on alternatives to fossil fuels.) If the failure of an industry or large corporation will cause huge job losses, obviously the best option would be for the government to sell them off in pieces, but make a condition of their sale that as many of the employees as possible keep their jobs or receive pensions or generous severance. Any government assistance should go to helping workers hold onto their jobs, or finding other work or being retrained, not to rewarding wealthy elites for failure.

British history shows us many examples of the failures of “lemon socialism.” There the state took over failing industries, and it usually only benefited incompetent elites by bailing them out no differently than welfare for capitalists. Workers at industries like coal and railroads were not helped much. Huge cutbacks were still made, only with government now being blamed and public ownership discredited.

The failed bailout of the banks in the 2000s (failed in the sense that the public was not helped, only the banks), and the successful bailouts of the savings and loans in the 1980s (successful in the sense of greatly lowering the cost of the bailout), would both have been barred with this proposed article. The two options to save the banks and savings and loans, as in other cases, would be to either seize them and make them publicly owned, or seize them and break them up and sell them off. A third option also exists, one better for the average non-wealthy depositor, turn the banks into credit unions.

What happened instead was that the banks received an obscene secret bailout of over $7 trillion (on top of the public bailout of $700 billion), equal to half the value of the whole US economy. Obama and his administration, made up of executives from the likes of Goldman Sachs, naively imagined banks would lend out their new government money. Instead, much of it was lent back to the federal government. These banks received an insanely low interest rate of 0.01%, then loaned the federal government's own money back to the government at 5% interest, making tens of billions. The economy recovered unevenly, no thanks to either federal or wealthy elite practices.

One more area of assistance needs to be changed, aid to the elderly. Social Security and Medicare must be means tested, much like Medicaid is now. Those with more than double the median income or wealth do not deserve it.

“2. All government loans or tax deferrals or holidays or other benefits to corporations or business must be repaid, with interest at market rates. All facilities built even partly to benefit or profit private businesses or individuals must be paid for by those businesses or individuals equal to the benefits or profits received.”

Facilities includes not just stadiums and sports complexes, but anything that benefits in large part private businesses, from highways to the internet to airports to the maintenance and regulation of public airwaves to state subsidized education to train workers for private industries, e.g. the nuclear power industry receiving most of its trained workforce from the US military. Externalities, as pro capitalist economists are fond of calling them, come to an end. For the layman, an externality is anything whose cost can be passed along to the public or the government, and the business avoids paying for it. The practice comes down to “private profits, public losses.” It is reverse Robin Hood at its worst.

For a safer environment for us all, ending externalities will be a godsend. Mining and some chemical industries have as standard practice to pollute without consequence, declare bankruptcy, and expect the cleanup to be done by the government and paid for by the public. This is a government benefit by any reasonable standard. Now companies will be required to pay for their pollution, or better yet, avoid it in advance as cheaper than paying for cleanup later.

The huge giveaways to corporations come to an end. Amazon has benefited from no sales tax far beyond reason. Ideally it should have ended as soon as the company turned a profit, back in the 1990s, and began paying sales taxes either to the states where the items were bought, or the home of their shipping centers. Trucking and shipping companies should be paying all of their part for the upkeep of the public highways. Broadcast networks should pay for the market value of the public airwaves, on top of the cost of regulation, as cable companies should pay for the entire market value of the use of public bandwidth and cost of regulation.

Benefits also clearly includes government research that private industries profit from. Companies would now have to pay back the government for the cost of research. Intellectual property laws should also be severely curtailed, though not ended entirely. A form of means testing would keep the laws in place for artists such as independent filmmakers, musicians, and authors, or those just starting out, but end such protection for individuals once they attain a certain level of wealth, and for all corporations. Thus while the struggling artist remains protected, Hollywood and the recording industry are not.

Drug companies would also lose their patents once they earn back the cost of research. Industries with de facto or legally enforced monopolies, such as cable networks and the football and baseball leagues, lose such protections. For the consumer, prices will drop sharply. But the biggest benefit to the public will be longer lives, since medical treatment and prescription prices will be greatly reduced. For the entire US public, the next biggest benefit will be a far more thriving and representative democracy since elites will no longer be using government to enrich themselves at everyone else's expense.

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Al Carroll is Assistant Professor of History at Northern Virginia Community College and the author of numerous articles and books, among them Presidents' Body Counts and the forthcoming A Proposed New Constitution.
http://alcarroll.com
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