Building an Economy that Works for Everyone

One reason to be thankful: we’ve had our wake-up call

Reprinted from the Everett Herald:

Can we be thankful? We have friends and family and food, all in large doses on Thursday. We also have a houseful of worries, which perhaps we can put off for a couple of days: mortgage payments, WaMu layoffs, shrinking public support for public education, health care costs, an economy that is sliding into depression.

But perhaps this is our wake-up call that business as usual doesn’t work anymore. Neither does bumping along from the Internet bubble to the housing bubble, with regulations getting tossed out the window every year. Chickens do come home to roost, and after the past 40 years of winner-take-all economics, an entire flock has taken up residence in each of our homes.

Even before the collapse of the financial system, something was wrong. During the economic booms of the past two and a half decades middle class families were left out. While productivity grew in the double digits, typical family income was stagnant, workers were paying more and more for health care, and pension benefits got “downsized.” At the same time, college tuition soared, increasing three-fold at the University of Washington.

So why be thankful? Because this long period of neglect, of pretending problems don’t exist, of wishful thinking and wrongheaded policies, must come to an end. We don’t have a choice now. Our current world is falling apart and taking so many of us down that we can’t ignore our shared plight.

And we can be thankful that we have the resources and ability in our state to make things right, to make sure everyone has affordable health care, to make sure our kids get a high quality education and that they can graduate from community colleges and universities without tens of thousands of dollars of debt.

Why should we be so sure? Because, if you think back to 30 years ago you will recall a time when health care was affordable, pensions were robust and guaranteed, and tuition was within the budgets of middle class families. And that was before the tremendous increase in productivity and profits of the past three decades. We had a secure, not fancy, middle class quality of life three decades ago. We have much more income and assets in our state now than then. Microsoft didn’t even exist 30 years ago.

So it really is a distribution problem, not an income problem. After all, King County by itself is the fourth wealthiest county per capita in the country. There is no good reason for middle class families to shoulder more and more of the burden of health care, retirement and higher education, while K-12 funding for their kids diminishes.

Where has the money gone? To the top 1 percent of families, the truly elite, and the global corporations. And when our state turns a blind eye to the income and wealth of the elite, we deprive our citizens of the resources we need for economic security and educational opportunity, and plain old good health. Plus we undermine democracy by elevating privilege and escalating fear.

Rather than wring our hands and wonder what Wall Street will have in store for us over the next weeks and months, let’s build our own financial and economic house. We can, if we have the leadership to do so. We can cut state property taxes in half, while instituting a tax of 5 percent on income above $200,000. This would result in a tax cut for 96 percent of the families in our state, while adding $1 billion a year for K-12 education. We can exempt all small businesses from the B&O tax, while closing one corporate tax loophole that perversely discourages main street business, and realize a net of $100 million a year to invest in health coverage. Each day $30 million is sucked out the Washington economy into the pockets of Exxon, Shell and BP. We could institute our own windfall profits tax on these oil giants and repatriate into our state $500 million a year, to be dedicated to jobs in the green economy.

We can do this ourselves, here in Washington. This is not a “make-do” time. That won’t do. This crisis demands can-do. That’s the challenge to meet. It is our opportunity for the 21st Century. And that’s a big reason to be thankful in the waning days of 2008.

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