Unstoppable
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Conservative Nobel laureate in economics Gary S. Becker, former secretary of the treasury George P. Shultz, and former chief economic adviser to President George W. Bush, N. Gregory Mankiw, are leading proponents of a carbon tax or a gasoline tax to pay for the damage (called “externalities” by economists) of motor vehicle traffic. Canadian reformers have a saying for this: “Tax what we burn, not what we earn.” I would add: “Tax first what we bet, not what we net.” When I discuss these ideas before mixed audiences, I find much convergent interest in those kinds of tax priorities, although some want the carbon tax to be revenue-neutral. But we won’t really know if these out-of-the-box proposals have traction unless some politicians and a few corporate leaders like Warren Buffett lead the way in giving the ideas visibility and credibility and then help the people mobilize.
As to the chronic matter of owed but uncollected taxes, where the miscreants are flouting the law, signing on should be an easy decision for conservatives. Such flouting is unfair to those who pay taxes and have to pay more or receive fewer services. It amounts, says the IRS, to more than $300 billion a year in tax evasion! This is not tax avoidance, the type practiced by corporate interests that legally use tax havens and have many other arcane ways they have pushed through Congress to escape taxes; it is a violation of the law. Amazingly, many conservatives and libertarians I have spoken with over time view this as a sport, as if cheating is making up for the too many taxes people have to pay. Because of this attitude, this issue may have to be shelved for a more auspicious time of convergent resolution.
6. Break up the “too big to fail” banks.
Conservative columnist George Will put the judgment pithily: a financial institution that is “too big to fail is too big to exist.”11 Richard W. Fisher, the president of the Federal Reserve Bank of Dallas, delivered a detailed address in January 2013 on just how to disaggregate these banks in a top-to-bottom restructuring, so that no one giant bank can imperil the financial system and require another gigantic taxpayer bailout. Out of more than 5,600 US commercial banks, Fisher says, “half of the entire banking industry’s assets are in the hands of five institutions”—JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, and US Bancorp. “This incurs the wrath of ordinary citizens,” Fisher adds, “and smaller entities that resent this ‘favorable treatment.’ . . . [Through encouraging these big banks] we plant the seeds of social unrest.” Perversely, the big bank bailouts under Bush and Obama required immediate mergers and acquisitions that more than doubled this concentration of banking assets and deposits.
Too-big-to-fail (TBTF) guarantees profits because it socializes losses. Mr. Will expresses why this subject is an immediate subject for ideological and legislative convergence: “TBTF is a double moral disaster. It creates moral hazard by encouraging risky behavior and it delegitimizes capitalism by validating public cynicism about its risk-reward ratios.”12 Most members of Congress, liberal and conservative, agree that TBTF must end, but as Senator Richard Durbin (D-IL) said, “The banks . . . frankly, own the place.”13
Perhaps what he should have said was that “the banks bought this place.” If the votes are there, with the smaller banks, consumers, and taxpayers at their back, members of Congress can un-buy themselves, at least for the limited purpose of prohibiting TBTF and letting market discipline prevail to that extent.
7. Expand and redirect contributions to charity.
How about a job creation convergence, which could be based on encouraging large charitable contributions from the rich and super-rich to local educational and charitable organizations needing more staff? This involves a national vision made possible by local networking and outreach to persuade donors that if they like what private charities are doing for children, needy people, the arts, sports, the environment, literacy, historic preservation, and more, then contributing enough to expand the staff budget means the charities can hire more people, which spells the magic word these days—JOBS!
The arithmetic is impressive. There are trillions of dollars held by upper-income Americans in what might be called “inert” investments, many in money market funds, savings banks, and treasuries, bringing in a fraction of 1 percent in interest. Almost all the people holding these monies are nowhere near their annual charitable deduction limit of 50 percent of adjusted gross income. Lamentably, many also give very little to charitable associations. Most could save more in taxes from their charitable contributions than by keeping the money in near zero-interest savings.
For each billion dollars in aggregate extra charitable donations per year to existing or new certified charitable associations to expand staff, 30,000 people could be hired at a salary around $30,000 a year. Ten billion additional dollars would produce 300,000 jobs all across the country, enlarging the good works of these organizations, which, in turn, produce their own human and economic savings. Think of the collateral benefits of safety programs; food banks; elder care; historic renovations sprucing up communities; sports programs for youngsters; more human assistance between the generations; support groups for the disabled and infirm; arts, crafts, and music activities; and quicker, adequate help for families or neighborhoods beset by the aftermaths of natural calamities, street crimes, domestic violence, and accidents.
As the Chronicle of Philanthropy reports, the unmet needs and opportunities are endless, and the willing talent pool only grows in a recession with high unemployment.14
One sterling way to launch the initiative, which, of course, is wonderfully nonpartisan, is for the president to speak before a large convocation of charitable groups (many of whom have had to lay off staff due to reduced budgets) and make the point that larger capabilities with expanded staffs, funded by whatever the target dollar figure is, will benefit millions of Americans and create jobs. Often presidents from either party visit factories as a way to highlight job creation, lugging their bully pulpits with them. And these presidents always give lip service to the good works of charities. So this should not be a difficult transition, matching these two themes, once the imaginative dynamic is introduced to the White House by a visiting Grand Convergence delegation.
The next set of six proposals deals with increasing democracy.
8. Loosen the current legal restrictions on standing to sue.
People who are not lawyers may not realize that an individual’s right to bring a lawsuit against certain parties for specific outrages is severely restricted in the US courts. A person can only bring suit if the court believes the individual has the proper “standing to sue,” traditionally defined as possessing “a distinct and palpable, redressable injury.” The standing-to-sue doctrine was originally conceived centuries ago in England to discourage litigators with no discrete, tangible stake in the case from filing suit, then losing interest and dropping out.
This issue has never been raised in our major party political campaigns. But if we view the courts as the last bastion of freedom from arbitrary, abusive power, and for the fundamental liberties of the people, then the door-closer that judges have when they say a person who wants to bring suit has no standing to sue comprises a critical abdication by our third branch of government. Access to the courts and the right of trial by jury were major bones of contention for the patriots who overthrew King George III. You may remember that second on their celebrated list of grievances, drawn up in 1774, coming right after “no taxation without representation,” was the charge that the king was excluding them from being judged by a jury of their peers—a definitive right they were later to put in the Seventh Amendment to our Constitution.
Today, libertarians often speak of their opposition to regulation by saying that access to the courts is the way to deal with harms inflicted by others. Jeno F. Paulucci, the late, immensely successful businessman who called himself an independent-minded conservative Republican, relished using the courts to obtain justice, including for those poor people whom he freed from their wrongful imprisonment. When I notified him about my quest to start the first law m
useum in America, he enthusiastically sent me a quotation from lawyer and president John Adams, clearly a conservative hero, in which the statesman eloquently approved of filing lawsuits to “procure redress to wrongs, the advancement of right, to assert and maintain liberty and virtue, [and] to discourage and abolish tyranny and vice.”15
Now consider what the continual opposition by the government and the courts to the standing-to-sue right as a way to block access to courts for Americans, rich and poor, who cannot, in John Adam’s words, “discountenance the haughty and lawless.”16 Time and again, ordinary taxpayers, no matter how many come together as plaintiffs, cannot get through the courtroom door to challenge the largest, most documented wasteful or violative programs involving, say, military or software contractors or mining on public lands. Nor can they legally protest against financial frauds, state subsidies to lure companies from other states, or ongoing taxpayer theft in the form of government contract corruption tied to corporate criminals, to select the obvious examples. The federal courts regularly say that the citizen plaintiffs have no standing to sue. Moreover, take this example: Arizona taxpayers wanted to challenge the state’s tuition tax credit, which was giving money to private, religious schools, on grounds of separation of church and state (the Establishment Clause of the Constitution). The Supreme Court of the United States ruled that they lacked standing to sue.17
What would happen if citizens, including members of Congress, sued to stop a war of choice that Congress had neither declared nor authorized nor appropriated monies? The courts would dismiss the case either for lack of standing or on the grounds that it is a “political question” to be resolved by the other two branches of government. The judges are not bothered by the fact that the two branches do not want to resolve it precisely for political reasons. Or how about a mandamus action (in which the court stops an institution from doing or not doing specific actions) in the egregious cases in which the executive department or agency is flouting a law by neither enforcing it nor meeting reporting deadlines to Congress. Such cases are brought frequently and are as frequently met by judges who stop them by invoking no standing to sue. Who might indeed have standing to sue in such cases? One person only—the attorney general of the United States—an unlikely plaintiff, especially as he owes his position to the president and is supposed to defend agencies, not prosecute them.
If conservatives and liberals are on the record historically and repeatedly as demanding governmental accountability, then having Congress provide flexible criteria to expand the standing-to-sue doctrine should be a prime candidate for convergence. Advocates can point to many procedurally dismissed cases, which have been brought by party faithfuls from both sides, as one warrant to justify their joining together.
9. Expand direct democracy.
When a former used car salesman, Ed Koupal, and his wife, Joyce, began their rise from utter powerlessness to being key champions of citizens’ power through the establishment of a statewide volunteer network in California, which would work to qualify ballot initiatives by getting large numbers of voters’ signatures on petitions, they were not relying on one specific group of ideologues to help them. They tapped into the widest possible group of citizens of different persuasions. It was from this diverse pool of voters that they drew their signatures, putting up tables in various high-density locations, such as shopping centers or convention and civic centers. Before cancer struck and ended their populist ascent, leading politicians, including governors, would call to ask their advice or try to curry favor from their volunteer network, a rising civic juggernaut of direct democracy, with two major statewide initiative wins to its credit.
About twenty-four states—mostly west of the Mississippi—have this citizen right of direct democracy through ballot initiatives. Many more municipalities, especially in New England, have this form of people power, dating back to the eighteenth century. But most states and localities do not allow such practices or, if they do, they are very hard for citizens to use without going through onerous hoops, including approval by state legislatures.
There are liberal and conservative groups that do not like this type of people’s initiative or referendum (in which decision on an issue is put to the people) or recall (in which an elected lawmaker can be put out of office by a citizen vote). Liberals who are against such practices include most labor unions, which fear corporate funded restrictions. Conservatives who don’t back them include right-wingers who dread “the rabble” and cite James Madison’s preference for only “representative government.”
But the polls suggest direct democracy is a necessity. So many voters sit out elections of candidates, thinking they have little say in who is nominated. If we afforded them the opportunity to be part of the process via the procedures of direct democracy, they would no longer have any excuse to opt out. Another benefit of direct democracy is the way it can be a watchdog over the legislatures, ready to move the body politic forward when, as is often the case, the lawmakers freeze because of interest group lobbying and money.
Let me give you an example of the effectiveness of direct democracy. In 1988, together with Harvey Rosenfield and others, I led a campaign in California to enact, via a ballot initiative, a law that required the auto insurance companies to open their books. Whenever they want a rate increase, they now have to prove their case by showing their need before approval or rejection by the state insurance commissioner. The insurers spent a record $80 million against our $2 million, yet we defeated them and enacted Proposition 103. More than $102 billion dollars have been saved by California consumers so far. The companies that threatened to leave the state are now making more money than ever, but under a more rigorous underwriting system.18
There is a strong convergence potential that could be marshaled to spread the initiative, referendum, and recall to every state and municipality. Moreover, there is a constitutional case to be made, as some law professors and former senator Mike Gravel argue, for our country to have a binding national referendum right for the consideration of significant issues, under careful procedures and conditions. This could be easily justified by the old Roman adage “Whatever touches all should be decided by all.”
10. Organize encouragement and patronage of community-rooted businesses.
Such businesses would include credit unions, community banks, farmer-to-consumer markets, local renewable energy producers, community health clinics, and assorted consumer-owned cooperatives. This couldn’t be more convergent—pleasing to both liberals and conservatives. It is private enterprise, born of and staying in the community, mostly small business, whose existence enhances community self-reliance, returning our society to traditional ways and avoiding dependency on absentee control by domestic or foreign multinational corporations, such as big banks, big energy companies, big hospitals, and big food-processing conglomerates. Yes! magazine chronicles specific community-rooted enterprises often enabled by modern technologies and many other expanding community economies in almost every issue. Yes! also delves into the fusion of consumer and producer, such as we see in food gardens, arts and crafts, time/dollar collaborations, neighborhood day care centers, community bookstores, and other facilities that are knitters of community life in America.
What’s not to like? Community self-reliance strengthens families, reduces long commutes that separate families from children, insulates local assets and savings from the speculative tumult, and avoids the excessive interdependence that can generate financial contagion, which is often a negative result of corporate globalization (as seen, for example, in small Greece shaking the stock markets of Europe and the United States). It further fortifies the connectedness of kin, neighborhood, and community that make for good, nurturing life. Where’s the downside? Convergence and our consumer dollars, here we come!
11. Clear away the obstacles to a competitive electoral process.
Let’s begin by looking at how a two-party monopoly controls the US political system and what it costs. Start with the
reality that no Western democracy presents the kinds of barriers to voting generally and to third parties or independent candidates running for elective office as do the various states of the United States. Not surprisingly, no other Western country is so completely dominated by two major parties, which predictably, given where the money and power comes from for their campaigns, are both converging on adherence to corporatism.
Candidate rights are inextricably related to voting rights. Very limited candidate choices under a two-party junta that gerrymanders electoral districts, so that they will be subject to domination by one or the other major party, depreciates voter rights. A wider range of candidates would give voters more voices and choices.
The existing system is perverse. Most voters are “represented” by one party’s dominated district’s incumbent. Currently 80 percent of the members of the House of Representatives are such incumbents.19 Both major parties erect harsh and costly barriers to hinder small challengers from getting on the ballot. Petitioners, garnering names to help get an independent or third party candidate on the ballot, are harassed on the streets, and fake names are signed for sabotage. Baseless lawsuits are filed by the major parties’ large law firms to drain away the resources and time of small candidates, and when the cases come to court, the independent often finds that a partisan judge, known for political loyalty, is on the bench. I experienced all this and more in my presidential campaigns. My campaign manager, Theresa Amato, meticulously documented many of the outrages in her book Grand Illusion: The Myth of Voter Choice in a Two-Party Tyranny.20
These myriad barriers may be condemned as a violation of laws protecting civil rights and civil liberties, and they certainly derail proposed reforms and policy redirections that an independent candidate may offer to the voters. That critique is probably the liberal/progressive take or is that of liberals who are not silenced by going along with the least-worst mindset.