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Making the economy work - latimes.com

Seeded on Mon Sep 6, 2010 6:44 PM EDT
Read ArticleArticle Source: The L.A. Times
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Seeded by spudpundit
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On the eve of the Depression, Andrew Mellon, President Hoover's Treasury secretary, said that rising unemployment would be good for the nation because it would "purge the rottenness out of the system" and force people "to work harder, live a more moral life." Few would dare utter such words today, but the actions — or inactions — of Washington and Wall Street indicate that respect for work and workers is again approaching that dismal level.

American workers and families face the deepest jobs crisis of their lives. Wages and income remain stuck around 1980s levels. Yet government and private-sector leaders remain unwilling or unable to develop viable long-term strategies to generate anything close to enough good jobs to build and sustain a recovery. To restore work to its rightful place in the economy and society, basic and bold changes are needed in government policy and in the leadership of business and labor. And it must all start with reordering a private-sector incentive system that is badly skewed.

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spudpundit

You think letting the Bush tax cuts expire is a bold/crazy move? Try this one out:

Restore top tax rates to pre-1980 levels. Allowing the expiration of current tax breaks for those who earn the most will help matters, but a more powerful way to assure that executives put revenues into long-term, job-creating investments rather than short-term, bonus-boosting profits is to take tax rates back even further in time. In 1970, the income tax rate was about 70% for compensation above $200,000 a year. Applying that rate to incomes of $1 million or more would change behavior and begin reversing the income disparities that have built up since then.

At first I was a little shocked but the idea is growing on me by the minute. I'm sure there are strong opinions either way. I'd be interested in yours.

  • 2 votes
Reply#1 - Mon Sep 6, 2010 6:47 PM EDT
Dave from Iowa

I graduated in '81. I remember thinking how ridiculous 70% seemed then.

Now 30 years later, I see it is necessary.

The Republican Business Corp likes to say us little people do not live within our means.

Reversely, if they are allowed to hoard cash, the whole economy suffers. It becomes a game.

Why invest in the economy (create jobs) when all you have to do to earn money is shuffle paperwork?

  • 5 votes
#1.1 - Mon Sep 6, 2010 7:13 PM EDT
spudpundit

I graduated in '81. I remember thinking how ridiculous 70% seemed then.

I don't think I was paying that much attention, but can kind of see both sides of it. But given the economic changes since 1980 it certainly seems like it would be wise to try to get that genii back in the bottle.

  • 1 vote
#1.2 - Mon Sep 6, 2010 7:24 PM EDT
Reply
Ozark Mountain Sage

Allowing the expiration of current tax breaks for those who earn the most will help matters, but a more powerful way to assure that executives put revenues into long-term, job-creating investments rather than short-term, bonus-boosting profits is to take tax rates back even further in time. In 1970, the income tax rate was about 70% for compensation above $200,000 a year. Applying that rate to incomes of $1 million or more would change behavior and begin reversing the income disparities that have built up since then.

We must put a stop to the hoarding of money by the super rich. We need to put money back in the hands of the consumers.

  • 2 votes
Reply#2 - Mon Sep 6, 2010 9:26 PM EDT
spudpundit

We need to put money back in the hands of the consumers.

I think that's important. I also appreciate a point made by Thom Hartmann that we need to stop compensating CEOs in stock (which used to be illegal.) It gives them an incentive to push value rather than view the "big picture" as an executive of a company. So their main goal turns into cutting payroll, increasing productivity, and increasing shareholder value. If they take the long view, then fair compensation and quality become more important goals.

  • 2 votes
#2.1 - Mon Sep 6, 2010 9:39 PM EDT
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