Tuesday, September 29, 2015

Tues. Sept. 29



AROUND NEW HAMPSHIRE
1.  Upcoming Education Bills in the Legislature
by Bill Duncan,   anhpe.org,   September 29, 2015
2.  A Comprehensive Approach to NH's Heroin Crisis
Charting a different course
by Daniel Weeks,   nashuatelegraph.com,   September 27, 2015


New Hampshire's drug epidemic hits close to home for Cynthia, a 57-year-old New Hampshire native living in a dilapidated apartment building in downtown Nashua.


When I ask her to describe the place she calls home, Cynthia turns immediately to drugs. "There's a lot of poverty and addiction in the building," she says, adding that it recently got so bad that she saw a steady stream of body bags coming out of the apartments. "The heroin was out of control ... I had to leave the scene." Six of her eight siblings have already passed away due to poverty-related causes including addiction, she says.


Although the ever-cheerful Cynthia counts herself fortunate to be free of any illicit addictions, she still has a habit of her own. "Been smoking cigarettes since age nine," she says. "Gotta get down to zero." According to Cynthia, the cigarettes calm her nerves in a chaotic and crime-ridden environment. "Can't sleep more than two-to-three hours a night."


Being unemployed doesn't help. Cynthia says that a brain aneurysm and double heart-attack forced her to give up her longtime warehouse job a decade ago and accept $954 per month in Social Security, the majority of which goes to pay rent and utilities on her single room unit with shared bath. "Loved working the warehouse," she says, and proudly recounts the time she bought her son a snowboard using money she saved. "Really wish I could do that again."


Cynthia and her neighbors are not alone. Some 321 Granite Staters died of drug overdoses last year including 124 in Nashua. New Hampshire ranks dead last in the percentage of teens who misuse drugs or alcohol and newly-approved state funding for prevention and rehabilitation is still considered "a far cry from what the true need is" by service providers. Meanwhile poverty - a known risk-factor in substance abuse - rose noticeably in 2014, especially among children and youth.


What does Cynthia's situation, and that of her high-risk neighbors, tell us about the drug epidemic sweeping our state?


Contrary to conventional wisdom - which teaches that drugs cause addiction and the failure to resist is largely the fault of individuals alone - a growing body of research suggests environmental factors are key.


In a now-famous experiment, Canadian psychologist Bruce Alexander compared the susceptibility of solitary versus social rats to opiate addiction. When individual rats were placed in a small cage and fed morphine-infused water, they became addicted nine times out of ten and died. When they were placed in a large and enriching environment with other rats, however, they gave the proffered drug a miss and did what normal rats do: eat, play, mate and raise their young.


The benefits of an enriching environment do not belong to rats alone. A study of drug use by American soldiers serving in Vietnam, for example, found that of the 20 percent of servicemen who became addicted to heroin while on tour, 95 percent left their habit behind once they returned home and only a small percentage required rehabilitation.


Likewise, when Portugal faced sky-high rates of heroin addiction a decade and a half ago, the country made the radical decision to replace its costly war on drugs with a policy of wholesale decriminalization and investments in community-based rehabilitation. Rather than prosecuting offenders for nonviolent drug-related crimes, people facing addiction were provided with the means to (re-)establish a healthy life: free housing, subsidized jobs and a bevy of social supports.


A decade and a half later, the experiment which many feared would create chaos in Portugal has been deemed a rousing success: addiction and drug use are down, especially among youth; HIV infections among drug users are down even more; and drug-induced deaths have nearly ceased at three per 1,000,000 people - one-fifth the European average and one-hundredth the New Hampshire rate.


The results are confounding to conservatives and liberals alike. Neither the Right-wing account of moral failing on the part of individual users nor the Left-wing view that addiction is the result of a chemically-hijacked brain can explain the dramatic effects of the environment in which we live.


For Cynthia, however, these findings come as no surprise. Sure, people can and must try their best to sort themselves out, as she has tried to do - especially when rehab services are few and far between, but to expect all of her neighbors to overcome their degrading environment and the intergenerational poverty into which many of them were born - without the help of caring parents, affordable college, a living wage, and the like - is hopelessly naive.


New Hampshire's leaders, and even the presidential candidates, express righteous indignation at the deadly state of affairs. But statements of concern will not suffice to prevent unnecessary deaths. The real test is this: will we as a state summon the political will - and the revenue if necessary - to provide humane rehabilitation for people in the throes of addiction? Better still, will we work to ensure that every New Hampshire child born into poverty has the resources she needs to succeed and the human connections to forge a fulfilling life?





3.   State Senators and Presidential Endorsements
NH senate minority leader latest establishment Democrat to endorse Hillary
by Dan Tuohy,   unionleader.com,   September 28, 2015
State Senate Minority Leader Jeff Woodburn is endorsing Hillary Clinton for President and touting her plans to help economically distressed areas, including rural communities in the North Country.

Woodburn, D-Dalton, will kick off canvassing for the Democratic presidential hopeful Oct. 10 in Berlin.

Part of Clinton’s plan to help rural America involves expanding technical assistance for farmers and ranchers, simplifying regulations for community banks, and incentives for community and development investment.

Woodburn, in an interview Monday, noted Clinton’s push to expand and make permanent the “New Markets Tax Credit” program, which allows individual and corporate taxpayers to get a credit against federal income taxes for investments. Between 2003 and 2012, an estimated $190 million in “New Markets” investments were made in New Hampshire, according to the New Markets Tax Credit Coalition. The Burgess BioPower plant in Berlin was one such project, receiving $69.3 million through the program, the coalition reports.

The tax credits have been used for redevelopment projects in Claremont, construction of a community health center in Plymouth, and land preservation in Errol, including recreational use, according to three examples provided by the Clinton campaign.

“Rural America and rural New Hampshire needs a proven fighter and somebody who has the tenacity to take a hit and get back up and fight,” Woodburn said about his decision to support Clinton. “I think a lot of people feel rural America is being left out.”

It is not a new concern for Granite Staters who live north of the notches, Woodburn said. His district, the northern most in the state, has 18 people per square mile. 

Jobs, health care access, and transportation are perennial issues raised by constituents, he said.

Woodburn is the eighth Democrat in the New Hampshire Senate to back Clinton, leaving sens. Andrew Hosmer of Laconia and Martha Fuller Clark of Portsmouth as the two yet to endorse a candidate.
4.  Ayotte: Trying to Whitewash Her History
New Hampshire Can’t Trust Kelly Ayotte’s Rhetoric
by Shripal Shah, Senate Majority PAC,   nh1.com,   September 28, 2015
Now that she’s running for re-election, Kelly Ayotte is trying to rewrite her record and hoping people across New Hampshire don’t notice. But when it comes to government shutdowns and women’s healthcare, Kelly Ayotte’s record is very clear, complete with multiple votes to shutdown the government and defund Planned Parenthood. Her new election cycle rhetoric is directly at odds with reality, and Ayotte’s attempt to deceive voters proves that she can’t be trusted.
THE FACTS: In Washington, Ayotte has repeatedly voted to defund Planned Parenthood and twice voted against legislation to keep the government up and running. If Kelly Ayotte had her way, the consequences for women across the country and our economy as a whole would’ve been disastrous.
WOMEN’S HEALTHCARE: Less than three months after taking office, Ayotte voted for a Republican plan that blocked federal funding for Planned Parenthood. The National Women’s Law Center noted at the time that the legislation Ayotte supported would have eliminated funding for “ALL federal funding from Planned Parenthood--part of a targeted campaign to shut down health centers that serve three million women each year and that jeopardizes women’s access to basic, preventive health care.”
One month later Ayotte again voted to defund Planned Parenthood in a resolution tied to a government funding measure. That resolution specifically noted, in reference to the legislation making its way through Congress, that none of the resources in the government funding bill “may be made available for any purpose to Planned Parenthood Federation of America, Inc. or any affiliate of Planned Parenthood Federation of America, Inc.” Then, just last month, Ayotte for a third time voted for legislation that would defund Planned Parenthood, this time when she supported a stand-alone bill introduced by Tea Party Senator Joni Ernst (R-IA) to “prohibit Federal funding of Planned Parenthood Federation of America.”
GOVERNMENT SHUTDOWNS: When it comes to shutting down the government, Ayotte’s hypocrisy is similarly inexcusable. In September of 2012, Ayotte voted against a bill to keep the government funded and open through March of 2013. The bill ultimately passed with bipartisan support, but Ayotte sided with a minority of Senators in opposing the effort.
When the funding in that legislation was set to expire months later, Ayotte again voted no on legislation to fund the government – this time siding with an even smaller minority of senators blocking the effort to keep the federal government up and running.
THE TAKEAWAY: Together these facts paint a clear picture of a politician trying to paper over her own record with the hopes that people don’t notice. But the facts remain clear: Ayotte has had multiple opportunities to do the right thing on behalf women’s healthcare and the economy and she repeatedly sided with a small minority in opposition. Each time, her positions could have resulted in disastrous consequences.
Ayotte’s rhetoric and her attempts to mislead voters are very obvious and transparent. Polling already shows that her record is at odds with the overwhelming majority of New Hampshire voters, especially when it comes to Planned Parenthood funding, so her rhetoric on women’s healthcare and government funding should be seen for what it is: political maneuvering solely designed to mislead voters. As a result, New Hampshire voters are learning they can’t trust what she says.
AND NATIONALLY
5.  Trump Tax Plan: Mostly Benefitting the Rich
On taxes? Not so populist
Analysis: Trump's plan would benefit the rich, and cost $2-3 trillion
by Danny Vinik,   politico.com,   September 29, 2015
On Monday, Donald Trump released his tax plan—for the most part, a classic supply-side approach that would simplify the number of tax brackets and cut the corporate rate to 15 percent. Like other Republican tax plans, Trump vows to bring in additional revenue by putting a cap on the amount wealthy people can deduct on their tax returns.
But Trump makes one promise that sets his plan apart: It will be deficit-neutral. In other words, it would pay for itself, and all those tax cuts wouldn’t make the federal deficit worse.
I did some back-of-the-envelope math on Trump’s plan to see if that’s true. The short answer: There’s no way the plan is deficit neutral.
Even with the most optimistic assumptions, Trump’s plan will still significantly reduce the total amount of money the government takes in. That might appeal to a lot of conservatives, but it will also definitely increase the federal deficit.
Here’s how the plan shakes out—with the caveat that this is a very rough estimate. (Keep an eye on the Tax Policy Center and Tax Foundation, whose wonks will no doubt try to provide a more authoritative score.)
The first big bite comes from his change in the tax rates. Trump’s plan would reduce the current seven tax brackets to four, with a 0 percent rate applying to all those making less than $25,000 ($50,000 for married couples). Those making between $25,000 and $50,000 ($50,000 and $100,000 for married couples) would pay at a 10 percent rate, and those making between $50,000 and $150,000 would pay at a 20 percent rate. Americans making more than $150,000 would pay at a 25 percent rate.
So most Americans will be paying less tax, including 73 million Americans who, Trump says, will pay nothing. Determining the exact total revenue hit from this plan is challenging, but there’s no question the loss would be large. Consider: Sens. Mike Lee and Marco Rubio’s tax plan would have just two brackets, at 15 percent for people with incomes below $75,000 and 35 percent for those above that threshold—and those changes would cost more than $300 billion over 10 years. Trump’s plan doesn’t get close to their top rate. And he’d have fewer people paying the top rate than Rubio-Lee would. So it’s fair to say the revenue loss from his new filing brackets would significantly exceed $300 billion.
Trump would also eliminate the Alternative Minimum Tax (cost: $400 billion), the estate tax (cost: $269 billion), and Obamacare’s 3.8 percent surcharge tax on capital gains and dividends (cost: $123 billion).
Finally, on corporate taxes, he’d lower the rate from 35 percent to 15 percent. This alone would cost $2.5 trillion.
So how does he close that gap? Trump has four ideas. First, he would curtail tax deductions for the “very rich.” This includes eliminating the carried interest loophole that benefits hedge-fund managers, and limiting itemized deductions (though the mortgage interest deduction and the deduction for charitable contributions are exempted). Without further details, it’s hard to know how much money this would raise. But the carried-interest loophole, though it’s received outsized political attention, is fiscally minor. Closing it would bring in only about$15 billion over 10 years. And the change to itemized deductions is effectively just capping the deduction for state and local taxes. If Trump eliminated that tax break for the top quintile—a generous assumption—it would raise around $650 billionover 10 years. He’d also give the rich less ability to claim the personal exemption and close other unnamed loopholes.
Second, Trump would tax the more than $2 trillion of corporate income stashed abroad at a 10 percent mandatory rate, raising more than $200 billion. He’d also end the deferral of taxes on corporate income earned abroad, which costs the government over $800 billion over 10 years. Since Trump is lowering the corporate rate to 15 percent, the revenue effects from eliminating deferral would be far less than $800 billion.
(There are other difficult-to-estimate policies I’ve ignored here, such as allowing small businesses to pay taxes at the 15 percent rate, which would cost money, and phasing in a cap on the deductibility of business interest expense and closing unnamed corporate tax loopholes, both of which would bring in money. Without more information, it’s impossible to know how much.)
Add it all up and you have—approximately—$4-5 trillion in tax cuts with less than $2 trillion in new revenue. The total cost? $2-3 trillion. That’s an enormous gap.
Even if you use “dynamic scoring”—taking into account that lower taxes are likely to boost economic growth and thus bring in additional revenue—it’s impossible to see how this plan would break even.
Who would be the winners of the Trump tax plan? The rich. The top tax rate falling from 39.6 percent to 25 percent will give them a huge windfall, as will eliminating the AMT, the estate tax for their heirs, and the Obamacare surtax on capital gains and dividends. The huge cut in the corporate income tax will also benefit the well-off. Even worse: Trump doesn’t say what we will do with the Earned Income Tax Credit, which is a financial lifeline for low-income Americans. Eliminating it would cause significant  hardship for the poor—while also going against the current political agreement around the effectiveness of the EITC. (The campaign didn’t return an email asking for more information.)
Trump has made a lot of hay as a “populist” candidate, exploiting rank-and-file Republicans’ mistrust for the elites who sell out to Wall Street and Big Business. In this case, the plan is a handout to those elites, giving them a big tax cut while cutting government revenues by trillions of dollars.  Whether it will make them any happier with Trump the candidate, of course, is another story.
by CAP Action War Room,   thinkprogress.org,   September 28, 2015

Donald Trump Releases His Tax Plan, A ‘Uge Tax Cut For The Wealthiest Few

Republican Presidential Candidate Donald Trump released his tax plan today and—shocking no one familiar with American politics—analysis by the Center For American Progress Action Fund shows the plan would be another ‘uge windfall for the wealthiest few. In fact, Trump’s family stands to gain more from his plan than almost anyone, with the elimination of the estate tax giving the Trump family a tax cut of up to $3.48 billion, and the dramatic cut to the corporate tax rate also benefitting the family.
The “losers” under Trump’s plan will be anyone that relies on Medicare, Medicaid, or investment in things like infrastructure, education or job training—in other words middle class families. Like Jeb! Bush before him, Trump makes the tired argument that his tax plan is focused on the middle class, when in fact it is a big, beautiful tax cut for the wealthy. Here are three ways the plan favors the wealthy few at the expense of the middle class:
A simply tremendous gift to his kids. Among the biggest beneficiaries of Trump’s pitch to eliminate the estate tax? The Trumps themselves. The estate tax only applies to estates worth $5.43 million, and only two out of every one thousand estates pay any estate tax at all.
  • Eliminating the current 40% estate tax could mean that Trump’s kids could stand to save as much as $3.48 billion in estate taxes—given Trump’s claimed net worth of $8.7 billion.
  • Because it is easy for wealthy people to use loopholes to lower their estate tax bills, using a more cautious estimate that assumes Trump pays near the average estate tax rate of 18.8 percent, Trump’s plan would result in giving his kids $1.64 billion.
The best, most luxurious tax plan for those living in luxury. Trump’s tax plan would slash corporate, individual income, and capital gains and dividends tax rates—three moves that give bigger boosts to the nation’s richest.
  • The top 20 percent of taxpayers pay 78.6 percent of the country’s corporate taxes—meaning a tax cut on corporate income would be a huge boost for them, but do little to nothing for the other 80 percent.
  • Trump would cut the top individual tax rate from 39.6 percent to 25 percent—even lower than Jeb Bush’s proposed top individual rate of 28 percent. An analysis by the Center for Tax Justice predicts that the top one percent of Americans would see an average break of $184,000 a year under Trump’s plan, compared to an average annual cut of only $250 for the bottom 20 percent.
  • Trump’s plan to cut tax rates on income from capital gains and dividends is yet another gift to the nation’s wealthiest people. The 400 richest taxpayers alonereceived 12 percent of all capital gains income and 8 percent of all dividend income. As shown in a recent Center for American Progress report, a lower tax rate on dividends and capital gains is one of the ways the U.S. tax code worsens inequality by helping those who are wealthy enough to own capital accumulate even more wealth.
  • Even the hedge fund managers who Trump says are “getting away with murder” might get a tax cut on their carried interest. Trump claims to close this loophole, but if investment funds pay taxes as businesses their tax rate on carried interests would fall from 23.8% to 15%. And even if Trump requires hedge funds to pay taxes using his individual rates, taxes on carried interest would only go up from 23.8% to 25%. Not to mention the fact that Trump would still give hedge fund managers huge tax cuts on the rest of their income.
A ‘uge increase to the deficit. Trump claims that his plan “doesn’t add to our debt and deficit,” but any reasoned analysis of the plan suggests that it would be extremely costly. The plan jeopardizes programs that working and middle class families depend on for economic security, like Social Security, Medicare, and Medicaid.
  • The Center for Tax Justice estimates that Trump’s plan would cost $10 trillion over the next 10 years.
  • Though the plans vary in some ways, Bush’s and Trump’s plans pledge to make some very similar tax cuts, which would inevitably force budget cuts from crucial programs. And even the team of advisors Bush recruited to support his plan say that it would cost $3.4 trillion over the next ten years.
BOTTOM LINE: Despite Trump’s populist rhetoric, his tax plan would only be the best, most luxurious tax plan for those already living in luxury. It gives his own family a potential $3.48 billion tax cut, jeopardizing programs that middle class families depend on for economic security along the way.
6.  The Extremist Party
The Blackmail Caucus, a.k.a. the Republican Party
by Paul Krugman,   nytimes.com,   September 28, 2015


John Boehner was a terrible, very bad, no good speaker of the House. Under his leadership, Republicans pursued an unprecedented strategy of scorched-earth obstructionism, which did immense damage to the economy and undermined America’s credibility around the world.


Still, things could have been worse. And under his successor they almost surely will be worse. Bad as Mr. Boehner was, he was just a symptom of the underlying malady, the madness that has consumed his party.


For me, Mr. Boehner’s defining moment remains what he said and did as House minority leader in early 2009, when a newly inaugurated President Obama was trying to cope with the disastrous recession that began under his predecessor.


There was and is a strong consensus among economists that a temporary period of deficit spending can help mitigate an economic slump. In 2008 astimulus plan passed Congress with bipartisan support, and the case for a further stimulus in 2009 was overwhelming. But with a Democrat in the White House, Mr. Boehner demanded that policy go in the opposite direction, declaring that “American families are tightening their belts. But they don’t see government tightening its belt.” And he called for government to “go on a diet.”


This was know-nothing economics, and incredibly irresponsible at a time of crisis; not long ago it would have been hard to imagine a major political figure making such a statement. Did Mr. Boehner actually believe what he was saying? Was he just against anything Mr. Obama was for? Or was he engaged in deliberate sabotage, trying to block measures that would help the economy because a bad economy would be good for Republican electoral prospects?


We’ll probably never know for sure, but those remarks set the tone for everything that followed. The Boehner era has been one in which Republicans have accepted no responsibility for helping to govern the country, in which they have opposed anything and everything the president proposes.


What’s more, it has been an era of budget blackmail, in which threats that Republicans will shut down the government or push it into default unless they get their way have become standard operating procedure.


All in all, Republicans during the Boehner era fully justified the characterization offered by the political analysts Thomas Mann and Norman Ornstein, in their book “It’s Even Worse Than You Think.” Yes, the G.O.P. has become an “insurgent outlier” that is “ideologically extreme” and “unmoved by conventional understanding of facts, evidence and science.” And Mr. Boehner did nothing to fight these tendencies. On the contrary, he catered to and fed the extremism.


So why is he out? Basically because the obstructionism failed.


Republicans did manage to put a severe crimp on federal spending, which has grown much more slowly under Mr. Obama than it did under George W. Bush, or for that matter Ronald Reagan. The weakness of spending has, in turn, been a major headwind delaying recovery, probably the single biggest reason it has taken so long to bounce back from the 2007-2009 recession.


But the economy nonetheless did well enough for Mr. Obama to win re-election with a solid majority in 2012, and his victory ensured that his signature policy initiative, health-care reform — enacted before Republicans took control of the House — went into effect on schedule, despite the dozens of votes Mr. Boehner held calling for its repeal. Furthermore, Obamacare is working: the number of uninsured Americans has dropped sharply even as health-care costs seem to have come under control.


In other words, despite all Mr. Boehner’s efforts to bring him down, Mr. Obama is looking more and more like a highly successful president. For the base, which has never considered Mr. Obama legitimate — polling suggests that many Republicans believe that he wasn’t even born here — this is a nightmare. And all too many ambitious Republican politicians are willing to tell the base that it’s Mr. Boehner’s fault, that he just didn’t try blackmail hard enough.


This is nonsense, of course. In fact, the controversy over Planned Parenthood that probably triggered the Boehner exit — shut down the government in response to obviously doctored videos? — might have been custom-designed to illustrate just how crazy the G.O.P.’s extremists have become, how unrealistic they are about what confrontational politics can accomplish.


But Republican leaders who have encouraged the base to believe all kinds of untrue things are in no position to start preaching political rationality.


Mr. Boehner is quitting because he found himself caught between the limits of the politically possible and a base that lives in its own reality. But don’t cry for (or with) Mr. Boehner; cry for America, which must find a way to live with a G.O.P. gone mad.

7.  Smaller Government is Not the Answer
Democratic polling shows voters want to fix government more than shrink it.
by James Hohmann,  The Daily 202,   washingtonpost.com,   September 24, 2015
Americans believe Washington is broken. Everyone knows that. It’s why outsider candidates are faring so well in the presidential race. But a new poll from a leading Democratic firm suggests that most voters do not necessarily think the solution is smaller government.
Global Strategy Group ran a national survey over the summer to figure out the best ways Democrats can rebut perennial GOP calls for cutting the size of the federal bureaucracy. The results, which could shape messaging if a government shutdown happens next week, were obtained exclusively by The Daily 202.
While only one-quarter of registered voters said they trust government to do what’s right always or most of the time, 56 percent of those polled said that they are “very” or “somewhat” confident that government remains capable of doing positive things.
What do folks see as the single biggest problem with the federal government? Asked to pick one item from this list of nine answers, this is how it broke down:
  • Corrupt (23 percent)
  • Inefficient (18%)
  • Out of touch (17%)
  • Wasteful (14%)
  • Too big (9%)
  • Doesn’t reflect my views (7%)
  • Not transparent (6%)
  • Unresponsive (4%)
  • Not inclusive (2%)
The results are interesting because they suggest voters care more about the power of special interests and mismanagement than the size or scope of government. Note that “too big” is fifth on that list. 
Republicans have a 16-point advantage on which party voters think can make government “less wasteful” and an 8-point advantage on making government “more efficient.” Democrats have a 12-point lead on making government more “in touch” and a 4-point edge on making it “less corrupt.” They have an even bigger lead on the questions of which party is more inclusive, in-touch and transparent. But those concepts do not resonate as much with voters.
Democrats can play to their strengths using this line, the most effective of three that the poll tested: “We need to make government work again for average Americans by reducing the corrupting influence of special interests and big money in politics.”
“The Republican argument for smaller government is effective because it is simple and easy to understand, but it doesn’t deal with the root cause of frustration,” Nick Gourevitch, who leads Global Strategy Group’s research practice, said in an interview. “Democrats have an opportunity to be the adults in the room, saying ‘we want to fix the thing, make it work, make it more responsive.’”
[To read the full memo, including results and methodology of the online survey, click on the following link:
8.  Who Writes the Rules of the "Free Market"?
Robert Reich: Capitalism Can Be Reformed, But America's Wealthy Class Will Fight It
by Steven Rosenfeld,   alternet.org,   September 25, 2015
Can American capitalism be saved from its most predatory, selfish instincts?
Could the U.S. economy spread its wealth—if the public and political class understood how today’s unprecedented domination by monopolistic corporations have undermined opportunity, wages and income, and public confidence in the future?
In other words, what would it take to reshape the marketplace so Americans do not feel they are endlessly emptying their pockets almost everytime they access health care, use bank or use credit cards, repay student loans or bills for necessities such as Internet access—which have been steadily tickingupward and outpacing income growth. 
This audacious question and challenge is the topic of Robert Reich’s new book, Saving Capitalism: For The Many, Not The Few. In it, the ex-Secretary of Labor and political economy scholar outs “the new monopolists,” debunks their “free-market” ideology and rhetoric, and offers a pragmatic reform-filled path forward.
Reich wants to reframe the way Americans understand and talk about the economy. His starting point is to start correctly labeling today’s widespread corporate consolidation as the nation’s latest monopololy-filled era. He provides plenty of examples of name-brand businesses and sectors that have consolidated their control of the choices that consumers face, such as Apple’s operating system or Comcast’s telecom services. But his definition doesn’t stop there. These corporate behemoths also manipulate government to their great benefit, sometimes take advantage of state power—such as by gaining patents to ensure market dominance, while simultaneouslylobbying other arms of government to impede possibly regulatory actions that might alter business models or profits.
But perhaps Reich’s largest target is taking on the very language used by the business world that perpetuates the myth that the private sector exists as magical sphere entirely unrelated to government. As he bluntly says and shows, there is no such thing as the “free market” or a natural governing economic principle that “the market knows best.”
“Few ideas have more profoundly poisoned the minds of more people than the notion of a ‘free market’ existing somewhere in the universe, into which the government ‘intrudes,’” Reich writes early in the book. “In this view, whatever inequality or insecurity the market generates is assumed to be natural and the inevitable consequences of impersonal ‘market forces’ …If you aren’t paid enough to live on, so be it. If others rake in billions, they must be worth it. If millions of people are unemployed or their paychecks are shrinking or they’ll have to work two or three jobs and have no idea what they’ll be earning next month or even next week, that’s unfortunate but it’s the outcome of ‘market forces.’”
Reich’s point is governing classes and government have always created the rules of the economic game. These legal frames and the systems they support affect a nation’s well-being and daily life more than the size of any government program. Reich gives many examples tracing how wealthy interests have used a mix of contributing to candidates’ political campaigns and deployed post-election lobbying to create a system that’s neither free nor arbitrary, but rigged to benefit the few at the expense of the many. He does this by breaking down the building blocks of American capitalism in order to show how the economy is constructed and where it must change. He delves into what it means to own property, what degree of monopoly is permissible, how contracts have evolved, what are the options when bills can’t be paid, and how the economy’s rules are enforced.
“The rules are the economy,” he writes, saying this is not a new observation. “As the economic historian Karl Polanyi recognized [in his book, The Great Transformation], those who are argue for ‘less government’ are really arguing for different government—often one that favors them or their patrons. ‘Deregulation’ of the financial sector in the 1980s and 1990s, for example, could more appropriately be described as ‘reregulation.’ It did not mean less government. It meant a different set of rules.”
Thus, it was not some amorphous free spirit that allowed Wall Street to start its ill-fated stampede of speculation “on a wide assortment of risky but lucrative bets, and allowing banks to push mortgages onto people who couldn’t afford them” that lead to the global recession of 2008. It was the friendliest American government that campaign cash and lobbying could buy that ushered forth a “freer” marketplace. While that analysis is not unique nor even in dispute, the propagandistic phrase that drove the lobbying and was touted in Congress as it deregulated Wall Street endures. There is no shortage of “free market” champions and purveyers of “government-hands-off” ideology today.
The response to modern predatory capitalism, Reich said, can be found in America’s past but must be fine-tuned for today’s corporate practices. Simply put, government must step in and rewrite the economy’s rules in several key areas: how candidates for public office finance their campaigns; how monopolies are regulated and broken up—through federal anti-trust enforcement; and what legal benefits are given to corporations, such as limited liability which lets businesses escape debt—which individual customers cannot always access when facing with unpayable bills. 
Reich reminds readers that America has had federal anti-trust laws since the 1890s, when Ohio Republican Sen. John Sherman, who sponsored a landmark antitrust law, did not distinguish between political and economic power. “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life,” Sherman famously said, underscoring Reich’s point that the rules governing the economy “also reflect their moral values and judgement about what is good and worthy and what is fair.”
Unlike today’s libertarians, Reich does not think the average American’s economic fortunes are tied to how long or hard they work. He said that while “we are the author of our own fate,” most Americans “are not the producers or directors of the larger dramas in which we find ourselves.” Richer people are not “smarter nor morally superior to anyone else,” he said. “They are, however, often luckier, and more privileged and more powerful. As such, their high net worth does not necessarily reflect their worth as human beings.”
Reich makes these points to underscore that it is not capitalism, per se, that has been the target of populist reformers over the decades who fought to reverse economic hardships. Rather “they rejected aristocrisy,” he said, and “sought a capitalism that would improve the lot of ordinary people rather than merely the elites.”
Thus, Reich touts a handful of well-known reforms to rebalance the current economy’s distortions. Federal antitrust enforcement would help smaller business compete and usher in new entrepreneurial energy. Reversing the decline of labor unions would increase the bargaining power of employees in many industries, who typically have seen their wages stagnate as executive suite pay has skyrocketed. And the benefits given by government to incorporating businesses should be tied to workplace practices. “Limited liability, life in perpetuity, corporate personhood for the purposes of making contracts and the enjoyment of constitutional rights—would be available only to entities that share the gains from the growth with workers while also taking the interests of their communities and the environment into account.”
Reich is under no illusions that any of this will come easily or without a massive fight.
“The moneyed interests have too much as stake in the prevailing distribution of income, wealth, and political power to passively allow countervailing power to emerge,” he said. “While they would be wise to support it for all the reasons I have enumerated above—mostly, they will do better with a  smaller share of a faster-growing economy whose participants enjoy more of the gains and will be more secure in an inclusive society whose citizens feel they are being heard—they will nonetheless resist.”
Yet Reich believes that the tides of history are on his side. Economic reforms and a rebalancing of the rules will come, he said, citing moments in American history where presidents with populist sentiments have triumphed over the wealthy by setting new economic rules: from Andrew Jackson in the 1930s, to the Theodore Roosevelt in the early 20th century, to Franklin Roosevelt's New Deal.
For now, however, perhaps the best takeaway from his new book is to start talking about the monopolies that rule the economy using that word: monopolies. As important, is rejecting any use of the pernicious term, “free market,” whenever it appears in conversation or public discourse. As he repeatedly writes, there isn’t a free market’ there’s a market governed by manmade rules and laws that were written to advantage some and not others.
“The market is a human creation. It is based on rules that humans devise. The central question is who shapes those rules and for what purpose,” Reich concludes. “The coming challenge is not to technology or to economics. It is a challenge to democracy. The critical debate for the future is not about he size iof government; it is about whom government is for.”
WHY WE MUST END UPWARD PRE-DISTRIBUTIONS TO THE RICH
by Robert Reich,   robertreich.org,   September 27, 2015
You often hear inequality has widened because globalization and technological change have made most people less competitive, while making the best educated more competitive.
There’s some truth to this. The tasks most people used to do can now be done more cheaply by lower-paid workers abroad or by computer-driven machines.
But this common explanation overlooks a critically important phenomenon: the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs.
As I argue in my new book, “Saving Capitalism: For the Many, Not the Few” (out this week), this transformation has amounted to a pre-distribution upward.
Intellectual property rights—patents, trademarks, and copyrights—have been enlarged and extended, for example, creating windfalls for pharmaceutical companies.
Americans now pay the highest pharmaceutical costs of any advanced nation.
At the same time, antitrust laws have been relaxed for corporations with significant market power, such as big food companies, cable companies facing little or no broadband competition, big airlines, and the largest Wall Street banks.
As a result, Americans pay more for broadband Internet, food, airline tickets, and banking services than the citizens of any other advanced nation.
Bankruptcy laws have been loosened for large corporations—airlines, automobile manufacturers, even casino magnates like Donald Trump—allowing them to leave workers and communities stranded.
But bankruptcy has not been extended to homeowners burdened by mortgage debt or to graduates laden with student debt. Their debts won’t be forgiven.
The largest banks and auto manufacturers were bailed out in 2008, shifting the risks of economic failure onto the backs of average working people and taxpayers.
Contract laws have been altered to require mandatory arbitration before private judges selected by big corporations. Securities laws have been relaxed to allow insider trading of confidential information.
CEOs now use stock buybacks to boost share prices when they cash in their own stock options.
Tax laws have special loopholes for the partners of hedge funds and private-equity funds, special favors for the oil and gas industry, lower marginal income-tax rates on the highest incomes, and reduced estate taxes on great wealth.
Meanwhile, so-called “free trade” agreements, such as the pending Trans Pacific Partnership, give stronger protection to intellectual property and financial assets but less protection to the labor of average working Americans.
Today, nearly one out of every three working Americans is in a part-time job. Many are consultants, freelancers, and independent contractors. Two-thirds are living paycheck to paycheck.
And employment benefits have shriveled. The portion of workers with any pension connected to their job has fallen from just over half in 1979 to under 35 percent today.
Labor unions have been eviscerated. Fifty years ago, when General Motors was the largest employer in America, the typical GM worker, backed by a strong union, earned $35 an hour in today’s dollars.
Now America’s largest employer is Walmart, and the typical entry-level Walmart worker, without a union, earns about $9 an hour. 
More states have adopted so-called “right-to-work” laws, designed to bust unions. The National Labor Relations Board, understaffed and overburdened, has barely enforced collective bargaining.
All of these changes have resulted in higher corporate profits, higher returns for shareholders, and higher pay for top corporate executives and Wall Street bankers – and lower pay and higher prices for most other Americans.
They amount to a giant pre-distribution upward to the rich. But we’re not aware of them because they’re hidden inside the market.
The underlying problem, then, is not just globalization and technological changes that have made most American workers less competitive. Nor is it that they lack enough education to be sufficiently productive.
The more basic problem is that the market itself has become tilted ever more in the direction of moneyed interests that have exerted disproportionate influence over it, while average workers have steadily lost bargaining power—both economic and political—to receive as large a portion of the economy’s gains as they commanded in the first three decades after World War II.
Reversing the scourge of widening inequality requires reversing the upward pre-distributions within the rules of the market, and giving average people the bargaining power they need to get a larger share of the gains from growth.
The answer to this problem is not found in economics. It is found in politics. Ultimately, the trend toward widening inequality in America, as elsewhere, can be reversed only if the vast majority join together to demand fundamental change.
The most important political competition over the next decades will not be between the right and left, or between Republicans and Democrats. It will be between a majority of Americans who have been losing ground, and an economic elite that refuses to recognize or respond to its growing distress. 
FINALLY

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