Progressive Breakfast for April 23

Morning Message

As Middle Class Falls Behind, We Need A Progressive Populist Response

The latest report that middle-income households are falling behind the counterparts in some other developed countries should embolden Democratic candidates to offer bolder, progressive populist prescriptions. The headline of the article in The New York Times on Tuesday could hardly have been more stark: “The American Middle Class Is No Longer the World’s Richest.” The underlying facts are by now familiar: Incomes of the top 5 percent have skyrocketed in the past three decades, reflecting the disproportionate share of national wealth that has moved from working people to the ownership class. What we may not be used to hearing is the conclusion by authors David Leonhardt and Kevin Quealy that “the American middle class, long the most affluent in the world, has lost that distinction.”

America’s Economic Divide

The American Middle Class Is No Longer the World’s Richest [New York Times]: “The American middle class, long the most affluent in the world, has lost that distinction.  While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades. After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.”

Bill Moyers and Michael Winship write that government is a “protection racket for the 1 percent”: “Inequality is what has turned Washington into a protection racket for the one percent. It buys all those goodies from government: Tax breaks. Tax havens (which allow corporations and the rich to park their money in a no-tax zone). Loopholes. Favors like carried interest. And so on. … Sad, that it’s come to this. The drift toward oligarchy that Thomas Piketty describes in his formidable new book on capital has become a mad dash. It will overrun us, unless we stop it.”

Robert Reich says raising taxes on corporations that pay their CEOs royally and treat their workers like serfs is a good place to start: “This growing divergence between CEO pay and that of the typical American worker isn’t just wildly unfair. It’s also bad for the economy. It means most workers these days lack the purchasing power to buy what the economy is capable of producing — contributing to the slowest recovery on record. … There’s no easy answer for reversing this trend, but this week I’ll be testifying in favor of a bill introduced in the California legislature that at least creates the right incentives. Other states would do well to take a close look. The proposed legislation, SB 1372, sets corporate taxes according to the ratio of CEO pay to the pay of the company’s typical worker. Corporations with low pay ratios get a tax break.Those with high ratios get a tax increase.”

Politics Post McCutcheon

Republicans Launch Second Post-McCutcheon Supercommittee To Tap Megadonors [Huffington Post]: “On April 2, the Supreme Court, in a 5-4 vote, struck down long-standing aggregate campaign contribution limits that prevented individual donors from giving more than $48,600 to federal candidates, more than $74,600 to political parties and PACs, and more than $123,200 overall. … Republicans registered their 2014 Senators Classic Committee on April 15, linking together 19 Republican candidates for Senate under one fundraising umbrella. The committee will be able to accept donations as high as $98,800 in one fell swoop from a single donor — twice as much as what was allowed prior to the Court’s ruling.”

NYT’s Mark Bittman asks “Why care about McCutcheon?”: “The Federal Election Commission believes, as do most Americans, that campaign spending limits help keep elections more fair; ideally your vote should have no less impact than that of someone with a hundred or a thousand times your income. But the majority of Supreme Court members don’t see it that way; they believe that campaign finance limits restrict ‘free speech.’ This is the same argument used to defend the marketing of junk food to children.

SCOTUS v. Affirmative Action

Supreme Court upholds Michigan affirmative action ban [BBC News]: “In a 6-2 ruling, the court said voters there had the right to prohibit public universities from taking race into account in admissions decisions. It was the latest blow to the 1960s civil rights movement-era system of race-based preferences in admissions. The decision could spur other states to push for similar ballot initiatives.”

Supreme Court ruling gives affirmative action foes more room to maneuver [Christian Science Monitor]: “The US Supreme Court decision Tuesday upholding a Michigan voter initiative that bans the use of race-based admission policies at the state’s public universities may not have immediate impact for colleges outside of Michigan, but it gives a go-ahead signal to other states contemplating similar initiatives –and sends a message about where America’s highest court stands on affirmative action.”

Sonia Sotomayor Delivers Blistering Dissent Against Affirmative Action Ban [Huffington Post]: “[Justice Sonia] Sotomayor said the decision infringed upon groups’ rights by allowing Michigan voters to change ‘the basic rules of the political process … in a manner that uniquely disadvantaged racial minorities.’ ‘In my colleagues’ view, examining the racial impact of legislation only perpetuates racial discrimination,” Sotomayor added. ‘This refusal to accept the stark reality that race matters is regrettable. As members of the judiciary tasked with intervening to carry out the guarantee of equal protection, we ought not sit back and wish away, rather than confront, the racial inequality that exists in our society.’