“Each of 4 presidential administrations and the federal government failed to effectively deal with the big economic challenges of our time and have let the American people down. My legislative objective will be to right those wrongs and promote economic justice.”
Throughout my adult life- roughly starting in the late 1980s, each of 4 presidential administrations and the federal government failed to effectively deal with the big economic challenges of our time and have let the American people down. There was deregulation of financial markets during the Clinton administration, and the federal government’s inability to monitor an increasingly complicated financial sector that festered into the Bush administration. NAFTA was negotiated with eventual gains and losses for different members our economy (and compared to other developed nations- the U.S. has historically done less to help the unavoidable “losers” that result from international trade policies). This was followed by a poorly-planned response to the terrorist attacks of September 2001 resulting in trillions added to our national debt. (Also in 2001- China became a member of the World Trade Organization and with its deeper integration into the world economy came new challenges.) By the end of the Bush administration our country was in the worst financial crises since the Great Depression. Then during the Obama administration, the necessary bail out was not managed in a judicious way that might have provided effective relief for more Americans. What’s more- the Justice Department failed to prosecute criminal financial activity in a way that might have demonstrated to the American people that justice was being served. (Wrongdoing was not nearly as effectively prosecuted as it had been during the Savings and Loan Crisis of the 1980s). Effective, affordable healthcare was then an increasing burden on countless Americans and even though the Patient Protection and Affordable Care Act of 2010 made it more accessible to many (and has protected us all more as healthcare consumers), it failed to overhaul a historically failing health insurance market model which perpetuates the haves and have-nots, and offers Americans separate- and therefore unequal, access to healthcare services. So now with the Trump administration we find ourselves dealing with haphazard trade policies that have had hugely negative impacts on our economy (American consumers, manufacturers, businesses and farmers paying for them). Trump’s trade tactics really put the brakes on a world economic recovery that had been gaining momentum since around 2011 following the 2008 financial crisis. On top of that the “Tax Cuts and Jobs Act” was a bundle of corporate goodies and tax-cutting overreach that has taken our national debt from really bad to significantly worse, with only projected short-term gains that are unlikely to really make a difference in the lives of average Americans- especially in the long term. Since before and throughout this same period of time, growing income inequality has occurred for a variety of reasons that our government failed to manage or prevent from happening. This degree of income inequality not only makes for an unhealthy economy that hurts economic growth in the long-run, but it is simply outrageously unfair to most Americans.
So here we are with plenty of mistakes to learn from. The patience of the American people is wearing out for good reason. We must now take actions that deal with these past catastrophic mistakes and be diligent to prevent future disasters.
I will make sure we are acknowledging all the detailed implications for trade policies and make sure that Congress does its duty to manage them.
I will work to protect policies put in place to prevent another financial crisis, and I will advocate for more effective monitoring and enforcement of the financial sector.
I will be a catalyst for bold changes to our failed health insurance market model to end corporate monopolies and empower people with access to affordable quality care where no one falls through the cracks or is threatened with financial ruin to get the care they need.
I will demand that our Justice Department clearly acts in the best interest of the American people, and I will promote the continual development of a more efficient and fair justice system with the funding it requires to serve all Americans better.
I will work with members of Congress to more responsibly manage tax policy in a way that benefits average Americans more. We can have a robust, appropriately-regulated, free-market economy that limits the national debt.
I will make sure that we develop and support federal programs that promote access to training and education in order to provide plenty of opportunities for Iowans and Americans to succeed. In doing this we will adapt to increasing changes in technology, and can lead the way with beneficial exchanges of ideas and resources with the people of other nations as well.
I will promote economic justice with proposals in addition to increasing the minimum wage: earned income tax credit expansion, partial cost tax credits to companies for new skills training for lower wage earners, expanded federal financial aid for certain quality training programs for displaced workers… and my healthcare reform proposals offer your more economic security and promotes health maintenance as a valuable human capital investment. Since corporations just received an unreasonably large reduction in taxes with no reduction in loopholes, this is the perfect time to eliminate the tax deduction for offering the employee benefit of health insurance. You will be empowered with better coverage unrelated to employment and your employer will have to increase wages or other more meaningful benefits like paid time off to retain you in this tight labor market. We will have further leverage with the possibility of repealing part of the “Tax Cuts and Jobs Act” as necessary.
Now it’s not all doom and gloom- we know that each of these administrations did a thing or two right. So let’s also work together to identify what worked, and learn from our successes to build on them. Iowans are known as people who tend to have each other’s backs- just try to pull over on a country road and not have someone stop to make sure you are OK. That kind of respect and consideration for our fellow Iowans and Americans are what will change the legislative process in Washington so that we all may prosper together.
Learning from our Mistakes
I was in the last year of my economics program at Iowa State when the 2008 financial crisis happened. I remember intense class discussions on whether or not the proposed major bail-out was absolutely necessary to prevent a complete financial system collapse, or if we could even consider less intervention as a valid option. The response plan initiated during the Bush administration was further implemented at the beginning of the Obama administration. Even though such unprecedented circumstances and urgency inspired collaboration among financial experts (and even political parties), it is now clear that our justice system failed the American people. The justice department under Eric Holder from 2009-2015 accepted large civil settlement payments from banks and other financial institutions (several over 5 billion each- the largest in history up to that date was from Bank of America for 16.6 billion dollars). But this time, no banking or securities executives ever went to jail. Special prosecutions teams had recommended many individuals to the department of justice for prosecution on criminal charges, and some within the DOJ wanted to pursue that course. But in the end the financial criminal activity was not prosecuted. The rationale suggested that such a move might lead to collateral damage and further economic decline with harm to corporations and more widespread job losses. This is likely among the most painful mistakes of the Obama administration. It contributed to increasing civil unrest and a sense of economic injustice that stoked frustration- opening the door for opportunistic, divisive political players. (It is important that more Americans understand the complicated details on why things ended up this way. This report is a good start: https://www.marketplace.org/2019/02/26/economy/corner-office-marketplace/why-no-wall-street-ceo-went-jail-after-financial-crisis
So instead of only opting for “check-book justice” (letting white collar criminals off the hook in favor of limiting potential collateral damage), we could have held those most responsible for the catastrophic financial crisis accountable. White collar crime had been more effectively dealt with during the Savings and Loan Crisis in the 1980s with around 800 convictions (after persistent special prosecutors pressured the DOJ to act). Later- after 2001, many scandalous Enron executives were indicted and went to jail. Upon both those occasions, and the great financial crisis of 2008, congress responded with new regulatory legislation to prevent similar future crises (some of which is already under threat). As Iowans and Americans we need to consider what economic justice is, and how we should pursue and defend it.
Considering Economic Justice
We now recognize that the 2008 bank bail-out money should have been allocated with more requirements and restrictions so that victimized Americans might have more directly experienced the relief efforts (instead of seeing it go to sustain corporate executive compensation). Inadequately regulated financial markets had contributed to increasing wage inequality in our country for decades leading up the financial crisis- making it even more unfair that taxpayers had to foot the bill for the financial industry’s recklessness. If we really don’t want as much of our money going to subsidy programs that sustain our fellow Americans doesn’t it make much more sense to be advocates for, and supporters of adequate government regulation to create and maintain fairer playing-fields throughout our economy? Wage inequality isn’t just unfair to middle and low-wage earners who have not experienced significant wage growth for decades (which contributed to many of them borrowing against the value of their home leading up to the financial crisis), but it is bad for our country’s economic growth in general (since gains that go to top-earners are not reinfused back into the economy as completely or as quickly). Arising from the great recession, the US and world economic recovery took hold during the Obama administration with steady growth. Uncertainty before most general elections (especially a contentious one like in 2016) historically give way to stock market gains due to less uncertainties just after an election- regardless of the new administration’s party affiliation. Now the stock market is NOT the economy, but we should note that U.S. and global economic recovery had also been gaining momentum (just as many economists had predicted would happen- estimating meaningful recovery would likely be realized a year or two shy of a decade after the great recession).
Then we went overboard by passing legislation that reduced the U.S. corporate tax rate even more than U.S. corporations in general were asking for. (Congressman John Delaney- probably the most moderate candidate running in the 2020 general election, points this out- suggesting that corporations were seeking a tax rate reduction from over 30% to around 25% (the Obama administration had suggested a rate of around 27%), but the “Tax Cuts and Jobs Act” dropped it to 21%!). This legislation makes the corporate tax cut permanent, while changes in individual rates are set to expire in 2025. So considering the obvious implications, and the concern of watchdog groups like the Center of Public Integrity – (https://publicintegrity.org/business/taxes/trumps-tax-cuts/did-billionaires-pay-off-republicans-for-passing-the-trump-tax-bill/) it is truly concerning that any significant part of the U.S. population would put so much blind faith in a figure like Trump to serve them any degree of economic justice. Are we- as a culture, really so vulnerable to marketing schemes? Does anyone really believe that a guy who survived in the business world by going bankrupt (putting his creditors on the line by incurring great loss- then in turn getting paid to just keep marketing the Trump brand to limit what would otherwise be a total loss for investors) is really a reasonable option as a champion for economic justice? His party will one day have to answer for supporting an individual with such an opaque and questionable past- having settled a law suit for his trade-school scam, running a phony charitable foundation, not divesting adequately from personal business so that his personal brand can benefit more from his public office, using his campaign and the presidency to promote foreign business investments (truly an exhausting and disheartening list of facts – easily verified with public information- no further investigation necessary. It is our duty as Iowans and Americans to be more judicious about the individuals we deem worthy of public trust.
Where We Stand Now: Our national debt outlook is going from bad to worse! According to the Peterson Foundation (non-partisan organization established in 2008 to raise awareness of America’s long term fiscal challenges and “put America on a fiscally sustainable path and protect the American Dream” https://www.pgpf.org/blog/2018/08/how-have-tax-cuts-affected-the-economy-and-debt-heres-what-we-know-so-far) this year Congressional Budget Office calculations put this year’s deficit at $164 billion larger because of the “Tax Cuts and Jobs Act”(TCJA) provisions. “Over the 2018–2028 period, the cumulative deficit would be $1.9 trillion higher — $1.3 trillion from the direct effects of the legislation and $0.6 trillion from increased interest payments.” Take some time to consider the PF “Top 10 Reasons Why the National Debt Matters” https://www.pgpf.org/fiscal-top-ten … Or at least consider the first one, “The national debt is a bipartisan priority for Americans”, noting that about 74% of voters agree that managing the national debt should be a top-three priority for the President and Congress.
“Five Things that we Have Learned Since the Tax Cuts Were Enacted” -The main points: The strong subsequent economic growth will be temporary as the stimulus effects wane, revenue growth was weak this past year in spite of economic expansion, and there are actually more tax breaks than before (a total of 216 before the TCJA, now after implementation there are 223), and trillion dollar deficits again- yikes!
Trump recently expressed dismay at the fact that many corporations were using the tax cuts as an opportunity fund stock buy-backs.
Trump has repeatedly demonstrated a lack of understanding of basic economic principles and acting on his misguided notions is hurting the country. Pulling out of the Transpacific Partnership (TPP) negotiations was a very short-sighted and costly, missed opportunity. I am not just saying this because I live in an important agricultural state and the American Farm Bureau Federation “estimated that under the TPP annual net farm income would have increased by $4.4 billion, driven by an increase of direct U.S. agricultural exports of $5.3 billion per year upon full implementation of the TPP agreement as compared to a scenario in which the U.S. fails to pass the agreement while the remaining member countries proceed apace.” https://www.fb.org/issues/trade/trans-pacific-partnership-tpp-agreement/ (There see “Get the Full Report – Comments Re…” for potential projections related to soybeans, etc.)
Trump recklessly gave up a crucial opportunity to be in a much more powerful negotiating position to put pressure on China when he failed to recognize the value of being part of this powerful trading partnership with China’s neighbors. We are not the only country that is concerned with losing intellectual property and the TPP was an important opportunity to actually start moving forward on that front as well. Before Trump was in office the U.S. had submitted the most powerful provisions with regard to intellectual property during the negotiations, but when we left the table- 22 provisions from the original agreement were suspended or changed, as 11 other countries went on to ratify it as the CPTPP. The Center for Strategic & International Studies points out “Even with these provisions suspended, however, the IP chapter offers the most advanced and detailed standards on intellectual property in a trade agreement to date. It gives substantial protections to companies operating abroad from having their innovations stolen.” https://www.csis.org/analysis/tpp-cptpp
What’s more- “U.S. absence from the new deal puts it at a competitive disadvantage in trading with CPTPP countries, particularly in contested sectors such as agriculture”… “A study by the Peterson Institute estimates the United States moves from a $131 billion gain under TPP to a $2 billion loss under CPTPP. Meanwhile, a study by the government of Canada’s chief economist estimates that Canada will benefit considerably more from CPTPP relative to TPP, in part due to the absence of U.S. competition.” (More on concerns or inadequacies of the proposed TPP noted later in this section)
I am having a hard time finding the “art” in no deal. In the meantime our president has spent his time sitting down with treacherous dictators in North Korea and Russia (achieving nothing but shame), as we keep missing our curtain call to be on the world stage with collaborative international partners. Members of the senate were neglectful in not speaking out on Trump’s reckless trade tariffs and historically disproved notions on protectionism in modern international trade. Sadly some farmers in Iowa nobly feel they may just be “taking one for the team” in the hopes of better circumstances post U.S.-China trade negotiations. We are not yet fully realizing the implications of likely long-term market opportunity losses as other countries are prepared to step into the void left behind by Trump’s haphazard, unfocused trade policies. Some might be doing all right for now with a small piece of the 12 billion dollar federal aid package (increased since these comments were originally written), but as one farmer stated last year on Iowa Public Radio- he would much rather be selling what he produced than receiving tax-payer funded subsidies- least of all as a matter of pride, and more-so because international market relations so painstakingly established should not be so recklessly lost. A real deal might have included efforts to isolate the agriculture sector from intellectual property trade issue deliberations, with input from trade negotiating experts and real diplomats instead of the devil-may-care-slap-on-tariffs experiment. This might have prevented Midwest agriculture from having to pay the price for Silicon Valley’s international business challenges.
U.S. importers, American consumers and manufactures are actually the ones paying for the tariffs.
Trade negotiations have always offered imperfect relationships between: nations, citizens and governments, corporations and consumers, laborers and corporations, human rights interests and corporations or governments, environmental concerns and all those other entities… the list goes on. But international trade agreements can be (and have generally been) a crucial catalyst for good that lifts people out of poverty and promotes citizen diplomacy with a better understanding of our world as people of different nations interact. Even though the TPP emphasized stronger safeguards for intellectual property, the environment, and labor rights- some detractors felt it went too far on the first and not enough on the other two issues. https://www.economist.com/asia/2016/11/19/trading-down
It was a massive proposal that included 12 pacific countries including the U.S. Canada and Japan (all together they account for two-fifths of the world economy). It is now a big missed opportunity for the U.S. to build better relations with much of Asia and be a leader in setting higher standards for fair trade that benefits the citizens of all the nations involved. Stepping out left a void that invited China to get more involved crafting international trade policy for the region.
Closer to home it looks as if we have brighter opportunities on the horizon to do the right thing as we take a hard look at proposals for the USMCA (US-Mexico-Canada Agreement), but only if we are really vigilant! The absolutely best run down I have seen that describes the deal and the opportunities we have to improve or botch it up is offered by this article: https://hightowerlowdown.org/issue/june-2019/ (a must read!)
It is from a small, progressive periodical “The Hightower Lowdown” that does an amazingly great job laying out the facts on the ground. Here- in summary: the main glimmer of hope is the chance to end “Investor State Dispute Settlement tribunals” that Hightower accurately describes as “autocratic, plutocratic, corporate-controlled “courts” empower multinational corporations to obtain unlimited taxpayer dollars through specious lawsuits claiming that their special NAFTA privileges are restricted by the people’s democratically enacted laws–laws intended to protect consumers, workers, the environment, and other social/economic interests.” The vigilance part is where members of Congress have to step in and stand up to big pharmaceutical corporations, big oil, suppression of labor rights, negligent food production standards, and the fact that its impact for job creation in our country is being unrealistically oversold. My goal is to join members of Congress who Hightower describes as part of a “rising opposition by the majority of Americans to government by and for corporate interests.” (Not unlike what I propose in my approach to healthcare reform.) My favorite quote from the article because it sets the right legislative tone –
“The USMCA is a momentous battle that’s more about people’s democratic power than trade. It unites folks across the left-right political spectrum, it’s worth the fight, and it’s winnable.”