Labor & the Economy: December 2008 Archives

Tuesday I wrote that Republicans were demanding mass layoffs of public employees -- during a recession.  And they are getting away with it because the state's corporate-owned media outlets are not explaining to the public what is going on. 

The history of how we got to this point of budget stalemate is that Republicans in the legislature have blocked every single budget and gone back on their own Governor and every negotiated compromise, demanding that all budget shortfalls be solved by laying off teachers, construction workers, DMV workers, firefighters, etc.  And through the whole process they have refused to offer any plan for the cuts they demand.  But this is explained to the voters as a problem caused by "both sides" or "the legislature" or "refusing to work together" or to "reach a compromise" or "pointing fingers."  Some even manage to blame the Democrats for not completely caving in to every single demand!  The result is that effective public pressure does not develop to get this solved.

Now, rather than compromise and work with the Democrats and the Governor, they have come up with a new list of demands, on top of their previous demands.  And this list is really something:

"Democrats have to capitulate to GOP demands for the 8-hour work day, meal breaks, looser environmental regulations, permanent budget cuts and a stiff spending cap, among other things.

Then, and only then, will Republicans come to the table to discuss -- but not necessarily agree to -- new taxes"

California's unemployment rate has soared to 8.2% -- third highest in the United States!  We need to stimulate California's economy.  We need a massive jobs and infrastructure investment program, rebuilding our roads and bridges and schools and making our buildings energy-efficient, and hiring more teachers and police and firefighters.  We can do this, while balancing the budget at the same time.

How can we do this?  We can raise taxes on big corporations and the wealthy and use the money to stimulate the economy and balance the budget and get things moving again.

Our economic system is not perfect, so over time income tends to concentrate at the top, which makes it harder for most people to get by.  People spend less and things slow down.  We are seeing this today -- wealth has massively concentrated at the top, and the consumer is "tapped out."  No one is buying cars and Christmas sales will be much lower. 

Taxes on the wealthy and corporations fix this by recirculating money that has bunched up at the top.  Taxes provide the resources that We, the People can then use to stimulate the economy and get it moving again.

The corporations will try to say that this tax increase will slow the economy.  But this isn't what has happened when this has been done in the past.  Actually history shows that taxing the wealthiest and corporations helps our economy.  This is not surprising when you realize that more people with more jobs and money to spend is a good thing in a consumer-driven economy. 

There is a problem, though.  In California we have a rule that we cannot pass any tax with less than a two-thirds vote.  A little over half the people voted to impose this two-thirds requirement -- and now 100% of us are hobbled for doing what we need to do to fix the economy.  Instead of stimulating the economy we have to lay off teachers and firefighters and road workers, further worsening the recession, because cutting budgets is the only option available.  Even if 55% or 60% of us would rather hire people and stimulate the economy, we still can't.

So we need to change this rule.  We need to be able to pass taxes on the corporations and the rich, and get the economy moving again.