Letters from an American - December 4, 2024

Episode Date: December 5, 2024

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December 4th, 2024. In 1883, as the Republican Party moved into full-throated support for the industrialists who were concentrating the nation's wealth into their own hands, while factory workers stayed above the poverty line only by working 12 hours a day, seven days a week, Yale sociologist William Graham Sumner responded to those worried about the extremes of wealth and poverty in the country with his book, What Social Classes Owe to Each Other. Sumner concluded it was unfair that worthy, industrious,

independent and self-supporting men should be taxed to support those he claimed were lazy. Worse, he said, such a redistribution of wealth would destroy America by destroying individual enterprise. Sumner called for a laissez-faire world in which those who failed should be permitted to sink into poverty and even to die to keep America from becoming a land where lazy folks waited for a handout. Such people should be weeded out of society for the good of the nation. Republicans echoed Sumner's What Social Classes Owe to Each Other, concluding, as he did, that the wealthy owed the lower classes nothing. Even though his views are singularly hard and uncompromising, wrote the New

York Times, it is difficult to quarrel with their deductions. However, one may feel one's finer instincts hurt by their apparent cruelty. In contrast to those who believed government should stay out of economic affairs so individuals can amass as much wealth as they like, others looked at the growing extremes of wealth, with so-called robber barons like Cornelius Vanderbilt II building a 70-room summer cottage while children went to work in mines and factories, and concluded that the government must try to hold the economic playing field level to give everyone equal chance to rise to prosperity.

Prevailing opinion in the U.S. has seesawed between these two ideologies ever since. In the progressive era, members of both major parties and other upstart parties turned against Sumner's argument, working to clean up cities, establish better working conditions, provide education, and regulate food and drugs to protect consumers. After World War I, Republicans led a backlash against those regulations and the taxes necessary to pay for their enforcement. In October 1929, the unregulated stock market crashed,

ushering in the Great Depression. From 1933 to 1981, Americans of both parties came to agree that the government must regulate the economy and provide a basic social safety net, promote infrastructure, and protect civil rights. They believed such intervention would stabilize society and prevent future economic disasters by protecting the rights of all individuals to have equal access to economic prosperity. Then in 1981 the country began to back away from that idea. Incoming President Ronald Reagan echoed William Graham Sumner when he insisted that this system took tax dollars from hard-working white men and redistributed

them to the undeserving. In a time of sluggish economic growth, he assured Americans that government is not the solution to our problem, government is the problem, and that tax cuts and deregulation were the way to make the economy boom. For the next 40 years, lawmakers pushed deregulation and tax cuts, privatization of infrastructure and cuts to the bureaucracy that protected civil rights. Those 40 years from 1981 to 2021, hollered out the middle class as about $50 trillion moved from the bottom 90% of Americans to the top 1%. When he took office in

January 2021, President Joe Biden set out to reverse that trend and once again use the government to level the economic playing field, returning the nation to the proven system of the years before 1981, under which the middle class had thrived. His director of the Federal Trade Commission Lena Kahn began to break up monopolies that had come to control the economy, while new rules at the Department of Labor expanded workers' rights to overtime pay and the government worked to expand access to health care.

Under Biden and the Democrats, Congress passed a series of laws to bring manufacturing jobs back to the United States. Those laws used federal money to start industries that then attracted private capital, more than a trillion dollars of it. According to policy researcher Jack Conniss, the Chips and Science Act and the Inflation Reduction Act are already responsible for more than 135,000 of the 1.6 million construction and manufacturing jobs created during the Biden administration. As Jennifer Rubin noted in the Washington Post today, it is stunning, frankly, that the most successful and far-flung private-public collaboration in history, one that is transforming

cities, states, and regions, has gotten so little coverage from legacy media. It may be the most critical government-driven initiative since the GI Bill following World War II. The widespread benefits derived from this massive undertaking, for individuals, communities, national security, and government itself through increased tax revenue demonstrate how far superior this approach is to trickle-down economics, which slashes taxes for the rich and big corporations," Rubin continued.

With the latter, the tax savings for corporations go to everything from stock buybacks to increased compensation for CEOs to foreign investment. While the cost of tax cuts runs up the national debt at a much greater rate than a public private approach. Republicans deliver temporary stimulus and wind up with more debt and more income inequality. But in 2024, voters elected Donald Trump, who promised to reject Biden's economic vision

and resurrect the system of the years before 2021, in which a few individuals could amass as much wealth as possible. Just 10 days after the election, a Texas judge overturned the Biden administration's overtime pay rule, permitting employers to cancel the raises they gave their employees to comply with that rule. The change in ideology is clear from Trump's cabinet picks. While the total net worth of the officials in Biden's cabinet was about $118 million, Laura Manweiler of US News and World Report noted, a week ago she estimated the worth of Trump's roster of appointees to be at least $344.4 billion, more than the gross domestic product of 169 countries.

That number did not include his pick for Treasury Secretary Scott Bessent, whose net worth is hard to find. Today Trump added another billionaire to his roster, picking entrepreneur and private astronaut Jared Isaacman as the next administrator of the National Aeronautics and Space Administration, or NASA. Isaacman is a close ally of billionaire Elon Musk, who aspires to colonize Mars. In a post on X after the announcement, Isaacman vowed to, usher in an era where humanity becomes a true space-faring civilization.

To free up capital for such ventures, Trump's team has promised more business deregulation and tax cuts for the wealthy and corporations. Today, Trump tapped Paul Atkins, who has called for looser regulation of cryptocurrency to chair the Securities and Exchange Commission. Atkins is expected to roll back the financial regulations initiated by his predecessor. Trump has also vowed to cut the post-World War II government far more than anyone before him has

done. He has put Musk and billionaire Vivek Ramaswamy in charge of a Department of Government Efficiency, or DOGI. Musk proposes to cut $2 trillion out of the $6.75 trillion U.S. budget. How he would accomplish this is hard to imagine, since most of the budget is mandatory spending already baked into the budget, and much of that is Medicare, Medicaid, and Social Security. During the campaign, Trump promised he would not cut these very popular programs. One of the things that constitute discretionary spending, which must be renewed every year, is veterans benefits. And yesterday, Jeff Scogall of Task and Purpose noted a growing chorus calling for cuts to veterans Affairs disability benefits

after the economist on November 28th called disability benefits absurdly generous. Disabled American Veterans spokesperson Dan Clare pointed out that the US was at war for 20 years in Afghanistan for 20 and in Iraq for 8, increasing the VA budget. Since Congress passed the PACT Act, formerly known as the Sergeant First Class Heath Robinson, honoring our promise to address Comprehensive Toxics Act, in 2022, more than 1.2 million veterans exposed to burn pits and other toxics have been treated for resulting health conditions. Today, Phil Galowitz of KFF Health News noted that nine states, Arizona, Arkansas,

Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah, and Virginia have trigger laws to end their expansion of Medicaid if federal funding is reduced. As many as 3.7 million people in these states would lose health care coverage if these laws go into effect. Other states might then follow suit as lost federal money would have to be made up by the states. On X this week, Musk commented that a thread by Senator Mike Lee, a Republican of Utah, attacking Social Security was interesting. Yesterday on the Fox News Channel,

Representative Richard McCormick, a Republican of Georgia, suggested, "'We're gonna have to have some hard decisions. We're gonna have to bring in the Democrats to talk about Social Security, Medicaid, Medicare. There's hundreds of billions of dollars to be saved and we know how to do it. We just have to have the stomach

to take those challenges on. ["Dead of Massachusetts"] Letters from an American was produced at Soundscape Productions, Dedham, Massachusetts. Recorded with music composed by Michael Moss.