After disturbing us with the theme of "Who Stole the American Dream", Hedrick Smith has left us with a "call to arms" for reclaiming the American Dream and re-building the American middle class. He points out that our dilemma calls for new thinking and an ambitious new economic agenda. He advocates for a government-led industrial policy, a domestic "Marshall Plan." Here are Hedrick's ten steps for reclaiming the American Dream. I like them:
Step #1): A Modernization of America's Infrastructure and Creation of Infrastructure Jobs. We must form a public-private partnership to modernize America's outdated transportation network. He says we should follow the example of President Lincoln who built the transcontinental railroad, Teddy Roosevelt who built inland waterways, and Ike who fathered the American interstate highway network. The United States has fallen from No. 1 to No. 15 in world rankings of infrastructure. We must do better to become more competitive. A more robust economy depends on it.
Step #2: Push Innovation, Science, and High-Tech Research. The National Academy of Sciences reports a "gathering storm" from foreign competitors threatening our traditional edge in high-tech and innovation. The trends in patents are worrisome. We must invest and we must act in this area.
Step #3: Generate a Manufacturing Renaissance. Technology-based manufacturing must be central to reviving the U. S. economy. We are losing our edge in this traditional American strength. "Close a manufacturing plant, and a supply chain of producers disappear with it." Reversing this multiplier effect is essential to American economic growth.
Step #4: Make the U. S. Tax Code Fairer. We must balance the U. S. income tax code to reduce its heavy tilt in favor of the super-rich. "Stop cuddling the super-rich", declares Warren Buffett. For example, remove the $106,800 tax cap over which income is exempt from payroll tax to fund Social Security and Medicare. Hedrick Smith points out that reform of capital gains, payroll taxes, loophole closing, off-shore shelters, all would make the tax code much fairer, plus cut the national debt by $1 trillion over a decade. And there is plenty of evidence which cites that tax favoring the rich does NOT create jobs nor stimulate the economy.
Step #5: Fix the Corporate Tax Code to Promote Job Creation at Home. The tax code must discourage U. S. firms from off-shoring jobs and reward those that hire at home. This is critical.
Step #6: Push China to Live up to Fair Trade to Generate Four Million Jobs in the U.S. We must take a tougher line with china. China manipulates the value of it's currency, it steals intellectual property from foreign-made products, and it dumps products on the world markets below cost of production using government subsides. We must develop a new strategy regarding our trade relationship with China.
Step #7: Save on War and Weapons. We must reduce the Pentagon budget by $1 trillion over the next decade. We should be able to do this after the misguided wars in Iraq and Afhganistan. Ike reduced defense spending 27% after Korea, and Nixon reduced the Pentagon 29% after Vietnam. Reagan rolled back military spending, as did Bush, Sr. and Bill Clinton. Bowles-Simpson called for $750 billion in defense cuts over a decade.
Step #8: Fix Housing and Protect the Safety Net. We need to arrange for massive refinancing of millions of homes "under water" to help get the economy moving. We must strengthen the nation's safety net programs, especially Social Security and Medicare. We must re-claim America as the "land of opportunity", making certain to keep open the economic ladder of upward mobility for the 60 million Americans "aspiring to middle class status" -- the hardworking poor. They depend on safety net programs such as college student loans, Medicaid, food stamps, child care support, housing assistance, and earned income tax credits. Without these program, the chance for rising into the middle class will disappear for them.
Step # 9: Rebuild the Political Center. We must regenerate the centrist core of American politics by rejecting extremist candidates in both parties. We must reform the primary system, and design a way to increase voter turnout. Higher turnout reduces the pull of extreme candidates. We must deal with the corrupting influence of money and the surge of super pacs.
Step #10: Mobilize the Middle Class. The government and politicians respond to organized, mobilized citizens. Smith says Americans must organize at the grassroots, put themselves on the line, show up at town meetings, demonstrate for jobs and homes, head to the state capital, take a bus or train ride to Washington. Like the civil rights protesters, or the military veteran bonus marchers during the Great Depression, or yes, the Tea Party today, ordinary citizens can make a difference by mobilizing.
Hedrick Smith says, "We are at a defining in moment for America. We cannot allow the slow, poisonous polarization and disintegration of our great democracy to continue. We must come together and take action to rejuvenate our nation and to restore fairness and hope in our way of life The time for action is now".
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