It Makes You Wonder

Elizabeth Warren looked like she might become the front-runner for the Democratic presidential nomination. But announcing her Medicare For All plan without simultaneously describing her sensible transition plan, as well as attacks from the corporate wing of the Democratic Party, have cost her a lot of support. She’s probably in third place now.

Still, I watch this brief video from a speech she made once, probably before she became a senator, and wonder what we could do with a president like her.

Who would you choose as president? A talented, hard-working woman who became a nationally-recognized expert on the law of bankruptcy, who knows what it means to struggle in America, and who has serious plans to fix our problems? Or a semi-senile, racist con man whose businesses declared bankruptcy six times (after he was handed $100 million dollars by his father), while “the burden of his failures fell on investors and others who had bet on his business acumen”.

Maybe we as a nation are too far gone to deserve a president like her.

Sacha Baron Cohen on the Greatest Propaganda Machines in History

The comedian spoke out this week. The problem he discusses may be insurmountable, given that anyone with an internet connection has the technological ability to communicate with everyone else who has one. Nevertheless, it’s encouraging that more people are demanding reasonable limits on the power of these gargantuan, unregulated companies.

The Guardian has a full transcript.

 

Checking In With Krugman

Prof. Paul Krugman summarizes where things stand with the economy and Our Dear Leader.

[DT] marked the anniversary of 9/11 by repeating several lies about his own actions on that day [Note: the New York Times cowardly referred to them as “exaggerations”]. But that wasn’t his only concern. He also spent part of the day writing a series of tweets excoriating Federal Reserve officials as “Boneheads” and demanding that they immediately put into effect emergency measures to stimulate the economy — emergency measures that are normally only implemented in the face of a severe crisis.

Trump’s diatribe was revealing in two ways. First, it’s now clear that he’s in full-blown panic over the failure of his economic policies to deliver the promised results. Second, he’s clueless about why his policies aren’t working, or about anything else involving economic policy.

Before I get to the economics, let’s talk about one indicator of Trump’s cluelessness: his remarks about federal debt.

In addition to demanding that the Fed cut interest rates below zero, Trump declared that “we should then start to refinance our debt,” because “the USA should always be paying the lowest rate.” Observers were left scratching their heads, wondering what he was talking about.

Actually, however, it’s fairly obvious. Trump thinks that federal debt is like a business loan, which you can pay down early to take advantage of lower interest rates. He’s clearly unaware that federal debt actually consists of bonds, which can’t be prepaid (which is one reason interest rates on federal debt are always lower than, say, rates on home mortgages). That is, he imagines that the government’s finances can be managed as if the U.S. were a casino or a golf course, and it never occurred to him to ask anyone at Treasury whether that’s how it works.

But back to the economy. Why is Trump panicking?

After all, while the economy is slowing, we’re not in a recession, and it’s by no means clear that a recession is even on the horizon. There’s nothing in the data that would justify radical monetary stimulus — stimulus, by the way, that Republicans, including Trump, denounced during the Obama years, when the economy really needed it.

Furthermore, despite Trump’s claims that the Fed has somehow done something crazy, monetary policy has actually been looser than Trump’s own economic team expected when making their rosy forecasts.

In the summer of 2018 the White House’s economic projections envisioned that this year three-month interest rates would average 2.7 percent, while 10-year rates would be 3.2 percent. The actual rates as I write this are 1.9 and 1.7 percent, respectively.

But while there’s no economic emergency, Trump apparently feels that he’s facing a political emergency. He expected a booming economy to be his big winning issue next year. If, as now seems likely, economic performance is mediocre at best, he’s in deep trouble.

Remember, Trump’s two signature economic policies were his 2017 tax cut and his rapidly escalating trade war with China. The first was supposed to lead to a decade or more of rapid economic growth, while the second was supposed to revive U.S. manufacturing.

In reality, however, the tax cut delivered at most a couple of quarters of higher growth. More specifically, huge tax breaks for corporations haven’t delivered the promised surge in wages and business investment; instead, corporations used the windfall to buy back stocks and pay higher dividends.

At the same time, the trade war has turned out to be a major drag on the economy — bigger than many people, myself included, expected. Until last fall the general expectation was that Trump would deal with China the way he dealt with Mexico: make a few mainly cosmetic changes to existing arrangements, claim victory, and move on. Once it became clear that he was really serious about confrontation, however, business confidence began falling, dragging investment down with it.

And voters have noticed: Trump’s approval rating on the economy, while still higher than his overall approval, has started to decline. Hence the panicky demands that the Fed pull out all the stops.

But while Trump realizes that he’s in trouble, there’s no indication that he understands why [Note: Prof. Krugman is being unnecessarily polite]. He’s not the kind of person who ever admits, even to himself, that he made mistakes; his instinct is always to blame someone else while doubling down on his failed policies.

Even actions that look like a slight policy softening, like his announcement of a two-week delay in implementing some China tariffs, betray a deep incomprehension of the problem — which has as much to do with his capriciousness as with the tariffs per se. Policy zigzags, even if they involve delaying tariffs, just add to the will-he-or-won’t-he uncertainty that’s causing companies to put investment on hold.

So what happens next? Trump could reverse course, and do what most people expected a year ago, reaching a deal with China that more or less restores the status quo. But that would be a de facto admission of defeat — and at this point it’s not clear why the Chinese would trust him to honor any such deal past Election Day.

Unquote. “It’s not clear why the Chinese would trust him” is an understatement of cosmic proportions.

Eviction vs. Conviction

We hear a lot about criminal justice in America and how it adversely affects the lives of black men in particular. A similar story should be told about housing in America and how it adversely affects the lives of black women. Lots of black men get convicted. Lots of black women get evicted.

Katha Pollitt’s 2016 review of “Evicted”, by Matthew Desmond, in The Guardian:

What if the dominant discourse on poverty is just wrong? What if the problem isn’t that poor people have bad morals – that they’re lazy and impulsive and irresponsible and have no family values – or that they lack the skills and smarts to fit in with our shiny 21st-century economy? What if the problem is that poverty is profitable? These are the questions at the heart of Evicted, Matthew Desmond’s extraordinary ethnographic study of tenants in low-income housing in the deindustrialised middle-sized city of Milwaukee, Wisconsin.

You might not think that there is a lot of money to be extracted from a dilapidated trailer park or a black neighbourhood of “sagging duplexes, fading murals, 24-hour daycares”. But you would be wrong. Tobin Charney makes $400,000 a year out of his 131 trailers, some of which are little better than hovels. Sherrena Tarver, a former schoolteacher who is one of the only black female landlords in the city, makes enough in rents on her numerous properties – some presentable, others squalid – to holiday in Jamaica and attend conferences on real estate.

Desmond follows the intertwined fortunes of eight families and a host of minor characters. Arleen Belle and Doreen Hinkston are black mothers clinging to the edge of low-wage employment; Crystal and Trisha are fragile young black women whose upbringing was violent and chaotic; Lamar is a genial black father of two who lost both his legs to frostbite when he passed out on crack in an abandoned house; Scott is a white male nurse who lost his licence when he stole opioids from his patients; Larraine, also white, is a slightly brain-damaged sweet soul. It is sometimes a little hard to keep up with the storylines as they weave in and out of the text, but no matter. What is important is that Desmond takes people who are usually seen as worthless – there is even a trailer-dweller nicknamed Heroin Susie – and shows us their full humanity, how hard they struggle to retain their dignity, humour and kindness in conditions that continually drag them down.

The main condition holding them back, Desmond argues, is rent. The standard measure is that your rent should be no more than 30% of your income, but for poor people it can be 70% or more. After he paid Sherrena his $550 rent out of his welfare cheque, Lamar had only $2.19 a day for the month. When he is forced to repay a welfare cheque he has been sent in error and falls behind on rent, he sells his food stamps for half their face value and volunteers to paint an upstairs apartment, but it is not enough. People such as Lamar live in chronic debt to their landlord, who can therefore oust them easily whenever it is convenient – if they demand repairs, for example, like Doreen, or if a better tenant comes along. Sherrena liked renting to the clients of a for-profit agency that handles – for a fee – the finances of people on disability payments who can’t manage on their own. Money from government programmes intended to help the poor – welfare, disability benefits, the earned-income tax credit – go straight into the landlord’s pocket and, ironically, fuel rising housing costs. Public housing and housing vouchers are scarce. Three in four who qualify for housing assistance get nothing.

Even in the Great Depression, evictions used to be rare. Now, each year, hundreds of thousands, perhaps millions, of renters are put out on the street. Even a paid-up tenant can be easily evicted. Arleen loses one apartment when her son Jori throws a snowball at a passing car and the enraged driver kicks in the front door, and another when the police come after Jori when he kicks a teacher and runs home. Any kind of trouble that brings the police can lead to eviction, which means women can lose their homes if they call 911 when their man beats them up. Think about that the next time someone asks why women don’t call the cops on violent partners.

As Desmond shows, the main victims of eviction are women. Why? They are paid less than men for doing the same job. They are less able to make deals with their landlord, who is almost always a man, to work off part of their rent with manual labour. The main reason, though, is that women are raising children as single mothers. They not only have all the costs and burdens of childrearing, they need bigger apartments – which, since landlords dislike renting to families with young children, are harder to find and a lot harder to keep. Other sociologists – Kathryn Edin, for example – have found that single mothers often get help under the table from their children’s fathers, but Arleen, Doreen and Doreen’s adult daughter Patrice get mostly trouble from men, who are variously abusive, addicted, vanished or in prison. In one of the book’s many small sad moments, Arleen claims she receives child support in order to seem more stable and respectable to a prospective landlord. In fact, she gets nothing.

Desmond lays out the crucial role housing plays in creating and reinforcing white privilege. In Milwaukee, one of the most segregated cities in the US, all black people suffer from housing discrimination and all white people benefit at least a little from the racial dividend – a landlord who will rent to them but not to black people, for instance, or offer them a nicer apartment. Black people have the worst housing in the worst neighbourhoods – the great fear of the trailer-park people, who are all white, is that they will end up on the black side of town. Eviction hits black women hardest of all, and the bleak benches of housing courts, which deal with disputes between landlords and tenants, are full of black women and their children: “If incarceration had come to define the lives of men from impoverished black neighbourhoods, eviction was shaping the lives of women. Poor black men were locked up. Poor black women were locked out.”

An evicted woman watches as a removal company moves her property out of her rented apartment on to the pavement.
An evicted woman watches as employees of a storage company remove her belongings to place them on the pavement in front of her rented apartment. Photograph: Sally Ryan/Zuma Press/Corbis

What are the social costs of eviction? It puts incredible stress on families. It prevents people from saving the comparatively small sums that would let them stabilise their situation. They are always starting over from scratch, losing their possessions in the chaos of removal, or putting them in storage and losing them when they can’t pay the fees. An eviction on your record makes the next apartment harder to get. Eviction damages children, who are always changing schools, giving up friends and toys and pets – and living with the exhaustion and depression of their parents. We watch Jori go from a sweet, protective older brother to an angry, sullen boy subject to violent outbursts who is falling way behind in school.

Eviction makes it hard to keep up with the many appointments required by the courts and the byzantine welfare system: several characters have their benefits cut because notices are sent to the wrong address. Eviction destroys communities: when people move frequently, they don’t form the social bonds and pride in place that encourage them to care for their block and look out for their neighbours. “With Doreen’s eviction, Thirty-Second Street lost a steadying presence – someone who loved and invested in the neighbourhood, who contributed to making the block safer – but Wright Street didn’t gain one.”

“There is an enormous amount of pain and poverty in this rich land,” Desmond writes in his conclusion. That is easy to say, and many books by journalists and academics have done so. By examining one city through the microscopic lens of housing, however, he shows us how the system that produces that pain and poverty was created and is maintained. I can’t remember when an ethnographic study so deepened my understanding of American life.to all and safeguarding our independence.

“The Central Question in America Today”: In Her Own Words

One of Senator Elizabeth Warren’s many gifts is that she can discuss important issues in plain language. Bill Clinton had the same ability. But her views are more progressive than Clinton’s. She will make a great president.

Below is an interview with Warren conducted by David Dayen of “The American Prospect”. It was published yesterday under the title “Monopolist’s Worst Nightmare: The Elizabeth Warren Interview”:

David Dayen: We’re doing this issue about economic concentration. And one thing I’ve noticed is that, probably since 1912 there hasn’t been this much talk about monopoly in a presidential context, in a presidential race. To what do you attribute that? I mean, why do you think this issue has inspired this interest at this time?

Elizabeth Warren: I believe the central question in America today is who government works for. Yeah, it’s got a lot of different directions, but that’s the fundamental one. Is it just going to work for the rich and the powerful, or is it going to work for everyone else? Antitrust cuts right to the heart of that. We’ve had a government that has kissed up to every giant corporation for decades. It has weakened antitrust enforcement, looked the other way on mergers, passed on deals that everyone knew were anti-competitive and would be bad for the economy and bad for competition but good for the bottom line of the companies that wanted it. And no one so much as fluttered an eyelash over it. And that’s started to change. And I think—So here’s my thinking: it’s because we’re focusing more on what’s wrong in this country. It’s not like somebody woke up and just said “antitrust”—we’re not that nerdy—but it’s about what’s wrong in this country. And as people increasingly see that the problem is not an overreaching government, the problem is a government that won’t get in the fight on the side of the people. Antitrust becomes one of the clearest places to see that.

DD: Now you did a speech at the end of 2017, you talked about this issue, and at the beginning of the speech you said something like, you know, people don’t have to know the Herfindahl-Hirschman Index to know that there’s something wrong.

EW: Exactly.

DD: But how do you talk about it on the trail? How do you talk about it to really drive that home so that it doesn’t get bogged down in numbers and economic theory and stuff like that?

EW: It’s important to give examples of how it touches people’s lives. So when I talk about Amazon, for example, I talk about the platform where everybody goes to buy coffee makers and pet cookies, and that the platform works great. But that Amazon does something extra. It’s not just an ordinary marketplace. It’s a marketplace where Amazon, the owner of the platform, sucks up information from every transaction and every near-transaction, the fact that a shopper looked at the item, right, searched for the item, spent a little time hovering, it’s been in your cart.

And I talk about that. And then they use that information to go into competition with the businesses that are trying to sell you coffee makers or pet cookies. And the consequence of that is that the guy who busted his tail, figured out the pet cookie business, got out there and marketed it—Amazon looks over the edge and says, hmm, profit to be made there, let’s do pet cookies, don’t even identify it as an Amazon business, and move the guy who built this business back to page seven in the search. Routine, and now Amazon has sucked up one more business.

DD: The other issue with Amazon is, that pet cookie business, they take a cut out of every transaction he makes anyway.

EW: Exactly, exactly.

DD: And they can raise that price, they can change and say, “Oh, we’re charging more for shipping now, we’re charging more for storage now.”

EW: Every part of it. So, in other words, the way I describe that particular point is, it’s like baseball. You can run the platform—that is, you can be an umpire—or, you can have a team in the game—that is, you can run competition against others who are trying to sell the items. But you don’t get to do both at the same time. And people in the room all say, “Right.” That makes sense to me.

DD: You just break it down and it makes sense.

EW: That’s right.

DD: So we’ve seen, very recently, these hearings in the House on the digital platforms.

EW: Yay.

DD: And, you know, I’m wondering about your thoughts on the role of Congress in this policy. These are policies that Congress wrote, that they have oversight function on. You know, in the ’40s we saw something called the Temporary National Economic Committee, which was a series of investigations into all sorts of sectors over the economy. Do you think, is that something we need now? How can Congress get involved in this?

EW: Okay, I’m glad to see Congress doing this. I think it’s great. I want them to call witnesses, to let people tell their stories, I want them to expose the data. I want to see the books and records of some of these companies. Remember, Congress has got a lot of muscle if it decides to use it. But I want to make two other points. The first is current law gives the Justice Department and the FTC and the banking regulators a lot of power to move now. Even without Congress, a president who put a strong team in place could change antitrust enforcement in this country, without a single change in the laws from Congress.

DD: And it’s interesting you say the banking regulators, because people don’t realize how much power is in, you know, other agencies, not just the FTC and the Justice Department.

EW: Exactly right. I picked banking, but you’re exactly right. But it’s the reminder—There’s a lot we could do right now. But also, and this is what I argue should come out of all this, there are places where Congress should draw a bright line in this. So I have a plan to break up the big platforms. If a platform is doing more than a billion dollars in business, the platform has to be broken off from all of the ancillary businesses. And there’s just—We shouldn’t have to litigate it. Just make it happen. It’s too much concentration of power. And so I’m both ways on this: there’s a lot we can do without—I’m delighted Congress is doing this. There’s a lot we can do, even if Congress doesn’t change any law. But, there is at least one good place Congress could change the law and make this whole system work better.

DD: You mention your plan on the platforms, but you’ve also made the point that if we broke up Google and Amazon and Facebook tomorrow, we’d have a terrible concentration problem in America.

EW: Oh, it’s much broader than just that. Platform is such an obvious one and we’ve—

DD: And everyone interacts with it.

EW: That’s exactly right … the analogy from history where someone—one business—could not only control the marketplace, but also be a dominant player in the marketplace simultaneously. It’s not that you can’t find them in history. It’s that when we found similar economic concentrations in history, we broke them up.

DD: Sure, sure.

EW: Especially when they started buying everything else. And then, of course, doing—as I recall in the railroads—doing a discriminatory pricing map. Charge themselves a different price from [someone else’s] grain outfit.

DD: Absolutely. So, I mean, the sort of elephant in the room on this is the judiciary, which has a very particular theory and view of antitrust and even if you put in enforcers that want to take that in a different direction, you still have to argue that in court. So what do you think can be done there? I mean, obviously a new president would have judicial nominations, but you know, that’s going to take some time, so how—Is there a way to sort of get the judiciary to realize that they need to do their part here?

EW: Use every tool in the toolbox. So part of it is get an aggressive antitrust team. Part of it is presidential leadership. Get out and talk about this issue. And explain to the American people why the laws are working for the big guys and not for them. Encourage the academics to get out and make their case. Remember—

DD: The ones not on the payroll—

EW: … That’s exactly right. Remember, it was the academics that got this started in the wrong direction, arguably.

DD: I would argue that as well.

EW: Yes, exactly, so I think it’s all of the above. And, at the same time, move on the congressional front. I just don’t want this to feel like, gee, if we can’t move Congress, we can’t do anything. No. Bang away without Congress, but also, bang away on Congress to make change. Just move on all the fronts.

DD: Excellent, excellent. And finally, there’s a famous—It was Richard Hofstadter wrote this thing in the ’60s. And he said—And the title of it was “What happened to the antitrust movement?”

EW: Yes.

DD: That there was a movement that created all these laws and then the movement sort of went away and said, “Regulators will take care of it.” It seems like a movement is what is necessary at some level, and how do you inspire that?

EW: Okay, now let’s move back up to the 10,000 feet where we started this, because I think that’s what this is all about. When we started this conversation, I said that I think the question is who government works for. I think much of the antitrust relaxation over time in the ’60s was confidence the government would handle this. Confidence that we had regulators who knew their stuff and who were technically adept and who had shown that they would be on the side of the American public. And when the big corporations started pushing back, started advancing the academic work that said, “No, let the giant corporations do whatever they want. What could possibly go wrong?”—That it’s taken a long time for people to see the implications of that. Look, for 40 years now, the mantra in Washington and in most of the Republican Party and a big chunk of the Democratic Party has all centered around Ronald Reagan’s “What are the nine worst words in the English language? I’m from the government and I’m here to help.” Ha ha ha. The idea that it’s government that poses the threat to all of the rest of America and must be held at arm’s length, and missing the fact that it’s government that balances out the power of these giant corporations. And without an effective government to enforce antitrust laws—and other laws—we’re all in trouble.

DD: Well, it’s the idea that if there’s—If government takes away the regulation, the regulation doesn’t go away, it’s just in the hands of the giant corporations.

EW: It’s just in the hands of the giant corporations.

DD: So they get to do regulation from the boardroom.

EW: And that’s how we keep hearing lately about self-regulation. Aircraft manufacturers that self-regulated; how did that work out? You know, it’s—But it’s over and over. It’s wait, what? They’re doing what? The oil companies that were doing the drilling offshore were self-regulating? You know, they filed some reports that nobody read. That’s not a government that’s working for the public. So when you say about, is it going to take a movement? The answer’s yes. That is the movement we’re starting to build.

Elizabeth Warren’s Plan for Economic Patriotism

Robert Kuttner discusses “Warren’s Astonishing Plan for Economic Patriotism” at The American Prospect:

I have been a fan of Elizabeth Warren for a long time. Her combination of deep knowledge of how American capitalism works, her capacity to narrate the lived experience of American working families and tie it to radical reforms, and her sheer integrity are unsurpassed.

Her rollout of one brilliant policy proposal after another and her ability to connect those to a political understanding of the American situation has been just stunning. But Warren’s latest plan is in a class by itself, even for Warren. She calls it an Agenda for Economic Patriotism.

Warren’s proposal does nothing less than turn inside out the globalist assumptions pursued by the past several administrations, Democrat and Republican alike. Where they have pursued more globalization of commerce as an end in itself (and as a profit center for U.S.-based multinational corporations and banks), Warren’s goal is to bring production and good jobs home.

Even better, she knits it all together with a coherent plan, beginning with a new Department of Economic Development “with the sole responsibility to create and defend quality, sustainable American jobs.”

The new Department will replace the Commerce Department, subsume other agencies like the Small Business Administration and the Patent and Trademark Office, and include research and development programs, worker training programs, and export and trade authorities like the Office of the U.S. Trade Representative. The new Department will have a single goal: creating and defending good American jobs.

Globalization didn’t just happen, Warren points out.

America chose to pursue a trade policy that prioritized the interests of capital over the interests of American workers. Germany, for example, chose a different path and participated in international trade while at the same time robustly—and successfully—supporting its domestic industries and its workers.

Warren proposes that every tool of American national policy be directed towards the goals of reclaiming domestic industry and producing good jobs for American workers.

This, in her phrase, is the essence of economic patriotism and is the opposite of what most American-based banks and corporations do.

These “American” companies show only one real loyalty: to the short-term interests of their shareholders, a third of whom are foreign investors. If they can close up an American factory and ship jobs overseas to save a nickel, that’s exactly what they will do—abandoning loyal American workers and hollowing out American cities along the way.

Specifically, she calls for leveraging government-subsidized R & D to promote domestic good jobs. If the research and development that goes into new products is funded by American taxpayers, those products will be built by American workers. Warren also wants management of the value of the dollar to take into account the impact on domestic production.

In her Green Manufacturing Plan, which Warren is also releasing today, she further proposes the federal government allot $150 billion every year for the next decade to purchase renewable, green, American-made energy products, which in itself would amount to a 30 percent increase in the government’s annual procurement.

In addition, she values these new tools of domestic economic development for regional development potential as well, so that good jobs can be spread to the nation’s regions that have been left behind by the bi-coastal shift of capital. And she wants government procurement to be used explicitly for domestic production and job creation. Warren also proposes a dramatic expansion of worker training to rendezvous with the anticipated new jobs.

If China can commit its national resources to promotion of domestic industry, through plans such as Made-in-China 2025, and even democratic Germany can commit a great deal more economic planning than we do, says Warren, it’s time for America to start planning a future of cutting edge industries and good jobs. Every four years, the Department of Economic Development would produce a National Jobs Strategy, and all trade-related policies would fall under the new department.

Consider what Warren has done with this proposal. For starters, she has blown away the assumptions of several decades of U.S. trade policy, in which the invisible hand is supposed to allocate production based on principles of laissez-faire. But as painful experience has demonstrated, free-market economics doesn’t work any better globally that it does nationally.

While other progressive critics have offered telling indictments of America’s trade policy, Warren is the first to nest that critique in an affirmative strategy for reclaiming good jobs and fostering cutting edge industries. By doing so, she underscores her distance from corporate Democrats and allies herself with working people.

… While [the president’s] version of economic nationalism is all swagger, symbol, and shotgun retaliation. Warren’s would actually deliver tangible benefits for the voters who turned [to him] in desperation….

Warren has also reclaimed the virtue of patriotism for the progressive left, and connected it to something urgent and with real meaning, as opposed to the right’s use of patriotism for symbols, military adventures, and worse. The Prospect recently addressed this need in E.J. Dionne’s essay on the important work of John Judis.

As this remarkable plan is debated, the usual suspects in the political center not to mention the orthodox economists are going to go nuts. Just wait for the editorials and columns. Warren will be damned as a protectionist and worse…. But the supposed gains of “free trade” are among the most overrated free-market myths.

America’s finest industrial hours came during World War II, when national planning was a necessity and trade was shut down. The postwar boom was an era when trade came to just about five percent of GDP, and prosperity was broadly spread. Trade is fine as the tail on the economic dog, but it becomes perverse when trade is the tail that wags the dog (even more so when the master is corporate).

With this plan, Warren has begun an overdue debate that she deserves to win, both intellectually and politically.  And she has demonstrated once again her potential as a powerful force against [the president].

And against others in the Democratic field. Joe Biden may be the candidate working class voters would rather have a beer with, but what will he have to say about this proposal? Let his constituents eat free trade? Having supported NAFTA, extending permanent “normal” trade relations to China, and the Trans-Pacific Partnership, Biden’s pro-worker bona fides leave a good deal to be desired.

For several months, I’ve been arguing with the naysayers who tell the usual story of Warren being too much the “shrill schoolmarm” who will never reach working class voters, or being politically vulnerable as “Pocahontas.” I’ve watched Warren’s stunning success talking candidly about race, and observed skeptics crediting her political, rhetorical, and policy acumen, as she keeps slowly moving up in the polls, benefiting from those lowered expectations.

This latest proposal demonstrates once again what makes Warren a once-in-a-lifetime progressive leader.

Not Taxing the Rich Is What’s Radical

David Leonhardt of The New York Times points out that not taxing the rich is the radical idea:

Imagine for a moment that a presidential candidate made this speech:

My fellow Americans, I’m here today to tell you about my economic plan. Each year, I will require every middle-class family across this great country to write a check. We will then pool the money and distribute it to the richest Americans among us — the top 1 percent of earners, who, because of their talent, virtue and success, deserve even more money.

The exact size of the checks will depend on a family’s income, but a typical middle-class household will hand over $15,000 each year. This plan, I promise all of you, will create the greatest version of America that has ever existed.

You would consider that proposal pretty radical, wouldn’t you? Politically crazy. Destructive, even. Well, I’ve just described the actual changes in the American economy since the 1970s.

Economic output — known as G.D.P. — per person has almost doubled over this period. But the bulk of the bounty has flowed to the very rich. The middle class has received relative crumbs.

If middle-class pay had increased as fast as the economic growth, the average middle-class family would today earn about $15,000 a year more than it does, after taxes and benefits. Instead, that middle-class family effectively forfeits the money to the rich, year after year after year….

The extreme redistribution of income — upward — has multiple causes. Some of them, like technological change, stem mostly from private-sector forces. But government policy plays a crucial role. Tax rates on the wealthy have fallen sharply. Labor unions have been undermined. Big companies have been allowed to grow even bigger and more powerful. The United States has lost its lead as the most educated country in the world.

More often than not over the past 40 years, our government has helped the rich at the expense of everyone else. As a result, economic inequality has reached Gilded Age levels.

In the face of these trends, the radical response is to do nothing — or to make inequality even worse, as President Trump’s policies have. It’s radical because soaring inequality is starting to threaten the basic fabric of American life. Many people have grown frustrated and cynical. Average life expectancy, amazingly, has fallen over the past few years.

Over the sweep of history, the main reason that societies have declined, as the scholars Daron Acemoglu and James Robinson have written, is domination “by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.” The name of Acemoglu’s and Robinson’s book on this phenomenon is, “Why Nations Fail”.

It’s worth keeping all of this in mind when you hear critics (or journalists) describe the economic proposals of the Democratic presidential candidates as “radical.” They’re not radical, for the most part. The proposals are instead efforts to undo some of the extreme economic changes of recent decades and to ensure that most Americans workers — not just a narrow elite — fully benefit from economic growth.

The proposals also happen to be popular, broadly speaking. On social issues, like abortion and immigration, the country is deeply divided. But clear majorities support higher taxes on the wealthy, higher taxes on corporations, more education funding and expanded government health insurance. No wonder: Americans don’t resent success, but they do resent not receiving their fair share of economic growth.

The coming primary campaign will be a good time for the candidates to hash out which specific ideas make sense and which don’t. So far, the agenda looks pretty good. Elizabeth Warren has a plan to increase workers’ power within companies — and help them get larger pre-tax raises. Cory Booker and Kamala Harris want to lift the after-tax pay of the middle class and poor. Kirsten Gillibrand and others support reducing major living costs, like child care and education.

Perhaps most important, some Democrats have begun pushing for a wealth tax — to reverse the upward redistribution of the past 40 years. Warren has proposed an annual 2 or 3 percent tax on large fortunes. Bernie Sanders has proposed a big increase in the inheritance tax.

These wealth taxes are a classic example of policies that are less radical than their opponents claim. Do you know who already pays a wealth tax? Middle-class Americans. It’s called the property tax, as Noah Smith of Bloomberg Opinion has noted. Every year, homeowners pay a percentage of their house value in tax. A house, of course, is the biggest asset that most families own. If middle-class families can pay an annual tax on their main source of wealth, wealthy families can, too.

The United States as we have known it — optimistic, future-oriented and more powerful than any other nation — cannot survive the stagnation of mass living standards over many decades. I’m glad to see that some political leaders understand this and are trying to recapture a core feature of American life….

For these progressive taxes to be enacted, the Democrats will have to take the White House and the Senate in 2020 and hold onto the House. The Senate will be competitive, but the Republicans probably have the edge, given the particular states that will have Senate races.

Meanwhile, Republicans want to eliminate the estate tax, which they recently weakened. As of this year, it only applies to estates worth more than $5 million.

On a related note:

On Tuesday, a pair of baffled [Fox News] anchors referred to [talk about higher taxes on the rich] as a movement “against capitalism.” It is a dubious assertion, because by that definition the U.S. has only been a capitalist country since the 1980s, when Reagan knocked the top tax rate even lower and conservatives convinced enough legislators that “a rising tide lifts all boats” was a substitute for economic policy. But in their efforts to find an explanation for why so many people are turned off by unfettered, unregulated, and unaccountable capitalism, they turn to Charles Payne of Fox News Business. His explanation: Schools have brainwashed kids with lessons about “fairness.”