Taxation Without Representation

Or, how to make bank on intellectual property, trade agreements and union-busting, and still kick the middle class when they’re down.

If you’re middle class, did you wake up this morning feeling happy that patents and copyrights are now stronger and longer than they have ever been in the United States? Did you wake up happy knowing that Donald Trump is going to maintain $800 billion annual trade deficits for the foreseeable future? Did you wake up happy knowing that union labor now represents about 7% of work in the United States compared to about 20% in 1983?

All of those changes and more have one common element: they are a result of public policy changes made with the intention to drive income upward to people who already have a lot of money. And those policy changes were made as a result of political contributions designed to drown out the voices of the many who do not have enough money to influence the politicians who made those policy choices a reality.

My favorite economist is Dean Baker, from the Center for Economic Policy and Research. I know, it’s not normal to have a “favorite economist”, but I’ve read up on a few and Baker really stands out from the others. I’ve been following him for nearly a decade. I started following his work after watching this video which I found quite by accident:

You might recall the bailout of the banks in 2009 as a result of the meltdown of the financial system we saw in 2008. On September 30th, 2008, all of the biggest banks had worthless stocks because their liabilities, toxic loans, outweighed their assets. And that fact was all over the business news on CNBC, MSNBC, CNN, etc, on that fateful day. That video of Dean Baker was published the day after on October 1st, 2008.

From that video, I looked him up, found his blog, “Beat The Press”, with an image in my mind of a rolled-up newspaper aiming for a lapdog mainstream media, and started reading. I’ve been reading his blogs and books for years, comparing them to other economists. To me, he is the only economist to expand the scope of debate.

Did you want the banks to be bailed out? I didn’t. I figured that the banks would go insolvent, their assets would be sold off or written off, and we’d be moving on. Instead of helping the worker, the bailout bailed out the banks and the executives who ran them to the tune of $700 Billion, plunging the country into economic constipation for a decade or more. Guess who wanted that bailout more than working people and had the influence to get it?

Some of the same people who wanted the banks to be bailed out also found themselves in President Obama’s cabinet running the Treasury Department. Obama chose members of his cabinet from a list provided by Citibank, one of the biggest beneficiaries of the bailout.

Some of the people in that same crowd are supporting President Trump now. How do we know this? Because as Baker says in this article he published just yesterday, one of the central themes in Trump’s campaign was that workers were being hurt by bad trade agreements. Trump called the professionals who negotiated those bad trade agreements, “stupid”.

But those “stupid” professionals were smart enough to get a seat at the table and they knew who they were working for, and it wasn’t for working people like you and me. They worked hard to negotiate trade agreements that let the American worker down while driving income upwards to the people that already have a lot of money. Tell me, who has more influence over trade agreement negotiators? Us or the top 1%?

We also know that those same people are behind the latest round of trade talks with China because Trump is emphasizing intellectual property. Curiously missing is currency manipulation, one of the themes of Trump’s rhetoric during his campaign. Who among us owns registered copyrights or patents? Raise your hand if you do. If you do not, then you can rest assured that Trump is not negotiating on your behalf. Why not?

Because longer and stronger copyrights and patents do not bring jobs home. If American manufacturers know that China is a member of the World Trade Organization, and is required to honor intellectual property rights in trade agreements with the United States, then they don’t have to worry about forced technology transfers to the Chinese when they move our manufacturing jobs to China.

At the same time that free trade proponents are talking about free trade with manufacturing, none of them are talking about freeing up trade in professional services. We have a shortage of doctors, an artificial shortage created by public policy. Congress, at the behest of the American Medical Association, limits the number of aspiring doctors who can train in hospitals. Congress, and the statehouses of all 50 states, at the behest of the AMA, restrict the practice of medicine to only those who are qualified by American institutions.

Do you think that if we can have a monetary system that can securely transfer funds from one country to the next with little friction, that we could arrange for an international standard for health care professionals so that any qualified doctor could work in any country they wanted to? I think so. I think that the high costs of health care in America is a result of public policy decisions. It’s a direct tax on the rest of the economy, and that most of us have little to zero influence on the decision-making process that got us to this point. That is taxation without representation.

The same is true for our intellectual property laws. Most of us don’t wake up in the morning, happy that we’re accruing $1 million a month from royalties on our creations. But there are a few people who do. Do those copyright and patent owners care to lessen the burden on the rest of us? Probably not. Who had the greatest influence on the decision-making process that allows copyright owners to continue to earn royalties 95 years after their death for their work? Wasn’t me. It must have been the executives at Disney, NBC Universal, and Sony Pictures America.

And if you want to bust unions and keep wages low, strong intellectual property laws make a great avenue for sending jobs offshore. When I think of union-busting, I think of the GOP. I think of employer resentment over high wages. I think of people who imagine that another million bucks will make them even happier. I think of people who imagine that their wealth was attained purely as a result of their hard work and talent, despite the fact that there are plenty of people who work just as hard as the wealthy, have just as much talent, but lack the connections that lead to the top. And of course, there is luck.

So it’s time to expand the scope of debate for the men and women running for the Democratic nomination. It’s time to stop assuming that the market is free and that extreme inequality is just how the market is supposed to work. In a free market, there would be no room for billionaires. In a free market, doctors, dentists, lawyers, and other professionals would meet demand by moving where the demand is. In a free market, poorly performing bank executives would get fired without a golden parachute and have to work again for wages.

In a free market, the scope of political discourse and debate would not be limited to just what the wealthy and powerful want you to see.

Write on.

Written by

Husband, father, worker, philosopher, and observer. Plumbing the depths of consciousness to find the spring of happiness. Write on.

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