The biggest difference between today’s super-rich capitalists and the robber barons [a much more descriptive term] of a hundred years ago appears to be style. Handlebar mustaches, wool suits, top hats and protruding bellies are out of fashion, but today’s plutocrats share the same values of the captains of industry of the early 20^th century. In fact, they openly long for that so-called Golden Age, when capitalism was unfettered by pesky consumer protections, labor rights, bank regulations, income taxes and safety nets. We’ve seen it all before.

We’ve also seen how the Progressive Movement of the early 20^th century figured out how to reign in the excesses and help create a thriving middle class. The trouble is that, today, many of the accomplishments and lessons learned in earlier days of progressivism have fallen by the wayside—whether through corporate-influenced legislation and/or regulation, by complacency or by a failure of memory. But the lessons and ideas are still out there, and progressives need to reinvigorate them.

That’s what veteran labor journalist Sam Pizzigatti writes about in his new book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class. In a post at Inequality.org, Pizzigatti suggests five public policies—all of which were on the table during the Great Depression—that could put the U.S. back on what he calls “the plutocracy-busting track.”

One: Income disclosure

Require the rich to annually disclose the income they’re reporting to the IRS and how much of that income they actually pay in taxes.

Pizzigatti notes that, in the 1930s, progressives proposed just such a measure, contending that disclosure would make it harder for the wealthy to play games with taxes. It would also make it easier to see which loopholes need to be plugged.

But, in an intriguing historical footnote, Pizzigatti points out that:

In 1934, progressives actually added a disclosure provision to the tax code.  But the super rich counterattacked with a media blitz that tied disclosure to the infamous Lindbergh baby kidnapping. If all rich Americans had to disclose their incomes, the argument went, kidnappers would gain a wider pool of targets.

The 1930s obsession with the Lindbergh baby kidnapping proved to be a powerful detour, and the provision was scrapped. But the basic premise behind income disclosure remains a solid idea, says Pizzigatti. And today we’ve got the the technology to make it happen.

Two: Leverage the power of the public purse against excessive corporate executive pay

Pizzigatti knows that government can’t set specific limits on what private corporations pay their executives. But Congress could impose limits indirectly by denying federal government contracts and subsidies to corporations that lavish rewards on top executives.

This is not a new idea, either, notes Pizzigatti. But it’s one to build on:

In 1933, then-senator and later Supreme Court justice Hugo Black won congressional approval for legislation that denied federal air- and ocean-mail contracts to companies that paid their execs over $17,500, about $300,000 in today’s dollars. But the New Deal never fully embraced the Hugo Black perspective.

Pizzigatti suggests that we could actually do that today, “by denying federal contracts and tax breaks to any companies that pay their CEOs over 25 times what their workers are making.”

Three: Give Americans a safe alternative to private banks.

There’s precedent for this idea, too, says Pizzigatt:

For Louis Brandeis, a reform giant who also became a Supreme Court justice, prohibiting financial institutions from speculating with the savings of average Americans always remained a top priority.

In the early 1930s, Brandeis advocated the expansion of postal savings banks, a system — in effect since 1911 — that paid 2 percent interest on modest savings accounts maintained with the post office. That expansion never took place, and postal savings banks withered away. They deserve a second shot.

Four: Tax undistributed corporate profits.

America’s biggest corporations are currently sitting on stashes of cash that have hit mega-billion levels, says Pizzigatti.

Money that could be invested in creating jobs sits instead in income-generating financial assets that only sweeten corporate bottom lines and executive paychecks.

A similar problem plagued the nation back during the Great Depression, and progressives pushed for a stiff tax on these “retained earnings.” In 1936, Congress passed a watered-down version of this tax that didn’t last and didn’t make much of an impact.

A stronger tax today just might.

Five: Cap income at America’s economic summit.

In a world in which Congressional Republicans refuse to even talk about raising taxes on top earners by even 3 percent, this is probably Pizzigatti’s most pie-in-the-sky idea. But if we want a rational discussion of revenue, it’s worth talking about.

First, the historical context:

In 1942, in the midst of a war-time fiscal squeeze, President Franklin Roosevelt proposed a 100 percent tax on all individual income over $25,000, the equivalent of about $355,000 today.

Congress didn’t go along. But lawmakers did set the top tax rate at 94 percent on income over $200,000, and federal income tax top rates hovered around 90 percent for most of the next two decades, years of unprecedented prosperity.

America’s rich fought relentlessly to curb those rates. They saw no other way to hang on to more of their income.

So, what is Pizzigatti proposing? A restructured top tax rate that would give the rich what he calls “a new incentive.”.

We could, for instance, set the entry threshold for a new 90 percent top rate as a multiple of our nation’s minimum wage. The higher the minimum wage, the higher the threshold, the softer the total tax bite out of the nation’s highest incomes.

Our nation’s wealthiest and most powerful, under this approach, would suddenly have a vested interest in enhancing the well-being of our poorest and weakest.

Pizzigatti concludes his fascinating history lesson this way:

Years ago, progressives yearned to create an America that encouraged just that sort of social solidarity. They couldn’t finish the job. We still can.

The post 5 plutocracy-busting ideas from America’s progressive history appeared first on Occasional Planet.

1. At a town hall meeting on Tuesday, February 22, a supporter of Georgia Republican Paul Broun asked the U.S. representative, “Who’s going to shoot Obama?” The question got laughs from the audience and reportedly a chuckle from Broun himself, along with this response:

The thing is, I know there’s a lot of frustration with this president. We’re going to have an election next year. Hopefully, we’ll elect somebody that’s going to be a conservative, limited-government president that will take a smaller, who will sign a bill to repeal and replace Obamacare.

This ugly little exchange crystallizes over two centuries’ worth of racial, economic, and political history in America.

Did that old man in Georgia clamoring for the assassination of America’s first black president really have health care on his mind, as Broun implied? And how could Broun pivot so smoothly from talk of assassination to talk of repealing “Obamacare” and its modest efforts to spread out some of the wealth that has become so concentrated in America?

How? It’s the same old song. Politicians of Broun’s ilk have been pivoting smoothly from racism to economics since our country’s beginning.

2. During the run-up to the last presidential election, Republicans mounted an attack on Barack Obama based on his response to Joe the Plumber’s question about taxes. At the end of a long and nuanced response, Obama talked about how he thought the country worked better when you “spread the wealth” around. Republicans gradually mustered a sense of moral outrage at this notion, even though it underlies accepted economic practices in most developed nations that aren’t straight-up oligarchies.

Let’s take a step back to consider some of the history of “spreading the wealth” in America.

The end of slavery in the South, for instance, constituted a gigantic transfer of wealth—from Southern slaveholders to the slaves themselves. The wealth transferred, of course, was the value of the slaves, a tangible monetary loss for all of the slaveholders. The emancipation of the slaves was the starkest redistribution of wealth in American history. Our nation is arguably still feeling the aftershocks of that cataclysmic act of justice.

In the debate leading to the passage of the health care bill—to whose repeal Rep. Broun so quickly turned in response to a proposed political assassination—what was ultimately at stake was another, much less dramatic redistribution. As Hendrik Hertzberg noted in a New Yorker piece from August of 2009, the Blue Dog Democrats (not to mention Republicans), resisted Barack Obama’s plan to provide health care for all because they “vociferously oppose[d] a modest surtax on the top one per cent, whose effective tax rates have dropped by fifteen per cent since 1979, while their after-tax incomes have more than tripled.”

The debate over health care, at its core, was really about this central question of American politics: To what extent should government intervene to ameliorate inequality and offset the damages wrought by vicious greed?

The federal government fought a war and amended the Constitution to outlaw the owning of one human being by another. Then, over a period of decades, Southern states gradually clawed their way back toward a slave system (as Douglas Blackmon argues persuasively in his 2008 book Slavery By Another Name). Eventually, under the intense pressure of the Civil Rights Movement, the federal government again came down hard on the side of equality.

In response, as LBJ predicted, the South turned its back on the Democratic party and conservatives embraced a doctrine of states’ rights and laissez-faire capitalism, essentially declaring that the government should do little or nothing to protect its citizens from being exploited. Profiteering and prejudice, in the minds of some, became synonymous with patriotism.

Those who control wealth will always complain about its redistribution. Slave owners were outraged to have their chattel taken from them. FDR was a “traitor to his class” for engineering the New Deal. White southerners violently resented the federal troops who made them open schools to blacks. And now Rush Limbaugh and Glenn Beck and “liberty-loving” Tea Partiers decry Obama’s health care plan as socialism.

3. Fogging this central economic debate is the issue of race. As the historian Edmund Morgan argues in American Slavery, American Freedom, our country was founded by wealthy white men who gained the allegiance of poor white men by presenting them a vision of freedom and liberty—a freedom that was explicitly predicated on their whiteness, and a freedom that implicitly excluded blacks. The wealthy, from our country’s very beginnings, have mitigated class conflict by cultivating racial solidarity among whites, a sense of shared superiority over African Americans.

Something similar occurred in the South after the abolition of slavery. Racist repression and exploitation served mainly to enrich a small percentage of whites. Poor whites who clung to their sense of racial supremacy were no doubt harmed economically by being pitted against oppressed blacks in the labor market.

A racially equal society, on the other hand, could have spread the wealth out more equitably to both blacks and whites, helping the South to share more fully in the wealth of America at large, but perhaps reducing the individual fortunes of the most wealthy.

Likewise in America today, our nation is stronger if more people have access to affordable health care and fewer people are driven to economic ruin by crushing medical debt. “Obamacare” and progressive taxation are not socialism. They’re reasonable plans for moderating a market economy in order to deliver the best quality of life for the most citizens possible, regardless of their race. And these measures are on a spectrum with the abolition of slavery, the New Deal, and the Civil Rights Act—a spectrum of controversial but necessary steps by the government to make the nation a better place for its citizens.

This is essentially the point that Barack Obama was making to Joe the Plumber. It’s a point that is evidently threatening to many of the wealthiest Americans, who have so dramatically outstripped the rest since the election of Ronald Reagan. And so, as we saw in Georgia last week, in order to defend wealth, the defenders of the wealthy yet again join hands with those who favor violence to advance a misguided sense of racial superiority.

The future of our country depends upon how many Americans can understand this classic American swindle—the use of racism as a fog to obscure predatory greed—and upon how many Americans can instead support the vision of a country, and indeed a world, in which the wealth of the few is not built upon the impoverishment of the many.

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