The American economic system ought to lift all boats — not just provide ever more tremendous boats for the few while the majority are sinking.
In June 2015, Bernie Sanders wrote the following in an op-ed in the Boston Globe:
Corporate America has mounted vigorous anti-union campaigns, making it harder for workers to collectively bargain for decent wages and benefits. That is why we must make certain that workers are given a fair chance to join a union.
Meanwhile, US companies are buying back billions of dollars of their own stock in a way that manipulates stock prices, hurts the economy and, by the way, used to be against the law. [Stock buybacks are permissible due to a SEC rule change in the early Reagan years. It is the President who appoints SEC commissioners and designates the SEC chairperson.]
Instead of putting resources into innovative ways to build their businesses or hire new employees, corporations are pumping their record-breaking profits into buying back their own stock and increasing dividends to benefit their executives and wealthy shareholders at the expense of their workers. It is a major reason why CEOs are now making nearly 300 times what the typical worker makes. We must demand an end to stock buybacks.
Coincidentally, the next day an op-ed titled “Ban the stock buyback binge, bring back the middle class” appeared by economist William Lazonick. And here is a snippet on the same subject from a PBS article by billionaire venture capitalist Nick Hanauer:
Our epidemic of stock buybacks is the smoking gun that reveals just how dangerous [and] bankrupt trickle-down economic theory is: it values profit above all else, and makes the sole responsibility of corporate managers the enrichment of shareholders.
Take, for example, Wal-Mart, which recently made headlines by announcing it would spend a billion dollars a year raising the wages of its lowest paid employees — a minor tweak to its low-wage business model. Over the past 10 years, according to data compiled from its public filings, Wal-Mart has spent more than $65.4 billion on stock buybacks — about 47 percent of its profits. That’s an average of more than $6.5 billion a year in stock buybacks, enough to give each of its 1.4 million U.S. workers a $4,670-a-year raise. It is also, coincidentally, an amount roughly equivalent to the estimated $6.2 billion Wal-Mart costs U.S. taxpayers every year in food stamps, Medicaid, subsidized housing, and other public assistance to its many impoverished employees. In this context, how can stock buybacks be either morally or economically justified?
They can’t, for the practice is not only unfair to the American middle class, it is also demonstrably harmful to both individual companies and the American economy as a whole. In a recent white paper titled “The World’s Dumbest Idea,” GMO asset allocation manager James Montier absolutely shreds our 40-year obsession with “shareholder value maximization,” or SVM, documenting the many ways that stock buybacks and excessive dividends have reduced business investment and boosted inequality.
There’s good reason to believe whoever wins the Democratic nomination will be our next president. Demographics have never favored a Republican victory in this cycle, and Donald Trump’s racist rhetoric has further diminished the GOP’s chances.
As president, Bernie Sanders would shine a light on income inequality and the shortsighted practices and policies which are contributing to it, and he’d use the levers of office and the bully pulpit to launch an aggressive agenda to ameliorate it — but just as importantly, he’d promote and leverage the progressive movement that helped elect him to help elect more politicians (and muscle incumbents) to support that agenda.
Anyone doubting the power of political movements should consider how successful the conservative movement has been for the last 35 years.
The massive income inequality we see today in America — where the wealthiest 20 people own as much as the bottom 152 million — is largely a result of policies that were birthed by the conservative movement, and the rightwing tilt of today’s Congress is of course a direct result of that movement. It’s not hard to imagine how different the policies and tilt of Congress could be if America had a vigorous progressive movement.
Bernie Sanders clearly understands that Democrats can leverage the power of a strong progressive movement to change the political and economic landscape in America. And since polls for many years have shown that most Americans support progressive policies, there is every reason to believe that — especially with the support of Democratic leaders — the progressive movement that Sanders’s candidacy is helping to inspire can grow and thrive.
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Postscript: to those who ask, “What happens if the voters’ passion for a political revolution fades after Election Day — how then could Sanders be successful?” — the answer is that a President Sanders would have the same tools of office available to him as a President Clinton or a President O’Malley would have — and there is surely no reason to believe he would be timid about using those tools. Sanders is right that to achieve grand progressive goals, America needs a vigorous progressive movement — but his entire political career has shown that he is quite willing and able to accomplish very significant progress even if that progress falls short of his ideals. His leadership in funding community health centers and negotiating the 2014 veteran’s health care bill are well-known examples. His philosophy has never been “all or nothing.” While each of our candidates could be a successful president without a Progressive Revolution, it stands to reason that each of them would be immensely more successful — and our country would be immensely better off — with a Progressive Revolution. So it would make sense for each of them, and all progressive Democratic leaders, to energetically promote this movement, just as Bernie Sanders is doing.