Friday, February 15, 2013

Honest Governing Begins at Home

It's not them, it's us

In a recent Financial Times column, Edward Luce imagines what President Obama really wanted to say in his State of the Union speech this year. I'll let you read the entire piece yourself, but I grabbed a few lines (below in italics) for comment.

Our system is rigged against equality of opportunity.

The President touched upon this notion in his actual State of the Union address, though with a slightly different spin:
It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation.
From my point of view the task isn't so much "unfinished" as we need to "undo" existing favoritism and bias. Gerrymandering, ballot restrictions, and other barriers to entry have rigged our political processes. A convoluted, loophole-riddled tax code as well as sector-specific subsidies and credits limit upward economic mobility. We subsidize college loans but do little to get young children pointed out of poverty and toward college.  Supporters of meritocracy believe that "doers" offering value deserve to get ahead. But when those already ahead and in power cut the rungs of the ladder behind themselves, the "doors of opportunity" close little by little over time.

We should be honest: our real crisis is about how we govern ourselves.

This is not about how politicians govern but how we manage our expectations for and oversight of those whom we grant our proxy to govern. By not going to the polls we abdicate our civic duties.  The elected look to wrest away our civic clout and maintain the status quo by making it harder for us to vote. And it's easy to fall prey to the cult of personality and the glitter of big money. Ultimately, however, it's up to we the people to leave something for the kids rather than take it all for ourselves now.

All of you ... pay lip service to the struggles of what we used to call the little guy while ensuring that most subsidies go to the wealthy.

The bulk of subsidies in the form of tax expenditures go to the rich in the highest marginal rate brackets.  The bulk of agricultural subsidies go to large agribusinesses, not small family farms. The bulk of housing subsidies go to high-income families in large houses, not households struggling to make a mortgage payment. (The inefficient and distorting nature of the mortgage interest subsidy is a whole other topic.) Nonwage income in the form interest, dividends, and capital gains is taxed at a lower rate than wage income, and nonwage income is exempt from Social Security and Medicare taxes which are piled on the employed and their employers.  It's past time to end these perverse practices.

Who among you will be the first to take on America’s wealthy retirees?

This is not about soaking the rich; this is about taxing all income equally whether received from a pension, retirement account distribution, government benefit, or paycheck. For those of us still working to pay Social Security and Medicare taxes that support wealthy retirees, this seems especially unfair because we don't expect to receive an equivalent government benefit in our retirement. There's no reason to treat retirement and working income differently.

Fellow Americans, let me conclude by reminding you that ultimate power in this land lies with your elected representatives.

In a CNBC interview, Clint Eastwood asked rhetorically why Americans should care if no one in Washington cares. Mr. Eastwood has it backwards:  we have to participate and engage to show the elected that we care enough to enable true change and empower dynamic, representative government.

Congress is in shambles because we elect careless, tone-deaf politicians. It always comes back to us: we can elect leaders that lead or we can elect carnival barkers and ideological shills.  The power of the ballot is and will always be ours.