The Progressive Ensign

insights and analytics to build an economy that works for all

Category: Local Politics

Securing Democracy: A Citizens Action Guide – Introduction

(Note: this is a continuing series of key topics to build the foundation of a reboot to our democracy to create an economy that works for all not just the top 1%)

The COVID-19 crisis is causing deep psychological shock combining panic, depression and recession. It is a new type of crisis or ‘panipression’.  To create this new word we combined three word stems: pan for all and Greek word for their god of terror in the word panic,  press a state of pressing down and sion for state or quality of something. People are stressed, not sleeping well, and worried about their families as in other recessions butnow health is added to their worries.  It is a sense of falling, that doesn’t seem to stopThis worldwide virus contagion is incredibly pervasive going right to the heart, soul and experience of every AmericanThe social fabric of our society has been shredded.  Now, we are trying to stitch our social fabric back together.   Everyday our way of living is turned upside down.  The previous ways of doing things have disappeared, instead social interaction has shifted to digital networks. Yet, we are social beings we need to be hugged, touched and feel close together.

The coronavirus pandemic has ‘uncloaked’ the vast gap between the top 1 % in wealth and their safety net versus the free fall of the working class. Our first responders, nurses, doctors, delivery people, grocery store clerks, restaurant attendants, farm workers, meat packing employees and others are putting themselves at risk for us and many of them only make a minimum wage or less with no sick leave.   While Wall Street investment banks get low interest loans, or even have the Federal Reserve buy their speculative debt, workers are left with one-time $1200 checks, temporary sick leave and unemployment bonus of $600 ending in eight weeks.  Over 31M small business owners of which only 40% are profitable are applying for temporary loans which may be converted into grants if they keep employees on payroll for eight weeks.  The virus panipression has stunned consumers to the point where they will be nervous and anxious about going out to stores to shop.  Businesses will not rehire workers until they see renewed demand.  What happens to the 36M on unemployment assistance when the eight week bonus stops and they are on 60% of their hourly wage for 26 weeks?

So, what is the path ahead?   There is in embedded in this crisis an opportunity to transform our democracy into a more secure, resilient society where the economy works for all.  What will get us through the convulsions of these times?  The  foundation of change in our nation has been the American Spirit has served us well through the Civil War, both World Wars, Civil Rights Reform, Vietnam War, and The Great Recession. It is time to renew that spirit and move ahead using it as a compass to navigate our future path in rebuilding our government, economy, education, and society – a reboot to version – P 2.0 (People).   Below is a diagram of the key institutions that sustain our democratic values, ideals and functions to serve us:

Source: Patrick Hill – 5/22/20

The American Spirit is the foundation of our democracy.  The American Spirit is typified by entrepreneurship, hard work, ingenuity, self-sacrifice, innovation, inclusiveness, equal opportunity, freedom of choice, and caring for others.

The American Spirit supports the creation of the Common Good.  The Common Good are those values, things or institutions that support the ability of citizens to pursue their dreams from a common base unfettered by imbalances in what all people need to live.  We all need clean air, water, and land to live each day.  We need good health, a sense of personal safety and economic security.  In common we desire that our families be protected, secured and allowed to grow in any way they desire.  Our country was founded by those persecuted for their religious beliefs we need to have our religious beliefs respected, tolerated and protected.   Core to a well-functioning democracy of citizens making wise choices is a public education system to ensure that every citizen is well educated to make intelligent choices.  A well educated citizenry will make good choices voting for those leaders that will implement laws and policies for the common good and welfare of themselves and their country. 

Consent of the governed is a guiding principle for our democracy and protected by the Constitution. This consent is carried out by voting,  Voting is a right guaranteed in the Constitution and succeeding amendments to all people regardless of race, wealth, religion, or nationality.  We will explore how voting has changed in America and future alternatives for safeguarding this core act of democracy. 

There are three branches of federal government that sustain our democracy: Supreme Court, Congress, and Executive.  Congress has become quite distant from the Will of the People, as well as the objectivity of the Supreme Court.  The Executive branch has become a power center all unto itself with limited checks on it power. We will look at ideas for reform that ensure they are focused yet again on the People and the Common Good.  Two other institutions are crucial to our democracy. The Press and Education.  The Press acts to point a light into the darkness with facts, investigative journalism into the actions of our leaders and ongoing education of our government on our lives.  Our educational institutions ensure that we continue to learn, grow and understand our world, ourselves and the universe in a way to build of society and live happier lives.  We will look at how to strengthen these institutions and make them more accessible to all and how to support a more civil dialog.

Our federal government establishes laws and policies that establish the rules of our economy.  The evolution of the highest concentration of wealth in the top 1% since 1929 has distorted our economy to the extent that the middle class is dwindling and with it the core strength of our democracy.  A strong democracy is typified by a vibrant, robust, thriving middle class.  The development of growing middle class has to be a goal of our next version of democracy.

The concentration of capital into a few families has left labor out of the benefits of a growing economy.  The pandemic has targeted the consumer in ways we never imagined and now threaten the lives of most workers.  Our federal government has scrambled to apply a financial band aid to a financially chronically ill workforce.  Labor must have equal economic power with capital for a democracy to thrive and renew itself.  We’ll look at how to bring labor into equilibrium with capital.

All Americans want to pursue happiness in their own way, whether it be wealth, family life, religious pursuits or service.  Our democracy needs to focus on the core values of the American Spirit and ensure they are represented powerfully thorough the institutions that run the day to day operations of our government.

The ideas presented are founded on facts, so you will see a few charts or data references.  Yet, each idea will be explained simply so that you as a citizen can be informed and participate in our democracy to your utmost ability.  The 2018 election had 49.3% of the electorate vote the highest for a mid-term election since 1914.  We would like to see more citizens participate in our electoral process, run of office and use civil dialog in the pursuit of law and policy making.  You may disagree with some ideas presented here to get the dialog rolling toward a Democracy version P 2.0, and that’s great.  The idea is to move to participation of everyone, not to be ‘right’ yet to be in tune with the American Spirit of progress for every citizen. You will find a focus on identifying a problem by using facts, and much larger focus on solutions. We need more focus on solutions.  The solutions then become larger than the problems and we overcome the obstacles to achieving the positive result.

This is a time of unprecedented events. A virus induced panipression like we have never felt before or know what to do about.  Yet, we can have faith that by going back to the American Spirit that binds us and unifies us we can all get through this together.  To support our institutions that sustain our rights, due process and justice we need to do our duty. We all must take responsibility for forming a more perfect society. We need to participate in the democratic process with all earnestness. Plus, we must trust and obey our leaders when they formulate policies that promote, ensure and build the common good. We need to balance our rights with the duty to ensure the safety, security and happiness of our fellow citizens. Let’s build consensus across all points of view toward a more perfect union Because, on the other side of this transformation we will have a more equitable, just and prosperous democracy that works for all.

Patrick Hill

Sunnyvale, California

May 29, 2020

Housing Has Not Recovered From the Great Recession

Image: 15146affordablehousing.weebly.com

As a percentage of GDP housing has not recovered from 2008.  Particularly, in two key categories: (1)  Furniture, Repairs & Maintenance and (2) Construction.  Additionally we know that appliance sales have been lagging as well due to tariffs and price versus worker wages being stagnant.

Sources: BEA, John Burns Real Estate, The Wall Street Journal, The Daily Shot – 10/18/18

Housing has not recovered from the Great Recession downturn from sub-prime mortgages and loose lending practices.  As part of the recovery, banks were made whole with billions of TARP funds, but homeowners who tried to write down their principal loss on their homes to reduce mortgage payments were not allowed in court.  Banks paid a small pittance of $50 million in homeowner relief that was distributed in a hazard manner.  Millions of homeowners lost their homes and more importantly lost their equity.  They could not replace their homes when the economy turned around, they had to take ‘make do’ jobs when they did finally find a job and are now left with little wealth to retire on except for Social Security.

Young prospective home buyers face a daunting affordability crisis as the inventory of affordable homes is low as builders focus on wealthy buyers, who buy high margin homes.

Sources: Scotiabank Economics, NAR, Haver Analytics, The Wall Street Journal, The Daily Shot – 10/17/18

In all regions of the country affordability continues to fall after reaching a peak in 2012.  Mortgage rates are at the highest level since the Great Recession, the inventory of middle class housing continues to decline and the commitment to homeownership is waning.  We hear more and more about how ‘renting is really ok’ – for who?  The wealthy landlords who continue to raise rents while raking in the cash.  What about families who want yards for their kids to play in, or to gain ‘sweat equity’ by upgrading the home they live in or landscaping the yard.  It is clear just looking at most neighborhood which homes are owned and maintained and which ones are rentals owned by an off premise landlord.

Next Steps:

Dropping the national commitment to home ownership is not the solution to the problem.  We need to ensure that the 80 % who do the heavy lifting in the economy can afford to buy a home on their incomes.  Corporations need to be increasing wages for workers at least as fast as their executives and more to ‘catch up’ to the raises and stock plans of the executive team receiving high compensation from stock and stock buybacks.

Reducing student debt, now at $1.5 trillion is critical so that prospective home buyers do not have student debt right at time they are starting families and purchasing a home.  We have proposed a far reaching program building on existing student debt forgiveness programs to more comprehensive service for debt forgiveness programs.

Builders need incentives to build lower margin homes middle class homes in new developments.  Local and state governments need to take on the charter of ensuring that affordable housing is a priority for zoning near commercial and business centers.

Fannie Mae and Freddie Mac need to be committed to focusing on first time buyers and lower income prospective buyers innovating ways to get them into homes while at the same time being financially responsible.  The Federal government needs to provide more funding for the two housing agencies to bring down rates to an affordable level.  Working in cooperation with groups like Operation Hope, banks need to make a new effort to make mid and lower income buyers financially literate and help them move into homes.  Think what a huge difference it would make for our cities and rural communities if people owned their homes and made improvements to their home and yards.

High Tech Behemoths Run State and Local Politics

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: youtube.com

Recently the high technology power houses like Google, Facebook, Uber and Amazon have appeared in the news related to national issues privacy, Russia hacking, driver contractors and conservative viewpoint censorship.  There is an even more troubling trend; major high tech corporations are controlling key decisions, policies and direction of development for many major American cities and states. Amazon is throwing its weight around the U.S. in search of a 2nd corporate headquarters.

Source: LA Times – 1/19/18

Amazon has already received millions of dollars in tax subsidies and compensation  for locating warehouses in some regions. The Governor of Maryland has offered a $5 billion package of transportation and tax breaks to the company to locate in Maryland, while Newark and New Jersey have offered a $7 billion package of subsidies.  Amazon has been adept at Seattle politics as well, when the city unanimously passed a $275 per employee tax on businesses to pay for homeless shelters and affordable housing. Amazon along with local businesses pushed back and the measure was repealed.

Apple purchased a site previously owned by Hewlett – Packard for its Apple Park spaceship headquarters.  The Cupertino city council was delighted with the plan to put 14,000 employees on the site, doubling the number of workers at the large parcel.  After the headquarters building was built the local council realized that the traffic congestion around the site and the city was going to be a major problem. The city then proposed a per employee tax to gain revenue of $10 million versus the present tax structure based on square footage would have netted only $800, 000. The proposed funding would have been allocated to buses, road widening, express lanes and other traffic flow enhancements. Apple and other businesses protested so the proposal was tabled until the 2020 election.

Uber has gone into cities all over the country from its base in San Francisco without authorization, creating major competition to local taxi companies.  Cab companies in most cities purchase a medallion from the city at great expense, some in the hundreds of thousands of dollars to license them to provide ride services in the city.  Uber has run into opposition in some major cities like New York, where the number of cars is capped.

Google has quietly purchased hundreds of acres of land in downtown San Jose, until newspaper stories began to spot light the land purchases.  The high tech behemoth plans on deploying up to 20,000 employees around the city hub and train station.  Planning for a huge employee center near public transportation makes sense, but local businesses and housing near purchased lots are under pressure to sell to make room for the corporate plan.  Local housing groups are concerned about the availability of affordable housing and small business.

Next steps

Our concern is that major corporations, their planning departments and executives have so much power that local elected leaders have little clout to push back on building or development that may not be in the interest of the local community.  As local government struggles to gain revenues lost to an Internet based economy, and stiff opposition from local citizens to raising taxes causes local city government power to decline.

Local leaders will need to rethink their base of power in the city, seeking alliances with local businesses while building a base of economic support for city services.  Cities and states often interested in luring businesses to their local regions spending hundreds of millions of dollars in the process maybe missing the point of their charter.  Building necessary infrastructure, affordable housing, fast transportation systems, healthcare for those not covered and safe streets are their mandate from local citizens. It is a challenging time for local and state governments, yet they need to take up the mantle and assert the policies and programs they were elected to implement.  Plus, corporations need to take responsibility for their actions and how they affect building the common good of the community.

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