Professor James Galbraith, of the University of Texas at Austin, urged lawmakers
Testimony by James K. Galbraith, Lloyd M. Bentsen jr. Chair in Government/Business Relations, LBJ School of Public Affairs, The University of Texas at Austin, to the Inaugural Hearing of the Select Committee on Economic Disparity and Fairness in Growth, United States House of Representatives, 2359 Rayburn HOB, July 29, 2021, 10 am.
証言者
ジェームズ・K・ガルブレイス
Lloyd M. Bentsen jr.
Lloyd M. Bentsen jr. in Government/Business Relations, LBJ School of Public Affairs,
テキサス大学オースティン校LBJ公共事務大学院政府・企業関係学講座
米国下院の経済格差と成長における公平性に関する特別委員会の発足公聴会での証言
and Fairness in Growth(経済格差と成長における公正さに関する特別委員会)」の発足公聴会に出席。
アメリカ合衆国下院、2359 Rayburn HOB。
2021年7月29日、午前10時。
Professor James Galbraith, of the University of Texas at Austin,urged lawmakers …
Adam Smith wrote, “Wealth, as Mr. Hobbes says, is power.” Today we have islands of wealth and power on one side and an ocean of precarity and powerlessness, alongside persistent poverty, on the other. This is a structural development over 50 years, the consequence of politics and policies, but also of industrial change, globalization and new technologies, with intense regional, social, demographic and political implications. In a nutshell, an agro-industrial middle-class economy that from the 1930s to the 1970s was centered in the heartland, feeding and supplying the world with machinery and goods while drawing labor from the impoverished South to the thriving mid-West – an economy of powerful trade unions and worlddominant manufacturing corporations – has become a bi-coastal economy dominated by globalized finance, insurance and high-end services on one coast, and by information technology, aerospace and entertainment on the other. In between, with important exceptions here and there, communities struggle – and inner cities, smaller towns and rural areas especially so. The unfortunate fact is that our most successful sectors – finance and technology – do not support a large base of direct employment. And the conduct of business in those sectors is highly competitive, often rapacious and predatory, shading from time to time into fraud. There are other industries that promote the concentration of wealth – petroleum and railroads are great historic examples – but very few have done so as efficiently and ruthlessly as finance and technology in recent years. To give just one indication: some years ago we calculated the rise of income inequality measured between counties during the 1990s boom years, and found that half the increase was due to income gains in just five counties : New York NY, San Mateo, Santa Clara and San Francisco CA, and King County WA. There have been other big gainers since, but the point remains: the largest income and wealth gains in America have become highly concentrated in very specific sectors and very specific places. On the other side of the ledger, practically all new jobs created in the past 30 years in the US, and especially since the Great Financial Crisis of 2007-2009 have been in services, and most of those in what may be called “stagnant services” – the profusion of restaurants, retail shops, hospitals and
Testimony by James K. Galbraith, Lloyd M. Bentsen jr. Chair in Government/Business Relations, LBJ School of Public Affairs, The University of Texas at Austin, to the Inaugural Hearing of the Select Committee on Economic Disparity and Fairness in Growth, United States House of Representatives, 2359 Rayburn HOB, July 29, 2021, 10 am.
Mr. Chairman, Members of the Select Committee, my name is James Galbraith. I am a creature of this House, having served on the staff of the Committee on Banking, Finance and Urban Affairs in the 1970s and as Executive Director of the Joint Economic Committee in the early 1980s. Presently I hold a professorship at The University of Texas at Austin, where for over twenty years I have directed a research group called the University of Texas Inequality Project , mainly concerned with accurate measurement of pay and income inequalities, in the United States and worldwide. The mission of this Select Committee has historic potential, comparable to the Pecora Commission of 1932 and the Temporary National Economic Committee of 1938. The future of the country depends on effective action to restore common economic ground, in the face of a concentration of wealth and power that has plainly gotten out of hand. The trend to concentration is long-standing. It has bipartisan roots. It is in some respects the outgrowth of policies that were thought practically necessary or even to have progressive intent – as I witnessed in the 1970s and 1980s. But irrespective of intent, we must now deal with the situation that we face.
Adam Smith wrote, “Wealth, as Mr. Hobbes says, is power.” Today we have islands of wealth and power on one side and an ocean of precarity and powerlessness, alongside persistent poverty, on the other. This is a structural development over 50 years, the consequence of politics and policies, but also of industrial change, globalization and new technologies, with intense regional, social, demographic and political implications. In a nutshell, an agro-industrial middle-class economy that from the 1930s to the 1970s was centered in the heartland, feeding and supplying the world with machinery and goods while drawing labor from the impoverished South to the thriving mid-West – an economy of powerful trade unions and worlddominant manufacturing corporations – has become a bi-coastal economy dominated by globalized finance, insurance and high-end services on one coast, and by information technology, aerospace and entertainment on the other. In between, with important exceptions here and there, communities struggle – and inner cities, smaller towns and rural areas especially so. The unfortunate fact is that our most successful sectors – finance and technology – do not support a large base of direct employment. And the conduct of business in those sectors is highly competitive, often rapacious and predatory, shading from time to time into fraud. There are other industries that promote the concentration of wealth – petroleum and railroads are great historic examples – but very few have done so as efficiently and ruthlessly as finance and technology in recent years. To give just one indication: some years ago we calculated the rise of income inequality measured between counties during the 1990s boom years, and found that half the increase was due to income gains in just five counties : New York NY, San Mateo, Santa Clara and San Francisco CA, and King County WA. There have been other big gainers since, but the point remains: the largest income and wealth gains in America have become highly concentrated in very specific sectors and very specific places. On the other side of the ledger, practically all new jobs created in the past 30 years in the US, and especially since the Great Financial Crisis of 2007-2009 have been in services, and most of those in what may be called “stagnant services” – the profusion of restaurants, retail shops, hospitals and
clinics, offices and entertainment venues, that have grown up in American cities and towns, fueled by household incomes (and borrowings) exceeding requirements for material goods, whose cost has been kept down by a rising share of inexpensive imports. Pay in these jobs is often mediocre and employment is unstable. Families have compensated by having, characteristically, two or more earners, each sometimes holding two or more jobs, where 50 years ago the normal pattern was one earner with a steady job paying a living wage.
Pay in these jobs is often mediocre and employment is unstable. Families have compensated by having, characteristically, two or more earners, each sometimes holding two or more jobs, where 50 years ago the normal pattern was one earner with a steady job paying a living wage.
For this reason – a curious fact – if you examine surveys of household disposable income in the United States, and if you exclude the vast gains of a tiny minority with large capital rents – you find that household income inequality, after taxes and transfers, has not actually risen very much since the 1990s (See Figure A25 ). The big change is that it takes many more hours of work to sustain a middle-class living standard, in work that is less intrinsically rewarding, and more precarious, than was the case two generations back. The rises and falls of inequality in estimates that are based on taxes – and therefore cover the wealthiest households – are closely aligned with the movement of stock prices and real estate values. They reflect the vast gains, and sometimes the sharp losses, of the wealthiest groups. The rise of “stagnant services” also explains why the median wage has been stagnant for so many years. It is not that individuals don't receive raises as they gain experience and seniority, nor that workers in manufacturing and in advanced technology no longer share in the productivity gains and profits of those sectors. It is, rather, that with more than half of all jobs in sectors that have a relatively flat and stagnant wage structure, the median worker is now found in those sectors. The path of the median wage therefore depends on what happens in the “stagnant services” sectors. There are reasons why it might have been better to maintain the balanced middle-class, manufacturingbased economy that we enjoyed 60 years ago, but it's gone. Globalization and the information revolution are irreversible facts of life. The June 2021 White House Review on the supply chain made this very clear, using four key sectors as examples. In particular, our advanced sectors need world markets – including the Chinese market – as much as they need access to the world's resources. Our consumers benefit from imported goods and from the efficiencies of the information age. The question for the Select Committee is: what do we do now? The answer, broadly, is that we must build on the advantages we retain, deal with the problems we now face, and convey the benefits to the whole of American society, recovering the unity and sense of common purpose that we need in order to solve our common problems. A sound strategy going forward should be free of illusions – the great economic powers and the information networks emergent today are going to be with us for the indefinite future. But we can adjust, and build a fair and secure middle-class society, free of poverty and of oligarchy alike, with tools that are broadly familiar. These tools include: Expand social insurance. Social Security, Medicare, Medicaid, Unemployment Insurance and SNAP already greatly reduce poverty, insecurity and hunger in America. They can be broadened and strengthened, in spite of the obstacles that we all know of. If you can't get Medicare for All, then drop the age of eligibility to 55 – that would cover a large part of the most vulnerable population and reduce in a stroke the burden of private health insurance on employers. Raise the minimum wage. A federal minimum wage at $15 per hour would provide a raise to at least 20 percent of all working Americans. It would solve in a stroke the supposed problem of “labor shortage” just now – and it would do so in a way that would not disadvantage any employer relative to any other.
Implement a job guarantee. A federal job guarantee is well-prepared proposal that would eliminate involuntary unemployment, set a basic wage standard, and provide willing workers with continuous employment on useful projects, giving private employers a labor pool from which they can easily recruit the workers that they need. As a stabilizing force in the economy, the job guarantee is selflimiting – with strong private demand for labor it would remain small, yet able to be expanded in emergencies. In this way, the job guarantee would finally realize the employment objective of the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978, on the drafting of which I was privileged to work 45 years ago. A job guarantee is a better policy choice than a “universal basic income” – an idea that would not wear well politically and socially in America, in my view. Still, we have learned from the pandemic that in an emergency, a generous cash benefit can be paid out quickly, providing a bridge that holds families and households together. So we can think of the job guarantee as a long-term stabilizing program, and cash grants as stop-gaps for exceptional situations. Build public services, infrastructure, and fight climate change, while trimming military commitments and expenses. A great and largely neglected element of economic fairness is the quality of services and amenities we enjoy in common – schools, parks, libraries, museums, theaters, music and the arts. The main point of infrastructure, including broadband, is to enhance the quality of life, with clean water, good transport, and – urgently – to change the energy and resource mix so as to mitigate, so far as possible, global warming. We cannot meet this need and at the same time devote our talents and resources to military projects whose limits are anyway apparent after 20 years in Afghanistan and 18 years in Iraq. Shift the basis of taxation toward rent. One of the great principles that the classical economists of the 19th century understood, was that taxes should fall on the factors that can least successfully evade them, and should encourage labor and enterprise while discouraging waste and extravagance in both the public and private spheres. In the 20th century, under the compulsion of the Depression, New Deal and war efforts, progressive income taxation, corporate taxation, land-value taxation all moved in this direction, creating an industrial middle-class economy. In the great economic counter-revolution of the 1980s, taxes were shifted away from personal and corporate incomes and capital gains and toward payrolls and sales – and the unsurprising result was the rise of an oligarchy of hyper-wealthy persons, a new generation in the mold of Carnegie, Mellon and Rockefeller, emerging mainly from finance and technology. The remedy now is to tax, as closely as possible, these accumulations and the associated rents – land values, mineral rights, technology quasi-rents – so as to bring the new plutocrats back to earth. A stronger estate-and-gift tax can spur the transfer of great fortunes to foundations and nonprofit institutions, helping to prevent the emergence of dynasties, financial and political. Definancialize the economy by rebuilding debt-free education and health care. The point of the Glass-Steagall Act was to protect the middle class – the ordinary depositor at a commercial bank – from the speculative instabilities of the financial elites. It is true that those protective barriers had already been eroded by the late 1990s when Glass-Steagall was repealed. But we saw in 2008 where that led. The way forward is restore the independence of the middle class from great financial risks – and the way to do that is to provide for the major expenses of most American families – health care, higher education and retirement security -- once again, on a basis that is largely free of debt. Once this is done, financial risks will be at least somewhat insulated from key elements of the social fabric. If this reduces the scale of the financial sector and takes some of the glamour out of being a banker – that too will be a step toward a more fair and stable system. The remit of the Select Committee includes the word “growth.” This word is largely taken to mean growth of the economy as a whole, measured by total income and expenditure, the gross domestic product. This is a crude measure from another time. The national income and product accounts were created in the 1930s for an industrializing economy that was largely self-contained, with consumer and capital goods far more standardized than they are now. And the purpose behind the accounts, namely macroeconomic management in war-time and in the post-war world, led to an emphasis on private material well-being, raising the problem of “social balance,” or “private opulence and public squalor,” already discussed by my father in The Affluent Society in 1958. The Select Committee should consider carefully the role of “economic growth” as a policy objective in the world today. Today, the growth metrics that matter most are not gross expenditure and incomes, but the quality of life, especially the sustainability of life and the economic security of the American people over time. These metrics are less well-developed and harder to measure. But the Committee should set a course that gives them the weight that they deserve, recognizing that a rapidly growing gross product is not, any more, the sole or central goal of a proper economic policy. Finally, there is a political dimension to economic disparity in America. This may be of some interest on both sides of the aisle. It is a fact that the gains of the Democratic Party in presidential elections since the early 1990s have been by far the strongest in those states where inequality and disparity have grown the most . Indeed in all such states, the Democratic presidential ticket now routinely prevails, and it is rising inequality in the South and Southwest that is propelling a political transition there. The reason is that the Democratic Party is a coalition of high- and low-income groups, notably urban professionals on one side and working-class minority communities on the other. Whereas the Republican Party remains dominant in the countryside, small towns and many suburbs, mostly in the middle of the national income distribution. It follows, therefore, that while Democrats have an idealistic interest and moral commitment to reducing economic disparities and improving economic fairness, Republicans have a practical political interest in the same goals. Indeed their political future, at least at the level of presidential election outcomes, would appear to depend on it. So for the good of the country, let Democrats be idealistic and Republicans be practical. And not the other way around. Thank you very much for your time and attention.
thank you very much mr chairman members of the select committee uh mr chairman since you've already made my first point about the historic potential of this county.
i'll move directly to the second which is a remark from adam smith that wealth as mr hobbs says is power today we have islands of wealth and power on one side and an ocean of precarity and powerlessness alongside persistent poverty on the other this is a structural development over 50 years or so the consequence of politics and policies.
but also with industrial change globalization new technologies in a nutshell an agro-industrial middle-class economy that from the 1930s to the 1970s was centered in the heartland supplying the world with machinery and food and other goods uh while drawing labor up from the south to the midwest this economy which was an economy of trade unions and world dominant manufacturing corporations has become a bi-coastal economy dominated by globalized finance insurance services information on one coast information technology aerospace and other industries on the other uh and the unfortunate fact is that those sectors which are very successful sectors do not support a large base of direct employment they concentrate income and wealth.
they they're not the only ones historically to do so railroads and petroleum are great examples but they do so very very efficiently and so we have a situation in which the largest income and wealth gains in america become highly concentrated in very specific sectors in very specific places and there's a lot of struggle uh in many other places uh most of the jobs that have been created in the last 30 years and especially since the great financial crisis have been in services where the wage structure is very flat where pay is often mediocre and unemployment is unstable families therefore compensate characteristically by having two or more earners sometimes holding two or more jobs the normal pattern half a century ago was a single learner earning a living wage uh the result and this is the big change is that it takes far more hours of work to sustain a middle class living standard in work that is less intrinsically rewarding more precarious than was the case two generations ago it might have been better to maintain the economy that we once had but it's gone globalization and information revolution are irreversible facts of life and so the question for the select committee is what do you do now and i believe that we have the tools uh to address these issues they have experience doing so when the question is implementing them we in fact have seen already expanding social insurance a very powerful tool.
uh social security medicare medicaid unemployment insurance snap the programs were put in effect last year we saw in the paper today reduced poverty by more than half it's a very effective thing to do in the short run i don't think it's the permanent solution but it's a step that is important expanding health i'm an incrementalist i would drop the medicare age to 55 and that would be a very useful step just for example raise the minimum wage as ms chaney has already said a federal minimum wage at 15 an hour would provide a raise to at least 20 probably more of working americans and of course it would solve the problem of a so-called labor shortage without disadvantaging a particular employer because everybody would be subject to the same standard i would urge the committee to examine closely the proposal for to implement a federal job guarantee uh that would have the effect of eliminating involuntary unemployment and setting wage standards as well as providing a buffer so that people who need jobs could always get them this would not be necessarily a large program but would also help private employers uh who need to find workers because they could always find people who have good good track records in a in an employment program of this kind i think this is a very good solution obviously.
and there's progress already being made to build public services infrastructure and fight climate change and this lays the basis for the economy of the future i i would add to this that we have uh i think experienced that now shows that we need to reduce our military commitments and move resources in that direction turning to the other side of the leisure in fact of the ledger in fact toward the question what you do about great wealth i think the principle here is that the basis of taxation should be shifted away from labor and also away from from business and onto capital rents essentially on to land rents onto mineral rents onto technology rents to tax as closely as possible the major accumulations uh and uh to bring so far so to speak the new plutocrats back to earth and i would urge that the economy broadly be de-financialized for the middle class by rebuilding uh debt-free education and healthcare and this would provide essentially a sense of security that would provide that would insulate people from financial risks so with that said uh i would urge you to pursue growth but in this context as a uh broadly seeking the welfare and fair and equitable welfare for all americans thank you very much.
well i think there are a number of things but the most important one is to have a kind of strategic plan about how you wish to distribute the pattern of economic development and growth going forward.
and that's an infrastructure plan that's a climate change plan that's an industrial development and an economic development plan the way we get these concentrations by having particular poles of attraction and that's true if uh it's true of of the san francisco area the bay area it's true of of the area around new york uh and the way we got a diffused economy uh in the 20th century was by building an industrial base that was centered in the center of the country um so one can do that i don't know that one can handle every neighborhood that way uh and the kind of cheek by jowl great wealth and great poverty that's also a question of urban development.
and question of patterns of taxation so professor are you when you say a plan a strategy are you talking about a federal plan for economic.
i think federal and regional plans sure i mean to begin with for example think about the tennessee valley authority which had a transformational effect across the south uh and is partly responsible for the fact the south is no longer and left behind impoverished regions these things are very very important they can be done on a multi-state basis but i think the federal government has to provide guidance well i i definitely agree uh congressman capture that the financial sector is oversized in this country and it needs to have uh standards and models that function as for the purposes of economic development i do think that your region of the country.
and i started my career working for a legendary member of this house henry royce of milwaukee uh who i worked for for a decade so i knew something about this at the time uh has an enormous potential precisely because it's presently so run down and neglected and that the future of the country uh will depend upon the ability to essentially rebalance things and to make things and make it into once more the vibrant region this will not be the similar to what it was in the thirties to the seventies generally it is timeless industries will not return dr gilbert uh big question i just asked for you to elaborate on that answer for the record please right i will provide more for the record the gentlelady from wisconsin ms moore is recognized okay on that point.
i think what you want to do is to ensure that people who own land are under considerable pressure to develop it and to put it to use so that it provides jobs and employment for the larger population that is the purpose of orienting taxation uh toward that asset it's an asset which can't escape taxation it's much better to tax that than it is to tax working people's wages uh and so when you do that you're going to create an economy which is more balanced without necessarily directing what specific activities.
it's going to uh these these things can be developed into and not into industries that are both regional national even global thank you so much sir thank you this is the same problem that was faced in the uh 1930s with electricity uh and with telephone service and the solution is to provide it as a public utility so that it's accessible to the whole population and to do so in a way which provides for the basic services at a very minimal cost and once that is done it becomes part becomes basically like a road you can access it without paying a user fee on an on on a monthly basis.
and at that point they the the problem simply becomes one of getting the getting the services out into the households that need it so it is a problem can be solved but it but it needs to be addressed and i think the same way that we we solved those previous problems the gdp measure was created in the last century uh to partly to help manage the mobilization for world war ii uh and it's a measure that doesn't care about disparity uh that dollar going to a wealthy person is the same as a dollar going to a poorer person and that's basically it's not the appropriate measure growth is is is a traditional value if you like at this point but we have to redefine it uh so that uh we are achieving uh as let's say a broader sense of common welfare.
uh when we have extreme polls of wealth you're creating enormous stress on the less well-advantaged people who then have longer commutes and who are you know in other ways basically excluded from living where they near where they work because you've got you've got these poles of disparity that is something which can be dealt with by uh essentially effective planning and effective uh effective taxation so you have to have provisions that reduce the stress on people uh and make their lives essentially stable and secure and another thing about this is that gdp doesn't care about how about how secure you are gdp is a measure at a given moment it doesn't tell you whether your job is secure whether your retirement is secure whether your health care is secure and you can measure that and add that in as a kind of the set of social objectives that you're trying to you're trying to deal with.
(i have 20 seconds left but you mentioned lowering the medicare eligibility age.
and i wanted to ask you why you mentioned that as part of addressing income inequality?)
because it's an incremental step that could be done i think reasonably quickly and because it would it would relieve health care pressure on a segment of the population 55 to 65 uh that has more healthcare problems and therefore it would reduce the burden off on private insurance as well so if you can't get medicare for all which i would favor uh i'm in favor of taking i'm a half a loaf person i'm it's better than none you said that just it's huge.
my experience living in austin is that people industries locate where people want to live rebuild the region and they they may the businesses will come that's uh that if you have the places that people wish to live that are great places to live then you will bring your improv capital will come in rather than go out.
and so essentially it's laying down the basis for it that is the essential essential task there was a massive abuse of the home ownership program of of of the mortgage industry uh and we failed in the aftermath of the crisis to deal with it and there was a further set of abuses with the foreclosure crisis that followed on uh going going forward we need to have a simple system that works for people and that is uh where we have effective regulation of the of the of the financial sector's interaction uh with with home uh home ownership and home financing uh so as to prevent these things from happening again uh and so as to and essentially restore a basis for long-term servicing of basically reasonable mortgage.
and i just wanted just to maybe pose a rhetorical question is it quite stunning to me how is it that a corporation that is as large as successful as amazon does not provide employer-paid health insurance for all of its workers well thanks.
L-R: Rep. Angie Craig, Speaker of the House Rep. Nancy Pelosi, Rep. Alexandria Ocasio-Cortez, and Rep. Sara Jacobs at a June 16, 2021 news conference to announce members of the newly established Select Committee on Economic Disparity & Fairness in Growth. (Getty Images)
Sign up for our weekly newsletter- the latest horror, humor, and hope around economic inequality in your inbox every Monday.
INEQUALITY
Despite Republican Boycott, Dems Launch New Inequality Committee
Over the next two years, they will study the problem of economic disparity and develop policy solutions.
BLOGGING OUR GREAT DIVIDE
JULY 30, 2021
by Sarah Anderson Justin Campos
Members of Congress serving on a new "select" committee on inequality had no trouble social distancing at their inaugural hearing. hat's because the six seats reserved for Republicans were all empty.
House Speaker Nancy Pelosi had dutifully invited the GOP to participate, but after she vetoed two of their nominees for a different body — the January 6 Commission — the Republicans picked up their toys and went home in a huff.
To no one's surprise, Democrats did not cry boohoo. Instead, they carried on with the business of launching the House Select Committee on Economic Disparity & Fairness in Growth.
In opening remarks on July 29, Pelosi explained that the committee will take a values-based, wholistic approach to the problem and recommend policy solutions to the various legislative committees of jurisdiction.
"We feel very concerned about the immorality of inequality in our country and we are going to do something about it," the Speaker said.
L-R: Rep. Angie Craig, Speaker of the House Rep. Nancy Pelosi, Rep. Alexandria Ocasio-Cortez, and Rep. Sara Jacobs at a June 16, 2021 news conference to announce members of the newly established Select Committee on Economic Disparity & Fairness in Growth. (Getty Images)
Witnesses at the first hearing came armed with bold ideas.
Professor James Galbraith, of the University of Texas at Austin, urged lawmakers to consider a federal job guarantee to "eliminate involuntary unemployment, set a basic wage standard, and provide willing workers with continuous employment on useful projects."
In an apparent dig at the billionaire space race, he also called for policies to "bring the new plutocrats back to earth," including taxes on assets that are hard to hide, such as land and mineral rights.
INEQUALITY WEEKLY
Subscribe
Shailly Gupta-Barnes, Policy Director of the Poor People's Campaign, also supported a federal job guarantee and increased taxes on the wealthy — two of the campaign's 14 legislative priorities. She and Rep. Alexandria Ocasio-Cortez had an impassioned exchange about the need to update obsolete official poverty measures so we can get a true accounting of who is poor.
"We cannot fix what we cannot measure," the New York Democrat said.
Freshman Rep. Sara Jacobs emphasized the importance of recognizing that poor people didn't create the inequality problem.
"If my colleagues on the other side of the aisle were here, they would be spending a lot of time talking about merit, and why it's okay that we have this inequality because of merit. But what I did to inherit my wealth was that I was born," Jacobs said. "I've benefited from this unfair system."
Republicans aren't the only ones who believe the rich are rich because they deserve to be — rather than as a result of a system rigged in their favor.
If my colleagues on the other side of the aisle were here, they would be spending a lot of time talking about merit, and why it's okay that we have this inequality because of merit. But what I did to inherit my wealth was that I was born.
REP. SARA JACOBS (D-CALIF.)
Jason Furman, who served as Chair of the Council of Economic Advisors in the Obama administration, made his rosy view of the wealthy clear in his testimony: "In many and perhaps even most cases, their incomes are a result of the large contributions they have made to the economy," he said.
And yet Furman supports "almost all" of President Biden's proposed tax increases on the rich because the resources generated would enormously benefit lower-income families through Biden's jobs and families plans.
In 2009, Furman was an architect of Obama's roughly $800 billion stimulus plan, which many now view as so modest that it prolonged the Great Recession. He now fully supports the scale of Biden's multi-trillion-dollar plans. And in some areas, he feels it could be bigger. "You could come back and invest more in pre-school, you could have more generous paid leave. It's a really great start, but it's definitely not an end and won't fully solve all these problems," he said.
In addition to Ocasio-Cortez and Jacobs, two other Congressional Progressive Caucus members serve on the committee: Rep. Gwen Moore of Wisconsin and CPC Chair Pramila Jayapal of Washington. Connecticut "New Democrat" Jim Himes chairs the select committee, while Representatives Vicente Gonzalez of Texas, Angie Craig of Minnesota, and Marcy Kaptur of Ohio round out the Democratic side of the body.
By statute, the committee is intended to be active only during the current legislative session, with policy recommendations to relevant committees due by the end of 2021 and all reports published by the end of 2022.
Pelosi said the GOP has a standing invitation to start participating in the committee whenever they'd like.
Sarah Anderson directs the Global Economy Project and co-edits Inequality.org at the Institute for Policy Studies. Justin Campos is an IPS Next Leader.
Members of Congress serving on a new "select" committee on inequality had no trouble social distancing at their inaugural hearing. That's because the six seats reserved for Republicans were all empty.
House Speaker Nancy Pelosi had dutifully invited the GOP to participate, but after she vetoed two of their nominees for a different body — the January 6 Commission — the Republicans picked up their toys and went home in a huff.
To no one's surprise, Democrats did not cry boohoo. Instead, they carried on with the business of launching the House Select Committee on Economic Disparity & Fairness in Growth.
In opening remarks on July 29, Pelosi explained that the committee will take a values-based, wholistic approach to the problem and recommend policy solutions to the various legislative committees of jurisdiction.
"We feel very concerned about the immorality of inequality in our country and we are going to do something about it," the Speaker said.
L-R: Rep. Angie Craig, Speaker of the House Rep. Nancy Pelosi, Rep. Alexandria Ocasio-Cortez, and Rep. Sara Jacobs at a June 16, 2021 news conference to announce members of the newly established Select Committee on Economic Disparity & Fairness in Growth. (Getty Images)
Witnesses at the first hearing came armed with bold ideas.
Professor James Galbraith, of the University of Texas at Austin, urged lawmakers to consider a federal job guarantee to "eliminate involuntary unemployment, set a basic wage standard, and provide willing workers with continuous employment on useful projects."
In an apparent dig at the billionaire space race, he also called for policies to "bring the new plutocrats back to earth," including taxes on assets that are hard to hide, such as land and mineral rights.
Shailly Gupta-Barnes, Policy Director of the Poor People's Campaign, also supported a federal job guarantee and increased taxes on the wealthy — two of the campaign's 14 legislative priorities. She and Rep. Alexandria Ocasio-Cortez had an impassioned exchange about the need to update obsolete official poverty measures so we can get a true accounting of who is poor.
"We cannot fix what we cannot measure," the New York Democrat said.
Freshman Rep. Sara Jacobs emphasized the importance of recognizing that poor people didn't create the inequality problem.
"If my colleagues on the other side of the aisle were here, they would be spending a lot of time talking about merit, and why it's okay that we have this inequality because of merit. But what I did to inherit my wealth was that I was born," Jacobs said. "I've benefited from this unfair system."
Republicans aren't the only ones who believe the rich are rich because they deserve to be — rather than as a result of a system rigged in their favor.
If my colleagues on the other side of the aisle were here, they would be spending a lot of time talking about merit, and why it's okay that we have this inequality because of merit. But what I did to inherit my wealth was that I was born.
REP. SARA JACOBS (D-CALIF.)
Jason Furman, who served as Chair of the Council of Economic Advisors in the Obama administration, made his rosy view of the wealthy clear in his testimony: "In many and perhaps even most cases, their incomes are a result of the large contributions they have made to the economy," he said.
And yet Furman supports "almost all" of President Biden's proposed tax increases on the rich because the resources generated would enormously benefit lower-income families through Biden's jobs and families plans.
In 2009, Furman was an architect of Obama's roughly $800 billion stimulus plan, which many now view as so modest that it prolonged the Great Recession. He now fully supports the scale of Biden's multi-trillion-dollar plans. And in some areas, he feels it could be bigger. "You could come back and invest more in pre-school, you could have more generous paid leave. It's a really great start, but it's definitely not an end and won't fully solve all these problems," he said.
In addition to Ocasio-Cortez and Jacobs, two other Congressional Progressive Caucus members serve on the committee: Rep. Gwen Moore of Wisconsin and CPC Chair Pramila Jayapal of Washington. Connecticut "New Democrat" Jim Himes chairs the select committee, while Representatives Vicente Gonzalez of Texas, Angie Craig of Minnesota, and Marcy Kaptur of Ohio round out the Democratic side of the body.
By statute, the committee is intended to be active only during the current legislative session, with policy recommendations to relevant committees due by the end of 2021 and all reports published by the end of 2022.
Pelosi said the GOP has a standing invitation to start participating in the committee whenever they'd like.
Sarah Anderson directs the Global Economy Project and co-edits Inequality.org at the Institute for Policy Studies. Justin Campos is an IPS Next Leader.