Can we keep hope alive? Is it reasonable to hope for a better, more just economy in which the 1% control a lot less than 50 percent of the wealth and income of our county? Is it reasonable to hope for policies that mitigate rather than contribute to climate change? Can we hope that future generations will participate in civic life and revitalize a democracy now on life support? What must we do today to keep hope alive?
The percentage of annual income collected by the top one percent in Oregon is greater today than it was in 1929. This is also true for Clackamas County. The average annual income for the top one percent in Clackamas County is $1,338,000. The rest of us, the 99%, have an average annual income of $61,062.
It didn’t use to be this way. For 30 years, as the economy grew, income and wealth were distributed much more evenly than today. From 1945 through 1973, the 99% captured 95.3 percent of the income created by economic growth in Oregon. During this period it made sense to talk about government promoting economic growth because the social benefits of economic growth were clear.
But that time has passed and has been over for more than 40 years. Yet our politicians and news media still talk about economic growth and still support policies that promote private profit as if the 99% of us are still getting the same social benefits as voters did prior to 1973. For the past 40-plus years Oregon’s 99% has captured less than half of the wealth and income they created, while the 1% has captured greater than 50 percent.1
How can public monies be used to support private investments when the public benefit is less than half of the outcomes? From private prisons to privately funded wars; from destroying net neutrality to selling our heritage at Willamette Falls to the highest bidder; we are increasing the gap between the rich and everyone else at all levels of government.
We continue to support outdated policy approaches even as the alarm bells are sounding on Main Street, in our forests, and with our democracy.
On Main Street, small businesses are replaced by corporate giants with global supply chains delivering lower prices (for a while) and greater selection with larger carbon emissions, massive CEO salaries, lower wages, and less money left in our local economies.
Our forests are burning and emitting massive amounts of carbon while destroying the last vestiges of our rural heritage. Large fires today are five times more likely to occur than during the 1970s. The increase in temperatures that the West has already experienced has extended the fire season by three months. In 2017, the costliest fire season ever, damages exceeded $18 billion dollars.2 Forests can no longer adapt to climate change within the span of any one lifetime.
Our democracy is in peril. Rather than face the inevitable challenge of under-regulated markets, politicians put re-election ahead of governance. This results in policies that promote economic growth regardless of social costs, community disruption, or lack of clear public benefits. It is not an economic growth that is climate-smart, nor does it promote Main Street.
Distrust is the winner. Since government can’t or won’t regulate corporations gone wild (e.g., doubling the price of EpiPens simply because they can), won’t enforce antitrust laws, won’t provide for the general welfare with laws that protect worker safety, workers’ rights, or small businesses from corporate predatory practices, government therefore takes the blame. When a politician arrives on the scene and promises to unrig the economy and feeds fear by stoking racial hatred, a perfect storm of government distrust forms. What often goes unnoticed is the fact that nearly every action the government takes reinforces the rigging rather than easing it.
When voters trust a corporate brand more than the government they elect, keeping hope alive becomes an almost insurmountable challenge.
It does not have to be this way. Between 1945 and 1973, when the top one percent of Oregonians captured only 4.7 percent of the wealth generated by economic growth, the top federal tax rate for income over $200,000 was 94 percent. This enabled Eisenhower to build the interstate highway system, Kennedy to go to the moon, and Johnson to fund the Great Society. This was a period when union density was twice as high as today, workers had the right to strike without fear of losing their jobs, and class size in most public schools was fewer than 30 students. During 1945 to 1973, the U.S. economy was the strongest it has ever been.
Between 2009 to 2015, however, and despite tax reforms that raised the state’s income tax, the top one percent of Oregonians were able to capture 29.8 percent of the wealth generated by economic growth — five times greater than it was from 1945 to 1973. It’s not that the 1% were any smarter during ’09 to ’15 or because the 99% worked less. The nation continued to have higher productivity than during prior periods, and yet we lost almost one-third of our wealth to the 1%.
Clearly federal tax cuts for the 1% dwarfed tax reform here in Oregon, where while the 1% may not have worked harder, they sure did pay less in taxes. Prior to the 2018 tax cuts, the tax rate in 2015 was down to 39.6 percent on incomes higher than $444,551. Today the top tax rate is 37 percent on incomes above $600,000.
Since 1980, attacks on unions and the social safety net as well as the abandonment of enforcing the Sherman Antitrust Act have contributed to sizable increases in inequality in general and in economic growth in particular. In Clackamas County today, economic growth fuels carbon emissions, air and water pollution, congestion, and unaffordable housing, while the 1% continues to receive a disproportionate share of this newly created income.
It will take another round of redistributive tax reform, strengthening workers’ rights, enforcing antitrust laws, and getting money out of politics to keep hope alive and rebuild the trust required to protect our democracy.