Economic Democracy – Page 4 – Committees of Correspondence for Democracy and Socialism

Why Is One of Sanders’ Most Important Proposals Being Ignored?

By Robert Reich
Alternet via USW Blog

Why is there so little discussion about one of Bernie Sanders’s most important proposals – to tax financial speculation?

Buying and selling stocks and bonds in order to beat others who are buying and selling stocks and bonds is a giant zero-sum game that wastes countless resources, uses up the talents of some of the nation’s best and brightest, and subjects financial market to unnecessary risk.

High-speed traders who employ advanced technologies in order to get information a millisecond before other traders get it don’t make financial markets more efficient. They make them more vulnerable to debacles like the “Flash Crash” of May 2010.

Wall Street Insiders who trade on confidential information unavailable to small investors don’t improve the productivity of financial markets. They just rig the game for themselves.

Bankers who trade in ever more complex derivatives – making bets on bets – don’t add real value. They only make the system more vulnerable to big losses, as occurred in the financial crisis of 2008.

All of which makes Bernie Sanders’s proposal for a speculation tax right on the mark.

He wants to tax stock trades at a rate of 0.5 percent (a trade of $1,000 would cost of $5), and bond trades at 0.1 percent.

The tax would reduce incentives for high-speed trading, insider deal-making, and short-term financial betting. (Hillary Clinton also favors a financial transactions tax but only on high-speed trading.)

Another big plus: Given the gargantuan size of the financial market and the huge volume of trading occurring within it every day, this tiny tax would generate lots of revenue.

Even a 0.01 percent transaction tax (a basis point is one-hundredth of a percentage point, or 0.01 percent) would raise $185 billion over 10 years, according to the nonpartisan Tax Policy Center.

Sanders’s 0.5 percent tax could thereby finance public investments that enlarge the economic pie rather than merely rearrange its slices – like tuition-free public education.

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David Bacon–Streets of New York: work or no work

A David Bacon photoessay on life and work on the streets of New York

Click on the photo to go to the entire essay

From Chinatown to midtown, Manhattan is part of a city that works, and also that doesn’t work. That is, it’s full of working people, but not everyone has a job. Some people work on the street, while others live and sleep on it. New York is not like the suburbs, or cities built around malls and cars. Everything and anything can happen in the streets here.

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How A Ragtag Group Of Lefties Mainlined Debt-Free College Into The Democratic Primary

Could Progressive Change Campaign Committee help ignite the youth vote for Democrats?

By Sahil Kapur

Bloomberg Politics

May 8, 2015 – A group of two dozen young activists working out of homes and coffee shops around the country has achieved something rather unusual: mainlining an idea into the upper echelons of the Democratic Party—including its top presidential contenders—in just four months.

The phrase "debt-free college" was hardly present in the national political lexicon until the Progressive Change Campaign Committee launched a campaign in January to push Democrats to support the idea of federal assistance to help Americans graduate from college without debt.

Why this idea? The group concluded that the abysmal Democratic turnout in 2014 was due to a lack of bold ideas in the national debate that excited progressives. So it did some polling and found not only strong support but that helping lower the cost of college was the number one issue that would have moved Democratic turnout, said PCCC spokesman TJ Helmstetter. It’s easy to understand younger voters’ interest: Outstanding student loan debt is currently $1.16 trillion and rising, according to the Federal Reserve Bank of New York, averaging $28,400 per college graduate.

"I’m hopeful that debt-free college is the next big idea." –Senator Chuck Schumer

The PCCC partnered with the left-leaning think tank Demos to write a white paper on the idea, which featured three components: federal aid to states to lower tuition costs, federal need-based aid to students, and other patchwork reforms to cut costs such as putting textbooks online.

Then the gears started turning.

In March, the 70-member Congressional Progressive Caucus endorsed debt-free college education in its budget blueprint. On April 21, New York Senator Chuck Schumer, the Democratic leader-in-waiting, cosponsored a resolution embracing the idea with Massachusetts Senator Elizabeth Warren, Hawaii Senator Brian Schatz and the House progressive leaders.

"When it comes to making college affordable, I’m hopeful that debt-free college is the next big idea," Schumer said.

The presidential hopefuls also jumped aboard. On April 13, Vermont Senator Bernie Sanders came out for making four-year public colleges free of tuition. Ten days later former Maryland Governor Martin O’Malley e-mailed supporters to say that Democrats’ "ultimate goal should be simple: every student should be able to go to college debt-free." And this week Democratic frontrunner Hillary Clinton’s campaign manager touted the idea—down to the exact phrase. "What voters are looking for is someone to be a champion for everyday people. For young people, that’s debt-free college," Robby Mook said Wednesday on CNBC.

Outdoing Obama

The plan is more sweeping than recent Democratic proposals. President Barack Obama in March signed a "Student Aid Bill of Rights" to order federal agencies to explore ways to offer students more repayment options and help them better understand their loan plans. On the legislative end, he has proposed two years of free community college, at a cost of $60 billion to the government. Warren has pushed a bill to slash interest rates for undergraduates and post-graduates. Both have gone nowhere in Congress. (Continued)

Continue reading How A Ragtag Group Of Lefties Mainlined Debt-Free College Into The Democratic Primary