Innovation & Entrepreneurship
We need an economy that prioritizes long-term investment over short-term profit-seeking, rewards the common interest over self-interest, and promotes innovation and entrepreneurship.
Democrats believe that the current minimum wage is a starvation wage and must be increased to a living wage. No one who works full time should have to raise a family in poverty. We believe that Americans should earn at least $15 an hour and have the right to form or join a union. We applaud the approaches taken by states like New York and California. We should raise and index the minimum wage, give all Americans the ability to join a union regardless of where they work, and create new ways for workers to have power in the economy. We also support creating one fair wage for all workers by ending the sub-minimum wage for tipped workers and people with disabilities.
Democrats support a model employer executive order or some other vehicle to leverage federal dollars to support employers who provide their workers with a living wage, good benefits, and the opportunity to form a union. The $1 trillion spent annually by the government on contracts, loans, and grants should be used to support good jobs that rebuild the middle class.
We believe that today’s extreme level of income and wealth inequality—where the majority of the economic gains go to the top one percent and the richest 20 people in our country own more wealth than the bottom 150 million—makes our economy weaker, our communities poorer, and our politics poisonous.
We reaffirm our commitment to eliminate poverty. Democrats will develop a national strategy to combat poverty, coordinated across all levels of government. We will direct more federal resources to lifting up communities that have been left out and left behind, such as the 10-20-30 model, which directs 10 percent of program funds to communities where at least 20 percent of the population has been living below the poverty line for 30 years or more. We will also focus on communities that suffer from persistent poverty, including empowerment zones and areas that targeted government data indicate are in persistent poverty.
Democrats will protect proven programs like the Supplemental Nutrition Assistance Program (SNAP)—our nation’s most important anti-hunger program—that help struggling families put food on the table. We will also help people grow their skills through jobs and skills training opportunities.
Opposes attempts to impose a religious test to bar immigrants or refugees from entering the United States.
Supports a “progressive vision of religious freedom that respects pluralism and rejects the misuse of religion to discriminate.”
Supports protecting both Muslims and religious minorities and the “fundamental right of freedom of religion” in the Middle East. (Read more here)
The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn’t work and then they get elected and prove it. — P.J. O’Rourke
Sometimes, a ray of light breaks through the dense gloom overhanging our political culture.Michigan voters, in a mass outbreak of common sense, on Tuesday resoundingly rejected a $2 billion tax increase proposal pitched as a fix for the state’s roads and, among many other things, a help for the working poor. That was one of the more outrageous claims, but the topper was Gov. Rick Snyder’s gun-to-the-head threat in March that if voters did not approve the tax increase, “there is no Plan B for the roads.” Insulting voters with such tactics undoubtedly played a role in the thrashing that Snyder and the Lansing political establishment received at the polls. As the Detroit News put it:
Proposal 1 suffered the worst defeat Tuesday of any Michigan constitutional amendment ballot measure since the current constitution was adopted more than a half-century ago, as 80.1 percent of voters rejected the sales tax increase and road funding plan. (more…)
Philosopher and theologian, Michael Novak recently delivered a speech at the Catholic University of America on the vocation of business and Forbes published the transcript. Novak argues that “capitalism is lifting the world out of poverty.” As many Asian and African economies shift from socialist to capitalist, they are seeing enormous economic growth, and small businesses are the force behind these economic gains:
Even in developed nations, most jobs are found in small business. In Italy, over 80 percent of the working population works in small businesses. In the U.S., the proportion is just about 50 percent, but some 65 percent of new employment is in small businesses.
During the great economic expansion of 1981-1989, the U.S. added to its economy the equivalent of the whole economic activity of West Germany at that time. Sixteen million new jobs were created in the U.S., the vast number of them in small businesses. Startups peaked as new businesses came into being at a rate of 13 percent (as a portion of all businesses) – an all-time high. Much the same happened under Clinton in 1993-2001, but even better – 23 million new jobs were created.
In the creation of small businesses, four factors are necessary. First, ease and low cost of incorporation; second, access to inexpensive credit; third, institutions of instruction and technical help (such as the system of local credit unions in the U.S.), and the steady assistance of the extension services of the A&M universities; and, fourth, throughout the population habits of creativity, enterprise, and skills such as bookkeeping and the organization of work. Economic development is propelled, as John Paul II said, by know-how, technology, and skill (Centesimus Annus 32). Therein, perhaps, lie the greatest entry-points for Americans and others who wish to help poor nations by proffering assistance in economic development from the bottom up. (more…)
Yesterday I began a series of posts which attempts to explain why the working poor tend to make terrible financial decisions and how they think about money differently than other economic classes. In my initial post I wrote,
Imagine that instead of having to deal with consumption smoothing decisions, at most, several times a year, you had to deal with them several times a month, or even several times a week. Now also imagine there is no workable solution that will actually smooth the short-term consumption problem and the best that you can hoped for is a temporary fix that delays having to deal with the issue.
That is what it’s like to be the working poor.
Several people have asked me to explain more what I meant, so before moving on I wanted to provide a more in depth example.
Let’s again begin by looking at the decision-making process of the middle-class. Imagine that you want to buy a home. Your household income is $51,404 a year (the median household income in the U.S.) and the house you’re interested in is on the market for $152,000 (the avg. home price in the U.S.). At what point do you buy the house?
There are several ways the average American may answer, but the one response you will almost never hear is, “You should buy the house only after you’ve saved the $152,000 needed to pay for it.”
While most people would agree that it would be prudent to apply a down payment, the idea that you’d pay the entire amount at once – even if you had $152,000 in cash – would strike most people as peculiar if not absurd. Instead, we borrow money for a mortgage that will allow us to pay a set amount each month for 15 to 30 years. Because we are willing to spread our payments out into the future we will pay a lot more than the $152,000 (at 5% for 30 years, the total would be $293,748.79). But we consider that a reasonable accommodation for getting what we want right now.
That is an example of how most of us take the concept of consumption smoothing for granted.
Protect the Poor, Not Poverty Programs
By John Couretas
One of the disturbing aspects of the liberal/progressive faith campaign known as the Circle of Protection is that its organizers have such little regard – indeed are blind to — the innate freedom of the human person.
Their campaign, which has published “A Statement on Why We Need to Protect Programs for the Poor,” equates the welfare of the “least of these” in American society to the amount of assistance they receive from the government — a bizarre view from a community that trades in spiritual verities. Circle of Protection supporters see people locked into their circumstances, stratified into masses permanently in a one-down position, thrown into a class struggle where the life saving protection of “powerful lobbies” is nowhere to be found. And while they argue that budgets are moral documents, their metrics for this fiscal morality are all in dollars and cents.
Not only does the Circle of Protection group appear to be oblivious to the power of private charity and church-based outreach to the needy, but they seem to have no hope for the poor outside of bureaucratic remedies. This is a view of the human person not as a composite of flesh and spirit, but as a case number, a statistic and a passive victim of the daily challenges and troubles that life brings.
In response to the Circle of Protection campaign, another faith group has formed with a very different outlook on the budget and debt debates that will consume the political energy of the country in the months ahead. Christians for a Sustainable Economy (CASE) argue for policies that are focused less on protecting poverty programs and more on protecting the poor (I am a supporter). In a letter to President Obama, CASE wrote:
We need to protect the poor themselves. Indeed, sometimes we need to protect them from the very programs that ostensibly serve the poor, but actually demean the poor, undermine their family structures and trap them in poverty, dependency and despair for generations. Such programs are unwise, uncompassionate, and unjust.
This is what Fr. Peter-Michael Preble was getting at when he observed that “… the present government programs do nothing but enslave the poor of this country to the programs and do nothing to break the cycle of poverty in this country.” This is not, he added, an argument to eliminate all government assistance but rather for “a safety net and not a lifestyle.”
In discussing the relative merits of the Circle of Protection and the Christians for a Sustainable Economy campaign, Michael Gerson wrote that “the Circle’s approach is more urgent.” Arguing against “disproportionate sacrifices of the most vulnerable,” he asserted that “public spending on poverty and global health programs is a sliver of discretionary spending and essentially irrelevant to America’s long-term debt.”
It’s a big and growing “sliver.” According to a Heritage Foundation study of welfare spending, of the 70-odd means-tested programs run by the federal government, “almost all of them have received generous increases in their funding since President Obama took office.” The president’s 2011 budget will increase spending on welfare programs by 42 percent over President Bush’s last year in office. Analyst Katherine Bradley observed that “total spending on the welfare state (including state spending) will rise to $953 billion in 2011.”
Instead of more billions for failed poverty programs, CASE argues that “all Americans – especially the poor – are best served by sustainable economic policies for a free and flourishing society. When creativity and entrepreneurship are rewarded, the yield is an increase of productivity and generosity.” Underlying this is a belief that the human person is able to freely and creatively anticipate what life may bring, rather than wait around for a caseworker or a Washington lobbyist to intervene.
That freedom explains why some people, even in difficult economic times, can move up the income scale despite assertions that they are among the “most vulnerable.” A U.S. Treasury study showed that “nearly 58 percent of the households that were in the lowest income quintile (the lowest 20 percent) in 1996 moved to a higher income quintile by 2005. Similarly, nearly 50 percent of the households in the second-lowest quintile in 1996 moved to a higher income quintile by 2005.” In an analysis of income inequality and social mobility, economist Thomas Sowell wrote that there is a confusion “between what is happening to statistical categories over time and what is happening to flesh-and-blood individuals over time, as they move from one statistical category to another.”
Income mobility is debated endlessly by economists, but it is the existential reality for countless Americans who have ever strived for something better — or suffered a setback in their hopes. Yet the one sure thing that will stifle this mobility is an economy in decline, with job creation slowed, and encumbered by ever higher federal budget deficits and debt. And that’s what we’ll get more of if the Circle of Protection’s prescriptions for a “moral budget” hold sway.
When economic systems break down, as they are now unraveling in some European welfare states, those who will be hurt first and hardest will be the poor, the working family living from paycheck to paycheck, the pensioner – those operating at the margins. If we fail to come to grips with the reality of our potentially ruinous fiscal trajectory, we will all learn, as other countries are now learning, what “truly vulnerable” means.