The biggest difference between today’s super-rich capitalists and the robber barons [a much more descriptive term] of a hundred years ago appears to be style. Handlebar mustaches, wool suits, top hats and protruding bellies are out of fashion, but today’s plutocrats share the same values of the captains of industry of the early 20th century. In fact, they openly long for that so-called Golden Age, when capitalism was unfettered by pesky consumer protections, labor rights, bank regulations, income taxes and safety nets. We’ve seen it all before.
We’ve also seen how the Progressive Movement of the early 20th century figured out how to reign in the excesses and help create a thriving middle class. The trouble is that, today, many of the accomplishments and lessons learned in earlier days of progressivism have fallen by the wayside—whether through corporate-influenced legislation and/or regulation, by complacency or by a failure of memory. But the lessons and ideas are still out there, and progressives need to reinvigorate them.
That’s what veteran labor journalist Sam Pizzigatti writes about in his new book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class. In a post at Inequality.org, Pizzigatti suggests five public policies—all of which were on the table during the Great Depression—that could put the U.S. back on what he calls “the plutocracy-busting track.”
One: Income disclosure
Require the rich to annually disclose the income they’re reporting to the IRS and how much of that income they actually pay in taxes.
Pizzigatti notes that, in the 1930s, progressives proposed just such a measure, contending that disclosure would make it harder for the wealthy to play games with taxes. It would also make it easier to see which loopholes need to be plugged.
But, in an intriguing historical footnote, Pizzigatti points out that:
In 1934, progressives actually added a disclosure provision to the tax code. But the super rich counterattacked with a media blitz that tied disclosure to the infamous Lindbergh baby kidnapping. If all rich Americans had to disclose their incomes, the argument went, kidnappers would gain a wider pool of targets.
The 1930s obsession with the Lindbergh baby kidnapping proved to be a powerful detour, and the provision was scrapped. But the basic premise behind income disclosure remains a solid idea, says Pizzigatti. And today we’ve got the the technology to make it happen.
Two: Leverage the power of the public purse against excessive corporate executive pay
Pizzigatti knows that government can’t set specific limits on what private corporations pay their executives. But Congress could impose limits indirectly by denying federal government contracts and subsidies to corporations that lavish rewards on top executives.
This is not a new idea, either, notes Pizzigatti. But it’s one to build on:
In 1933, then-senator and later Supreme Court justice Hugo Black won congressional approval for legislation that denied federal air- and ocean-mail contracts to companies that paid their execs over $17,500, about $300,000 in today’s dollars. But the New Deal never fully embraced the Hugo Black perspective.
Pizzigatti suggests that we could actually do that today, “by denying federal contracts and tax breaks to any companies that pay their CEOs over 25 times what their workers are making.”
Three: Give Americans a safe alternative to private banks.
There’s precedent for this idea, too, says Pizzigatt:
For Louis Brandeis, a reform giant who also became a Supreme Court justice, prohibiting financial institutions from speculating with the savings of average Americans always remained a top priority.
In the early 1930s, Brandeis advocated the expansion of postal savings banks, a system — in effect since 1911 — that paid 2 percent interest on modest savings accounts maintained with the post office. That expansion never took place, and postal savings banks withered away. They deserve a second shot.
Four: Tax undistributed corporate profits.
America’s biggest corporations are curr