The Democrats Should Target the Wealth Gap
by Jerome Grossman
For the first time in a dozen years, the Democrats have retrieved control of Congress. While foreign policy and the Iraq war are high on the new agenda, pocketbook issues are sure to have a high priority.
Soaring executive pay, stagnant worker salaries, corporate criminal conduct, and as the decline in pensions and health care have stimulated nationwide – even international – concerns about the fairness of American business.
Congressman Barney Frank is in position to correct some of these problems. He is the new chairman of the powerful House Committee on Financial Services, legislating and monitoring the activities of banks, brokers, and other corporations. This chairmanship makes him one of the more powerful people in the entire nation.
Frank is a liberal who knows his way around, through, and under these issues. Widely considered one of the brainiest members of Congress, he knows how to get to the heart of matters, often with wit and a touch of brazenness. Overwhelmingly popular in his Fourth District of Massachusetts, he hears the complaints of workers and small portfolio investors alike, both wondering whether the game is rigged.
Frank and his committee will have a lot to deal with: supporting the Sarbanes-Oxley law that reformed corporate reporting after the Enron scandal; monitoring and controlling soaring executive pay, now widely regarded as excessive by stockholders; examining incestuous relations between corporate directors and executives; monitoring stock options that encourage short-term and short-sighted corporate policies and tend to dilute stockholder equity; outlawing backdated stock options that rob stockholders; protecting contractually obligated worker pensions and health benefits.
These are all critical issues. But if Barney Frank has the time, the energy, and the necessary political support, there are other inequities to be corrected, in order to make our capitalist system more resilient and fair.
Perhaps he can find a way to crack down on corporate tax shelters overseas that increase the taxes the rest of us pay. Or find a way to raise tax rates on the richest ten per cent, whose rates are less than what their secretaries pay. Or maintain the estate tax as a feature of democracy and equality, so that we will not become an aristocracy of vast inherited wealth. The public understands the unfairness of the current trends in the distribution of income.
Raising the minimum wage from the current ridiculous $5.15 per hour is sure to pass the new Congress. The only question is whether the legislation will give offsetting tax breaks to business, so that the wage increase will be paid by the innocent taxpayer.
The Democrats can accomplish these overdue reforms and Barney can lead them. This is one of the reasons they were brought back to power – and it might be easier to accomplish than bringing our troops back from Iraq . Let the Democrats live up to their promises and their advance notices.