A good friend calls my attention to this Wall Street Journal op-ed by former governor, and current Democratic presidential candidate, John Hickenlooper: I’m Running to Save Capitalism: Massive deregulation and socialism would both ruin the economic system that allows America to flourish.
To me, the really interesting thing is not what Hickenlooper had to say, but that the infamous WSJ editorial page gave him a forum to say it.
When I was a young man and still had all my hair, I worked (as a junior lawyer) at 14 Wall Street. There used to be a saying among us: don’t be a pig: pigs get eaten for breakfast. Something along these lines may have come to mind within the WSJ Editorial Board. In any event, Mr. Hickenlooper writes as follows:
American capitalism is at risk.
Dramatic income inequality has driven voters to support influential leaders in both political parties who advocate changes to our economic system that would ultimately destroy capitalism. Some on the right argue for an increasingly deregulated market, while the far left calls for massive government growth and even socialism.
Neither approach recognizes the realities of our situation. Capitalism is the only economic system that can support a strong middle class, a growing economy, and innovative entrepreneurs leading global technological advancements. Yet for too many Americans, capitalism simply isn’t working. Even with recent employment gains, the real average wage will only buy you about as much as it did in the mid-1970s. Meanwhile, the cost of living has continued to rise, leading more Americans to take on credit card debt. Forty percent of Americans in 2017 didn’t have enough savings to cover a $400 medical emergency or car repair, according to the Federal Reserve.
To save capitalism, the government has to adjust it, as it has countless times in this nation’s history—from Teddy Roosevelt and the muckrakers to Franklin Roosevelt and the New Deal.
First, it has to make obtaining necessary skills affordable. For too many Americans, getting the training they need to pull themselves up by their bootstraps is cost-prohibitive. More than 65% of Americans over 25 don’t have four-year degrees, and a high-school diploma is no longer enough. As president, I would make community college free for those who can’t afford it and expand apprenticeships and skills training programs dramatically.
Next, the government has to expand and extend the existing earned-income tax credit to millions more working Americans, and it has to raise the hourly minimum wage to $15 and permanently index it to the regional cost of living so that it automatically rises as prices do. To revitalize capitalism, the government has to ensure that hard work pays.
It also has to protect the heart of capitalism—competition—by strengthening antitrust enforcement. Industries from hardware stores to cellphone carriers are dominated by three or four megaplayers. The government needs to strengthen the Federal Trade Commission by restoring the Clayton Antitrust Act to its original focus on whether a merger hurts competition—not only whether it will cause a rise in consumer prices.
The U.S. health-care system also needs to be reformed to provide universal coverage, reduce costs and establish portability, so that when you change jobs you can take your insurance with you. Today, too many would-be entrepreneurs are deterred from pursuing their startup dreams or new opportunities, because it could mean giving up their health-care coverage.
I reject the idea we can improve health care by turning it entirely over to the government. More than 150 million Americans have private coverage through their employers, and the majority of people are satisfied with the coverage they have. It would be a fierce and needless battle to take that away from them. Under my plan, if you want to keep your private coverage, you can; but if you don’t have coverage, or if you desire coverage from a public option, we’ll make that available and affordable by allowing you to buy into a plan like Medicare.
The government also must tax capital gains, adjusted for inflation, at the same rate as income, and close the loopholes that allow the very wealthy to pass on their financial portfolios to their children with no tax on capital gains. Under my plan, the Internal Revenue Service would exempt retirement accounts, primary residences and small businesses—defined in Section 1202 of the Internal Revenue Code as a business with under $50 million in assets. Right now, our tax system tells American workers that their labor matters less than wealth that’s inherited.
Capital-gains reform would also allow Americans to pour their money into what is needed: skills and education. The American Enterprise Institute estimated in 2015 that President Obama’s proposal for free community college would cost more than $60 billion in the first 10 years and $130 billion over the following decade. Reforming the capital-gains tax would bring in as much as $2.4 trillion over 10 years, more than enough to cover that price tag and other, vital skills training and apprenticeships, which I estimate would cost $40 billion over 10 years. In an economy where 45% of employers say they are unable to find workers with the skills they need, and the stock market is at record highs, tax policy needs to encourage a surge in human capital, not financial capital.
Finally, the U.S. should expand trade rather than adopt a protectionist crouch. One of the most reckless things President Trump did was walk away from potentially positive trade agreements and impose tariffs to force other countries to capitulate. In the process, he has driven away allies around the world and jeopardized Americans’ well-being.
My policy would extend fair trade that benefits Americans. For example, I would use trade deals to enforce global greenhouse-gas emissions targets and increase penalties for theft of American intellectual property. I would ensure that U.S. companies aren’t required to surrender their intellectual property as a condition to trading abroad and penalize countries that consistently steal American ideas, even going so far as to withdraw trading privileges. We have to ensure trade is fair to our workers and entrepreneurs and doesn’t harm the environment.
The 2020 election will decide if capitalism flourishes in America. I am a small-business man—and, yes, a capitalist. But today American capitalism is broken. We have to fix it before it’s too late.