It appears this Christmas Day that Congress is likely to pass Health Reform Legislation.  If this historic legislation does pass, it will be the first step towards a long overdue overhaul of our disjointed almost to the point of being dysfunctional health care delivery system.

No one got what they wanted.  The health insurance industry spent a reported $260 million trying to kill this reform effort.  That’s more than George Bush and John Kerry spent combined running for President in 2000.  Big winners were those lobbyists and media who got paid from this effort.

The Republican Party, rendered nearly unrecognizable in this debate from its former status as a responsible political party, couldn’t kill the effort.

Democrats, as per usual, nearly fell apart in their reform efforts but pulled together at the end.   Still, the embarrasment of bribing some Senators, notably Nebraska Sen. Ben Nelson and Louisiana Sen. Marie Landrieu, to gain their support, is hurtful.  Congress has already lost a great deal of its former public respect (in some polls below lawyers, and far below any President) because of this kind of sleaze.   Coming on the heels of the bailouts of reckless investment banks, this kind of underhanded wheeling and dealing is going to diminish the praise Obama and the Democrats deserve.

Still, this legislation represents the most important kind of change: A change in direction.

It appears we’re coming out of a decades long descent into selfishness and general over-indulgence.  We’re putting a little more emphasis on the “unum” part of our national motto “E pluribus unum,”–”Out of many, one.”  This is a good change in direction.  We’re beginning to think about our national welfare, for a change, instead of a slavish worship of money and greed.

Nelson and Landrieu’s brazen bribery aside, the total effort will enhance the nation’s fiscal and physical health.  And those are excellent goals made possible because of this change in direction.  For the first time in a long time, Congress managed to pass something designed to help the average working American instead of further enriching the wealthiest among us.

Much more needs to be done.  The overhaul is just beginning.  Once small business discovers that even this small step will save them money on health insurance (as opposed to what their official organizations maintain) a powerful political force for further improvements will be unleashed.  True small businesses are not represented even by their own official organizations, which are in reality dominated by large corporations. 

And the public option, which didn’t make this first effort, will certainly resurface.  Why?  Because all the organizations who study reform know that this is the best option to increase competition within the industry.  And at bottom that’s the problem.  Private industry isn’t always the best option for providing universally needed services.

This debate/discussion has begun in earnest.  More will be proposed and enacted.  As it should be.  It’s a far too important reformation for America. 

If you want a good, non partisan, look at health care reform, visit the Robert Woods Johnson Foundation website here.

About 40% of Americans don’t make enough income to pay, net, income taxes.  In contrast, the top 20% of Americans (particularly the top 5%) have seen their incomes surge the past 30 years.  Until the recent financial debacle and recession, corporate profits as a share of total revenue reached historic highs.  Executive compensation across all industries soared in comparison to the median income of their company’s employees.  Multiples of 100, 200 or 300 times the median, unheard of in American history, became common.

The financial service industry, which includes Wall Street, saw their share of revenues go from an historical norm of 7% to almost 20%.

The concept of “trickle down” benefits became a cruel joke to the vast majority of Americans.  Nothing trickled down.  Just the opposite occurred.  Instead, income flowed up the economic ladder at a record rate, enriching the small minority while the vast majority (working harder than ever according to productivity gains) saw their incomes flatline when adjusted for inflation.

These are not the signs of a healthy economy, obviously.  When the rewards of economic production are so disproportionate something fundamental is wrong.

What?

First, for the most part labor lost it’s seat at the table where the distribution of revenues is decided.  Corporate Boards of Directors are charged with helping a corporation make more profits and returning the greatest value to shareholders.  They will only approve what they consider the minimum wages to company labor.  In that area, that’s the limit of their concern.

When organized labor held more power (only about 12% of labor is organized in today’s economy), they could force corporations to consider better pay.  They held the power of strikes, or work to rule.  They negotiated hard won contracts that forced corporations to hold labor’s wages as a higher priority.

For a number of reasons including poor trade agreements and lousy enforcement of even those agreements, corporations began facing more and more competitive pressure from foreign products.  Often those products were being made by what amounted to slave labor, in dangerous sweat shops.  Low wages, and often manipulated currency schemes, tilted the competitive playing field away from American corporations and their employees.

A negative cycle went into effect.  Organized labor lost the battle to protect worker incomes.  Like any other negative cycle, as organized labor power receeded, fewer and fewer workers were able to protect their incomes, to protect their ability share in revenues.   And the Federal Government abandoned them as well,  failing to install policies which would protect labor, including revenue enhancing tariffs and import taxes that would take away unfair advantages of foreign producers who plundered their own labor. 

The competition wasn’t about quality and value any longer.  It was about low foreign wages, subsidized export driven foreign companies and manipulated currencies.  It was also about barriers to competition enacted in foreign countries against American products.

In short, American companies who had been forced to consider paying livable wages to their American employees, sent those jobs and incomes overseas where the companies could plunder those workers.  Generations of labor organizing, fought often with the blood of labor, was lost as the Federal Government allowed, even encouraged, domestic international companies to plunder labor in other countries.

American international companies, for the most part, thrived under this regime.  Profits rose but they were enjoyed only by shareholders and top executives.  Labor had been locked out from the decision making of revenue distribution.  The international financial industry thrived as well, as their international reach and services followed the American corporations who were creating jobs everywhere but in their home country.

Meanwhile, the majority of Americans foundered as fewer and fewer of them had the ability to protect their jobs, much less their incomes. 

The nation’s finances also foundered as well.  There was still plenty of revenue around, but the number of Americans who shared this revenue decreased.  Those who did benefit were able to protect their wealth by successfully blocking any attempts to make tax rates more progressive or to enact other legislation that would protect American labor.

Also, following the expansion of international corporations, the country increased its entanglements  as it sought to protect American corporate investments overseas.  Instead of concentrating on reducing the use of foreign petroleum, as an example, America instead found itself using military might to protect oil sources.  Negotiating fairer trade agreements with China, as another example, become more and more difficult the greater American’s reliance on products often manufactured by American joint ventures in China.

In brief, the policies of the past 30 years have brought the majority of Americans to their collective knees.  As a result the country is unable to fund its ambitions for its own citizens.

Changing all this was the change Americans wanted and voted for with Obama.  It has shown up with the health care reform debate. It will show up with the financial re-regulation debate to come.  It will show up in the arena of protecting Americans from predatory trade agreements.  

Above all, it must result in the resurrection of organized labor, and in a government committed to seeing that the majority of Americans can earn enough income to pay income taxes.

The key to a prosperous American future is granting labor a seat at the table where revenue distribution is decided, and in installing steeply progressive tax rates which will allow the country to pay for its ambitions.

China’s economy has been regularly growing at a neck cracking speed, often surging in growth more than 10% annually.  Even with the current global slowdown, China is expected to grow by 5% or more this year.

So how do they manage this?  To use a boxing analogy, China slips brass knuckles into its fighters’ gloves.

In the most recent example of this, both the US and the European Union filed official objections against Chinese restrictions on the export of raw materials extracted in China.  The United States trade representative, Ron Kirk, said China had imposed quotas, export duties and other costs on raw materials used in the production of steel, chemicals and aluminum. In effect, he said, China was putting its thumb on the scale and giving Chinese manufacturers an unfair edge.

China pegs its currency, the yuan, to a tight range beneath the dollar.  This is one way to maintain price competitiveness in the export market, which China has nurtured for two decades as the main driver in its economic growth.

China also places many restrictions on investment, and rules out investment totally in many critical industries, such as the resource extraction industry cited by Kirk.  As another example, in car manufacturing foreign firms are limited to four joint ventures (with a Chinese company)–two for automobiles and two for trucks. 

The Chinese discourage foreign owned entities but rather encourages joint ventures with a Chinese partner.  Often, once the operation is up and running well, the Chinese partner eliminates the foreign partner.

China also often favors local companies for government contracts, awarding domestic companies contracts even if a foreign bidder offered an obviously superior product and price.   And when it comes to intellectual property protection, despite its promises to conform to international rules in this all important area, China regularly looks the other way.

Even those companies which overcome the costly impediments to establishing a totally foreign owned entity have to export half of what they make in China and must employ local labor.

Yet until Obama took office, previous administrations acted as if none of this trade cheating existed.  

A US based corporation may be making some buses in China, but it’s throwing the American worker under those buses in order to do so.

There are many reasons why the private economy has been unable to create new jobs in America, but unfair trade practices by China is one of the major reasons.

There are a lot of Congressmen and Senators who sternly admonish the nation that it’s running up large deficits which will impoverish our children and grandchildren.

My answer?  Pay the bills.  If you want something now, pay for it now.

Unfortunately, the same Congressmen and Senators who admonish us the most are the ones least likely to pay the bills.   In fact, they are the first ones to call for tax cuts.  Which is how a government gets the money to pay the bills.

They are the first ones to call for reducing trade barriers and the first ones to proclaim that more international trade creates jobs and incomes.  But is that true?  A recent paper here points out the obvious:  Import penetration into our economy significantly reduces income for labor.   Welcome Wal Mart greeters with college degrees, minimal pay and no health insurance.  Welcome 40-45% of the population not making enough to pay, net, any income taxes.

These are the Congressmen and Senators who ominously warn that if the tax rates are made more progressive then jobs and income will be lost.  Yet no new private market jobs were created during the 8 years of the George Bush presidency even though taxes were cut.   Under President Clinton, who preceeded Bush and when tax rates were higher, millions of private market jobs were created.

Clinton left a budget surplus.   Bush left a $10 trillion deficit.  And a global recession.  In fact, since the Presidency of Truman, steeply progressive tax rates are POSITIVELY correlated with job and income growth.  

Either these Congressmen and Senators are fools, or they are knaves tricking their own populace.

We can all have health insurance.  We just need to pay for it.  Yet we still believe the obviously false promise these fools/knaves offer that, somehow, we can have all these benefits without paying for them.

Raise the tax rates on upper incomes.  It’s that simple and straightforward.  It won’t destroy jobs.  In fact if the past is any guide at all, it will create jobs and broadly raise incomes.  Best of all, it will allow us to pay the bills today.

Someone somewhere once observed that Europeans work to live, whereas Americans live to work.

In Europe four weeks of paid vacation is mandatory.  In the private economy in the US, four weeks of vacation is a luxury for the majority of employees who normally don’t get paid anything unless they are working.

In much of Europe labor wages are set nationally and labor unions are still dominant.   In the US fewer than 12% of labor is organized.  The remaining labor has no say when it comes to deciding the distribution of revenues.

Most of Europeans have universal health care in one form or another.  In many European countries there is no bill at all when medical services are used.   In the US there is no universal health care.  Yet European medical care costs less than it does in America and by most measurements of general health Europeans are healthier than their American counterparts.

Which is not to say Europeans don’t pay for these benefits.  European tax rates are stiffly progressive compared to those in the US.   For whatever reasons, Europeans emphasize benefits for all their populations as a national priority.   In the US this impulse does not gain the same priority.

Why are these attitudes so different?  After all, both Europe and the US enjoy relative prosperity compared to much of the world.  How can Europe afford paid vacations, livable union wages and universal health care whereas the US cannot?

From this writer’s perspective, the US can obviously afford the same benefits for its citizens if Europeans can.  That’s what makes the difference in attitude so important.

In the US we live to work.  In Europe it’s the other way around.

Jared Diamond, a history professor and author of two best selling books “Guns, Germs And Steel” and “Collapse” writes a New York Times editorial arguing that big business can help save our environment, and many want to.  He cites three large corporations the average reader might not mention first in citing large corporations with environmental interests; Coca Cola, Wal Mart and–get this–Chevron.

Having read both books, Beezer is not surprised by this editorial.  Diamond is an environmentalist who has traveled the world.  In his “Guns, Germs and Steel” book Diamond wrote of his surprise that Chevron’s oil operations in New Guinea were more environmentally strict than conservation districts run by the Sierra Club.  Coca Cola depends upon clean water, which is in increasingly short supply worldwide.

And Wal Mart has shown that he who has the “biggest shopping cart” can change production worldwide simply by not buying product from companies who abuse the environment–which Wal Mart has done.

An expert in the world’s interdependence (in part a subject of “Collapse”), Diamond issues this warning in his editorial.

“While the United States is dithering about long-distance energy transmission from our rural areas with the highest potential for wind energy generation to our urban areas with the highest need for energy, China is far ahead of us. It is developing ultra-high-voltage transmission lines from wind and solar generation sites in rural western China to cities in eastern China. If America doesn’t act to develop innovative energy technology, we will lose the green jobs competition not only to Finland and Germany (as we are now) but also to China.

On each of these issues, American businesses are going to play as much or more of a role in our progress as the government. And this isn’t a bad thing, as corporations know they have a lot to gain by establishing environmentally friendly business practices.

My friends in the business world keep telling me that Washington can help on two fronts: by investing in green research, offering tax incentives and passing cap-and-trade legislation; and by setting and enforcing tough standards to ensure that companies with cheap, dirty standards don’t have a competitive advantage over those businesses protecting the environment. As for the rest of us, we should get over the misimpression that American business cares only about immediate profits, and we should reward companies that work to keep the planet healthy.”

Read the editorial, it’s instructive.  Even better, read the books.