Introduction:
Back to the Future

I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.

—Thomas Jefferson, letter to William

Charles Jarvis, September 28, 1820

ON APRIL 14, 1789, GEORGE WASHINGTON WAS OUT WALKING through the fields at Mount Vernon, his home in Virginia, when Charles Thomson, the secretary of the Continental Congress, rode up on horseback. Thomson had a letter for Washington from the president pro tempore of the new, constitutionally created United States Senate, telling Washington that he’d just been elected president and the inauguration was set for April 30 in the nation’s capital, New York City.

This created two problems for Washington.

The first was saying goodbye to his 82-year-old mother, which the 57-year-old Washington did that night. She gave him her blessing and told him it was the last time he’d see her alive, as she was gravely ill; and, indeed, she died before he returned from New York.

The second problem was finding a suit of clothes made in America. For that he sent a courier to his old friend and fellow general from the American Revolutionary War, Henry Knox.

Washington couldn’t find a suit made in America because in the years prior to the American Revolution, the British East India Company (whose tea was thrown into Boston Harbor by outraged colonists after the Tea Act of 1773 gave the world’s largest transnational corporation a giant tax break) controlled the manufacture and the transportation of a whole range of goods, including fine clothing. Cotton and wool could be grown and sheared in the colonies, but it had to be sent to England to be turned into clothes.

This was a routine policy for England, and it is why until India achieved its independence in 1947 Mahatma Gandhi (who was assassinated a year later) sat with his spinning wheel for his lectures and spun daily in his own home. It was, like his Salt March, a protest against the colonial practices of England and an entreaty to his fellow Indians to make their own clothes to gain independence from British companies and institutions.

Fortunately for George Washington, an American clothing company had been established on April 28, 1783, in Hartford, Connecticut, by a man named Daniel Hinsdale, and it produced high-quality woolen and cotton clothing as well as items made from imported silk. It was to Hinsdale’s company that Knox turned, and he helped Washington get—in time for his inauguration two weeks later—a nice, but not excessively elegant, brown American-made suit. (He wore British black later for the celebrations and the most famous painting.)

When Washington became president in 1789, most of America’s personal and industrial products of any significance were manufactured in England or in its colonies. Washington asked his Treasury secretary, Alexander Hamilton, what could be done about that, and Hamilton came up with an 11-point plan to foster American manufacturing, which he presented to Congress in 1791. By 1793 most of its points had either been made into law by Congress or formulated into policy by either President Washington or the various states, which put the country on a path of developing its industrial base and generating the largest source of federal revenue for more than a hundred years.

Those strategic proposals built the greatest industrial power-house the world had ever seen and, after more than 200 successful years, were abandoned only during the administrations of Ronald Reagan, George H. W. Bush, and Bill Clinton (and remain abandoned to this day). Modern-day China, however, implemented most of Hamilton’s plan and has brought about a remarkable transformation of its nation in a single generation.

Hamilton’s 11-point plan for “American manufactures” is a primary inspiration for this book (see sidebar). It was part of a larger work titled Alexander Hamilton’s Report on the Subject of Manufactures: Made in His Capacity of Secretary of the Treasury.

Hamilton looked at the nation and determined what needed to be done to rebuild the country after the Revolutionary War had devastated it and subservience to England’s Tudor Plan “free trade” policies had left Americans without any significant domestic industrial base.

In the same tradition, this book goes through 11 steps we can take today to rebuild our country in the wake of the devastation of 30 years of Reaganomics and how we can recover the industrial base we’ve lost to the “free trade/flat earth” idiocy of the Reagan-Bush-Clinton-Bush era.

11 Ways

Chapter 1, “Bring My Job Home!” covers how economies work and why we need to heed Alexander Hamilton’s advice. It points out that simply moving money around or creating a service economy (“Do you want fries with that?”) doesn’t produce long-lasting wealth in a country; only manufacturing does. Political economist Adam Smith pointed out that it’s the application of human labor to raw materials—his example was turning a tree branch into an axe handle—that fuels a growing economy. We’ve gone from more than 20 percent of our economy being based on manufacturing before Reagan to around 11 percent now. This has left us in the precarious position of being unable to make a missile or an aircraft carrier that we may need if we have to defend Taiwan from China without parts from the communist dictatorship of China. These “free trade/flat earth” policies are stupid on national security grounds as much as anything else, but their major impact has been to dismantle the American middle class and consequently put our democracy itself at risk.

Chapter 2, “Roll Back the Reagan Tax Cuts,” points out how when top income-tax rates on millionaires and billionaires are above 50 percent, not only does the gap between the very rich and the working poor shrink but the nation’s economy stabilizes and grows. One of the most interesting features of this chapter is a little-known study done by the chairman of the libertarian Cato Institute, which found that Ronald Reagan’s and George W. Bush’s tax cuts actually stimulated the growth of the size of government, whereas the higher taxes that had preceded Reagan and the increased taxes under Clinton (passed into law without a single Republican vote) actually shrank the size of government.

Chapter 3, “Stop Them from Eating My Town,” covers the ground of monopoly- and crony-capitalism, an economic system born and bred when Reagan stopped enforcing the Sherman Antitrust Act of 1890. From too-big-to-fail to too-big-to-allow-competition, oligarchic corporations have come to dominate virtually every major sector of the American economy; the result has been the devastation of local economies and the prevention of new entrepreneurial small ventures. In the 200 years before Reagan, the downtowns and the business districts of every city in this nation were unique—and locally owned and operated. There was a certain inefficiency associated with it, but that inefficiency guaranteed healthy local businesses and communities. Only when we roll back Reagan’s hands-off policies on Big Business and re-embrace the “trust-busting” practices of Republican Theodore Roosevelt will we see a revitalization of Main Streets across America.

Chapter 4, “An Informed and Educated Electorate,” begins by showing how badly our news media has deteriorated, how it caters only to what people want and not to what they need, and how important it is that we take our media back from the profit-hungry monopolies that have abandoned the public-service mission of media. This chapter also tells the story of Thomas Jefferson’s dream—made explicit when he founded the University of Virginia as this nation’s first free college—that every American, regardless of birth or station, should be able to get an education from primary school through postgraduate university programs—at no cost. Spending on the education of young people pays back handsomely when they go on to make the society richer and, because of their higher incomes, provide higher income-tax revenues. When Reagan took a budgetary axe to the University of California and ended its free admissions policy, he handed to the countries of Europe and Asia the opportunity to overtake us in everything from patent applications to doctor-to-patient ratios to excellence in engineering and invention. And they’ve taken that opportunity. We need to take it back.

Chapter 5, “Medicare ‘Part E’—for Everybody,” points out how a nation that liberates its citizens from worrying about getting proper medical care is a nation of entrepreneurs, innovators, and stress-free families. It’s also a nation that can successfully compete internationally for manufacturing work, when companies are free of health insurance burdens. Instead of handing off trillions of dollars to for-profit health insurance companies—which are forbidden by law in every other industrialized nation on earth from providing basic health insurance—we have attached giant corporate leeches to our own backs. The salt we need to pour on them is a national single-payer health insurance system—simply by expanding Medicare to include all Americans and plugging the loopholes in it that have been drilled by corporate lobbyists and their wholly-owned prostitutes…er…politicians.

Chapter 6, “Make Members of Congress Wear NASCAR Patches,” tackles the problem of our private money–fueled electoral system and all the havoc it has wreaked. We need to fix—seal, really—the revolving door between government and industry; repair our monetary, investment, and banking systems; and change how we finance campaigns in this country. The idea of public financing of campaigns has recently been made very problematic by five Republicans on the U.S. Supreme Court, who ruled in 2010 that corporations are “persons” with full “free speech” rights under the First Amendment. This chapter offers some workarounds, and chapter 10 takes on the problem of the Court’s decision directly.

Chapter 7, “Cool Our Fever,” shows the incredible problems that arise from our own addiction to oil, especially in transportation, and it calls out the corporations and the billionaires who are making fortunes by pumping carbon into our atmosphere, putting all life on earth at risk—including us. The solutions include a carbon tax, but we must act soon.

Chapter 8, “They Will Steal It!” is based on one of the greatest foreign policy insights I’ve ever gotten, shared with me by activist and comedian Dick Gregory at around 3:00 A.M. as we were well into our third glass of wine and about five miles above the Atlantic Ocean on our way to Uganda. It is about how we cannot force other countries through military might to adopt our values of democracy and an open society—and how they will steal our ideas and our values if we engage them constructively so they can see how they can benefit from those ideals. It’s high time that America became less dependent on the military by cutting back the Pentagon, by bringing back the draft, and by returning to a functional democratic republic like our Founders envisioned and most of the developed countries of the world enjoy.

Chapter 9, “Put Lou Dobbs out to Pasture,” addresses the problem of what’s popularly referred to as “illegal immigration,” when, in reality, it is a problem of economics and illegal hiring by American companies. The problem started in 1986, when Reagan granted a blanket amnesty to millions of people who’d come into this country illegally, declared war on unions, and thus broke down the main barrier to entry to the workforce for people here without citizenship. The result has been more than 10 million noncitizens flowing across our borders (from countries all over the world—many come in on tourist or student visas and simply stay after their visa has expired), producing a massive dilution of the labor market. Add to that incendiary mixture a few right-wing racists pointing out the immigrants and telling frightened American workers, “Those brown people want your jobs!” and you have an explosive brew. We can fix all of this by cracking down on companies illegally hiring “undocumented workers” and by tightening the labor market to shore up wages for American workers.

Chapter 10, “Wal-Mart Is Not a Person,” tells the story of how back in the 1880s corporations—then the railroad corporations, the giants of the Robber Baron Era—turned to the U.S. Supreme Court to give them human rights under the Constitution. Although the Court didn’t actually do that, the court reporter wrote that they did, and for 130 years we’ve seen the creeping encroachment of the corporate form into rights our Founders fought and died for to give exclusively to humans. The pinnacle of this came in 2010 when the Supreme Court ruled that corporations are people and have political free-speech rights to spend millions, even billions, of dollars for or against political candidates and ballot initiatives. The result—if not fixed soon—will be the complete transformation of this country from a democracy into a corporate plutocracy. We need to block the Court in this superactivist behavior by amending the Constitution to say that only humans are “people.”

Chapter 11, “In the Shadow of the Dragon,” tells the story of a visit to the Mondragon Cooperative headquarters in the town of the same name in the Basque region of Spain in late 2009. We saw one of the world’s largest worker-owned businesses, with more than 90,000 employees turning over more than $14 billion a year worldwide. There are alternatives to the traditional top-down investor-owned corporate form, and people around the world are increasingly embracing these alternatives because they are better for local communities, better for the workforce, and better for the environment. The only losers are billionaires, particularly those who own most of our media and thus never tell you that every corporation in Germany, for example, must have at least 50 percent of its board of directors coming directly from the ranks of labor.

The conclusion, “Tag, You’re It!” is about tried-and-true methods—most that we’ve used before in this country and all that we’ve at least flirted with—that can bring back a strong middle class and restore America to stability and prosperity without endangering future generations. It’s straightforward, easily understood, and the only obstacle to implementing virtually every chapter’s suggestion is the power of vast wealth (usually corporate wealth). Past presidents—most famously Teddy and Franklin Roosevelt—have openly challenged that corporate power, and the time has come for the current or next president (and Congress) to do the same. But they won’t if We the People don’t demand it.

This book is an outline to lay down those demands. Good luck!