I’ve been doing a chalk-talk/PPT on “The Three M’s – Everything You Need to Know About the Federal Budget” for many years.  Facing the new Trump/Broligarchs Regime, it’s no longer what we need to know, it’s where we need to fight for our future.

But let’s take a step back and look at the big picture.  We have lived for hundreds (if not really thousands) of years under the Iron Law of Capital: “the rate of return must be higher than the rate of growth,” or stated as a very simple formula, “R > G.”  When the economy grows, everyone can do better, but the investors must do better than everyone else if they are to earn a return on their investment.  When the economy doesn’t grow, they still need to do better than the rest. 

The natural tendency, then, is for the rich to get richer and inequality to grow.  That’s why the Fin de Siècle “Belle Epoque” (ca. 1900) saw levels of inequality that make feudalism look pretty egalitarian.  After the Great War, however, and again after the Second World War, when Capital was at a low ebb of power due to Depression and destruction, a political struggle was waged to control those tendencies.  That struggle created, in the industrial world, a brief period of relative equality, a kind of egalitarian mesa, whose high plateau lasted from about 1943 to 1973.

In other words, while for about 5000 years of human “civilization” it mattered more who your parents were or who you married, roughly two generations experienced a life in which what you DID was more important.  Not before, and, sadly, not since.  While that existential utopia was mainly experienced by the male descendants of Europeans, it inspired vast movements for colonial liberation, race equality, and feminism.  Aristocracy is Aristocracy, but Equality cannot remain a privilege.

What built the “mesa of equality” that made the “Great American Middle Class” possible?  The program of shared prosperity of the New Deal.  That program was based on three key strategies to redistribute the wealth that “R > G” was driving relentlessly upward.

The first, in civil society (that is, in the non-governmental “private sector”) is collective bargaining, in which organized workers bargain for a bigger share of the product of their work.  The New Deal gave collective bargaining a huge boost with government protections of organizing rights in the National Labor Relations Act, increasing union membership by four times.

The second, in civic society (that is, in the “public sector”) is government transfer payments, whereby taxes on the wealthier are used to fund programs for everyone.  The New Deal instituted a “wealth tax,” actually an income tax of 94% on top earners, that was used to fund ten million public works jobs, affordable housing, educational opportunities and much more.

The third, in the realm between civil and civic society, is “social insurance,” in which sliding- scale premiums (usually through payroll taxes) are used to fund pensions and insurance for all.  The New Deal did this by creating Social Security, later extended with Medicare in the 60s, and, recently in Massachusetts, with Paid Family and Medical Leave.

The sad story of the undoing of this regime since 1973 is quite simple.  The economic crisis of 1973 was a unique combination dubbed “stagflation,” which included both the stagnation of a recession with the inflation of an overheated economy.  The Iron Law of Capital had been broken by the mesa of equality, the excessive costs of Vietnam, and the oil crisis, reducing rate of return to the rate of growth.

Capital exploited this crisis to wage a counter-revolution, using the courts and globalization to hit unions while they were weakened, and lowering union membership from a third of the workforce to less than ten percent.  Productivity has continued to rise, but wages have stagnated ever since.  And the share of GDP going to Capital soared from one percent to 12% today.  A decisive victory, I’d say, for the investor class and the restoration of the Iron Law!

In the governmental sphere (especially with the election of Ronald Reagan), Capital succeeded in dramatically reducing effective tax rates on the One Percent from 60% down to 20%.  This set up a struggle for funding at the heart of the federal budget that has grown increasingly intense.

And this is where the three M’s come in: Millionaires, Medicaid, and the Military.

How you tax Millionaires, and how you apportion those funds between Medicaid and the Military, says everything about what kind of political economic regime we live under.  Of course, you know what Millionaires and the Military are, but do you know what Medicaid is?  

Unlike Social Security and Medicare, MedicAID is NOT social insurance.  It is the biggest government transfer payment from the progressive income tax to the well-being of the American people.  While social insurance is basically “from each according to their labor; to each according to their labor,” a fairly egalitarian principle to be sure, Medicaid is “from each according to their ability [to pay]; to each according to their need [for care],” the egalitarian principle par excellence.

For decades, as the revenue from Millionaires declined due to tax cuts, the pressure to cut either Medicaid or the Military has grown.  But how can you reward Millionaires with tax cuts only to cut the Military, one of their main sources for a higher rate of return?  That puts the target squarely on Medicaid.

Fortunately, Medicaid is not defenseless.  80 million Americans rely on Medicaid, and it funds 90% of long-term care.  When George Dubya, then Paul Ryan and then Trump the First went after Medicaid, they faced unexpected resistance from Republican Governors whose state budgets depended on it, and Republican voters who used it or were employed by it.

Now arrives Trump the Second to finish the job in the name of the Iron Law of Capital, his mission to destroy organized labor and the progressive income tax once and for all.  He and his Broligarchs (who are already planning a Tech-Bro-Warbucks takeover of the Military) are proposing 2.3 trillion dollars in cuts to Medicaid to fund a flattening of the tax system.

Our mission is clear: to take up the struggle over the three M’s.  

Our demands: Cut the Military, not Taxes!  Money for Care, not for War! Defend Medicaid!

It’s a fight we can win . . . .  It’s the fight we must win!

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