My the first book, The four, began as a love letter to Big Tech. I was in love with their products, their innovation, their financial success and the future they promised. But as I got further into the research, I saw how much danger lay in that promise. The resulting critique was not something I would have expected to write just a few years earlier. Now, half a decade later, the rifts I recognized in Big Tech are rippling wide open in society. My latest book, On Stream: America 100 Rankingstells this story.
As I admit in the book, I am sometimes criticized for focusing on technology, business, or societal problems rather than offering solutions. Well, guilty as charged, I guess. But let me say two things.
First, these problems stem in part from failures in perception and awareness. My group of economically successful people vastly overestimates our own contribution to our success. Society tells us that our nice homes and fancy cars must mean we’re hardworking geniuses, and why should we argue about that? The reverse is also true. Society tells those dealt a bad hand, who have never been able to break free, that their failure must come from a lack of courage, an inability to dream big. I believe that pulling back the veil from advertising that is placed in our unequal society is part of the solution to that inequality.
While there are bad apples, in my experience people are mostly good and want to do right by their society. We are more often wrong than wrong, but the result is the same. America is a country of great wealth and achievement, yet a chronic illness can bankrupt a family. So my goal is to reframe my appreciation of what got us here in the hope that a clearer perspective can help change where we’re headed.
Second, to be honest, things are really bad. The scoreboard of threats, from inflated asset values to irreversible climate change to armed attacks on government procedures, is flashing red and getting worse. If I spent my entire public life pointing out the risks we face, I would never run out of material.
That said, there’s a lot going right, and a lot of promise, and my critics have a point. In his first inaugural address, President Clinton famously said, “There is nothing wrong with America that cannot be cured by doing what is right for America.” These are words that would have fit the first inauguration. Reagan’s, celebrating “business America,” would have suited Lincoln speaking to a fractured union, or sounded straight out of FDR during the Great Depression. These are words that I deeply believe in today.
Moreover, it is important to “heal” America. This belief is implicit in all my work, including my latest book, but I want to make it explicit here. Although it’s out of fashion, I remain an American extraordinaire. This country is truly different in ways that make it, in words used by too many presidents to list, a “city on a hill,” a beacon for the optimistic and the innovative. That’s not to say that I think America is perfect—my book is called Upstream, after all—but as a nation born not of ethnicity or dynastic conquest, but rather built on the foundation of an ideal, it holds special promise. This remains an unfulfilled promise, but I believe it is within our grasp.
The central thesis of Downstreamand the north star of my politics is that we have come closest to realizing our ideals when we have balanced ruthless capitalism with the ballast of a strong middle class. We have deviated from that course. Here are five recommendations to help us find it again.
Simplify the Tax Code
The idea of simplifying the tax system is perhaps the one policy that all Americans everywhere support. Yet the tax code is becoming increasingly complex. In 1955, the Internal Revenue Code totaled 409,000 words; today there are approximately 4 million.
The complexity of the code itself is a tax on the poor. The rich hire small militias to conquer the system and reduce their taxes. The tricks that benefit the wealthy are unavailable to ordinary Americans, and so is the expensive advice needed to take advantage of them. What this complexity means for ordinary people is a huge waste of time. In 2012, the IRS National Taxpayer Advocate estimated that it took a total of 6.1 billion hours for all taxpayers to do their taxes. Compare that to the filer’s experience in thirty-six countries, including Germany, Japan, Norway and Sweden, where the government calculates taxes and provides taxpayers with a pre-filled return.
We need to overhaul the tax code with uniform definitions and eliminate itemized deductions in favor of higher standard deductions for households. Tax savings programs from Roth IRAs to Coverdell Education Savings Accounts should also be consolidated to achieve one simple goal: encouraging personal savings by avoiding double taxation. And we must end the favorable tax treatment of income derived from the sale of assets. Money (and the money it makes) is no nobler than sweat.
Reform Section 230
Social media companies are largely immune from scrutiny because of a law that was passed in 1996 — when only 16 percent of Americans had access to the Internet through a computer connected to a telephone cord.
Facebook, Twitter, and YouTube didn’t exist yet, and Amazon was an online bookseller.
Today, more than half the world’s population uses social media, and although this expansion has created enormous value for stakeholders, externalities are growing faster than revenues. Social media users are exposed to anger algorithms – fostering an ecosystem of contempt, partisanship and polarization. Our teenagers are depressed and suffering from device addiction.
Social media companies no longer need special treatment. They now have the resources and reach to play by the same rules as any other media company—rules that make the punishment and likelihood of getting caught outweigh the upsides of pillaging democracy. These rules fairly shift the cost of externalities from the community to the companies that create them.
Rethink the land of the free incarcerated
The US leads the world in many things to be proud of, but incarceration is not one of them. As of 2021, 629 out of every 100,000 Americans were behind bars, the highest incarceration rate of any country in the world. Cuba, an authoritarian regime that imprisons people for “precriminal public danger,” has a lower percentage of people in prison. America’s incarceration rate is twice that of Russia, not to mention seventeen times that of Japan. If the US prison population were a city, it would be the fifth largest in the nation – more populous than Atlanta, Miami, Cincinnati and Memphis combined. Blacks and Hispanics make up almost 60% of the prison population, even though they make up roughly one-third of the US population. And it costs more than $80 billion a year to maintain all those prisons.
We need to rethink this. Sentences for non-violent crimes should be reevaluated, and inmates with no history of violence should be considered for release. Drug courts, diversion programs, and other alternatives to prison must be expanded. Release from prison must be accompanied by re-entry and education programs. Locking up a young man for a youthful mistake that hurt no one and then throwing him out on the street without any training years later only compounds the problem. We have broken criminal justice and we need to fix it.
Introduce a one-time wealth tax
One of the largest transfers of wealth from the young to the old in US history came with the government’s response to the Covid pandemic. He issued a whopping $5 trillion in stimulus and essentially $3 trillion ended up in the hands of the wrong people. This amount could have been
$30,000 for every American who reports lost wages due to pandemic. Vast swathes of America suffered while the rich got richer.
That $30,000 in the hands of those who need it most would go a lot further in restoring the economy, as more money would end up in the economy and not in the markets. And who better than consumers to determine which businesses deserve to survive and are prepared for a new economy?
In the future, stimulus packages should be limited to supporting people who are food and housing insecure – not Delta Air Lines or your neighbor who owns seven dry cleaners.
But since we’re already $3 trillion in the hole, we need to recoup some of those losses. We should impose a lump sum tax on wealth. A 2% tax on the richest 5% of households would raise up to $1 trillion. (The initial stock market surge triggered by the passage of the CARES Act helped America’s wealthiest stock owners amass an additional $2 trillion.)
If we do not align financial rewards and punishments with the health of our community and its citizens, we are doomed to a pattern of failed crisis responses.
Nuclear power suffers from a tragic branding problem. The technology is a carbon-free and reliable source of energy for twenty-four hours a day. A single generator produces enough electricity to power all the homes in Philadelphia. And nuclear power has been widely used around the world for generations.
Yet only 29% of Americans view it favorably and 49% view it unfavorably, making it the most unpopular energy source after coal. Our fears of this powerful source of clean energy stem from isolated, extremely rare incidents. In fact, nuclear power is one of the world’s safest energy sources, recording accident and pollution-related deaths roughly 300 times lower than coal and oil, relative to their energy output.
It’s time for a rebrand.
Adapted from Galloway’s new book, On Stream: America 100 Rankings published by Portfolio/Penguin
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