Mend capitalism, don’t end it

In the fight for America’s future, ideologues are on the march. Right-wingers make jingoistic nationalist arguments with overt doses of white supremacy. Lefties flirt hard with Democratic socialism. They are reacting to real problems: decades of stagnating wages, concentrating wealth, an aging population and crumbling infrastructure. Globalization and automation are changing the nature of work and we aren’t preparing enough citizens to fill the coming jobs.  

President Donald Trump is too polarizing to lead us, but there is one national figure with an idea who unites most Americans: Beyonce. In her recent hit single with husband Jay Z, Queen Bey laid down a verse that makes a lot of sense: “Put some respect on my check. Or pay me in equity (pay me in equity) and watch me reverse out of debt.”

{mosads}America can fix a lot of problems if we get more equity into the hands of more women and people of color. The pay gap is wide but the wealth gaps are huge. This is a problem the private sector can fix — with the government playing a supportive role, convening the big players, highlighting best practices and establishing a few rules of the road.

According to “Women and Wealth,” an Asset Funders Network study, “The median wealth for single women is $3,210, whereas single men have a median wealth of $10,150, (just) 32 cents for every dollar of wealth owned by single men. … Single black women have a median wealth of $200 and single Hispanic women $100, less than a penny for every dollar of wealth owned by single white, non-Hispanic men.”

The racial gap is just as depressing. In 2017, The New York Times found that “black families in America earn just $57.30 for every $100 in income earned by white families, according to the Census Bureau’s Current Population Survey. For every $100 in white family wealth, black families hold just $5.04.”

One way to close the wealth gap is to get more families invested in retirement accounts. Although “79 percent of Americans work for employers who offer 401(K)-style plans,” according to the U.S. Census Bureau only 32 percent of citizens are enrolled. They’re leaving money on the table. A 2012 Ariel/Aon Hewitt study recommended automatically enrolling employees into savings vehicles and offering an employer match for higher contributions, among other fixes.   

Democratizing entrepreneurship will help. #ProjectDiane found that the average tech startup was able to raise $1.3 million. Those were mostly started by white men. Meanwhile, the average black woman raised only $36,000. That’s true even though black women are the fastest growing group of entrepreneurs and generate over $44 billion in yearly revenue. Only 34 black women raised over $1 million in venture funding between 2009 and 2017, just 0.0006 percent of total investments.

Geography is a problem, too. AOL co-founder Steve Case told the 2017 Code Conference that 75 percent of venture capital funding is sunk into just three states: California, Massachusetts and New York. Too much capital is invested in too few places with too few people.

China can do quick and cheap replication of existing products to make money. That’s not our game. The United States innovates products and ideas. But like royal families that intermarried too much, we have to diversify the gene pool of innovation or deficiencies will emerge.

Fixing the skills problem is one place the government has to spend money. Sen. Bernie Sanders (I-Vt.) campaigned for president on free public college tuition. We should marry up free tuition with another idea: American youths should spend a year or two in a mandatory national service program to earn financial credits that can be used toward skills certification, community college or university degrees. Not only would we see a massive skills upgrade, but we would create a common experience shared by citizens across racial, geographic and economic boundaries. Lord knows, we could use that.

As U.S. workers move between multiple jobs and entrepreneurial opportunities, they could use a stronger safety net: a government option health care plan or portable benefit accounts for independent and gig workers. But instead of dismantling a private, market-based economy, America could use more capitalism, in more places, that includes more people.

Teddy Roosevelt busted up big corporate trusts and implemented consumer protections. Franklin Roosevelt created the Social Security system and regulated the banking industry. Lyndon Johnson created Medicare. It’s time for a new generation of Americans to think creatively about how to keep the engine of growth alive while curbing capitalism’s excesses and including more people in its benefits. So, how do we mend capitalism and not end it?

Let’s follow the Beyonce rule: Get people some equity.

Jamal Simmons is a Democratic strategist who has worked for the Clinton White House, Congress and the Clinton, Gore and Obama presidential campaigns. He is a liberal host for The Hill’s new HillTV video division.