Opening the Seattle Times this morning, I was surprised to see a photo of Seattle’s new
Socialist Councilmember, Kshama Sawant,
standing alongside the City’s new Mayor, Ed Murray, who was announcing the
formation of a new Income Inequality Committee. The Committee will
consider minimum wage legislation, which Ms. Sawant would like to set at
$15/hour, the level recently adopted through initiative by the City of SeaTac.
The paths leading to a more Egalitarian Seattle are
cluttered with obstacles. A former UW
political scientist, Paul Peterson, insists that egalitarian initiatives, "redistribution"
in Peterson's jargon, are pursued more effectively by countries than cities. The title of Peterson’s book, “City Limits,”
captures the main idea, which is that businesses and well-to-do residents
aren’t trapped within the City’s boundaries; they can relocate to more
“hospitable” jurisdictions, as Boeing is threatening to do.
In a more perfect world, minimum wages would be
raised in concert nationwide (or worldwide), we’d have a more progressive tax
code, and there would be better educational opportunities for less advantaged
citizens. But we don’t live in an ideal world, and so Seattle must seek
out the next best alternatives.
There are some egalitarian policies Seattle can
pursue without running up against the “city limits.” Ms. Sawant isn’t the
first Socialist elected to the Seattle City Council. A hundred years ago,
the Socialist Party was an active participant in the political battle to create
Seattle City Light. At the time, the existing electric utility was owned
by a Boston syndicate and charged 20 cents/kWh. When City Light started
delivering power, it charged 8 cents/kWh, forcing its private competitor to
reduce its rate to 8.5 cents/kWh. Now that's public power!
But I digress. Today, Seattle has a chance to
follow the excellent lead of B.C. Hydro, British Columbia’s publicly-owned
electric utility. B.C. Hydro charges its larger customers a carefully
designed electric rate that doubles the financial incentive to conserve.
Each customer receives a block of low-cost power based on their past
consumption, but pays a much higher rate for additional consumption. In
the long run, this electric rate alternative will reduce total energy costs, which
are borne disproportionately by low-income households. Perhaps our new
Socialist Councilmember can nudge Seattle City Light in this progressive
direction.
Here’s another question for Ms. Sawant: Do you
approve of the City’s Retirement System's plan to triple its investment in
Private Equity? Thanks to the so-called “carried interest” tax loophole,
Private Equity owners (remember Mitt Romney) pay a lower tax rate than most
City Employees. Seattle’s Liberal Councilmembers seem content to allow
the City’s Private Equity holdings to be sharply increased, even though Private
Equity lobbying groups are now pressuring Congress to maintain a tax loophole
that benefits the highest echelons of the top 1%. Surely a Socialist
can’t support such investments!
Since I’m gathering up my holiday spirit, let me
express the hope that our new Socialist Councilmember will bring the Liberal
members of the City Council to their senses on these issues. More
efficient and environmentally-friendly utility pricing used to be a Liberal
battle cry in Seattle, and the argument that it won’t work, or will drive
business away, holds no water in light of B.C. Hydro’s success. And if
our Liberal Councilmembers can’t be persuaded to halt the City’s indirect
support of Private Equity’s “carried interest” tax break, then perhaps their
new Socialist comrade will occasionally remind them about the City’s $20
million investment in a Cayman Islands private equity firm, which is now
worthless.
Note: This is my first post on
this new blog. Shortly I'll write a general introductory post about the
point of "Socialism in Seattle." Suggestions welcome.