The commonwealth is stuck on big government thanks to escalating corporate profit margins

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The Bluegrass state has turned hot red. A significant change from the fifties and sixties when the middle class in all of the U.S. represented the American dream and was bluer. Hard work paid off. The lifestyle and comfort associated with the middle living used to impress other democracies. Everything was “bigger” in the U.S. That comfort is no longer attainable on a middle-class income. Quality of life has gone down.

The middle now identifies with Rand Paul and Mitch McConnell’s effective claim that “big government” is bad and must be eliminated. But under their rein, Kentucky has fed off the federal government for years. Their policies have instead increased, not decreased, public expense.

  • For every dollar Kentucky paid to the federal government in 2020, we received $3.16 without COVID relief. The highest in the country! In 2020 KY received $14,300 per capita versus the US average of $3.900. Kentucky received a total of $64.5 billion. That is about 30% of our GDP.  Rockefeller Institute

  • All states have public spending to maintain transport networks, roads, and bridges, ensure public order and safety, people in jail, monitor public health and clean water, and educate children. But Kentucky has almost doubled Health Care and Social Assistance in the past 20 years to over 250.000 employees. A hidden diabetic epidemic, respiratory and cardiovascular illnesses, obesity, and mental health weigh in heavily.

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Democrats’ struggle: They have a disconnect; how did they lose the middle they built?

If you were looking for answers, you didn’t need to listen to “Meet the Press” or “Fox News” on April 29. You could drive to Falls of Rough, Kentucky, where “The BluegrassRoots” hosted their first conference. Thomas Frank, the author of “Listen Democrats” and other bestsellers, was invited as the keynote speaker:

Thomas Frank: “What happened to the value we lost? The great middle class of 1965 disappeared. In a time of growing abundance, with GDP growth at 6.5% and widely shared Medicare bills. The wealthiest owned just one billion. Thirty-five percent of workers were organized in Unions, and taxes were high for those who made earnings.”

  • Back then, in 1950-1960, when the middle class knew of comfort, the corporate tax was around 50%, and the economy grew at an annual average rate of 3.9%. But in the following decades, the corporate tax was lowered to 35%, and the economy only grew around 1.8% on average. Now, the federal corporate tax is 21% percent, and in several states, corporations pay zero in corporate income taxes.

  • Following the Covid recession, the corporate profits margin of a product’s price increased from a typical 11% to 54%, according to the Economic Policy Institute. Labors share went down from the typical 62% to 8%.  

Thomas Frank: “Fast forward to 2021. Low taxes, 6% are organized in Unions, five times the prescription drugs, sky rising death of despair, 16 mega multibillion-dollar billionaires, and 84% of new jobs are in the service sector (health care and restaurants). It’s an undoing of civilization and all about the well-being of the top. It’s the downfall of the affluent society.”

  • Today, the “top” are States with larger financial markets, like Connecticut and New Jersey, or the many more educated metropolitan regions where wealth tends to concentrate. Those are also the areas injecting revenue into the federal government that help us pay the bills. Mostly this is blue territory.

  • Kentucky is a top net beneficiary of federal funds because our revenue from income tax and social security is much too little to cover our bills. Corporate tax revenue is negligible.

Thomas Frank: “Republicans who worshipped the corporate sector made it easy to go abroad, with that severe domestic job loss and more tax cuts. Long summer of corporate love. Suddenly monopolies were harmless, and blue-collar unions were dangerous. Why are democrats not out there organizing their discontent?”

  • The corporate welfare is hurting the local communities. There’s little return to society on their profits, destroying state and local economic balances.

  • Rand and Mitch still advocate for coal jobs! As a doctor, Rand should create jobs that make people healthy, not sick, and land people on welfare. Coal country should have been left as prosperous rural communities, not depleted and depressed.

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“Democrats have distanced themselves from who they used to represent. Bill Clinton, the flower of meritocracy: what you earn depends on what you learn. You get what you deserve, what you did in school! Democrats became the class party, not the US!”

  • Most democracies will show that education is an aid in a better bottom line for all. This is how you create comfort and trust and build better health, a long-term process. But society must include all.

Thomas Frank: “How to build a liberal movement? It’s about addition, not a substitution, about economic development to appeal to the economic interest of the working class and mobilize the CEO. For whom does America exist? Billionaires, technocrats. Blue-collar workers are not visible. Opportunities are unlimited.” Kentucky must wean itself from federal funds and demand big corporations invest in rural communities. Blue-collar labor must be recognized again, and hard work must pay off. The truth is rough, and Falls of Rough was an excellent place to digest it. The BluegrassRoots was one initiative to state: We are all one nation under GOD.  Finding common ground must be the answer.

Kris O’Daniel is a native of Denmark and has a Master of Dairy Science and Engineering background.

Kris O’Daniel
Kris O’Daniel

Her first employment was as an Associate Expert at the United Nations Food and Agricultural Organization (FAO) stationed in Chiang Mai, Thailand conducting training courses in the Far East.

Kris and her husband own Zelma Farm, a cow-calf operation producing beef cattle with improved genetics. Kris is passionate about the environment. In her spare time, she does woodwork.

This article originally appeared on Louisville Courier Journal: KY is stuck on big government thanks to escalating corporate profits