They Pay the Most

The working class built this country's safety net. They are still the only ones paying for it.

The working class does not hate social programs.

They built them. They fund them. They need them.

What they are tired of is being the only ones who do all three, while the people who write the rules have arranged the rules so that the check never finds its way to them.

This is not a values story. It is not a demographic story. It is not the story the press has been telling for a decade about a working class that abandoned its principles and went looking for a strongman and got what it deserved. That story is wrong and has always been wrong and the wrongness has consequences, real ones, the kind that land on actual people rather than on the journalists who filed from the airport and went home.

The actual story is the check stub.

The working class looks at the check stub and sees the deduction and they follow the money with the precision of people who cannot afford to lose track of it, and what they find at the end of the follow is not a system that pools resources to protect the most exposed. What they find is a system that has been quietly renegotiated, without their presence, by the people they sent to do the negotiating, who negotiated with the rooms and called the result a compromise and sent the bill back to the table.

The bill always comes back to the table.

The rooms never get the bill.

What They Built

Social Security was not a gift.

It was a negotiation. It was the specific outcome of a working class that had watched the Depression take everything, the savings, the farms, the factories, the dignity of men who had worked their whole lives and found at the end of it nothing to show for the working, and decided that the nothing was not acceptable and organized and fought and in some cases died for the proposition that a society could be structured so that the old did not starve.

They won.

Medicare was not a gift either. It was thirty years of organizing after Social Security, thirty years of watching the old die of treatable conditions because the money was not there, thirty years of the same arithmetic the working class does at the kitchen table applied to the specific problem of what happens to a body when the body gets old and the insurance is gone and the bills are not.

They won that too.

The minimum wage. The forty-hour week. The weekend. Unemployment insurance. Workers’ compensation. The Occupational Safety and Health Administration, which exists because the working class spent a century watching people die in mines and factories and on scaffolding and decided that dying at work was not a condition of employment that a decent society should accept.

The working class built all of it.

They built it with their bodies and their time and their money and in some cases their lives. They built it against the opposition of the people who owned the mines and the factories and the scaffolding, who argued at every step that the regulation would destroy the economy, that the minimum wage would eliminate jobs, that the weekend was an unaffordable luxury, that the OSHA inspector was an overreach, that the market would sort it out if the government would simply step aside and allow the market to function.

The market had been functioning.

The market produced the Triangle Shirtwaist fire.

The market produced coal mines where the operators weighed the cost of a safety improvement against the cost of a lawsuit from the family of the man the improvement would have saved and found the lawsuit cheaper.

The market produced children in textile mills at five in the morning.

The working class looked at what the market produced and decided to build something else.

They built it.

They paid for it.

They have been paying for it every week since 1935 without interruption and without the option of interruption because the payment is not voluntary and the working class understands why it is not voluntary because voluntary means the people who can afford to opt out will opt out and the pool will shrink and the protection will shrink with it and the whole architecture will begin to simplify the way a town simplifies when the plant closes and the money leaves and the ecology of the place begins its long contraction.

They understand pooling.

They invented pooling.

What they did not invent was the arrangement that has grown up around the pool. The one where the people who manage the pool have structured their own finances so that they do not need the pool. Structured the rules so that the pool is funded primarily by the people who need it most. Structured the politics so that any attempt to change the funding structure can be labeled socialism and killed in committee before it reaches a vote.

That arrangement they did not build.

That arrangement was built without them.

In the rooms.

At their expense.

The Arithmetic of Who Pays

The payroll tax is 15.3 percent.

Twelve and a half of that goes to Social Security and Medicare. The worker pays 7.65 percent directly. The employer pays 7.65 percent on the worker’s behalf, which sounds like a gift until you understand that the employer’s share is a labor cost and labor costs determine wages and wages determine the check stub and the check stub determines the kitchen table and the kitchen table is where the working class does the math that the rooms do not have to do.

The payroll tax is capped.

It is capped at $184,500 in 2026.

That means a warehouse worker making $38,000 a year pays the full 7.65 percent on every dollar they earn.

That means a hedge fund manager making $4 million a year pays the full 7.65 percent on the first $184,500 and zero percent on the remaining $3,815,500.

The warehouse worker funds Social Security at a higher effective rate than the hedge fund manager.

This is not an accident.

The cap has been in the tax code since 1937 and it has been adjusted upward over the decades to account for inflation but the structure, the working class pays on everything, the wealthy pay on a fraction, has never been changed because changing it would require the people who benefit from it to vote against the benefit, and the people who benefit from it are the people who fund the campaigns of the people who would have to vote, and the funding is the reason the vote never happens.

The Social Security trust fund is projected to face a shortfall.

The shortfall is real.

The solution is not complicated.

Remove the cap.

Require the hedge fund manager to pay the same effective rate as the warehouse worker.

The shortfall closes.

The solution has been proposed many times, in many Congresses, by many members who understood the arithmetic and the politics and the straightforward justice of asking the people who have more to pay the same rate as the people who have less.

The solution has not passed.

It has not passed because the people who would pay more fund the campaigns of the people who would have to pass it, and the funding is more reliable than the constituent, and the constituent cannot afford a lobbyist, and the lobbyist is what the money buys, and the money is in the rooms.

The warehouse worker keeps paying.

The hedge fund manager keeps capping.

The press keeps covering the debate.

The debate keeps not resolving.

The morning keeps coming.

The Stock Portfolio

Richard Burr of North Carolina was a Republican. He was chairman of the Senate Intelligence Committee. In January 2020 he received a classified briefing about the emerging pandemic while the public was being told the risk to Americans was low. He sold between $628,000 and $1.72 million in stock in the following days. His wife sold stock the same day.

Nobody went to prison.

Nancy Pelosi’s husband made $5.3 million on Nvidia call options in 2023.

He bought them six months before the AI spending surge that Nvidia led. He bought them while his wife sat on the committee that oversees technology policy, that receives the briefings, that sees the things the public has not been told yet, that knows which direction the wind is moving before the wind announces itself.

This was legal.

Both of them were legal.

Members of Congress and their spouses are not prohibited from trading individual stocks.

The STOCK Act of 2012 required disclosure. It did not prohibit the trading. It said: tell us what you did, within a period of time long enough that telling us does not cost you the trade. The disclosure is not accountability. The disclosure is the appearance of accountability, which is a different product, which requires a different word, which is performance.

The performance has been running for fourteen years.

The trades have been running longer.

In 2020, senators received classified briefings about the emerging pandemic while the public was being told it was under control. Several of them sold stock before the market collapsed.

The public was told in January 2020 that the risk to Americans was low.

The senators were told something else.

The senators acted on what they were told.

Burr was investigated. The investigation was closed by the Justice Department, which is a department that serves at the pleasure of the executive branch, which is a branch that has its own stock portfolios and its own donors and its own arrangements, which is the thing the arrangement is designed to protect, which is itself.

The working class lost 34 percent of their retirement savings in six weeks in the spring of 2020. The median retirement account balance in this country is $87,000. Thirty-four percent of $87,000 is $29,580. That is not a portfolio adjustment. That is the difference between retiring and not retiring. That is the calculation that changes everything downstream. The children who get called. The house that gets sold. The plan that was almost a plan and became something else.

The senators lost nothing.

The senators were already out.

I want to sit with that for a moment because the sitting is what it requires.

The people whose job was to protect the public from the pandemic used the advance knowledge of the pandemic to protect their portfolios from the pandemic. They received the information as public servants. They deployed it as private investors. They did this in the same weeks that the public they served was being told to remain calm, that the risk was low, that the situation was under control.

The situation was not under control.

The senators knew it was not under control.

The senators’ portfolios knew it three weeks before the public did.

And then the public lost $29,580 from the median retirement account and the senators went back to work and nobody was charged and the disclosure forms were filed and the STOCK Act performance continued and the working class added it to the list and the press covered the investigation and then covered the closing of the investigation and moved on and the senators moved on and the portfolios moved on and the working class did not move on because $29,580 is not the kind of number you move on from.

It is the kind of number you carry.

In the revised retirement calculation. In the conversation with the financial advisor who tells you the math does not work anymore and suggests you consider working two more years. In the two more years. In what two more years costs a body that has already given forty to the work.

The senators’ knees were fine.

The Carried Interest Loophole

There is a provision in the federal tax code called the carried interest loophole.

It allows hedge fund managers and private equity partners to pay a 20 percent capital gains rate on their compensation instead of the ordinary income rate, which for people in their income bracket is 37 percent.

The difference between 20 percent and 37 percent on a $10 million compensation is $1.7 million.

Per year.

Per partner.

The hedge fund has many partners.

The loophole has been in the tax code since the 1950s. It was designed for oil and gas partnerships. It was expanded over decades by the patient, well-funded work of lobbyists who understood that a provision buried in the tax code does not generate headlines and does not generate constituent calls and does not generate the political cost that visible legislation generates and can therefore be protected indefinitely as long as the people who benefit from it fund the campaigns of the people who would have to eliminate it.

The people who benefit from it fund the campaigns.

The loophole survives.

Barack Obama called for eliminating it in 2008. He called for eliminating it in 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016. Eight consecutive State of the Union addresses. He did not eliminate it. He did not eliminate it because eliminating it required sixty Senate votes and sixty Senate votes required members who received significant funding from the financial industry to vote against the financial industry and the financial industry understood this and funded accordingly and the loophole survived eight years of presidential opposition without serious injury.

The hedge fund managers kept the $1.7 million.

Every year.

The working class kept paying the full rate on every dollar they earned.

The press covered the State of the Union and noted the president had called for closing the loophole and moved to the next segment.

The loophole is still there.

The warehouse worker is still paying 7.65 percent on every dollar.

The morning still comes.

The Revolving Door

When they are done being senators, they become something else.

The something else has a name. It is called the revolving door and the naming of it has made it seem like a known quantity, a managed risk, a structural quirk that everyone understands and no one can do anything about, which is what happens when the people who could do something about it are the people who will walk through the door.

Thirty-seven percent of former senators and forty-two percent of former House members who left office between 2009 and 2019 became registered lobbyists.

Registered lobbyists. That is the reported number. That is the people who filed the paperwork.

The number of former members who became consultants, strategic advisors, senior vice presidents of government affairs, managing directors of public policy, partners in the law firms that do the lobbying without registering as lobbyists, is higher. The precise number is not knowable because the precise number has been arranged to be not knowable.

The arrangement is legal.

The arrangement is the point.

A senator spends six years on the banking committee. The banking committee oversees the regulation of the largest financial institutions in the country. The senator receives briefings. The senator understands the regulatory calendar. The senator knows which rules are coming and which rules are not coming and which rules are coming in a form that will matter and which are coming in a form that will not. The senator votes on the rules. The senator cultivates relationships with the people who will one day employ the senator.

Then the senator leaves.

The bank pays $4.5 million a year for the relationships and the knowledge and the understanding of the calendar that six years on the committee produced.

The bank is buying the senator’s accumulated public service.

The senator is selling it.

This is legal.

The cooling-off period is two years for senators. One year for House members. Two years. The relationships do not cool in two years. The knowledge does not expire. The access does not lapse. The former senator sits in a well-appointed office for two years being paid to be available and then, when the calendar clears, begins the actual work, which is the work they were building toward the whole time, which is the reason the bank was patient.

The public funded the training.

The industry bought the graduate.

The public received the decisions the graduate made before leaving.

The industry received everything after.

The working class does not have a cooling-off period.

When the plant closes, the cooling-off period is the drive home.

The Campaign Finance Machinery

The Federal Election Commission reported $14.4 billion in spending on the 2020 federal elections.

$14.4 billion.

The annual budget of the Environmental Protection Agency is $9.2 billion. The annual budget of the Centers for Disease Control is $8.7 billion. The country spent more electing the people who oversee those agencies than it spent running them.

The average House race in 2024 cost $3.4 million to win.

The average Senate race cost $26 million.

You do not raise $26 million from the people at the kitchen table at eleven o’clock. You raise it in rooms. The rooms have requirements. The requirements are not written down. They are understood. They are the grammar of the money, the language that does not need to be spoken because everyone in the room already speaks it. You know what is expected. You know what the money means. You know what it will mean when you sit on the committee the money cares about.

The working class cannot run.

Not because they are not qualified. Because the system has been priced in a way that makes qualification irrelevant if the money is not there, and the money is not there, and the money is not there because the money is in the rooms and the rooms are not interested in funding candidates whose interests align with the people who could not afford the room.

This is not a conspiracy.

It is a market.

The market is working exactly as designed.

The design is the problem.

Think about what the design requires. You need $26 million. You need to raise it in increments from people who can write the check, but the Super PACs have no limit, and the Super PACs are where the real money moves, and the Super PACs are funded by people who have decided that $5 million on a Senate race is a sound investment because the Senate race determines the committee seat and the committee seat determines the regulation and the regulation determines whether the $5 million returns $50 million or $500 million.

It is an investment.

It has always been an investment.

The return is the policy.

The policy is the life.

The life belongs to people who were not in the room when the investment was made.

I know what that life looks like.

I have been living inside it for sixty-six years.

The Porch

Someone will read this and note that I am smoking Padróns and drinking Jameson and writing from a porch in western Nebraska and conclude that I do not know what I am talking about.

Fair enough.

Let me tell you what the porch cost.

I know what the floor feels like because I stood on it. I have done the math at the kitchen table at eleven o’clock when the kids were asleep and the numbers still did not add up and the morning was already coming. I know what it costs to keep going the next day and the day after that. I know what this country costs the people who build it and what it gives them back.

Which is less.

Which has always been less.

Which is the whole argument.

The cigar is the sitting down. The Jameson is the sitting down. The porch is what you get after sixty-six years of doing the math and watching what the rooms do to a town and deciding that the watching and the writing are the work that is left. I earned the retirement. I earned the Padróns. I earned the right to sit here and tell you that the arithmetic has not changed and the machinery has not changed and the morning still comes whether anyone in the rooms is paying attention or not.

I am paying attention.

The arithmetic does not care about the cigar.

Both Sides of the Aisle, Which Is One Side of the Table

I want to be careful here because careful is what honesty requires.

This is not a Republican problem.

That is what makes it a working-class problem.

The Republicans are straightforward about it. They have been the party of capital since before anyone reading this was born and they have been candid about that allegiance with a candor that is almost clarifying compared to the alternative. They do not claim to be something else. They serve the money and they say they serve the money and they pass the tax cuts and they deregulate the banks and they do it in plain sight with the confidence of people who know that the opposition will not be sufficiently different to constitute an alternative.

The Democrats are the complicated case.

The Democrats claim to be the alternative.

They raise money from the same rooms and they vote the same way on the things the rooms care most about, the carried interest exemption, the pharmaceutical patent protections, the banking deregulation that happened in the 1990s that nobody named for what it was, which was the rewriting of the rules to protect the money from the people who might use the government to constrain it, and they tell the working class they are on their side.

They say it at the diner. They say it at the union hall. They say it with the sleeves rolled up and the hard hat on and the careful affect of people who have been coached on how to stand in a place they do not come from and project the impression of belonging.

The working class has been watching both columns.

The money column and the vote column.

They do not match.

The senators from states with large pharmaceutical industries vote against drug pricing reform. The senators from states with large financial sectors vote against financial reform. The senators who receive the most from the defense industry vote for the most defense spending. The senators who collect from the insurance industry find reasons, at the critical moment, to support the version of healthcare legislation that protects the insurance industry from the competition that would constrain it.

The correlation is not subtle.

The working class watches.

They have been watching their whole lives.

They called it corruption and were told they were being simplistic. They called it buying and were told they were being naïve about how the system works. They were told the system was complex, that causality was difficult to establish, that there were competing interests and legitimate disagreements and the sausage-making of democracy required tolerance for the gap between promise and delivery.

They tolerated.

For decades they tolerated. They voted for the party that claimed to be the alternative because the alternative to the alternative was worse, and it was worse, and the calculation was real. They understood that the choice between a party that serves the money openly and a party that serves the money while claiming not to is still a choice and they made it and kept making it and kept watching the columns.

The gap did not close.

The wages did not rise.

The minimum wage did not move.

The carried interest loophole did not close.

The drug prices did not come down.

The hospital forty-seven miles away became the building with the sign.

And into the space left by all of that not happening came something loud and mean and very skilled at pointing at the distance between the rooms and the people outside them and saying: I see it too. I see what they did to you. I am the only one who sees it.

He was lying.

He was lying in the specific way of people who understand that the lie does not matter if the grievance underneath it is real.

The grievance was real.

The grievance is still real.

The grievance will be real long after he is gone because the grievance was never about him. It was about the columns not matching. It was about the carried interest loophole surviving eight presidential speeches. It was about $29,580 gone from the median retirement account while the senators were already out.

The press looked at the working class and called it a values story.

It was a math story.

The math has not changed.

The Stock Act That Didn’t

In 2022, there was a moment.

The bipartisan TRUST in Congress Act was moving. It would have banned members of Congress and their spouses from trading individual stocks entirely. Not disclosed. Banned. The poll numbers were extraordinary. Seventy-six percent of Americans supported the ban. Seventy-six percent is a number that does not happen in American polling. Abortion does not get seventy-six percent. The child tax credit does not get seventy-six percent.

Stock trading by members of Congress got seventy-six percent.

Seventy-six percent is not a coalition. It is a consensus. It is the thing that happens when an issue cuts so clearly across every line that divides American politics that the only people on the other side are the people who directly benefit from being on the other side.

The bill died.

It died in the House. It died in a Congress controlled by the Democrats. It died in a Congress led by Nancy Pelosi, whose husband had made $5.3 million on the Nvidia options.

She said she believed in a free market. She believed members of Congress should be able to participate in the free market.

The free market that a member of Congress participates in is not the free market.

The free market, in theory, is a system where participants make decisions based on publicly available information and the prices reflect what everyone knows. What the member of Congress has is not publicly available information. It is the briefing. It is the closed hearing. It is the conversation with the regulator, the call with the agency head, the draft of the rule that has not been published yet.

That is not the free market.

That is the market the free market is supposed to prevent.

The bill died anyway.

Seventy-six percent wanted it to live.

The seventy-six percent did not have the same access to the leadership that the portfolios did.

The working class was in the seventy-six percent.

They are always in the seventy-six percent.

They are always in the supermajority on the things that matter most to them and the supermajority keeps not being enough because the supermajority does not have a Super PAC.

The Town That Paid For It

Population of Scottsbluff, Nebraska: 14,323.

Median household income: $53,448.

Distance to Washington: 1,085 miles.

The federal tax receipts from a town of 14,323 people earning a median of $53,448 are not large. They are real. They get collected and they travel the 1,085 miles and they enter the machinery and the machinery decides what to do with them.

The machinery has been deciding for a long time.

It decided to bail out the banks in 2008. The bailout cost $700 billion. The banks paid $36 billion in executive bonuses in the fiscal year following the bailout. The $700 billion came from taxes. The taxes came from the working class in Scottsbluff and Youngstown and Flint and Bakersfield and every other town the financial crisis hit hardest, the towns where the mortgages were underwater and the jobs were gone and the retirement accounts had collapsed and the recovery, when it came, came first to the people who needed it least.

The machinery decided to extend the pharmaceutical patents.

Humira, the rheumatoid arthritis medication. $6,900 a month in the United States. $1,300 a month in Germany. Same drug. The difference is not chemistry. It is lobbying. The pharmaceutical industry spent $4.5 billion lobbying between 1999 and 2018. The most expensive lobbying campaign in the history of American democracy. The return on that investment was $1.3 trillion in protected revenue.

The working class paid $6,900.

The German working class paid $1,300.

The machinery decided not to close the carried interest loophole.

It decided not to raise the minimum wage.

It decided not to pass the Employee Free Choice Act.

It decided that the hospital forty-seven miles away was a private sector matter and the private sector had decided it was not viable and the not-viable is what you drive to at three in the morning when the symptoms cross the threshold and the ambulance bill has been ruled out and the forty-seven miles is what is left.

The town sent the money.

The machinery decided.

The town received the decisions.

The minimum wage does not apply to their work. The healthcare deductible does not apply to their care. The closed plant does not apply to their retirement. The ambulance bill does not apply to their emergency. The forty-seven-mile drive does not apply to their three a.m.

They are governed by people who do not live inside the consequences of their governance.

The working class built this country’s safety net with their labor and their bodies and their dues and their dead.

They are still building it.

Every week.

Without being asked.

Without being thanked.

Without being represented.

The morning comes anyway.

This newsletter runs on the same principle the working class has always run on. You pay for what you use. No countdown clock. No matching gift deadline that resets at midnight. No red text telling you the republic will fall if you don’t act in the next four hours.

If you read this and recognized something true in it…something you have known in the body for a long time but have not seen named in plain language, consider becoming a paid subscriber. The money does not go to a think tank. It does not go to a Super PAC. It goes to the time it takes to do the arithmetic, stay on the porch, and write it down.

The cap is still $184,500.

The warehouse worker is still paying on every dollar.

The rooms are still well funded.

This is the other thing.

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