recession

Giving Thanks for the Occupation, Election, Demonstrations

Leo Gerard — Tue, 22 Nov 2011 10:29:51 -0500

I want to thank you, thank you
Thank you, thank you,
Thank you, thank you,
Thank you, thank you. ~ Natalie Merchant, “Kind and Generous”

This week’s holiday mandates giving thanks. For many Americans, that is complicated by the harsh years since 2008.

There’s the bitterness of lost jobs, foreclosed homes and diminished opportunity. There’s the resentment over bailing out Wall Street, then watching banksters grant themselves sensational bonuses while denying Main Street loans to save businesses. There’s the fear generated by county club conservatives demanding draconian cuts to Social Security, Medicare and Medicaid.

It’s hard to muster gratitude while suffering, to feel appreciative while dreading a meaner future.

The past two months, though, produced glimmers of hope -- the occupation, the election and the mid-November demonstrations. These events suggest empowerment of the 99 percent and emergence of change. They’re reason for thanks giving, especially by those formerly in the middle class who will for the first time experience this holiday without the traditional feast.

Change began in September with the launch of Occupy Wall Street. Previously, the disaffected had rallied and protested. The newly-homeless had held signs. The jobless had marched on Wall Street, the epicenter of the economy’s crash. But this was different. These rabble-rousers didn’t protest and go home. They dug in. They offered no end date for their cries for justice. Like the sit-down strikers who inhabited the General Motors plant in Flint, Mich. for 44 days in 1936 and 1937, these protesters are determined to stay as long as necessary.

The New York occupiers’ gumption and message – “we are the 99 percent” -- inspired a movement worldwide. Activists encamped in more than a 1,000 cities. And when police tried to rout them, the occupiers defied the official oppression, just as the sit-down strikers did. Emblematic is the 84-year-old Oakland, Calif. protester who said after police pepper sprayed her in the face that the experience energized her.

Before this movement began, country club conservatives had confined political discussion and concern to government deficits. No one acknowledged the unemployed, the impoverished or the foreclosed on – except to condemn them. The occupations changed this. Suddenly, the media talked of the problem of sharply higher income inequality and wrote about highly profitable corporations dodging taxes. Abruptly, politicians recalled the agony of joblessness and homelessness. Amazingly, there was new emphasis on polls showing massive majorities opposing austerity for the 99 percent and supporting higher taxes on the 1 percent.

For those of us in warm homes, Natalie Merchant’s words send a perfect message to those encamped:

“For your kindness, I’m in debt to you,
And I could never have gone this far without you,
For everything you’ve done,
You know I’m bound – I’m bound to thank you for it.”

On Election Day, the majority put the 1 percent and their purchased politicians on notice. The problem for the 1 percent in a one-person-one-vote democracy is that they’re outnumbered. In referendums on Nov. 8, the majority rebuffed attempts to restrict the ability of citizens to vote and to collectively bargain.

Mainers reversed a Republican attempt to limit balloting. The majority there restored Election Day voter registration – a right they’d exercised without problem for 38 years before the state’s GOP-dominated legislature and GOP governor passed a law eliminating it. The 60 percent vote for reinstatement served as public censure to Republican lawmakers nationwide who have worked to suppress voting.

In Ohio, citizens reversed a Republican attempt to sharply constrict the right of public employees to collectively bargain for better wages, benefits and working conditions. Ohio citizens affirmed their belief in unionization as a way to move workers into the middle class. The vote was 61 percent in favor of union rights, a margin that chastened country club conservatives, including Ohio’s GOP Gov. John Kasich, who said afterwards that he would “pause” to reflect because: "The people have spoken clearly. You don't ignore the public.”

To the voters in Ohio and Maine:

“Oh, I want to thank you for so many gifts. . .
I want to thank you for your generosity . . .
I want to thank you, show my gratitude. . .” ~Natalie Merchant

The following week, two demonstrations reinforced the election’s message of hope for the 99 percent. On Nov. 16, two dozen millionaires climbed up Capitol Hill and told Congress they wanted their taxes increased. Really. The following day, on the two-month anniversary of Occupy Wall Street’s birth, activists and unionists took to bridges nationwide in demonstrations for jobs.

The rich guys, the Patriotic Millionaires for Fiscal Strength, told Congress to eliminate the Bush tax cuts for the rich to help balance the budget. This group of 200 members of the 1 percent offered a solution very different from the Republican austerity demand that had dominated discourse for months.

Similarly, the protesters who occupied bridges across America sought federal investment in infrastructure to create jobs, which would help relieve the recession. Jobs, not cuts.

To the Patriotic Millionaires and the protesters,

“Oh, I want to thank you, thank you,
Thank you, thank you,
Thank you, thank you. . .” ~Natalie Merchant

Because of them, because of wise voters in Ohio and Maine, because of the Occupiers, there’s reason for gratitude this Thanksgiving.

Sacrilege: Wall Street Worship

Leo Gerard — Tue, 01 Nov 2011 10:05:26 -0400

Americans have been worshiping a bull. Too many citizens, and particularly politicians, prostrate themselves to Wall Street’s bronze idol.

They revere financial titans who pay themselves and their minions millions to manipulate money and gamble recklessly. Politicians gave tribute to the financiers with tax breaks and bailouts when the bankers’ bad bets threatened to bankrupt their institutions.

This false idolatry produced a nation gripped by massive unemployment, a nation in which destructive income inequality has risen beyond robber baron levels, a nation where greed has been perverted from sin to good, a nation where politicians genuflect to money changers, not majority citizens.

Salvation for the majority is not more failed trickle-down economics or more deregulation so that Wall Street can resume committing unfettered wagering. Redemption is political and economic systems devoted to serving the common good, not the affluent few.

These concepts -- that governments should protect majorities and that the international financial collapse is an opportunity to transform the system into one supporting a more fraternal and just human family -- are contained in a report released last week by the Pope’s Council for Justice and Peace. It says:

“The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence.”

Those values mandate economic and political systems that transcend “personal utility for the good of the community,” the report says, then adds:

“The primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics, which is responsible for the common good – over the economy and finance.”

This is exactly what the 99 percenters -- the Occupy Wall Street activists of every faith -- have been saying. They want systems that work for the vast majority of citizens, not just the 1 percent at the top.

A day after the Pontifical Council reported that inequitable distribution of wealth has increased both between individuals and nations, the non-partisan Congressional Budget Office documented a massive spike in income inequality within the United States from 1979 to 2007.

The household income of the nation’s richest 1 percent grew 275 percent during that nearly 30-year period, according to the CBO report.

By contrast, the income of the middle class rose by one-seventh of that -- 40 percent. For the poor, the increase was one-fifteenth of that for the rich -- only 18 percent over 30 years.

The result is that the richest 20 percent of households got more money in those 30 years than the entire bottom 80 percent. That is redistribution of wealth – moving it from the poor and middle class to the richest.

The CBO study cites several factors contributing to the rising inequality, including federal tax policy. The CBO says tax policy fed inequity as the incomes of the wealthiest rose astronomically and their federal tax burden shrank.

This pattern is consistent internationally. The Organization for Economic Cooperation and Development determined that from the mid-1980s to the mid-2000s income inequality increased in three-quarters of the 30 developed countries studied.

If basic morality fails as a reason to reverse these trends, then the Pontifical Council suggested another. Such inequality leads to instability and violence:

“If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid.”

So far, the violence surrounding the 99 percenters in the “Occupy” movement has come from the government and police and not the other way around, thus the photos and videos of defenseless women pepper-sprayed by an officer in New York and a bleeding, critically-injured Iraq war veteran struck down by police in Oakland.

Historically, it wasn’t always that way. During another spike in the nation’s history of income inequality, in the first two decades of the 1900s, violence was turned on the rich. An anarchist shot robber baron Henry Clay Frick and bombings terrorized industrialists. As the socialist movement surged, Andrew Carnegie wrote that the gulf between rich and poor threatened the survival of capitalism.

Also ignoring morality, just consider that income inequality impedes economic development. An International Monetary Fund study found high levels of inequality retards economic recovery while relatively equal income distribution supports sustained growth. Numerous academic studies have reached the same conclusion – inequality diminishes economic expansion, for many reasons, including its tendency to provoke political and social unrest.

Yet conservative politicians continue to demand changes that would make matters worse. Candidates Herman Cain and Rick Perry, seeking the Republican nomination for president, have proffered flat tax plans that would compound the burden on the middle class and poor. On being informed that his would increase income inequality, Perry said, “I don’t care about that.”

When Democrats on the debt-reduction super committee suggested raising $1.3 trillion in tax revenues, including levies on the rich, a measure consistently supported by huge majorities of the American public, Republicans summarily rejected the proposal, calling it absurd.

The answer to the question, “What would Jesus do?” in this case is clear. The only gospel story in which Jesus engaged in violence is the cleansing of the temple of moneychangers. Morality demands an end to Wall Street worship and a new era in which both politics and financial markets work for the majority, for the common good.

A Vision for Economic Renewal – An American Jobs Agenda

Leo Gerard — Wed, 27 Jul 2011 09:32:21 -0400

Written with Leo Hindery Jr., Chair of the Smart Globalization Initiative at the New America Foundation

America is facing a catastrophic jobs crisis. Not since the Great Depression has official unemployment hovered above nine percent – where it is today – for more than 20 months. Millions of American have given up looking for a job altogether. Even worse, real unemployment is more than 18%. Yet Washington overall has obviously yet to embrace a large-scale job creation agenda. Even if we reach consensus around the deficit – the only economic issue even getting any attention these days – it will do little to help the 29 million Americans who are unemployed in real terms. If we do not seriously tackle jobs, our country may never regain its competitive global edge.

We recently co-chaired a Task Force on Job Creation, seeking real solutions to the jobs crisis plaguing our country. This group of policy makers, economists, business and labor leaders developed a series of 15 immediate recommendations for reversing the crisis, outlined in a new report, "Vision for Economic Renewal: An American Jobs Agenda." We found there are six vital policy areas that our government must address in order to create millions more jobs now: manufacturing, trade and globalization, U.S.-China trade, the infrastructure crisis, jobs in the green economy, and youth unemployment.

Washington is often a city of Chicken Littles, which makes ringing the alarm bell difficult. But once Washington wakes up from its deficit hangover, politicians will realize something that most Americans have known for months: The sky has already fallen.

Here’s what we can and need to do:

Manufacturing
America’s manufacturing sector must be a cornerstone of the nation’s economy and thus one of the essential drivers of the recovery we are still searching for. Yet manufacturing remains in a decades-long free fall, with, like most other sectors, stagnant wages for more than a decade. In just three years, our manufacturing sector has lost over 2.5 million jobs, and over the last decade, we’ve lost more than 6 million. The continuing decline of manufacturing will limit job growth and jeopardize our national standing. Industries that were once great contributors to our country – auto manufacturing, shipbuilding and machine tools fabrication – are barely shadows of what they once were. Meanwhile, jobs in other leading manufacturing sectors, like aerospace, are being offshored every day.

Why the decline? One of the fundamental reasons is simply that the U.S. lacks a national manufacturing strategy that integrates policies around tax and investment, R&D, domestic procurement and currency valuation. And we lack any plan for how to restore this sector. Our task force identified several ways to bring back this sector:

• Buy-Domestic Procurement requirements. No single measure would do more to help resuscitate U.S. employment, particularly in manufacturing, than an encompassing buy-domestic government procurement requirement. All infrastructure projects funded and guaranteed by the federal government and the proposed infrastructure bank should require purchases to be made in America rather than overseas, consistent with our international trade agreements. As well, to qualify as “Made in America,” at least 75 percent of the content should have to be manufactured within our borders. To make that happen, Congress should require domestic content calculations to be effective and transparent. Domestic sourcing requirements for all government procurement programs (e.g., Buy American, the Recovery Act) and programs that support U.S. exports (e.g., the U.S. Export-Impact Bank) should also be reviewed to ensure that contracting agencies are obeying and implementing the requirements. The Defense Authorization Bill passed in December that requires the Pentagon to buy solar panels from U.S. manufacturers is a good model. In addition, Congress needs to enact an all-of-government successor to the 1933 Buy American Act.

• Link an investment tax credit directly to jobs. A 10% investment tax credit for the rehabilitation and renovation of existing manufacturing facilities would pump billions of dollars into modernizing America’s plants. And with an additional investment tax credit for new equipment, businesses could retool their factories.

• Determine which government programs create and support U.S. jobs. We should require those bidding or applying for government contracts, assistance, grants or awards to provide detailed Employment Impact Statements in the application process. Results would factor into the outcome of the project or transaction.

Trade and Globalization
Our trade policies and unaddressed ills from globalization exacerbate America’s manufacturing industry woes. Just since 2001, the U.S. has had massive annual trade deficits totaling over $6 trillion. Yet the U.S. has no precise strategy to compete in a globalized economy.

In many parts of the developing world, workers toil for minimal pay under harsh conditions because organizing against unfair treatment is prohibited. This cheap labor seduces large multinational companies to move production overseas, where healthcare, pension and environmental costs are minimal. While human rights are plundered, U.S. workers are also losing their jobs. And many of the Asian countries where these jobs are going are manipulating their currencies to keep them undervalued against the dollar and are providing massive illegal subsidies and other unfair trade benefits.

We must mobilize to restore balance and mutual benefit to international trade. Let’s call on our leadership to:

• Restructure the tax code so American companies stay here. Right now, we provide tax incentives for companies to invest overseas, a sure sign that our economy works best for big business instead of for regular Americans. We must fix our tax code so corporations are not rewarded for closing plants and shipping jobs to China. In addition, Congress should offer partial tax rebates on exported goods and impose equivalent taxes on imports.

• Protect national security manufacturing. Today, the U.S. has an $80 billion annual trade deficit with China just for “Advanced Technology Products,” many of which are essential to our national defense. Congress should pass legislation requiring that certain critical items be subject to a national security impact statement before allowing their manufacturing overseas.

• Enact temporary tariffs. Congress should enact temporary tariffs to protect our high-value manufacturing. A temporary policy of import tariffs, coupled with encouragement of foreign direct investment, would provide the U.S. with all the benefits of free trade without promoting a low-wage workforce.

• Create a new Justice Dept. bureau to enforce trade. On the issue of enforcement, an independent office within the Department of Justice would be tougher and more effective at ensuring that our trade agreements are complied with.

• Initiate trade cases under the U.S. trade remedy laws. The U.S. should spearhead an Unfair Trade Strike Force to be deployed when nations violate trade laws.

U.S.-China Trade
It is impossible to overlook China when considering how to correct globalization’s unwanted fallout. The Chinese economy has been growing at ten percent a year for the last 30 years. Such unprecedented economic growth is at the root of China’s dramatic surge in military power, international political weight, and financial influence. These developments, with their economic and geo-political implications, are not simply the outgrowth of free market forces and fair trade. Rather, they stem from sophisticated industrial and mercantilist trade policies, often illegal, that China has instituted to establish its great power status.

The U.S. economy will continue its decline unless our leaders in Washington take immediate action to take on Chinese economic practices.

• Create a White House office to focus on American competitiveness. A transparent office dedicated to gathering independent intelligence on our trade competitiveness with China would improve our economic standing. It would help align trade and tax policy so that private sector incentives match the public interest.

• Pursue a hard line on Chinese economic policy. From intellectual property theft to restrictions on rare earth mineral exports to extortionist indigenous innovation purchasing policies, China is playing by a different set of rules and we’re doing little about it. Our government must be willing to challenge and mitigate the disastrous effects of Chinese economic policies on American manufacturing and trade. This should start with a clearer focus from the White House, guided by the independent body recommended above and directed at all federal agencies. Initiatives should include bringing cases in the W.T.O., imposing tariffs when necessary, and requiring rigorous reviews of China’s planned investments in American ports, markets, natural resources and transportation industry.

Infrastructure Crisis
Coincident with the loss of trade and manufacturing is the decline of our nation’s infrastructure. After years of under-investing in public infrastructure, America faces an infrastructure deficit of $3 trillion that is impeding economic growth and undermining our economy’s efficiency. We need to spend $2.2 trillion over just the next five years to meet America’s core infrastructure needs, according to the American Society of Civil Engineers. But actual spending plans fall far short.

• Create a levered National Infrastructure Bank. The administration and Congress should create a national infrastructure bank that would be an independent financial institution owned by the government. Able to fund a broad range of infrastructure projects beyond roads, rails and runways, it would make loans and loan guarantees and leverage private capital. It should be able to sell or issue general purpose bonds to raise funds for lending and investment, sell specific project bonds when necessary, and invite private investment, along with state and local government pension plan investments.

Green Economy
Employment opportunities in the “green economy” can provide some relief, although not as much as some project. According to Booz Allen, green projects will create eight million jobs by 2013; the Global Climate Network puts that number at 20 million world-wide by 2030. Bolstering this segment of our economy will put people to work in manufacturing jobs that have the greatest multiplier effect, and will stimulate more economic growth. Leaders in Washington must do more to encourage growth in this industry.

• Extend the Cash Grant Program for renewable energy production. This program converts non-refundable tax credits for renewable energy production into cash grants. Extending the program until the equity and debt markets recover will help create jobs and avoid further job loss in the industry.

• Lengthen the period of the Advanced Manufacturing Tax Credit. ARRA authorized up to $2.3 billion in tax credits for investments in qualified advanced energy projects at manufacturing facilities, such as energy storage, electricity transmission, energy conservation technologies, and others.

• Expand Title 17 Loan Guarantee Program. Title 17 of the Energy Policy Act of 2005 provides federal loan guarantees for the construction of energy-related facilities that use “new or significantly improved technologies” which are “non-commercial” and have high technological risk. These guarantees lower the cost of capital for these projects. Broadening Title 17 to include energy-efficiency investments would help spur this market and create new jobs.

Youth Employment
The hardest hit among the unemployed are young people. Almost 25 percent of teenagers from 16 to 19 are officially unemployed. For young adults aged 20 to 24, unemployment is nearly 16 percent – a number not seen since 1948. Many of these disconnected youth are at risk of becoming permanently disengaged from the labor market. Young people who do not have a successful work experience by age 25 are also at greater risk of lifelong poverty.

• Extend the Work Opportunity Tax Credit (W.O.T.C.) beyond August 2011. This law provides small businesses with tax incentives to hire people who might ordinarily struggle to find work – for example, those with lesser skills and veterans. Congress expanded the tax credit in 2009 to include the tax credits for hiring disconnected youth. Our ongoing national youth unemployment demands that this W.O.T.C. provision be extended well beyond August of this year.

Our national leadership is responsible for tackling the extreme real unemployment and stagnant wages crises. President Obama has already shown a strong willingness to reform health care and regulate the financial services industries. Today, however, our nation needs, from all of Washington, that same passion and commitment directed at job creation. It’s time our leaders show the moral courage that defines true leadership and resolve to restore what all good Americans want and need: the security, well-being and self-respect that come from fair employment and wages.

***

Leo Hindery Jr. is chair of the Smart Globalization Initiative at the New America Foundation and an investor in media companies. He is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. and Liberty Media.

False Fear: Cyborgs Instead of CEOs

Leo Gerard — Mon, 28 Mar 2011 11:43:09 -0400

The nightmare for far too many is Cyborgs. The public fears HAL, the 2001 Space Odyssey computer that killed astronauts rather than forfeit its objective.

So terrified of the sentient machine, citizens overlook the allegory. The soft-spoken, reasonable-sounding HAL behaves exactly like a greed-driven, multi-national corporation. The corporate mission is profit. With 29 workers massacred in a Massey mine explosion and 11 slain in the BP oil rig explosion in just one month last year, greedy corporations have shown they’re willing to kill rather than forfeit their profit objective.

In America, the UK and Europe, the entities that should be feared -- greedy corporations -- are pulling politicians’ strings. Reckless speculation by multi-national financial corporations took down the world economy, creating the worst recession since the Great Depression. Governments – in the UK, Europe and America – used worker tax dollars to bail out the banks. Now those big banks are granting outsized bonuses and pay packages to their executives while demanding that governments balance recession-ruined budgets with cuts to social services, education, pay and pensions for government workers and worker’s rights to collectively bargaining for better lives.

Workers, students and pensioners in the UK and Europe have protested these measures for a year, from general strikes in Greece to national strikes in France. In the U.K. students, in the largest numbers since the 1960s, protested education fee increases. Last weekend, the U.K.’s Trades Union Congress (TUC) organized the March for the Alternative in which a quarter million demonstrators walked for five hours in London to protest austerity imposed on workers while corporations get breaks.

The diamond-crusted rich on both sides of the Atlantic have determined that workers and the vulnerable will pay the consequences of the bankster-caused recession. And they’re exploiting the financial crisis to strip workers of collective bargaining rights, preventing them from ever regaining what they’ve lost.

That is what’s going on in Wisconsin -- and in a half dozen other American states where right-wing legislatures and governors are passing or pressing for legislation decimating workers’ rights to collectively bargain, even after workers accepted pay cuts to help balance budgets.

The disingenuousness of these right-wing governors in blaming public employees is clear. First of all, many of the state leaders granted huge tax breaks to corporations, lowering the states’ anticipated revenues, then demanded state workers bear the brunt of filling budget deficits.

Second, many of these governors didn’t stop at demanding public workers accept pay cuts. They also insisted on terminating workers’ rights to bargain for better pay, benefits and working conditions in the future. In addition, these right-wingers are meddling in the relationship between private sector unions and corporations. They want to forbid private employers from subtracting union dues from paychecks and remitting the money to the union. And they want to pass legislation intended to bankrupt unions and to prevent them from supporting progressive candidates who would treat workers fairly and protect their rights.

This is how it played out in Wisconsin: The governor, right-winger Scott Walker, gave corporations more than $100 million in tax cuts then decreed that public workers, such as teachers, nurses and librarians, take wage and benefit concessions. And Walker threatened to send out the National Guard, a state-run militia despite the name, to quell protests. This raised the specter of the May 4, 1970 massacre at Kent State when Ohio National Guardsmen called out by the governor gunned down unarmed students protesting the Vietnam War.

Contrary to Walker’s expectations, his threat energized opposition. Repeatedly, tens of thousands of workers, students, retirees, environmentalists, religious leaders and children poured into the streets and occupied the state capitol building in Madison, Wisconsin to protest the right-wingers’ plan.

Walker’s proposal passed in the state Assembly and needed a vote in the state Senate before it could get to his desk for final signature. To prevent a quorum needed to vote on the measure, all 14 Democratic senators left the state. They became known as the “Fab 14” as they remained holed up in hotels in Illinois for weeks, trying to negotiate a less draconian measure with the governor.

Although public opinion polls showed 60 percent of Wisconsin citizens opposed cutting collective bargaining rights, although workers already had accepted the pay reductions Gov. Walker had contended were vital to balance the budget, although protestors occupied the capitol building with a sit-in and sleep-in for weeks, the right wingers devised a scheme, in a secret meeting behind doors locked to the public, to vote without a quorum to deny government workers their collective bargaining rights.

In the midst of the dispute, Gov. Walker revealed his puppet masters – the Koch brothers, owners of the Georgia-Pacific paper company, with plants in the United States and the U.K. While contending he had no time to talk to progressive leaders or union officials about his union-busting legislation, Gov. Walker jumped on the phone for 20 minutes when told the caller was billionaire David Koch. The billionaire was Walker’s second largest campaign contributor; he provided $1 million to a fund to attack Walker’s opponent, and he bankrolls the right-wing’s right-wing, the Tea Party.

Events in some other countries show it doesn’t have to be this way. Brazil just passed a law giving unions a director’s seat on each board of a state-owned company. And in Australia, progressive labor legislation has enabled unions to increase membership by 20 percent in the past two years.
There are some signs of success in U.S. workers’ struggle to stop the corporate-backed right-wing campaigns. A Wisconsin judge has halted implementation of the union-busting measure because the way conservatives passed it appears illegal. And progressives are working to recall – or remove from office – eight right-wing Wisconsin senators who voted against worker rights. They’ve pledged to mount a recall campaign against Gov. Walker as soon as it’s legally possible.

In addition, labor activists and their supports have derailed proposed anti-union legislation in Indiana and Missouri.

That’s an indication of what coordinated coalitions of citizen protesters can do. That’s an indication that organized workers with their allies can take on global capital and win.

The difference between HAL and corporations is that HAL is fictional while greedy multi-national corporations are real threats. In the end, a human defeated HAL. In democracies, workers united with their allies can take on corporations and win as well.

Whistling Past the Ruins: The "Education Moment"

Robert Borosage — Tue, 15 Mar 2011 06:46:38 -0400

The President went to Kenmore Middle School in Arlington, Virginia to deliver a speech on education, calling on Congress to fix and reauthorize No Child Left Behind by the fall.

The speech was a carefully modulated discussion of education reform that echoed themes from the Clinton years. We need to hold schools accountable, but not brand 82% failures. We need testing and standards, but not force teachers to teach to the test. We need to honor and reward good teachers, but get rid of the bad ones.

And of course, the president made the case for both reform and resources:

Now, for a long time we weren’t sure about how to give our kids that kind of education…. Some people thought if you just put more money into education that would solve the problem. And then the other side thought, money doesn’t matter; what we need is reform. In fact, there were those who argued that we should just dismantle the public education system altogether. Rather than working together, both sides remained locked in this stalemate year after year, decade after decade, and nothing much changed.

And then something began to happen in states and local schools districts. Instead of getting caught up in these old, stale debates, people began to agree that, you know what, we need both more money and more reform.

We need to change rules, standards and attitudes, said the President, and that will “cost some money. Fixing our failing schools costs money. It requires reform, but it costs some money. Recruiting and rewarding the best teachers will cost money. Making it possible for families to send their kids to college costs money. “

So the president pledged that despite his five year freeze on domestic spending, he will protect spending on education. “ A budget that sacrifices our commitment to education would be a budget that’s sacrificing our country’s future. That would be a budget that sacrifices our children’s future. And I will not let it happen.”

Will not let it happen?

I know the White House wants to believe the recovery has started, but is it totally blind to the carnage taking place in schools and colleges across the country? States are cutting not just pre-K but kindergarten. Urban schools are headed to classes of 40 or 50 students. After school programs are getting slashed. Teachers are being laid off and facing harsh cuts in pay and benefits. Colleges are hiking tuitions, cutting assistance, and even reducing the number of students they’ll admit. And the state and local budget crisis is getting worse now that aid from the federal government is running out.

You’d think an education president would treat this as a national emergency. Convene Governors and Mayors from across the country. Meet with teachers and superintendents. Rally parents to join in protecting education investments. Call on Congress to provide targeted aid to states to protect school and university budgets.

One with a more populist temper might sensibly detail the damage being done, and call for levying a surcharge on the wealthiest Americans (or on financial speculation) to pay for emergency aid to the schools)

Will not let it happen?

It’s happening already. Deep and ruinous cuts in public school budgets. An accelerated departure of demoralized teachers, the best leaving first. College growing more unaffordable to more and more young people..

And the White House is rolling out an agenda for “this education moment,” while saying not one word about the carnage taking place in our schools across the nation. Whistling....across the ruins.

Making America the Best Place on Earth to Work

Leo Gerard — Mon, 31 Jan 2011 09:37:33 -0500

Not the wars. Not greenhouse gasses. Not even the deficit. The issue most important to Americans is jobs.

Despite that, jobs failed to make an appearance in the State of the Union address.

The talk was all about business. Business was doing better. Business needed taxpayers to help pay for research and innovation. Business will get government help to eliminate pesky regulations. Business must have lower taxes.

The most telling statement was this:

“We have to make America the best place on Earth to do business.”

Especially because it wasn’t matched by a companion:

“We have to make America the best place on Earth to work.”

The speech expressed a policy in which business is the focus of government, taking precedence over workers. The American colonists created a government for their own benefit; they did not constitute an agent to serve business. A policy giving corporations primacy is risky for American workers.

The state of the union noted that happy days are here again for corporations and banks:

“Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.”

Never mentioned, however, were the 14.5 million unemployed Americans, the sustained record rate of foreclosure, and the increasing poverty and food bank reliance among citizens of the richest nation in the world.

The state of the union outlined a plan under which the government will coddle corporations, essentially proving companies government welfare using American workers’ tax dollars. If businesses create jobs for workers as a result, fine. If they don’t, there’s no plan to exact a penalty.

For example, under the policy described in the speech, American workers will fork over tax dollars to pay for research and development for businesses that are sitting on a record $1.8 trillion in cash reserves -- hoarding it rather than creating jobs.

The president said:

“Two years ago, I said that we needed to reach a level of research and development we haven't seen since the height of the Space Race. And in a few weeks, I will be sending a budget to Congress that helps us meet that goal. We'll invest in biomedical research, information technology, and especially clean energy technology -- an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.”

Maybe it will create new jobs. Hopefully. But no guarantees were offered. Mentioned as a business success story in the speech was a Michigan company, Luma Resources, which began manufacturing solar shingles with the help of a $500,000 government grant. It created 20 jobs, $25,000 a job. American taxpayers might think that’s a little pricey, but what’s worse is the potential for Luma Resources to go the way of Evergreen Solar, squandering the corporate welfare.

Evergreen, the third largest maker of solar panels in the U.S. and recipient of at least $43 million in corporate welfare, announced earlier this month it would close its main American factory in Massachusetts and move manufacturing to China. Eight hundred Americans will lose their Evergreen jobs by April.

Evergreen officials said China will give the company even higher amounts of corporate welfare, which, of course, makes sense since China is not a capitalist country. Its economy is government controlled. And that government routinely violates international trade regulations – by providing banned subsidies to industries and by deliberately devaluing its currency.

No matter how better educated American workers get. No matter how much more innovative. No matter how much more productive. No matter how many tax dollars the government spends on research and development, if the corporations that benefit move manufacturing overseas, the American workers who paid for it will suffer.

In fact, it’s more than suffering; it’s betrayal by their government that provided tax benefits to companies for off-shoring jobs. It is betrayal by their government that fails to stop violations of trade laws by countries like China that lure away firms like Evergreen.

At the end of the State of the Union speech, the president said:

“From the earliest days of our founding, America has been the story of ordinary people who dare to dream.”

An ordinary American dreams of a family-supporting job, owning a home, saving enough to pay for a child’s college education, helping to build a safe community. Corporations aren’t Americans, no matter how often the U.S. Supreme Court grants them rights that the U.S. Constitution guarantees to human beings. Businesses aren’t citizens. Their allegiance isn’t to America. It’s to profits. They dream only of dollars. They concede no responsibility to family, community or country.

They were not included when the president said:

“Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater -- something more consequential than party or political preference. We are part of the American family.”

The top priority of the American government must be making America the best place on Earth for Americans. If that’s good for corporations, great. The government must never place American citizens second.

Can't Get By On $250K? Try Leaving Your Bubble!

Dave Johnson — Tue, 14 Dec 2010 00:17:12 -0500

The Washington Post ran a story how hard it is for a family making only $250K a year. Just who could a story like this be written by and for? How many ways does this story mislead its readers? If you want to write about hardship write some stories about and for the rest of us!

Over the weekend the Washington Post carried a story labeled as a "Fiscal Times" piece, Where does $250,000 a year go? Summary:

It's the annual income that President Obama and others have repeatedly used to define what it means to be "rich" in America today. ... Just how flush is a family of four with a $250,000 income?

... The bottom line: Living in high-tax areas on either coast can leave our $250,000-a-year family with little margin.

Richard Eskow hit the nail on the head in his post, A Quarter Of A Million Little Pieces: Pete Peterson & The Washington Post Have A New Fiscal James Frey, writing,

This "analysis" was written by someone named Karen Hube, and it's based on two phony premises: First, that "President Obama and others have repeatedly used (that level of income) to define what it means to be 'rich' in America today," and second, that it's a hardship to get by on $250,000 a year.

(Please read Richard's post, because he gets into what the Fiscal Times is, and why it carries stories like this one.)

The story claims that President Obama and others label them as "rich" because $250K would be the lower borderline if the Bush “tax cuts for the rich” expire. But this misleads readers because the family making $250,000 will NOT see any tax increase at all. If you understand how tax brackets work you know that only amounts above $250K get taxed the additional 4.6%, so someone making $250,001 will pay an additional tax of $0.046. Yes, that’s right, four point six cents. The amounts become large only with very (very) high incomes, but those incomes are so high that the additional tax is still almost nothing. A person making $1,000,000 would pay an additional tax of $2,875 a month on their $83,333 a month of income. (Sorry, it's hard to write a number like that without shouting.)

So Who Is The Story For?

Just who is going to feel the pain of the people who "only" make $250K? The Joneses in the story actually have retirement savings and life and disability and health insurance! They have student loans to pay off because they went to expensive universities and they will have the high expenses to send their kids because their kids will, too. 98% of us understand that when we read this story. Since anyone who makes less than $250K is going to know better from their own experience than to believe what they read in this story, who is this story written for? Hint: the Washington Post is in ... wait for it ... Washington!

What about the rest of us? If $250K a year -- the borderline for entering the top 2% -- leaves the Joneses "with little margin" then shouldn't there be 49 articles for every article like this, explaining how people who make less than $250K are doing -- since that is almost all of us? Shouldn't there be 49 articles about how 98% of us are not getting by, and have no margin at all?

Anti-Government

The story tries to make an anti-government point by claiming that taxes are squeezing the Joneses, complaining that the Joneses "only" take home $173K after all taxes (incl cell phone tax). (That is "only" $14.4K a month take-home.) But a careful reading shows that the opposite might be the case. It might really be limited government that is squeezing them:

College Costs: One of the factors in the cost analysis is college costs. They are paying off high student loans, and are getting ready to send kids to expensive colleges. But college costs are so high because we have less government, because of tax cuts. This is clearly true in California, for example.

Child Care: Child care costs are high because government is "limited" in our conservative on-your-own society.

Health Care: The Joneses health insurance bill is another product of our on-you-own limited government here. Health care is covered anywhere else.

Retirement: The Joneses are saving a lot for their retirement. This drain on their income is high because in conservative America you are on your own. Corporations got rid of most pensions through the 401k scam, while the Social Security system is inadequate.

There are many other areas where limited government puts a squeeze on people: insufficient transportation options and high energy costs due to fossil-fuel reliance among them.

They Did One For The Rest Of Us

To their credit the Post also has a story this weekend, In the U.S., Christmas remains a great divide, but the story misses the point by blaming the recession for the difficulties regular people face,

A new division is emerging in America between those who have moved on from the recession and those still caught in its grip.

This holiday season, those two worlds have been thrown into stark relief: At Tiffany's, executives report that sales of their most expensive merchandise have grown by double digits. At Wal-Mart, executives point to shoppers flooding the stores at midnight every two weeks to buy baby formula the minute their unemployment checks hit their accounts. Neiman Marcus brought back $1.5 million fantasy gifts in its annual Christmas Wish Book. Family Dollar is making more room on its shelves for staples like groceries, the one category its customers reliably shop.

But many, many people with jobs are having a hard time buying baby formula, too, these days. It was like this for more and more people before the recession. In fact, many say that is why there is this bad economy. Where I live people go through my recycle bin looking for cans - and were doing so before the recession. People living on Social Security are having a very, very hard time while the people making $250K "with little margin" can talk casually about cutting the program in order to avoid having the cap lifted causing them to pay a bit more into the system.

The Post story attributes the divide to the “grip” of the recession and not to the problems caused by policies that have led to our intense concentration of wealth. The problem is that our economic system for thirty years has been increasingly rewarding a few at the very top, and not the rest of us. Tax cuts, bailouts and bonuses for them, government cutbacks and stagnant wages for us.

But flawed as it is, that is one down, only 48 more stories about the other 98% to go to catch up with the one about getting by on only $250K.

Barney Frank and the Fed Bailout Fallacy

Zach Carter — Thu, 09 Dec 2010 10:05:49 -0500

Mike Stark has posted a provocative on-the-street interview with Barney Frank about the recently released Fed data. Frank offers what is now a standard defense of the Fed's bailout operations: Without them, the economy would have collapsed, so critics should just quit whining. But Frank takes this line a step further, accusing liberal Fed critics of playing into the hands of right-wingers who don't want to extend any economic relief to anybody for anything, ever. It's all hooey.

Here's Frank:

"On the whole, frankly, those who were looking for conspiracies and scandals were disappointed. I think the fact is, what you saw was a series of events that worked pretty well and helped the economy . . . . Would you have had the Fed do nothing? At a time when there was no credit available, would you have had the Fed do nothing? That's what the right-wing wants."

First, the "disappointed" critics line massages away the fact that the Fed failed to disclose an enormous amount of information. We still don't know the credit ratings of collateral accepted at some facilities, and we don't know the trading prices of securities they accepted as collateral at any of the facilities. Without that information, we can't determine whether many of these actions were scandalous.

Second, yes-- without major government intervention, the economy would indeed have collapsed. Really, the economy collapsed anyway—two years later unemployment is near double-digits—but it's safe to say the collapse would have been worse had the Fed failed to act. But just because the Fed had to do something doesn't mean it had to do exactly what it did. There were always other alternatives, and the most obvious would have involved attaching some strings to the bailout facilities.

If you want this money, you have to help homeowners avoid foreclosure, or your executives have to take a hike, or you all have to spend the next month wearing a shirt that reads, "I hijacked the U.S. economy and all I got was this lousy t-shirt." Just about anything to make clear that aid from the U.S. government came at a price would have been better than, well, nothing.

Frank spends a good deal of the discussion arguing that liberal Fed critics are catering to right-wing agendas:

"My friends on the liberal side shouldn't always focus on the negative. You're playing into the hands of the right-wing. You know, it's the right wing that thinks this is some terrible conspiracy. This was a case of government intervention. The Federal Reserve is a government entity. It intervened substantially to stave off worse damage than we would have gotten, and I think it's a great mistake for people on the liberal side to engage in this kind of Fed-bashing."

The Fed had extraordinary powers and was not faced with the choice of whether to intervene, but of how to intervene. I fail to see what is so ultraconservative about objecting to free money for fabulously wealthy criminals/fools who wrecked the economy with predatory loans.

Indeed, it seems to me that the ideological pressure here is really on Frank's shoulders. When a traditional liberal icon like Frank endorses a bankers-and-brokers-first policy, the public starts to believe that all Democratic policies are just handouts for Wall Street. This was the biggest reason why voters abandoned Democrats at the polls last month. The stimulus and the bailout were all mushed together in peoples' minds.

But things get really interesting when Stark proposes cutting checks to individuals instead of making loans to the banks. Frank responds:

"You understand how fallacious that is because the money was paid back . . . You acknowledge the money was paid back. Doing what you're suggesting, cutting everybody a check, they wouldn't have paid the money back . . . You're saying instead of lending the banks money, why don't we give it to individuals? Because then you would have had that much more deficit!"

Frank gets the best of this argument because Stark proposes cutting checks instead of making loans. But what if the Fed had offered everyone in the country a loan at zero or near-zero percent interest, on the condition that individuals put up sufficient collateral? This is a (very) charitable way of describing what the Fed did to support the banking system. If the same courtesy had been extended to individuals, I'm sure plenty of people would have defaulted. But certainly not everybody-- zero percent loans are actually pretty easy to pay back. And for those people who did in fact default, the Fed could have simply held onto the collateral to avoid taking a loss.

It's not obvious that this policy ends up working wonders—plenty of people would have been unable to post collateral, and for many who could, the risk of losing the lawnmower in order to pay the heating bill for another couple of months isn't really a great deal. There's no way to gauge whether the additional spending generated could have brought the unemployment rate down very much. And of course, personal loans wouldn't have helped debt-burdened homeowners very much. But then again, neither did any of the policies the Fed actually implemented!

And it is obvious that the government wouldn't end up taking a big loss on a big direct-lending-to-actual-people policy. As a result, crowing about the government turning a profit on the Fed's bailout facilities is really very silly. That doesn't stop Frank from doing it, however:

"It came back with interest! . . . The Fed is making money off that."

In short, you don't have to endorse Michelle-Bachmann-dystopia to object to the Fed's bailouts. Watch the whole thing:

For Millions without Private Life Insurance, Social Security is the Only Hope

Daniel Marans — Tue, 07 Dec 2010 19:05:34 -0500

Everybody knows that Social Security helps grandma pay her grocery bill, but many forget that it does much more. Social Security survivors benefits are still the largest and most generous life insurance program in the country--insuring 98% of American children against the loss of a parent. For the family of an average worker who is married with two children, Social Security is the equivalent of a private life insurance policy worth nearly $500,000. I was reminded of how important Social Security survivors benefits are by a shocking statistic in the news. USA Today reported last Friday that the number of Americans purchasing life insurance has reached its lowest point in 50 years.

Here's the relevant quote:

Only 44% of households have an individual life insurance policy, and 30% have no individual or employer-provided life insurance, according to a recent survey by LIMRA, an industry-sponsored group. Some 11 million households with children younger than 18 — viewed as families with the greatest need for coverage — have no life insurance.

Now, not all of the decline can be chalked up to the economic pressure facing American families--but quite a bit of it can:

More than 40% of families said they haven't purchased life insurance because they have other financial priorities.

So economic insecurity is causing people to make choices that would leave them far less secure if a bread-winner were to die.

We see this time, and time again. The private market, especially in the downturn, has become less and less likely to provide Americans with security from life's unforeseen circumstances: unemployment, recession, medical emergencies--and now, even death.

But of all government safety net programs, even Social Security stands in a class of its own. Unemployment insurance, Medicaid, Medicare either have holes in them, or are periodically subject to political attacks that leave them a shadow of their former selves.

Not Social Security. It has always been there, providing families a protective blanket against, among other things, a death in the family. For the families of fallen veterans, Survivors benefits are an especially essential lifeline. The wars in Iraq and Afghanistan have bereft an estimated 4,100 American children of their parents. What is more, the Social Security Administration expedites the processing of survivors and disability claims for the spouses and children of veterans.

Hard times tend to remind us of how vulnerable we really are. The family without private life insurance could very well be yours and mine. At a time when private life insurance is not affordable for millions of Americans, cuts to Social Security of any kind would strike another devastating blow at the security of American families who have already suffered the loss of a loved one. That sometimes gets lost in the debate.

The cutters haven't got to Social Security yet. Here's one more reason why we shouldn't let them.

The Lame Direction of the Lame Duck

Deepak Bhargava — Fri, 19 Nov 2010 11:50:09 -0500

Nearly 2 million U.S. workers are facing premature elimination of federally-funded unemployment benefits if Congress doesn't act by November 30. Yet the talk dominating Washington, D.C. these days is about extending George Bush's tax giveaway to the rich. Really?

It's not difficult to figure out why Washington pays attention to the needs of special interests and the wealthy while ignoring the needs of ordinary Americans. Washington is not a mere reflection of the larger inequalities in our society; it's an amplification of that inequality.

Start with the recently released study about who is in Congress: rich people. Of the 535 members of Congress, nearly half of them - 261 - are millionaires. And of these congressional millionaires, 55 had an average calculated wealth of $10 million or more in 2009, with eight in the $100 million-plus range.

And who influences D.C.? Consider that since 2008, the insurance lobby has spent $1 billion dollars trying to make sure profits keep getting priority over people in our health care system (Health Care Profiteers: A Billion-Dollar Lobby.) And that's just health care. If we add in the hundreds of millions spent by Wall Street trying to avoid regulation, keep their tax loppholes and get big bailouts, and the big oil interests who succeeded in blocking green energy jobs the numbers are staggering.

The resulting disregard for the well being of working Americans, reflected in the imminent lapse of unemployment benefits, is at the root of America's economic predicament. For the past 30 years, most of the benefits of economic growth have been held by a small group at the top of the ladder.

The solutions of the past can't be our roadmap out of this economic crisis. Our economy will not grow strong with millions of people economically insecure and living on the edge. Continuing unemployment benefits isn't luxury spending, this is necessary spending we must make not only keeps millions of Americans from despair, but place priority on the values of mutual security, equity and interdependence and injects crucial money into a sputtering economy.

On the other hand, extending tax cuts for the wealthiest 2 percent of Americans would do little to benefit most workers and would do a lot to increase the deficit. An extension of the Bush era tax cuts for the top 2 percent of income earners would cost $700 billion over the next 10 years, or 1 trillion when you add interest. That fact alone should be enough to end the squabbling. But this fight really isn't about working Americans versus millionaires. It's about a clash in ideology as to who is most deserving of receiving support in order to rescue our economy. The numbers undoubtedly favor workers.

Never in the history of the UI program has Congress cut back on federally-funded benefits when unemployment was over 7.2 percent. Unemployment now stands at 9.6 percent and at a staggering 16.1 percent in African American communities. In a new national survey on unemployment benefits by the National Employment Law Project and Half in Ten, 67 percent of all voters believe Congress should continue to provide unemployment benefits until unemployment comes down substantially.

The fight over tax cuts and UI benefits waging in Congress is just the tip of the iceberg. It's a harbinger of a much larger crisis of inequality.

The latest hunger report by the U.S. Department of Agriculture shows hunger remains at its highest levels in 15 years with 17.4 million households reporting having difficulty feeding their family due to lack of resources. Perhaps the most staggering indictment of the old economic paradigm: From 1980 to 2005, more than 80 percent of the total increase in American incomes went to the richest 1 percent.

Political leaders that justify tax breaks for millionaires and cuts to programs benefiting middle America are rooted in an old way of thinking. It's this way of thinking that got us where we are now. It's time we turn the old ways on their head and invest wisely in the real needs of people - education, health, a secure income and the benefits they need just to keep their heads above water in this Great Recession.

We have a chance to create a new equitable economy that will foster a more prosperous renewal of America. But that will only happen if we stand up for the values of mutual security, equity, and interdependence.

Work with us to create this new economy by texting CHANGE to 69866.

This article originally appeared in The Huffington Post.