January 10, 2013

Why DC Ignores Real Problems And What You Can Do About It

How many real and serious national problems can you list? And how many obvious solutions can you come up with literally off the top of your head? Now an experiment: list how many of them are being worked on by our DC elites or even discussed my our elite media? The answer is none. Why is this? And what can you do about it?

Real And Serious Problems

Start with climate change, clearly the most serious problem facing the world. If you think this is something that won't do serious damage until way off in the future, consider what could happen this year if our country's terrible drought continues, and then other climate-related disasters hit other agricultural regions around the world. Oh, right, mass starvation. Never mind the storms and storm surges, huge wildfires, heat waves, etc. that we are already experiencing.

Jobs. We have an absolute and continuing jobs emergency and people are suffering. And it is the reason we have a big budget deficit. Is there an economic problem that is more serious than jobs? Imagine if we had full employment, and companies had to actually pay well to get the employees they need, and provide training, etc. Imagine how LOW the budget deficit would be. The high budget deficit is a flip side of all the benefits businesses are getting from the low wages, long hours, etc. that come from high unemployment. The budget deficit is literally the government subsidizing WalMart's low wages.

Our huge, huge trade deficit - the actual deficit that is actually draining our economy and killing jobs and factories and industries and our ability to make a living in the future. The budget deficit is money spent on each other, things that make our lives better. The trade deficit is money that just bleeds out, making us all poorer and less able to take care of each other.

Infrastructure - our country's infrastructure is seriously in disrepair. Never mind that we don't have modern things that could be seriously boosting our economy, like high-speed rail and fiber-internet to every business and home -- things are falling apart.

Education, the cost of universities and resulting student-loan debt, the need for more community colleges, etc. They are pretending to talk about this but all the solutions being discussed take money away from our schools and universities and only benefit the Wall Street types...

You can name dozens of other serious, major national problems that are not even on the DC-elite agenda!

OK, they appear to be talking about guns. That's good. But not if they are talking about even more guns.

Many Problems Have Obvious Solutions

We can start attacking the climate problem with a big carbon tax. People will start using alternatives, which will cost less than using carbon-based energy sources. (PS the revenue also helps fix the budget problem.) Refund some of the money collected to those who are hit hardest by the tax, like low-income people who have to drive to work.

Infrastructure and jobs are two of our most serious problems. But obviously if we start fixing the infrastructure problem we are also fixing a lot of the jobs problem. (Especially if we have strict "Buy American" requirements for the materials, steel,etc.) (PS this also helps fix the budget problem because people with jobs are paying taxes, not using the safety net, and the economy becomes more competitive in the long run.)

Etc, with the obvious solutions. I don't have to put them here, they're obvious.

So why do they ignore the real problems and the obvious solutions that help We, the People?

Why Do They Ignore The Real Problems?

So WHY do our DC-elite geniuses ignore our real problems? We all know the answer: the influence of big money. Big money dominates. Big money steers the discussion. Big money buys the politicians. Big money lobbies the rule-makers. Big money uses the "revolving door" to reward the officeholders and staffers and regulators with high-paying jobs after they leave government -- if they play ball while in government.

And big money rigs the game so only the really big money -- those who already have it -- can win.

But the problem extends so far past the direct bribery, especially in the way it dominates the country's information channels. This means the major media (all of it dominated by only 6 companies), and all of the ways that our national discussion gets shaped.

Using the climate problem as an example, we all understand that big money from the fossil-fuel industry is being used to keep us from attacking this problem. But how?

Looking at how the information channels are influenced illustrates how far big money reaches. They don't just bribe politicians, and hire them and staffers later, etc. They also use their big money to influence how we talk and even think about this. Aside from the huge money spent on lobbyists, there are the dozens and dozens of so-called "think tanks" and "institutes" and other organizations that get money from these companies to pay people to go on TV and radio and write articles and op-eds, etc, to influence the nation's discussion of this. They also have their "studies" and "reports" etc. that get in the news. If you want a major-media career you had best not get on the wrong side of these companies. They totally dominate and intimidate and do what it takes to get their way.

(A few - just a few - resources on this: Frontline: Climate of Doubt, Meet The Climate Denial Machine, Koch Industries: Secretly Funding the Climate Denial Machine, Climate Skeptic's Debunked Report Exposes How the Denial Industry Works, How climate change denial lets the fuel industry run politics, in one handy chart)

The information sources of our democracy are controlled by the big money. Another example (of so many) of how the corporate money machine influences what we as a country talk and even what we think about: How often do you see a labor leader on your TV talking about the benefits of unions?

Then there are the other information channels. Did you hear about FreedomWorks paying Glenn Beck and Rush Limbaugh huge money to promote the Tea Party? Or the other stories about how they get and use their money? (FreedomWorks is one of the organizations that bused in thugs to disrupt Congressional town hall meetings a few years back.) This is just one of the dozens and dozens of well-funded outfits that is getting huge money to influence our national political climate.

How about that huge fight over taxes on billionaires? Do you know about the huge influence of Grover Norquist and his organization? Look at this: Grover Norquist's Budget Is Largely Financed by Just Two Billionaire-Backed Nonprofits.

This flood of corporate and billionaire money goes well beyond just paying politicians. And it is the reason it seems like we are helpless to do anything about the real and serious problems our country faces.

What You Can And MUST Do

We have to counter this money, and that takes money. We have to get money to use to fight back. We can't just all be doing what we can in our spare times, and signing online petitions, or quitting our jobs and living in poverty so we can work on these problems.

There are millions of us and if we all give even a small amount of money to help out, we can get things done!

The most important and effective thing you can do, even before you get active online and then on the streets is to contribute money to progressive organizations, and make it a habit. Seriously, they have corporate funding and all We, the People have is We, the People. There are a lot of us and if everyone who agrees with progressive values started to actually put some money where our values are, we could make up for that corporate money.

If you have to start small, that is fine. 20 million people starting small can make a huge difference.

Try it, click here and give $3 to the organization I work for, Campaign for America's Future.

Click these links and give $3 to Progressive Congress, or Media Matters.

How about giving $3 to help Netroots Nation or Crooks and Liars or Daily Kos, or Blue America or Firedoglake, or AMERICAblog.

You can also give a donation to Center for American Progress here, or to the National Council of La Raza here, or to Demos here, or to the Economic Policy Institute here, to the Center for Community Change here, the Leadership Conference on Civil and Human Rights here, to People For the American Way here, and there are so many other organizations that are working in their own way to help. (I'll add them as they read this and write to yell at me for leaving them out.)

Go through the ActBlue directory, and give $3 here and $3 there.

We really need for progressives to understand this need, and the difference between this and election campaign contributions. Think about it, and help spread the word. Help fund it, and help others understand this need. We can beat back the conservative machine by building a machine of our own that is strong enough to do the job. This takes money.

And to keep that machine answerable to US, we have to fund it democratically, with each of us stepping up and contributing what we can. It has to be lots of people giving small and medium amounts, not depending on a few large donors. ANY organization or candidate is going to dance with the ones that brung ‘em, so WE have to bring them to the dance together. Go give $3 or $10 or $100 to any of those organizations now, and keep doing it, and get others to do it.

If you want to help be part of the SOLUTION this is a great way to start. This is the most important thing you can do. AND you should be online and on the streets. But the most important thing is to give some money to help counter the huge flood of corporate money.

PS See also Republicans Again Use Race, And It’s OUR Fault That It Still Works

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This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 8:21 AM | Comments (0) | Link Cosmos

December 11, 2012

Michigan Races To Bottom With Anti-Union Law

Pay attention to what is happening in Michigan, because it will add downward even more pressure to your wages and benefits, wherever you live and work. Republicans in the Michigan legislature have rammed through anti-union "right-to-work" laws making union dues voluntary even as unions a required by law to provide services to members and non-members. They say this will make Michigan more "business-friendly" by driving down wages and benefits, thereby stealing jobs from states where working people have rights. The actual intent is to get rid of the unions altogether, and their ability to fight for the 99% in the ongoing class war with the 1%.

What Are So-Called "Right-To-Work" Laws?

"Right-to-work" means the right to work in a unionized business thqt has a negotiated contract without paying dues to the union.

The 1947 Taft-Hartley Act allows states to prohibit unions from collecting fees from non-members or making union membership mandatory, and states that do this are called "right-to-work" states. So-called "right-to-work" laws prohibit labor contracts from requiring employees who are covered by the contract to pay dues to the union that won the contract. But the unions are still required to represent every worker who is covered by a contract -- even workers who are not members of the union and do not pay union dues. This costs money, so the union is drained of funds and power, thereby weakening their ability and incentive to fight for better wages and benefits.

Stealing From Other States, Lowering Wages And Tax Revenue

The appeal of these so-called "right-to-work" laws is that by weakening the ability of workers to band together and fight for better wages and conditions, they result in lower wages, benefits and safety standards. This is supposed to make these states more attractive to employers, which then brings jobs to the lower-wages states as employers leave states where worker have rights.

This affects wages across the larger economy. Any jobs that do move to these states come from other states. So in the larger economy of the country the effect of these laws is to shift wages, benefits and safety standards downward. This brings pressure that forces all wages for all employees down, which further lowers the country's tax base, reducing the entire country's ability to educate, maintain and modernize infrastructure, etc.

As jobs shift to lower-wage states, pressure to lower all wages increases, and the collection of income tax revenue decreases. The ability of consumers to make purchases decreases as well. Infrastructure investment declines. Education declines. Over time the country falls behind the rest of the world and it become more expensive and more difficult to catch up.

Or, in other words, exactly what we are seeing all around us now.

Studies Of The Effects

A May, 2011 Bureau of Labor Statistics study found that "right-to-work" states have lower wages (examples: 9.4% lower for all occupations, 11.4% lower for teachers) than states with union rights.

A January, 2012 study by American Rights at Work, New Research Counters Arguments for “Right-To-Work” Laws, examined a number of studies and found that "recent studies rebut claims of economic growth and instead find that laws suppress wages."

In Nonunion Wage Rates and the Threat of Unionization Henry Farber, Professor of Economics at Princeton University found that after Idaho passed a RTW law in 1985, there was a statistically-significant drop in nonunion wages relative to other states.

Feb, 2011, Economic Policy Institute (EPI), Does ‘right-to-work’ create jobs? Answers from Oklahoma,

Despite ambitious claims by proponents, the evidence is overwhelming that:
• Right-to-work laws have not succeeded in boosting employment growth in the states that have adopted them.
• The case of Oklahoma – closest in time to the conditions facing those states now considering such legislation – is particularly discouraging regarding the law’s ability to spur job growth. Since the law passed in 2001, manufacturing employment and relocations into the state reversed their climb and began to fall, precisely the opposite of what right-to-work advocates promised.
• For those states looking beyond traditional or low wage manufacturing jobs – whether to higher-tech manufacturing, to “knowledge” sector jobs, or to service industries dependent on consumer spending in the local economy – there is reason to believe that right-to-work laws may actually harm a state’s economic prospects.

Sept, 2011, EPI, ‘Right to work,’ The wrong answer for Michigan’s economy, findings included,

• Right-to-work laws lower wages—for both union and nonunion workers alike—by an average of $1,500 per year, after accounting for the cost of living in each state.
• Right-to-work laws also decrease the likelihood that employees get either health insurance or pensions through their jobs—again, for both union and nonunion workers.
• By cutting wages, right-to-work laws threaten to undermine job growth by reducing the discretionary income people have to spend in the local retail, real estate, construction, and service industries. Every $1 million in wage cuts translates into an additional six jobs lost in the economy. With 85 percent of Michigan’s economy concentrated in health care, retail, education, and other non-manufacturing industries, widespread wage and benefit cuts could translate into significant negative spillover effects for the state’s economy.

Labor's Reaction

On CNN this morning UAW President Bob King explained that this bill threatens worker rights. "It demonstrates to workers and really a broad spectrum of the populous that we have to work hard, we have to fight hard to protect our rights." Explaining that workers already have the choice to join a union, King said,

"You don't have to be a union member. But you have to pay your fair share. Just like if you live in a community, you pay for your fair share of the road cleaning, of the police, of the fire," King argued. People who benefit by [the union's] collective bargaining benefit by this procedure. They pay a fair share of the cost of representation."

Steelworkers leader Leo Gerard called on Michigan governor Snyder to veto the law, (click through for the entire statement)

“The USW active and retired members join other unions and allies in Michigan and across the nation to call on Gov. Snyder to support the proposal of the state’s Democratic congressional delegation. We ask the Governor to use his veto power to stop this unnecessary and divisive right-to-work bill.
“If the Governor feels this bill will move Michigan forward, he should delay the final legislative votes and allow an amendment that would put this issue before the public as a state ballot initiative. We urge Governor Snyder to delay his signing of the bill. Let the people of Michigan debate and vote on a consequential matter that will affect all working families.
“We know the newly-elected Michigan state legislature convening early next year has added Democrats that would reject a right-to-work-for-less bill. Right-to-work is only supported by millionaires and billionaires who profit by taking more money out of the workers’ pockets.

Demonstrations and Disruptions

In a sign of things to come, 12-15,000 people demonstrated today at Michigan's capitol building. There were confrontations, including mounted police charging into the crowd. Former Congressman Mark Schauer was pepper-sprayed.

Ned Resnikoff, writing in, Michigan passes ‘Right-to-Work’ but fight isn’t over at the Ed Schultz website,

Shortly after noon on Tuesday, Michigan’s Republican-controlled House of Representatives gave its final approval to the state’s hotly contested “right-to-work” legislation, as thousands of the bill’s opponents rallied outside. But labor activists and their allies say that the fight isn’t over yet, and they’re already plotting their strategy for keeping Michigan a union stronghold.
“This fight is not over by a long shot, regardless of what happens today,” said Zack Pohl, the executive director of Progress Michigan.

See Also

Mary Bottari at PRWat: Michigan Passes "Right to Work" Containing Verbatim Language from ALEC Model Bill

AFL-CIO 'Right to Work' for Less fact sheet.

Economic Policy Institute, Unions and Labor Standards, a collection of articles, posts and studies of the effects labor and anti-labor policies.

Nicole Pasulka at Mother Jones, Right-to-Work Laws, Explained

Josh Eidelson at Salon, Koch brothers, Tea Party cash drives Michigan right-to-work bill

Amanda Terkel at Huffington Post, Big 3 Automakers Reportedly Worried About Michigan Right To Work Legislation

Teamster Nation: RTW passes in #MI as thousands try to enter Capitol

OurFuture post on being "business-friendly, China Is Very “Business-Friendly”,

China is very, very “business-friendly.” Corporate conservatives lecture us that we should be more “business-friendly,” in order to “compete” with China. They say we need to cut wages and benefits, work longer hours, get rid of overtime and sick pay — even lunch breaks. They say we should shed unions, get rid of environmental and safety regulations, gut government services, and especially, especially, especially we should cut taxes. But America can never be “business-friendly” enough to compete with China, and here is why.

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This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 3:42 PM | Comments (0) | Link Cosmos

December 5, 2012

Jobs First Because Jobs Fix Deficits


What happened to jobs? The pubic wants government to do something about jobs and getting the economy moving, and in DC the only thing is this weird argument about ... anything but jobs and getting the economy moving! "Fiscal cliff?" What about jobs? Fixing the economy will fix the debt, not the other way around.

Economic Storm Clouds

The economy is slowing, with signs of trouble on the horizon. Recent economic indicators are not so good. Trade deficits are huge, a bad manufacturing number this week, Europe still stagnant and slipping (because of austerity), China slowing. NY Times says, "Recent economic data "surprisingly weak," and "recovery sputtering." From Republicans Balk at Short-Term Stimulus in Obama Plan,

“As the debate rages in Washington, data has shown the recovery once again sputtering, with the underlying rate of growth too slow to bring down the unemployment rate by much and some of the economic momentum gained in the fall dissipating in the winter.”

It's Demand Stupid

This slowing is not happening because people are "worried about the fiscal cliff." It is because there are not enough jobs, and the wages of the people who do have jobs are stagnant with all the gains in the economy going to a very few at the very top of the economic ladder. Europe is slowing because they attacked deficits instead of hiring people to do jobs. We are slowing because the government stopped stimulus and started cutting.

The slowdown is because the jobs are not coming back fast enough, wages are stagnant and falling, and the government is not doing anything about it. And that means that there is not enough "demand" in the economy to cause investment and hiring.

Businesses want customers, not tax cuts -- and certainly not cutbacks. In fact most of what DC is focused on -- austerity -- will make the situation worse, possibly even much worse, as it has done in Europe.

Small Stimulus In President's Proposal

To his credit the President's "fiscal cliff" proposal does contain a limited stimulus to help keep the economy moving, at least at its current slow pace. But we really need a massive investment in jobs. The President's offer of $50 billion in stimulus for one year is insufficient, but at least it is something. The Republicans offer less than nothing, they want government efforts cut.

Jobs Fix Problems: The DC elite, major media and lobbying apparatus is focused like a laser beam on how much to cut, so the wealthy can have even more. But the public isn't stupid, they get that there is a disconnect because they know that jobs fix problems, jobs fix deficits and lots of jobs fixes wage stagnation. Strong employment = wage growth. Strong wages = strong economic growth.

The People Spoke -- The Election Was Supposed To Have Decided This

The election made it obvious, the public wants jobs, wants government services like Medicare and Social Security protected and even expanded, and more than anything wants taxes raised on the ultra-wealthy.

The election made the public’s wishes clear. But Washington continues to simply ignore what the public wants, and is focused like a laser beam on what a few billionaires want.

It was like there was an intense focus on the election, the public spoke, and then the very next day all attention shifted back away from what the public wanted and onto this austerity agenda that helps the billionaires at the expense of the rest of us.

A Government Of, By and For We, the People

I recently watched the PBS series The Dust Bowl. One thing that stood out was how the government actually cared about what was going on with the people, was trying to solve the problems, and how the people got it that the government was on their side.

Today it is a very different story, with the government isolated and largely under the control of wealthy and powerful interests. The current "fiscal cliff" absorption being only the most recent example.

The public doesn't get what is going on in DC. They want JOBS first, they want the meager government services they do get preserved and even expanded. And they want a fix to the problem of the last few decades of wage stagnation, corporate domination, outsourcing manufacturing, deferring infrastructure maintenance, unionbusting, age discrimination, and cancelling TV shows everyone likes. (Just seeing if you are still reading.)

Economy Has Lots Of Jobs That Need Doing

Jobs solve problems. Right now the country has lots of problems, so the country needs lots of jobs, which solve problems. And by great coincidence right now the country needs lots of things done. The country needs to repair and modernize its infrastructure. The country needs to update its electrical grid. The country needs to make its buildings and homes more energy efficient. All of these are things that improve the economy in the long run. And the remarkable thing is that all of these are things that will have to get done sooner or later.

So the country could just hire people to do those jobs that need doing -- like FDR did. How hard is it to understand that?

1) Hire people to modernize the infrastructure and make buildings and homes energy efficient.
2) All those people are participating in the economy again: paying taxes, buying things, not getting food stamps and unemployment.
3) The economy is much more efficient because of the work that got done on the infrastructure and energy efficiency.
4) The newly efficient economy is more than able to pay off the cost of all the work that was done -- that had to be done eventually.

Republicans Obstructing Everything

The current Republican view is that government itself hurts the economy, is "in the way," and that taxes and government spending "take money out of the economy." So they continue to block all efforts to revive the economy through jobs programs, investment in infrastructure, even helping the unemployed.

They say that providing unemployment benefits keeps people from being forced to take the lowest-paying, nastiest, most demeaning job that comes along. But progressives believe in democracy and say that's the point of helping each other -- that we are a country where we are in this together to build mutual prosperity -- unemployment benefits prevent a death spiral of continually falling demand.

Republicans talk about “pro-growth” policies, always meaning tax cuts for the rich. They say that only rich people "create jobs" so giving more and more money to these "job creators" will eventually trickle down to the rest of us. But all actual evidence shows that this policy does nothing to promote growth, only inequality. In fact the times of highest taxes on the wealthy have been the times of more jobs and more economic growth shared by more of us.

Business Gets It

I recently came across this Comstock Partners, Market Commentary: The Deficit Did Not Cause The Recession; The Recession Caused The Deficit,

Both Wall Street and Washington have lost sight of the major cause of the deep recession and exceedingly slow economic recovery. To hear all the talk, the major concern is about the impending fiscal cliff and the federal budget deficit. Fix the fiscal cliff and make major reductions in the deficit, they say, and all will be ok. We think they've got it wrong.

Go read why...

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This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 12:14 PM | Comments (1) | Link Cosmos

How the Territorial Tax Cut Destroys Jobs

There is a little-discussed proposal that was introduced into the "fiscal cliff" discussions by the CEOs of the "Fix the Debt" campaign. This is for a “Territorial Tax System" idea that lets multinational companies off the hook for taxes on offshore profits. This plan is particularly dangerous to American wages and jobs -- YOUR wages and job -- as well as any American companies that don't export their profit centers. This threat is not limited to the blue-collar jobs that have been disappearing, it also threatens the professionals, "knowledge workers," designers, innovators and others who contribute to corporate profits here in the US.

The Territorial Tax proposal asks for no taxes on foreign profits of American corporations. This system would encourage and practically force companies to move profit generation (innovation, intellectual property, etc.) out of the US. This gives corporations an incentive to move everything that makes them money out of the country — every profit center, every job, every factory, every designer, inventor, etc.

This plan only benefits the giant multinational corporations — and helps them kill off even more American jobs and smaller businesses. And without those wages and taxes our infrastructure, schools, police and fire protections, and everything else here will decline even more.

If executives brought these American-company profits back to America now, disbursed it to shareholders or reinvested it in their companies -- and paid the taxes due -- this would be at least a $1.2 trillion boost to our economy. The taxes owed to We, the People wold help pay for our schools, etc., or help pay down our debt. But instead of just doing the right thing, this Territorial Tax Dodge System will add another layer of corporate game-playing, encouraging them to report even more of their profits as being made out of the US. It also lets the ones who have dodged taxes by holding cash offshore -- and away from their own shareholders -- get away with it. See this Citizens for Tax Justice report on companies that have been holding cash offshore -- away from our ability to tax them as well as from their own shareholders, Which Fortune 500 Companies Are Sheltering Income in Overseas Tax Havens?

A new CTJ analysis of the financial reports of the Fortune 500 companies shows that 285 of these corporations had accumulated more than $1.5 trillion in overseas profits by the end of 2011, and there is evidence that a significant portion of these profits are located in tax havens.
In particular, our analysis shows that ten corporations, representing over a sixth of the $1.5 trillion in unrepatriated profits, reveal sufficient information to show that they have paid little or no tax on their offshore profit hoards to any government. That implies that these profits have been artificially shifted out of the United States and other countries where the companies actually do business, and into foreign tax havens.

A March Bloomberg report, Cash Hoard Grows by $187 Billion in Untaxed Overseas Profits also looked into specific companies that hide profits offshore (and away from shareholders) to avoid their corporate taxes.

The Institute for Policy Studies warns about the Territorial Tax in a report, The CEO Campaign to ‘Fix’ the Debt, A Trojan Horse for Massive Corporate Tax Breaks,

The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.

The full report continues,

A territorial system would give companies additional incentives to disguise U.S. profits as income earned in tax havens in order to avoid paying U.S. income taxes.
[. . .] S&P 500 companies as a whole have nearly $1.5 trillion parked offshore, according to Citizens for Tax Justice. While some of these profits are offshore because a U.S. multinational corporation produced a product offshore and sold it to a foreign consumer, a significant share is there for the purpose of avoiding taxes.
Here’s how it works. The U.S. corporate tax code requires U.S.-headquartered corporations to pay a tax rate of 35 percent on their profits regardless of where in the world those profits are earned. But there are two important exceptions. First, U.S. corporations are granted credits for any taxes paid to foreign governments. Second, any profits deemed permanently reinvested offshore are exempted from U.S. taxes until and unless they are returned to the United States.

The report details ways that corporations shift profits out of the country.

David Cay Johnston talked about this idea on the Ed Show in May,

Well, what it would encourage companies to do is to take all their intellectual property that they haven`t moved and anything else they can out of country, so that they earn a dollar here in the U.S. and they show it to their shareholders, and then they may magically send it to the Cayman Islands and it disappears to the IRS.
So even if they are making things here in the U.S., they`ll be able to move profits out of the country by having their intellectual property out of the country. Secondly, if they find a place that has similar rules, then you move the jobs offshore and you can still earn tax free profits.

2004 - Been There, Done That, CUT Jobs

In 2004 corporate lobbyists got the American Jobs Creation Act passed, letting multinationals bring their foreign cash back at a special low rate. We allowed corporations to bring profits back to the U.S. at a tax rate of 5.25 percent, instead of the top corporate rate of 35 percent.

After bringing the profits back from the tax havens where they had been parked, the companies involved actually cut jobs. Alain Sherter, in Sure, a “Tax Holiday” on Overseas Profits Is a Great Idea — If You Hate America, looked into what happened and wrote,

The nonpartisan Congressional Research Service found that the companies that got the biggest tax breaks following the 2004 rate cut went on to eliminate jobs over the next two years. Instead of hiring, they mostly used the repatriated funds to repurchase stock or pay dividends — and to expand outside the U.S. But it did provide a huge incentive to do even more offshoring of profits and jobs, because this scheme worked and the money came back in a tax holiday. So of course they are proposing to do it all over again.

Sherter points out this really does benefit a very few at the expense of the rest of us, including other companies,

Repatriation holidays also favor a handful of huge corporations at the expense of other companies, especially businesses without operations around the globe. In 2004, a total of five companies reaped more than one-quarter of the benefits from the tax holiday, while 15 firms got more than 50 percent. To pay for such a cut without raising the deficit, meanwhile, the U.S. would have to increase taxes on other U.S. businesses or make even deeper cuts in already tight federal spending.

Be aware of this Territorial Tax proposal. It is offered by the Fix the Debt CEOs, and it is entirely about reaping even more billions for the billionaires, at the expense of all of the rest of us and the country.


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This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 8:34 AM | Comments (0) | Link Cosmos

Shorter Fiscal Cliff (Video)

Give rich people more money or they'll kill the economy:

"Think of the economy of a car, and a rich man as the driver. If you don’t give the driver all the money, he’ll drive you over the cliff. It is just common sense."

Posted by Dave Johnson at 8:29 AM | Comments (0) | Link Cosmos

November 13, 2012

Fiscal Cliff Scare Talk Follows Shock Doctrine Script

Anyone who has read The Shock Doctrine understands exactly what this "Fiscal Cliff" scare is.

If you have already read The Shock Doctrine by Naomi Klein you have probably been rolling your eyes at all this "Fiscal Cliff" scare talk. "Here they go again" you're thinking... If you haven't read the book, you should. You really, really should.

The Phony "Fiscal Cliff" Scare

At the end of the year the Bush tax cuts expire. When this happens tax rates will rise modestly to where they were when Clinton was President. Also at the end of the year budget "sequestration" occurs. This means that the various cuts Congress approved to end the debt ceiling "crisis" will begin to phase in. (Remember, the debt-ceiling "crisis" was when Republicans refused to allow the country to honor its debts, holding the economy hostage, unless they got deep budget cuts in the things We the People do for each other.)

That's it. That's the "crisis." All of the people who had been hysterical about the budget deficit "crisis" are now hysterical that taxes will go up and spending will go down. Go figure. Maybe -- just maybe -- I shouldn't even say it -- these "serious people" weren't ... serious ... when they said they were worried about the deficit. You see, the hysteria now is because tax rates at the top will go up (cutting the deficit), and because a big part of those budget cuts (cutting the deficit) is military spending. Unfortunately the sequestration also cuts important things that help a lot of people and our economy. But these cuts do not take place all at once (a "cliff"), they will be phased in over time, and the Congress can act at any time to halt any of these cuts.

The "Fiscal Cliff" is not a cliff and the language itself is intended to scare people. The name itself is designed to create panic, evoking disaster imagery of people and the economy falling off a cliff. It is the latest manufactured "crisis" and we are all supposed to be terrified and demand immediate and extreme solutions.

Again, the very people screaming loudest about deficits are the people who passed tax cut after tax cut, and military spending increase after military spending increase, and started war after war. Then these same "serious people" terrify the public, telling them that budget deficits will lead to the destruction of the country — and soon. After a decade of screaming “9/11,” “9/11,” noun verb “9/11,” they screamed "deficit, deficit, deficit." Now they scream, "fiscal cliff, fiscal cliff, fiscal cliff."

Then after the public is suitably stirred up and terrified they offer “solutions” they say are necessary to cut the scary deficit (that they caused, for this purpose).

And the fixing all has to happen right now, in the "lame duck" Congress, before those new legislators We, the People elected can take office.

The "Grand Bargain"

The "serious people" are pushing for a "grand bargain" that they say will "solve" the "deficit problem" "once and for all."

Of course, nothing in any "grand bargain" can bind the Congress, and any part of this "grand bargain" can and will be undone by Congress at the earliest opportunity.

The outline of this "bargain" involves "tax reform" and "getting a handle on entitlements." Tax "reform" does not involve raising tax rates on the wealthy, it "reforms" taxes by getting rid of various deductions and lowering tax rates. "Getting a handle on entitlements" means cutting Social Security, Medicare, Medicaid, Food Stamps and the rest of the things that We, the People do for each other -- the things we are entitled to as citizens in a democracy.

(Note -- Social Security by law can not and does not contribute to the deficit -- they just threw it in because it is "in crisis." The Social Security "crisis" is that under certain economic projections its funding might run a bit short many years down the road. Compare this possible future shortfall to the huge, vast, bloated, enormous military budget which, unlike Social Security, has no separate funding mechanism and runs 100% short every year. But that is not a "crisis.")

So a fix for a budget problem caused by cutting taxes, massively increasing military spending and crashing the economy will be "solved" by ... not fixing those things. Once again the income and wealth of the country will be shifted away from We, the People and upward to the same 1% who have been benefiting from everything in our economy since the election of Ronald Reagan and the disaster-capitalism formula: cut taxes, raise military spending, then use the resulting deficits to scare people into accepting extreme "solutions." Rinse and repeat.

The Shock Doctrine

The Shock Doctrine is a book by Naomi Klein that describes a "disaster capitalism" strategy used by wealthy and powerful people to take advantage of crises -- even causing crises -- to herd people into accepting "solutions" to those crises that really just enrich the 1% at the expense of the rest of us.

In times of crisis (real or perceived) the public is in a state of shock, distracted and ready to grasp at straws to get out of the panic. This is the perfect time for "serious people" to come in and offer pre-planned "solutions." These solutions usually involve privatizing public institutions and wealth, cutting public services, cutting taxes on the rich, seizing property, lowering wages and pensions ... well, just look at Europe's "austerity" and you get the picture.

This shock-doctrine disaster capitalism model has become standard practice. We see this happening over and over again: crises occur or are manufactured, the media whips people into a panic, and then the "solution" is introduced. The solution involves a "reform" that transfers wealth or institutions into a few private hands.

The Real Problem And Real Solution

We have a jobs problem, not a deficit problem. The best way to deal with the deficit is to put Americans back to work. The real job creators are working people with money in their wallets. We can’t cut our way to growth. These are not just slogans, these are solutions to real problems.

We need to invest in our economy, restoring and modernizing our infrastructure, retrofitting our homes and buildings to be more energy efficient, upgrading our public schools and universities, and fighting to create the manufacturing ecosystems for the new industries of the future,. All of these investments create jobs while they are underway, and pay off by improving our economy for the long term.


Inoculate yourself by reading The Shock Doctrine. Inoculate your friends by telling them about the book, and how this game works, over and over again.

“Nothing is more important in the face of a war than cutting taxes." — Republican Majority Leader Tom Delay, 2003

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This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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October 12, 2012

New Video - CEOs or Kids?

From Americans for Tax Fairness

A new web video unveiled today by the National Education Association and Americans for Tax Fairness vividly shows how extending the Bush tax cuts for CEOs and the richest 2 percent of Americans would be paid for by cutting education funding for kids.
Click through to take action.

Posted by Dave Johnson at 10:30 AM | Comments (0) | Link Cosmos

October 5, 2012

So DO Tax Cuts Create Jobs?

In Wednesday's debate Mitt Romney repeated his claim that cutting individual and corporate income taxes creates jobs. But when you look at what actually happened, the periods when we had the highest tax rates were the periods we had the greatest job and economic growth. And the periods with lower taxes had lower job and economic growth. (And we all know what happened in the Bush years...)

Here is Romney at Wednesday's debate,

"54 percent of America's workers work in businesses that are taxed not at the corporate tax rate, but at the individual tax rate. And if we lower that rate, they will be able to hire more people. For me, this is about jobs. This is about getting jobs for the American people."

and,

"The problem with raising taxes is that it slows down the rate of growth. And you could never quite get the job done. I want to lower spending and encourage economic growth at the same time."

So DO tax cuts for rich people and already-profitable businesses create jobs? DO businesses hire people when they have extra money? When few customers are coming through the door will tax cuts cause businesses to hire people to sit around reading newspapers or checking Twitter?

I think that people with jobs have money to spend and then the businesses that get their business will hire people, and will make money and be happy they have profits to pay taxes on. And I think that the numbers -- and charts that help us visualize those numbers -- back me up. Here are some of those numbers.

Michael Linden at Center for American Progress took a look at tax rates and job creation, in Rich People’s Taxes Have Little to Do with Job Creation, Conservative Arguments that Higher Income Taxes for the Wealthy Hurt Employment Don’t Hold Up to Scrutiny,

... in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less—which it is now—employment grew by an average of just 0.4 percent.

And there’s no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.

In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

OK, got that? The periods of highest job growth correspond to the periods of highest tax rates on the wealthy. 70% top tax rates. 90% top tax rates. Maybe this is because that money gets used to build roads and bridges and buildings and ports and dams and the things that make our economy more efficient and competitive. And maybe because the years of low tax rates are the years of government cutbacks because there isn't enough revenue coming in -- infrastructure not maintained, education budgets cut, etc.

What do tax rates do to economic growth? Romney says raising taxes hurts the economy. Is that what happens?

Michael Linden looked at what happens with taxes and GDP growth, in The Myth of the Lower Marginal Tax Rates, Conservatives’ Go-To Growth Solution Doesn’t Hold Up (I'll spare you the blow-up photo of Speaker Boehner's face),

The top marginal income tax rate has ranged all the way from 92 percent down to 28 percent over the last 60 years. With such a large range, it should be easy to see the enormous impact of lower rates on overall economic growth, as conservatives routinely claim. Years with lower marginal rates should boast higher growth, right?

That’s definitely not what happened. In fact, growth was actually fastest in years with relatively high top marginal tax rates. Back in the 1950s, when the top marginal tax rate was more than 90 percent, real annual growth averaged more than 4 percent. During the last eight years, when the top marginal rate was just 35 percent, real growth was less than half that.

Altogether, in years when the top marginal rate was lower than 39.6 percent—the top rate during the 1990s—annual real growth averaged 2.1 percent. In years when the rate was 39.6 percent or higher, real growth averaged 3.8 percent. The pattern is the same regardless of threshold. Take 50 percent, for example. Growth in years when the tax rate was less than 50 percent averaged 2.7 percent. In years with tax rates at or more than 50 percent, growth was 3.7 percent.

These numbers do not mean that higher rates necessarily lead to higher growth. But the central tenet of modern conservative economics is that a lower top marginal tax rate will result in more growth, and these numbers do show conclusively that history has not been kind to that theory.

Zaid Jilani at CAP's Think Progress also takes a look, in Top Reagan Economic Advisor: Return To Clinton-Era Tax Rates Would Not Hurt Economic Growth,

Historically, the United States has actually had some of its strongest periods of economic growth while taxes were high. As this graph from Slate shows, some of our strongest periods of growth in gross domestic product actually occured while taxes were very high:

In the 1950s, which had one of the sharpest periods of economic growth in all of American economic history, the top marginal tax rates for the richest Americans stretched above 90 percent. Likewise, economic growth in the relatively higher-taxed 1990s was much stronger than in the 2000s. This isn’t to say that higher taxes necessarily cause greater economic growth, but it does seem to show that higher taxes do not appear necessarily to be impeding job growth, nor are lower taxes especially helpful.

OK, did you see those charts? Not only do high taxes on the rich not impede growth, but growth looks to be higher when taxes are higher. Maybe this is because higher taxes on the rich means that the government -- We, the People -- has more to spend on the things that make our economy more efficient and competitive like schools, roads, bridges, transit systems, courthouses, judges, etc...

And, again, the periods of low taxes are the periods of government cutbacks ...

David Leonhardt at the NY Times looks at recent numbers, in Do Tax Cuts Lead to Economic Growth?

President George W. Bush and Congress, including Mr. Ryan, passed a large tax cut in 2001, sped up its implementation in 2003 and predicted that prosperity would follow.

The economic growth that actually followed — indeed, the whole history of the last 20 years — offers one of the most serious challenges to modern conservatism. Bill Clinton and the elder George Bush both raised taxes in the early 1990s, and conservatives predicted disaster. Instead, the economy boomed, and incomes grew at their fastest pace since the 1960s. Then came the younger Mr. Bush, the tax cuts, the disappointing expansion and the worst downturn since the Depression.

(Click that graphic for larger)

Whoa, did you see what happened after Bush cut taxes for the rich? Do you remember what happened after Bill Clinton got taxes increased on the rich?

My own 2010 post, Did The Rich Cause The Deficit? included this chart, (The red line is the tax rates, the blue is growth and the red arrow shows the trend.

Top Tax Rate vs GDP

But, from that post, one thing that cutting taxes on the rich obviously does cause is deficits:

TopRates_vs_Debt_Chart

And deficits cause government to cut back, cut infrastructure projects, cut the things government -- We, the People - does for We, the People. And the economy slows...

The real job creators are working people with money in their wallets.

Tax the rich, use the money to modernize our infrastructure and help regular working people. Build roads, schools, bridges, ports, airports, dams, courthouses, wind farms, water systems, high-speed rail, municipal transit systems, all the things that make our economy efficient and competitive...

(PS I also came across a chart showing that lowering capital gains rates correlates with lower, not higher, economic growth. But somehow we knew that would be the case...)

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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October 1, 2012

Jobs Are For We, The People. Budget Cuts Are For The Billionaires. Who Will Prevail?

We have millions unemployed with millions more underemployed or just gave up looking, our infrastructure is literally crumbling, our trade deficit is horrendous, our "safety net" has eroded below minimum acceptable standards, pensions are cut or gone, the climate is getting more and more unpredictable and dangerous, and how many other problems can you name? But the billionaires will tell you that our biggest problem is too much government -- the very entity that exists to fix those problems. Will we get the jobs that We, the People want or the cuts in government that the billionaires are pushing for?

Deficit Hysteria Is About Cutting Government

Keep this in mind in the coming months -- the deficit hysteria and the "fiscal cliff," are all about cutting government and the things We, the People do for each other, so that the billionaires can have more. Who benefits if we cut government - Medicare, Social Security, the "safety net" programs, education, health and safety regulation and inspection, environmental controls, bank regulation, etc.? All of these help We, the People but are in the way of the billionaires.

How do we get to this bizarre point where DC elite, the corporate media, etc are all talking about cutting the safety net and the things we do for each other, when the obvious problem is jobs? Why isn't this vast media machine writing and talking and showing videos about jobs and jobs and jobs?

Surplus To Deficit -- What Changed?

Before Reagan the country did not have a big debt problem - and then we did. Reagan implemented changes that create huge yearly deficits that added up to big debt. When Clinton left office we had huge budget surpluses, and we were actually paying off the debt. Bush implemented some changes that immediately turned the surpluses into deficits, and left office with a $1.4 trillion deficit -- in one year.

So ... something changed under Reagan and then under 'W' Bush. Are the deficit cutters talking about reversing those changes? Are they talking about fixing the things that caused the deficits that added up to this huge debt?

Sacrifice

The deficit problem came from tax cuts for the rich, the size of the military budget (Reagan doubled it, 'W' Bush doubled it again), effects of the trade deficit, and the revenue loss and safety-net costs (due to lack of jobs) that fall out from the Wall Street financial crisis.

Instead of fixing what caused the deficits and debt, the elites say we should all make "sacrifices" to fix the problem. Except, of course, there are no "sacrifices" for the very ones who benefited from those changes Reagan and Bush made. They got huge, huge tax cuts and to pay for the results of those tax cuts We, the People are being pushed to accept "sacrifices." No one is talking about putting the top tax rate back up to pre-Reagan levels -- back when we took care of the infrastructure and funded our schools, etc. They are not talking about hiring millions to modernize our infrastructure and make our buildings energy-efficient.

Starting about the same time as Reagan cut taxes on the wealthy the wages of people who work for a living began to stagnate and the income and wealth inequality started to accelerate. In other words, almost all the benefits from gains in our economy started to go to a few at the top of the ladder. Some dramatic numbers illustrate this. For example, you may have read that in 2010 93% of the gains from the "recovery" went to the top 1%. Or you may have read recently that the wealth of the Forbes 400 went up by $200 billion last year.

But now that it is time to "sacrifice" who is supposed to do the sacrificing? We, the People, and programs like Medicare, Social Security, the "safety net," health and safety regulations, environmental protections, etc.

Another Billionaire Weighs In

Ross Perot is in the news today whipping up deficit hysteria, with a huge-headline assist from the Drudge Report pointing to this Politico story, Ross Perot: No 2012 endorsement, saying we could "lose our country" or "be taken over."

“We’re on the edge of the cliff, and we have got to start fixing it now. Otherwise, we’re leaving a disaster to our children’s and our grandchildren’s future,” he said.

... Perot talks about his fear of the United States being taken over.

“If we are that weak, just think of who wants to come here first and take us over, and the last thing I ever want to see is to see this country, our country taken over because we’re so financially weak we can’t do anything and we’re moving in that direct. … We could even lose our country if we don’t get this fixed and straightened out and nobody that’s running really talks about it, about what we have to do and why we have to do it. They would prefer not to have it discussed.

Krugman On Democracy

Today Paul Krugman, in The Real Referendum, points out that the public is turning against candidates who are exposed as wanting to cut the things We, the People do for each other,

Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare, which represents an extension of that legacy. Will they vote for politicians who want to replace Medicare with Vouchercare, who denounce Social Security as “collectivist” (as Paul Ryan once did), who dismiss those who turn to social insurance programs as people unwilling to take responsibility for their lives?

If the polls are any indication, the result of that referendum will be a clear reassertion of support for the safety net, and a clear rejection of politicians who want to return us to the Gilded Age. But here’s the question: Will that election result be honored?

What he means is that the public's wishes are clear, but there are indications that after the election the "Grand Bargainers" are going to try again to cut the things We, the People do for each other, so the billionaires can have it even better. This is what the Simpson-Bowles plan is, this is what the "fiscal cliff" hysteria is about.

Will the election results be honored? Will it be jobs (We, the People) or budget cuts (the billionaires).


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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September 27, 2012

The Clincher

Here is Romney explaining how Bain would "harvest" companies. (See also So DID Mitt Romney Really "Create Jobs" At Staples?)

NEW ROMNEY VIDEO: In 1985, He Said Bain Would "Harvest" Companies for Profits | Mother Jones

BAIN%20HARVEST.jpg
(Poster created by Richard Eskow, Super-Genius)

Posted by Dave Johnson at 8:46 AM | Comments (0) | Link Cosmos

September 20, 2012

Wow! Watch This One

Outside the circle:

Devastating!

Posted by Dave Johnson at 2:51 PM | Comments (0) | Link Cosmos

September 19, 2012

New Romney Video Surfaces

Here is another Romney video, from 1979:

(It's really the Dead Kennedys, Kill the Poor.)

Posted by Dave Johnson at 8:26 AM | Comments (0) | Link Cosmos

September 18, 2012

The Real Question: WHY Don't People Make Enough To Pay Income Taxes?


Mitt Romney was caught on video complaining that 47% of us don't make enough to pay taxes, believe they are victims, are dependent on government, etc. The right question is why do so many of us make so little?

Moving Jobs To Places Where People Don't Have A Say

You often here that competition due to "globalization" means that we have to accept lower wages and fewer benefits, because people "over there" make so much less. What has caused the pressure, however, is "free trade" agreements that allow companies here to close factories here and open them over there, and then bring the same things they used to make here to sell in the same stores. The only "trade" involved in this transaction is trading who does the work.

In places where people are able to have a say, they say they want better wages, benefits, good schools, good roads, parks, a clean environment, safety standards, and things like that. In places where people do not have a say, they are told they can't have better wages, benefits, good schools, good roads, parks, a clean environment, safety standards, and things like that.

When we allow our companies to close factories here, where people have a say and move them there, where people do not have a say, and then bring the same goods back here to sell, we are allowing them to escape the borders of democracy. When they are no longer subject to the We, the People that has a say, they can do what they want, exploit workers, exploit the environment, and reap the profits of not having responsibilities to others. And because it costs less to pay people less and exploit the environment, allowing them to escape these responsibilities makes democracy a competitive disadvantage.

The Wal-Martization Of Our Economy

Another reason so many people don't make enough wages to pay taxes is because we let companies like Wal-Mart and Staples pay close to minimum wage. That is part of how they compete with our smaller, local businesses. Low wages, selling cheap stuff made in China by people with lower wages. (And by the way, we don't raise the minimum wage to a livable level! This means that government ends up helping employees of these companies through "safety-net" programs like Medicaid, Food Stamps, and the other "dependency" programs Romney complains about.)

Also, bigger companies are able to use their size. They can also apply the advantages of access to capital that smaller, local companies and regional chains cannot. They can also take advantage of scale in their purchasing, negotiations, management functions and elsewhere. This is smart business, but then we let them drive down wages, and send the difference to a few at the top, without even taxing those at the top so we can use the money to make up for the circumstances this imposes on those at the bottom.

In So DID Mitt Romney Really "Create Jobs" At Staples? I looked at whether Staples really invented new jobs or really just shifted jobs from other companies to their company. Unfortunately Staples didn't "create jobs," it grew by putting other companies out of business, thereby shifting people into lower-paying jobs. That is the Wal-Mart model, Bain Capital model, that has taken over our economy.

Staples grew by putting local stationery stores out of business, local office supply, and other chains like Businessland out of business. All those small business owners who had local stores, making a modest small-business income, now instead are working maybe as managers at a Staples. From the post,

As Staples grew it overtook competing chains like Businessland and others. In other words, Staples took business from other, existing stores -- often local retailers. Staples did not “create” jobs, it shifted office-supply jobs from local stores, etc., probably to lower-paying jobs. (The former owners of local businesses certainly were worse off from this.) They likely even lowered overall office-supply, stationery, etc. employment in the larger economy.

Low Wages?

How do these"Romney job creator" jobs stack up against other jobs? Average Staples salaries for job postings nationwide are 51% lower than average salaries for all job postings. The pay at Staples appears to be around $8-10 an hour. That's $16-20,000 a year, certainly not enough to support a family, or even pay rent in many areas, never mind buying food. (The 2012 poverty guideline for family of four is $23,050.)

So Mitt Romney complains that the changes in our economy over the last few decades that have made most of us so much poorer are our own fault. But he concludes that government - We, the People - shouldn't try to do something about it! He complains that government - We, the People - are really just in the way of letting it go on and make a few at the top get even richer at the expense of the rest of us.

In democracies We, the People are supposed to have a say. And WE say we want better wages, bnefits, and a piece of the pie. When democracies function, that is what happens. When the Romneys and the Bain Capitals and the Wal-Marts are able to tell us what the government's policies should be, then things fall apart. 6 Wal-Mart heirs have more wealth now than around 1/3 of all Americans combined. Mitt Romney has an income of approx $440,000 per week.

And yes, 47% of us don't make enough to pay income taxes.

The solution is to restore our, We the People's, yes government's control over these circumstances. Government is US making the decisions and bug government is us making more of the decisions. And when We, the People have a say we say we want to restore the virtuous circle of prosperity: we create the fertile ground for businesses to prosper by building roads and bridges and good schools, we help them prosper by providing good courts, regulation to keep the giants from domination and to keep the components of the economy functioning smoothly, and investing in research and universities. And then when the business are doing well we ask for good jobs with good wages and benefits and working conditions, and we collect taxes to pay for the investment that keeps that virtuous circle going.

Please read also: Tax Cuts Are Theft


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 5:10 PM | Comments (1) | Link Cosmos

September 12, 2012

Austerity Suicide -- Literally

You might be hearing about the "Fiscal Cliff." And you might be hearing about a "Grand Bargain." You certainly have heard about "Simpson Bowles." You will be hearing more and more about these strangely-named things because the usual suspects are cranking up the usual propaganda machine again, getting the usual DC elite ready to play out another of the usual take-from-the-people-to-give-to-the-rich games right after the election. This time it's a push for austerity.

Why Deficits?

I always start any discussion of deficits and debt by reminding people that the country had a big budget surplus before Bush cut taxes for the rich, and doubled the military budget.

Deficit history: Reagan dramatically cut taxes on the wealthy and corporations. He doubled the military budget. Huge deficit resulted and the country began accumulating massive debt. They called it "strategic deficits," a plan to "starve the beast" by bankrupting the country and forcing cuts to government, to the things government does for We, the People, and the ways government protects us from exploitation by the wealthy and powerful.

After 12 years of Reaganomics people were fed up, and elected Clinton. Clinton raised taxes on the rich. Those increases combined with the stock market bubble created a surplus and we were paying off the debt, and then something changed. 'W' Bush again cut taxes for the wealthy and again doubled the military budget and now the deficits are enormous. So here we are.

But fixing what caused the deficits is not on the table. It never is, because that doesn't fit the plan.

Fiscal Cliff

They say the country faces a "Fiscal Cliff" at the end of the year. After the election the Bush tax cuts for the wealthy expire. And – this is a bit complicated – something called “sequestration” also kicks in. This is a series of budget cuts that happen because of the “debt ceiling” deal, when Republicans held the debt ceiling hostage and threatened to put the country into default, demanding that we immediately take trillions out of the economy. The sequestration deal was a compromise that was intended to force the Congress to agree to a bipartisan solution, which failed.

The sequestration includes military cuts, which our billionaire-backed DC elite believe would ruin the economy when combined with expiration of the Bush tax cuts -- because in their minds tax cuts do not cause deficits and unlike other government spending military spending creates jobs. So to avoid the "Fiscal Cliff" after the election Congress is supposed to meet to keep the military budget intact, keep taxes on the rich from rising and cut the things our government does for We, the People.

Why After The Election?

That pesky democracy thing keeps on getting in the way of Wall Street’s plans for our economy. But after the election comes what's called a "lame duck" session of the Congress. The legislators who have been chosen by the people aren't in office yet, the ones who have been defeated are still there and the ones who were re-elected know that anything they do will be long forgotten by the next election. Democracy and the will of the people will not be a factor. Every poll says the public wants immediate action on jobs and no cuts in the things government does for We, the People.

If Obama is re-elected the post-election debate will be between the Obama deficit plan, a "Grand Bargain" based on the "Simpson-Bowles" plan vs the Ryan plan -- the budget the House Republicans passed that privatizes Medicare and reduces spending on most things government does for our people. If Romney is elected all bets are off.

Simpson-Bowles

Simpson-Bowles is a budget plan put together by a Republican Senator and a Director of the Wall Street bank Morgan Stanley. After the President's National Commission on Fiscal Responsibility and Reform ("Deficit Commission") failed to make recommendations, the two came up with a plan that cuts Social Security, cuts a number of other things government does for our people, cuts a bit from military and cuts tax rates on the rich and corporations, calling it "reform." (The plan also eliminates the home mortgage interest deduction, for example.)

Important point: At least Simpson-Bowles is not a "cuts cause growth" plan. It is sold as a deficit plan, even though it cuts taxes at the top and for big corporations. It clearly asks that any cuts not take place until the economy has improved because cuts slow growth.

Grand Bargain

The "Grand Bargain" is the idea that Democrats and Republicans can reach a compromise involving Republicans "allowing" tax "reform" that eliminates some tax deductions like the home mortgage interest deduction and reducing tax rates on the wealthy and corporations, in "exchange" for cuts in things government does for us, including Medicare, Social Security and Medicaid. (These cuts do not eliminate the need, they just shift the cost away from the government onto the larger economy.) (If this sounds like a "bargain" that entirely benefits the wealthy and large corporations, that's just how Washington works these days.) ("Reform" always means cutting out things government does for We, the People and reducing taxes on the wealthy.)

Austerity

Austerity is the word used to describe attempts to lower budget deficits by cutting government spending on the things that government does for its citizens.

The theory is that cutting way back on government will cause the economy to grow because government is "in the way" and helping citizens "takes money out of the economy." Also, when government provides fewer safety-net services unemployed people are forced to take any work they can get, which drives wages down and increases corporate profits. Government cutbacks also mean they can't enforce regulations, which unleashes businesses to pollute, commit fraud, cut safety procedures and other things government polices that restrict corporate profits.

But austerity literally "takes money out of the economy." Public-employee wages and pensions are cut. Government services and safety net programs are cut. Public assets are sold off for immediate cash (reducing the government's income in later years). So the demand side of the economy is reduced as people are not able to spend.

The Results Of Austerity

In practice the theory that removing government makes the economy grow has not worked out. Several European countries have been severely cutting budgets, and the result has been that the economies in the "austerity" countries have suffered. These economies appear to have fallen into a downward cycle where the "reforms" reduce demand, growth stalls, this reduces tax revenue, which means the deficit-cutting is not effective. (And meanwhile the economies are ruined and people are in misery.)

The austerity cycle happening in Europe works something like this:

Bankers demand "austerity" which drives up unemployment, cuts demand and slows economic growth. The reduction in economic growth causes tax revenue to shrink and increases use of whatever "safety net" programs remain, thereby increasing budget shortfalls.

So bankers demand more "austerity" which drives up unemployment, cuts demand and slows economic growth. The reduction in economic growth causes tax revenue to shrink and increases use of whatever "safety net" programs remain, thereby increasing budget shortfalls. .

So bankers demand more "austerity" which drives up unemployment, cuts demand and slows economic growth. The reduction in economic growth causes tax revenue to shrink and increases use of whatever "safety net" programs remain, thereby increasing budget shortfalls.

So bankers demand more "austerity" ... well you might be starting to get the picture.

Recession Resulting From Austerity

These are the GDP growth rates in European "austerity" countries:

Spain expects -1.7% from 0.4% 2011
Greece -10% to 11%
Portugal -1.2%
Italy -0.7%
Ireland -1.1%
UK -.7%

Chart from Think Progress, CHART: HOW AUSTERITY IS SQUASHING EUROPE’S ECONOMIC GROWTH.

Unemployment Resulting From Austerity

These are the official unemployment rates in European "austerity" countries:

Spain 24.6%
Greece 24.4%
Portugal 15%
Italy 10.7%
Ireland 14.9%
UK 8%

Austerity NOT Lowering Debt

Here is a chart of the debt-to-GDP ration as these countries shrink their GDP - and tax revenue - through austerity (click for larger):

Decline Resulting From Austerity

CNBC: Europe Facing Mental Health "Catastrophe" as Crisis Worsens,

Europe is approaching a crisis as the region’s debt crisis and austerity measures increase the rates of depression, suicide and psychological problems – just as governments cut healthcare spending by up to 50 percent, according to campaigners, policy makers and health organizations.

NY Times: ‘Shocking’ Dip in Britain’s Output Reflects European Stress

Guardian: Portuguese death rate rise linked to pain of austerity programme,

Portugal's health service is being forced into sweeping cuts as last May's EU/IMF bailout terms begin to bite

Catholic Online: European economic crisis takes emotional toll

Suicides Resulting From Austerity

Alternet, April: Crisis to Suicide: How Many Have to Die Before We Kill the False Religion of Austerity?

Telegraph, April: Italian businessman becomes country's 25th 'austerity suicide' of the year

CNN, April: Austerity drives up suicide rate in debt-ridden Greece

Digital Post, July: Austerity takes its toll with suicides increasing in Greece

Tampa Bay Times, August: Suicide rates rise in Europe amid job losses and severe cutbacks

Digital Post, August: Italian dies after setting himself alight in austerity protest

Reuters, August: Study links British recession to 1000 suicides,

A painful economic recession, rising unemployment and biting austerity measures may have already driven more than 1,000 people in Britain to commit suicide, according to a scientific study published on Wednesday.

CNN, September: Death and taxes in Italy

Watch the following news reports if you can stomach it:

What You Can Do

So the experiment in austerity that is playing out in Europe is coming to the US after the election - when democracy can't intervene.

But the way to reduce deficits is to grow the economy. When people have jobs they pay taxes and use fewer social services. Jobs programs that come out of fixing our infrastructure and making us less dependent on oil also make our economy more competitive in the future so they pay for themselves.

Contact your member of Congress and let them know that you do not think this is the time to cut the budget. Let them know that you want to see jobs programs, infrastructure maintenance and improvements, increase the safety net so people are not forced to take any work, cut the age when people can get Medicare and Social Security and increase the benefits so people can retire and open up jobs and renegotiate trade deals that are sucking us dry.

Tell them jobs fix deficits -- you want to grow us out of deficits, not pretend that cuts will work. Cuts make deficits worse.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 10:08 AM | Comments (0) | Link Cosmos

August 27, 2012

Republicans Again Use Race, And It's OUR Fault That It Still Works

Since forever, the Republican message is STILL "Dems take your money and give it to black people." Doesn't change. Doesn't have to. It's OUR fault.

Since Forever

I am not young. I remember when Nixon campaigned with his racially divisive "Southern Strategy." Nixon campaigned on "crime" - fear of black people - and on the claim that Dmeocrats take "your" money and give it to black people. It worked.

It worked for Reagan, too, when he talked about "welfare queens" and "welfare Cadillacs." Here is part of a Reagan campaign stump speech,

"She has eighty names, thirty addresses, twelve Social Security cards and is collecting veteran's benefits on four non-existing deceased husbands. And she is collecting Social Security on her cards. She's got Medicaid, getting food stamps, and she is collecting welfare under each of her names. Her tax-free cash income is over $150,000."

(Please read what Terrance Heath has to say about welfare queens in, Romney And Ryan: The Right Kind Of "Welfare Queens".)

HW Bush used the infamous Willie Horton ad. Watch it with the sound off.

Bush II beat back John McCain in the primaries by circulating stories that he had "fathered a black child" and "terrorists." (But correct me if I'm wrong, Bush II didn't appear to use race against Gore, instead preempting potential attacks on his own character and honesty by hammering Gore's "character" and making him out to be a liar - both with the help of the media. His later use of "terrorists" (brown people) is another story entirely...)

Prediction

So I'm going to go way out on a limb here. I predict that Republicans will use race and other terribly divisive tactics to distract us from the real situation -- the draining of the wealth of 99% of us and the country for the benefit of an already-wealthy few -- in the 2014, 2016, 2018, 2020 and every campaign after that. They will say that "Democrats take your money and give it to black people." They will campaign against "union thugs" and "union bosses" and say paying fair wages "hurts business" and we need to be more "business friendly." They will say "government takes money out of the economy" and helping each other "makes people dependent." They will say "cutting taxes increases government revenue." They will say a lot of nonsense, and their policies when enacted will always, always benefit an already-wealthy few at the expense of the rest of us, our economy, our country and our planet.

They will say all kinds of stuff to keep We, the People from seeing what is in front of our faces.

That is who they are and that is what they do.

Unless we do something about it.

Look Where We Are & At What Romney Is Doing

Look where we are: Deregulation pretty much destroyed the economy. Tax cuts have partially defunded the government's ability to empower and protect We, the People. The 1% and their giant corporations get so much of the benefits of our economy now. The climate is obviously getting worse and worse, already risking crop failures, incredible heat waves and terribly destructive storms. And with all of this going on one party blocks efforts to improve things, so they can campaign saying nothing is getting done. Yet with all that going on, the election so far is all coming down to billionaires spending hundreds of millions to run ads that say Obama is taking your money and giving it to black people.

Look what Romney is doing! He is running ads that come pretty close to the "welfare queen" messaging, pretty much saying that Democrats take your money and give it to black people. He is running ads about Medicare that pretty much say the same thing. And now he is even going "birther." Thomas Edsall explains today in the NY Times, in Making The Election About Race,

The Republican ticket is flooding the airwaves with commercials that develop two themes designed to turn the presidential contest into a racially freighted resource competition pitting middle class white voters against the minority poor.

... The racial overtones of Romney’s welfare ads are relatively explicit. Romney’s Medicare ads are a bit more subtle. ... Obamacare, described in the Romney ad as a “massive new government program that is not for you,” would provide health coverage to a population of over 30 million that is not currently insured: 16.3 percent of this population is black; 30.7 percent is Hispanic; 5.2 percent is Asian-American; and 46.3 percent (less than half) is made up of non-Hispanic whites.

... The Romney campaign is willing to disregard criticism concerning accuracy and veracity in favor of “blowing the dog whistle of racism” – resorting to a campaign appealing to racial symbols, images and issues in its bid to break the frustratingly persistent Obama lead in the polls, which has lasted for the past 10 months.

Once again, Republicans are saying, "Democrats take your money and give it to black people."

And just like they do every time it works they take our money and give it to rich people instead.

It's Our Fault

Here's the thing. This is our fault. Fool me once, shame on you. We were fooled once, when Nixon did it. Shame on Nixon. But ... We were fooled twice, when Reagan did it. We were fooled again and again, and apparently never caught on that this is what they do.

And if this is what they do, we should have taken steps after, maybe, the fifth or sixth or seventh or eighth time? This is our fault.

WHY are Republicans still able to use race in their campaigns to deflect attention from their ongoing campaign to turn the wealth and management of our country over to the 1%? Because we have not organized ourselves to reach out to regular people around the country and help them to understand what is happening to them. Instead we (progressives) have largely focused our on changing things through elections. But we have not done the hard work between elections to set the stage for elections. We have not been very good at reaching out to tens and tens of millions of regular people and helping them to understand and appreciate the benefits to them of a progressive approach to solving our problems.

I mean, a lot of us do get this and try. This is a big part of what Campaign for America's Future does - or tries to do with the very limited resources it has. But a real national, between-elections, ongoing -- decades-long -- campaign takes real resources, facilities, coordination, supplies, management, researchers, writers, talkers, technologists, and the rest. And that takes real money. The kind of money conservatives have been willing to put into such and effort, and progressives have not.

Let's Finally Do Something About It

When are we going to recognize that this is what they do, and do something about it? They use race. They divide us. They make shit up, and spend millions and millions on blasting their made-up shit into people's brains. Then they enrich the 1% at the expense of the rest of us, and use part of that to do it more. This is what they do. And very little is done to counter it. (Some say the problem is, "democracy does not have an advertising budget.")

What if we had started 4 years ago to get ready for this campaign of lies and division, knowing full well that they are going to use race and lies and the rest against We, the People? What if we had started then to reach and educate millions and millions of working people, bring them together, help them see the bigger picture? What if we had reached out to millions of disaffected white voters and explained directly to them, in language that reaches them, with stories that resonate with them, so they would be ready for it when they are told "Democrats take your money and give it to black people," and why believing it hurts them.

What if we did this between elections, and kept doing it after elections, and explained and reinforced the concepts of democracy so that people's understanding and appreciation of democracy and what it really means increased year after year after year?

What if we had started doing this 8 years ago? 12 years ago? After Nixon's election? What if we had started to dedicate a percentage of progressive-aligned funding and organizing toward a centrally organized, well-funded campaign of reaching regular people and explaining the harm conservatives are doing, and the benefits to them of democracy and a We, the People approach to our mutual problems?

How well would their campaign of racism and lies and division work, if we had done that? How well will it work if we do it.

What would it have done for the goals of environmentalists if we had put serious money into a coordinated, values-based approach that helped people understand and appreciate the meaning and benefits to them of truly honoring We, the People "we are in this together" democracy over the prevailing corporate/conservative, Randian, "you should be on your own"?

What would it have done for the goals of labor unions if we had used this approach?

What would it have done for the goals of consumer attorneys if we had used this approach?

What would it have done for the goals of Medicare-For-All advocates if we had used this approach?

And what could it do for all of these if we started today?

A Fight Back Strategy

Research & Development, and Action: What we need is a major, coordinated, funded, national project dedicated to researching the ways the 1% manipulates us, and developing strategics for overcoming them. This project also needs a national action arm that takes the research and strategies out to the country and continues this work for as long as it takes.

Just think about this, think about changing your orientation from election cycle to outside of the election cycle, ongoing, as-long-as-it-takes strategies. And mostly, please help and continue to help fund organizations that work outside of elections to help make these changes, so that progressive candidates and policy initiatives have fertile ground in which to do well!

Of course, this kind of work is a big part of what Campaign for America's Future does - or tries to do with the very limited resources it has. You can and should help us with this, and you can do that right now by visiting this page. If you can give $3 right now, that helps. Seriously, if everyone reading this just gave $3 (or more) it would help.

And this is not a selfish appeal so I can get a raise (although it can't hurt). There are a number of other organizations that are seriously working on this kind of approach. You can also give a donation to Center for American Progress here, or to the National Council of La Raza here, or to the Economic Policy Institute here, Media Matters here, to the Center for Community Change here, to Progressive Congress here, the Leadership Conference on Civil and Human Rights here, to People For the American Way here, and there are so many other organizations that are working in their own way to help. (I'll add them as they read this and write to yell at me for leaving them out.)

There is a (somewhat out of date) page on funding progressive infrastructure here and a (somewhat out of date) list of progressive infrastructure organizations here.

We really need for progressives to understand this need, and the difference between this and election campaign contributions. Think about it, and help spread the word. Help fund it, and help others understand this need. We can beat back the conservative machine by building a machine of our own that is strong enough to do the job. This takes money.

And to keep that machine answerable to US, we have to fund it democratically, with each of us stepping up and contributing what we can. It has to be lots of people giving small and medium amounts, not depending on a few large donors. ANY organization or candidate is going to dance with the ones that brung 'em, so WE have to bring them to the dance together. Go give $3 or $10 or $100 to any of those organizations now, and keep doing it, and get others to do it.

Cost-Effective

A dollar donated to an effort like this now is like a dollar donated again and again to each and every progressive issue campaign and candidate from now on, except that the dollar is amplified. This is because doing the work now makes elections and policy battles so much easier and less expensive.

Conservatives have developed a "brand" and their candidates and policy initiatives ride that brand like a surfer surfs a wave. They just hop on the wave and attach themselves or their issue. So much of the things we have to spend so much money on are already covered by their infrastructure of like-minded organizations, so for each candidate and policy initiative they have to spend so much less! ALL of their candidates are helped by the central branding effort.

Progressive-oriented candidates and policy initiatives start almost from scratch, and so it is tremendously expensive to get them elected or passed. We have to raise tremendous sums to do the things that conservatives have ready-to-go. And each of our candidates have to each raise that money, on their own, just to overcome the things conservatives already have in place - for all of them. One dollar spent on a core branding effort could have the same effect for all of our candidates and policy initiatives as the more-than-one-dollar spent for EACH candidate or policy initiative at election time to overcome it.

So help out, OK?

P.S. Here is a talk I gave on this subject in 2004, titled "On Our Own?" that talked about how the corporate right works between elections to market their ideology, and suggesting that we should try a similar outside-the-election-cycle approach.

Here is a talk I gave to an education organization in 2007 titled, "We're All In This Together" that described how the right uses the Overton Window to move public attitudes,

What can we, as supporters of public education, do about this?

The supporters of public education must join with their natural allies -- the trial lawyers and the environmentalists and reproductive rights organizations and others and begin to talk to the public with a COMMON message that says WE ARE ALL IN THIS TOGETHER because we are a COMMUNITY. Only after people come to understand and appreciate this philosophy of community again, will they begin to understand and appreciate the value of public schools.

... The Right pushes an ugly message that we are each on our own, out for ourselves to get what we can, in a dog-eat-dog world. But in truth, we are really ARE all in this together, not only as being on the receiving end of similar attacks, but also because we can work together to help each other. We can work to counter the Right’s message by restoring the public’s understanding and appreciation of COMMUNITY and the value of responsible government.

How can we do this?

As I’m sure you know, frame and message development and testing are complex and require skilled professionals. Messaging efforts on behalf of public education will have the greatest effect if linked to broad frames that are developed across sectors, frames that support the value of community and government. And the messaging that supports these values will be most effective if it is delivered by multiple voices, third-party voices that are not strongly identified with public education and other interest groups. It must be coordinated with a long-term strategy.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 5:38 PM | Comments (0) | Link Cosmos

August 25, 2012

What Did Mitt Learn At Bain?

Mitt Romney (or someone) writes (or writes for him) in Murdoch/Al-Waleed's Wall Street Journal, that lessons he learned at Bain Capital will help him turn the country around if he is elected President. Is he right?

In WSJ: Mitt Romney: What I Learned at Bain Capital, Romney writes about "job creators" who are "burdened by regulations." He writes about "today's anti-business environment."

In the piece, Romney uses a lot of "code words." For example, he writes that he will "give every family access to great schools and quality teachers." This is code for privatization, meaning he will help dismantle public schools and give people vouchers for private schools instead, just like his Medicare plan. He writes that he will, "make it easier for entrepreneurs and small businesses to get the investment dollars they need to grow, by reducing and simplifying taxes" meaning give even more tax cuts for the wealthy few, and "stemming the flood of new regulations" meaning getting democracy's pesky protections for people's health and safety and the environment out of the way.

Much of what Romney writes is, of course, great and impossible to argue with. Millions upon millions in corporate campaign cash give him access to the best persuasion messaging that focus groups and polling can come up with. He will tell you exactly what you want to hear. But what happens when you look deeper?

Finally, being Romney, he just lies, writing, "President Obama has piled on excessive regulations, proposed massive tax increases, added more than $5 trillion in federal debt, and failed to address the coming fiscal cliff—all of which is miring our nation in sluggish growth and high unemployment." It was the very Bush policies that Romney advocates returning to, that caused the financial collapse, recession, high unemployment and debt. Before Bush we had a great economy and we were paying off the debt.

Staples, For Example

In So DID Mitt Romney Really "Create Jobs" At Staples? I looked into the claim that Romney "created" 100,000 jobs by starting the company. What really happened was that Romney's company followed the Wal-Martization model, using the advantages that come with having large, national chains, putting a number of local, smaller businesses out of business, while shifting a lot of people into lower-paying jobs. From that post,

Staples grew into a major chain because they consolidated what different kinds of stores sold, offering a one-stop-shop for stationery products, office supplies, office-furniture, computers, etc. They also were able to be competitive because of the advantages of scale as they grew into a national chain, centralizing functions like accounting, purchasing, legal, marketing, etc. And never underestimate the power of having a ton of cash at your disposal. This is all just smart business, well executed.

As Staples grew it overtook competing chains like Businessland and others. In other words, Staples took business from other, existing stores -- often local retailers. Staples did not “create” jobs, it shifted office-supply jobs from local stores, etc., probably to lower-paying jobs. (The former owners of local businesses certainly were worse off from this.) They likely even lowered overall office-supply, stationery, etc. employment in the larger economy.

This is in many ways just smart business. But it is so important to understand that this is not in any way about creating wealth in ways that help all of us, building up industries and helping communities and the country and the larger economy. It is about taking advantage of various loopholes and innovations that allow a few to shift wealth from the many to themselves. "Shift" is the key word, there is a difference between creating wealth and shifting wealth.

"Good Business"

So what are the "good business" practices that Romney promises to extend to the entire country?

If you can manufacture at a lower cost in another country, closing the factory here, laying the people off, devestating the surrounding community, that is "good business."

If you can find ways to reduce staff and reduce the pay of the rest, that is "good business."

How do these"Romney job creator" jobs stack up against other jobs? Average Staples salaries for job postings nationwide are 51% lower than average salaries for all job postings. The pay at Staples appears to be around $8-10 an hour. That's $16-20,000 a year, certainly not enough to support a family, or even pay rent in many areas, never mind buying food. (The 2012 poverty guideline for family of four is $23,050.)

If you can find ways to scam the tax system to increase your own return on investment, that is "good business." Private-equity companies like Bain Capital borrow tremendous amounts using the assets of the acquired company as collateral, immediately passing much of the borrowed money to themselves. The interest payments are tax deductible. Also,

These giant companies even have the power to squeeze communities and even states, demanding tax concessions with the threat of relocation. This has put our tax base in a downward spiral along with our wages.

If you can find ways to put smaller, local businesses out of business, that is "good business."

As Staples grew it overtook competing chains like Businessland and others. In other words, Staples took business from other, existing stores -- often local retailers. Staples did not “create” jobs, it shifted office-supply jobs from local stores, etc., probably to lower-paying jobs. (The former owners of local businesses certainly were worse off from this.) They likely even lowered overall office-supply, stationery, etc. employment in the larger economy.


Please read the entire post, So DID Mitt Romney Really "Create Jobs" At Staples? to understand what Mitt Romney is promising to do to our economy.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 11:51 AM | Comments (0) | Link Cosmos

August 9, 2012

Star Trek, Deficits and Why Cutting Government Hurts We, the People!

Mitt Romney's bullet-point, detail-free, policy-free economic "plan" contains a section on cutting the deficit. What is Romney's approach, and what is the effect on our economy and our lives?

The Deficit "Crisis"

Any discussion of the deficit "crisis" should start with this:

1) January 26, 2000, Clinton to Propose Early Debt Payoff,

President Clinton said Tuesday that the budget he will send Congress on Feb. 7 will propose paying off the entire $3.6-trillion national debt by 2013--two years earlier than had been expected even a few months ago.

2) 2001 Alan Greenspan said we needed to pass the Bush tax cuts because we were paying off the debt too quickly.

3) Bush said it was "incredibly positive news" when the budget turned from surplus to deficit because budget deficits meant there would be pressure to cut entitlements. Bush wanted to continue the "strategic deficits" plan to "starve the beast" that was launched in the Reagan years.

We were paying off the debt, and then something changed, and now the deficits are enormous. A discussion of the borrowing ought to perhaps, maybe, possibly, understandably, reasonably begin with a look at the causes of the borrowing: tax cuts for the wealthy, huge increases in military spending, and the effects of the financial collapse and jobs emergency. Does Romney's? (Hint: it does the opposite.)

Romney's Deficit Plan

Mitt Romney’s Plan For A Stronger Middle Class is a short collection of bullet points, divided into 5 sections. On Cenk's show the other day, he was describing the plan, how it is just a few bullet points with no details, but underneath the bullet points it says "Click here for a bigger copy." So he clicked it and instead of more information, specifics and details it's the same few bullet points, just BIGGER. (By the way if you aren't watching Cenk's show, you're missing out, it is really good. If you have Cable or satellite TV, see if you get Current TV where you live by going here, entering your zip code at the top...)

Here is the deficit section of Mitt Romney’s Plan For A Stronger Middle Class,

• Immediately reduce non-security discretionary spending by five percent • Cap federal spending below twenty percent of the economy • Give states responsibility for programs that they can implement more effectively • Consolidate agencies and align compensation of federal workers with their private-sector counterparts

Reduce "non-security" means don't cut military, homeland security and similar spending. In fact, Romney has proposed to increase military spending.

Romney does not specify what to cut to reach the 5% figure. But he does elsewhere say he would accomplish this by passing the House budget proposal -- "the Ryan plan" -- which eliminates Medicare and cuts the "safety net."

Cap federal spending below twenty percent of the economy -- he means federal spending which by the way includes his military spending increases -- is about picking some arbitrary number regardless of the need for government to do certain things.

By tying spending to GDP this is a plan to cut government exactly when it is needed most -- when GDP falls. If GDP falls dramatically as it did after the financial crisis, "safety net," infrastructure investment and other programs would have to fall dramatically at the very time they are needed to help We, the People and the economy!

Give states responsibility for programs that they can implement more effectively: means getting programs off of the federal budget and letting states decide if they want to do them. Note that President Obama recently approved changes in "welfare" that opened up flexibility to the states, and the Romney campaign said the President was "gutting" welfare.

Consolidate agencies and align compensation of federal workers with their private-sector counterparts: means drive down pay and get rid of pensions and other benefits that government workers receive, because Wall Street (and private-equity firms like Romney's) have been able to drive down pay and eliminate pensions and benefit in the private sector,

Deficit Reduction After He Proposes Cutting Taxes?

Romney's "Championing Small Business" section of this same plan dramatically cuts taxes on the wealthy. It cuts tax rates another 20% on top of the Bush tax cuts (paid for by raising taxes, fees and costs on 98% of us). It cuts corporate taxes by a third. It eliminates corporate taxes on foreign earnings, encouraging corporations to move profit centers out of the country. It eliminates taxes on income received from having wealthy parents ("death tax"). It eliminates the alternative minimum tax that keeps the rich from using loopholes to avoid all taxes.

So it is important to note that Romney's promise to reduce deficits follows on the heels of his promise to dramatically increase deficits.

Shifting, Not Cutting

When government eliminates a program the need for the program doesn't go away. Either the need is left unaddressed -- a cost to those with the need -- or the cost of addressing that need is shifted from government onto individuals, on their own. This means that the cost to our larger economy is increased, but bearer of that cost is shifted.

One example of this cost-shifting is what happens if Medicare is cut or eliminated, as Republicans have proposed (and passed in the House.) The need for health care for seniors doesn't go away, but without Medicare the cost is shifted onto the seniors and their families, on their own -- as is the burden of locating and choosing coverage and care. And this means that the cost of that care increases. By shifting Medicare costs from government we are actually increasing medical costs in the larger economy, not eliminating those costs. (One study,"Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan," says cutting Medicare increases the actual cost sevenfold. This is because the government can negotiate bulk discounts, etc. that we cannot get on our own, and because seniors, on their own without our government handing this will be taken advantage of, especially when they are sick.)

Cutting government is not just shifting these costs onto each of us, the loss of government's bargaining power means that in the larger economy these costs are magnified, which hurts the economy. They are just shifted from taxpayers onto and at the expense of the larger economy. But why distinguish between taxpayers and the rest of the economy?

Cutting Government Means Cutting What WE Get From The System

In our system those who do the best from the economy pay more taxes back. Those taxes are then used to invest in education, science, health, infrastructure, security, courts and the rest of the things that set the stage for the economy to continue and grow. These are the things that are the soil in which businesses thrive, and some of the gains are then put back into that system through taxes. Those becoming wealthy today are doing so out of the soil that We, the People nurtured yesterday.

Prosperity is what grows out of that soil that nurtures our businesses. It was our mutual contribution as citizens in our democracy that nurtured that soil, and in a democracy we are supposed to see a mutual benefit from that prosperity. WE educated and got educated. WE worked and provided jobs. WE built roads and bridges. WE built the system that creates such great wealth that people can have private jets and many houses. We, the People, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, did ordain and establish this Constitution for the United States of America.

Since taxes come out of the benefits of our mutual prosperity -- in other words the wealthy pay more taxes because they get more from the economy -- and government is what We, the People get out of it, then cutting government means that a lesser share of that prosperity goes to We, the People, and an even greater share of that prosperity goes to to top few. In other words, those gaining wealth already get the benefits of society's gains, and then if we cut government they pay less back in taxes for those things that get cut. In other, other words, those things that We, the People do for each other through our government, like Medicare, education, parks, etc., are reduced, so We, the People are getting less back from our system, while those already benefitting from that system by becoming wealthy are paying less back into the system. That is what cutting government means.

This is the Romney plan for cutting deficits -- We get less so a wealthy few can have even more.

"These words were written for the Kohms as well!"

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 1:12 PM | Comments (2) | Link Cosmos

August 8, 2012

What Is The Calculation Behind Romney's Campaign Of Lies?

The Romney campaign has turned to a strategy of swamping the public with flat-out, blatant lies, one after another, again and again, endlessly and lavishly repeated. They do this because they are making a calculation that it will work! So what is going on? And can democracy survive this assault?

The Growing List Of Lies

This week's lie is the "Obama gutted welfare reform" nonsense. See Bill Scher's must-read response, Romney's Welfare Lie: A Betrayal Of Conservatism. The reporting conveys the Romney message, like this: Romney accuses Obama of dismantling welfare reform. The lie is driven home by a massive $$-driven carpet bombing of ads.

The next-most recent lie was the "Obama is trying to keep military families from voting" lie. This lie, repeated over and over, coordinated with outside groups, reinforces the "Democrats are anti-military" narrative.

Before that was the "You didn't build that" lie, where the Romney campaign doctored audio to make it sound as though President Obama said something he didn't say. (And got away with it.) This lie, repeated over and over, reinforces the "Democrats are anti-business" narrative.

This one on welfare reinforces the "Democrats take your money and give it to black people" narrative. "We will end a culture of dependency and restore a culture of good, hard work," said Romney, promising to make them work good and hard.

Rachel Maddow's blog has been keeping track of the Romney lies, and it is a loooooong list.

How It Is Done

Here is how it works. Each lie is developed in the right's machine, using something currently in the news to reinforce an ongoing narrative about "liberals." The lie percolates up through a well-worn process where the germ of the story is planted in smaller outlets, and variations of it are tried out until one seems to resonate. Next, larger right-wing media operations pick up the developed "story" and drive it further. It gets amplified on the radio, FOX News and the right's newspapers. Finally the corporate media takes it out to more and more people, covering themselves with the claim they are just "reporting" on a "story" that is "already out there."

One way or another the lie is repeated and repeated and repeated (and repeated) in various forms through various channels that reach various target groups, until it becomes a "truth." Once it has become a "truth" the Romney campaign uses this "truth" to claim Democrats and President Obama are harming the country.

The Solyndra story is a good example. The right developed a lie about "cronyism," claiming that a Democratic donor is "tied to" solar-panel manufacturer Solyndra because a foundation with his name on it was an investor in the company. Because a foundation was the investor there was no possibility for the donor to benefit. But that doesn't matter, they used this "tie" to spread a lie the Obama administration was steering money into someone's pocket, and they repeated it and repeated it and repeated it.

After months of repetition of this lie, the Romney campaign understood that the lie has become a "truth," and is using that "truth" themselves in campaign ads and Romney's stump speech! Romney talks about "cronyism" in the Obama administration, understanding that much of the public now believes this is established fact.

The Calculation

The Romney campaign is limiting media access to the candidate and offering little in the way of substantive policy proposals. They are instead using press releases, advertisements, message-trained surrogates, cooperative media like FOX, Drudge, talk radio, allied newspapers and the right's blogosphere, while coordinating with massively-funded outside groups like Crossroads GPS, Americans for Prosperity, Heritage Foundation and others.

This is a key thing to get, the Romney campaign believes that they can win this election using lies and propaganda as "truths" to drive their campaign story. They are making the calculation that the right's media machine has become sufficiently powerful for their version of reality to reach enough of the public, and that it is sticking in their minds as "truths!"

They are also making the calculation -- so far validated by the media response -- that there will be little if any pushback from "mainstream" media. They trust that the media will look the other way, report lies as "one side says X, the other says Y," tell the public "both sides do it," and say this is just par for the course.

But if there is media resistance, they are calculating that the right's own media power can override any pushback that might come. They might also believe they can turn media resistance to their advantage. Decades have been spent convincing their followers to see potentially objective information sources as "the liberal media," enemy of conservatism, and any pushback for lying could just increase support for their campaign.

So the Romney campaign, like the recent Bush administration, are conscious that they do not need to work with facts. Instead they believe they can "create truth" through the manipulation of perception. This is hardly new in Repubican circles. The phrase "reality-based community" came out of the previous Republican administration's calculations of what the public will and won't learn about. This famous quote from Faith, Certainty and the Presidency of George W. Bush by Ron Suskind, explains,

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."

What Does The Public "Know?"

If you are reading this you are likely very well-informed. You pay attention to the mainstream news, as well as read various progressive sources. But much of the public is not very well-informed, and faces the problem of not knowing what sources to trust. Subjected to a constant battering of corporate/conservative propaganda and disinformation, they are busy, and not ready or able to do the extensive research needed to make informed decisions.

Progressives and "liberals" try to solve this problem by trying to help people get informed. Conservatives, however, try to use it to their advantage, spreading self-serving misinformation.

The well-funded propagandists study and understand the shorthand methods people use to determine what to believe. This is the reason for the ongoing attacks on the credibility of what would normally be seen as trustworthy sources, like PBS, NPR and what the rest of what has been disparaged for decades as "the liberal media." This is also the reason for the establishment of so many corporate-funded conservative "institutes" and other academic and authoritative-sounding organizations that issue "studies" and "reports" that always echo the corporate-conservative positions.

The "mainstream" corporate media has also undergone a change over recent decades. Many outlets now see themselves as businesses with a product that has to appeal to "the market" to make money. They no longer see their mission to be informing the public so citizens have the information that is needed to function in a democracy, but instead as "maximizing shareholder return," by "driving traffic" and whatever else it takes to sell advertising. And many people working as "journalists" understand that advancing their own careers means not making waves by being perceived as "leftist" or "anti-business."

The Test

Steve Benen calls this a "test for the political world," writing,

How are we to respond to a campaign that deliberately deceives the public without shame? This lie about welfare policy comes on the heels of Romney's lie about voting rights in Ohio, which came on the heels of Romney's lies about the economy; which came on the heels of Romney's lies about health care; which came on the heels of Romney's lies about taxes.

The Republican nominee for president is working under the assumption that he can make transparently false claims, in writing and in campaign advertising, with impunity. Romney is convinced that there are no consequences for breathtaking dishonesty.

The test, then, comes down to a simple question: is he right?

This is a test for the political world, as well as a challenge to the viability of our democratic system. We can expect this to continue and accelerate until election day, driven by hundreds of millions of dollars from billionaires and their huge corporations. The question is, will enough of our misinformed public be tricked by the lies? If this succeeds, what kind of country will we become? What will be left?

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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July 30, 2012

Another New York Times Columnist Attack On Social Security And Medicare

The New York Times contains another elite-columnist attack on our Social Security and Medicare systems today. This time it's in the form of an op-ed by Bill Keller. Recently and regularly, New York Times columnists David Brooks and Tom Friedman have also gone after the things We, the People do for each other.

First, The Basics Of The Borrowing

Any discussion of our deficit/debt "crisis" must start with a few quick points about the history of the "crisis":

1) January 26, 2000, Clinton to Propose Early Debt Payoff,

President Clinton said Tuesday that the budget he will send Congress on Feb. 7 will propose paying off the entire $3.6-trillion national debt by 2013--two years earlier than had been expected even a few months ago.

2) 2001 Alan Greenspan said we needed to pass the Bush tax cuts because we were paying off the debt too quickly.

3) Bush said it was "incredibly positive news" when the budget turned from surplus to deficit because budget deficits meant there would be pressure to cut entitlements. Bush wanted to continue the "strategic deficits" plan to "starve the beast" that was launched in the Reagan years.

Republicans are following a decades-old shock-doctrine plan:


  • Use tax cuts and military spending increases to create terrible deficits that add up to massive debt,

  • Then use the resulting "debt crisis" to scare people (esp elites like Keller, Brooks and Friedman) into cutting democratic government and our ability to control the billionaires and their corporations.

But cutting government doesn't mean the costs go away, it means that we each have to bear those costs ourselves, on our own, without the help of the rest of us. This is really about cutting democracy so the very rich can be even very-richer.

The Attack

With that out of the way, let us now turn to the latest elite attack on entitlements -- those things We, the People are entitled to: the fruits of the prosperity that democracy brings us.

In a NY Times op-ed, The Entitled Generation, Bill Keller writes about the "bloat" of projected entitlement spending, blaming "baby boomers" for future budget shortfalls, because they will need to retire without living in absolute poverty, and get health care.

He writes that because budget cuts have us spending less than we should on infrastructure investment, therefore we should also spend less on Social Security, Medicare and Medicaid. "In 1962 ... [a]bout 32 cents of every federal dollar, excluding interest payments, was spent on investments, only 14 percent on entitlements. In the mid-70s the lines crossed. Today we spend less than 15 cents on investment and 46 cents on entitlements. "

Keller writes, "So the question is not whether entitlements have to be brought under control, but how. " (These greedy seniors don't understand that the situation has changed -- we have cut taxes for the very wealthy and increased our military spending to prevent the Soviet Union from invading. Who do they think they are?)

Finally, ignoring the People's Budget, the Budget For All, the Schakowsky Deficit Reduction Plan and all the other sensible budget plans that have been proposed by progressives, Keller writes, "At least the Republicans have a plan. The Democrats generally recoil from the subject of entitlements."

Keller praises "bipartisan authors of the Simpson-Bowles report" -- even though there was no "Simpson-Bowles report." The commission couldn't come to agreement and issued no report. As for the "bipartisan" Simpson and Bowles, he is referring to former Republican Senator Alan Simpson, and member of the Board of Directors of Morgan Stanley Erskine Bowles. (Please click the link.) ("Bipartisan" as used by elites like Keller apparently refers to even and odd numbered addresses on Wall Street -- the crowd that gets the money if our Social Security system is dismantled.)

Social Security

Our Social Security system is critical to human beings and our economy, just like hospitals, highways, schools and power plants. It is a core institution, used by everyone, and is absolutely vital in most people's lives. It is the foundation of our retirement security. It is our most basic protection for our families if we become disabled or die.

Dean Baker of the Center for Economic and Policy Research explains just how crucial our Social Security system is to the lives of so many of us, in Bill Keller Wants to Take Away Your Social Security and Is Either Too Ignorant or Dishonest to Acknowledge that He Is Not a Typical Baby Boomer,

Does Keller know that the typical near retiree has total wealth of $170,000. This includes everything in their 401(k), all their other financial assets and the equity in their homes. Another way to put this is that the typical near retiree (between the ages of 55-64) could take all their wealth and pay off their mortgage. After that they would be entirely dependent on their Social Security to cover all their living costs.

In other words, half of near-retirees have less than that so they depend on Social Security even more than that.

We built and paid for our Social Security system. Each generation has done its part to maintain the system's foundations for over 75 years, and it has only become stronger. If the middle class can’t count on Social Security in their retirement years, what can it count on?

Social Security is a far safer bet than any other retirement savings available. It is vastly safer than a 401K, which is available only to a few anyway, and can disappear overnight. Corporate raiders can take your pension plan. You can't even count on a pension plan if you are a public employee. House prices can go up or down. But Social Security is always there for us. Even the most sophisticated investors can lose everything, but you can't lose your Social Security. Social Security is the one retirement system that really works.

Social Security is the most successful government program, and that is why so many elites hate it!

Medicare And Medicaid

A government budget cut is really like a huge tax increase on regular people because it increases what each of us pays for the things government does -- or forces us to go without. This is because cuts in government spending don’t actually cut the cost of things, they just shift those costs onto each of us on our own.

For example, if you cut the the government's Medicare or Medicaid budget our health problems don’t disappear, but each of us has to find ways to pay the cost of medical care or a nursing home on our own, with no help, often at a time when we are stressed by illness.

In Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan the Center for Economic and Policy Research (CEPR) explains what happens to the cost of health care if Medicare is eliminated. Summary: it shifts the costs to us, except each of us ends up paying seven times as much as the same care costs under Medicare. This is because Medicare covers millions, and that economy-of-scale means the government can negotiate bulk discounts, etc. that we cannot get on our own. From the CEPR explanation:

[The Republican] plan to revamp Medicare has been described as shifting costs from the government to beneficiaries. A new report from the Center for Economic and Policy Research (CEPR), however, shows that the [Republican] proposal will increase health care costs for seniors by more than seven dollars for every dollar it saves the government, a point missing from much of the debate over the plan.

... In addition to comparing the costs of Medicare to the government under the current system and under the [Republican] plan, the authors also show the effects of raising the age of Medicare eligibility. The paper also demonstrates that while [the Republican plan] shifts $4.9 trillion in health care costs from the government to Medicare beneficiaries, this number is dwarfed by a $34 trillion increase in overall costs to beneficiaries that is projected ...

Our health problems won’t disappear just because government cuts out Medicare and Medicaid. But the costs of treating – or not treating – those health problems will now fall on us, individually, on our own, instead of aggregated through the mechanism of democracy. And that is money that would otherwise be spent elsewhere in the economy.

The Money

So where do we get the money to pay our bills, if not from the things We, the People do for each other? Get the money from where the money went.

Start by ending the Bush tax cuts! The Bush tax cuts not only cut marginal tax rates for the wealthy, they cut taxes on capital gains and dividends -- money you get just for having money. And it dramatically cut the tax on income inherited from wealthy parents -- more money that one gets just because one already has money! But ending the Bush tax cuts is just a start.

Reagan dramatically increased the military budget: In 1980, before Reagan, the Defense Department budget was $134 billion, by 1989 it was $303 billion. But that was nothing. In 2000, before 'W' Bush, it was $294 billion. By 2008 it was $616 billion. But that doesn't count military-related items outside of the Defense Department. Depending on how interest debt is applied, total military spending is between $1 and $1.4 trillion. (And, by the way, wars are expensive.) ("Nothing is more important in the face of a war than cutting taxes." –Tom DeLay)

Fix health care. Today Mitt Romney praised the way that Israel's socialized health care system keeps costs low. WaPo: Romney praises health care in Israel, where ‘strong government influence’ has driven down costs,

He praised Israel for spending just 8 percent of its GDP on health care and still remaining a “pretty healthy nation.”

“Our gap with Israel [on health spending] is 10 points of GDP,” Romney said. “We have to find ways, not just to provide health care to more people, but to find ways to fund and manage our health care costs.”

... Israel created a national health care system in 1995, largely funded through payroll and general tax revenue. The government provides all citizens with health insurance: They get to pick from one of four competing, nonprofit plans. Those insurance plans have to accept all customers—including people with pre-existing conditions—and provide residents with a broad set of government-mandated benefits.

Get the economy moving again. Jeeze, instead of saying because we stopped investing in infrastructure therefore we need to cut other things, how about investing in infrastructure? We have millions of jobs that need to ing and millions of people looking for jobs. And we can finance it for free. The payoff will be enormous, all those people no longer needing unemployment and food stamps, all those people and construction companies paying taxes again, and the resulting economic growth cutting the debt-to-GDP ratio.

Don't Be Fooled By Elites Hating On Entitlements

Don't be fooled: this is really about shifting from democracy to a system where we are on our own, up against the wealthy and powerful. This is about shifting from a system where we can all be prosperous to a system where a few have all the wealth and power.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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July 23, 2012

Is It Moral And Ethical To Have $250 Million?

Question for discussion. Is it moral and ethical to have $250 million?

This is so much more than anyone needs, for anything. What's the point?

Posted by Dave Johnson at 4:35 PM | Comments (0) | Link Cosmos

July 3, 2012

Why Romney Won't Release More Tax Returns

Ah, so we're starting to find out why Romney won't release any older tax returns... Investigation: Mitt Romney’s Offshore Accounts, Tax Loopholes, and Mysterious I.R.A. | Vanity Fair

Maybe even some illegal activity!

Posted by Dave Johnson at 7:31 AM | Comments (0) | Link Cosmos

June 28, 2012

Pension Gimmicks Blamed On Workers

The student loan deal is badly needed. It should have just been extended - duh! But the 1 percenters took it hostage and demanded their pound of flesh before We, the People can preserve even this little bit of what we do for ourselves. So as part of the "sweetener" for those 1 percenters there is a corporate pension giveaway in the deal that has nothing to do with student loans. It appears they are going to let companies underfund pensions -- money that should be set aside for worker pensions tomorrow will instead go into 1 percenter pockets today -- and are setting up for a taxpayer bailout (or just stiffing retirees) later.

Pension Calculations Are Tricky But Regulated

This is kind of tricky, so bear with me. When companies (and governments) put money into pension funds they have to calculate how much will be needed to pay the promised pensions. This involves estimating things like how long (and how many) people will live, and how much "return" (interest, stock price increases,dividends...) to expect as the money is set aside. Key point: If you expect a too-high rate of return you can set less aside now (and put it in your pocket,) but when the time comes to pay the pensions you won't have enough.

This is supervised by government standards and regulations. They say how much of a rate of return is allowed to be used in these calculations. A higher expected-rate-of-return allowance means less has to be set aside, so more money can go into 1 percenter pockets. So there is a lot of pressure from corporations to let them get away with overestimating, and therefore putting more in their pockets today. Since this is complex, it is easier to get away with diverting promised-worker-retirement money into 1 percenter pockets.

This student loan deal apparently lets corporations claim a higher expected rate of return, thereby diverting more money today into 1 percenter pockets.

Money Into Worker Pensions Or 1 Percenter Pockets?

For a long time the government has been allowing pension funds to use a too-high estimated rate of return, with the result that many pensions are now underfunded. Money that should have gone into savings to pay worker pensions was diverted into 1 percenter pockets, either through improved corporate bottom lines in the case of companies, or through lower taxes in the case of state & local governments. (Of course, many companies shifted worker-pension promises into 1 percenter pockets using the 401K scam -- you fund your own retirement, on your own, with little help, and have to know how long you'll live, and it turns out badly every time -- but that's for another post.)

In fact, this worker-set-asides-for-later vs 1 percenter-pockets-today issue is similar to what happened with the Social Security Trust Fund. Money from workers was set aside into the fund but was used to pay for tax cuts (and massive military increases). Now 1 percenters are demanding austerity -- cutbacks in the things We, the People do for each other -- instead of workers getting the money back from where the money went, namely the 1 percenters.

And since this is about money for worker retirees, and retired workers don't have big, influential PR firms while 1 percenters do, it is convenient and easy to blame workers when the promised money isn't there for their retirement.

The Much-Hyped Public-Employee Pension Crisis

The supposed public-employee pensions crisis is partly the result of state and local governments not setting aside enough money to pay up on pension promises (because of tax cuts). It is also partly caused by Wall Street scamming on those same governments as they got into riskier investments trying to get a high enough rate of return to make good on their pension promises. But the blame is being placed on the workers themselves.

The post Discover The Network Out To Crush Our Public Workers traced just a few of the corporate-conservative think tanks (really just PR firms) promoting the idea that public-employee unions are responsible for pension shortfalls. Almost all of these organizations traced back to Wall Street firms and individuals for their governance or funding. They are engaged in a campaign to divert attention and blame the workers themselves for pension shortfalls,

These corporate/conservative organizations are very good at manipulating the media and public opinion -- it is their purpose. Their "experts" are well paid and always available to talk to reporters, appear on TV and radio shows and write articles and opinion pieces for newspapers, blogs and for their network of similar organizations. Their "reports' and "studies" reach the conclusions that fit the strategy, and are crafted to sound just right. And there are so many of them! The result is development of "conventional wisdom" about what is going on in our society. This is why that conventional wisdom more and more reflects the corporate/conservative line. And right now the corporate conservative line is that we should think that public employees and their unions are responsible for state and local budget shortfalls.

See also Understanding The Attacks On Public Employees, Ten Holiday Attacks On Public Employees and Are Public Employee Unions Strangling Us? Also, Rick Smith And Dave Johnson Counter The Attack On Public Employees.

Others See It, Too

NY Times Editorial, The Deal on Student Loans,

The pension provision is not ideal. It could mean that more companies will underfinance their pension liabilities, shortchanging employees down the road. Lawmakers have tried to address that potential shortfall by strengthening the agency that insures private pensions with more money from higher premiums.

Thus from the Competitive Enterprise Institute, usually a most unreliable source. (The check from the big corps who want to underfund pensions must have been late.) In this case it is the same gimmick but added the the highway bill...: Threat of Pension Fund Bailouts Lurks in Senate Highway Bill, "Pension Smoothing" a License to Make Up Numbers,

The bill ... would amend the Employment Retirement Income Security Act (ERISA) to allow for an accounting gimmick known as “pension smoothing,” whereby pension managers spread losses out over several years, while overestimating projected investment returns.

Specifically, this provision would expand the range of allowable projection figures, starting this year at a 20 percentage point range, to 60 percentage points after 2015. This is essentially a license to make up numbers for income projections four years out from now. ...

"This accounting trick will likely expose taxpayers to potential pension fund bailouts in the future. " ...

"It would further remove pension investment return projections even further from reality, by expanding the range of allowable projections so broadly as to render them meaningless."


Making Things Worse

To get a deal that keeps student-loan interest rates low enough for more people to afford to go to college, we had to pay off the 1 percenters with this "pension-smoothing" deal. Such is the way of Washington since we shifted from a democracy (rule by the people, for the people) to a plutocracy (rule by the rich, for the rich). Or, in this case a 1 percenter kleptocracy (rule by the rich, stealing from everyone).

But make no mistake, this deal makes the country's future pension problems even worse. It diverts even more money from promised pensions into 1 percenter pockets. The result will be clear in 10, 20 or 30 years when people are retiring and the money isn't there. Taxpayers will be asked for ever more "austerity" to cover money that was diverted to the 1%.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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June 27, 2012

Here Is Why Our Elites Are Not Fixing The Economy

When we had democracy, We, the People made the rules and we ran our country and our economy for our benefit. Now that we are a plutocracy things are different. The reason our elites are not doing anything to fix the economy is because from their viewpoint, things are just fine.

Merriam-Webster:

plu·toc·ra·cy noun \plü-ˈtä-krə-sē\

1: government by the wealthy

2: a controlling class of the wealthy

Our political leaders dance with the ones that bring them. Increasingly they are dancing with the billionaires and their giant corporations.

Our politicians are doing and saying increasingly incomprehensible things. The separation from regular people is unbelievable. But in politics you "dance with the one that brung ya," and these things become comprehensible and believable when you look at who is bringing them to the dance.

Our Benefit

In a democracy a successful business is the result of our investment in infrastructure, education, and a system that enables our businesses to thrive. A business can't deliver products except over the roads or ports or the Internet our government built. Our police and firefighters protect our businesses. Our schools and universities train and educate the inventors and managers and line workers. Our scientific research brings about the innovation that leads to new technologies and products.

"Entitlements" are the things We, the People are entitled to as citizens of a democracy. Those who do well as a result of our investment in our system pay back through taxes, good jobs and great products. When we were a democracy we were entitled to a minimal level of retirement, and health care, education, protection if we lost our jobs, protection of our environment, protection from corporate fraud, and other things that are now disappearing.

Now that democracy is gone, a wealthy few are living off our past investment, and cutting back on the things we used to do for each other.

Why All The Cuts, No Jobs?

Here is the reason that our leaders are cutting back on the things our country does for We, the People, and are not working very hard to do anything about the high unemployment and economic troubles most of us are feeling:

2010: Corporate Profits Were the Highest on Record Last Quarter

2011: Corporate Profits At All-Time High As Recovery Stumbles

2012: Corporate Profits Just Hit An All-Time High, Wages Just Hit An All-Time Low

2012: Bank CEO pay rises. Corporate profit margins rise. Worker wages, not so much.

2012: Richest 1 Percent Account For Nearly All Of U.S. Recovery's Gains: Report

The billionaires and their giant corporations are doing just fine, thank you.

The reason our leaders are not doing anything to fix the economy is because, from the viewpoint of our real leaders, the economy is working just fine.

Golden Oldie

A golden oldie (updated a bit): Democracy Or Plutocracy? A Chart

DEMOCRACYPLUTOCRACY
We, the PeopleWealthy Few
One Person One VoteOne Dollar One Vote
MajoritiesMarkets
GovernmentLimited Government
MajoritySupermajority
BudgetsBudget Cuts
Taxes on the WealthyTax Cuts for the Wealthy
InformationPropaganda
Public SchoolsPrivate Schools
EducationTraining
Studying the arts, literature, history, philosophy, etc.Mocking people for studying the arts, literature, history, philosophy, etc.
Jobs programsBank Bailouts
WelfareWarfare
Express Lanes for 2 or More PeopleExpress Lanes for 2 or More Dollars
Security Lines at AirportsSpecial First-Class Security Lanes at Airports
Public InvestmentPrivate Investment
Public TransportationPrivate Jets
AccountabilityImpunity
Rule Of LawAbove The Law
JusticeJust Us
TransparencySecrecy
Sustainable growthPolluter Growth
Medicare-For-AllHealthcare For Profit
Clean ElectionsRigged Elections
Savings AccountsOffshore Accounts
Credit Card DebtCredit Default Swaps
Union membersSerfs
LayoffsPayoffs
HomiesCronies
GrassrootsAstroturf
Pensions401Ks
Honest BrokersSelf-Interest
Free WillAt Will
CitizenConsumer
CitizenEmployee
Participant Observer
ActorActed On
DoerDone To
Healthy CommunitiesGated Communities
Bedford FallsPottersville
George BailyHenry F. Potter
SavingsDebt
America the BeautifulAmerica the Profitable
The ManyThe Rich
PeopleCogs
HumanityEfficiency

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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June 22, 2012

Romney, Jobs And China -- Let's Connect Dots

Will Mitt Romney create jobs and help our economy, or will he just take us back to the Bush-era, send-jobs-to-China destruction that made him rich? With Romney there is no way to connect what he says with what he means or might do. So we are forced to read tea leaves and look for signs. Should be reading Chinese tea leaves?

The Fire Sale Of Our Economy

Mitt Romney made his huge fortune partly by taking over companies, sending the good-paying American jobs to places like China -- or using the threat to do that to force wage and benefit cuts -- and keeping that money for himself and his business partners. A Washington Post story says that Romney's company not only took advantage of this technique, but actually helped pioneer the technique!

While Romney and those like him became enormously wealthy from this since-Reagan fire-sale of American factories, companies, industries and technologies, our economy suffered terribly. Working people's wages stagnated and people turned to credit cards and borrowing on their homes just to get by. Evenually the economy collapsed.

The Romneys and Wall Street 1%er types did very well from this destruction of our economy and our capacity to earn a living, as they have been doing since the collapse. China has also done very well by this. And they are all trying to keep things that way.

Connecting Dots

Dot: Under Bush we lost 50,000+ factories and 1/3 of our manufacturing jobs. Non-manufacturing was also hit hard with outsourcing of jobs to other countries. Companies then used the threat to move other jobs to force wage and benefit cuts here. "If you don't agree to this we'll just move your job, too."

Dot: Since the "recovery" began the richest 1% received 93% of the economic gains. It's all going to the top -- to the Romneys among us.

Dot: Washington Post: Romney’s Bain Capital invested in companies that moved jobs overseas. Note that Romney's company "pioneered" the practice. They didn't just do it, they "pioneered" it,

Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components...

Dot: The Supreme Court's "Citizens United" decision allows unlimited secret money to influence our elections. Secret, as in we don't even know what country the money comes from, never mind what companies or billionaires.

Dot: Huge amounts, from the 1%ers, all coordinated: Romney plans posh weekend donor retreat featuring Rove and VP hopefuls,

The presumptive Republican nominee and his senior advisers and aides are hosting two days of policy sessions and campaign strategy discussions at the Deer Valley resort for more than 100 top fundraisers and their spouses. Those who raised more than $100,000 are expected to attend. ... Rove’s appearance could raise questions because of laws barring any coordination between super PACs and campaigns. ...

Dot: One source (of many) of this flood of money has been disclosed. Casino billionaire Sheldon Adelson, has already given $10 million to Romney's campaign, promises a "limitless" amount -- $100 million or more. (He has $25 billion, largely thanks to China.) There are also allegations of corruption, bribery and violations of US law in the operation of these Chinese-licensed casinos.

Dot: Adelson's exclusive Chinese-granted casino license is worth billions, and he has used his influence with Republicans in Congress to help China. Adelson influenced Republicans to help China get the Beijing Olympics and then received the license to build casinos in Chinese territory. From the New Yorker, The Brass Ring: A multibillionaire’s relentless quest for global influence,

In July, 2001, Adelson met with a Vice-Premier of China, Qian Qichen ... [and] met with the mayor of Beijing, who asked Adelson for help with a matter pending in the U.S. House of Representatives, which he believed was threatening China’s chance to host the Olympics.

Adelson ... immediately made calls on his cell phone to Republican friends in Congress—including Tom DeLay, then the majority whip—who had received generous support from Adelson. DeLay told him that there was indeed a resolution pending ...opposing China’s Olympic bid, saying, “China’s abominable human rights record violates the spirit of the games and should disqualify Beijing from consideration.” ... Three days later, the International Olympics Committee voted in China’s favor. [Adelson received the casino license soon after, in early 2002 - dj]

[...] In May, 2004, the first gamblers entered the Sands Macao. Its construction costs were two hundred and sixty-five million dollars, and Adelson made back his initial investment in a year. In December, 2004, Adelson took Las Vegas Sands public (according to Forbes, he owns sixty-nine per cent of the stock) and became a multibillionaire, overnight.

Adelson used his influence with the Republicans in Congress to help China get the Olympics, and then got a casino license worth billions to him. What else has he helped or will he help China get?

Dot: McCain: Adelson funding Romney Super PAC with 'foreign money'.

Senator and Romney presidential campaign surrogate John McCain (R-AZ) said Thursday that casino magnate Sheldon Adelson is indirectly injecting millions of dollars in Chinese "foreign money" into Mitt Romney's presidential election effort.

Owing China

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair.

When China offers you a path to make a huge fortune, you start to have a hard time understanding how this can hurt your own country. As I said last week in Why Can't Apple Make Your IPhone In America?,

China offers our business leaders an amazing deal – a deal that they can’t refuse. The owners and managers of our companies get really, really rich if they play along with China. Nerver mind if the companies go away later, they’re rich.

... In fact, China has essentially recruited our own business leaders to fight against our own government.

Romney's Bain Capital, and so many others, have made fortunes from offshoring our jobs, factories, industries, technologies and our economy. Fortunes. And now they are applying those China-made fortunes to our election process.

How Much Of Romney's Campaign Money Comes From Or Depends On China?

So we know about one source of secret money funding Romney's campaign, and this source is directly obliged to China for much of his multi-billion fortune, and has influenced our government on China's behalf in the past. But we don't know anything about much of the rest of the money that is being spent on the flood of negative ads and other persuasion and election efforts.

How many of Romney's other funding sources are dependent on China for their fortunes, directly or indirectly? And how much will this lead them to have trouble understanding how shipping jobs and factories and industries to China hurts our country?

The question is out there, and really should be answered before the election. How much of Romney's huge, secret, campaign war chest comes directly or indirectly from China? And beyond China, where else is Romney's campaign money coming from?

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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May 31, 2012

Watch Reporter Manhandled For Trying To Ask Question Of Powerful CEO At Public Event

Mike Elk, of In These Times, attempted to ask Honeywell CEO David Cote a question, at a Capitol Hill event. Watch what happens.

More from Republic Report: Video: On Capitol Hill, Reporter Attacked For Daring To Ask A Question To A Powerful CEO,


Republic Report attended a conference for “entrepreneurs” and small businesses today on Capitol Hill hosted by Congressman Tim Scott (R-SC). Although it was advertised as a lively discussion about economic policy, we witnessed the only staffers violently grabbing the mic from the only reporter who asked a critical question during the forum.
Mike Elk, a journalist for In These Times magazine, was called on during the question and answer portion of a morning panel to ask David Cote, the CEO of Honeywell, about his efforts to bust labor unions at a Honeywell-owned uranium plant. Elk asked Cote, who earlier in the event boasted about his company’s profit margins, about his labor practices and the recent news that a poorly trained worker used to replaced Honeywell’s organized workforce had allowed a release of radioactive gas. But before he could finish his question, a man in a suit working for the event repeatedly grabbed the microphone away from Elk.

Please read the rest at Republic Report. This is what happens when the wealthy plutocrats come to believe they are in charge, and are not answerable to We, the People or our press.

Note - Mike Elk has written for Campaign for America's Future.

Posted by Dave Johnson at 5:32 PM | Comments (0) | Link Cosmos

May 2, 2012

99% Spring Movement To Protest Corporate Greed At Verizon Shareholder Meeting In Huntsville Thursday

The Take Back the American Dream conference -- the summit for the 99% -- is taking place June 18-20 in Washington, DC. Click here to register.

Big companies like Verizon use threats of layoffs to force their workers to take pay and benefit cuts, and use the money to pay huge amounts to their executives. This is why the middle class is being "hollowed out." So the 99% Spring movement will be protesting outside of Verizon's shareholder meeting in Huntsville, Alabama on Thursday. I'll be there, joining the Communications Workers of America, Jobs with Justice and other groups.

Verizon (member of ALEC) is a tremendously wealthy company. CEO Lowell McAdam's gets a $23.1 million compensation package - triple the $7.2 million he received the year before.

Verizon, between 2008-2010:


  • $21.5 billion in pre-tax U.S. profits.
  • Verizon’s taxes paid: $1 billion REFUND.
  • Verizon’s six top executives were paid $210 million.
  • Verizon productivity increase: $150,000 per worker.
  • Jobs eliminated in the same period: 40,000.

But the company is trying to take away pay and benefits from its workers -- demanding givebacks of $20,000 per worker per year in contract negotiations. In June, 2011 contract negotiations began for 45,000 workers represented by Communications Workers of America (CWA) and the International Brotherhood of Electrical
Workers (IBEW). According to CWA, Verizon made excessive, retrogressive demands that would cost each union represented employee $20,000 a year, slashing healthcare benefits; increasing the costs for active employees and retirees; eliminating pensions for new employees and freezing pensions for current employees.

So the workers are trying to fight back. This is why the 99% Spring movement is coming to Huntsville Thursday - like it came to the GE shareholder meeting last week.

Again and again companies are coming to their workers and saying they have to take pay cuts and benefit cuts or lose their jobs. These companies threaten to move jobs to other countries or just lay people off and make the remaining workers do their jobs, and then when they have forced the workers to give in the executives get huge raises. Note that Mitt Romney didn't patent this method. This was how he got rich, but he's not the only one who has been doing it.

Let's see if we can make our voices heard!

Click here to read the 99 Spring/Challenging Corporate Power action tool kit about VeriGreedy.

PHere are some of the posts I have written about Verizon and its workers:


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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April 26, 2012

Why Does It Seem Everything Republicans Say And Do Is A Trick Or Lie?

In today's Progressive Breakfast: Republicans say student-loan interest rates are high because of "Obamacare." House Republicans are trying to block the Violence Against Women act, using a ruse. They oppose the Dream Act and offer a false compromise to make it look like they support the concept. And that's just from today's news.

Why is there so much deception, propaganda, misdirection, distraction and general subterfuge coming from Republicans? Maybe its because they understand what We, the People would do if we understood their real agenda.

Some Of The Most Repeated Deceptions

Here are a few of the most-repeated deceptions that corporate conservatives and Republicans indoctrinate,m saturate and bombard us with:

Tax cuts increase revenue? This one has been around for a long time, and is completely false. Republican tax cuts have always caused deficits. This is the point, the plan, to force the government into debt and then claim we need to cut the things democracy does for citizens. This is why Bush said that it was "incredibly positive news" when his first budget took the country from a huge surplus to a huge deficit. (Yes, that is in quotation marks because it is a quote)

Obama tripled the deficit? (Bush's last budget had a whopping $1.4 trillion deficit - Republicans -- Fox, etc. -- tell people this was Obama's.) (Please click through.)

Obama made the recession worse? Mitt Romney has been repeating this one. These Three Charts To Email To Your Right-Wing Brother-In-Law show clearly how Obama's policies stopped the downward spiral where we were losing hundreds of thousands of jobs a month and and brought us back to (not nearly enough) job-creation.

A Long, Long List

How long would this list be? How many lies and deceptions can you think of, even just off the top of your head? Actually you'd go crazy trying to gather examples of all the deceptive propaganda we are subjected to on a daily, hourly, even minute-by-minute basis.

They are very good at it. They can afford to pay professionals to come up with stuff that really twists people's thinking. They can afford the best pollsters and focus groups to help come up with the best-sounding phrases that resonate with people's core understandings of things. And they can afford the constant repetition that actually forms people's core understanding of things to begin with.

What's a few hundred million spent on creating and disseminating deceptive propaganda, when you get back billions upon billions through tax breaks, wage cuts, offshoring jobs, gutting pension funds, privatizing public assets, killing efforts to get us off of oil and coal, and the rest of the plutocrat 1% agenda?

Why The Lies?

Why are they using deception, distraction, misdirection instead of honest, open, transparent, fact-based ? Why are we constantly bombarded with this nonsense? There is a simple answer: Republican policies are designed to help the 1% at the expense of the 99%. It takes a lot of effort to talk a blue-collar worker into accepting wage cuts and giving up a pension so the 1%'ers can buy a yacht and a private jet.

Please click through the links in this post.

PS: you can sign up to get Progressive Breakfast every morning by clicking here.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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April 24, 2012

1% Vs 99% Battle Comes To GE Detroit Shareholder Meeting Tomorrow

I'm in Michigan to cover the GE shareholder meeting tomorrow. I grew up in Michigan and have to say that Mitt Romney was exactly right that the trees here really are the right size. The look of the houses, the layout of the roads, the birds, everything feels right. Of course, my wife grew up in England, and she says that the trees in England are the right size. (She also says the beer there is better -- and she's right.)

I grew up in Michigan. My family was in Michigan because my grandfather worked in what is now called "Carriage Town" in Flint in the days of Dort and Durant and Nash and the rest of the early auto company industrialists. (No he didn't get stock.) He fought in the first world war, and considered himself an American. Later he was an executive at different companies, living outside of Detroit. In WWII he and a number of other auto company executives went to work in Washington for $1 a year, because they felt it was their patriotic duty. Later, when Eisenhower was President he went to work in the government, and considered it public service.

My grandfather was a proud Republican, and even spoke at Rotary Club events. He worked under and was a friend of Mitt's dad George, another auto executive. I found a speech online where he said he felt that big corporations should be taxed more to incentivize formation and competition of smaller, innovative companies and said they they create more jobs. I know he agreed that we need a high top tax rate (it was over 90% when he was in the Eisenhower administration), that the revenue should be used to invest in infrastructure because it is the soil in which businesses grow and prosper. He believed in his country and in investing in this country and in the importance of making things in America.

"Bean-Counters" Take Over, Sacrifice Long-Term

Later on the auto companies went in a different direction. Bob Lutz, former vice-Chair of GM is a "car guy" and a conservative. In his recent book Car Guys vs. Bean Counters: The Battle for the Soul of American Business Lutz wrote about how the MBA and finance types took over management from the "gar guys" and didn't care about design, product quality, customer satisfaction -- only about money, and really only short-term money even if it meant sacrificing the company in the long term.

The "bean counters" took over more than just the car companies, they took over company after company, industry after industry. And they sacrificed more than just their companies to short-term profits. When they closed factories, as documented in Michael Moore's Roger & Me, the community of Flint, Michigan was devastated when GM closed car factories there. This was back 1989 and presaged the tsunami that was coming. As I wrote about in 2010, the movement of more and more manufacturing out of the country wiped out the midwest and other regions, and the resulting loss of jobs and wages combined with the huge trade deficit helped lead to the financial crisis and current "jobless recovery."

On My Way To Detroit

I stayed in Flint last night and am writing this from a coffee ship in downtown Pontiac on the way to Detroit. I mentioned "carriage town" in Flint - the little area which incubated much of our automotive industry and with it the Midwest's manufacturing prosperity. Today the area is neglected. The original buildings at least have historical markers, but the area is relatively deserted, several houses in the area are boarded up, with vacant lots where the city has cleared derelicts. The roads are not in good shape, there are many empty storefronts, roadside businesses, offices and manufacturing facilities. The city has lost and is losing population, and has been taken over by Michigan's anti-democracy "emergency manager" law. ("If you people won't sell off your assets to private interests, cut public employee pay and pensions, cut back on the things democracy does for citizens, etc., and other "reforms" that enrich the 1%, then we'll just take over and make it happen and you don't get a say.)

Downtown Pontiac is one more of so many examples of the devastation of our country's communities by the short-term-profit, long-term-collapse mentality of America's ruling elites. We drove by closed factories, boarded-up stores and houses, and sit in a little coffee shop - one of the few remaining businesses in the "downtown."

GE Shareholder Meeting Tomorrow -- 1% vs 99%

The 1% vs 99% clash comes to Detroit tomorrow. The GE shareholder meeting takes place in that city tomorrow, and while it is going on inside, outside people will be making their voices heard with nonviolent protests. GE brings to light the the battle between short-term-gain-for-a-few vs long-term health of the communities and economy of the rest of us.

GE has made billions in profits, but paid zero federal income taxes from 2008 to 2010. Over the last ten years, GE’s effective tax rate has been 2.3%. In 2010 alone, the top five GE executives received $75.9 million. Just five people. Over the last three years, GE's executives collected $234 million.

Since 2008, GE has spent more on DC lobbyists than it paid in taxes. GE spent $84.35 million on lobbyists from 2008-2010.

The cause of our terrible economic inequality is clear: the 1% have too much power, and use that power to enrich themselves at the expense of the rest of us -- the 99%. Since 2008, at least thirty big American corporations reported big profits and paid their CEOs excessively while laying off workers and spending more on Washington lobbyists than they paid in taxes. In fact, 100 of the Fortune 500’s most profitable companies received average tax refunds of 2%.

Tomorrow in Detroit, people are taking it straight to the top of GE.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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April 19, 2012

MUST-WATCH! Reich Connects The Dots

From Robert Reich's Blog:

1. For three decades the American economy has been growing, but almost all the gains from that growth have been going to the very top.

2. All the income and wealth at the top has translated into political power.

3. This political power has been used to reduce taxes on the top and get corporate welfare for big businesses.

4. Because so much income and wealth have gone to the top the vast middle class no longer has the purchasing power to keep the economy going.

5. Because most people’s wages have gone nowhere, and tax rates on top earners have dropped, tax revenues to fund government have plummeted.

6. Fewer jobs, lousy wages, and deteriorating public services put average working Americans in competition with other workers.

Posted by Dave Johnson at 11:11 AM | Comments (1) | Link Cosmos

April 17, 2012

Corporations Supporting ALEC Are Risking Damage To Their Brands

Some companies are learning that supporting hyper-partisan groups can backfire when their customers find out about it. In recent weeks a number of companies are trying to distance themselves from the partisan, right-wing group ALEC before their brands become as damaged as Susan G. Komen for the Cure®.

ALEC, The American Legislative Exchange Council, is a shady, hyper-partisan, state-based lobbying group that was able to wield power by staying under the radar. Recently the Trayvon Martin shooting case exposed how ALEC helped push through a dangerous "shoot first" law in Florida. Now people are learning that ALEC is also getting state laws passed that limit the voting rights of minorities, limit the power of working people to negotiate for better wages and limit the power of citizens to fight for cleaner environment. So now the big corporations supporting ALEC risk being seen as fighting people's efforts to have a better life, and their brands are at risk.

(Please visit Alex Exposed for more information. See alsoAtlantic: Exposing ALEC: How Conservative-Backed State Laws Are All Connected)

Komen Foundation's Serious Brand Damage

A few months ago, in a move to please the conservative right, the Susan G. Komen for the Cure® foundation pulled funding from Planned Parenthood. How'd that work out for them? Komen’s "brand equity" dropped 21 percent, one of the most dramatic plummets in brand-equity ever.

How far a drop was this? Komen was ranked among the top two. This year it ranked No. 56. That's a drop of 54 spots. The value of the Komen brand is ruined. The Komen executives behind the Planned Parenthood decision were forced out.

Harris Interactive: Scandal Rocks America's Support for Susan G. Komen for the Cure®, According to 23rd Annual Harris Poll EquiTrend® Study,

Based on findings reported in the 2012 Harris Poll® EquiTrend® study, Susan G. Komen's current brand equity score of 55.1 represents a 21% drop in brand equity over the prior year ─ a historic drop in the study's 23-year history, surpassed only by Fannie Mae in 2009.

From "Gold Standard" to "Trailing the Pack"

Since its inclusion in the EquiTrend survey in 2008, Susan G. Komen has consistently rated as either the first or second most equitable non-profit organization in its category. This year, SGK fell 54 spots to 56th place out of 79 non-profit brands surveyed.

If you are a corporate executive, numbers like that are terrifying. This is a completely ruined brand, and it only took a few weeks to get there after people heard about their association with the partisan right. This is what happens to a brand when it is caught associating with the likes of ALEC.

Corporations Leaving ALEC

Now that people are finding out what ALEC is doing, some of the big corporations that fund them are dropping out to protect their brands. In recent weeks Coca-Cola, McDonald’s, Wendy’s, Intuit, Mars, Kraft Foods, and PepsiCo made their escape. Their business depends on people having positive feelings about their brands, so they dare not risk a Komen-style brand crash.

The NY Times, in an editorial, Embarrassed by Bad Laws,

The council, known as ALEC, has since become better known, with news organizations alerting the public to the damage it has caused: voter ID laws that marginalize minorities and the elderly, antiunion bills that hurt the middle class and the dismantling of protective environmental regulations.

... In recent weeks, McDonald’s, Wendy’s, Intuit, Mars, Kraft Foods, Coca-Cola and PepsiCo have stopped supporting the group, responding to pressure from activists and consumers who have formed a grass-roots counterweight to corporate treasuries. That pressure is likely to continue as long as state lawmakers are more responsive to the needs of big donors than the public interest.

But there is a long list of companies that are still supporting this partisan, anti-citizen organization.

When Coca-Cola left ALEC, Richard (RJ) Eskow explained, in Good Guys Win One: With ALEC, Things Go Better Without Coke,

Score one for the good guys: After being pressured by Color of Change and other progressive groups, Coca-Cola has left ALEC - the cynical corporate coalition that has pushed a bevy of anti-democratic, anti-middle class, and anti-consumer initiatives.

Now that Coke's come around, next up is Walmart. Their response on the ALEC issue was equivocal and unacceptable. And the issue needs to be raised directly and firmly with the other companies that back the organization - a list that includes AT&T, Bayer, ExxonMobil, GlaxoSmithKline, Johnson & Johnson, Kraft Foods, Pfizer, and UPS.

[. . .]

No Defense

It's true that ALEC is like the United States Chamber of Commerce, in that many of its member companies don't realize what it really stands for. But the ones who have consciences (or understand the power of consumer anger) will eventually respond, just as they have for the Chamber. (Many leading corporations have left that organization as it moves to the extreme right.)

Richard concluded with the point I wanted to make here, so I'll let him say it:

Heads up, Walmart. Know who does a lot of shopping in your stores? People who have been victimized by ALEC policies: Poor people, minorities, and people who are working more and earning less. They're getting wise, they're getting angry - and they're getting involved.

Companies: you are risking ruining your brands by associating with partisan, right-wing groups like ALEC. Executives: needless ot say, you are risking your careers if you are funding ALEC or any other partisan, right-wing lobbying groups, including the Chamber of Commerce, even Heritage Foundation.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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April 12, 2012

Republicans & Plutocracy Explained

By Monty Python:

Posted by Dave Johnson at 8:48 AM | Comments (0) | Link Cosmos

April 11, 2012

Why Do So Many Elites Hate Social Security?

This week there was another big attack on Social Security by another elite. This time the attack comes from an elite columnist, other times it comes from Wall Street types, wealthy CEOs or the kind of politicians that have been in DC way too long. These attacks never come from people who depend on these programs (i.e. almost all of us.) Why do the privileged elites hate Social Security so much?

Robert Samuelson wrote this week in the Washington Post, Would Roosevelt recognize today’s Social Security? Samuelson writes that Social Security, "has become what was then called “the dole” and is now known as “welfare.” " He discusses a book that, he writes, "shows how today’s “entitlement” psychology dates to Social Security’s muddled beginnings."

Entitlements

Elites hate "entitlements" -- those things we all are entitled to as are citizens in a We-the-People democracy. Democracies are based on "we are in this together" and "watch out for each other." Plutocracies are based on rule by the elites. These elites especially hate what Samuelson calls "entitlement psychology" -- a state of mind in which 99% of us forget our place and get all uppity about being citizens in a democracy and the things that entitles us to.

Samuelson's core attack on Social Security is that there is no trust fund, that the money has been spent, and it is just a program where working people pay for the retirement of older people,

Millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they “earned” these benefits. To reduce them would be to take something that is rightfully theirs.

And, he restates, while people think they are entitled to their Social Security benefits it really is just "welfare," writing,

What we have is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension. The result is entitlement.

The "rhetoric" and "psychology" of "entitlement." Public pride in We-the-People democracy. Gotta stamp that out!

(Samuelson, for some reason, does not talk about how the military budget trust fund is depleted and we need to cut back on the trillion-or-so we will spend this year, how it is bankrupting us, etc. Oh, wait, there isn't a trust fund at all for military spending... we just spend it.)

Dean Baker Responds

Dean Baker answered Samuelson, writing in Robert Samuelson Shows that the Post Has no Fact Checkers on Its Opinion Pages,

Social Security and Medicare are hugely important for the security of the non-rich population of the United States. For this reason, Robert Samuelson and the Washington Post hate them.

As we know, this is a question of basic political philosophy. In the view of Samuelson and the Post, a dollar that it is in the pocket of low or middle class people is a dollar that could be in the pocket of the rich. And Medicare and Social Security are keeping many dollars in the pockets of low and middle class people.

Regarding Samuelson writing that the funds were not segregated, and have been spent,

Of course Samuelson is 100 percent wrong here. Payroll taxes have been segregated. That is the point of the Social Security trust fund and the Social Security trustees report. These institutions would make no sense if the funds were not segregated.

Samuelson is welcome to not like the way in which the funds were segregated, in the same way that I don't like the Yankees, but that doesn't change the fact that the Yankees have a very good baseball team. Since its beginnings, the government has maintained a separate Social Security account. Under the law, no money can be paid out in Social Security benefits unless the Trust Fund has the money to pay for them.

In this sense, the funds are absolutely segregated. Samuelson doesn't like this, but why should any of the rest of us care? The rest of the piece shows the same dishonesty and lack of respect for facts.

Jared Bernstein Responds

In WaPo WAY Off on Social Security Jared Bernstein writes,

Here are the relevant facts about Social Security’s future (as we at CBPP see them):

–The trustees estimate that the combined Social Security trust funds will be exhausted in 2036 —a year earlier than they forecast in last year’s report.

–After 2036, Social Security could pay three-fourths of scheduled benefits using its annual tax income [Samuelson implies all benefits expire in three years!]. Those who fear that Social Security won’t be around when today’s young workers retire misunderstand the trustees’ projections.

–The program’s shortfall is relatively modest, amounting to 0.8 percent of GDP over the next 75 years (and 1.45 percent of GDP in 2085). A mix of tax increases and benefit modifications — carefully crafted to shield recipients of limited means and to give ample notice to all participants — could put the program on a sound footing indefinitely.

–The 75-year Social Security shortfall is only slightly larger than the cost, over that period, of extending the 2001 and 2003 tax cuts for the richest 2 percent of Americans (those with incomes above $250,000 a year). Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable [or like the Ryan budget, add trillions more in tax cuts] while the Social Security shortfall constitutes a dire fiscal threat. And the shortfall is well under half the cost over 75 years of making all of the 2001 and 2003 tax cuts permanent.

Elites Hate It, Hate It, Hate It

At Balloon Juice, the first comment following John Cole's post, It Will Never Make Sense To Me nails the real reason the elites hate Social Security so much. Cole writes in the post that it will never make sense to him ...

Why our elites and media elites have such sheer contempt and hatred for social security. It’s there for everyone! It’s a solid government program which gives everyone the peace of mind that no matter what, there will be some money available for you to take care of yourself in your most vulnerable years. It’s such a miniscule portion of the taxes we pay, and for the ultra-rich screamers who hate social security the most, it’s a negligible portion of their income, and it’s capped! It’s not money wasted on fraud and abuse, it’s extremely efficient with the kind of overhead any charity or organization in the world would die to achieve, and it’s just an amazing program.

Actually that's the reason they hate it. But the first commenter nails it, writing,

They hate it because it works; Social Security is proof that government is capable and competent. That is why it MUST be destroyed.

For elites this is the problem. Government works, and that tells We, the People that we don't have to depend on elites. That really is why the elites hate Social Security: Because it works.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 11:34 AM | Comments (1) | Link Cosmos

April 4, 2012

The Most Important Thing The President Said About The Republican Budget

The most important thing the President said about the Republican Budget in his big speech Tuesday was when he described just some of the damage it does, and said, "This is not an exaggeration. Check it out yourself." Seriously, do that, and see if you can get your friends, relatives and especially your right-wing bother-in-law to do it, too. Seriously.

Republicans Counting On "Low-Information" Voters

The secret of the Republican technique is that they count on lots of people being tuned out, apathetic and largely uninformed. They put up a lot of misinformation and smoke and mirrors and diversion and distraction, often claiming that what they are doing is the opposite of what they are doing, to trick people into accepting what they are doing, or at least not getting involved and working to stop them. And then they go ahead with their hidden agenda, usually involving handing over tax cuts, public money or property, favors, contracts, deregulation, get-out-of-jail cards, etc., to the highest-bidding contributor, or the company/lobbyist/etc. promising the most lucrative "jobs" or "speaking fees" etc., after government service is completed...

Another technique is accusing the other side of doing what they themselves are doing, as "cover." (It's called inoculation.) They won the majority in the House by running ads telling seniors that Democrats had cut $500 billion from Medicare, and a majority of seniors voted Republican for the first time. It was enough to swing control of the House. Now in office they are not just cutting Medicare, they are privatizing Medicare, phasing it out for those now under 55.

(Update: See: Romney Accuses Obama Of Taking ‘A Series Of Steps That End Medicare As We Know It’)

They are using another inoculation tactic to mask what they are doing, confusing people by portraying Obama as extreme and divisive for saying the Republican budget is extreme. Really, if you try to explain to regular people what is in this Republican budget, they will think you are an insane extremist for saying such things! (See Who Is The Crazy Person In The Room?)

Don't Trust Me - Find Out For Yourself

The antidote is to get informed. Do not just trust what I write here, go find out for yourself what the Republicans have voted to do. Go visit several news sources and learn about this Republican budget. I'm not going to tell you where to go (except that FOX is not a news source.) Make an effort. Use the Google. And this is what you will learn:

They really are privatizing Medicare.

They really are claiming to "cut deficits" but extending the Bush tax cuts for the rich, costing $4.6 trillion.

They really are cutting taxes on the rich by another $4.6 trillion!

They really are giving millionaires an average $187,000 tax cut.

They really are dramatically cutting corporate taxes.

They really are denying health insurance to up to 17 million children with pre-existing conditions.

They really are dramatically cutting Medicaid by as much as 75%, with as many as 27 million people losing coverage.

They really are cutting 1,311 federal agents immediately from the Dept of Justice and another 4,587 agents each year over the next decade.

The cuts really do cost 4.1 million jobs.

They really are cutting 700,000 pregnant or postpartum women, infants, and children off the Special Supplemental Nutrition Assistance (WIC) program and another 1.8 million women, infants, and children off each year for the next 10 years.

They really are cutting 60,000 children out of Head Start immediately, and another 200,000 a year out each year for a decade.

And those are just some of the cuts. Food inspectors, work safety inspectors, education, infrastructure, police, courts, environmental protection ...

They really are counting on most of the the public to stay distracted, apathetic and largely uninformed. YOU can help do something about that. Learn the facts and spread the word.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 8:47 AM | Comments (0) | Link Cosmos

April 3, 2012

Obviously This Is What They Want

Whining about the downturn in Europe that results from austerity.

OK, here's the thing. They aren't stupid, they are just saying one thing (austerity brings growth) but really following an agenda that suits them. Obviously the austerity isn't supposed to lift their economies. Everyone knows it will raise unemployment, etc. Obviously it is about privatizing and plundering. I mean, duh!

At what point does it become obvious that the "cut taxes for the rich, cut the things governments do for everyone else" agenda is NOT abou growing economies? Duh?

"You said if we gave you our money for these magic beams that a huge plant would grow with money for leaves, but all that is growing is tomatoes. Hey, where did you go?

"Stop! You said that if we brought you all the gold in town, you would user it to cure everyone's illnesses -- why are you riding away with it?"

"Hey, wait, you said we were going to a Halloween party when you got us all dressed up as bandits. Why are we robbing this bank?"

Posted by Dave Johnson at 2:29 PM | Comments (0) | Link Cosmos

March 31, 2012

One Hedge Fund Manager Got $3.9 Billion Last Year

ONE guy was "paid" $3.9 billion last year - and pays only 15% in taxes. And you wonder why we can't have good roads, schools, etc...

Top earning hedge fund managers of 2011 - Mar. 30, 2012

Posted by Dave Johnson at 1:31 PM | Comments (0) | Link Cosmos

March 27, 2012

Republican Budget For Billionaires

The new Republican budget (called the "Ryan Budget" by DC insiders) reflects current electoral reality: billionaires and corporations now finance candidates, and we get government of, by and for billionaires and corporations. The rest of us no longer matter, except as "the help" and, at least to the extent we haven't been entirely fleeced, a flock to harvest. This budget starts with $10 trillion in tax cuts -- mostly for the rich. After adding $10 trillion to the deficits Republicans then claim that severe cuts are necessary to "fight deficits." Right. Details below.

Keep in mind where we are starting from: The way our economy and tax system is already structured, the top 1% received 93% of income gains from recovery. As Mitt Romney's tax returns demonstrated, those at the very top -- whose income comes as checks generated by the money they already have -- already pay much lower tax rates than those of us who work for a living.

Shock Doctrine

"Nothing is more important in the face of a war than cutting taxes. -- Republican Majority Leader Tom Delay, 2003"

After passing tax cut after tax cut, and military spending increase after military spending increase, and starting war after war, Republican borrowing has added up. So now Republicans terrify the public, telling them that budget deficits will lead to the destruction of the country -- and soon. After a decade of screaming "9/11," "9/11," noun verb "9/11," they now scream "deficit, deficit, deficit." Then with the public suitably stirred up and terrified they offer "solutions" they say are necessary to cut the scary deficit (that they caused, for this purpose).

Behind a blizzard of fog and mirrors, the new Republican budget completes the ongoing shift of our government and our economy away from "we are in this together" democracy to a "you are on your own" system that is entirely for the benefit of a few at the top.

Cuts Taxes For The 1%

The smoke and mirrors: they claim this budget is necessary to reduce deficits, but it doesn't even pretend to. Instead it starts by cutting taxes on the rich and their corporations by another $4.6 trillion while making permanent the Bush tax cuts, costing another $5.6 trillion. It gives a $187,000 tax cut To every millionaire!

Cuts Jobs

Ethan Pollack at the Economic Policy Institute describes how Ryan’s budget cuts would cost jobs -- 4.1 million of them:

Paul Ryan’s latest budget doesn’t just fail to address job creation, itaggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using astandard macroeconomic model that is consistent with that used byprivate- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.*

Cuts Everything Government Does For Regular People

This budget starts with $10 trillion in tax cuts for the wealthy! After handing billionaires and their corporations trillions, increasing deficits by an additional $10 trillion, the Republican budget then cuts the things government does for the rest of us: Medicare, Medicaid, food assistance and public investments (mostly infrastructure and education), and pretends it is necessary because of deficits. (It increases funding for military contractors.)

What is cut? The following is from an analysis by the Office of Democratic Whip Steny H. Hoyer:

A Choice of Two Futures: A Look at How the Republican Budget Ends Medicare, Destroys Jobs, Benefits the Wealthy

Ending the Medicare guarantee and raising health care costs for seniors:


  • Ends the guarantee of health security and shifts higher costs onto seniors and the disabled over time.

  • Increases seniors’ health care costs just like last year’s budget – which drove up costs by over $6,000 per year, according to CBO.

  • Reopens the prescription drug donut hole, increasing seniors’ drug costs by up to $44 billion through 2020, including $2.2 billion in 2012 alone, according to HHS.

  • Increases seniors’ out-of-pocket costs for preventative care and annual checkups by over $110 million in 2012 alone, according to HHS.

  • 54-year-olds would have to save more money just to cover health care costs – an analysis of last year’s budget showed they would have to save an additional $182,000, according to the Center for Economic and Policy Research.

Cutting taxes for the wealthiest Americans at the expense of working families:

  • Provides millionaires an average tax cut of $150,000.

  • Reduces revenue by $4.6 trillion on top of the $5.4 trillion cost of permanently extending all of the Bush tax cuts and other expiring provisions, according to the Tax Policy Center.

  • May force working families to pay higher effective tax rates to cover some of the cost of this $4.6 trillion tax cut for the wealthy by eliminating deductions.

Turning Medicaid into a block grant that jeopardizes access to affordable health and nursing home care for seniors and the disabled:

  • Cuts a total of $1.7 trillion from Medicaid over the next decade, and according to CBO, is on track to cut the program by 75% by 2050. According to the Urban Institute, block granting the Medicaid program could result in between 14 million and 27 million people losing coverage. An additional 17 million people, who gained Medicaid and CHIP coverage through health care reform according to the CBO, would also lose that coverage as a result of repealing the Affordable Care Act.

Making it harder for Americans to receive Social Security benefits:

  • Increases backlogs that delay people from getting benefits that they are due and could leave up to 90,000 people with disabilities waiting for a decision in 2013 and leave 300,000 more people with disabilities waiting for a decision each year over the next decade.

Weakening our ability to out-educate competitors and build a competitive workforce:

  • Reduces Pell Grants by more than $1,000 for 9.6 million students in 2014 and could eliminate Pell Grants for over one million students over the next decade.

  • Kicks 60,000 low-income children out of the Head Start program in 2013 and 200,000 low-income children out of the program each year over the next decade.

  • Cuts Title I funding, which could result in nearly 11,000 teachers and aides losing their jobs in 2013 and nearly 38,000 teachers and aides losing their jobs each year over the next decade.

  • Cuts funding for Individuals with Disabilities Education Act, which could result in 7,800 special education teachers, aides, and other staff serving children with disabilities losing their jobs in 2013, and 27,000 teachers, aides, and staff losing their jobs each year over the next decade.

  • Reduces work-study funding, meaning almost 37,000 students could lose access to college work-study opportunities in 2013, and more than 166,000 students could be affected each year over the next decade.

Slashing assistance to low-income families:


  • Cuts the WIC program (Special Supplemental Nutrition Assistance Program for Women, Infants, and Children), kicking 700,000 pregnant or postpartum women, infants, and children off the WIC program and leaving another 100,000 without access to critical foods necessary for healthy child development in 2013. Each year over the next decade, the cuts would kick 1.8 million women, infants, and children off the WIC program and leave another 100,000 without access to critical foods.

  • Converts SNAP into a block grant beginning in 2016, which could jeopardize access to food assistance for millions of Americans.

  • Cuts HUD’s rental assistance programs, resulting in over 116,000 fewer low-income families housed through the Housing Choice Voucher program in 2013 and 400,000 fewer low-income families housed through the program each year over the next decade.

  • Risks permanent loss of affordable units that serve 1.1 million Americans.

Repealing patient protections and putting insurance companies – not American families – in control of health care:

  • Allows insurers to once again be allowed to discriminate against up to 17 million children with pre-existing conditions.

  • Subjects 105 million Americans once more to arbitrary lifetime caps on their health insurance.

  • Increases 54 million Americans’ out-of-pocket costs for preventative care.

  • Puts up to 15 million Americans who are sick or injured at risk of being dropped from their private insurance because of a simple mistake on an application.

  • Eliminates tax credits for up to four million small businesses, which are already providing more affordable care to two million workers. [Figures provided by HHS and the Treasury Department]

Weakening national security:

  • Cuts COPS hiring grants, which could result in 75 fewer local police hires and 6,200 fewer bullet proof vests for state and local law enforcement personnel in 2013, and 285 fewer local police hires and 23,000 fewer vests each year over the next decade.

  • Cuts Department of Justice (DOJ) funding, resulting in 1,311 fewer federal agents to combat violent crime, pursue financial crimes, secure the border, and ensure national security in 2013, and 4,587 fewer agents each year over the next decade.

  • Cuts DOJ funding resulting in 948 fewer prison guards to maintain safe and secure federal prisons in 2013, and 3,319 fewer prison guards each year over the next decade.

  • Reduces Department of Homeland Security funding for preparedness efforts of state and local governments, which could mean 100 firefighters and 80 emergency managers not being hired or laid off in 2013, and 400 firefighters and 300 emergency managers not being hired or laid off each year over the next decade.

Undermining American competitiveness by cutting investments in science, medical research, space and technology:

  • Cuts funding for biomedical research by NIH, meaning 500 fewer grants NIH could award in a cutting-edge field in 2013 and 1,600 fewer grants each year for the next decade, limiting research that could lead to new cures for diseases.

  • Cuts funding for NSF, which could result in NSF making up to 1,100 fewer competitive research and education grants supporting over 13,000 researchers, students, and teachers in 2013 and 4,000 fewer grants supporting almost 48,000 researchers, students, and teachers each year over the next decade.

  • Cuts NASA funding and puts jobs at risk by forcing the agency to terminate major programs and potentially close major facilities.

Threatening our clean energy future:

  • Cuts investments in the Department of Energy Office of Energy Efficiency and Renewable Energy and its applied research program, known as ARPA-E, that was established specifically to conduct energy research that industry by itself cannot support but where success would provide dramatic benefits for the nation.

  • Eliminates jobs by setting back efforts to put a million electric vehicles on the road, retrofit residential homes, and make commercial buildings more efficient.

  • Fails to boost all energy sources by eliminating tax support for renewable energy generation and the domestic jobs created by those energy projects.

  • Unless otherwise noted, all figures from OMB.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 1:47 PM | Comments (0) | Link Cosmos

March 25, 2012

The Anti-Government Game

My local paper runs op-eds railing against public employee pensions maybe once a week.

The idea is that since most working people's pensions have already been taken away, why should public employees still have them?

Posted by Dave Johnson at 8:01 AM | Comments (0) | Link Cosmos

March 22, 2012

The Republican Budget, Explained

The new Republican budget plan:

Smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke. Tax cuts for the 1%, cuts in the things We, the People do for each other. Smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke, smoke.

Fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog, fog. Tax cuts for the 1%, cuts in the things We, the People do for each other. Fog, fog, fog, fog, fog, fog, fog, fog, fog, fog.

Words, words, words, words, words, words, words, words, words, words, words, words, words, words, words, words, words, words, words, words, words. Tax cuts for the 1%, cuts in the things We, the People do for each other. Words, words, words, words,words, words, words,words, words, words,words, words, words,words, words, words, words, words, words,words, words, words, words, words, words, words, words, words, words, words, words, words, words, words.

Nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, Tax cuts for the 1%, cuts in the things We, the People do for each other. Nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense, nonsense.

Propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda. Tax cuts for the 1%, cuts in the things We, the People do for each other. Propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda, propaganda.

Obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation. Tax cuts for the 1%, cuts in the things We, the People do for each other. Obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation, obfuscation.

Mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors. Tax cuts for the 1%, cuts in the things We, the People do for each other. Mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors, mirrors.

Stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff. Tax cuts for the 1%, cuts in the things We, the People do for each other. Stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff, stuff.

Smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears. Tax cuts for the 1%, cuts in the things We, the People do for each other. Smears, smears, smears, smears, smears, smears, smears, smears, smears, smears, smears.

Division, division, division, division, division, division, division, division, division, division, division, division, division, division, division, division, division, division. Tax cuts for the 1%, cuts in the things We, the People do for each other. Division, division, division, division, division, division, division, division.

Distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction. Tax cuts for the 1%, cuts in the things We, the People do for each other. Distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction, distraction.

Bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement. Tax cuts for the 1%, cuts in the things We, the People do for each other. Bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement, bamboozlement.

Diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion. Tax cuts for the 1%, cuts in the things We, the People do for each other. Diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion, diversion.

Shiny Object, shiny object, shiny object, shiny object, shiny object, shiny object, shiny object, shiny object, shiny object, shiny object, shiny object, shiny object. Tax cuts for the 1%, cuts in the things We, the People do for each other. Shiny object, shiny object, shiny object, shiny object, shiny object, shiny object

And when it is all cleared away:

Tax cuts for the 1%, cuts in the things We, the People do for each other.

Update: England, too!

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 9:34 AM | Comments (0) | Link Cosmos

March 19, 2012

There Is Consensus On How To Fix Economy

“There was clearly something wrong with the U.S. economy long before the crash.”

Consensus

Consensus. Again and again, people who examine what went wrong with our economy leading up to the great recession come to the same conclusions! Study after study, book after book, statement after statement, op-ed after op-ed, organization after organization, expert after expert, all weighing in, all coming to the same conclusions. One after another voices speak up (click through for just a sampling), voicing their understanding of what happened to the economy, what caused the crash and what we have to do to fix things. One after another they voice the same conclusions: our economy was damaged by,


  • tax cuts for the rich combined with huge military budget increases (and wars) that led to budget deficits and increased inequality;

  • trade deals that damaged vital industries and led to trade deficits, layoffs and wage cuts;

  • deregulation of rules that protected working people, unions, vital economic sectors and the commons of public wealth;

  • and cuts in crucial areas of investment in our people and our economic future, including education & job training, infrastructure, energy, manufacturing, transportation and R&D into new technologies.


All of these betrayals of the social contract were enabled by the influence of big money on our political system, including huge sums spent on an infrastructure of corporate/conservative organizations designed to propagandize the public into accepting these changes - or at least keeping the victims from rebelling.

This Time, The AFL-CIO

This time the AFL-CIO offers their analysis, Fixing What Is Wrong With Our Economy. Here are a few excerpts - but if you have been paying attention you have heard all of this again and again from all directions:

The crash was the end-result of policy changes brought in with the "Reagan Revolution:"

The crash of 2008 and the Great Recession were inevitable consequences of three decades of economic policies designed by and for Wall Street and the wealthiest Americans. At the heart of the problem was the hollowing out of American manufacturing, the growing dysfunction of our financial sector and a rapid increase in economic inequality, all of which crippled the growth engine of the U.S. economy.

Trade deals and policy choices that sent jobs, factories and industries out of the country:

[. . .] The deindustrialization of America and the substitution of speculation for productive investment were not accidents, they were not inevitable, and they were not the outcome of natural forces. They were the predictable results of mistaken policy choices made by politicians of both parties for more than a generation. These policy choices had victims with first and last names: millions of displaced workers, shuttered factories and hollowed-out communities across the country hobbled by shrinking tax bases that no longer could support vital public services.

In The Way

The corporate/conservative propaganda apparatus (and its candidates for office) continue to demand even more tax cuts for the wealthy and cuts in the things our government does for We, the People:

[. . .] The Republican candidates pretend that tax cuts for corporations and the wealthy are the answer to wage stagnation and the economic crisis, but the Bush years taught us that these obscenely wasteful tax cuts only make the problem worse. They are the equivalent of eating our seed corn, because they starve the kind of public investment in education, infrastructure and innovation that is indispensable for long-term economic growth.

The Fix

Again and again experts tell us how to fix the problems we face in our economy and society: restore democracy's (the 99%'s) controls over corporations (the 1%) and especially re-regulate the financial sector, reverse the taxation policies that led to budget deficits and extreme inequality, fix the trade deals and other policies that led to trade deficits and allow the wealthy to pit working people against each other, and invest heavily in our country and people again. That's a start, anyway -- get the influence of big money and big money's propaganda machine out of our politics and maybe after a while We, the People can start addressing the rest of our problems again.

The AFL-CIO's conclusions, from a summary of the analysis:

The statement outlines several significant steps that need to be taken to build an economy that can compete with world economic powers like Germany and China and that works for all, including:
  • Significant investment over the next decade in education and apprenticeship programs for young people, infrastructure, energy, manufacturing, transportation, skills training and new technologies;
  • A fair share from Wall Street and the wealthiest Americans, who have benefited most from the economic policies of the past 30 years—pass a financial speculation tax, let the Bush tax cuts for the wealthy expire and tax capital gains at the same rate as ordinary income;
  • Tackling the problems of wage stagnation and economic inequality by reforming labor laws so that all workers who want to form a union and bargain collectively have a fair opportunity to do so, making full employment the highest priority of our economic policy, increasing and indexing the minimum wage, shrinking the trade deficit and eliminating incentives for offshoring;
  • Reviving U.S. manufacturing by bringing the trade deficit under control, enhancing Buy America safeguards, aggressively enforcing trade laws and ending incentives for offshoring;
  • Once again regulating Wall Street, eliminating tax advantages for leveraged buyouts and finding other ways to favor strategic investment over short-term speculation;
  • And working toward a global New Deal that establishes minimum standards for the global economy, prevents a race to the bottom, creates vibrant consumer markets in the global South and creates new markets for advanced U.S. manufacturing.

The American people aren’t stupid. Majorities are also coming to the same conclusions. The American Majority in poll after poll show agreement with these conclusions.

We have to reverse the corporate/conservative, anti-government, pro-1% policies that started about 35 years ago. All the charts show the changes, when the changes happened, and how those changes have worn away at our economy and our people -- click through and see for yourself the story that the numbers tell: tax cuts, deregulation and outsourcing our jobs, factories and industries has not helped our economy or our people. Since then all the gains from the efforts of all of us have gone to fewer and fewer of us. Since then our infrastructure has fallen into disrepair. Since then our trade deficit has gotten worse and worse. Since then regular people -- the 99% -- have been falling further and further behind, democracy has eroded to the breaking point, with plutocracy -- rule of, by and for the 1% -- taking its place.

Our wealth is being extracted for the benefit of a few. We, the People must reassert control, or face further decline.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 7:25 AM | Comments (0) | Link Cosmos

March 12, 2012

You Want To Bring The Old Economy Back? Really?

There are small signs that real recovery might finally be kicking in. (Republicans have been able to obstruct it for only so long.) But we have not rewired the economic paradigm to work for the 99%, so any recovery will only bring back the imbalances that caused the problems in the first place. This means recovery may not have the electoral effects Democrats hope for, because any growth means the beneficiaries of the old economy are the beneficiaries of this recovery.

Green Shoots Taking Root?

The economy is not collapsing - today. There is at least some growth in most sectors, and this certainly beats continuing decline. The layoffs have slowed to a less gut-wrenching level and there is even hiring occurring. The overhanging inventory of unsold houses has pulled back from record levels. Car companies are doing well and you can't turn on the TV without seeing car commercials everywhere. Yes there are signs that "green shoots" might be taking root this time - maybe.

But at the same time, to what end?

Here We Go Again

Right on the tail of any green shoots we see signs of the old ways returning, the old imbalances resurfacing. People are running up credit cards again. Trade deficits with China are rising to extreme levels again. Banks and other giants are finding ways to soak scam fees out of customers again. Unrestrained financial-casino speculators are helping drive the price of gasoline to highest-ever levels. And here we go again: the top 1% captured 93% of the income gains in the first year of recovery.

This all shows an economy wired for the 1% will only benefit the 1% as it recovers. The gains are not trickling down.

THIS is what you call recovery?

Won't Help Election

Democrats and the President are hoping, hoping, hoping that signs of recovery will continue, and people will look more favorably at the President and his party. But any recovery that just goes back to the old economy will not help, because it will not help regular people. An economy wired for the 1% only helps the 1% during any recovery. Today's poll demonstrates this: Washington Post: Gas prices sink Obama's ratings on economy, bring parity to race for White House,

Disapproval of President Obama’s handling of the economy is heading higher — alongside gasoline prices — as a record number of Americans now give the president “strongly” negative reviews on the 2012 presidential campaign’s most important issue, according to a new Washington Post-ABC News poll.

"Recovery" only helps the President and Democrats if the recovery actually helps the 99%. Mere words won't do it.

Mere Words Won't Do It -- We Need An Actual Agenda For The 99%

Mere words won't do it. We need an agenda bigger than what we are doing now, otherwise we just "recover" an economy that didn’t work for working people or for the planet. We need actual change that people actually feel. This means a serious, meaningful attack on inequality and its effects. This means changing the wiring of the economy so We, the People again are in control.

Democrats have to be perceived as actually fighting for the interests of the 99%. The way to be perceived as doing this is to actually do it. This means bringing in people to the Treasury Department and economic advisors who don't actually work for the interests of Wall Street and the big banks and the 1%. This means actually fighting to raise taxes on the 1% back up to actually meaningful pre-Reagan levels. This means actually doing something about the trade agreements that pit the 99% against exploited workers who have no say, while creating massive trade deficits that drain our economy. This means actually providing good schools and college education that everyone can afford. This means an actual national industrial policy that helps us actually compete in the world's economy. This means actually fighting climate change. This means actually empowering workers to form unions so they can actually confront concentrated wealth and power with some actual leverage. This means actually hiring millions of people to actually modernize our infrastructure and retrofit our buildings to be energy efficient. This means an actual Medicare-for-All health care plan instead of just reinforcing the 1%er insurance giants. This means actually doing those things that need to be done.

Mere words won't do it. Actually rewriting the economic paradigm is what is actually required here.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 1:16 PM | Comments (0) | Link Cosmos

March 9, 2012

Cuts and Consequences - How Budget Cuts Hurt The Economy

Is smaller government really better for the economy? Conservatives chant that taxes and government "take money out of the economy" and we need to "cut and grow," meaning if government spending is cut way back the economy will grow as a result. Europe's conservatives are also forcing cuts in the things their governments do for regular people, claiming "austerity" will bring "confidence" that grows their economies. How is this experiment working out? What are we learning about the effect on the larger economy when government is cut?

What Does Government Do?

Almost everything the government does is because it needs to be done. We need roads, bridges, schools & colleges, dams, courts, police & fire departments, water management, etc. (We can discuss the need for military spending another time.)

These are all needed and contribute to the functioning of the economy. So if government is cut back and doesn’t do something that is needed, then how does it get done? Or does it just not get done? Either way, the real question we should be asking is what is the effect on the larger economy when our government cuts back on or stops doing needed things? If you save the “government” a bit of money but cost the economy a lot of money, are you saving money? Or are cuts in government really just shifting and even increasing the costs in the larger economy of doing these things?

Who Is Our Government For?

In the United States, our Constitution says that government is supposed to be of, by and for We, the People. The country was established after the colonists rebelled against the aristocracy of England -- a few people who had all of the wealth and power and would not let the colonists have a say in how things were run and who would benefit. So they fought the Revolutionary War and established a country where "We, the People" all have an equal say, and to "promote the general welfare." In other words, a country that aspires to be of, by and for the good of all of us.

So cutting back on government means cutting back on We, the People doing things for the good of all of us. It means cutting back on the things we have a say over. It means relinquishing the wealth and power that we hold in common to ... well, just where does our common wealth and power go if our government is cut back?

Medicare, For Example

Republicans say we need to cut back on what the government spends on Medicare. But if you cut Medicare the health problems of elderly people and the larger problem of fast-rising health care costs in the larger economy don’t disappear. In fact, both problems just get worse.

The "Ryan Budget" that Congressional Republicans voted to approve actually converts Medicare into a program that gives seniors a voucher that pays for part of a private medical insurance policy that seniors have to shop for. The Center for Economic and Policy Research (CEPR), in Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan, took a look at that plan and explains what happens to the cost of health care. Summary: it shifts the costs to us, except each of us ends up paying as much as seven times as much as the same care costs under Medicare. From the CEPR explanation:

[The Republican] plan to revamp Medicare has been described as shifting costs from the government to beneficiaries. A new report from the Center for Economic and Policy Research (CEPR), however, shows that the [Republican] proposal will increase health care costs for seniors by more than seven dollars for every dollar it saves the government, a point missing from much of the debate over the plan.

... In addition to comparing the costs of Medicare to the government under the current system and under the [Republican] plan, the authors also show the effects of raising the age of Medicare eligibility. The paper also demonstrates that while [the Republican plan] shifts $4.9 trillion in health care costs from the government to Medicare beneficiaries, this number is dwarfed by a $34 trillion increase in overall costs to beneficiaries that is projected ...

Repeat, the Republican plan to cut Medicare would cost the larger economy seven times as much as it cuts government spending.

Social Security, For Example

Conservatives have been trying to cut or gut Social Security for decades. While this might mean government has to pay out less of what is owed to seniors, such cuts would have a negative effect on the larger economy.

Social Security allows working people to retire with at least a minimal income. If this is cut many could not retire for many more years (if ever), which would increase the unemployment rate because their jobs would not open up. The same is true as the retirement age is increased - fewer job openings. If it is cut, the spending (on cat food) at local grocery stores and other necessities is reduced by the same amount. And the effect on children of retirees is increased, if they contribute to make up the difference.

This is why cutting Social Security or raising the retirement age only shifts costs onto the larger economy, dragging it down (and cruelly hurting our elderly).

Cutting Disease Control, For Example

One of the clearest examples of the way government helps us all, rich and poor, is the government's Center for Disease Control (CDC). One of the jobs of the CDC is to help prevent the spread of infectious diseases. If an epidemic is spreading and killing people it doesn't matter if those people are rich or poor. And if a serious outbreak spreads this can damage the economy as people are too sick to, or decide not to show up for work. So of course cutting back the budget of the CDC could cause damage to the economy in any given year and is certain to cause damage eventually. (The CDC budget was cut back 11% last year.)

Budget Cuts Hurt The Economy

The above are only a few examples.

A government budget cut is like a huge tax increase on regular people because it increases what each of us pays for the things government does -- or forces us to go without. This is because cuts in government spending don’t actually cut the cost or the need for those things, they just shift those costs onto the larger economy. But because these shifts attack the economy-of-scale, transparency, integrity and public-good management that government provides, they almost always increase the costs and harms to the larger economy.


  • As government health care is cut (or not provided in the first place) each of us must take on those costs on our own, and as demonstrated, pay up to seven times what the same care would/could have cost.
  • As infrastructure maintenance and modernization is cut, our economy becomes less competitive, unemployment increases and our wages and spending power fall.
  • As spending on education is cut, our costs of educating ourselves and our kids increase. College costs soar. And the overall education level of our people will decrease, making our country less competitive in the world.
  • As environmental regulation and enforcement is cut the costs of the resulting health problems and cleanups increase and our quality-of-life will decrease.
  • As enforcement of labor laws is cut, our wages and protections fall.
  • As etc. is cut, the costs of etc. are shifted to the larger economy, and the total costs of accomplishing etc. actually increase.

As budgets are cut, the costs are increased and shifted to the larger economy.

Austerity In Europe

Several countries in Europe are severely cutting budgets. The result is that the economies in those countries are slowing. Reuters: Euro zone's slump in late 2011 points to recession.

A collapse in household spending, exports and manufacturing sucked the life out of the euro zone's economy in the final months of 2011, the EU said on Tuesday, showing the scope of the downturn that looks set to become a fully fledged recession.

... The European Commission forecasts a recession of the same magnitude this year. That would be the euro zone's second contraction in just three years as the bloc's debt crisis drags on a region that generates around 16 percent of the world's economic output.

[. . .] The battle between austerity and growth was already evident in the fourth quarter. Euro zone government expenditure fell 0.2 percent, while industry contracted 2 percent and imports were down 1.2 percent, making for some of the worst readings since the world was dragged into the 2008/2009 financial crisis.

The austerity experiment is making the case: cutting government budgets just shifts costs and hurts the larger economy.

Who Benefits From Cuts?

Governments dance with the ones that brung 'em. Whoever controls government is naturally going to direct government to benefit them – and only them. We-the-People democracies do things for We, the People; plutocracies do things for plutocrats. So when, as now, plutocrats are running government, you will get a government that only does things that benefit plutocrats. And when We, the People were running government, we did things that benefit We, the People -- all of us.

The plutocrats now demanding government budget cuts obviously understand that this will result in slowing economies, but don't care -- they are already fabulously wealthy. What they want is reduced taxes and increased power. They say that cuts will bring growth, in order to persuade people to accept cuts. Blocking governments from providing things that don't directly benefit them and only them is a means to that end. And cutting government cuts government's ability to reign them in.

What We, the People Want

When We, the People are running government we insist that government increases overall prosperity. We demand laws and regulations that bring us good wages, benefits and safe working conditions. We demand good public schools & colleges, parks, safety and opportunities for our smaller businesses to fairly compete. We insist on a clean environment, consumer protections, regulations on business behavior, rules against monopolies and (after learning the hard way) rules that keep banks from taking risks that threaten the economy. And we want controls and limits on the use of wealth and power by the 1%ers.

Plutocrats -- the 1%ers -- of course see all of these protections of regular people as hindering their power and ability to make as much for themselves as they can grab. Plutocrats just don’t see how public parks benefit them. They just don’t see why they should have to pay for public schools. What good do public schools do them, today? Plutocrats don’t see why it should be anyone else's problem if old people don’t have health care -- health care for seniors certainly isn't their problem.

They explain that things for anyone other than themselves and their interests just “wastes money.” Things for regular people are not their problem. And when plutocrats run government, it isn't their problem.

The fact is a public park “costs money.” Schools and infrastructure are just more “government spending.” Things like that just "redistribute income" because taxes on the income of plutocrats is used to build that park or school that anyone can use. The basic message of the plutocrat is, "Why should I pay for anything that benefits you?"

You and I might argue that this kind of austerity, cutting schools, Medicare, infrastructure, etc. slows the larger economy, hurting the plutocrats, too. But that doesn’t hurt the ones who are already rich, which is the definition of plutocrat. It puts more in their pockets, today, by lowering their taxes. They want out of taxes and they don't want government (We, the People) interfering with their power.

What We, The People Need

Democracies where We, the People make decisions demand things that are good for regular people and their small businesses: pensions, health care, modernized infrastructure, good schools & colleges, child care, regulations on the behavior of giant corporations... This is why strong democracies have proven to be more prosperous for regular people and for longer than other forms of government that leave people on their own against the wealthy and powerful and drive all of the income and wealth to a few at the top. This is why so many regular working people in our country were so much more prosperous in the decades before the plutocratic 1%-favoring policies of Reagan steered us toward plutocracy.

Understand what is going on here. Demands for budget cuts and austerity are really about shifting from democracy to a system where regular people -- the 99% -- are on their own, up against the wealthy and powerful. This is about shifting from a system where regular people can be prosperous together, to a system where a few -- the 1% -- have all the wealth and power.

We, the People need democracy restored. We need to be in charge again, before the economy can improve.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 7:51 AM | Comments (0) | Link Cosmos

March 6, 2012

The Big Reagan Recovery Was Government Spending And Hiring

Conservatives like to talk about how well the economy did under Reagan, and how poorly it is doing now. Then they say that government "takes money out of the economy." But the difference in economic growth was that under Reagan the government was spending and hiring, and now it isn't.

Paul Krugman lays it out, in States of Depression,

... compare government employment and spending during the Obama-era economic expansion, which began in June 2009, with their tracks during the Reagan-era expansion, which began in November 1982.

Start with government employment (which is mainly at the state and local level, with about half the jobs in education). By this stage in the Reagan recovery, government employment had risen by 3.1 percent; this time around, it’s down by 2.7 percent.

Next, look at government purchases of goods and services (as distinct from transfers to individuals, like unemployment benefits). Adjusted for inflation, by this stage of the Reagan recovery, such purchases had risen by 11.6 percent; this time, they’re down by 2.6 percent.

And the gap persists even when you do include transfers, some of which have stayed high precisely because unemployment is still so high. Adjusted for inflation, Reagan-era spending rose 10.2 percent in the first 10 quarters of recovery, Obama-era spending only 2.6 percent.

Austerity Killing Growth

Meanwhile conservative demands for government spending cuts - "austerity" - are causing exactly the opposite of what they claim. They claim that spending cuts will cause economies to grow, while all the economies that are cutting spending are shrinking faster and faster. NY Times: Spain Adjusts Deficit-Reduction Target at European Summit,

Spain announced Friday that a deepening recession meant it would have to abandon its deficit-reduction targets for this year...

Spain’s predicament is a reminder of how, in several countries, the austerity measures that evolved from the debt crisis have eroded confidence and reduced growth, making it harder to escape a downward spiral.

Same in Greece, and elsewhere. Cuts = downward spiral.

Government Of By and For Plutocrats

Here is what is going on: Politicians dance with the ones that brung 'em. A government that is of, by and for We, the People will do things that benefit We, the People. A big part of that equation is investing in the future: good schools, infrastructure, even parks. From Free Trade Or Democracy, Can't Have Both,

When people have a say we insist on good wages, benefits, safe working conditions, and a clean environment. We even go so far as to say we want good public schools, parks and opportunities for our smaller businesses. When We, the People have a say we get so uppity and ask for the most outrageous things!

A government that is run only for 1%er plutocrats will only do things that benefit plutocrats. As the governments of the world are increasingly "captured" by the plutocrats they will increasingly cut back on doing things for regular people. It doesn't matter if this hurts or even kills their economies in the future, 1%ers don't care. Plutocrats want it now, for themselves, and take it now, for themselves, the rest be damned.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 7:10 AM | Comments (0) | Link Cosmos

February 23, 2012

Politicians Increasingly Dancing With Billionaires Who Brung 'Em

Our politicians are doing and saying increasingly incomprehensible things. The separation from regular people is unbelievable. But in politics you "dance with the one that brung ya," and these things become comprehensible and believable when you look at who is bringing them to the dance.

The Supreme Court, in its conservative-movement-created wisdom, has ruled that billionaires and corporations -- even subsidiaries of foreign corporations -- can spend unlimited amounts in our elections. This has led to the super Pacs, where just a few billionaires and companies now dominate the elections and the things the candidates say and the policies they promote. And it is most of that money is used to run negative ads that run down candidates and destroy the public's faith in government and democracy.

Serving The Billionaires Not The People

This new election-funding system has our candidates trolling for billionaire and corporate dollars instead of coming up with policies and positions that serve the people. Did you think Republicans were talking about billionaires as "job creators" because it would get them votes? No, it is because vain, wealthy, greedy billionaires like to be described that way, and those politicians are trying to get them to loosen their wallets. Even if they lose the election they are looking for rewards -- lucrative jobs -- later.

Even if they aren't trolling for billionaire bucks, they still dare not offend. These super PACs are in the business of running nasty, negative ads, and lots of them. Politicians want them on their side and not on the other side. So they are much, much less likely to oppose policies that favor the billionaires and their big corporations.

Did you think the country needs an oil pipeline that runs from our northern border all the way across the country to Gulf Coast ports, to help Canadian oil companies sell to China? No, this is about politicians getting big checks from oil companies.

President Obama OK'd a super PAC. A week later he comes out with a proposal to cut corporate taxes from 35% to 25%. Coincidence? And Obama's tax-reform plans pale in comparison to what billionaire-and-corporate-backed Republicans are proposing. Both parties are proposing rewriting the tax codes to favor the billionaires and their giant corporations.

When you hear about anything being done for the giant corporations, look at this chart to see who we are really talking about. Corporate wealth is also personal wealth. When you hear about corporations doing well, think about this chart:

wealth2

The top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%.

Some recent stories:

Nat Journal: One-Fourth of All Super PAC Donations Last Month Came From Just Five People,

An analysis of January's campaign-disclosure filings reveals that 25 percent of all the money raised for the presidential race that month came from just five donors.

WaPo: "Overall, 23 people have directed about $54 million to super PACs this cycle."

Just 23 people... brung 'em to the dance.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 5:23 PM | Comments (0) | Link Cosmos

February 16, 2012

Will American Anti-Labor Policies Infect Europe?

I want to send a warning to working people in Europe: when you let your businesses save money by mistreating workers in other countries, it might teach them to think they can save money by mistreating you, too. Over here in the US we have learned this the hard way. We entered into "free trade" agreements that enabled our businesses to take advantage of exploited labor in countries like China, and the plutocrats used that as a wedge against us here to drive down our wages, get rid of our benefits and break our unions. Now your own business leaders are taking advantage of eroded labor rights here, and if you let them get away with this they will want to bring these working conditions back to you.

Recently in the post Democracy V. Plutocracy, Unions V. Servitude I described how American companies use China as a wedge to drive down wages and labor rights here,

The threat is in the air: "Shut up and take the wage cuts or we will move your job to China."

... Workers in countries like China where people have no say have low wages, terrible working conditions, long hours, and are told to shut up and take it or they won't have any job at all. They are given no choice.

Increasingly workers here have their wages, hours, benefits, dignity cut and are told to shut up and take it or their jobs will be moved to China. Because we are pitted against exploited workers in countries where people have no say, we have no choice.

The unions are weakened, the government doesn't enforce or weakly enforces labor laws and regulations, age, gender or race discrimination laws, worker safety laws, so workers are placed in a terrible squeeze. Workers who try to organize unions are isolated, moved, smeared, fired, humiliated, whatever it takes.

In countries like Germany workers are still paid fairly well and have benefits and rights. Here our pay, benefits and labor rights have eroded terribly. This is the result of American companies using exploited labor in countries like China as a wedge to force concessions at home. Can the same chain of events attack wages, benefits and unions in Europe? Last May, Harold Meyerson’s LA Times op-ed, The U.S.: Where Europe comes to slum, described how European companies come here and behave like American companies,

… slumming in America is fast becoming a business model for some of Europe's leading companies, and they often do things here they would never think of doing at home. These companies — not banks, primarily, but such gold-plated European manufacturers as BMW, Daimler, Volkswagen and Siemens, and retailers such as IKEA — increasingly come to America (the South particularly) because labor is cheap and workers have no rights. In their eyes, we're becoming the new China. Our labor costs may be a little higher, but we offer stronger intellectual property protections and far fewer strikes than our unruly Chinese comrades.

… The auto companies of Europe and Japan have opened factories in the nonunion South over the last couple of decades. Not one of them has agreed to refrain from waging a union-busting campaign should their workers wish to organize. Their stance could not be more different from their attitude toward workers and unions in their home countries.

Meyerson describes the kinds of anti-union, anti-worker things these companies are learning how to do,

As a report released by Human Rights Watch late last year documents, companies that routinely welcome unions, pay middle-class wages and have workers' representatives on their corporate boards in Germany and Scandinavia have threatened their U.S.-based employees with permanent replacement by other workers as the penalty for protesting wage cuts (that was the German manufacturer Robert Bosch), ordered workers to report on fellow workers' pro-union activities (that was T-Mobile, a subsidiary of Deutsche Telekom) and disciplined workers who couldn't show up for unscheduled weekend shifts announced on Friday night (that was IKEA, according to an L.A. Times story).

T-Mobile’s Anti-Union Efforts

Here is an example. Germany’s Deutsche Telkom is trying to turn their wholly-owned subsidiary US company T-Mobile into a low-wage, low-benefit, union-free dumping ground. Is this an effort to ultimately bring these tactics back home to break Germany’s unions?

This is how T-Mobile is operating now: In May T-Mobile workers in upstate New York filed a petition for a union election. Over the next three months management used anti-union “isolate and pressure” tactics to erode support. Instead of letting the workers decide for themselves if they wanted a union, they contested the effort and brought in a “union avoidance” specialist firm.

The company used excuses to delay the election, and launched a propaganda campaign, making the workers hear a constant barrage of reasons to suspect union motives, suspect the benefits the union promised, and other reasons not to vote for a union. They were repeatedly required to leave their job to attend meetings and conference calls, on company time, where they were lectured, given misinformation, told they would lose benefits they current had, that unions would make them pay $5,000 in dues every year, told again and again that the union was lying, that union organizers were only telling them things to get bonuses, told they must not ever talk to each other about the union on company time and that if they voted for a union the company would have to eliminate their jobs and contract out the work instead. After enough of this the workers withdrew the election petition.

The Sheer Weight Of This Wears You Down

When regular people who are just doing their jobs, who work hard and get up in the morning and go home tired and don’t make a lot have to face constant tactics of daily pressure by management, constantly being told that unions are evil and “unions bosses’ and “union thugs” are trying to trick them, and they are put under tactics that isolate them from being able to discuss what is true or not, finally the sheer weight of all of it together can be too much.

Again and again when workers try to form a union they are up against these tactics. Management repeatedly calls meetings where they give professionally-crafted propaganda speeches about all the terrible things that will happen if workers vote for a union. If a worker has the courage to stand up and talk about the good reasons for a union, they are excluded from future meetings and isolated from the other workers. (This is when a company stays legal and doesn’t just fire people who favor a union – not an uncommon tactic and it takes years for the company to be penalized for illegal firings, if it ever is.) In these situations management completely controls the message and keeps workers from hearing the other side.

Typical Here, Outrageous There

This all sounds normal to American workers, because this is what American companies do. This is what workers regularly face when they try to organize to make their workplace better and safer and get things like sick pay, decent wages and some benefits. We have sort of become used to this kind of treatment here. In America we have gone from 30% to 7% union membership because companies are allowed to fight unions, and routinely do things like this.

But T-Mobile is wholly owned by a German company. Germany respects workers rights and German workers would be absolutely shocked if they understood that a German company was doing this to workers. They would be shocked to even see a company try to stop a union – why would a good company want to?

Will American Anti-Labor Policies Infect Europe?

So here is the question for European working people to ask. Will Europe let the US be their China? American companies learned to use China as a weapon against workers here. Will European companies bring American anti-labor practices home as a weapon to break down European worker rights and living standards?

Will European companies learn to use American anti-labor practices against European workers? Or will European workers stop this in time? If you think this sort of thing can’t happen in Europe, just look at what is happening to Greek workers right now.

US workers are threatened with having to do things like China does them in order to compete. Will German workers be threatened and told things have to be like the US? Will they tell that German public that their policies need to be more “Business friendly?”

So this is a warning to European working people. Pay attention to what your companies are doing in the US. You really don’t want them learning to operate the way a lot of US companies operate, or your own wages, benefits and even your jobs could be on the line – like ours are here.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 9:43 AM | Comments (0) | Link Cosmos

February 15, 2012

China Is Very "Business-Friendly"

China is very, very "business-friendly." Corporate conservatives lecture us that we should be more "business-friendly," in order to "compete" with China. They say we need to cut wages and benefits, work longer hours, get rid of overtime and sick pay -- even lunch breaks. They say we should shed unions, get rid of environmental and safety regulations, gut government services, and especially, especially, especially we should cut taxes. But America can never be "business-friendly" enough to compete with China, and here is why.

Workers In Dormatories, 12 To A Room, Rousted At Midnight

China is very, very "business friendly." Recent stories about Apple's manufacturing contractors have started to reveal just how "business-friendly" China is. Recently the NY Times' Charles Duhigg and Keith Bradsher exposed the conditions of workers at Apple's Chinese suppliers, in How the U.S. Lost Out on iPhone Work. They describe how China's massive government subsidies and exploitation of workers mean, as Steve Jobs told President Obama, “Those jobs aren’t coming back.”

One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. ... New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Right. No American plant can roust workers out of nearby dorms at midnight to force them onto a 12-hour shift. And the corporate conservatives criticize America for this, not China, saying we are not "business-friendly" enough to compete. This is because we are a place where We, the People still have at least some say in how things are done. (Don't we?) Later in the story,

The first truckloads of cut glass arrived at Foxconn City in the dead of night, according to the former Apple executive. That’s when managers woke thousands of workers, who crawled into their uniforms — white and black shirts for men, red for women — and quickly lined up to assemble, by hand, the phones.

“Business-friendly” = living 12 to a room in dorms, rousted out of bed at midnight for 12-hour shifts, working in a plant paid for by the government, using a neurotoxin cleaner that harms people but enables more production for companies like Apple.

Forced Labor Is The Real "Business-Friendly"

Arun Gupta at AlterNet, in iEmpire: Apple's Sordid Business Practices Are Even Worse Than You Think, writes,

Researchers with the Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM) say that legions of vocational and university students, some as young as 16, are forced to take months'-long “internships” in Foxconn’s mainland China factories assembling Apple products. The details of the internship program paint a far more disturbing picture than the Times does of how Foxconn, “the Chinese hell factory,” treats its workers, relying on public humiliation, military discipline, forced labor and physical abuse as management tools to hold down costs and extract maximum profits for Apple.

... Foxconn and Apple depend on tax breaks, repression of labor, subsidies and Chinese government aid, including housing, infrastructure, transportation and recruitment, to fatten their corporate treasuries. As the students function as seasonal employees to meet increased demand for new product rollouts, Apple is directly dependent on forced labor.

... The use of hundreds of thousands of students is one way in which China’s state regulates labor in the interests of Foxconn and Apple. Other measures include banning independent unions and enforcing a household registration system that denies migrants social services and many political rights once they leave their home region, ensuring they can be easily exploited. In Shenzhen about 85 percent of the 14 million residents are migrants. Migrants work on average 286 hours a month and earn less than 60 percent of what urban workers make. Half of migrants are owed back wages and only one in 10 has health insurance. They are socially marginalized, live in extremely crowded and unsanitary conditions, perform the most dangerous and deadly jobs, and are more vulnerable to crime.

Please read the entire AlterNet piece, iEmpire: Apple's Sordid Business Practices Are Even Worse Than You Think. These things are not “costs” that we can compete with by lowering our wages, these things are something else.

Not JUST Low Taxes -- Massive Government Subsidies

These stories also describe how the Chinese government massively subsidizes these operations, assists their low-wage labor-recruitment schemes, and looks the other way at violations of labor and trade policies. The Chinese government is very "business-friendly." They hand money to businesses so they are much more able to "compete." They are so friendly to business that they even own many businesses.

Trade Secret Theft

Another area where China has very "business-friendly" policies is when their own businesses steal from non-Chinese businesses. This NY Times story, U.S. to Share Cautionary Tale of Trade Secret Theft With Chinese Official details just one case of the "unbelievably endemic" problem of Chinese theft of "intellectual property" -- the trade secrets that keep businesses competitive. In this case China's Sinovel sole the software that ran an American company's products, and immediately cancelled their orders for those products because they could now make them in China:

Last March, China’s Sinovel, the world’s second largest wind turbine manufacturer, abruptly refused shipments of American Superconductor’s wind turbine electrical systems and control software. The blow was devastating; Sinovel provided more than 70 percent of the firm’s revenues.

... Last summer, evidence emerged that Sinovel had promised $1.5 million to Dejan Karabasevic, a Serbian employee of American Superconductor in Austria.

If you steal the ideas, processes, techniques, expertise, plans, designs, software and the other things that give companies a competitive edge, then you don't have to pay them and you can just make the things yourself. When you get in bed with a very "business-friendly" country, you might find that they are more friendly to their own businesses. Because they consider themselves to be a country with a national strategy, not a self-balancing, self-regulating "market."

Trade Deficit Drains Our Economy

As a result of our ideological blindness, refusing to understand China's game, we have a massive trade deficit with them. This means hundreds of billions of dollars are drained from our economy, year after year. And to make up for this we borrow from them in order to keep buying from them. But this does not cause their currency to strengthen in the "markets" because China loves this game the way it is going, and intervenes against the markets to keep their currency low. And so it continues, year after year. We believe in "markets" they believe in rigging markets so they come out ahead...

Markets Can't "Compete" With This

Corporate conservatives tell us we need to be more "business-friendly" to "compete" with China. But at the same time Steve Jobs was being a realist when he said "the jobs are never coming back" because he understood that the current political climate, controlled by a wealthy few who benefit from China's "business-friendly" policies will not let us fight this. Why should these companies bring jobs back here, when over there they can roust thousands from dorms at midnight and make them use toxic chemicals for 12 hours a day for very low pay to make iPhone screens that he can sell at fantastically high prices? Why should they, unless We, the People tell them they can't do that to people, and that we won't let them profit from it?

As long as we continue to think that this is about "markets" competing, we will lose. China sees itself as a nation, and they have a national strategy to continue to be so "business-friendly" that our businesses can't compete. Our leaders and corporations may have "moved on" past this quaint nation thing but China has not.

We, The People Need To Act To Fix This

As long as we continue to send our companies out there alone against national economic strategies that engage entire national systems utilizing the resources of nations, our companies will lose. But the executives at those companies are currently getting very rich now from these schemes, so what happens in the future is not their problem. Maybe the companies they manage won't be around later, but that is not their problem. Others are concerned, but are forced to play the game because no one can compete with national systems like China's.

When everyone is in a position where something isn't their problem, or where they can't do anything about it on their own, it means this is a larger problem, and this is where government -- We, the People -- needs to get involved. It is our problem but we have been convinced that we -- government -- shouldn't interfere, or "protect" our industries, because "the markets" don't like "government" -- We, the People -- butting in. This is a very convenient viewpoint for few who are geting very, very wealthy at the expense of the rest of us.

We Need A Plan

In U.S. must end China's rulers' free pass at Politico, AAM's Scott Paul writes, Read it, read it, read it!)

We shouldn’t fear China’s citizens. But we should be worried about the actions of its authoritarian — and, yes, still communist — regime that tightly controls the People’s Republic. And we should be downright terrified by some of our own leaders’ attitudes toward China.

... China is not merely the key U.S. supplier of cheap toys, clothing and electronics: Its government is also one of our foreign financiers. China achieved this status by defying the free market and its international obligations toward more open trade and investment.

[. . .] History didn’t do in the Soviet Union. A sustained and aggressive strategy did. China engaged our business and political elites — and seduced them into believing these policies were no longer necessary.

... There has been no strategy, no effort to prevail economically.

... No one is suggesting that China is an enemy and we should just update our Cold War strategies. No one can accurately define what China’s intentions are in terms of foreign policy or defense. But on the economic front, the lessons of the past are instructive: We need a plan.

We need a plan. We need to understand that China is not competing with us in "markets' they are competing with us as a nation. We need a national economic/industrial strategy that understands the urgent need to fight as a country to win the industries of the future.

It’s not just price, it is things a democracy cannot allow. We can’t ever be “business-friendly” ENOUGH. We have to do something else. We have to understand that We, the People -- the 99% -- are in a real fight here to keep our democracy, or we will lose what is left of it.

Democracy Is The Best Economics

When people have a say they demand good wages, benefits, reasonable working conditions, a clean environment, workplace safety and dignity on the job. We need more of that, not less of that. We must demand that goods made in places where people who do not have a say do not have a competitive advantage over goods made in places where people do have a say. And we must demand that those places give their people a say.

As long as we let democracy be a competitive disadvantage, We, the People will lose.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 12:49 PM | Comments (0) | Link Cosmos

February 9, 2012

Producers Vs. Moochers, Freeloaders And Losers -- The Cruel Pro-Rich Propaganda Of The Right

"Producers" and "parasites." Cruel language justifying extreme greed seems to be mainstream now. Even Presidential candidates feel free to disparage 99% of us! In today's right-wing folklore government by We, the People is an evil thing that takes from "producers" and gives to "moochers," "freeloaders," and "losers." Government and taxes "take money out of the economy." Decision-making by We, the People is "collectivism" and "mob rule." And those of us who think the insanely wealthy should pay fair taxes suffer from "envy."

In today's discourse wealthy elites receiving $20 million a year in “capital gains” while paying almost no taxes are “producers,” while janitors or nursing home workers, working two jobs and not making enough to pay rent and feed themselves, are “moochers” and “freeloaders.” Right.

This email came in to CAF yesterday, (see also Richard Eskow's take on it, John Galt Is A Crybaby And So Are You)

I am really curios to know what motivates the mind of a socialist. Why do you think its fair to penalize those of us who produce while rewarding those who do not? If healthcare should be a right then where does it stop? Could one not use the same argument that everyone has a right to free housing? A free car? Perhaps free air travel? Who will pay for all this? What happens when the government has exhausted the money acquired from the producers? I have a feeling producers will stop producing if the government is just going to take it. Again, I ask why should the people who produced be punished to reward free loaders?

Actually, a right to housing, health care and decent transportation sound like the kind of things that proud citizens in a democracy ought to demand, if you ask me.

The Ayn Rand Poison

This email and others like it echo the language of the novels of Ayn Rand, which so many Republican politicians today embrace. The people writing them are disciples of Ayn Rand. They used to be teenagers who resented being told to clean their rooms; now they are grownups who don’t want to be told to pay their taxes. Republicans have enthusiastically embraced the poison of Ayn Rand, its justification of psychopathic greed and selfishness, along with her belief that altruism and democracy are "evil."

This Ayn-Randian idea that there are two kinds of people, "producers" and "parasites," is reflected across the language of the right today. The wealthy "producers" are "job creators" Republican Speaker of the House John Boehner, for example, regularly echoes this core philosophy of "producers" and "parasites," saying,

I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.”

"The very people" who "hire people" shouldn't have to pay taxes because that money is then taken out of the productive economy and just given to the parasites -- "the help" -- meaning you and me...

Who Is The Real Freeloader?

With the release of his (but for some reason only the most recent) tax returns we learned that Mitt Romney collects over $20 million a year, while doing nothing, from the many millions he was able to get control of by stripping companies and laying people off or making them take huge pay cuts and loss of benefits. According to the Christian Science Monitor, this is the story of what happened to the workers in one company when the Romney/Bain machine "came to town":

The new owner, American Pad & Paper, owned in turn by [Mitt Romney's] Bain Capital, told all 258 union workers they were fired, in a cost-cutting move. Security guards hustled them out of the building. They would be able to reapply for their jobs, at lesser wages and benefits, but not all would be rehired.

According to the cruel language of the right, those workers are "losers." If they need to get unemployment or food stamps they are "parasites" and "freeloaders" who are "asking for handouts." When old, they will need the Social Security and Medicare they paid into all their lives, more "handouts." People like Romney says these "entitlements" -- the things we are entitled to as citizens in a democracy -- are "draining the economy."

Mitt Romney says government is the culprit, not people like him who show up and strip our jobs, factories, companies, industries and economy. Romney, who pays very little in taxes on the $20-plus million he receives in "capital gains" every year, wrote in a December USA Today op-ed titled, What kind of society does America want? that the very existence of government itself costs the economy jobs, writing, "With the growth of government has come an inevitable contraction of the private sphere." Romney writes that programs like Social Security and Medicare are examples of "government dependency." And, finally, he writes, "Government dependency can only foster passivity and sloth."

Right. Mitt Romney, producer -- who receives $20-plus million a year for not working -- as contrasted with the "losers" who work two jobs at minimum wage, making so little they need food stamps just to get by. (They used to make more, but Mitt Romney came to town, buying the company they worked for, chopping it up and sending the parts they don't sell to China, laying them off or cutting their wages in half, and taking their health care and pension.)

The Dependency Index

The conservative Heritage Foundation has published an "Index of Dependence on Government," saying we have "unsustainable increases in dependent populations." Heritage writes that, "Americans are haunted by the specter of enormously growing mountains of debt that suck the economic and social vitality out of this country."

Heritage fails to mention that we were paying off the nation's debt before Bush's tax cuts for the wealthy. In fact, at the rate we were paying off the debt when Clinton was President the entire US debt would have been paid off by now. Except for those tax cuts for the wealthy. But according to Heritage, the problem is not wealthy people paying very low taxes, it is humans who have human needs who are a "a potentially ruinous drain on federal finances."

Please take a look at Heritage's "dependency index." Social Security is "government dependence." Medicare is "government dependence." And on and on. Heritage says nothing about the huge, bloated, corrupt, enormous, massive, ginormous military budget -- that doubled under Bush. Heritage says nothing about the incredible subsidies government provides to oil and coal companies. Heritage says nothing about the cost of all of the tax cuts handed out to the wealthiest since the Reagan era. Nothing at all.

Heritage says that We, the People doing things for each other "encourages dependence." They talk about people as if they are squirrels. Like building the interstate highway system encourages dependence or having good public schools encourages dependence or a pension after a life of hard work encourages dependence or public health programs that keep epidemics from spreading encourages dependence or giving vaccines to children encourages dependence or, I guess, in the old days helping a neighbor put up a barn encouraged dependence.

It is the Romneys, getting their $20-million-plus checks for doing nothing -- the "gains" from stripping our economy and sending our jobs to China -- who are dependent. Not the people that the Romneys threw out of work or cut their pay in half. Not the people working two jobs yet not making enough to pay rent and get enough to eat. The real "producers" in our economy are the 99%, the people who work, not the1%er "parasites" who use their wealth and power and connections to game the system and reap vast "gains."


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 1:31 PM | Comments (0) | Link Cosmos

January 27, 2012

Democracy V. Plutocracy, Unions V. Servitude

Servitude: "a condition in which one lacks liberty especially to determine one's course of action or way of life"

Democracy: "a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections"

Plutocracy: government by the wealthy

Labor union: an organization of workers formed for the purpose of advancing its members' interests in respect to wages, benefits, and working conditions

You may have seen the recent flurry of stories about how hi-tech products are made in China. The stories focus on Apple, but it isn't just Apple. These stories of exploited Chinese workers are also the story of how and why we -- 99% of us, anyway -- are all feeling such a squeeze here, because we are suffering the disappearance of our middle class. Our choice is democracy or servitude.

Working In China

A collection of excerpts from the Charles Duhigg and David Barboza story, Human Costs Are Built Into an iPad and the Charles Duhigg and Keith Bradsher story, How the U.S. Lost Out on iPhone Work both from the NY Times:

Rousted from dorms at midnight, told to work:

Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“Work hard on the job today or work hard to find a job tomorrow.”

Banners on the walls warned the 120,000 employees: “Work hard on the job today or work hard to find a job tomorrow.”

(How close is that to the very definition of servitude?)

Long shifts, legs swollen from standing:

Shifts ran 24 hours a day, and the factory was always bright. At any moment, there were thousands of workers standing on assembly lines or sitting in backless chairs, crouching next to large machinery, or jogging between loading bays. Some workers’ legs swelled so much they waddled. “It’s hard to stand all day,” said Zhao Sheng, a plant worker.

Write confessions if late:

Mr. Lai was soon spending 12 hours a day, six days a week inside the factory, according to his paychecks. Employees who arrived late were sometimes required to write confession letters and copy quotations. There were “continuous shifts,” when workers were told to work two stretches in a row, according to interviews.

Injuries from speed-up toxics:

Investigations by news organizations revealed that over a hundred employees had been injured by n-hexane, a toxic chemical that can cause nerve damage and paralysis.

Employees said they had been ordered to use n-hexane to clean iPhone screens because it evaporated almost three times as fast as rubbing alcohol. Faster evaporation meant workers could clean more screens each minute.

American companies forcing Asian suppliers to squeeze workers:

“You can set all the rules you want, but they’re meaningless if you don’t give suppliers enough profit to treat workers well,” said one former Apple executive with firsthand knowledge of the supplier responsibility group. “If you squeeze margins, you’re forcing them to cut safety.”

The Results For The 1%

A series of recent newspaper headlines tells the story of how China's working conditions benefit the 1% here.

NYT: Apple's Profit Soars‎

CBS Moneywatch: Apple shares close at record high

SF Chronicle: Apple CEO's Stock Awards Lift Compensation to $378 Million

ZDNet: Apple: made in China, untaxed profits kept offshore. We don't even get to tax the profits from moving our jobs to China, to use for schools, roads, police, etc.

The Results For The 99%

Headlines like these show how things are going better and better for the 1%. But what happened to our middle-class prosperity? We allowed companies to move jobs and factories across the borders of democracy to places where workers are exploited, calling that "trade." This enabled the breaking of unions and the weakening of our democracy.

The threat is in the air: "Shut up and take the wage cuts or we will move your job to China." How is that threat used on us? Here is an example: We have heard the stories of Mitt Romney's company Bain Capital, and how it "earned" its millions. According to the Christian Science Monitor, this is the story of what happened when a Bain-owned company "came to town":

The new owner, American Pad & Paper, owned in turn by Bain Capital, told all 258 union workers they were fired, in a cost-cutting move. Security guards hustled them out of the building. They would be able to reapply for their jobs, at lesser wages and benefits, but not all would be rehired.

Workers in countries like China where people have no say have low wages, terrible working conditions, long hours, and are told to shut up and take it or they won[t have any job at all. They are given no choice.

Increasingly workers here have their wages, hours, benefits, dignity cut and are told to shut up and take it or their jobs will be moved to China. Because we are pitted against exploited workers in countries where people have no say, we have no choice.

The unions are weakened, the government doesn't enforce or weakly enforces labor laws and regulations, age, gender or race discrimination laws, worker safety laws, so workers are placed in a terrible squeeze. Workers who try to organize unions are isolated, moved, smeared, fired, humiliated, whatever it takes.

This quote by Steve Jobs is from How the U.S. Lost Out on iPhone Work,

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

Democracy Brought Us Prosperity

We used to be a democracy, where everyone used to have a say in things. Because we had a say we built up a country with good schools, good infrastructure, good courts, and we made rules that said workers had to be safe, get a minimum wage, overtime, weekends… we protected the environment, we set up Social Security. We took care of each other. This made us prosperous. A share of the prosperity for the 99% was the fruit of democracy.

China, on the other hand, is not a democracy, and workers in China don't really have a say. So they don't make much money, they don't have good working conditions, the environment isn't protected, etc.

We Used To Protect Democracy

We used to protect our democracy. We used to put a tariff on goods coming in if they were made by people who didn’t have the ability to speak up and better their condition. We’d let the goods in but we would use a tariff to strengthen our country, our infrastructure, our schools – our democracy. This brought us prosperity.

For some reason, we started letting our companies move our factories over there, forcing our workers to compete with workers who have no say. We got tricked, by people who call that "trade," and said it would be good for us. (Like cutting taxes for the wealthy "job creators" is good for us.)

We opened the borders and let the big companies move the jobs, factories and industries over the border of our democracy, to places where workers don't have a say, so they are exploited. And the result was the big corporations were able to come back and cut our pay, and get rid of our pensions, and tell us, "take it, shut up, or we will move your job, too." We made the wages and working and conditions and environmental protections prosperity that democracy brings into a cost. We turned ourselves into a cost. We made democracy a competitive disadvantage.

Plutocrats Say Shed Benefits Of Democracy

Plutocrats say we need to shed the benefits of democracy and become more like China if we want to compete. They say get rid of regulations, employee protections, environmental protections, good wages, benefits like pensions and time off, etc... They say that We, the People (government) "get in the way of doing business." They say the taxes that pay for good infrastructure and schools and police and courts and services like Social Security and care for the disabled and health care for children "take money out of the economy" but they mean these take some of the money that they have been taking from the economy.

Democracy Is The Best Economics

Look at the primary target of the corporate/conservatives: unions. That should tell you something. This is a power confrontation. This is the power of the 1% overcoming the power of the 99%.

Democracy is the power of the 99% to make the decisions, and to build structures that protect us from exploitation by the wealthy and powerful. This confrontation is the story of the origin of our country -- how We, the People confronted the power and corruption of the British aristocracy, overcame that power, and built a country of, by and for the people.

Democracy and the taxes it enabled us to ask from the wealthiest is what enabled us to build the infrastructure and schools and everything that enabled our prosperity. The regulations of democracy are what enable our smaller businesses to compete with the giants. The shared prosperity -- redistribution of wealth -- is what enabled the middle class to grow, and turned us into the most prosperous country and largest market in the world.

Unions

Unions are about building up the power of groups of people, to confront and overcome the advantages of wealth and the power wealth brings to a few. When a union is strong enough to be able to confront the power of big corporations the result is that the 99% get a share of the pie. When unions are strong we all get better wages and better working conditions and a say in how we are treated, whether we are in unions or not. The benefits flow to the rest of the economy.

It would be nice if our system worked well enough that we didn't need to organize unions on top of the structure of laws and regulations, but it is just the fact of life that the wealthy and powerful and their corporations have throughout our history been able to exert tremendous influence over legislative bodies, again and again. So to fight that working people organize and build these organized unions of people, and leverage that power of the group to demand wages and benefits and weekends and a share of the prosperity. The story of the power confrontation between unions of working people (99%) and the large corporations (1%) is the story of how we built a middle class that brought us the prosperity we enjoyed.

It is not just a coincidence that the weakening of the unions coincides with the decline of the middle class. It is not just a coincidence that the current rise of the plutocrats brings in a swarm of anti-union legislation. It is not just a coincidence that the times when our democracy is strongest we all do so much better. And now, when our demcoracy has been weakened by the money and power of the 1% and their corporations, the rest of us are so much worse off.

Not US v. China

This is not about US workers and markets vs China. Working people in all countries are at risk when their countries trade with countries where workers are exploited. China's huge trade imbalance is threatening the world's economy. The loss of manufacturing to countries that exploit workers is threatening workers in many countries.

The US market is still large, and the US can still demand that imported goods be made according to better standards for workers. The rest of the world can also demand that China's workers be brought up to international standards. And we can certainly hold companies like Apple accountable, and demand that they only buy from suppliers that treat and pay workers according to international standards, because allowing companies to cheat, exploit workers and commit fraud drives the good companies out of business.

This is not about taking jobs back from Chinese workers! This is about demanding they be paid fairly and given a say in their workplaces! This is about not exploiting people there or here!

Trade can be an upward spiral, rather than a lever for exploitation of the 99% by the 1%. If Chinese workers are given a say and paid fairly then they can buy things we make and we can keep buying things they make.

Unions = Democracy = Middle Class = Shared Prosperity

Jon Stewart explains:


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 8:42 AM | Comments (0) | Link Cosmos

January 25, 2012

Mitt's Taxes

File under plutocracy: Why Does Mitt Romney Want to Keep His Tax Returns From the Bain Years Under Wraps? | | AlterNet:

Mitt Romney has released his most recent tax returns. They tell us some eye-popping things about Romney and about the wealthy 1 percent and the low taxes they pay on the gains from invested wealth. But they only raise questions about Romney's controversial years "working" at Bain Capital. What would we learn from seeing his tax returns from the Bain Capital years, and what would that tell us about the transformation of our economy into a playground for the 1 percent and a sweatshop for the rest of us?
Go read!

Posted by Dave Johnson at 7:42 AM | Comments (0) | Link Cosmos

January 23, 2012

To Get Our Economy Back Hold Cheaters, Fraudsters And Exploiters Accountable

The spiral-to-the-bottom and inequality we are suffering is not an inevitable result of globalization, it is what happens when we don't hold cheaters and exploiters accountable and stop them. This is not just about Wall Street, it is the story of what has happened to our wages and benefits, jobs, factories, companies, industries, economy and democracy in the last 30-or-so years.

Cheaters, Fraudsters and Exploiters

If cheaters and exploiters are not held accountable and fraudsters are not prosecuted, then the advantages this brings them forces honest players out. We're all waiting to see if there is a deal in the works that lets big banksters off the hook for mortgage fraud and other (uninvestigated) crimes, making their shareholders pay fines for them instead. But that story of the 1%'s fraud and cheating and the consequences to the 99% are not what I am writing about here. This post is about how letting 1%er cheaters, fraudsters and exploiters off the hook has hurt America's manufacturing and trade.

Apple Can't Make It Here

Recent news stories about Apple hilight how we allowed our thriving, high-paying manufacturing sector to erode, with the result that our middle class is in decline. Apple used to proudly make their computers in the United States, but now everything is made in Asia. The NY Times' Charles Duhigg and Keith Bradsher, in How the U.S. Lost Out on iPhone Work describe how China's massive government subsidies and exploitation of workers mean “Those jobs aren’t coming back.”

The Entire Supply Chain Is Over There

China has done what it needs to do to bring factories, which bring supply chains, which bring industries. The NYT story describes what it means to have an entire supply chain located where the factories are,

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.

The Chinese plant got the job.

“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”

Subsidies are often a violation of trade rules. Even so, as the article says, "The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory." So, of course, "the Chinese plant got the job." Meanwhile, our own country has resisted having an "industrial policy" to keep our industries and foster new ones. This is finally changing, but good efforts like "Buy American" and President Obama's green energy policies are fought tooth-and-nail.

Exploited Workers

Another key part of China's advantage is the ability to exploit workers and get away with it -- which lets Apple get away with it, too. And when Apple sees violations, it doesn't stop them.

One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Later in the story,

The first truckloads of cut glass arrived at Foxconn City in the dead of night, according to the former Apple executive. That’s when managers woke thousands of workers, who crawled into their uniforms — white and black shirts for men, red for women — and quickly lined up to assemble, by hand, the phones.

... The company disputed some details of the former Apple executive’s account, and wrote that a midnight shift, such as the one described, was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours’ notice of any schedule changes.

Foxconn employees, in interviews, have challenged those assertions.

Apple Audits Its Suppliers, Finds Many Violations

Earlier this month Apple released a report describing the practices of its suppliers. NY Times: Apple Lists Its Suppliers for 1st Time,

Apple said audits revealed that 93 supplier facilities had records indicating that over half of workers exceeded a 60-hour weekly working limit. Apple said 108 facilities did not pay proper overtime as required by law. In 15 facilities, Apple found foreign contract workers who had paid excessive recruitment fees to labor agencies.

And though Apple said it mandated changes at those suppliers, and some showed improvements, in aggregate, many types of lapses remained at general levels that have persisted for years.

William K Black, writing in Apple's Foreign Suppliers Demonstrate Widespread Scamming and Horrific Abuse of Employees at AlterNet, looked at Apple's report. Black writes that the audit of suppliers, "shows that anti-employee control fraud is the norm."

Black says that two things stand out in the report,

First, Apple rarely terminates suppliers for defrauding their employees – even when the frauds endanger the lives and health of the workers and the community – and even where Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices. Second, it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers even when they commit anti-employee control frauds as a routine practice, even when the frauds endanger the worker’s and the public’s health, and even when the supplier repeatedly lies to Apple about the frauds. Apple’s report, therefore, understates substantially the actual incidence of fraud by the 156 suppliers (accounting for 97% of its payments to suppliers).

As Black wrote, "Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices" and "...it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers" Apple doesn't stop these violations. They get too much of a competitive advantage out of it.

This Is Fraud

When you buy a product you assume that it is on the shelf at the cost you are asked to pay because laws and regulations were followed and standards were met. So you buy the one that has the right quality at the right price. But what if a product has a low cost as the result of cheating, exploitation and violations of environmental, labor and trade laws? What if there is a lie at the root of the transaction you are engaged in?

China's massive investment in capturing entire industries -- a violation of trade laws -- means that many of the components of the high-tech manufacturing supply chain have migrated out of the US to that country. And China's non-democracy political system means that workers have few, if any rights, and often the rights they have are not enforced. Black says American companies taking advantage of this are engaging in "a form of control fraud (fraud in which the head of a company subverts it for personal gain)."

Anti-employee control frauds most commonly fall into four broad, but not mutually exclusive, categories – illegal work conditions due to violation of safety rules, violation of child labor laws, failure to pay employees’ wages and benefits, and frauds based on goods and loans provided by the employer to the employee that lock the employee into quasi-slavery.

Allowing Fraud Drives Legitimate Businesses Out Of Existence

The key point Black makes is that allowing cheating, fraud and exploitation to continue brings them advantages that drive legitimate businesses out,

George Akerlof, in his famous article on markets for “lemons” (largely describing anti-customer control fraud), explained the perverse “Gresham’s” dynamic in 1970: "[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”

A Criminogenic Environment

Specifically, what this means to companies that try to compete with companies like Apple,

Anti-employee control fraud creates real economic profits for the firm and can massively increase the controlling officers’ wealth. Honest firm normally cannot compete with anti-employee control frauds, so bad ethics drives good ethics out of the markets. Companies like Apple and its counterparts create this criminogenic environment by selecting least-cost – criminal – suppliers who offer components at prices that honest firms cannot match. Effectively, they hang out a sign – only the fraudulent need apply to be suppliers

When we let companies get away with building products in places that violate trade rules, allow environmental degradation, exploit workers, cut corners on safety, use cheap components and ingredients, these companies get cost advantages that force honest companies out of business. This is the story of our economy. This is why our middle class is engaged in a race to the bottom.

Should Companies Like This Exist In The US?

Robwert Cruickshank puts two and two together, in a must-read post, Thinking Differently About Apple and 21st Century Society. He writes,

In the last year or two, it’s become increasingly clear that the way Apple makes its products is deeply flawed. Working conditions at the factory which makes most of their products – Foxconn in Shenzhen, China – are so appalling that workers engaged in a rash of suicides in 2010 to ameliorate their own suffering. Earlier this year workers threatened mass suicide over pay and working conditions. And of course, there’s the fact that Apple makes these products overseas rather than in the United States, where unemployment remains at some of the highest levels we’ve seen since the Great Depression.

Cruickshank asks if companies with this attitude should be allowed to continue to do business? He writes that Apple has,

...a narrow focus on their products and their profits, and disdain wider concerns for the good of society. When an unnamed Apple executive was asked about their role in addressing America’s economic problems, their response was revealing:
They say Apple’s success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

That quote is perhaps the best encapsulation of the pathologies of the modern American corporation. In fact, Apple does have an obligation to solve America’s problems. Everyone who lives in this country has that obligation. And corporations have that obligation too. If they don’t want to help make things better, then they shouldn’t exist.

Then he gets to the wider point,

The notion that companies exist only to generate profit or build a specific few set of products is corrosive. Those profits and products serve the rest of society. And as a part of that society, companies and their executives exist to make that society a better place. If they are engaged in a set of practices that make society worse off, then those actions are indefensible and need to be changed.

For the last 30 years, American businesses have been devoted to a single-minded pursuit of maximizing short-term profits. Unsurprisingly, this has had profound ripple effects throughout the rest of society. The economy became focused on those profits, and so with it followed politics, culture, and our values as a civilization.

By now it should be clear to everybody that while this works well for the small elite that has hoarded all these profits – the so-called “1%” – it has utterly failed to provide a happy and fulfilled life for everyone else.

Here I quote Cruickshank quoting Black, who is looking at Apple's report of its suppliers, with "overwork and other forms of employment fraud being rampant."

As William K. Black explains at Alternet, this is a good example of what may be a widespread tolerance for fraud in the global economy:
These frauds take place abroad, but they harm employees at home. Mitt Romney explains that Bain had to slash wages and pensions to save firms located in the U.S. who had to meet competition from foreign anti-employee control frauds. The damage from foreign anti-employee control frauds drives the domestic attack on U.S. manufacturing wages. Bad ethics increasingly drive good ethics out of the markets and manufacturing jobs out of the U.S. and into more fraud-friendly nations.

"These Frauds Take Place Abroad But They Harm Employees At Home"

Once again, for emphasis, "these frauds take place abroad, but they harm employees at home."

If we want the downward slide to stop we have to decide to hold the cheaters, exploiters and fraudsters accountable for their actions. At home the efforts by the giant corporations to keep the National Labor Relations Board (NLRB) and the Consumer Financial Protection Bureau (CFPB) from doing their jobs, enforcing the rules and holding them accountable further show how this is affecting us all. Abroad we have to demand enforcement of labor and trade rules so companies like Apple can not gain advantages that put more ethical and honest companies out of business. We certainly should not be letting products made there have cost advantages here and stiff tariffs can fix that. Letting companies get away with this makes democracy a competitive disadvantage.

We have to get mad and hold the cheaters, fraudsters and exploiters accountable.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 2:43 PM | Comments (0) | Link Cosmos

January 20, 2012

The Kangaroo Court of Wall Street

A story of systemic corruption, everyone paid off. Instead of an excerpt, just go read: The Kangaroo Court of Wall Street | The Big Picture

Posted by Dave Johnson at 10:15 AM | Comments (0) | Link Cosmos

January 19, 2012

Why Keep The Capital Gains Tax Break?

Mitt Romney's ultra-low tax rate on his ultra-high income is reviving questions about the breaks and perks that the wealthiest of the 1% receive from the rest of us. One of these is a special low tax rate for investments -- as if anyone needed special tax incentives to induce them to make a bundle.

High Incomes At The Top

How much does Romney make? We won't know until we get a chance to see his tax returns -- if we do -- but Romney described his $374,328 income from speaking fees last year as "not very much." If $374K is "not very much" of his income ... well ... at least we can understand why he feels he can casually make $10,000 bets as if he was just pulling a dime from his pocket.

In his post What Mitt's Taxes Could've Paid For (If Not For Those Cushy Tax Breaks), Richard Eskow writes,

1,470 households made more than a million dollars and yet paid nothing -- zero, zip, nada -- in Federal income tax in 2009.

[. . .] The top 25 hedge fund managers in the US made $22 billion in 2010.

Low Taxes At The Top

Mitt Romney's admission that he probably pays a 15% tax rate shows us what is going on. For you or me, when our taxable income passes about $35,000, we start paying a 25% rate, much higher than Mitt pays on his millions on income. (That doesn't mean we pay 25% on money up to $35K, which is what most people think. It means any additional money we make after the $35K is taxed at that higher rate rate. If we make $35,001 we only pay an increase of ten cents. That's how tax brackets work.)

Lots Of Money To Use To Attack The Deficits

This special low tax rate on capital gains is sucking a lot of money out of We, the People's ability to pay for our schools, military, infrastructure, etc, which is part of why we are borrowing so much. How much? Continuing to steal from Richard Eskow's post,

As we wrote earlier, eliminating these tax breaks would add as much as $44 billion to our bottom line in the next ten years. Or to put it another way:

Ending cushy breaks for these 25 billionaires could also reduce the deficit by as much as $44 billion. Paging all deficit hawks!

In 2008 the taxable income of everyone earning above $100,000 was $3.4 trillion. If we concentrate our tax reform on the upper end of that spectrum -- the Romneys, not the folks in the $100-$400 thousand range -- we know that every percentage point in increased collection comes out to another $34 billion per year. That ain't chicken feed.

Why The Low Capital Gains Tax Rate?

The justification for a special tax rate for gains from investing capital is supposed to be to provide an incentive to invest. But there is already a really good incentive to invest: to make a bundle of cash. Piling a special "incentive" on top of making a bundle of cash creates market distortions - moving investors away from deciding where to put their money based on the value and merits of the investment and toward tax-reduction schemes.

The necessary precondition for investing capital is having capital. So a tax break on the return from investing capital is by definition a break for the well-off. Here is the reality: capital gains are taxed at a lower rate because most of the income of the 1% is from capital gains, and most of the income of the 1% is from capital gains because the tax rate is lower. The "incentive to invest" should be making a good investment, period.

I'll bet you $10,000 that getting rid of this tax break helps fix the deficit, and leads to a saner investment climate. (Of course, I'm kidding, I think that is a lot of money.)


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 9:35 AM | Comments (0) | Link Cosmos

Did The President's Jobs Council Go All Corporate?

President Obama's Council on Jobs and Competitiveness ("Jobs Council") issued a report calling for fewer regulations and lower corporate tax rates. This doesn't have to be a bad idea.

The Report

The Jobs Council report, Road Map to Renewal makes a number of recommendations. Here are the main points - please click through for the details:


  • Prepare the American Workforce to Compete in the Global Economy

  • Foster a Climate that Lets Innovation Thrive

  • Adopt an “All-In” Strategy on Energy

  • Revitalize the American Manufacturing Sector

  • Enhance American Competitiveness through Smart Regulatory Reforms

  • Reform the Outdated Tax System to Enhance American Competitiveness

Council Heavily Weighted Toward 1%

The Jobs Council is heavily, heavily, heavily weighted to tilt toward the 1%. The list of members reads "Chair and CEO" with a smattering of ultra-wealthy finance types thrown in, and then a couple of token union leaders.

The Objections

United Food and Commercial Workers president Joseph Hansen abstained from voting. AFL-CIO President Richard Trumka released a 1635-word dissent. In the dissent Trumka writes, (emphasis added)

I agree with the overall spirit and a number of the specific recommendations in today’s report ... I absolutely agree ... that the United States is falling behind our international counterparts in investing in modern infrastructure, education, and skills; supporting a vibrant manufacturing sector; developing cost-effective and globally responsible energy practices; and supporting innovation. ...

Unfortunately, I believe the report downplays the need for a proactive role for the U.S. government in many of these areas; fails to address the significant additional revenues needed to address the challenges identified on an appropriate scale; and in many cases erroneously identifies the root causes of the underlying structural problems.

... the report addresses regulatory issues as if we were not in the midst of a prolonged economic crisis whose proximate causes clearly included inadequate regulation of business, and in particular financial markets and institutions.

With respect to corporate tax reform, I believe that corporations as a group pay too low a share of taxes to support the kind of infrastructure investment and education/skills upgrades that are so urgently needed at this time... The report places way too much emphasis on statutory tax rates, mentioning only as an aside that the effective rates paid by corporations are much lower, and that overall corporate tax revenues as a percent of GDP are the fourth lowest in the OECD.


Yes, We Can Cut Corporate Taxes ... If

Actually, we can cut corporate taxes, increasing our international competitiveness, while We, the People still fund our democracy and get paid back for our investment that enabled the prosperity of the corporations. Here's how: Cut corporate taxes, but raise taxes on the 1%er owners of the corporations. Stop the nonsense of lower capital gains tax rates, and restore pre-Reagan top tax rates. Also, require corporations to either use their cash or pay it out to shareholders instead of just sitting on it as many do now.

Capital gains are taxes at a lower rate because most of the income of the 1% is from capital gains, and most of the income of the 1% is from capital gains because the tax rate is lower. The "incentive to invest" should be a good investment, period.

What does cutting corporate tax rates accomplish? First, by cutting corporate tax rates the right ways our companies could become more competitive with companies in other countries. This can be an incentive to locate companies here. But we don't have to just sacrifice this revenue by any means. Instead we can tax it when it becomes personal income. But cutting corporate tax rates without increasing personal income tax rates to make up for it -- which happens to be the DC elite consensus as voiced by Simpson-Bowles -- is complete folly, nothing more than another scam by the 1% to rob We, the People. It is essential that a cut in corporate tax rates happen at the same time as taxes on the resulting personal income are increased, along with requirements that corporate money is either used inside the company or paid out to shareholders.

Look at this chart, which tells you everything you need to know about the who what when where and why of corporations. Corporate wealth is also personal wealth. When you hear about corporations doing well, think about this chart:

wealth2

Yes, the top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%. And it's most likely only gotten worse since these figures were gathered.

Cut The Right Regulations

When the elite DC consensus calls for cutting regulations, they mean regulations that hamper the 1%'s ability to fleece us even more. But there are regulations that actually do impede competitiveness.

Here is what usually happens in DC. After Congress passes laws the regulatory bodies translate the laws into a regulatory framework. This is where the giant companies and their lobbyists get to work. The work they do is influencing these agencies to write regulations that help them, the 1%er corporations that can afford to swarm the agencies with lobbyists -- and that obstruct their competition. So we end up with a situation where small businesses and startups don't have a chance making it through the regulatory maze. They either have to hire specialized, $1000-an-hour DC law firms to help them out, or give up. This is by 1%er design, not because of "big government."

So yes, there are regulatory impediments to competition, but I don't think this form of "cutting regulations" means what the 1%ers on the Jobs Council and the big corporate-elites think it means.

Education

On education, the Jobs Council recommends,

In order to stay competitive in a global age, we must invest in our future by ensuring Americans have the right education and skills to realize their full potential and drive our nation’s economic success. ... These measures will create a purposeful educational system that produces work-ready graduates, satisfied employers with access to a talented labor pool, and a vibrant economy poised for growth and success.

Trumka writes,

With respect to the education section of the report, I believe that the Jobs Council’s education recommendations begin and end in the wrong place: focusing on providing businesses with an endless supply of workers -- as opposed to supporting, improving and sustaining a strong public education system.

So the report calls on government to reconfigure our education system to provide companies with trained worker-bees, which means companies don't have to cough up the dough themselves to train their own workers. The report actually goes even further, basically calling for government to replace think-for-yourself education with do-what-we-say job training. There's a difference. And they ask for this after already asking for tax cuts, too. Sheesh.

The Rest

On energy the 1%ers of course mean "drill, baby, drill." But the council is correct, we do need to go "all-in" on energy, with massive Green Energy investment, freeing us from the damage Big Oil and King Coal do to our environment, our economy, our politics and our democracy.

On manufacturing the council notes that since 1980 manufacturing has slipped from 20% to only 9% of total employment,. The report calls for adding "three to four percentage points of global value added market share—an ambitious but achievable goal." They say we should :take share from our global competitors." There are wonky but great suggestions like "cluster development" and important ideas like going after in promising new manufacturing sectors. The President has formed an Office of Manufacturing Policy that is taking up many of the kinds of recommendations in this report.

In fact, we also need to rewrite our trade agreements so they provide a win-win for the working people here and across our borders, and incentives to manufacture here rather than move jobs, factories, companies and industries out of the country.

And So In Conclusion

Trumka sums things up nicely at the end of his dissent:

Perhaps most profoundly, the report does not ask the critical question: why is our country suffering a manufacturing crisis, complete with massive job loss and a structural trade deficit, when countries with higher overall taxes, higher wages, and more robust health, safety and environmental regulations are enjoying trade surpluses?

The answer lies in the view that we share with so many of our fellow Americans: that our country has become dominated by the interests of the wealthiest 1% at the expense of the remaining 99%. It turns out that a country run in the interests of the wealthiest 1% systematically underinvests in public goods;systematically silences, disempowers, and underinvests in its workers; and in the end is less competitive and creates fewer jobs than a country that focuses on the interests of the 99%.

Echo and amplify what Trumka said: Perhaps most profoundly, the report does not ask the critical question: why is our country suffering a manufacturing crisis, complete with massive job loss and a structural trade deficit, when countries with higher overall taxes, higher wages, and more robust health, safety and environmental regulations are enjoying trade surpluses?

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 9:33 AM | Comments (0) | Link Cosmos

January 14, 2012

NY Times Gives Romney The Cain Defense

In which the NY Times avoids being a "truth vigilante" -- goes to the town of one of the companies in the Romney video, talkes to people who were not affected by what Romney's company did.

This is the Cain defense: there were actually women he didn't harass.


Posted by Dave Johnson at 11:11 AM | Comments (0) | Link Cosmos

January 13, 2012

1% vs 99% In The News

Apple CEO Cook pay could lead in 2011 with $378 million pay package due to restricted stock - The Washington Post

vs

'Mass suicide' protest at Apple manufacturer Foxconn factory

Around 150 Chinese workers at Foxconn, the world's largest electronics manufacturer, threatened to commit suicide by leaping from their factory roof in protest at their working conditions.

Posted by Dave Johnson at 10:38 AM | Comments (0) | Link Cosmos

January 12, 2012

When Mitt Romney Came To Town -- Who Benefits?

The MUST WATCH video from the post below:

Another aspect of this, you have to have a heck of a lot of money in the first place to participate in private equity, hedge funds, etc. Even in stocks, actually: 50.9% of all stocks, bonds, mutual funds are owned by the 1% and 39.4% owned by the next 9%. The bottom 50% of us own 0.5% of all stocks, bonds and mutual funds.

So if this does somehow benefit "the economy" it is not an economy that most of us participate in at all. All most people get out of this intense capitalism is the wage cuts, job cuts, loss of benefits, etc.

THIS is who benefits from the layoffs, job cuts, wage cuts, loss of benefits, environmental degradation, worker deaths/injuries, and the rest:

wealth2

This chart says it all. The 1% benefit, almost no one else. And we are ALL -- 99% of us, anyway -- feeling it now.

Posted by Dave Johnson at 6:00 PM | Comments (0) | Link Cosmos

MUST Watch: When Mitt Romney Came To Town

This is the story of what has happened to America since the 80s:

Outsourcing jobs to places where people don't have a say so they can't demand good wages, firing people and making them reapply for their jobs but at half the pay, gutting people's benefits, stripping companies, treating employees like throwaway Kleenex, closing factories, stealing pensions, borrowing and pocketing... Locust capitalism. Chop shops.

MUST WATCH!!

And keep this in mind if people try to tell you that doing what it take to increase the stock price helps everyone:

wealth2

Also see post above, When Mitt Romney Came To Town -- Who Benefits?

Posted by Dave Johnson at 12:26 PM | Comments (0) | Link Cosmos

January 3, 2012

Republicans Have Shut Down The NLRB. The President Must Act!

As of now an agency of our government, the National Labor Relations Board (NLRB), is effectively shut down, unable to do its job. This is a "nullification" by Republicans, of laws that protect workers and companies, in exchange for campaign help from the 1%. They are simply obstructing, blocking appointments in order to keep the agency from functioning. The President has a responsibility to keep the government operating and must use his power to make recess appointments to get the NLRB up and running.

The NLRB

The mission of the National Labor Relations Board (NLRB), by law, is "to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy."

Once again, the reason we have the NLRB is:

"...to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy."

For readers who missed that, here it is in bold:

"to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy."

It's The Law

That's right, it is the policy of the U.S. government, and the law, to "encourage" unionization because higher wages and benefits helps Americans and our economy overall. By law.

It's the law.

Influence Of The 1%

Yes, it's the law. But so what? Paying good wages and providing benefits means that the 1% and their corporations might have to wait a bit longer to stash away a few billion more, so they are furious at such government "interference." Yes, it is better for everyone in the long run when working people do better, but it isn't better for the 1% right now, this quarter, so they fight every effort to help the middle class.

The 1% and their big corporations have a lot of influence. They dole out generous campaign contributions to those politicians who do their bidding. And they set up "outside groups" that are allowed to spend unlimited amounts to help those they favor and fight those they do not. And they hire lobbyists -- and let current members of Congress and their staff know they can hire them, too, later, for extremely generous salaries, if they just play ball now.

Agency Shut Down

In 2010 the Republican majority on the Supreme Court ruled 5-4 that the NLRB must have a quorum of board members or it cannot decide cases. Ongoing Republican efforts to keep the Board from operating succeeded. Over 600 decided cases were thrown out. Big companies could continue to get away with firing people for trying to exercise their legal rights to organize unions so they could get better pay and benefits, regardless of what the laws said.

So Republicans are doing the bidding of the 1%. Today the NLRB is effectively shut down because it does not have enough Board members to function. Republicans in the Senate have blocked appointments to the Board, to keep it from operating, to prevent it from deciding cases, so that big companies can operate with impunity and continue to shovel all the gains from our economy up to the top 1%.

Nullification

"Nullification" was the pre-Civil War "states rights" practice of Southern states simply ignoring federal laws. The Republicans are again engaging in nullification, on behalf of the 1%.

Kevin Drum at Mother Jones, in Nullification Makes a Comeback, explains,

Republicans are refusing to allow votes on President Obama's nominee to head the new Consumer Financial Protection Bureau and on his nominees to fill vacancies on the National Labor Relations Board. In both cases, the Republican refusal is explicity aimed at shutting down these agencies.

... Republicans make no bones about why they're doing this. They opposed the CFPB from the start, and they're now using the filibuster as a way of unilaterally preventing it from operating even though it was lawfully created by a vote of Congress and signed into law by the president. Likewise, they're afraid the NLRB is about to make some rulings they dislike, so they're using the filibuster as a way of shutting it down by denying it a quorum.

The 1% are only 1%, and we are technically still supposed to be operating as a country where the majority rules. So when they can't get their way the 1% engage in various schemes to get their way. We have seen an unprecedented use of filibusters to block the ability of the Congress to function. We have seen hostage-taking and shutdown attempts. In the case of the NLRB (and the new Consumer Financial Protection Agency) we are seeing another "nullification" effort -- preventing the agency from operating by preventing appointments.

This is not politics, this is not bipartisanship, this is intentional obstruction to keep the government from operating.

Where Is Our President?

The President of the United States has a lot of power -- if he chooses to exercise that power. One of his powers is to make appointments himself at times when the Senate is unable to make appointments. This is in the Constitution because the Founders understood how important it is to keep the government operating.

The Constitution is clear about the President's power, and his implied responsibility to use that power to keep the government operating:

Article II Section 2: The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

Article II Section 3: ...he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper;

If the House and Senate disagree on adjournment, the President can adjourn them. And when they are adjourned he can make recess appointments. The Congress is engaging in a charade of "pro-forma" sessions to give the technical appearance of being in session when they are not in session as part of this obstruction/nullification strategy by the agents of the 1% to keep our government from functioning for the 99%.

The 15-Second Option

The President had the power to make recess appointments at noon today, when the Senate was officially in recess between the first and second sessions of the 58th Senate. This would have kept this important agency in operation, doing its legally mandated job of protecting workers and companies. The president didn't.

President Teddy Roosevelt used this power in 1903 to appoint 160 officials. The country survived.

Adjourn And Appoint

We can't wait. We have an extraordinary situation here, where one of the parties, as a political strategy, in exchange for campaign assistance from the 1%, is obstructing for the purpose of preventing the government from operating. It is the duty of the President to keep the government operating.

Mr. President, this is outrageous. Working people need you to use your power to get the NLRB up and functioning. Please, adjourn and appoint -- WE CAN'T WAIT!


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 12:35 PM | Comments (0) | Link Cosmos

December 31, 2011

Mass Unemployment As Conservative Policy - To Keep Wages Down

In England under Margaret Thatcher:

The policy was to create mass unemployment IN ORDER to reduce the strength of the working class IN ORDER to bring wages down and profits up -- so that the few at the top benefit.

Posted by Dave Johnson at 9:32 AM | Comments (1) | Link Cosmos

December 24, 2011

What Next In The Fight Over Who Our Economy Is For?

Who is our economy for, anyway? In the United States We, the People are supposedly in charge and our country and economy are supposed to be managed for the public good. But that isn't how things have been working out, is it?

Let's take a quick look at America over the last few decades.

We used to have a social contract. We invested in top-notch infrastructure (like the interstate highway system) and education (the best universities and research), and then tax the resulting gains at very high rates, to recirculate those gains for the benefit of all of us.

Broken Social Contract

Then the contract was broken. Starting in the 1970s a cabal of wealthy businessmen and conservative ideologues organized and funded an attack on We, the People government, manipulating public opinion and our political system, gutting the regulations and trade rules that protected us and our way of life, privatizing -- selling off things We, the People own -- and killing the tax-and-invest cycle so they could keep the gains from all of that prior investment for themselves.

Blanket Of Propaganda

To provide cover for the operation these agents of the 1% spread a thick blanket of propaganda, using every technique in the modern marketing book. They divided us by race, religion, gender, sexual preference, even pitting people who like quiche and lattes against those who like beer and sausage. To cripple potential opposition they infiltrated and fractured key institutions, and turned the public against the news media. They developed a professional career-path system that rewards those who play along with the corruption and destruction and punishes those who do not. To cripple dissent they used ridicule, shame and intimidation.

Destructive Choices Come Home To Roost

Since then things have steadily fallen apart. The infrastructure is crumbling. Unemployment is extreme. The country has very high debt. The trade deficit is extreme. Half of us are poor or nearly poor. Inequality is at the highest levels.

Bailouts For The 1%, Sell-Outs For The 99%

When things hit the fan it became clear that our country is no longer run for the good of We, the People. When it came down to it, a few got special treatment, the rest of us got ... uh, less-than-special-treatment. (And weren't even kissed.)

When the financial crisis occurred Congress was told they literally had only hours to come up with hundreds of billions to bail out the too-big-to-fail banks, and they did - with almost no conditions. We know now that the Federal Reserve also stepped up, providing trillions to the big banks, even hundreds of millions to bankers' spouses! State and local governments, institutions and smaller businesses? The unemployed and millions facing foreclosure? Not so much.

Plutocracy Not Democracy

They provided assistance for the giant financial institutions of the 1%. Instead of providing assistance to the 99& -- We, the People -- our government instead cut the things We, the People do for each other. It was made clear that this country is now a plutocracy, not a democracy.

System Of Control Breaking Down

It is clear where we are. But it is also clear that the system of control is breaking down. The elections of 2006 and 2008 shook the foundations. Democracy tried to reassert control. The behind-the-scenes system of lobbyists writing legislation that passes under cover of "studies" from corporate-front think tanks, telling us this is for our own good, propelled by a flurry of corporate-funded op-eds, stopped working. After the bailouts for banks / sell out for the rest of us, people started figuring things out. In response the 5-4 Supreme Court handed down the Citizens United decision, flooding the system with corporate money.

Instead of stealth takeover masked by propaganda we now see blatant grabs of wealth and raw power poorly disguised. Now the control is in our faces every day. Even constant filibusters of acts that might help We, the People were no longer enough to keep a lid on. So now it is shutdowns, hostage-taking, refusal to follow laws, refusal to prosecute, threats to take down the government and/or the economy. Now more visible methods of suppression are in use -- batons, tasers and pepper spray.

Waking Up

Everyone has been frustrated, discouraged, betrayed, scared and angry but without a focus for action. Then came the Occupy movement, people actually showing up and showing how! It resonated. People responded, and the conversation of the country was pulled out of the propaganda fog, at least for a while.

Stephen Lerner, interviewed by Sarah Jaffe for AlterNet, discusses where we go from here, saying, "[I]t's an exciting feeling to see something a lot of people spent a lifetime hoping for --this kind of dramatic increase in activity that targets financial capital, those who really control the country." On Occupy Wall Street, Lerner says,

Everybody knows they're getting zapped by banks, and what's so good about Occupy is that it's put that front and center. The fact that they were in Wall Street, I think everybody forgets. It was not Occupy a park somewhere, it was the fact that it was in the middle of the financial district. And I think on an intuitive level, people all over the political spectrum understand that those guys are at the center of how the economy is organized in a way that doesn't work for most people.

On Wall Street's position in our economy,

I don't think people are mad at somebody who invented a product or founded a company. It's that people see that Wall Street is not productive. Their wealth and their riches, they do not come through any normal means -- they come through cheating and gambling and ripping us off, which I think troubles us in a different kind of way.

On today,

I don't think anybody should view a sort of holiday or winter lull in activity as a sign of anything. As people have said, movements ebb and flow, and whenever we look back, spring is the time that things take off again. It's really important that people not say “Oh, everything was front page news and now it's not.” People instead should be stepping back, saying, “In three months we did more than anybody imagined we could do, now it's time to step back and figure out the next stage.”

What Next?

Now comes the long slog of organizing people into focused action to take back our country from the 1%. Van Jones has been laying the groundwork, joining with MoveOn.org and other organizations to organize the Rebuild the Dream movement, and its Contract for the American Dream. Please visit and get involved.

Here is Van Jones at Netroots Nation, talking about the American Dream movement:

Organized labor is fighting, too, with new tactics and getting more people involved. They are focusing on labor's role in creating a middle class in America. The recent Take Back the Capitol demonstrations are a case in point. In conjunction with many local and national organizations SEIU brought unemployed people to the DC to occupy the offices of 99 legislators, asking for jobs programs and extensions of unemployment benefits. They also marched on "K Street" - the symbolic center of lobbying activity.

Here is AFL-CIO President Rich Trumka, Take Back the American Dream conference in October, calling for "a massive, militant movement":

Trumka told the audience that the right wing is “banking on an upside-down America for its path to political power.” Trumka said that now is the time for “a mighty movement for jobs and a just economy," adding, "We won't stop fighting, shoving and kicking until everyone is back at work."

Here is Steelworkers President Leo Gerard, talking about labor support for Occupy Wall street, and holding Wall Street accountable:

Here is Communication Workers of America President Larry Cohen discussing the fight for the middle class on The Ed Show.

See the pics in this post, showing labor's involvement at the November 2 Occupy Oakland actions:

Up To Us

What happens next is up to us. Don't be discouraged. "The people, united, will never be defeated."

THIS is what democracy looks like. Here are Wisconsin protesters chanting: "Tell me what democracy looks like. THIS is what democracy looks like!"




For those of us who can't get enough, here is 13 minutes of THIS is what democracy looks like!


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 5:36 PM | Comments (1) | Link Cosmos

December 14, 2011

Republican Hostage-Taking Threat Again! Guess Who Benefits?

Once again, Republicans are holding government hostage, trying to force through unpopular cuts to the things We, the People -- "the 99%" -- do for each other and our economy, while giving handouts to the 1% who pay for their campaign ads and smears. Once again they are threatening to just shut down the whole government if they don't get their way This time the hostage is unemployment benefits for 2 million people and the payroll tax cut that is the only stimulus left to keep the economy going. Here's the thing, they say they want "cuts" but what they are really doing is shifting costs from the 1% on to the rest of us.

The current 112th Congress is the first Congress elected under the Citizens United Supreme Court decision that opened the floodgates of corporate money in elections. Remember the flood of ads accusing Democrats of "half a trillion in cuts from Medicare" that got them elected -- paid for with corporate money? Those ads swung the electorate toward Republican candidates, and now we are seeing the results -- including cuts in Medicare and even plans to privatize it entirely.

How Many Times?

To get their way Republicans have already nearly shut down our government or just shut down parts of it several times. Shutdown. Hostage. Shutdown. Hostage. Shutdown. Shutdown and hostage. Shutdown. Shutdown. Shutdown. Hostage. Shutdown. Shutdown. Hostage. Hostage. And on and on...

This Time

Here are just some of the Republican demands this time if we want the hostage released:


  • Approve the Keystone XL oil pipeline project.
  • Block rules reducing air pollution from industrial burners.
  • Drug tests for people receiving unemployment benefits.
  • Reduce the duration of jobless aid from 99 to 59 weeks.
  • Allow states to cut benefits even more.

Even Worse Than That

The National Women's Law Center writes, in, House Bill Cuts Unemployment and Health Benefits, Domestic Programs, Child Tax Credit and More that there are many other reasons to be concerned:


  • Slashes federal emergency unemployment benefits for long-term jobless workers by more than half—and hits the states with the highest unemployment rates the hardest.
  • Makes permanent, mean-spirited changes to the basic unemployment program, such as requiring claimants to have a high school diploma or GED and making unemployed workers pay for re-employment services offered by the government.
  • Reduces health benefits by reducing financial protections for low- and moderate-income families purchasing health insurance, cutting funds to providers serving low-income populations, and slashing prevention and public health funds.
  • Denies the refundable Child Tax Credit to low-income immigrant families by requiring a Social Security number to claim the credit.
  • Cuts funding for non-security discretionary programs by over $26 billion—on top of the cuts already imposed by the Budget Control Act.

The European Lesson

Republicans claim that cutting back government is good for the economy and creates jobs. (Note -- they always claim that anything for the 1% is good for the economy and creates jobs, whether or not it really is good for the economy and creates jobs or not.)

But is it really good for the economy to cut back on the things government does for the people and the economy? Let's look to Europe, where they have been cutting back on government in a grand experiment to see if that helps the economy. (Hint: it has really, really, really hurt the economy.) Reuters: Analysis: Europe's austerity zeal risks killing the patient,

Europe's "no pain no gain" attitude to solving its sovereign crisis risks exacerbating the bloc's problems, choking off the very growth needed to raise the money to pay down the debt.

... The austerity zeal risks tipping the continent back into recession and a downward spiral of austerity as pitiful growth prospects undermine budgetary targets and ramp up debt burdens, meaning further austerity is required.

"The expansionary fiscal contraction story says that you cut, you show you are serious about cutting and then the confidence fairy will come along and she will start pulling in private investment," said Stephen Kinsella, professor of economics at the University of Limerick.

"The expansionary fiscal contraction story is a lie. You don't cut your way to growth."

Shifting Not Cutting

Do cuts in government spending actually cut spending? Consider what happens when you cut health care spending. The need for the health care certainly doesn't go away, but the cost of it is shifted away from government and on to individuals. Since iIndividuals do not have the economy-of-scale bargaining power and ability to protect themselves from scams and schemes that government does, their own individual cost is often much higher. So when these costs are shifted from government the cost to the larger economy is actually increased dramatically.

The things government does are done because they need to be done. So if government doesn’t pay for them, does the need go away? No, when you cut government the need is still there. The costs are still there. But the power to bargain and to protect is gone. By cutting the 99%'s ability to protect themselves from scams and schemes, the 1% are better able to prey on them.

So, no, cutting government does not cut the costs of the things government does, it just shifts those costs from government onto the larger economy -- the 99% -- and even increases them, to the benefit of the 1%.

Who They Are Protecting And Who They Are Hurting

Why else do the 1% push so hard for government budget cuts, even though they really just shift the same costs onto the larger economy? Because this cost-shifting takes the tax pressure off of the 1%. Government collects taxes to cover the things regular people need, the cost of maintaining and modernizing infrastructure, etc. Of course, these are all good for the economy, the country, and the people. But since the 1% make most of the money and hold almost all of the wealth these prime beneficiaries of the economy are the obvious people to collect taxes from. So by cutting back on government they cut back on government's need for taxes -- from them.

And they get the added benefit of cutting back on government interference in their schemes and control.

In the long game of cuts and consequences, a society cannot win. In the 1980s we cut taxes and started cutting government. As a result we now have crumbling infrastructure, bad schools, unaffordable universities, etc. This is because government cuts do not cut the need out of the larger economy, they shift the costs of needed things away from causing tax pressure on the wealthy.

They don't care if the larger economy suffers as a result, they're already the 1%.

What To Do

Tell Republican leaders to stop sabotaging the economy. Renew the payroll tax cut and long-term aid for the jobless.
Sign the petition.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 3:42 PM | Comments (0) | Link Cosmos

December 13, 2011

Take Back The Capitol -- Right Message, Right Time

Last week's Take Back the Capitol action brought two or three thousand unemployed people to the capitol. These representatives of the 99% went to the offices of 99 Senators and Representatives who now represent the 1%, where they were ignored and doors were closed on them. Some members were filmed fleeing down stairwells or hiding in copy rooms. So the next day the representatives of the 99% went to the people who really make the decisions. They marched on K Street, the symbolic center of the lobbying industry. They went to political fundraisers, and even to the Chamber of Commerce.

Here is a collection of videos of legislators fleeing their constituents who were there to represent the 99%, asking for JOBS and for extensions of unemployment benefits:


Just The Right Time

Take Back the Capitol seemed to happen at just the right time. "Occupy" camps across the country are being cleared, and newspapers were starting to talk about the movement as if it was over. Then this mass action descended in the nation's capitol making noise and drawing attention.

The powers-that-be might have thought they had suppressed this movement, but the movement seems to be stronger than ever. As Lee Camp said, "Pepper spraying #occupiers is like throwing water on gremlins, you just get 10 times as many."

Human Red Carpet

One of the best creative actions was a protest at the Chamber of Commerce, where the Take Back the Capitol people formed a "human red carpet" so the 1% could literally walk on the 99% as they entered the Chamber's holiday party.

Several dozen Occupy DC protesters rolled out the human red carpet for the U.S. Chamber of Commerce's holiday party at their Washington, DC headquarters this evening. The Chamber is the nation's largest corporate lobby group. As guests entered, protesters shouted, "You walk on our rights, now walk on us!" encouraging attendees to trample on the activists laying underneath the red carpet painted with "99%." No one did, sadly, at least while ThinkProgress was in attendance.

Press Reports

Here is a sampling of the press reports:

Washington Post: As Occupy faces setbacks around the country, focus shifts to D.C.,

In Washington, hundreds of people, either from Occupy D.C. or bused in from around the country, participated in a "Day of Action: Occupiers Unite" to target K Street NW, where many of the capital's lobbyists are based.

The protesters succeeded in crippling downtown traffic for much of the afternoon, blocking intersections as they chanted and formed human chains. More than 70 people were arrested, but many Occupiers will tell you that can be a good thing, because it means the world will keep watching.

... The K Street action came on the heels of a similar protest called "Take Back the Capitol," during which hundreds of demonstrators from around the country parked themselves on the Mall. The group is backed by the powerful Service Employees International Union and the progressive activist group MoveOn.org.

AP: '99 percent' drop in on DC power players,

It wasn't the slick suits, pricey heels and sense of purpose of the congressional staffers that Susan Wilkinson saw this week on Capitol Hill. What stung about crossing paths with them, she said, was this: "They wouldn't make eye contact with us," the unemployed Seattle activist recalled Thursday. "When did I get invisible?"

Wilkinson was among hundreds of angry Americans who streamed through Washington and its corridors of power this week to command attention for the 99 percent of Americans that protesters claim are struggling to survive the recession. They were hard to miss.

CNN: Occupiers take K street -- photos,

Occupiers from all over the country marked the 3rd day of the 'Take Back the Capitol week', in Washington DC, with an event called 'Make Wall Street Pay' in which hundreds blocked several intersections on K street. Ultimately the protesters focused on 2 intersections: K street & 13th and 14th st nw, in which they decided to block the traffic flow by staging a sit-down and lying on the ground until arrested.

LA Times: Protesters occupy Newt Gingrich's fundraiser,

Newt Gingrich witnessed the Occupy movement up close and personal Wednesday night.

Protesters crashed his presidential fundraiser at a restaurant next to the storied Willard InterContinental Hotel in downtown D.C., about a baseball's throw from the White House.

. . . Gingrich held the $1,000-a-plate fundraiser as his campaign is trying to become a national organization--and pay off all its debts.

Our Reports From Last Week

99% March On K Street To Take Back The Capitol From The 1%

As Unemployed Seize K Street, Time To Amplify Pressure On Congress

Unemployed Confront Congress At Take Back The Capitol

It Keeps Going

People have had enough and are finally realizing they can speak out against the abuses and insults that the 1% are heaping on the rest of us. Last week it was blocking unemployment benefit extensions, so 2 million more of us will lose all income at the end of the year. It was blocking the appointee to head the new consumer financial protection agency, so backs and credit cards and predatory lenders can keep running their scams. What will it be next week?

It was predicted that the cold weather would stop the occupiers. It was predicted that clearing out the camps and using the intimidation that comes from masses of policy in military hardware using pepper spray and batons would suppress the movement. It didn't. Instead the movement moved on DC and into the offices of the legislators and then down to K Street and the Chamber from where the legislators get their orders and the fundraisers from which they get their corporate cash for use smearing the good people who try to fight them. Where next?


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary.

Last week’s Take Back the Capitol action brought two or three thousand unemployed people to the capitol. These representatives of the 99% went to the offices of 99 Senators and Representatives who now represent the 1%, where they were ignored and doors were closed on them. Some members were filmed fleeing down stairwells or hiding in copy rooms. So the next day the representatives of the 99% went to the people who really make the decisions. They marched on K Street, the symbolic center of the lobbying industry. They went to political fundraisers, and even to the Chamber of Commerce.

Here is a collection of videos of legislators fleeing their constituents who were there to represent the 99%, asking for JOBS and for extensions of unemployment benefits:


Just The Right Time

Take Back the Capitol seemed to happen at just the right time. "Occupy" camps across the country are being cleared, and newspapers were starting to talk about the movement as if it was over. Then this mass action descended in the nation's capitol making noise and drawing attention.

The powers-that-be might have thought they had suppressed this movement, but the movement seems to be stronger than ever. As Lee Camp said, "Pepper spraying #occupiers is like throwing water on gremlins, you just get 10 times as many."

Human Red Carpet

One of the best creative actions was a protest at the Chamber of Commerce, where the Take Back the Capitol people formed a "human red carpet" so the 1% could literally walk on the 99% as they entered the Chamber's holiday party.

Several dozen Occupy DC protesters rolled out the human red carpet for the U.S. Chamber of Commerce’s holiday party at their Washington, DC headquarters this evening. The Chamber is the nation’s largest corporate lobby group. As guests entered, protesters shouted, “You walk on our rights, now walk on us!” encouraging attendees to trample on the activists laying underneath the red carpet painted with “99%.” No one did, sadly, at least while ThinkProgress was in attendance.

Press Reports

Here is a sampling of the press reports:

Washington Post: As Occupy faces setbacks around the country, focus shifts to D.C.,

In Washington, hundreds of people, either from Occupy D.C. or bused in from around the country, participated in a “Day of Action: Occupiers Unite” to target K Street NW, where many of the capital’s lobbyists are based.

The protesters succeeded in crippling downtown traffic for much of the afternoon, blocking intersections as they chanted and formed human chains. More than 70 people were arrested, but many Occupiers will tell you that can be a good thing, because it means the world will keep watching.

... The K Street action came on the heels of a similar protest called “Take Back the Capitol,” during which hundreds of demonstrators from around the country parked themselves on the Mall. The group is backed by the powerful Service Employees International Union and the progressive activist group MoveOn.org.

AP: '99 percent' drop in on DC power players,

It wasn't the slick suits, pricey heels and sense of purpose of the congressional staffers that Susan Wilkinson saw this week on Capitol Hill. What stung about crossing paths with them, she said, was this: "They wouldn't make eye contact with us," the unemployed Seattle activist recalled Thursday. "When did I get invisible?"

Wilkinson was among hundreds of angry Americans who streamed through Washington and its corridors of power this week to command attention for the 99 percent of Americans that protesters claim are struggling to survive the recession. They were hard to miss.

CNN: Occupiers take K street -- photos,

Occupiers from all over the country marked the 3rd day of the 'Take Back the Capitol week', in Washington DC, with an event called 'Make Wall Street Pay' in which hundreds blocked several intersections on K street. Ultimately the protesters focused on 2 intersections: K street & 13th and 14th st nw, in which they decided to block the traffic flow by staging a sit-down and lying on the ground until arrested.

LA Times: Protesters occupy Newt Gingrich’s fundraiser,

Newt Gingrich witnessed the Occupy movement up close and personal Wednesday night.

Protesters crashed his presidential fundraiser at a restaurant next to the storied Willard InterContinental Hotel in downtown D.C., about a baseball’s throw from the White House.

. . . Gingrich held the $1,000-a-plate fundraiser as his campaign is trying to become a national organization—and pay off all its debts.

Our Reports From Last Week

99% March On K Street To Take Back The Capitol From The 1%

As Unemployed Seize K Street, Time To Amplify Pressure On Congress

Unemployed Confront Congress At Take Back The Capitol

It Keeps Going

People have had enough and are finally realizing they can speak out against the abuses and insults that the 1% are heaping on the rest of us. Last week it was blocking unemployment benefit extensions, so 2 million more of us will lose all income at the end of the year. It was blocking the appointee to head the new consumer financial protection agency, so backs and credit cards and predatory lenders can keep running their scams. What will it be next week?

It was predicted that the cold weather would stop the occupiers. It was predicted that clearing out the camps and using the intimidation that comes from masses of policy in military hardware using pepper spray and batons would suppress the movement. It didn't. Instead the movement moved on DC and into the offices of the legislators and then down to K Street and the Chamber from where the legislators get their orders and the fundraisers from which they get their corporate cash for use smearing the good people who try to fight them. Where next?

Posted by Dave Johnson at 8:20 AM | Comments (0) | Link Cosmos

December 2, 2011

DeLong: Top Tax Rate Should Be 70%

Brad DeLong says the "right" top tax rate is 70%. I think it should be much higher, at 70% someone making a billion still ends up with $300 million so the incentive to bad action is still too high. The 70% Solution - J. Bradford DeLong - Project Syndicate

Posted by Dave Johnson at 11:06 AM | Comments (0) | Link Cosmos

November 28, 2011

One Unbought Judge

Very rare these days - an unbought public official: NYC judge rejects $285M SEC-Citigroup agreement - Yahoo! News

Posted by Dave Johnson at 11:28 AM | Comments (0) | Link Cosmos

November 4, 2011

People Want Jobs - Congress Focused On Taking Money Out Of Economy

This situation of crony government protecting the connected rich while people are in the streets demanding change is more and more reminiscent of Egypt under Mubarak. In the real world tens of thousands are in the streets around the country demanding taxes on the rich and an end to corporate rule, as a new report lists profitable companies that pay no taxes at all. Today's jobs report is not enough to even keep up. But in the Congress Senate Republicans filibuster another jobs bill and the "super committee" is looking at how much to take out of the economy and out of the things We the People do for each other -- in order to keep taxes low for the rich and their giant corporations.

Filibustering Jobs

Yesterday Senate Republicans again filibustered a jobs bill - a plan to hire people to repair our country's infrastructure. This is work that has to be done, and right now millions of people need work. But Republicans filibustered this bill. The corporate-owned mainstream media, however, largely refused to tell the public what is happening, instead blaming "the Senate." The Washington Post headlined, Senate blocks $60 billion infrastructure plan, another part of Obama jobs bill. Politico blamed "both parties," with Both parties block jobs bills. MSNBC: Senate blocks $60B part of Obama jobs plan. CNN: Competing infrastructure spending measures fail in Senate.

So the big-corporate media leads the public to blame "the Senate" and government, providing few clues that tell people where to apply the pressure that makes representative democracy function.

Big Corps Paying No Taxes, Not Just Low Taxes

From Citizens for Tax Justice report: Corporate Taxpayers & Corporate Tax Dodgers, 2008-2010,

280 Most Profitable U.S. Corporations Shelter Half Their Profits from Taxes.

“These 280 corporations received a total of nearly $224 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”

  • 30 Companies average less than zero tax bill in the last three Years, 78 had at least one no-tax year.

  • Financial services received the largest share of all federal tax subsidies over the last three years. More than half the tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.

  • U.S. corporations with significant foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.
  • Who Are "The Markets?"

    Who are we talking about, when we talk about "corporate taxes?" Just who do we mean when we talk about "the markets?" See for yourself why the #occupy movement talks about the 1% vs the 99%.

    When you hear about corporations and "the markets," think about how that connects to this chart:

    wealth2

    People In The Streets

    Yesterday, in the post, Oakland Occupied -- Will Washington Listen At Last?, I wrote about the large demonstrations that are spreading and growing: spreading to more and more cities, and growing with larger numbers in each city. I warned that this is starting to look like Egypt with the people in the streets protesting Mubarak's cronyism:

    A Warning Shot At Washington's Increasing Irrelevance

    As I said, this public protest is spreading and growing. People have had enough and are taking to the streets in increasing numbers. But Washington continues to ignore the public, debating a national motto, as Repubicans block jobs and an elitist "super committee" debates cutting the things government does for the 99%.

    Poll after poll shows the public overwhelmingly supports increasing taxes on the wealthy, bringing corporations under control, and reigning in trade agreements that suck our jobs, factories, companies and industries out of the country. People do not want Medicare, Social Security and other essential government programs cut, they want the rich and corporations and Wall Street to start paying their share.

    The public wants something done about these problems. They want jobs, they want something done about the increasing

    If Congress continues to ignore the people of the country it will not be long before the situation is like Mubarak pretending he is still in charge of Egypt, while the people of the country are in the streets planning how they will run the country without him and his cronies.

    Super Committee To Take Money Out Of The Economy

    A representative democracy serves the 99%, a plutocracy serves the 1%. Currently in Washington Congress' elite "super committee" represents the 1%, looking at ways to take more money out of the economy, discussing cutting Social Security at a time when many people have lost their pensions and savings. They are discussing cutting Medicare and other health services at a time when more and more people are in need. They are discussing cuts and cuts and cuts, when working people are falling behind and behind and behind.

    But the actual causes of the deficits that have Congress so concerned are ignored. Reagan and the Bushes cut taxes on the rich and increased military spending, and the deficits and resulting debt soared. It is right there in front of our faces. But even with such "concern" about deficits the tax cuts for the rich continue and the huge increases in military spending are left alone. Instead Congress discusses austerity - making the 99% pay for the benefits and bailouts for the 1%.

    People are fed up, and rightly so. Poll after poll shows that the public wants taxes on the rich increased to pay for the deficit, infrastructure, education, health care, retirement and the rest of the things We, the People need. But our captured government is only serving the top few when they talk about cutting these things in order to keep taxes low at the top. The 1% would be well-advised to pay attention to what has happened in other countries where government ignores the people and takes care only of the connected rich.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 10:58 AM | Comments (0) | Link Cosmos

    October 31, 2011

    Why You Should Attend An Occupy Meeting

    Please forward this to friends, relatives, "centrists" and conservatives you know. You may have heard about the "Occupy" protests that are occurring in cities around the country. They aren't what you are hearing. Please come to one and see for yourself. If you are young, old, white, black, brown, poor, rich, left, right, centrist, even Tea Party you will find people just like you. You might agree, you might disagree, you might love it, you might hate it, but you owe it to yourself to come and see for yourself.

    A lot of people feel frustration with the huge and increasing gap between the rich and the poor and the effect this is having on our country, culture, politics and the way we relate to each other as Americans. It seems like everything in the country is now geared toward the top 1%, and the rest of us are divided and supposed to keep quiet and accept this. Somehow the Occupy movement started at just the right time, when just the right number of people were fed up with the way things are going and the lack of solutions coming from our political leaders. It grew quickly, because people were tired of keeping quiet while our government seems to operate only for the benefit of the top few and expects the rest of us to sacrifice to pay for that.

    This all brings us a chance to restore democracy not just in our communities, but within ourselves. By attending and participating, we are exercising the "muscles" of democracy, of speaking up and being part of something. The thing is, you won’t just see it, you’ll feel it. You'll feel what it is like to have so many people around you who agree with you. You'll feel what it is like to be part of something important.

    How To Find One Near You

    The "Occupy" movement has now been going on for just over six weeks, and has spread to hundreds of towns across the country. You can probably find one near you. Start at Occupy Together which is at http://www.occupytogether.org/. Take a look at the page where they show you what is happening in your area, using a map. Also, try typing 'Occupy' and the name of your town into Google just to see what pops up.

    Also see them on Facebook, at http://www.facebook.com/occupyeverywhere, and http://www.facebook.com/Gilded.Age . Also visit the Rebuild the Dream movement, and, of course, MoveOn.org.

    So now that you know where one is, come on down, and see for yourself. If you need a ride ask your niece or your aunt. If your aunt needs a ride, give her a ride.

    What To Expect

    Warning, there might be some people with beards, and God forbid, drum circles.

    People are out there speaking for themselves, and learning how to be citizens again, instead of just consumers. This will have a lot of interesting outcomes, most of them good, some of them won't work out. But it will be people who want to be involved again.

    Depending on your community, there will likely be a turnout of some people with signs and leaflets, maybe some people set up with tables to do things like register people to vote, organizations with literature, groups that know each other, people who don't know each other standing around, etc. There will be a diversity people people.

    These events are self-organizing, no one is "running" these events, but volunteers will be helping to organize them. The character of the event completely depends on who shows up, who volunteers to help run it, and how much the people speak up. So it's up to you to do your part.

    See the website How To Occupy and the Field Manual wiki.

    Occupy events have a "General Assembly" meeting once or twice every day. In New York the meeting is at 7pm. At the recent Redwood City, CA Occupy event it was at about 6pm. As I said above, volunteers run things, which means that after you get to know the ropes you might want to volunteer.

    From the Occupy Wall Street website:

    The occupations around the world are being organized using a non-binding consensus based collective decision making tool known as a "people's assembly". To learn more about how to use this process to organize your local community to fight back against social injustice, please read this quick guide on group dynamics in people's assemblies.

    These meetings are the heart of the movement. Please come attend one, even if it is just to watch. You'll feel what it is like to be say what is on your mind. (And you'll feel what it is like to sit there while so many other people say what is on their minds. ;-) Don't worry, it works, and people keep comments short.) This is what democracy looks like.

    Occupy Redwood City

    Friday I attended Occupy Redwood City (California), and took some pictures. It was the first Redwood City event, maybe 50 people showed up, and the General Assembly lasted a couple of hours. They'll meet again next Friday, and probably should expect a lot more people now that it is up and in operation and people are telling each other about it. If 50 people doesn't seem like a lot, this is not a huge city, and there are more than a hundred events like it going on, some with thousands of people turning out.

    Scary, no? Especially the guy (me) with the little white dog. Was that a beard? Of, that first one is a short video, click here in case it doesn't work in this post.

    Don't Let Them Scare You Away

    Speaking of being scary: There will not be violence. This is a non-violent movement. The media outlets, talk show hosts, columnists, etc. that tell you there is violence are trying to keep you from showing up. They are trying to scare you. When they send large numbers of police to shoot tear gas into these events, it is an attempt to intimidate people, not just there but people who are thinking of showing up.

    Another way they are trying to keep people from showing up is with humiliation. This is a remarkably effective technique. Make people ashamed to show up, tell them they will be laughed at, or shunned, and people will stay away. They tell you the "protesters" are "dirty," even "urine-soaked." They tell you they are "hippies" and thinkthis will make you ashamed to show up and speak your mind.

    This is about what speech is "permissible" and what is not. The corporate-conservatives on the Supreme Court say that corporations are people who “speak” and can use all of their money to swamp our elections. But when people show up to complain about the 1% running everything, they are met with force. The big banks can crash the economy and commit crimes and are offered modest “settlements,” but when people show up to complain they are beaten, maced, tear-gassed and arrested.

    Don’t let them make you feel scared or ashamed to stand up for your rights.

    Show Up & See For Yourself

    If you want democracy you have to fight for democracy. You have to stand up for your rights or they will go away. Please visit at least on Occupy event in your area, and see for yourself.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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    Posted by Dave Johnson at 12:54 PM | Comments (0) | Link Cosmos

    October 27, 2011

    Plutocratic Government Tries To Beat Down #Occupy

    In Oakland peaceful #Occupy demonstrators were camping out in front of city hall. The city launched a police raid to clear out the camp, using tear gas, flash-bank grenades, rubber bullets and beating people with batons. An Iraq war vet was hit in the head by either a rubber bullet or tear gas canister and critically injured. These days this is the typical government response to non-Tea-Party "protesters." Let's look at how the Occupiers and protests would be treated if we were a functioning democracy -- a government of by and for We, the People -- instead of a dysfunctional plutocracy serving the biggest corporations and the billionaires behind them.

    Citizens?

    The first thing to understand about every single person involved in the #occupy movement is that they are citizens and human beings. Even the ones with beards. Alas, even the drummers. (What do you call a drummer who breaks up with his girlfriend? Homeless. What do you call a drummer with half a brain? Gifted.)

    The people involved in the #occupy movement are upset that our country has abandoned democracy in favor of plutocracy. They are upset that every decision made in Washington is based on the wishes of the top 1%. They are upset that we do not have a reasonable health care system, no reasonable pension system, or child care system, or other benefits that people in democracies around the world receive. They are upset that most of the benefits of our economy instead go to a very few at the top. They are upset that a huge amount of our money goes to pay for a military machines that costs more than all other countries spend on military combined. They are upset that there is a "Super Committee" meeting in secret to decide how much money to take out of the economy to pay for the bailouts and other costs of the fiasco caused by Wall Street and the big banks.

    So with their government ignoring their majority demands they have finally decided to voice their protests publicly. For doing this they have been met with smears, derision, and police attacks.

    Police Ordered To Attack

    Just as in countries like Syria, Egypt, Libya and Iran, the instinctive response of our plutocratic government and Wall Street-backed power structures has been to see those people who have shown up at these protests as somehow suspect, possibly even as an enemy, and to attack them. FOX News and the entire corporate/conservative media machine regularly attacks them. And the police are ordered to attack them.

    This is not "protesters vs police." People who work in law enforcement are part of the 99%, just like us. They have families to feed, bills to pay, and have to do what they're told.

    Share photos on twitter with Twitpic Source: http://twitpic.com/6s2g4a

    And this is what they were ordered to do, to people who were exercising their legitimate rights:


    American citizens were treated as criminals and attacked just for speaking out about the injustice of Wall Street getting a huge bailout after they caused this mess, and now the rest of us are told to sacrifice to pay for it.

    John Stewart on The Daily Show reacts to the Oakland attack:


    If We Were A Democracy Instead Of A Plutocracy

    The occupy movement clashes with federal, state and local governments the way they currently work. We really have an opportunity here to come back to an understanding of democracy and the role of government, and who government should serve. Currently government is really set up to serve the top few, and facilitate bigger businesses, and understands the people in their communities as consumers and corporate employees, and not as citizens.

    So imagine how it cold be different, if we had a government designed to serve the people rather than keep them in their place. In a country with a true democratic culture the local governments would be serving these people and honoring their right to dissent and protest. They would instinctively be showing up at protests like this and offering to help with any sanitation problems, etc, setting up public toilets, and other services. They would even be offering tents. If there are security problems in the occupy camps a city would be posting police in the encampment to help the people there, with a clear mission to serve them. They certainly would not be seeing them as the enemy, and attacking them.

    Imagine Real Democracy and its Implications

    The #occupy movement opens up the space to imagine what the country could be if we really did have a democracy with a first instinct of serving the people, instead of serving only the wealthy and their big corporations.

    Imagine a government of, by and for the people and the things that regular people want and need. Imagine everyone entitled to a free education through college? Imagine a transportation system that helps us all get around -- mass transit and high-speed rail systems instead of just roads and highways for those who can afford cars, with plutocratic pay lanes so those with more money can get around.

    Imagine a people outraged at special passes through airport security for those with first-class tickets.

    Imagine advertisers having to get people's permission before they are allowed to interrupt their attention. Imagine the things we would have if We, the People were in charge.

    Imagine a modern, maintained infrastructure, good schools, and a guarantee of a job working on those for any9one who needed work.

    Imagine a government that enforced laws even when the top few violated them, enforced job discrimination laws, enforced anti-trust laws... or a government that protected citizens from corporate fraud, fees, scams, etc.

    Occupiers Are People Too

    These occupiers are "the people' just as much as any other people in the community and government should exist to serve them just as much as any other group.

    Alas, even the drummers.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 12:01 PM | Comments (0) | Link Cosmos

    October 22, 2011

    Citibank Knew Where Toxic Assets Were Because They Put Them There

    The financial system collapsed because it was full of "toxic assets." That collapse took millions of jobs, homes, businesses, retirements down with it. Years later we are nowhere near recovering.

    But even when markets are collapsing there is a lot of money that can be made. You can place bets against assets that are overvalued, and when their price drops those bets pay off. If they drop a lot, the bets pay off really big. (Oh - and when they do pay off the billionaires get special, lower tax rates.)

    And if you know where the toxic assets are, in advance, you can make a ton of money. And you can know that if you put them there, on purpose, in order for them to collapse, so you can make a killing when they do collapse.

    Here is a story in ProPublica about an SEC settlement with CitiBank for creating toxic assets on purpose in order to make bets that they would fail, Did Citi Get a Sweet Deal? Bank Claims SEC Settlement on One CDO Clears It on All Others,

    In the run-up to the global financial collapse, Citigroup’s bankers worked feverishly to create complex securities. In just one year, 2007, Citi marketed more than $20 billion worth of deals backed by home mortgages to investors around the world, most of which failed spectacularly. Subsequent lawsuits and investigations turned up evidence that the bank knew that some of the products were low quality and, in some instances, had even bet they would fail.

    In this case Citibank made a lot of money from these bets because they knew where the toxic assets were, because they put them there, on purpose, in order to bet against them. CitiBank created these CDO toxic assets in a way that was designed to fail, and sold them to customers as solid investments, and then made bets that these assets were worthless. When the designed-to-fail assets failed, CitiBank made money, the customers were wiped out.

    As I pointed out in the previous post, the corrupt SEC is "settling" a case with corrupt Citibank, and the corrupt Justice Department isn't doing anything about it. Everyone knows that the people in the SEC who are doing the settling will get lucrative jobs on Wall Street in a year or two. That is the quid pro quo. Everyone knows this.

    This sort of thing was widespread - and probably still is. Wall Street firms created toxic assets on purpose in order to make money betting against them as they imploded on the customers. Goldman Sachs, for example, also did this. In one case they worked with - and were paid millions by - a big hedge fund to create toxic CDOs that were sold to customers, while the hedge fund made bets that the CDOs would fail. When the CDOs failed as planned the hedge fund made billions, the customers lost. The SEC settled with Goldman - no one was prosecuted.

    And , of course, after the collapse these very firms were bailed out by taxpayers because they were so big. And now, with all the money that taxpayers have had to spent on the effects of the disaster that these firms created the Wall Street-backed Tea Partiers are demanding that taxpayers take "cuts" in pensions, health care, education, infrastructure.

    With this in mind, watch this video of Wall Street types on a balcony mocking the #OccupyWallStreet people as they march past.

    Posted by Dave Johnson at 1:35 PM | Comments (0) | Link Cosmos

    September 12, 2011

    Capital Gains Tax Cuts Prove: Rich Win, You Lose

    Why are "capital gains" taxes so much lower than taxes on other income? The reason capital gains taxes are lower is because most of the income of the rich is from capital gains. And the reason most of the income of the rich is from capital gains is because capital gains taxes are lower.

    Our System

    "Capital gains" are the gains, or profits, made from the investment of capital -- the big pools of money that a few of us have the great responsibility and burden of being stuck with. The theory is that the few among us who have bundles of money (capital) use that money to start businesses or buy stocks or property (or race horses) and thereby "create jobs." (For more on how businesses and the wealthy "create jobs," click here and then click here.)

    If the value of the business or property (or race horses) goes up those wealthy few make even more money (gains). This ability to obtain these huge gains is a benefit offered to those who have lots of money in the first place. Thus the term "capital gains." These gains are differentiated from the gains the rest of us make from ... working ... because the rest of us do not have the intelligence and wisdom of having those huge pools of money to invest.

    Incentives

    In our system the income gained from these investments by these wealthy few is therefore taxed at a special very, very low rate, because they have the wisdom and intelligence to have large sums of money available to invest, and the rest of us do not. This low rate is considered an "incentive" to those who have these large accumulations of money, to try to persuade them to make these huge profits. They require these "incentives" to make huge profits, because otherwise they might not be interested in making the huge profits that can result from owning most of the property and stock and race horses (and yachts and private jets and multiple homes and million-dollar cars.) So that is why they must be given the incentive of these very special low tax rates - to persuade them to make investments that reap huge profits that they otherwise would not want to make.

    Government Interference

    Of course, the wealthy usually complain when government gets involved in creating "incentives" and "picking winners and losers" in ways that help We, the People, saying government interference distorts decision-making. But when the "incentive" is special low tax rates to persuade the wealthy to invest and make huge profits, that's different. Because it is, that's why. Shut up. Hey, look over there!

    Job Creation

    This reaping of huge profits from "efficiencies" like downsizing, laying people off and making the remaining workers do 2 jobs each in the same amount of time, outsourcing, buying companies and firing everyone and then selling off the pieces, offshoring, force reductions, firing people and then bringing them back as "contractors" at half the pay, relocating factories out of the country where people don't have the protections of democracy, replacing workers with machines, etc. is called "creating jobs."

    Effect Of Cutting Capital Gains Taxes

    In 2001 these special low tax rates for the very rich "job creators" were made even lower. This was done in order to provide even more incentive for them to make even more profits from their large accumulations of property, houses, cars, yachts, private jets and race horses, so that these "producers" - the "job creators" - would produce even more and create even more jobs. (Click here for more on who and what really creates jobs.) The result of these 2001 tax cuts was spectacular: eight years of the lowest economic growth and lowest job-creation rate since WWII, followed by the collapse of the entire financial system and mass layoffs of millions of us.

    So the 2000s brought upon us an even greater need to provide incentives for the producers to create jobs! In fact, each time these incentives are increased and jobs do not result there is even greater pressure to provide even more incentives to the "job creators." A great system, this, if you're already rich, no? The worse things get, the more you get, because you had the wisdom and intelligence to be sitting on a huge pile of cash. Brilliant! (See Did The Rich Cause The Deficit?)

    So with all this in mind, today the Washington Post looks at these super-low tax rates for those who have large accumulations of money, in Capital gains tax rates benefiting wealthy feed growing gap between rich and poor,

    For the very richest Americans, low tax rates on capital gains are better than any Christmas gift. As a result of a pair of rate cuts, first under President Bill Clinton and then under Bush, most of the richest Americans pay lower overall tax rates than middle-class Americans do. And this is one reason the gap between the wealthy and the rest of the country is widening dramatically.

    [. . .] Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.

    Repeat, "about half of all the capital gains have gone to the wealthiest 0.1 percent."

    The Washington Post story explains the strongest reason why it is so important for legislators to pass these lower tax rates to "incentivize" the wealthiest to invest and make huge profits:

    Some lawmakers who have backed low tax rates on capital gains have later been hired by the financial industry.

    So you see, it is very clear why it is very, very important for members of Congress to make sure that there is a special very, very low rate of taxation for the wealthiest few. And the result?

    The 400 richest taxpayers in 2008 counted 60 percent of their income in the form of capital gains and 8 percent from salary and wages. The rest of the country reported 5 percent in capital gains and 72 percent in salary.

    Yes, that is the very same 400 wealthist who have more wealth than 60% of all Americans combined. (That's right, I had it wrong when I wrote that it was more than 50%, it is now more like 60%.)

    So here is how it is: the rich are rich because they are smarter than the rest of us. And what is the proof that they're smarter than the rest of us? That's easy:

    Because they're rich!

    Take a moment to browse a collection of pictures of the job-creating results of these special exemptions from taxation enjoyed by these wealthiest, in Nine Pictures Of The Extreme Income/Wealth Gap. And read more about the ideology behind this idea that the wealthy are "producers" who "create jobs."

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 1:20 PM | Comments (0) | Link Cosmos

    August 23, 2011

    Rich Guy "Deeply Resents" Helping Pay For Democracy

    Hey here's a real dog bites man story for you: a really, really rich guy says to readers of billionaire Murdoch's Wall Street Journal that he "deeply resents" paying taxes and whines about how the government does things he doesn't like. This in response to Warren Buffet's call to ask billionaires to at least pay as much in taxes as their secretaries. Seriously, it wasn't in The Onion.

    Let's set the stage. Thanks to the "trickle down" policies of Reagan and Bush all the income gains in recent decades have gone to the top few. One in seven Americans and 25% of our children now live in poverty. (43% of our children are "at risk.") The average family income for "the bottom" 90% of us is $31,244, while the average income of the top .01% is over $27 MILLION. Per year, each year. The average income of the richest 400 Americans was $227.4 million -- and those 400 hold more wealth than the "bottom" 50% of Americans combined. Etc., etc. (I don't have to write about how many are unemployed, do it?)

    So with those statistics as background, former American Express CEO Harvey Golub wrote an op-ed in the Wall Street Journal today, responding to Warren Buffet’s call for the rich to start paying taxes again.

    Mr. Golub writes,

    I deeply resent that President Obama has decided that I don't need all the money I've not paid in taxes over the years, or that I should leave less for my children and grandchildren and give more to him to spend as he thinks fit.

    ... After all, I did earn it.

    Now there's attitude! Never mind that someone who reached the high position of CEO of America Express doesn't even seem to understand the system well enough to know that the President doesn't spend tax dollars "as he thinks fit." In American We, the People (used to) decide how best to spend our tax dollars, for the benefit of We, the People.

    Golub gets to the heart of his complaint, government services like post offices where "no one lives":

    Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country? Do we really need all the regulations that put an estimated $2 trillion burden on our economy by raising the price of things we buy? Do we really need subsidies for domestic sugar farmers and ethanol producers?

    Why do we require that public projects pay above-market labor costs? Why do we spend billions on trains that no one will ride? Why do we keep post offices open in places no one lives? Why do we subsidize small airports in communities close to larger ones? Why do we pay government workers above-market rates and outlandish benefits? Do we really need an energy department or an education department at all?

    Summing Up His Complaint: Democracy

    He complains about the inefficiency of providing services for rural citizens because no one who conts in his eyes would live out there. He complains about efforts to help workers displaced by pro-corporate trade policies. He complains about efforts to fight the harm caused by pollution-for-profit. He complains about paying people good wages with benefits. To sum up his complaint in one word: democracy.

    Above I set the stage for Golub's complaint: millions unemployed, in poverty, wages stagnant... Contrast the situation so many of us find ourselves in with the lifestyle if the beneficiaries of the dominant conservative "trickle down" policies. Just imagine the lifestyle of Golub and the rest of the wealthiest few today. Private jets, multiple mansions, servants... (This might help your imagination: Nine Pictures Of The Extreme Income/Wealth Gap.) Did you know that the latest trend is to send your kids to summer camp in private jets?

    Now, even as the economy limps along, more of the nation’s wealthier families are cutting out the car ride and chartering planes to fly to summer camps. One private jet broker, Todd Rome of Blue Star Jets, said his summer-camp business had jumped 30 percent over the last year.

    ... “We have 50 to 60 jets up here in just that one day,” Mr. Kilmer said. “It’s a madhouse because they all leave at the same time, between 4 p.m. and 6 p.m.”

    Extreme Inequality Makes Even The Rich Resentful

    They say that extreme inequality causes even the very rich to feel poor. They look upwards and feel inferior. They don't look down; We, the People are literally invisible and meaningless in their lives. They look up and see vast extremes, and feel like they are missing out. And they feel resentful.


    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 2:34 PM | Comments (0) | Link Cosmos

    August 11, 2011

    The Top 1%

    If you haven't seen this yet, it is a must-see. "With 1% of Americans controlling 40% of the country's wealth, we examine the gap between the rich and the rest."

    Fault Lines: The Top 1%

    The richest one per cent of Americans earn nearly a quarter of the country's income and control an astonishing 40 per cent of its wealth.

    Inequality in the US is more extreme than it has been in almost a century - and the gap between the super-rich and the poor and middle class people has widened drastically over the last 30 years.

    Meanwhile, in Washington, a bitter partisan debate over how to cut deficit spending and reduce the US' $14.3 trillion debt is underway. As low and middle class wages stagnate and unemployment remains above nine per cent, Republicans and Democrats are tussling over whether to slash funding for the medical and retirement programmes that are the backbone of the US' social safety net, and whether to raise taxes - or to cut them further.

    The budget debate and the economy are the battleground on which the 2012 presidential election race will be fought. And the US has never seemed so divided - both politically and economically.

    How did the gap grow so wide, and so quickly? And how are the convictions, campaign contributions and charitable donations of the top one per cent impacting the other 99 per cent of Americans? Fault Lines investigates the gap between the rich and the rest.

    Posted by Dave Johnson at 2:16 PM | Comments (0) | Link Cosmos

    August 9, 2011

    Ten Years Ago We Were Paying Off The Nation's Debt. But Then We Elected Obama.

    Just ten years ago this country was running huge surpluses and paying off its debt. But then we elected Obama and all hell broke loose. Oh, wait...

    Something Happened

    Between the time ten years ago when we had big surpluses and were paying off the debt and now when we are told the "Obama spending and deficit" mean we have to cut back on the things We, the People do for each other, something happened. Something changed. The things that happened, the things that changed, are being ignored in the current DC discussion about what we need to do to fix things.

    Separation From Reality

    This DC/Tea Party argument over deficits and the Reagan/Bush debt is completely separated from facts and history. And it is completely separated from what the public wants. There are things that we are supposed to just not remember and which seem to be taboo in the national media. There are things that are "off the table" for discussion, and certainly for solving our problems.

    But here is some reality anyway, even if we're not supposed to see it. Just ten years ago we were paying off debt at a rate that would have completely paid it all off by now. But under George W. Bush we cut taxes for the rich and more than doubled military spending. We deregulated and stopped enforcing laws. We let the big corporations run rampant. Our federal budget turned from huge surpluses to massive deficits, and Bush said it was "incredibly positive news" because it would lead to a debt crisis they could use to shock people into letting the corporate right privatize and thereby profit.

    And then, under and because of Bush, our economy collapsed.

    Deficits From Tax Cuts And Military Spending

    Once again: the deficits are the direct result of tax cuts for the rich, and huge increases in military spending. Then that huge jump in already-large deficits up past the trillion-dollar level that occurred in Bush's last budget was the result of the Bush-caused financial collapse. The economy collapsed and the government stepped in with hundreds of billions, even trillions, to rescue the wealthy, with "bailouts," while doing little, even cutting back, on what our government does for We, the People. That all happened in Bush's last budget year, not Obama's first.

    To Fix The Damage, Undo The Cause

    The way to fix deficits is to undo the damage Bush did, by raising taxes on the rich, and cutting back the huge, bloated, extreme, massive, astonishing, incredible, stratospheric military budget. And we have to boost the economy by investing in rebuilding our infrastructure to get people employed. We have millions of jobs that need doing, while millions are looking for jobs. Then those people will be paying taxes instead of collecting unemployment and food stamps. And the infrastructure improvements will bosst our economy's competitiveness. This is all so simple and obvious that only DC insider types could miss it.

    Taxes And Spending = Democracy

    Cutting spending doesn't cut the need, it shifts the burden. Cutting government spending does not cut the costs to society and the overall economy of meeting those needs. Cutting government spending just shifts -- or privatizes -- those costs onto the backs of people who can't afford to spend that money. That need and cost is still there in the economy, except without government -- democracy -- handling it, doing it for all of us, less expensively. Cutting government's role opens those functions up to private profit, instead of We, the People taking care of and watching out for each other -- and making the decisions.

    Do you really think that if you phase out Medicare, that old people won't still need the medical care? Of course they will still need it, but the government won't be negotiating cost-savings for them, they'll be on their own, up against the giant insurance monopolies.

    In the 1950s the top tax rate was 90%, and the country's economy worked a lot better for a lot more of us. We didn't have big deficits. We certainly weren't piling up huge debt. With high tax rates at the top, predatory, sell-the-farm business models didn't make sense. We were investing in infrastructure, and that infrastructure made us competitive in world markets. We as a people were doing better every year, paying our bills, getting educated and becoming more civilized. This empowerment led to demands for equal rights for all of us.

    Ignored By Media

    The "both sides do it" major media is simply ignoring the majority of the public. But people aren't fooled. Poll after poll (did I already say that?) shows that the public "gets it." Poll after poll shows that the public wants our government to address jobs, not deficits, to restore top tax rates, to invest in America's infrastructure, to leave Social Security and Medicare alone (or increase them,) and to put more money into education. Poll after poll.

    The Public Wants Jobs

    The public gets it. Poll after poll shows that Americans want their government focused on jobs, not deficits. The latest, from CNN, taken August 5-7, shows 49% of Americans think unemployment is the biggest issue facing the country, while only 27% say deficits. Only 16% say the deficit is the country's biggest problem.

    Rebuild The Dream

    The The American Dream Movement is rolling out their Contract for the American Dream. The Tea-Party-fascinated press is largely ignoring this, but this movement represents the majority of the public, and can't be ignored for long. I'll be writing more about it later.

    Also the Take Back the American Dream conference is coming up on Oct. 3. Click through and learn more.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 11:00 AM | Comments (0) | Link Cosmos

    June 24, 2011

    How Free Trade Made Democracy A Disadvantage

    This is my presentation from last week's Netroots Nation panel session: Revitalizing Manufacturing: The Road to Renewed Job Growth. Click through for panel details and other panelists, here for a pdf of slides, including Jared Bernstein's. See below for video -- and be sure to watch Beri Fox!!!

    Four Stories

    I want to share four quick stories:

    1. Democracy

    The story of America

    We fought a wealthy powerful few who had all the say and didn’t let us have a say, and made a country where We, the People made the decisions and share the benefits.

    So because we had a say we built up a country with good schools, good infrastructure, good courts, and we made rules that said workers had to be safe, get a minimum wage… we protect the environment, we give out social security. We take care of each other.

    And we used to protect that. We used to put a tariff on goods coming in if they were made by people who didn’t have the ability to speak up and better their condition. It was called the American System. Look it up. We’d let the goods in but we would use a tariff to strengthen our country, our infrastructure, our schools – our democracy.

    But that changed. Superman left and we stopped protecting the American Way. We started letting goods in made by people who had no say, so the goods were cheap and they undercut us.

    We have made democracy a disadvantage. We made it a disadvantage instead of an advantage.

    Make no mistake, people who say they want things more “business friendly” they mean they want America to be less of a democracy, with fewer of the protections we fought to build for ourselves.

    2. Trade

    Once upon a time some areas made some things well, and other areas made other things well, and they would trade, and both areas could have the things they made AND the things made somewhere else, and everyone benefitted. And both areas increased the customers they had.

    And so to most people “trade” means we buy things made somewhere else, and they buy things we make. In what world does “trade” mean closing a factory that is located here, moving it there where they don’t already make something, laying off all the people, and then bringing back here the same things that used to be made here and selling them in the same stores?

    And the result is a lot of people have lost jobs, devastating our communities.

    And then they tell workers who still have jobs that the same can happen to them, we can just close this factory, so shut up and don’t expect raises or benefits or safety or dignity.

    What we see happening when a company moves production out of the country is not trade, it is getting around the borders of the democracy we built, and the things we fought and sacrificed to build.

    Letting companies move factories away was giving up our ability to make a living. Sure a few people might get really rich from it, but look around you the rest of us, and our communities, and our economy have been sent sliding down a hill into the sewer.

    3. The Deal

    There once was a company. The company made a deal with a company in the next county, they make something you don’t, and you make something they don’t. So the deal is you’ll buy things from them if they buy from you. And you start buying from them, but they aren’t buying from you. And this goes on, and they still aren’t buying from you, but you are starting to owe them a lot of money. And they you’re borrowing from them to buy from them, and they still aren’t buying. And then they show up in your county selling the things you already made and sold, buy they used the money they got selling to you to set up to make what you made.

    And by the way they say you have to pay them what you owe them.

    That is how our deal with China is working out. We bought from them, they didn’t buy form us, and now they have accumulated $1.5 trillion which they were supposed to have been buying American-made goods with.

    And they cheated. Or I would say they were smart and watched out for their own interests excessively, and we didn’t at all.

    $1.5 trillion! So imagine what would happen if we said we're going to default on the debt but these bonds are redeemable in the next 3 months for American made good. Can you imagine what $1.5 trillion of orders would do for our economy right now? $1.5 trillion in orders? Factories humming...

    Well the picture of what that would do FOR our economy is a way of understanding what that has done TO our economy.

    4. The Cost

    I like to tell you a story about the cost of our free-trade deals and tax policies.

    I took a road trip last fall, through four industrial states, MI, OH, WV, PA to visit some of the Manufacturing Town Hall meetings that Scott’s group put on. [Note - see posts about this tour here.]

    They call it the "rust belt" because so many factories are closed and rusting.

    From town to town you see downtowns devastated, because the way you make a living is gone and the cheap imported goods at wal mart competing with local businesses. Michael Moore wrote about Flint after the auto plants closed. That kept happening, town after town, year after year, and got worse.

    You have to see to first hand. [Note - there are pics in this post.]

    But I’ll tell you, we’re even seeing it now in Silicon Valley, seeing downtowns with lots of empty storefronts. Empty office and manufacturing buildings everywhere. That wave that hit the Midwest has reached the tech areas now.

    So the moral of the four stories is that We the People have to protect the things we fought for and won. And we have to remember that We, the People have to take care of and watch out for each other because the wealthy and powerful won’t do that for us. And markets aren’t about that, either.

    When we relax our eternal vigilance they will come back with a vengeance.

    Progressive Solutions


      a. Industrial Policy

      We don’t believe in having the government help. We think the markets will fix everything. But other countries don’t see it that way.
      We are pitting our companies on their own against the national resources of governments. We can live in an ideological dream world and say we shouldn’t, but our competitors in the rest of the world DO.

      b. Protect Democracy

      Tariffs. Call it a democracy tariff. Or a thugocracy tax. Use this to help lift others out of their exploitation. By making democracy a disadvantage we are only encouraging the worst, and encouraging it here, too. “Business friendly” is a code word that means get rid of all the protections We, the People have built for ourselves.

      They can protect the environment, etc, or charge a tariff to bring those goods in.

      c. Renegotiate Trade Deals

      Trade can mean something different. We still have a huge market. We can require goods to either be made by people who are not exploited and who have a say so

      d. Enforce Trade Laws

      China cheats in so many ways, and we all know it. Currency rates. Indigenous innovation . Forcing companies to turn over proprietary IP…


    We can do these things. Because of the strong prosperity that democracy brought us others really want to sell into our markets.

    And my own favorite:

      e. Top tax rates

      With high top rates it takes time to build a fortune. You have to have long-term plans, sustainable businesses that are surrounded by healthy communities, good schools, good infrastructure.

      Lower rates, you can make a fortune in a few days. Business models changed, became short term, cash in, quick-buck schemes. Harvest infrastructure, close factories, no need for healthy communities, etc.

    Video Of The Panel

    Scott Paul opens
    Jared Bernstein at 6:02
    Rep. Jim McGovern at 17:00
    Beri Fox at 31:29
    Dave Johnson at 48:13

    IF the video below doesn't show up, click to see it here.

    Sobotka

    As always, Frank Sobotka explains what's wrong:


    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 10:16 AM | Comments (0) | Link Cosmos

    June 7, 2011

    Tax The Rich, Don't Cut Programs!

    From CAF: 10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.

    Posted by Dave Johnson at 8:04 AM | Comments (0) | Link Cosmos

    June 2, 2011

    Jobs Fix Deficits

    Polls show that the American Majority is much more concerned about jobs than deficits. So why is DC talking only about deficits instead of jobs, when jobs are the medicine for deficits? And why is DC only talking about budget cuts as a path to fixing the deficits, when the deficits were caused by tax cuts and lack of jobs? In fact most of the “deficit cures” being discussed in DC don’t make the deficit better, they make deficits worse because they kill jobs.

    Stimulus Ends And Job Growth Ends, Too

    Now that the stimulus is running out, so is any sign of a jobs recovery. The stimulus stopped the economic freefall that was occurring under the prior administration, and restored at least some job growth. It worked, but it was not big enough. Much of it was wasted on tax cuts that leave behind only debt, and it is running out. At the same time, state and local government cutbacks are working against any current economic rebound. For the longer term, badly-needed restructuring of trade deals, development of a national industrial policy and removal of the plutocratic tax and regulatory changes that led to intense concentration of wealth have not occurred, keeping the economy from moving forward. See for yourself in the following chart:

    All Jobs - April 2011

    Follow the timeline on this chart:


    • First, the Bush freefall,

    • then the effect of the stimulus spending,

    • then the stimulus winds down,

    • combined with state & local budget cutbacks.

    Until needed changes are made the economy remains mired in the failed Reagan/Bush/Bush plutocratic, everything-to-the-top structure and cannot sustain itself without stimulus. The worst thing that could happen now is federal budget cutbacks on top of the state and local government cutbacks. Pulling that much out of the economy, laying off all those government employees, and ceasing to invest in the infrastructure and education that make us competitive in the world would be a tragic mistake.

    Jobs In The News

    Stimulus winding down, state and local governments cutting back, trade deficit increasing again... Which brings us to to this week's economic news. Reuters: Private sector job growth slumps in May,

    The ADP report showed private employers added a scant 38,000 jobs last month, falling from a downwardly revised 177,000 in April and well short of expectations for 175,000. It was the lowest level since September 2010.

    ... A separate report showed the number of planned layoffs at U.S. firms rose modestly in May with the government and non-profit sectors making up a large portion of the cuts.

    ... The housing market, meanwhile, continued to struggle as a report from an industry group showed applications for U.S. home mortgages fell last week, pulled lower by a decline in refinancing demand.

    And, Manufacturing growth slowest since September 2009: ISM

    The pace of growth in the manufacturing sector tumbled in May, slackening more than expected to its slowest since September 2009, according to an industry report released on Wednesday.

    ... New orders fell to 51.0 from 61.7 in April, the lowest since June 2009. The index for prices paid fell to 76.5 from 85.5, below expectations of 82.0.

    Forbes: Double Dip in Housing; Could Double Dip Recession Be Next?

    This chart from Business Insider shows what the Standard & Poor’s Case-Shiller Index looks like on a graph chart: bad. National home prices are back to their 2002 levels, according to the index data released May 31.

    . . . Moreover, consumer confidence unexpectedly declined in May to its lowest level in six months due to the lackluster job market and declining home values.

    Austerity Cuts Jobs

    But DC is not only not talking about jobs, they are talking about austerity -- cutting the very things that create jobs. History and the experience of other countries as they struggle to crawl out of the economic collapse has shown again and again that government investment in infrastructure and education and scientific research and manufacturing are the path to recovery. England, Greece and others trying austerity are falling back into recession. Meanwhile China is investing hundreds of billion in high-speed rail and other infrastructure. Germany is investing in manufacturing. Others are investing billions more in infrastructure. All are pursuing green energy sources.

    Mired in austerity ideology we are doing none of these. For example, on a PBS NewsHour discussion of the House vote rejecting a "clean" debt-ceiling bill Tuesday, Rep. Peter Roskam said,

    ...any raising of the debt ceiling has to be preconditioned upon cuts that drive towards a real economic recovery and long-term growth and prosperity and job creation.

    Rep. Roskam actually claimed that cutting the things that have proven to drive growth and job creation will drive growth and job creation.

    Austerity Can't Cut Deficits

    The other day I wrote about calculations that shows that cutting budgets does not cut deficits. From See WHY Austerity Can't Reduce The Deficit, (click through to see the calculations that prove austerity can't reduce deficits),

    Austerity -- cutting government benefits and services -- is not the path to fixing deficits. In fact, economists warn that trying to fix a sluggish economy by cutting government spending will just make things worse. Worse yet, this approach can have damaging effects that last into the future. This can be easily shown with simple calculations.

    Jobs First In Democracy

    In a democracy jobs would be the first topic of discussion and the only toipic until plenty of good-paying jobs are available. But in a plutocracy -- government by the wealthy -- jobs for regular people would be of little concern. Which are we seeing here?

    The American Majority clearly, absolutely, firmly and primarily want jobs as government's -- our -- first priority (click through to see the polling), while our leaders are talking about doing things that cut jobs and cut the thing that We, the People do for each other.

    The solution to the huge post-collapse jump in deficits is to restore the jobs. Restoring good-paying jobs starts to restore the tax base and stops the emergency spending on the unemployed. The increased demand as people find work and paychecks revives retail and manufacturing. Housing recovery, for example, depends on more jobs. With more jobs and better pay. Unemployment is high and wages are low, so many people just can't afford to buy -- or keep -- a house.

    Just cutting people out of the economy doesn't fix the problem, it shifts the problem and eventually will kill the economy.

    Jobs First In Election

    One thing is for sure: jobs will be the first concern of voters in the coming 2012 elections. And Republicans understand that making things worse now helps Republicans later. The question is why aren't Democrats and the President focusing on making things better now to help themselves and all of us later?

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 6:33 AM | Comments (0) | Link Cosmos

    May 31, 2011

    The Politics of 2012 and Maybe 2016

    Will Sarah Palin, Congressman Paul Ryan or Newt go under the bus? This is quite a polemic for our Republican brethren that have always made hay on their brilliant use of language while we Dems contemplated our sleepy intellectualism. Perhaps finally in the aftermath of the failed assassination attempt on Congresswoman Gabby Giffords, the President's irrefutable victories, and the Arab spring -- maybe the forces have finally aligned for the Democrats together with social media to counter balance the megaphone of the Right wing propaganda.

    Given that language and propaganda are not working, who will be the first to be thrown under the bus for the greater good of the Republican Party? Will it be Sarah our old pal from the McCain campaign that has built a $25M industry around her 2008 candidacy to the chagrin of the Party elders? Or will it be the "real" Palin appropriately coined as such by the supporters of Michelle Bachman on national television? Or have the women folk run their course in Republican Land? And if so has the time come to "man-up" with a few good, old white conservative male Governors from Conservativeville - like Tim Pawlenty or Jon Huntsman? Or better yet will it be Newt who inappropriately danced on the head of Congressman Paul Ryan and his budget plan -- only to refute it later? Sadly, for the Republicans all of this is off putting for guys like Mitt, or even Governor Chris Christie that appeal to the moderates of both parties.

    Admittedly, any candidate, male or female, needs the proverbial brass cajoles, or other such accoutrements to challenge this sitting President after the take down of Osama bin Laden. This factoid together with Obama's recent tough stance on the Middle East clearly levels the playing field. The scare tactics of the past cannot work at this rodeo particularly when bundled with the wholesale lunacy of the Republican leadership on the debt ceiling, Medicare and the budget. Vice President Biden in an LA Times piece summarizes well when referring to the Osama take-down as a "defining moment" for the Obama presidency. Certainly, this together with the broken Republican message machine is having an impact. Terms like "Mediscare" are not getting the same kind of traction as "ObamaCare" did just last year, or the coinage of the term "entitlement" used to pollute a whole generations' thinking on Medicare and Social Security. Of course, Newt and his merry gang of language shapers keep trying to spin, but it is not sticking. Maybe in Newt's case, folks have had enough of those that behave badly, pander family values, but live on the edge of exorbitant wealth. For him it appears that there is just no way to explain away things like the Tiffany's account to the Middle Class. Further is there now cause to wonder if the day has come for Sarah, sweet Sarah, who walks the walk on reality television, but lives shall we say in Palin vernacular, high off the hog.

    Indeed, the President and the Party are on the right side of the budget, Medicare, Social Security, national security, jobs and climate change. But can he and the Dems maintain this momentum when the banks, remember those pesky money men, continue to behave poorly. The reality is that folks are as fed up with these fat cats as they are with the empty threats of Right wing rhetoric and the bad behavior of men of a certain age and power whether they represent Hollywood, government or international politics.

    Note to the Democratic Party: clean up the banks, the bankers and all of the bad behavior of their ilk and 2012 is a shoe-in, and maybe even 2016. Let's think like Republicans and chart the waters for the next eight years.

    Posted by Michelle at 11:01 AM | Comments (0) | Link Cosmos

    Dems Should Vote For Clean Debt Limit Bill

    The House is voting on a “clean” debt ceiling bill today -- a bill to raise the debt ceiling without any "hostage-taking" conditions. This is the right thing to do for the country and every Democrat should vote for this. Voting for a clean bill will draw the contrast for the public between those who are doing the right thing, and those willing to hold the world's economy hostage to a make-the-rich-richer plutocracy agenda. Democrats who do not vote for a clean bill should lose committee assignments, parking places, even bathroom keys.

    The Debt Ceiling

    The country's "debt ceiling" has been reached. This means that the government's authority to borrow money has reached its limit. The Treasury Department is engaging in gimmicks and schemes to keep the country going but time is running out. The Congress must extend this limit, or the government will default on its bonds.

    If our government defaults on its bonds it would initiate a worldwide financial crisis that dwarfs the Wall Street meltdown of a few years ago.

    WHY We Have This Debt

    In 1981 the Reagan administration dramatically changed the course of the country. They defunded government by passing huge tax cuts for the rich and massively increasing military spending, and began cutting back on the things We, the People (government) do for each other. The country cut back on maintaining -- never mind modernizing -- our infrastructure, our schools, colleges and universities, scientific research and other things that make us competitive in world markets. We began cashing in our factories and moving the jobs out of the country. As a result of Reagan-era changes our trade deficits soared, wages stagnated, pensions disappeared, and a few extremely wealthy started getting much, much richer.

    One major result of these changes, of course, was the huge budget deficits that accumulated into today's massive debt. This was the plan from the start, to "starve the beast" by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government's protections for the people, unleashing plutocracy.

    Hostage-Taking Enabled: The Tax Cut Extension

    This debate over the debt ceiling and hostage-taking follows the recent extension of the Bush tax cuts -- another product of hostage-taking. At the end of the last Congress unemployment benefits for the millions of unemployed were running out. Republicans -- having filibustered much of the legislation of the prior two years -- held the extension of benefits "hostage" saying they would not let it pass unless the deficit-creating Bush tax cuts were extended.

    Enough Democrats caved and passed an extension of the Bush tax cuts. This validated hostage-taking as a successful tactic while making the deficit much worse, setting the stage for today's debt-ceiling fight.

    The Vote Is A Trick

    Today's vote has been scheduled by the Republican leadership as a trap, trying to get some Democrats to vote with Republicans to support their hostage-taking agenda and create the appearance of bipartisan support for plutocracy. If the Republican position gets the support of enough Democratic members, Republicans can then demand deep cuts in Medicare and other programs that help people and hold corporate power in check, in exchange for their votes to allow the world's economy to continue to operate.

    From TPM: First Debt Limit Vote Today As GOP Looks To Divide Dems,

    The vote is intended to expose fault lines within the Democratic caucus, with Republicans counting on sizable number of Democrats to side with them and bolster their case that Democrats need to agree to deep spending cuts as a condition to raising the debt limit.

    Vote For A Clean Debt-Ceiling Bill

    Voting for a clean bill stops government-by-hostage-in its tracks. Voting for a clean bill saves the world's economy. Voting for a clean bill fights the plutocracy agenda. Voting for a clean bill saves Medicare, Social Security and the things We, the People do for each other. Voting for a clean bill is the right thing to do and doing the right thing is the right thing politically.

    Call your member of Congress NOW and demand a vote for a clean debt-ceiling bill.


    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 9:27 AM | Comments (0) | Link Cosmos

    May 17, 2011

    Debt Crisis? Really?

    You think we have a debt crisis now? You should have seen the one Canada had in 1993!!! And just like this one, it was phony, designed to scare people into cutting and privatizing government so the rich can get even richer.

    The following is from The Shock Doctrine, Naomi Klein, Picador, Pages 324-326. This book was published before the financial collapse, and subsequent "debt crisis." (All emphasis added.)

    -----

    In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in the national newspaper, the Globe and Mail. A major national television special reported that “economists are predicting that sometime in the next year, maybe two years, the deputy minister of finance is going to walk into cabinet and announce that Canada’s credit has run out…. Our lives will change dramatically.

    The phrase “debt wall” suddenly entered the vocabulary. What it meant was that, although life seemed comfortable and peaceful now, Canada was spending so far beyond its means that, very soon, powerful Wall Street firms like Moody’s and Standard and Poor’s would downgrade our national credit rating from its perfect Triple A status to something much lower. When that happened, hypermobile investors, liberated by the new rules of globalisation and free trade, would simply pull their money from Canada and take it somewhere safer. The only solution, we were told, was to radically cut spending on such programs as unemployment insurance and health care. Sure enough, the governing Liberal Party did just that, despite having just been elected on a platform of job creation.

    Two years after the deficit hysteria peaked, the investigative journalist Linda McQuaig definitively exposed that a sense of crisis had been carefully stoked and manipulated by a handful of think tanks funded by the largest banks and corporations in Canada, particularly the C. D. Howe Institute and the Fraser Institute (which Milton Friedman had always actively and strongly supported). Canada did have a deficit problem, but it wasn’t caused by spending on unemployment insurance and other social programs. According to Statistics Canada, it was caused by high interest rates, which exploded the worth of the debt much as the Volcker Shock had ballooned the developing world’s debt in the eighties. McQuaig went to Moody’s Wall Street head office and spoke with Vincent Truglia, the senior analyst in charge of issuing Canada’s credit rating. He told her something remarkable: that he had come under constant pressure from Canadian corporate executives and bankers to issue damning reports about the country’s finances, something he refused to do because he considered Canada an excellent, stable investment. “It’s the only country that I handle where, usually, nationals from that country want the country downgraded even more – on a regular basis. They think it’s rated too highly.” He said he was used to getting calls from country representatives telling him he had issued too low a rating. “But Canadians usually, if anything, disparage their country far more than foreigners do.”

    That’s because, for the Canadian financial community, the “deficit crisis” was a critical weapon in a pitched political battle. At the time Truglia was getting those strange calls, a major campaign was afoot to push the government to lower taxes by cutting spending on social programs such as health and education. Since these programs are supported by an overwhelming majority of Canadians, the only way the cuts could be justified was if the alternative was national economic collapse – a full blown crisis. The fact that Moody’s kept giving Canada the highest possible bond rating – the equivalent of an A++ – was making it extremely difficult to maintain the apocalyptic mood.

    Investors, meanwhile, were getting confused by the mixed messages. Moody’s was upbeat about Canada, but the Canadian press constantly presented the national finances as catastrophic. Truglia got so fed up with the politicised statistics coming out of Canada, which he felt were calling his own research into question, that he took the extraordinary step of issuing a “special commentary” clarifying that Canada’s spending was “not out of control,” and he even aimed some veiled shots at the dodgy math practiced by right-wing think tanks. “Several recently published reports have grossly exaggerated Canada’s fiscal debt position. Some of them have double counted numbers, while others have made inappropriate international comparisons… These inaccurate measurements may have played a role in exaggerated evaluations of the severity of Canada’s debt problems.” With Moody’s special report, word was out that there was no looming “debt wall” – and Canada’s business community was not pleased. Truglia says that when he put out the commentary, “one Canadian… from a very large financial institution in Canada called me up on the telephone screaming at me, literally screaming at me. That was unique.”

    By the time Canadians learned that the “deficit crisis” had been grossly manipulated by the corporate-funded think tanks, it hardly mattered – the budget cuts had already been made and locked in. As a direct result, social programs for the country’s unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets. The crisis strategy was used again and again in this period. In September 1995, a video was leaked to the Canadian press of John Snobelen, Ontario’s minister of education, telling a closed-door meeting of civil servants that before cuts to education and other unpopular reforms could be announced, a climate of panic needed to be created by leaking information that painted a more dire picture than he “would be inclined to talk about”. He called it “creating a useful crisis.”

    -----

    This story of financial interests creating a phony crisis to scare people into cutting and privatizing government is from the book The Shock Doctrine: The Rise of Disaster Capitalism. If you want to understand what is happening to us today, you must read this book. (read more here)

    "The best way to stay oriented, to resist shock, is to know what is happening to you and why."

    "Nothing is more important in the face of war than cutting taxes" - Tom DeLay, 2003


    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 9:07 AM | Comments (0) | Link Cosmos

    May 13, 2011

    Actually, "The Rich" Don't "Create Jobs," We Do.

    You hear it again and again, variation after variation on a core message: if you tax rich people it kills jobs. You hear about "job-killing tax hikes," or that "taxing the rich hurts jobs," "taxes kill jobs," "taxes take money out of the economy, "if you tax the rich they won't be able to provide jobs." ... on and on it goes. So do we really depend on "the rich" to "create" jobs? Or do jobs get created when they fill a need?

    Here is a recent typical example, Obama Touts Job-Killing Tax Plan, written by a "senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth,"

    Some people, in their pursuit of profit, benefit their fellow humans by creating new or better goods and services, and then by employing others. We call such people entrepreneurs and productive workers.

    Others are parasites who suck the blood and energy away from the productive. Such people are most often found in government.

    Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” ...

    Producers and Parasites

    The idea that there are producers and parasites as expressed in the example above has become a core philosophy of conservatives. They claim that wealthy people "produce" and are rich because they "produce." The rest of us are "parasites" who suck blood and energy from the productive rich, by taxing them. In this belief system, We, the People are basically just "the help" who are otherwise in the way, and taxing the producers to pay for our "entitlements." We "take money" from the producers through taxes, which are "redistributed" to the parasites. They repeat the slogan, "Taxes are theft," and take the "money we earned" by "force" (i.e. government.)

    Republican Speaker of the House John Boehner echoes this core philosophy of "producers" and "parasites," saying yesterday,

    I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.”

    "The very people" who "hire people" shouldn't have to pay taxes because that money is then taken out of the productive economy and just given to the parasites -- "the help" -- meaning you and me...

    So is it true? Do "they" create jobs? Do we "depend on" the wealthy to "create jobs?"

    Demand Creates Jobs

    I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people. What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go.

    If I had extra money I wouldn't just hire people to sit around and read the paper. And if I had more customers than I could handle that -- the revenue generated by meeting the additional demand from the extra customers -- is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has.

    If you ask around you will find that every business tries to employ the right number of people to meet the demand. Any business owner or manager will tell you that they hire based on need, not on how much they have in the bank. (Read more here, in last year's Businesses Do Not Create Jobs.)

    Taxes make absolutely no difference in the hiring equation. In fact, paying taxes means you are already making money, which means you have already hired the right number of people. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don't even calculate your taxes until well after the hiring decision has been made. You don;t lay people off to "cover" your taxes. And even if you did lay people off to "cover' taxes it would lower your costs and you would have more profit, which means you would have more taxes... except that laying someone off when you had demand would cause you to have less revenue, ... and you see how ridiculous it is to associate taxes with hiring at all!

    People coming in the door and buying things is what creates jobs.

    The Rich Do Not Create Jobs

    Lots of regular people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people, regular people with money in their pockets is what keeps everything going. And the equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning.

    When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.

    Democracy Creates Jobs

    This idea that a few wealthy people -- the "producers" -- hand everything down to the rest of us -- "the parasites" -- is fundamentally at odds with the concept of democracy. In a democracy we all have an equal voice and an equal stake in how our society and our economy does. We do not "depend" on the good graces of a favored few for our livelihoods. We all are supposed to have an equal opportunity, and equal rights. And there are things we are all entitled to -- "entitlements" -- that we get just because we were born here. But we all share in the responsibility to cover the costs of democracy -- with the rich having a greater responsibility than the rest of us because they receive the most benefit from it. This is why we have "progressive taxes" where the rates are supposed to go up as the income does.

    Taxes Are The Lifeblood Of Democracy And The Prosperity That Democracy Produces

    In a democracy the rich are supposed to pay more to cover things like building and maintaining the roads and schools because these are the things that enable their wealth. They actually do use the roads and schools more because the roads enable their businesses to prosper and the schools provide educated employees. But it isn't just that the rich use roads more, it is that everyone has a right to use roads and a right to transportation because we are a democracy and everyone has the same rights. And as a citizen in a democracy you have an obligation to pay your share for that.

    A democracy is supposed have a progressive tax structure that is in proportion to the means to pay. We do this because those who get more from the system do so because the democratic system offers them that ability. Their wealth is because of our system and therefore they owe back to the system in proportion. (Plus, history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth. In other words, part of the contract of living in a democracy is your obligation to protect the democracy and high taxes at the top is one of those protections.)

    The conservative "producer and parasite" anti-tax philosophy is fundamentally at odds with the concepts of democracy (which they proudly acknowledge - see more here, and here) and should be understood and criticized as such. Taxes do not "take money out of the economy" they enable the economy. The rich do not "create jobs, We, the People create jobs.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 2:26 PM | Comments (0) | Link Cosmos

    May 10, 2011

    Understanding What Is Happening To Us

    You have to read The Shock Doctrine to understand what is happening to us. I've said it before but want to say it again. It's really important to read that book.

    It explains why we have this phony "crisis" over debt, or public employee pensions, why it is being pushed so hard and being used to scare people so much. It is called "disaster capitalism" and they need people to think there is a disaster before they will except radical changes like getting rid of Medicare, cutting Social Security, getting rid of public-employee unions, etc...

    You have to read the book, the whole book.

    Posted by Dave Johnson at 5:24 PM | Comments (0) | Link Cosmos

    May 3, 2011

    American Workers - Unneeded

    Nancy Folbre: Super Sad True Jobs Story - NYTimes.com

    Unneeded as workers, the unemployed also become superfluous as consumers and burdensome as citizens.

    We CAN fight this, but we have to remember who "We, the People" are. We have to remember WE are supposed to be in charge here, and do something about it. We are the people in charge, not a burden, in the way of profits.

    Posted by Dave Johnson at 10:48 PM | Comments (0) | Link Cosmos

    May 1, 2011

    Top 400 People Get More Than 10% Of All Cap Cains Income!

    Krugman dug it out of the IRS reports,

    ... in several years during the last decade the top 400 accounted for more than 10 percent of all capital gains income in America. Just 400 people!

    Posted by Dave Johnson at 4:07 PM | Comments (0) | Link Cosmos

    April 30, 2011

    There Are Millionaires ASKING To Pay Higher Taxes

    Susie Madrak explains, in Oh, Orrin? Why Won't You Listen To Millionaires Who Want To Pay Higher Taxes? | Crooks and Liars,

    So the Patriotic Millionaires, a group that includes several dozen people in the highest tax bracket, first tried unsuccessfully to convince elected officials to let the Bush tax cuts expire. No dice. ...

    Then, right before Obama was to announce his budget proposal, they took a different approach. Via Justin Elliott in Salon:

    "For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you increase taxes on incomes over $1,000,000," the group writes in a new letter to Obama, Harry Reid, and John Boehner. "We make this request as loyal citizens who now or in the past earned incomes of $1,000,000 per year or more."

    Last year, Obama signed a bill to extend the Bush tax cuts after originally proposing that the two highest tax rates return to 36% and 39.6%, up from the Bush tax cut levels of 33% and 35%.

    One of the signatories of the new letter, film and television producer Linda Gottlieb, explained her participation to me this morning: "For me to be sitting and hoarding my money is insane," said Gottlieb, whose producer credits include "Dirty Dancing" and who now teaches at NYU's Tisch school. "We all give to charity, but that's not the same as creating a more equitable society."


    Anyway, go read the story of these millionaires trying to get Republicans to see them, and Republicans mocking them. And read how the millionaires explain that it is part of democracy to pay your taxes.

    Posted by Dave Johnson at 5:40 PM | Comments (0) | Link Cosmos

    April 29, 2011

    A Medicare Phase-Out By Any Other Name Still Stinks

    The Republicans voted to phase out Medicare and use the money for even more tax cuts for the rich. The public found out and turned out. So now they are coming up with new ways to mask the same thing. They call them "triggers," "across-the-board cuts" and "spending caps" but these are all really just about cutting Medicare and Social Security and education and giving more and more tax cuts to the rich. Please don't be fooled. And please get active and let them know you do not like what they are up to.

    The "Ryan Plan" To Phase Out Medicare

    A Republican named Paul Ryan came up with a plan to phase out Medicare and use the money to give even more tax cuts to the rich. Hence the name “Ryan Plan.” The plan replaces Medicare with a “premium support” voucher that covers some of the cost of insurance, (as if an ill 80-year-old can get insurance at all. The trick was to start the phase-out in 10 years, hoping people won't notice.

    While this phase-out of Medicare cuts “government spending” it just shifts that cost to you and me, and actually dramatically increases the overall costs. The Center for Economic and Policy Research calculates that it adds $7 in individual costs (you and me) for every $1 it cuts in “government spending.” But the mask that it cuts "government spending" gives them cover for even more tax cuts at the top.

    Town Hall Anger

    Last week every Republican in the House (save for a few) voted to say, “Yes, let’s do this.” Then they went home and met with constituents at town hall meetings, and were surprised to learn that regular people are smarter than they thought they were. They thought they could just slip this past people, under the cover of deficit hysteria. Instead people shows up at town hall meetings demanding answers. And they were not happy about what the Republicans were doing.

    So now, returning from exposure to the unwashed masses they are saturating the airwaves with corporate-funded propaganda, ads with soothing voices telling us how good for us the Republican plan to get rid of Medicare will be. And they are working on new plans to do the same thing, but to make it less obvious what they are up to. "Triggers. "Caps." "Across-the-board cuts (that leave out military and cut taxes at the top.)" Etc.

    The Polls

    Poll after poll after poll after poll shows that the public understands where the deficits came from -- tax cuts for the rich, huge increases in military spending and the costs of the recession -- and wants their government to fix these causes of the deficit. But the people are not in control of the government, the powerful few who own the giant corporations are, so the government keeps coming back again and again with schemes to cut the things government does for We, the People and use the savings to cut taxes on the wealthy and the corporations.

    Demand The Details

    Do not accept any plan that does not detail specifically what they are doing to fix the problems. Any plan that does not clearly raise taxes on the rich, cut the military spending and provide jobs and a solid economic foundation for the future by investing in infrastructure and alternative energy is not addressing the problems. (The People's Budget is a plan that does these things.)

    These are the things that the public is demanding. This is why the powerful forces in control of the government keep coming up with shadowy detail-free schemes like "triggers" and "spending caps." They are trying to mask tax cuts for the rich and cuts in the things We, the People do for each other like Medicare, Social Security and education.

    Get Angry

    We are bombarded with scheme after scheme to take away what is ours, so that a wealthy few can have even more. They have plan after plan. Here is comedian Lee Camp explaining that "Evil People Have Plans":

    Don't just take it, foil their plans. React. Get angry.

    And then:

    Get Active

    Get out there and get your voice heard. Call your member of Congress and both senators. Show up at town hall meetings and demonstrations and protests. Sign up to be on mailing lists of organizations like Campaign for America's Future, MoveOn, Srengthen Social Security and Don't Make Us Work Till We Die!, Credo Action, Coalition on Human Needs, US Uncut, On May 12, Campaign for Community Change, Working America and others who are working to fight back. Join Up.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 11:07 AM | Comments (0) | Link Cosmos

    April 9, 2011

    If Top Tax Rate Was Returned To 90%

    John Paulson would "only" take home $490 million last year. A single year.

    See Top hedge fund managers raked in $22 billion last year - Apr. 1, 2011

    The 25 highest-paid hedge fund managers took home a combined $22.07 billion in 2010, according to a industry magazine's survey released Friday.

    And, believe it or not, that's actually down nearly 13% from the prior year, when they earned $25.33 billion, AR Magazine said.

    AR said pack leader was John Paulson, who earned a record $4.9 billion. That means he was making around $155 per second last year.

    Posted by Dave Johnson at 8:02 PM | Comments (0) | Link Cosmos

    April 7, 2011

    Budget Battle: Who Is Our Country FOR?

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Who is our country for? Is this a country for We, the People, where all of us are banded together to protect and empower each other, together? Or is this a country where a powerful few reap all the benefits, and the rest of us are little more than "the help?" That is what the coming budget/deficit/debt/shutdown battles are about.

    In the past several decades our country and economy has been thrown out of balance in ways that hurt most of us but greatly benefit a powerful few. Communities are being bankrupted, forced to lay off police, firefighters, teachers, nurses and other essential people who work to protect and help us. More and more working people are hurting, falling ever further behind, losing or barely clinging to their jobs and homes and businesses and health. At the same time big-company CEOs who cheat, bankrupt their company, ship jobs overseas and fire white collar workers by the thousands are not held accountable -- instead they are rewarded with big bonuses.

    And in the larger picture the country is falling behind, the economy is losing its competitive edge, the infrastructure that supports our businesses is crumbling and our public structures like the court system and schools are deteriorating. And in the face of this decline our public confidence, trust, civility and other measures of civic health are falling.

    The measure of any serious budget deficit reduction program should be to look at these imbalances and address them. That is the role of We, the People government. But instead, the new Republican budget accelerates the imbalances -- on purpose. It cuts or eliminates the programs that assist people, helping us maintain or rise to a middle-class existence.

    Decades of Stealth Attack

    Most of us probably thought this country was a "We, the People" democracy where we are all in this together, looking out for each other. But for decades corporate conservatives have been engaged in a stealth attack on the middle class, taking all of the gains of our joint investment in a prosperous economy just for themselves.

    The effects of the stealth attack on the middle class have been creeping up on us, and are now widely felt. Incomes have been stagnant for some time, as costs rise. Predatory industries increasingly prey on the public and small business. At the same time a powerful and wealthy few have benefited from these changes so much that today, just 400 people have more wealth than half of our population of 300 million people combined!

    One measure of the price of maintaining a middle-class existence is the "toil index." The index of toil measures the work hours it takes for a family to live in an average home where children have access to an average school. In the past few decades the work hours required to maintain a middle-class existence has gone up 62.4%.

    So in 1950 the "toil index" was 42.5 hours. That dropped to 41.5 by 1970. But then it started to rise -- a lot. By 2000 it was 67.4 hours, an increase of 62.4%! Yet this was at a time when the country as a whole got ever wealthier. And since 2000 it has obviously gotten much worse.

    Now The Attack Is In The Open

    Now the attack on the middle class is out in the open. The new Republican budget plan takes away any pretense of our government working for We, the People, and transforms it completely to a government of, by and for the top 1%. Programs to maintain the middle class are cut or eliminated. Help for the jobless is cut back. Government workers are eliminated. Medicare is privatized. Social Security is phased out.

    But in this budget taxes for the wealthy few and big corporations are cut, big oil companies continue to raid the treasury, the arms industry prospers and other multinational giants continue to receive subsidies and advantages over smaller, less-powerful competitors.

    This budget is clear in its purpose: to create a one-dollar-one-vote plutocracy for the wealthy few, while gutting our one-person-one-vote democratic system.

    How We Got Here

    Let's look at the effect of the recent decades of this stealth attack on our We, the People government and economy.

    Top tax rates for the rich have been dropping and dropping, resulting in big budget deficits that add up to big debt:

    Top Tax Rate

    The Republican budget doesn't fix this at all. It makes it worse. It cuts tax cuts for the rich even more, and guts the things We, the People do for each other.

    The next chart shows how corporate taxes have declined, the one after that shows who owns those corporations:

    Corp_Taxes_Share_GDP
    wealth2

    So at the same time as income taxes for the wealthiest dropped the tax share from the corporations -- mostly owned by the wealthiest few -- also declined dramatically. On top of that cuts in taxes on capital gains and dividends pushed even more of the gains to the top. The Republican budget plan makes this worse.

    As top tax rates have been dropping working people's payroll taxes have been rising. This is the money we set aside in the Social Security Trust Fund for our retirement. (Chart from Urban Institute)

    The Republican budget not only doesn't address this, it raids this money we have set aside for retirement by cutting our retirement benefits!

    Because of cuts in taxes for the rich and the corporations they own, inequality has been increasing dramatically. The Economic Policy Institute shows that, "The share of income going to the majority of households has dropped considerably since the 1970s.. Share of household income held by bottom 99.5%, 1913-2008:"

    Family-Income_Share-of-household-income_bottom-99_3

    The share of income that 99.5% of us get has fallen from 93.7% to 83.1%. The top half percent get all the rest. The Republican budget plan doesn't fix this at all. It makes it worse.

    Here is a chart of the increasing concentration of income at the top:

    The Republican budget plan doesn't fix this at all. It makes it worse.

    How It Happened

    The "Reagan Revolution" cut taxes, deregulated business, opened our borders to let in goods from "thugocracies" that exploit workers, dramatically increased military spending and cut back on the things we (government) do for each other. It cut back on investment in our people, our infrastructure, education, public structures like our courts, our labor protections, our consumer protections, and attacked the independence of the ways we receive objective information. Things have gotten steadily worse in the years since.

    Last year's post Reagan Revolution Home To Roost -- In Charts shows the impact on us of these changes over time, concluding,

    Sometimes it can be so obvious where a problem comes from, but very hard to change it. The anti-government, pro-corporate-rule Reagan Revolution screwed a lot of things up for regular people and for the country. Some of this disaster we saw happening at the time and some of it has taken 30 years to become clear. But for all the damage done these "conservative" policies greatly enriched a few entrenched interests, who use their wealth and power to keep things the way they are. And the rest of us, hit so hard by the changes, don't have the resources to fight the wealth and power.

    Look at the influence of these entrenched interests on our current deficits, for example. Obviously conservative policies of tax cuts and military spending increases caused the massive deficits. But entrenched interests use their wealth and power to keep us from making needed changes. The facts are here, plain as the noses on our faces. The ability to fight it eludes us. Will we step up and do something to reverse the disaster caused by the Reagan Revolution or not?

    The Republican budget plan doesn't fix this at all. It makes it worse. Much, much worse.

    More Charts

    In the meantime, lobbying to influence our government against the things that help We, the People has gone through the roof.

    lobbying_spending_totals_98-09
    (Chart source Sunlight Foundation.)

    The Republican budget doesn't fix this at all.

    They lobby because it pays off. It pays off because the lobbying buys them special favors, breaks, subsidies and policies that favor them over their competitors and the rest of us. This happens because we let them get away with it. Of course when powerful interests can use money to bend the rules they will bend the rules in their own favor -- and will start by bending the rules in ways that let them bend the rules even more.

    Of course this is what they have been doing. Here is what is happening in the case of some specific industries:

    Lobbying for "defense' has increased:

    Defense_Lobbying

    And the result show how this has paid off: (note, chart includes defense-related spending.)

    Military_spending_chart

    We spend more on military than all other countries combined. The Republican budget doesn't fix this at all.

    Imbalances

    So these are just some of the imbalances that government should be addressing. But it isn't. The Republican budget doesn't fix this at all. It just makes all of these problems and imbalances worse. And this is because of that ability of the wealthy and powerful to pay to get the rules bent in their favor. We need to instead change the system to hold politicians and CEO’s accountable, making sure the rich are not abusing the system.

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    Posted by Dave Johnson at 12:23 PM | Comments (0) | Link Cosmos

    April 1, 2011

    Social Security "Cannot Exist" Says Rep. Cantor, House Majority Leader

    From Campaign for America's Future:

    Help Fight Cantor's Quest to Eliminate Social Security

    Last week, House Majority Leader Eric Cantor said out loud what he really thinks: He believes Social Security "cannot exist." At all. For anyone.

    This week NPR played Cantor’s remarks to the conservative Hoover Institution: He declared: "So we've got to protect today's seniors. But for the rest of us? For - you know, listen. We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be."

    These guys say things like this at right-wing think tanks, expecting that the folks back home won’t hear them. We want to make sure every person in Rep. Cantor's congressional district hears those words straight from his mouth.

    The Campaign for America's Future isn't letting Rep. Cantor get away with it. We have a TV ad that will let his constituents know about his extreme opposition to Social Security. But we need your help to get it on the air. The more you can donate, the more we can get his constituents to see the ad and the more we can spread the truth, and put him on the hot seat.

    Click here to help us keep this ad on the air »

    Here is what CAF sent out in an email:

    Help us expose Rep. Eric Cantor's plan to make sure Social Security "cannot exist." Contribute $10, $25 or $50 to our ad campaign.

    This week NPR played Cantor’s remarks to the conservative Hoover Institution: He declared: "So we've got to protect today's seniors. But for the rest of us? For - you know, listen. We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be."

    These guys say things like this at right-wing think tanks, expecting that the folks back home won’t hear them. We want to make sure every person in Rep. Cantor's congressional district hears those words straight from his mouth.

    Check out our hard-hitting ad. Then help us get it on the air.

    Help us expose Rep. Eric Cantor's plan to make sure Social Security "cannot exist." Contribute $10, $25 or $50 to our ad campaign.

    A significant ad buy in Rep. Cantor's central Virginia district would only require 100 supporters to donate $50 each.

    But the more you can donate, the more we can get his constituents to see the ad and the more we can spread the truth, and put him on the hot seat.

    Help us expose Rep. Eric Cantor's plan to make sure Social Security "cannot exist." Contribute $10, $25 or $50 to our ad campaign.

    All year, the Campaign for America's Future has been leading the fight to protect Social Security. And our polling shows that big majorities across the country want to strengthen Social Security – including in Cantor’s district.

    We helped stop the President from embracing disastrous Social Security cuts in his State of the Union address. Now, let's make sure the Republicans know what they’re in for if they try to abolish one of American's most successful, and most popular programs.

    Thank you for all of your support.

    Sincerely,

    Roger Hickey, Co-director
    Campaign for America's Future

    Posted by Dave Johnson at 10:21 AM | Comments (2) | Link Cosmos

    March 25, 2011

    Koch And Native-American Reservation Oil Theft

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Just what is this Koch Industries? Should it be called a "company?" If so we need to re-think the idea of what a company and a business is supposed to be. Even the brother of Koch Industries owners David and Charles Koch called the company an "organized crime" operation.

    Koch money is a key driver of the conservative movement. Almost every conservative-movement rock you turn over has Koch money crawling around under it. As the movement becomes more and more of a pay-to-play operation, conservatives of every stripe do more and more to protect and enrich the Koch operation. This has included blocking, disrupting and avoiding official investigations of accusations. It also includes funding front groups to advance the political and financial interests of the company and its owners.

    Theft Of Oil From Reservations

    Oppose The Future has the story of how Koch Oil was caught stealing oil from an Indian Reservation, reducing or removing the incomes of so many poor residents.

    At some point in 1987, Thurmon Parton’s royalty checks for the three oil wells he inherited from his mother suddenly dropped from $3,000 a month to a little over $1,000. He and his sister, Arnita Gonzalez, members of the Caddo tribe, lived near Gracemont, Oklahoma, a town of a few hundred people on a small grid on the prairie.

    Those modest royalties were the only source of income each of them had.

    . . . What happened to Mr. Parton, Ms. Gonzales and Ms. Limpy had nothing to do with the wells or how they were producing. Their oil was being stolen. And all of the evidence pointed to the same culprit: Koch Oil, a division of Koch Industries.

    This is an important story today because it helps us understand the nature of the Koch operation, which has so much influence over our politics and even livelihoods today. It also helps us understand why our government not only appears to be influenced, but often to be outright corrupted. From the story,

    In the spring of 1989, a Special Committee on Investigations of the United States Senate’s Select Committee on Indian Affairs was formed to look into concerns that the path to tribal self-rule was impeded by fraud, corruption and mismanagement from all sides.

    ... Within a span of months, the Special Committee determined that “Koch [Oil] was engaged in systematic theft, stealing millions in Oklahoma alone.” BLM, even with a tip that Koch was behaving improperly, hadn’t done a thing.

    Oppose The Future lays out the story and details of the oil theft. There is also story of the years following.

    "A Broad Pattern Of Criminal Behavior"

    Back in 1996 Business Week looked into the relationship between then-Senator and Presidential Candidate Bob Dole and Koch Industries and an apparent pattern of influence by the company, in BOB DOLE'S OIL-PATCH PALS. Here are some excerpts from their investigation, [emphasis added]

    Koch has had a history of run-ins with the Justice Dept. and other federal agencies. In 1989, a special congressional committee looked into charges that Koch had routinely removed more oil from storage tanks on Indian tribal lands ... Dole tried to influence the Senate committee to soft-pedal the probe. Nevertheless, after a yearlong investigation, the committee said in its final report, "Koch Oil, the largest purchaser of Indian oil in the country, is the most dramatic example of an oil company stealing by deliberate mismeasurement and fraudulent reporting." The report triggered a grand jury probe. The inquiry was dropped in March, 1992, which provoked outrage by congressional investigators.

    Then in April, 1995, the Justice Dept. filed a $55 million civil suit against Koch for causing more than 300 oil spills over a five-year period. Dole and other Senators, however, sponsored a bill ... that critics charge would help Koch defend itself ... legal sources say the government's ultimate goal is to use evidence in the two actions to establish that Koch has engaged in a broad pattern of criminal behavior.

    ... From Apr. 19, 1991, through Nov. 2, 1992, David Koch and the Koch Industries political action committee together contributed $7,000 to Nickles' campaign war chest. Around the same time, [Oklahoma Republican Senator Don] Nickles sponsored Timothy D. Leonard, an old friend of Nickles, for the post of U.S. Attorney in Oklahoma City. ... initially, questions were raised in the U.S. attorney's office about whether Leonard should recuse himself because Koch Industries purchased oil from wells in which Leonard and his family had royalty interests ... Then-Deputy Attorney General William P. Barr granted him a waiver to participate in the case ... In March, 1992, after an 18-month investigation, the U.S. Attorney's office terminated the grand jury probe and informed Koch it anticipated no indictments. ... As the grand jury investigation was winding down, Nickles sponsored Leonard for a federal judgeship. He was nominated by President Bush in November, 1991, and confirmed by the Senate the following August.

    Business Week lays out the evidence in detail. The timing, with Republican administration/committee/agency/department after administration/committee/agency/department impeding and/or dropping investigations into Koch activities is also clear.

    In 2000, CBS' 60 Minutes ran a segment, Blood And Oil And Environmental Negligence looking at the activities of the Koch brothers and their private company Koch Industries,

    As we told you when we first reported this story last November, the Koch family of Wichita, Kansas is among the richest in the United States, worth billions of dollars. Their oil company, Koch Industries, is bigger than Intel, Dupont or Prudential Insurance, and they own it lock stock and barrel.

    William Koch, brother of company owners David and Charles, called the company an "organized crime" operation:

    Koch says that Koch Industries engaged in "(o)rganized crime. And management driven from the top down."

    "It was – was my family company. I was out of it," he says. "But that’s what appalled me so much... I did not want my family, my legacy, my father’s legacy to be based upon organized crime."

    In March, 2001 the incoming Bush administration repealed the "responsible contractor rule" that barred companies that chronically defraud the government and/or violate federal pollution, wage and other rules from receiving federal contracts.

    Then, in 2002 the Bush II administration awarded Koch the contract to supply oil to the Strategic Petroleum Reserve. (There were accusations that the government bought oil when prices were high, and sold it when prices were low.) The contract was renewed in 2004. Koch received tens of millions in other government contracts during the Bush years.

    The story and timeline of the Koch operation (and its front-groups) go on and on, organizing and funding climate-denial front groups, front-groups run and funded by the Koch Brothers organizing and funding the Tea Party. (Please click the links.)

    Think Progress in particular has been following the activities of this "company" and its front groups, and it is certainly worth taking a look. See REPORT: How Koch Industries Makes Billions By Demanding Bailouts And Taxpayer Subsidies (Part 1),

    Koch funds both socially conservative groups and socially liberal groups. However, Koch’s financing of front groups and political organizations all have one thing in common: every single Koch group attacks workers’ rights, promotes deregulation, and argues for radical supply side economics.

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    Posted by Dave Johnson at 7:52 AM | Comments (0) | Link Cosmos

    February 28, 2011

    Crappy Jobs Caused By Plutocracy And Austerity

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    There are good jobs and there are crappy jobs. There are burger-flipping jobs and there are skilled trades and professions. There are jobs that pay well and have benefits and jobs that don’t.

    There is even the job you had, now paying less, with no benefits.

    Much of the post-recession job growth is at low end. Many "better" jobs not at the low end pay less and offer fewer benefits than they used to. So the middle class continues to fall. The "economic divide" -- the gap between the top few percent and the rest of us -- continues to accelerate, pushed by the recent continuation of tax cuts for the wealthy, stock bubble-pumping from the Fed, and ongoing attacks on labor. And now, in particular by "austerity" budgets in the states and the pullback of stimulus and other programs from the federal government.

    If you are desperate you’ll take any job, and the "austerity" idea -- cutting taxes for the rich and using the resulting deficits to force cuts in unemployment, services, things government does for We, the People -- forces people to be desperate enough to do just that. At the same time, it is cutting the number of jobs and the possibility that the economy will ever create more.

    Why Crappy Jobs? Plutocracy and Austerity

    Why isn't the economy rebounding and producing lots of good jobs? The answer has two parts: plutocracy and austerity. Plutocracy forces the money and power to the top, and that power forces austerity measures on us to remove even more money and power from the rest.

    Plutocracy: Fundamental changes brought in by the Reagan Revolution have come home to roost, shifting almost all of our economy's income growth to a few at the top, while pitting working people around the world against each other. The forced decline of labor unions has left people on their own against giant corporations.

    This video shows what it is like to negotiate on your own, up against companies with billions in resources:

    Austerity: The second part of the crappy-jobs, slow-growth equation is austerity. Tax cuts for the wealthy have resulted in huge budget deficits, defunding government's power to protect regular people. The plutocracy uses these deficits as an excuse to force budget cuts, "spending down" our infrastructure by deferring maintenance and modernization, cutting back on education, cutting back on basic scientific research and cutting back in many other areas thereby reducing our economic competitiveness. But they're doing fine today, so they don't care about how this hurts the rest of us tomorrow.

    Austerity cuts back economic growth. This week a Goldman Sachs report says that the proposed budget cuts passed by the House shave a couple percent off of economic growth. Goldman Sachs Says GOP Budget Plan Will Hurt Economy

    A Goldman Sachs economist has warned that the $60 billion package of spending cuts proposed by the Republicans to counter President Obama's proposal could slow economic growth.

    The cutbacks will also hurt employment. Center for American Progress this week, in Cuts In House GOP’s Continuing Resolution Could Drive The Unemployment Rate Up One Full Point,

    Earlier this month, the Economic Policy Institute released a report finding that the $100 billion in discretionary spending cuts that the House GOP passed last weekend would result in the loss of nearly one million jobs. “Cuts of this magnitude will undermine gross domestic product performance at a time when the economy is seeing anemic post-recession growth,” wrote EPI’s Rebecca Theiss.

    Another report this week shows how state and local cuts are also shaving growth. And who can be surprised by that? When you lay off thousands of teachers and other government workers, this causes a ripple effect to grocery, clothing and other stores. It causes even more foreclosures. AP: State spending cuts slow US economic growth in Q4,

    The government's new estimate for the October-December quarter illustrates how growing state budget crises could hold back the economic recovery.

    The Commerce Department reported Friday that economic growth increased at an annual rate of 2.8 percent in the final quarter of last year. That was down from the initial estimate of 3.2 percent.

    . . . State and local governments, wrestling with budget shortfalls, cut spending at a 2.4 percent pace. That was much deeper than the 0.9 percent annualized cut first estimated and was the most since the start of 2010.

    The Effect On People

    This "austerity" craze -- cutting taxes for the rich to force cuts in the things government does for We, the People -- is threatening to destroy even the small amount of job creation we are getting. And what is the human effect?

    A report from the Coalition on Human Needs titled, A Better Budget for All: Saving Our Economy and Helping Those in Need shows that millions of Americans would suffer from the proposed budget cuts:

    At a time when 14 million people are out of work, the House approach to the federal budget fails those who are struggling most, according to a new report by the Coalition on Human Needs for the SAVE for All campaign.

    The report draws a sharp contrast between the president’s budget for next fiscal year and the House plan for the remainder of this year, although it also notes serious concerns with elements of the president’s budget. It shows how the proposed budget cuts would both harm individuals and damage the country’s fragile economic recovery. The House plan includes the largest cuts, on an annualized basis, in domestic appropriations funding in history.

    An Expanding Economy Fixes This

    Cutbacks shrink the economy. And expanding economy provides good jobs with good pay and benefits and fixes budget deficits. We want an expanding economy for We, the People, not tax cuts for the rich and cutbacks on the things government does for We, the People. Tax cuts and austerity provide an opportunity for a few to cash out and take off, but does not provide for the rest of us.

    March 10 Summit on Jobs and America's Future

    On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

    Free. $15 with lunch. Register here.

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    Posted by Dave Johnson at 12:42 PM | Comments (0) | Link Cosmos

    A Joke To Send To Right-Wing Relatives

    A unionized public employee, a member of the Tea Party and a Big Corp CEO are sitting at a table. In the middle of the table there is a plate with a dozen cookies on it. The CEO reaches across and takes 11 cookies, looks at the tea partier and says, "Look out for that union guy, he wants a piece of your cookie."

    Posted by Dave Johnson at 8:26 AM | Comments (0) | Link Cosmos

    February 24, 2011

    We Didn’t Have Any Of These Problems When The Top Tax Rate Was 90%

    Deficits
    Huge national debt
    Massive debt-interest payments
    Extreme concentration of wealth
    Unfunded public-employee pension liabilities
    Corporate business models operating for the quick buck instead of for the long term

    The list goes on and on. Add to it in the comments.

    Posted by Dave Johnson at 5:40 PM | Comments (3) | Link Cosmos

    Plutocracy Charts

    Go see: It's the Inequality, Stupid | Mother Jones

    Posted by Dave Johnson at 7:34 AM | Comments (0) | Link Cosmos

    February 23, 2011

    What Is The Real Agenda Of The Budget-Cutters?

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    What is the real agenda of the budget-cutters? Are they really trying to bring the country back from the edge of financial ruin? Or did they bring about the appearance of a borrowing crisis to create a public panic that enables them to impose "solutions" that change the very nature of our country -- while doing little about the borrowing?

    In the news this week, Wisconsin Governor Scott Walker "ginned up" a budget crisis, then introduced legislation that removes collective bargaining rights from public employees, and over time effectively destroys their unions. Similar measures have been introduced by Republican governors or legislatures in several other states.

    This legislative attack on public employees follows more than a year of "preparing the ground" with a coordinated campaign from conservative organizations to convince the public that public employees are overpaid and that their pensions are "bankrupting" state governments -- not the effects of the recession.

    In the news soon, the coming strategic "shutdown" of the federal government by Republicans. After decades of forcing through tax cuts for the wealthy and corporations, again and again -- most recently just a few weeks ago -- Republicans and corporate conservatives are engaged in a national campaign promoting the belief that there is a "deficit crisis." Their solutions involve gutting the things government does for We, the People like consumer, health, safety, labor and financial, retirement and income protections, while keeping things the government does for corporations and the wealthy "off the table."

    We see variations of the same formula over and over. Here is how it works:

    1) Cut taxes for the rich and corporations (corporate stock is mostly owned by the top 1%); big deficits result.
    2) Claim a deficit emergency and use their domination of corporate-owned media to whip the public into a panic, creating the appearance of demand for corporate-approved "solutions." Manipulate the appearance of consensus.
    3) With taxes and military “off the table” push through cuts in the things government does for We, the People.

    Repeat as often as needed to create a plutocracy.

    Today's "debt crisis" is the culmination of the long-term "starve the beast" strategy from an organized corporate-conservative movement. By cutting taxes for the wealthy they have starved the government, created massive debt (guess where the interest payments go) gutted the infrastructure, and put our country on the road to third-world status. This conservative movement has an agenda, and is not interested in working out "bipartisan" compromised.

    In an example in the news this week, a hoax call, purported to be from David Koch, one of the billionaire-industrialists helping fund the conservative movement and major funder of efforts to make it appear that Wisconsin is having a budget crisis. In the hoax call, Wisconsin Governor Scott Walker clearly understands that he and Koch are in engaged a joint effort, describing a Democratic Senator who could work with him as "not one of us."

    Koch: Now you’re not talking to any of these Democrat bastards, are you?

    Walker: Ah, I—there’s one guy that’s actually voted with me on a bunch of things I called on Saturday for about 45 minutes, mainly to tell him that while I appreciate his friendship and he’s worked with us on other things, to tell him I wasn’t going to budge.

    Koch: Goddamn right!

    Walker: …his name is Tim Cullen—

    Koch: All right, I’ll have to give that man a call.

    Walker: Well, actually, in his case I wouldn’t call him and I’ll tell you why: he’s pretty reasonable but he’s not one of us…

    Elsewhere in the call Walker and faux-Koch talk about whether "planting troublemakers" would "work" or not.

    In another example of the self-awareness of this strategy: On public radio's Marketplace, February 22 Vincent Vernuccio of the Koch/conservative movement/corporate front-group Competitive Enterprise Institute discusses how the real agenda of the state actions is to destroy unions and their ability to fight corporate power politically, not to solve budget problems. (Note, he was not identified on the show as funded by conservative/corporate interests and Koch.)

    VINCENT VERNUCCIO: Union bosses want to inflate these budgets so they can get more members, so they can get more dues. And in turn, they take that dues money they have and give it to politicians who are going to give them more favors in the future.

    Several states are considering bills that would allow workers to opt-out of a union. Again, Vincent Vernuccio.

    VERNUCCIO: The main focus of this isn't just the budget cuts. It's actually giving workers the right to say no to the union if they so choose.

    Professor Bruno also sees broader implications for the debate. Since union money helps support the Democratic party, he argues changes in collective bargaining could shake up the political landscape far beyond the Midwest.

    These are just two small examples, in the news on the same day, showing the difference between the public pronouncements of concern for the country and a private agenda to fool the country. It is one thing when responsible leaders disagree on the best way to solve the country's real problems. It is quite another thing when organized wealth pursues a strategy to scare the country into handing over our remaining wealth and power.

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    Posted by Dave Johnson at 1:58 PM | Comments (0) | Link Cosmos

    February 3, 2011

    Jobs, Income Crisis As Govt Captured By Interests

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Earlier in Jobs Crisis In Real World ... Just Not In DC I wrote about the gap between DC/Wall Street thinking about the jobs crisis and reality in the rest of the country. Summary: Our government is not addressing out problems because it is captured by interests:

    Out here in the real world the real problem is not "structural," it is that there just are not enough jobs, they don't pay enough, "free trade" deals have lowered wages and undermined our manufacturing base, there is not enough demand in the economy and the government is not doing its job of picking up the slack and after 30 years of tax-cutting the infrastructure is crumbling and not supporting competitiveness for our businesses.

    There are millions of unemployed and millions of infrastructure jobs that need doing. There is a new green energy and manufacturing revolution going on in the world and we do not have an economic/industrial policy to capture our share. There is problem after problem that is not being addressed by a government captured by interests.

    Harold Meyerson writes today, in What's holding back the U.S. economy? that income has stagnated for everyone, while a few at the top are raking in tremendous amounts, because we have "lost power to our corporate and financial elites."

    From 1947 through 1973, according to the Economic Policy Institute's State of Working America report, released this week, the incomes of the poorest 20 percent of Americans rose 117 percent, while the middle 20 percent saw a rise of 104 percent and the wealthiest 20 percent a rise of 89 percent. From 1973 through 2000, however, the income of the bottom fifth increased by a scant 9 percent, the middle fifth by 23 percent and the richest fifth by 62 percent. Since 2000, the concentration of income gains at the very top has grown only more pronounced. The share of income going to the wealthiest 1 percent of Americans, which was less than 10 percent in the early '70s, reached 23.5 percent in 2007 - the highest level on record save for 1928. (Note: Both years preceded epic crashes.)

    Lagging innovation may explain many things, but it doesn't explain the rise of the rich over everybody else. For that, we need to look at changing power relationships, something that most mainstream economists resolutely ignore. Surely, the shrinking of unions - from 35 percent of the private-sector workforce in the 1950s to less than 7 percent today - has decreased American workers' ability to win good wages. Surely, the offshoring of manufacturing has diminished both the number of good jobs and our ability to exploit our innovations productively. Surely, the deregulation of finance has diverted more and more resources to a relatively small circle of bankers and speculators. And that tiny cadre has chiefly enriched itself at the expense of the rest of the nation.

    Meyerson is saying that the changes in our economy that are causing the middle-class-destroying joblessness and wage stagnation are not due to lack of innovation, a great stagnation from a "lack of low-hanging fruit," or any of the other excuses we are hearing. (Other countries and their economies are growing.) He says it is because the economic benefits of growth are now going to a very few.

    The difference between America pre- and post-1973 is that in the years preceding, the benefits from economic growth were widely shared, while in the years following, they increasingly went only to the top.

    These things are happening because we have lost the checks and balances that functioning democracy brings to our economic and political system, which are supposed to moderate the savage effects of unbridled, top-down capitalism. As a result both systems are captured by the very wealthy interest who are running things to further concentrate their wealth and power.

    As I began the earlier post: Who is our economy for? Who is our government for? For 30 years we have been undergoing a transition from "We, the People" democratic government to a plutocracy run by and for the wealthy.

    Jobs, income, infrastructure, dignity, security and mostly the benefits of democracy, all falling away from us at a faster and faster rate. This is The Reagan Ruins, hitting us upside the head like a hammer. This is "trickle down" not trickling down at all.

    March 10 Summit on Jobs and America's Future

    On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

    Free. $15 with lunch. Register here.


    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 12:25 PM | Comments (0) | Link Cosmos

    Jobs Crisis In Real World ... Just Not In DC

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Who is our economy for? Who is our government for? For 30 years we have been undergoing a transition from "We, the People" democratic government to a plutocracy run by and for the wealthy. One indicator of this transition is the way the DC Elite respond to unemployment. 9-10% unemployment used to be a national emergency. Now it's a yawn.

    What The Washington Paper Says

    The Washington Post has a front-page story, Why does Fresno have thousands of job openings - and high unemployment? that says the problem is really "structural," a skills gap, and there is little we can do. This is significant because so many people who make policy read the Washington Post while sitting in their nice, expensive restaurants. Stories like this risk that they will think that there really are plenty of jobs out there, but the serfs just aren’t up to taking them, or are too spoiled, but in any event there is no problem that needs solving, and call the lobbyist because this month’s check is late.

    Meanwhile, anyone in the real world outside of Washington or Wall Street, reading about “thousands” of job openings going unfilled immediately knows something is fishy. In fact, if this story ran on the front page outside of DC or Wall Street we might even need to worry about Egypt-style riots. Anyone on the same side of the continent as Fresno knows that there are not “thousands’ of unfilled job openings. There might be thousands of foreclosures, or thousands of people in food lines, or thousands of people whose unemployment has run out but there are not thousands of unfilled job openings.

    What The Local Paper Says

    The Fresno Bee has a different story to tell, EDITORIAL: President should come see impact of joblessness in Valley:

    The economy may be improving, but it would be difficult to persuade the thousands of out-of-work Valley residents that things are looking up.

    The six Valley communities cited in a U.S. Labor Department report have unemployment rates that run from 16.4% in Hanford-Corcoran to 18.6% in Merced. The other Valley cities on the list are Fresno (16.9%), Visalia-Porterville (16.8%), Modesto (17.2%) and Stockton (17.5%).

    . . . The nation's economic recovery will not be complete until Americans go back to work. At every level of government, the goal should be to implement policies that improve consumer confidence and encourage businesses to hire workers.

    The Fresno Want Ads

    The Fresno Bee help-wanted ads tell the story.

    There are 963 “Sales” jobs listed, but the first 519 of those are at the same "company," called “Work At Home Jobs, Inc.” and are mostly the same "job," if you can call it that. The next 136 are a different "company" and the "jobs" are calling people from home to sell them wireless cell service – on commission. The next 52 are the same deal but a different "company," selling internet from home, on commission. The next 46, same story. Etc.

    The next category after Sales is “Business development”, with 691 jobs, 466 are “work at home” and many of the rest are the same jobs at the same companies as the “sales” jobs. The next two categories are "General Business" and "Other" and, again, list the same "jobs" at the same "companies." The next category is "Business Opportunity." I challenge you to guess what "companies" and "jobs" are listed. (Hint: it's the same ones again.)

    Supply And Demand

    Among the few specifics in the story is the example of "Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week."

    $15-an-hour is just above the poverty level for a family of four, at about 130%.

    Dean Baker, writing in, The Problem of Structrual Unemployment: Really Incompetent Managers, makes the point that a company complaining they can’t find skilled workers at $15 an hour needs to think about raising their offer. Baker writes,

    It presents comments from one employer who complains that he can't find workers for jobs that pay $15 an hour. This is not a very good wage. It would be difficult for someone to support themselves and their children on a job paying $15 an hour ($30,000 a year). If the company president understand economics, then he would raise wages enough so that the jobs were attractive to workers who have the necessary skills.

    If they can't get workers, they should know that they need to bump up the wage offered until they can. That is about as basic as it gets in the supply/demand equation.

    Can't Sell The House And Move

    Part of this problem is the housing market. If Fresno really doesn’t have the skilled workers businesses need, Silicon Valley and Las Vegas certainly do, and have very high unemployment rates, but the people there can’t sell their houses and move! And even if they could sell they are "underwater," will come out of the sale owing a ton of money that they can't make up by taking a $15-per-hour job!

    Externalizing Training Costs

    Companies expect workers to already be trained, “externalizing” one more cost onto local communities, while shopping for the lowest tax areas to locate.

    California has a budget crisis and is cutting back on funding for the community colleges and other programs where people are trained for jobs. One reason for the budget crisis is businesses demanding ever-lower taxes, or playing communities and states against each other for tax incentives to relocate, using property tax avoidance schemes and so many other ways to get out of paying something back to the public for the public investment that enabled them to prosper.

    The Real Problem

    Out here in the real world the real problem is not "structural," it is that there just are not enough jobs, they don't pay enough, "free trade" deals have lowered wages and undermined our manufacturing base, there is not enough demand in the economy and the government is not doing its job of picking up the slack and after 30 years of tax-cutting the infrastructure is crumbling and not supporting competitiveness for our businesses.

    There are millions of unemployed and millions of infrastructure jobs that need doing. There is a new green energy and manufacturing revolution going on in the world and we do not have an economic/industrial policy to capture our share. There is problem after problem that is not being addressed by a government captured by interests.

    DC Avoids Dealing With The Problem

    It seems that the DC Elite will do anything to avoid just seeing what is in front of their faces.

    Clearly we have lost jobs from trade deals, Wall Street financialization and domination, lack of investment in infrastructure and education, etc. But the DC Elite come up with a thousand reasons not to fix these because the interests that benefit from those deals have influence over them. Our budget deficit is obviously from tax cuts and military spending – but you will never, ever, ever, ever hear that. Instead we hear job-killing "austerity" solutions that avoid asking the wealthy few to pitch in.

    On one issue after another, the DC Elite provide cover for the wealthy elite interests who now control DC. The transition from We, the People democracy to a plutocracy of, by and for the wealthy few is nearly complete.

    The real problem is not a breakdown of the structure of the job market and is not a mismatch between the jobs and the skills, it is a lack of jobs because of lack of demand, and a mismatch between who our government and economy are supposed to work for, and the interests that have brought this about.

    March 10 Summit on Jobs and America's Future

    On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

    It's free, $15 if you want lunch. Beat that.


    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 7:33 AM | Comments (0) | Link Cosmos

    February 1, 2011

    Democracy vs Plutocracy: Public Transportation

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Here is a letter in a recent "Mr. Roadshow" column in the San Jose Mercury News. The letter illustrates the problems in plutocratic/libertarian thinking vs democracy. (Note: Caltrain is the commuter-rail line serving towns between San Francisco and San Jose.)

    Your recent article on Caltrain's $30 million deficit is once again showing your socialist leanings. Saying Larry Ellison of Oracle or Sergey Brin and Larry Page of Google or Steve Jobs of Apple should rescue Caltrain is one of your famous inane ideas. If Caltrain cannot operate without taxpayer funding, it should go out of business. Just how much taxpayer money is used to fund the likes of Southwest Airlines, Greyhound Bus or any taxi services? As a taxpayer, I have never received a billing statement from any of these companies for not using their business! If you want the rich to pay for Caltrain, I suggest you tax rich athletes, actors, entertainers, the major news network anchors and, of course, rich politicians such as Dianne Feinstein, Barbara Boxer, Nancy Pelosi and John Kerry, to name a few. Private business is the heart of America! Not government! Maybe you should quit the Mercury News and go to work for Gov. Jerry "Moonbeam" Brown and become director of Caltrans.

    Let's look at the assumptions in this letter:

  • If XXXX cannot operate without taxpayer funding, it should go out of business. (Insert Caltrain, Public Radio, schools, libraries, health clinic for the poor, etc., as needed.)
  • Private business is the heart of America! Not government!
  • No taxpayer money goes to help airlines, bus companies, etc. operate.
  • Never mind the idea of public infrastructure, courts, etc. that provide the underpinnings of all business. An airline can't operate without an airport, air traffic control, weather forecasting, etc. A bus or taxi company cannot operate without roads, police, and the rest of the system. No business would exist without courts and the financial system...

    I want to explore a deeper question. What are we, as citizens in a democracy, entitled to? Yes, that word, "entitled." There are things we are entitled to because we are human beings and citizens. We are supposedly still a one-person-one-vote system and not a one-dollar-one-vote system, and we are supposedly entitled to equal opportunity, equal access and an equal voice.

    But for-profit systems only respect those with lots of money. In a democracy is it right to require people to have a lot of money have access to transportation? To health care? To information?

    What are your thoughts?


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    Posted by Dave Johnson at 8:36 PM | Comments (1) | Link Cosmos

    January 28, 2011

    Democracy or Plutocracy? A Chart

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    DEMOCRACY

    PLUTOCRACY

    We, the People

    Wealthy Few

    One Person One Vote

    One Dollar One Vote

    Government

    Limited Government

    Majority

    Supermajority

    Information

    Propaganda

    Taxes on the Wealthy

    Tax Cuts for the Wealthy

    Budgets

    Budget Cuts

    Jobs programs

    Bank Bailouts

    Welfare

    Warfare

    Express Lanes for 2 or More People

    Express Lanes for 2 or More Dollars

    Security Lines at Airports

    Special First-Class Security Lanes at Airports

    Public Schools

    Private Schools

    Public Investment

    Private Investment

    Updates:

    Public TransportationPrivate Jets
    AccountabilityImpunity
    Rule Of LawAbove The Law
    TransparencySecrecy
    Sustainable growthPolluter Growth
    Medicare-For-AllHealthcare For Profit
    Clean ElectionsRigged Elections
    Savings AccountsOffshore Accounts
    Credit Card DebtCredit Default Swaps
    Union membersSerfs
    LayoffsPayoffs
    HomiesCronies
    GrassrootsAstroturf

    Feel free to add additional contrasts in the comments.

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    Posted by Dave Johnson at 9:52 AM | Comments (1) | Link Cosmos

    January 7, 2011

    Unemployment Rate Dropped Because So Many People Gave Up

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Unemployment Rate Dropped BecausThe new monthly job numbers are out. They are a little bit better than they have been, but they are not very good. We added very few jobs but the unemployment rate went down. This is a function of a really bad economy in which people are so discouraged they aren't even bothering to look. So many people have given up that the labor force is actually smaller now than before the recession. We must make sure that these people are not just discarded, abandoned and marked up as a loss. They are people.

    Any increase in jobs is good news. In December the economy created a net of 103,000 new jobs. Also the prior two months' numbers were revised up by 70,000. But there are real problems behind these numbers. We are more than two years into this recession, and we still are not seeing job growth that will bring the unemployment levels down anywhere near where they need to be. The stimulus worked but was not enough, and it is winding down. The new Congress has no intention whatsoever of new job-creation or infrastructure programs. And it is ending help for state and local governments that are increasingly shedding jobs.

    The official unemployment rate dropped, but only because 260,000 people "left the labor force." That means they gave up looking for work. There are so many discouraged workers who are not in the labor market that any truly good news will bring a flood back into the labor force. And that will keep the unemployment number high.

    Dean Baker of the Center for Economic and Policy Research writes,

    The 0.4 percentage-point drop in the unemployment rate was the largest since April of 1998, but this decline may just be an aberration. The 290,000 reported gain in employment reported in the Bureau of Labor Statistic's household survey is healthy, but inconsistent with so many people leaving the labor force. It is also worth noting that average weekly unemployment claims are still averaging more than 400,000. The economy did not start generating jobs at all following the last recession until weekly claims fell below 400,000 in 2003.

    [. . .] On the whole, this report does not suggest a very positive picture of the labor market going into 2011. The decline in the unemployment rate is certainly positive, but with EPOPs hovering near their low point for the downturn, the main story appears to be people giving up looking for work. Furthermore, there is no sector that appears to be experiencing robust job growth at the moment, nor any likely candidates for the near future.

    Lower Pay

    Many of the new jobs come with lower pay than the jobs lost. Isaiah Poole writes about this in Where Are The Breadwinning Jobs?

    There isn't much cause for gloating in today's unemployment report, with the number of jobs created during December—103,000—being lower than most analysts expected. But, more critically, we're not even treading water on creating a sufficient number of "breadwinning jobs" needed to grow and sustain America's middle class.

    . . . "We are now America, the downwardly mobile," wrote Harold Meyerson this week when he offered his own analysis of what has happened in the job market in recent years. The shortage of breadwinner jobs exacerbates the middle-class economic decay that began with the economic policies of the Bush administration and the conservatives in Congress. As Meyerson points out, median household income (in 2007 dollars) went from $50,557 in 2000 to $50,233 in 2007 and $49,777 in 2009.

    Stocks & Profits Are Up, Nothing Else Matters

    The stock market is up and corporate profits are soaring, so as far as the people who make decisions are concerned, things are better than ever. They refuse to see the problems faced by the rest of the people of the country. While waves of people are hitting the "99er" limit for receiving unemployment checks, our leadership will not do anything about it. Plutocracy has replaced democracy.

    Abandoned?

    According to the Economic Policy Institute, we are 7.2 million payroll jobs below the start of the recession, and that does not take into account 3.7 million more jobs that were needed just to keep up with population growth.

    We face a serious risk that a plutocratic leadership will just abandon the unemployed. Corporate profits and stock prices are up, even with this level of unemployment. So the plight of so many millions of Americans is of little concern.

    There is so much work that needs doing. The country's infrastructure is deteriorating, dragging down our economy's competitiveness. This represents millions of jobs that need doing -- while millions of people need jobs. But the nation's leadership instead passes tax cuts for the rich, borrowing hundreds of billions for that purpose instead of for putting people to work and maintaining the infrastructure. And in the midst of the borrow for tax cuts instead of jobs, creates deficit commissions in stead of jobs commissions.

    The Charts

    Here is The Chart (from Calculated Risk.)

    EmploymentPercentLossesAlignDec2010

    The following two charts are from this analysis.

    Unemployed over 26 weeks:

    UnemployedOver26WeeksDec2010

    Part time for economic reasons (underemployed):

    PartTimeDec2010

    The President and Congress should recognize that stock prices and corporate profits have become separated from what the rest of the country is experiencing. "Main Street" is not recovering. People are not finding jobs. It is still a crisis. We need a jobs first economic plan.e So Many People Gave Up

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    Posted by Dave Johnson at 5:19 PM | Comments (0) | Link Cosmos

    Sen. Conrad Plutocracy Plan Vs. Democracy Deficit Commission

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    If you saw this morning's Progressive Breakfast, you know that Senator Kent Conrad has an op-ed in Politico, "Priority no. 1: Pass long-term budget plan," in which he proposes steps to do something about the borrowing caused by the tax cuts for the rich that he just voted for. (And if you didn't see this morning's Progressive Breakfast you really ought to sign up to receive it every day. Click here and scroll to the bottom to sign up.)

    In his op-ed Sen. Conrad claims that the President’s National Commission on Fiscal Responsibility and Reform -- the "deficit commission" -- released "a plan." This is surprising, because the deficit commission did not release a plan. The commission was assigned the task of coming up with an overall package that, taken as a whole, could receive 14 votes from the commission's members. Instead co-chairs Alan Simpson and Erskine Bowles, a conservative Republican and a Wall Street representative (a Director of Morgan Stanley) -- released a plan of their own that did not get the required support of the commission. Just two guys, not the commission.

    Saying “the deficit commission” recommended anything is a deception that pushes the Wall Street-favoring plutocracy plan from those two guys. Others one the commission also released plans that were much more aligned with the public interest than Wall Street's interests, but Conrad ignores those plans. There was The Schakowsky Deficit Reduction Plan: A Proposal That Actually Strengthens Social Security and doesn't raise taxes on the middle class. There was Andy Stern's Invest in America plan. There was EPI's plan, Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility. And there was a comprehensive plan from The Citizens' Commission On Jobs, Deficits And America's Economic Future. Conrad ignores those plans, favoring the Wall-Street/Simpson/Bowles plutocracy plan.

    Conrad says the Simpson/Bowles/Wall Street plan-for-plutocracy has "three basic principles [that] can serve as the foundation for a long-term deficit-reduction package." These are:

    1) Address our long-term budget issues now without damaging our economic recovery. Good start.

    2) Cut taxes on the rich while increasing them on everyone else. The plan goes off the rails.

    3) Cut Social Security, even though Social Security has nothing whatsoever to do with the deficit. The hidden agenda comes to light.

    This is what happens when Wall Street and conservative Republicans design a plan: give even more to the already-wealthy few, gut what our government does for We, the People.

    Here is the real deficit commission that you would expect to see if we were a democracy instead of a plutocracy: It would have 100 members:


    • 98 of the 100 members would make less than $250,000 a year.

    • 50 of the members would come from households in which the total income of all wage-earners is less than $50,221.

    • 17% of the commission members would be un- or underemployed, and would be wondering why they are on a deficit commission instead of a jobs commission.

    • 19 people on the commission would receive some form of Social Security benefits, 12 of those as retirees. And on this deficit commission they get to talk when the ones making over $250K propose cutting Social Security.

    • 43 of the commission members would have less than $10,000 saved up for retirement. 27 of those less than $1,000.

    • The commission would include the right proportion of factory and construction workers, and people who work in a kitchen, and waiting tables, and teaching, and nursing, and installing tires, and all the other things that people do except, apparently, those on DC elite commissions. (People who do manual labor get an extra vote each on what the retirement age should be.)

    • Include people who are on active duty in the military – the people who said they don’t need that expensive plane, but couldn’t get body armor.

    • 60 members would not have college degrees.

    • 13 members would be receiving food stamps.


    You get the idea. (2010 census data on race, marital status, etc. not yet located.) This democracy deficit commission would probably start fighting deficits by putting top tax rates back where they were when we didn't have huge deficits. It would probably understand that we don't have to pay to keep the Soviet Union at bay. It would recommend that we invest in our people and our infrastructure instead of giving even more to the already-wealthy at the expense of the rest of us. It would release a plan that is much more like the The Citizens' Commission On Jobs, Deficits And America's Economic Future plan than the Wall-Street/Simpson/Bowles plutocracy plan that Sen. Conrad is pushing.

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    Posted by Dave Johnson at 5:17 PM | Comments (0) | Link Cosmos

    December 17, 2010

    Don’t Pass Tax Cuts For The Rich And Then Tell Me About Deficits

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Congress passed tax cuts for the rich and cut the estate tax way down, adding $800 billion to the deficit and placing Social Security on the chopping block. No one will have predicted what’s coming next year in the name of deficit reduction: they are going after Social Security and everything else that benefits the middle class, and will hold the full faith and credit of our country hostage to get that. Choice: Gut the programs or kill the country. Action: get ready now for the coming fight.

    Where We've Been

    The Congress passed tax cuts for the rich and a huge cut in the estate tax at a time of worries about deficits and intense concentration of wealth. This act just puts the name on what has occurred since Reagan: it formalizes the collapse of We, the People democracy, replaced by plutocracy. And that was with the big Democratic majorities that we all worked so hard to elect. Next year is when it starts getting bad. Action: get ready now for the coming fight.

    Here is my message to Republicans: Tax cuts for the rich were so important to you that you took the country hostage, you refused to help the unemployed, you obstructed everything to get them. You blocked unemployment checks, DADT, the DREAM Act, the START Treaty, everything. So don't come back to me and complain about deficits, and say you need to cut the budget.

    My message to the President and Democrats: Rewarding obstruction just makes things worse. You caved on, well, everything in the last two years. You pre-negotiated away things the country needs, only to have Republicans respond by increasing their demands, and then you caved on that. They filibustered something like 420 bills, not to mention judges and appointees, and you only brought the cots out once. So they just did it more. And they will do it more and more, until you stop rewarding them. Action: get ready now for the coming fight.

    Worse Fights Coming

    There are already signs of the start of the next fight. The big fight is when the debt ceiling has to be raised, and they can hold the country's and world's economy hostage to their demands. Before that, though, will be an omnibus spending bill.

    Giving in to hostage takers has only solidified this kind of hostage-taking as a successful tactic. For example, last night, even while the House was capitulating to the last hostage-taking, Republicans again used the tactic to kill the omnibus spending bill. Republicans took the spending bill hostage and threatened to shut down the government if Dems didn’t accept their new demands. And Dems again gave in. As TPM puts it today,

    Late last night, Harry Reid's plan to get the federal government funded through the end of the fiscal year went up in flames, burning months and months of work by Senate appropriators and their staffs. To avert a government shutdown, Reid agreed to work out a federal funding plan with Senate Minority Leader Mitch McConnell -- Congress will agree to continue funding the government at its current levels through some yet-to-be-determined point next year.

    ... Next year, though, this arrangement will come back to haunt Dems. ... Whatever date they decide will be the deadline for resolving the next spending fight, which will occur in a dramatically different, and more conservative political environment. Republicans will demand spending cuts. And if they're successful, the stimulative impact of the just-passed tax package will be clawed back.

    If they win every time, why would they stop using the tactic? Again and again rewarded for obstruction, Republicans take new hostages. Essentially they say, again and again, "Agree to our demands or we will blow everything up." Again and again the President and Dems cave. Rinse and repeat.

    Action: get ready now for the coming fight.

    How Far Will They Take This?

    Just how far will they take this? Look at just how far they have taken it. Look what they have already done to the country. As CAF's Robert Borosage put it in Top End Tax Cuts and a Collapsing Infrastructure

    America is literally falling apart. Collapsing bridges, exploding water mains, crumbling levees are a deadly clear and present danger. Children go to schools that are dangerous to their health. Our declining infrastructure is also costly economically, with outmoded transport, crowded highways, slow and inadequate broadband impeding our ability to compete. As President Obama has suggested, we need to make significant investments in building a 21st-century infrastructure, in education and training, in research and development as a foundation for a revived American economy.

    The new batch of conservatives is very different from anything this country is used to, and that even includes the conservatives who shut down the government in the 90s, and relentlessly investigated President Clinton and literally anyone who ever knew him. Don't forget impeachment. They do not care about governing, they care about winning. And they now see absolute obstruction -- no matter the cost to the country -- as a wining tactic.

    People haven’t come to grips yet with what it means when one party can just block everything, and has no interest in governing at all. The corporate right intends to use the debt ceiling and the threat of literally ruining the country to get their way. They will refuse to provide funding for anything they don’t like and threaten to kill the government if they don't get their way. At risk: Social Security, Medicare, alternative energy programs, infrastructure funding, the Department of Education, certainly NPR, anthing to do with science, reason, civility ...

    They see this as their moment. They intend to reform the government in their far-right image or destroy it. If you think I am being extreme to say this, watch Fox for a while, listen to their radio shows, read their magazines and blogs. They intend to destroy the government.

    Limbaugh: “We won the election, we shut it down.”

    Limbaugh was talking about last night's hostage-taking on the omnibus spending bill, but reflects what I am hearing on the radio and blogs about their attitude in general. They really, really mean it, they see this as their moment to get everything they want or just destroy the government. They don't really care which.

    Former Senator Alan Simpson recently gave a preview of conservative thinking. From Politico,

    “I can’t wait for the bloodbath in April,” Simpson said, relishing the prospect of political turmoil. “When debt limit time comes, they’re going to look around and say, ‘What in the hell do we do now? We’ve got guys who will not approve the debt limit extension unless we give ‘em a piece of meat, real meat” in the form of spending cuts.

    “And boy, the bloodbath will be extraordinary,” he said.

    They want that "bloodbath." They just can't wait.

    Actions:

    First we have to bolster our own leaders, ask them to stop rewarding obstruction and fight for us and let them know you will fight for them if they do. We need an absolute commitment that Social Security will not be touched! Especially now that the just-passed payroll tax cut threatens Social Security's financing.

    Tell The President: Stand Up To The Hostage-Takers! Defend Social Security And Medicare.

    Action: get ready now for the coming fight.

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    Posted by Dave Johnson at 3:06 PM | Comments (0) | Link Cosmos

    December 1, 2010

    Do Tax Cuts Help The Economy?

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    In the news: Congress debates extending an extra tax cut for the rich, Obama's "deficit commission" proposes tax cuts to cut the deficit. Both of these assume tax cuts help the economy. But do they? What is the record?

    In this morning's public hearing of the National Commission on Fiscal Responsibility and Reform (deficit commission) Rep. Paul Ryan repeated the conservative mantra: "Economic growth comes from lower taxes." You may have heard this before. In fact, you may not have been able to avoid hearing this, repeated over and over, until you are running in circles with your hands over your ears. You can't get away from it.

    In the Congress, Republicans and some conservative Democrats are demanding that the special Bush-era extra tax cut for the wealthy be extended, repeating (over and over and over and over and over) that you must not raise taxes in a recession, because it will hurt growth.

    It is certainly a convenient argument, if you are really, really wealthy. But is it based on reality or ideology? A look at the record can provide some answers to that question.

    To start, here are three charts I have been using that show what happened after previous tax cuts:

    First, as top tax rates declined, so the the GDP:

    Top Tax Rate vs GDP

    Second, a different look at growth since the 80s tax cuts using 12-quarter rolling average nominal GDP growth:

    Third, the effect of tax cuts for the rich on the country's debt:

    TopRates_vs_Debt_Chart

    Economist Mark Thoma yesterday at MoneyWatch, Did the Bush Tax Cuts Lead to Economic Growth?

    What impact did the Bush tax cuts have on economic growth?

    The evidence is not favorable. For example, according to this Census report (see table A1), median household income in 2007, adjusted for inflation, was lower than it was in 2000. ... employment growth was particularly weak ... real wages and salaries grew at a 1.8 percent average ... as compared with a 3.8 percent average... (Click through to read)

    It’s Possible for Tax Cuts to Reduce Economic Growth

    Furthermore, even the part of the tax cuts used for investment purposes may not result in enhanced long-run growth. ... the growth disappears as soon as the bubble pops. In fact, this type of investment leads to reduced growth relative to what could have been achieved with other investments. Thus, to the extent that tax cuts helped to fuel the housing bubble, they actually harmed rather than helped long-run growth. (Click through to read)

    The Bottom Line

    ... Like it or not, tax increases will be required. ... If allowing the Bush tax cuts to expire for the wealthy is the only acceptably equitable way to raise taxes in this political environment, then there is little evidence that this will be harmful. ... (Click through to read)

    It is obvious that the Reagan and Bush tax cuts for the wealthy have hurt us in many ways.

  • They hurt the economy. (See charts above) (also, just look around you.)
  • They caused massive debt.
  • They hurt government's ability to do its job.
  • They caused extreme concentration of wealth.
  • They changed us from a democracy to a plutocracy: government of, by and for the wealthy.
  • They kept us from maintaining and modernizing our infrastructure.
  • But this was the plan all along, wasn't it?

    Click here to Tell Congress: Don't extend the Bush tax cuts for the wealthy

    Click here to read the The Citizens’ Commission On Jobs, Deficits And America’s Economic Future's report on how to create jobs, grow the economy and reduce the borrowing.

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    Posted by Dave Johnson at 1:37 PM | Comments (0) | Link Cosmos

    November 23, 2010

    Does It Matter What The Public Wants Or Needs?

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

    Does it even matter what the public wants anymore?

    I guess that's a rhetorical question these days because more and more obviously the answer is no. It matters what the plutocrats want, and they know how to get what they want. Public opinion is "engineered" or at least "managed." When it can't be managed it is ignored and the effort shifts to our elected officials, who are led to believe the public wants what the plutocrats want using elite opinion leaders, astroturf, front groups or flat out cash.

    According to polls (and most of these by overwhelming margins):

    Things the public doesn’t want:

  • Tax cuts for the rich. For example, this morning’s Progressive Breakfast hilited:
    Another poll shows support for ending Bush tax cuts for the wealthy. McClatchy:"...51 percent want to extend the tax cuts only for households making less than $250,000 a year, and 45 percent want to extend the tax cuts for all ... Those who want to extend all of the tax cuts, including for the wealthy, include Republicans, tea party supporters, conservatives, Southerners and Westerners, Independents were closely divided, with 49 percent for extending only the 'middle class' tax cuts, and 48 percent for extending all of them."

    P.S. Campaign for America's Future and CREDO Action have a petition, Tell Congress: Don't extend the Bush tax cuts for the wealthy. Click the link, and add your voice.

  • Cuts in social security. Isaiah Poole wrote last week, Nobody's Buying The Cut-Social-Security Line,

    A whopping 82% of respondents in the poll oppose Social Security cuts for the purpose of deficit reduction, while only 15% support cuts. What's particularly telling is the striking uniformity of opinion across the political spectrum: 83% of Democrats, 82% of Republicans, 78% of independents and 74% of Tea Party supporters.

    P.S. Campaign for America's Future has a petition, Tell President Obama to Reject Social Security Cuts. Click the link and add your voice.

    P.S. Strengthen Social Security is holding a National Call Congress Day on November 30. Click for details.

  • Cuts in Medicare. Republicans figured this out, and ran ad after ad after ad (after ad after ad) telling voters that Democrats should be thrown out of office because they cut $500 billion from Medicare. You saw the ads. (and saw them and saw them and saw them.)

  • Cuts in anything. (Actually, polls show that the public wants cuts in foreign aid.)

  • Corporate-written "free trade" schemes. As Leo Gerard points out in Corporate Rewards: Controlling U.S. Trade Policy,

    In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.

    Things the public wants:

  • Jobs. The official unemployment rate is 9.6%. The total including "underemployed" is 15.9%.

  • Unemployment benefits extended. Poll: Majority of voters support another extension of unemployment benefits,
    In a poll released Monday, 73 percent of voters say it's too early to cut back benefits for those who are struggling to find work as unemployment rate hovers at 9.6 percent....

  • A plan to revive American manufacturing. Election Day Poll: Voters Weren't Backing Extreme Right Agenda,

    Eighty-nine percent of those surveyed agreed with the statement that "America is falling behind" in the global economy and that "we need a clear strategy to make things in America, make our economy competitive, and revive America's middle class."

  • Rebuild America's Infrastructure. From the poll cited above,

    Significant majorities in the poll also supported new investments in infrastructure through a national infrastructure bank, and a five-year strategy for reviving manufacturing in America

    So there are things the public clearly wants and doesn't want. These things are significantly at odds with the things the plutocrats want. If we are still a democracy we will get the things the public wants. If we have completed the transformation to a plutocracy we will get the things the plutocrats want. That's the definition of the terms.

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    Posted by Dave Johnson at 2:30 PM | Comments (0) | Link Cosmos

    September 20, 2010

    Third World America: Reagan Revolution Drags Us Down

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    The recession ended in June, 2009? What? Seriously? No one told the millions of unemployed. And last week we got more bad news: 44 million of us living in poverty, and that was last year, before unemployment and COBRA subsidies started running out for the unemployed,

    ... four million additional Americans found themselves in poverty in 2009, with the total reaching 44 million, or one in seven residents. Millions more were surviving only because of expanded unemployment insurance and other assistance.

    We are living in the Reagan Revolution every day. Conservative policies are making us poor and poorer,

    Who counts and who doesn't count? We hear so much about the "middle class" but rarely about the plight of the poor. And of course we hear again and again that the wealthy are "successful" and the "job-creators" who shouldn't be "punished" by being asked to give something back to the country that enabled their wealth. Conservative "market" thinking and Ayn Randian "the poor are losers" dehumanizing ideology has become pervasive and dominant as we transition from one-person-one-vote democracy to one-dollar-one-vote plutocracy. In this plutocratic environment the national discussion of tax cuts for the wealthy saturates the corporate media, while the 44 million of us in poverty now are barely mentioned and count for little.

    Arianna Huffington's new book, Third World America, documents what is happening to us. RJ Eskow explains,

    Third World America is direct and clear in its message: Decades of aggressive corporate lobbying, driven by bankers and other large corporations, have led to a series of policy decisions that are eroding the American standard of living. The details are all there: The financial industry's gone from 2.5% of our GDP in 1947 to 8.3% right before the meltdown. Financial profits went from a maximum of 16% between 1973 and 1985 to 41% right before the crisis hit. And rather than being chastened by their failure, or disciplined by taxpayers in return for being bailed out, bankers have embraced their old ways with enthusiasm. Meanwhile the American households that rescued them lost $13 trillion in wealth between mid-2007 and March 2009.

    Last week more than 300 economists issued a dire warning that the current conservative "austerity" approach to the economy is dangerous. Focus on jobs now they say,

    More than 300 economists, policy experts and civic leaders have signed a statement warning political leaders of “a grave danger” that the still-fragile economic recovery will be undercut by austerity economics of the kind being pushed by conservative politicians and by the White House deficit commission. Read the statement and more at dontkilljobs.org.

    Meanwhile, all over the blogs this weekend was the story of the whiny rich, complaining that they "only" make a few hundred thousand a year. Why are they whining?

    The reason is that the income inequality has become so extreme that even the really rich see people above them who make VASTLY more than they do, so they feel like they aren't making hardly anything at all. They don't look down, they look up, and they see people making millions, hundreds of millions, even billions in a single year.

    One more nasty outcome of the Reagan Revolution: even the really rich feel poor compared to the really, really rich who are the primary beneficiaries from conservative policies.

    What can you do? There is a One Nation Working Together rally in DC on October 2. PLEASE click this link and find out what you can do to help, even if yo can't make it to DC. There are local events across the country.

    And remember, the election is coming up. We need to remind people that it was conservative policies that got us into this mess. It was conservatives who bailed out the banks. It was conservatives who ran up the massive debt. It was conservatives who killed the jobs.

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    Posted by Dave Johnson at 8:50 AM | Comments (1) | Link Cosmos

    September 17, 2010

    Listening To Conservatives Is Making Us Poor And Poorer

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Who counts and who doesn't count? We hear so much about the "middle class" but rarely about the plight of the poor. And of course we hear again and again that the wealthy are "successful" and the "job-creators" who shouldn't be "punished" by being asked to give something back to the country that enabled their wealth. Conservative "market" thinking and Ayn Randian "the poor are losers" dehumanizing ideology* has become pervasive and dominant as we transition from one-person-one-vote democracy to one-dollar-one-vote plutocracy. In this plutocratic environment the national discussion of tax cuts for the wealthy saturates the corporate media, while the 44 million of us in poverty now are barely mentioned and count for little.

    Yesterday the Census Bureau reported (NYT) that another four million people fell below the poverty line just last year, with trends showing it will probably grow. 44 million Americans -- one in seven of us -- are now trying to make it on $10,830; $22,050 for a family of four.

    “We’re seeing more younger people coming in that not only don’t have any food, but nowhere to stay,” said Marla Goodwin, director of Jeremiah’s Food Pantry in East St. Louis, Ill. The pantry was open one day a month when it opened in 2008 but expanded this year to five days a month.

    This chart (from the Census report) shows the trends.

    On top of this, the level of "severe poverty" has hit an all-time record level. At Angry Bear, All Time Record Level of Severe Poverty,

    Coverage focused on the headline poverty rate which is horrible enough. Much worse, 6.3% of people in the USA suffered severe poverty, that is lived in households with income less than half the poverty line. This is the highest severe poverty rate on record. That means that over 19 million people in the USA live in households with income less than half the poverty line (severe poverty implies income significantly less than $ 11,000 yr for a family of four) [emphasis added]

    The Lifesaver Net Is Under Attack: Unemployment Benefits, Food Stamps, Welfare, Social Security

    Even as poverty rises (because of conservative policies) the conservatives are attacking and weakening the safety net that keeps this disaster from getting even worse. They denigrate the idea of our government assisting citizens -- taking care of and watching out for each other -- as "spending" and "handouts." They say that unemployment and poverty assistance "undermine the work ethic." They say that helping the poor is "reaching into other people's pockets." Click through to read an example of what the Koch/Scaife/Walton (WalMart)/Tobacco/Oil/Corpation-funded Heartland Institute on "handouts". Or click through to read a sample of what the Koch/ Scaife/Tobacco/Corpation-funded Freedomworks (one of the astroturf organizations behind the Tea Party) on "handouts." Here is the Koch-founded/tobacco/oil/corporate-funded Cato Institute saying, about helping the people of New Orleans after Katrina, that government helping people is"coercion" (taxes are theft) and "it is important to remember that you can't be compassionate with other people's money."

    This is dehumanizing and degrading and listening to it at all dehumanizes and degrades all of us. And the result is right in front of our faces: poverty grows, poverty becomes more extreme, wealth concentrates at the top, society becomes more cruel, the country falls further and further backwards. We have lived through a decade of conservative policies, and from the NYTimes story on the increasing poverty rate,

    “This is the first time in memory that an entire decade has produced essentially no economic growth for the typical American household,” Mr. Katz said.

    The Money Is Going To The Top

    The Census report notes that the highest "quintile" or fifth of income-earners received 50.3 percent of all income last year, the bottom fifth receive only 3.4%..

    In 2009, the share of aggregate income received by the bottom quintile was 3.4 percent; the second quintile, 8.6 percent; the third, 14.6 percent; the fourth, 23.2 percent; and the highest quintile, 50.3 percent.

    Unemployment Benefits Running Out

    Conservatives in the Congress are blocking emergency extensions of unemployment benefits, jobs programs and other critical parts of the safety net that helps people in emergencies such as the conservative-caused financial collapse. So another indicator of human suffering is about to get even worse. Unemployment for the "99ers" is running out, many of them older, with no jobs in sight.

    Only unemployment benefits are keeping another 3.3 million from the same fate. (Chart from Center for Budget and Policy Priorities)

    Health Insurance, Too

    According to the Census Bureau report, the number of United States residents without health insurance climbed to 51 million in 2009, from 46 million in 2008. Additionally in 2010 millions of unemployed workers who were covered by the stimulus' COBRA subsidies are losing their coverage. There is no relief in site for years.

    Temporary Assistance for Needy Families (TANF) Expiring

    The Temporary Assistance for Needy Families (TANF) Emergency Fund from the "stimulus" expires at the end of this month. Steve Benen at Washington Monthly writes that the TANF program, "subsidizes jobs with private companies, nonprofits, and government agencies and has single handedly put more than 240,000 unemployed people back to work."

    So of course it needs to be renewed. But conservatives are blocking this. Benen writes,

    The irony is, when those Americans lose their jobs, Republicans will say it was the failure of the stimulus. Their pathetic rhetoric will have it backwards -- the stimulus created those jobs, and the GOP's filibuster of an effective jobs program will throw these men and women out of work. In a sane political world, this would be a pretty big scandal...

    Food Stamps Cut

    Last month we saw this tragedy happen, Food Stamps Slashed to Pay for Teacher Jobs Bill. Conservatives forced cuts to food stamps before they would allow a bill providing $26 billion to help states cover Medicaid expenses and teacher salaries to pass.

    Social Security

    It has been covered here extensively that the President's "Deficit Commission" is talking about cuts to Social Security, which by law cannot borrow so it cannot contribute to the deficit, instead of looking at the tax cuts for the rich and military spending increases which caused the deficits. At the very time older Americans have had their retirement savings wiped out and many cannot find jobs and are taking early retirement, the commission is talking about reducing instead of increasing this vital program!

    JOBS JOBS JOBS JOBS

    This is really all about jobs and wages. The best antidote to poverty is more employment and better wages. But conservatives continue to block all efforts to provide jobs and lift wages. Isaiah Pool wrote here yesterday, in Latest Senate Jobs Bill Tests The Limits Of Right-Wing Obstruction,

    Senate Finance Committee chairman Max Baucus has introduced a bill today that is a frankly unadventurous mix of jobs initiatives and tax incentives, with a healthy dose of loophole-closings to make sure that it can be presented as revenue-neutral.

    . . . Senate Minority Leader Mitch McConnell issued his "hell no, you can't" edict ... telling reporters that he'd lead a filibuster to make sure billionaires and millionaires paid not one dime more in earned income tax.

    Such is the political environment in which Baucus drops his latest effort to move the jobs debate forward.

    So every indicator of a society in terrible trouble -- unemployment, poverty, severe poverty, balance of trade, concentration of wealth, foreclosures, health insurance coverage, you name it -- is going in the wrong direction. And conservatives are proudly doing what they can to make it even worse! Why do we even listen to them at all?

    * (For more on the roots of Ayn Rand and dehumanizing ideology click and scroll to the asterisk.)

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    Posted by Dave Johnson at 2:41 PM | Comments (0) | Link Cosmos

    August 28, 2010

    Corporate Power

    We went into health care reform looking to free ourselves from a predatory industry that was harming us and the country, and get ourselves Medicare-For-All.

    We came out the other side with all of us ordered to buy health insurance from the predatory health insurers.

    This has been another chapter in democracy v.s. predatory corporatist plutocracy.

    Posted by Dave Johnson at 3:52 PM | Comments (0) | Link Cosmos

    August 26, 2010

    Simpson Social Security Comments Highlight Battle Of Democracy Vs. Plutocracy

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Former Wyoming Republican Senator Alan Simpson is co-chair of President Obama's Fiscal Commission. This is what he said the other day about the relationship between the American people and our government:

    "We’ve reached a point now where it’s like a milk cow with 310 million tits!"

    This country that was once run by We, the People with government "of the people, by the people and for the people" has become instead a country where the ruling elites can talk about the public as babies, the unemployed as parasites who are jobless because they are "lazy." The prevailing attitude about the public, from the new Versailles that has grown up around Washington, DC -- what bloggers call "the village" seems to be if you feed them they will breed.

    Look at the weird situation we are in today. The wealthy are wealthier than ever. The gap between the rich and the rest of us is bigger than ever. Big corporate profits are soaring and the too-big-to-fail multinational corporations have more power than ever. At the same time wages that were stagnant for decades are now dropping, people with jobs are working longer and harder, more of our people are unemployed and unemployed for longer, more without health insurance, more are depending on food stamps for basic nutrition, more are losing their homes than ever with bankruptcies soaring, and small businesses are barely hanging on or are going under at an alarming rate.

    But what are our political leaders up to? On the one hand, the deficit commission is focused on cutting Social Security (which does not contribute to the deficit or debt) at a time when more people need it and need it more than ever. On the other hand many in the Congress are looking for ways to extend the deficit-causing Bush tax cuts for the wealthiest 2%.

    And few are talking about our government hiring or helping the unemployed, stimulating the economy, or holding the bad actors who caused this mess accountable. In fact, far from talking about helping our fellow citizens, our ruling DC elites have a different view of things entirely. We, the People are just in the way. It is our own tit-sucking fault, they say, and we need to step up and sacrifice because we are not doing enough to help the people who really deserve it: the producers, the "job creators."

    Did you catch the rhetorical trick I used above? I said "our" people, and "our" government. How quaint. You don't hear that kind of talk much anymore. Instead you hear about "personal responsibility," which makes everything that is done to someone by the wealthy and powerful their own fault.

    This Is About Democracy vs. Corporatist Plutocracy

    These battles over cutting Social Security and extending tax cuts for the wealthy expose the competing worldviews of We, the People democracy vs corporatist plutocracy. Is our country a community of the people, by the people and for the people? Or are we "the help," only here for the benefit of the wealthy few.

    In the democracy worldview we are a community that takes care of and watches out for each other. We are each citizens with equal rights and equal value, to be respected equally. Our government and economy are supposed to be for us. In the democracy worldview we should be increasing Social Security's benefits because people really need it.

    In the plutocratic worldview held by conservatives and corporatist moderates we are "the help," 310 million loafers ("parasites" is the Randian word) sucking their " unearned sustenance" (more Rand) from the tits of the milk cow when we all ought to be working harder because the portfolios of the "achievers" (and more) are down a bit. Your value to society is only what you "produce." Your role otherwise is to "consume." In that worldview the wealthy deserve tax cuts and the parasites shouldn't be getting Social Security checks at all.

    So what is it going to be? Will we see and understand ourselves as citizens, who share this country on an equal basis with the rich and the poor, with rights and entitlements, deserving dignity, respect, protection and empowerment from a government that is of, be and for We, the People? Will we demand those things and fight for them? Or will we quietly yield those hard-won rights to our "betters" and allow ourselves to be told what to do, fleeced by giant corporations, hoping to get a flat-screen TV out of the deal if we behave?

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    Posted by Dave Johnson at 7:19 AM | Comments (0) | Link Cosmos

    August 23, 2010

    Five Things People "Know"

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    The things that people "know" are very different from the "reality-based" things those of us reading a blog like this know, and those things seem to always, always serve the corporate right.

    I have been away on vacation. While away I have been talking to "regular" people who are outside of the circles many of us who follow progressive blogs and news closely live in. The particular group I spent time with might not fairly represent "regular" people but whenever I spend time talking to people who are outside of our highly-informed circles, whether it is talking to relatives, doing call-in radio shows or just talking to people I meet I come away very discouraged by the things that most people "know." The corporate right has been very effective at spreading an anti-government, anti-democracy narrative that, when believed, puts their interests on top.

    Some of the things that people "know" that I heard in one form or another on my trip include:

    1) Government caused the financial crisis. A lot of people know this, and a lot more have heard it repeated over and over. Government forced banks to give mortgages to poor people and minorities. Taxes and government spending "take money away" from and generally harm the economy.

    2) Obama bailed out the banks. The most a lot of people know about the stimulus is that it was a lot of money and it went to bailing out the banks. Obama's massive spending increase (Democrats "tax and spend") is the cause of the deficit and the government is at risk of going bankrupt.

    3) Corporations (plutocracy) are always more effective and efficient than government (democracy). Government messes up everything that it touches.

    4) "Entitlements" are welfare and are destroying people's independence and work ethic. People think the government will solve their problems so they don't turn to themselves. Illegal immigrants immediately get welfare and have lots of babies on welfare and this is why states are going bankrupt.

    5) Social Security is going broke and won't be there for younger people.

    Of course all of these are just wrong, and of course acting on these beliefs leads the country to results that are terribly destructive to the economy and people's lives while a few at the top make out very very well for themselves. I'm not going to spend any time here getting into how much is wrong with each of these. I do want to get into why people believe these things.

    So many of us -- by "us" I mean people likely to be reading this -- spend our time in somewhat insular information environments, where the blogs and other information sources we read and the people we talk to tend to follow news closely, and to be very highly informed with "reality-based" information. But "regular" people do not follow the news closely, and the "news" they get does not come from the same places as the news sources you and I carefully seek out.

    Why The Right Controls The Narrative

    It's simple. The corporate right controls the narrative because they make an effort to do so, and the forces of We, the People democracy, community and caring humanity do not. (Peace love and understanding, truth and happiness.)

    Corporations and conservatives have invested a ton of money in a huge ideological message machine because they understand marketing. There is FOX News, Rush Limbaugh and the rest of talk radio, Drudge Report, a vast, vast Astroturf operation and all the rest of the right's propaganda operation. It is very, very well funded. They have constructed an effective narrative and they repeat it and repeat it and repeat it and repeat it -- and then they repeat it.

    But there is also the corporate-owned "mainstream" media that largely echoes and often directly transmits the right's narrative. First, they echo these anti-government themes. Then, as with the current anti-Muslim "ground-zero mosque" frenzy they carry the things that distract from the real issues. Why? Because it serves their interests, too. If people are focused on distractions instead of looking at the real causes of their economic woes it is all the better for the real causes of their economic woes: namely the big, monopolist corporations.

    (Does the mainstream media reflect corporate interests against those of the rest of us? Without going into detail here is a simple test: When was the last time you saw, heard or read someone on TV, radio or in a newspaper explain the benefits of joining a union?)

    Meanwhile progressives and the forces of democracy are barely reaching out to regular people at all. We seem to focus our efforts mostly on elections, and do very little between elections to persuade the public that there are benefits to them of a progressive approach to issues. (And never mind our political leaders who repeat and reinforce the right's frames and narratives.)

    A big part of this is that it takes a lot of money to reach out past our circles. But we sure do seem able to come up with money for elections. In fact the return on investment of reaching people outside of the election cycle should be obvious. We wouldn't have to raise and spend so much money in the election cycle if we were making the case that progressives bring more benefits to regular people, because then regular people would be more inclined to vote that way in general.

    I plan to write more about this.

    I think I did an OK job going into more detail on the things people "know" and why in this video from the Netroots Nation panel, The 2010 Elections: Channeling the Power of Jobs, Populism and the Angry Voter. Use the bar to slide this to the 40:00 minute mark, and watch for about 5 minutes.

    And, while I'm showing videos, here is Love, Peace & Happiness by the Chambers Brothers. (I can't get it out of my head since writing "Peace love and understanding, truth and happiness" above...)

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    Posted by Dave Johnson at 9:54 AM | Comments (0) | Link Cosmos

    June 11, 2010

    Citizens to Consumers to Beggars

    Americans used to be citizens. Then they were trained to be consumers instead.

    But now they're just wage slaves in a plutocracy (rule by a wealthy few). "Shut up and beg for a job." "Rich people provide jobs." Just look at the attitudes toward fellow citizens who are unemployed, "living off' the government, "unemployment benefits make people lazy" and "keep people from looking for work" etc.

    Posted by Dave Johnson at 10:34 AM | Comments (0) | Link Cosmos

    June 2, 2010

    Tax Cuts Caused The Deficits, Therefore...

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    No serious person denies that Reagan's 1981 tax cuts and military increases threw the country into a pattern of borrowing and borrowing that we have not escaped. When Reagan took office the national debt was $995 billion. When Reagan left office it was $2.87 trillion and climbing fast.

    No serious person denies that Bush's 2001 tax cuts and continued military increases dramatically worsened the problem. Bush's last budget year ended with a record single-year deficit of $1.4 trillion.

    As the country discusses what to do about the borrowing the elephant in the room is that everyone understands that restoring top tax rates to pre-Reagan levels and cutting the military budget in half would solve the problem completely. But we can't do that. We can't even discuss it.

    And we all know why. And we all know why. It is because the Reagan Revolution transformed the country from a democracy to a plutocracy -- a country run by and for the wealthy.

    Such sensible and simple ideas are considered off-limits. To even bring up the idea of restoring tax rates to pre-Reagan levels and cutting military spending invites terrible consequences. The speaker risks becoming the target of the money's noise machine: Limbaugh, Hannity, Drudge, Fox. Smears. Humiliation. Banishment. Or the noise machine cranks up a campaign of misinformation, convincing people --especially DC people -- that what they see in front of their eyes just isn't so. Repeat it enough and it becomes solid knowledge.

    We all know this is the way it is. So don't tell me that "we don't have the money" to keep 300,000 teachers from being laid off, or to help the long-term, mostly older unemployed workers get something to live on and keep their health care. The money is right there in front of us, but the Congress is bought and paid for.

    What do we do? We have to demand representatives who represent us, not make excuses for representing the wealthy. The unfortunate, poor and disadvantaged must count every bit as much as the privileged -- that's what democracy means. And we have to be ready to turn them out if they don't. For our part, we have to pay attention and demand to be shown, not told. We have to become citizens, not consumers.

    Posted by Dave Johnson at 8:33 AM | Comments (1) | Link Cosmos

    May 2, 2010

    Plutocracy and Anti-Government Front Groups

    It is entirely about maintaining a plutocracy, and it uses the model developed by the tobacco companies to keep the government away - keep us from protecting ourselves. When you look into it, ALL the anti-government, anti-tax, anti-regulation ideology out there is funded by a few ultra-wealthy people and/or the corporate resources they have access to. It isn't corporate rule, it's rule be a few with access to the vast corporate resources. (Look into the history of the movement and its orgs like Federalist Society that got the people onto the Supreme Court who rules that corporate resources can flood our elections.)

    Along these lines go read Secretive Right-Wing Plutocrats Use Front Groups To Attack New Campaign Finance Disclosure Bill

    Posted by Dave Johnson at 8:14 AM | Comments (0) | Link Cosmos

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