These Low Information Voters Will Be Our UndoingThe Color of Law -- By David A. Love, JDBC Executive Editor | ||
The results of the recall election of Wisconsin Governor Scott Walker tell you most of what you need to know about the state of politics in the
On the one hand, you have a governor who did not hide his desire to divide and conquer the unions, eliminate collective bargaining, decimate government services and serve a small cadre of wealthy, powerful and shady corporate interests. He was bought by the Karl Rove, the Koch Brothers, and other criminal organizations. There’s even a possible federal indictment for him on the horizon, in connection with anembezzlement investigation that has already ensnared six of his associates and aides.
The oppressed are made to feel like winners even as they emerge empty handed
Yet, despite all this,
So, what’s going on here? No one can question the corrupting influence of money in politics, particularly since the Supreme Court’s Citizens United decision. Money is a big factor in elections, and when a few billionaires can decide which jerk to put in office, their money trumps the votes and drowns out the voices of the common folk. But still, the 1 percenters require voters to get their candidate in office and seal the deal. These people, known as “low information” voters - a charitable and technical sounding term for uneducated, ignorant or gullible - are the real problem.
In the
White working class voters have made a pact with the devil - in the case of Republican Party, this should be taken in a literal sense - and now they (and all of us) are paying for it. Convinced that government programs are welfare - translated to mean the blacks and Latinos are getting freebees they don’t deserve - they will oppose them if doing so will hurt blacks more than whites. It is the legacy of theSouthern Strategy that has allowed conservatives to politically capitalize on white resentment of black progress. That resentment is summed up in a scene from the 1997 film, Rosewood, a film depicting the massacre of a prosperous black
Man #1: You know he’s [Sylvester] got a piano? A ni**er with a goddamn piano. I’ve been working all my life, I ain’t got a piano.
Man #2: You don’t know how to play one.
Man #1: That ain’t the point. Old man Cummer, up that house of his, he’s got a piano. That ni**er’s got one, and I don’t.
The Rosewood massacre of 1923, like the
A democracy works only with an educated, informed populace
While some working-class and poor whites have been content with being one rung above people of color on the totem pole, still they have remained on a very low rung and out of luck. There is a reason why the
And the culture wars, including gun worship, abortion bans, homophobia and immigrant bashing, become substitutes for concrete policies of economic uplift and social progress.
Faced with hard times, people have clear choices. Either they join forces across racial and ethnic lines and fight their common adversary, or they double down on the dumbness, thrive on misinformation and assign scapegoats. The Tea Party, which now prevails in national politics and owns a major political party, represents the latter of the two choices. It is this mindset that gives us creeps running state houses throughout the country - not just in
And yet, once again, someone out there is voting for these people. Until we resolve this,
BlackCommentator.com Executive Editor, David A. Love, JD is a journalist and human rights advocate based in
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Friday, June 15, 2012
Faced with hard times, people have clear choices. Either they join forces across racial and ethnic lines and fight their common adversary, or they double down on the dumbness, thrive on misinformation and assign scapegoats. The Tea Party, which now prevails in national politics and owns a major political party, represents the latter of the two choices. It is this mindset that gives us creeps running state houses throughout the country - not just in Wisconsin.
What is interesting about the relationship of the extreme political Right to Romney is that they actually hate him. This is not speculation. If you review the language of the Republican primary season it is clear that they actually despise him. They do not believe that he is a real conservative. They do not believe that he even has a belief system.
Romney and the Right:
They hate him...but they hate Obama more...
The African World-- By Bill Fletcher, Jr.
BC Editorial Board
What is interesting about the relationship of the extreme political Right to Romney is that they actually hate him. This is not speculation. If you review the language of the Republican primary season it is clear that they actually despise him. They do not believe that he is a real conservative. They do not believe that he even has a belief system. Some of the so-called Christian elements do not trust his Mormonism. So, one could say that there is an alignment that should result in the extreme Right sitting out the election...
Except for one thing: they hate Obama even more.
Their attitude towards Romney is an alliance of convenience rather than an alliance of trust and respect
So, November 2012 is shaping up to be something similar to November 1968. The Goldwater Republicans at that time had no love for Richard Nixon. They saw him as much too soft. But Nixon was the candidate at the moment and the Right saw in Nixon cover in order to give them more time to move their agenda. They turned out to be quite successful, all things considered. Though the Watergate scandal got in their way, it did not block their road to power; it just delayed it.
Obama’s re-election would be difficult under the best of circumstances, but he is not facing the best of circumstances. Although he prevented total economic collapse, his overall program of responding to the economic crisis has been weak. His healthcare reform, while truly historic, was a vast compromise and even with that faces the possibility of being blown up by the Supreme Court. And internationally, though theUS has largely withdrawn from Iraq , the war in Afghanistan and Pakistan
Karl Rove, then, was quite correct in pointing out that the Romney road to victory, should it happen, is brought about through a demoralization of the Obama base. It is also the case that it comes through playing the race card and voter suppression tactics.
Romney is not the candidate that enthralls the Right
Yet it is the strategy of the political Right that is quite noteworthy. Their aim is to destroy the Obama presidency, but more importantly, to destroy the possibility of a two party system. While it is absolutely the case that Obama has done all he can do to save capitalism, and in that sense is nothing approaching a socialist, the political Right wants to remove obstacles to the extension and possible completion of their political agenda. Their attitude towards Romney, therefore, is an alliance of convenience rather than an alliance of trust and respect. He serves as their battering ram.
Therefore, do not rest any significant hope in a split on the Right because Romney is not the candidate that enthralls the Right (the way that the Right was taken with Ronald Reagan). All that the Right is concerned with at the moment is that Romney is not Obama.
BlackCommentator.com Editorial Board member, Bill Fletcher, Jr., is a Senior Scholar with the Institute for Policy Studies, the immediate past president ofTransAfricaForum and co-author of Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice(University of California Press), which examines the crisis of organized labor in the USA. Click here to contact Mr. Fletcher.
As unappetizing as it might be to those on the right, the self-described “patriots,” American workers must take a page from the French workers’ book, become more sophisticated about their politics and their economy, understand thoroughly where their interests lie, and vote with their fellow workers, not with those who have a strong hand on their paychecks and any other wealth they might have under their mattresses, or invested in that mythical American Dream, their home.
Right Wing Gloating Over Wisconsin
is Par for the Course
Solidarity America - By John Funiciello
BC Columnist
“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
-Lincoln’s First Annual Message to Congress, Dec. 3, 1861
The declaration that Wisconsin Governor Scott Walker had survived the recall election last week was barely an echo in the statehouse halls when the chorus of right-wing pundits and right-wing politicians declared that the working class is dead and so are their unions.
Lots of them do the bidding of Corporate America without knowing much about why they do it.
No question about it, the election was between the interests of Labor and Capital, plain and simple. Working people lost. As has been noted over and over since the election of Ronald Reagan to the White House in 1980, a sizable portion of the working class has voted to stick closely to the ruling elite, perhaps feeling that a few crumbs will fall from their table for them and their families.
No matter that they vote with the 1 percent, as we saw in the Walker recall election. Little more than half the working class and middle class electorate voted to keepWalker as governor, even though he promised that he would strip them of their right to collective bargaining, if they ever again got around to forming unions. There are many reasons for their departure from sanity and the rest of the working class will just have to deal with it.
It was time for the right wing pundit, Charles Krauthammer, to crow and crow he did: “Tuesday, June 5, 2012, will be remembered as the beginning of the long decline of the public-sector union. It will follow, and parallel, the shrinking of private-sector unions, now down to less than 7 percent of American workers. The abject failure of the unions to recall Wisconsin Gov. Scott Walker - the first such failure in U.S. history - marks the Icarus moment of government-union power. Wax wings melted, there’s nowhere to go but down.”
To say they wanted to defeat “workers” might give the actual working class and middle class workers an idea that they are under attack by the ruling elite.
Always, always the pundits and the right-wing politicians follow the lead of the corporations, which pull their strings. They can deny that Corporate America pulls their strings, but one has to discover where all those strings run among the 1 percent. For those who do the bidding of the 1 percent, if the strings were made visible, the whole place would look like an explosion in a spaghetti factory. It’s everywhere. Lots of them do the bidding of Corporate America without knowing much about why they do it. They just know that that’s where their money comes from.
And, they always talk in terms of “unions,” rather than workers. They make unions out to be some invisible entity that has nothing to do with the workers on the job. They have to refer to defeating the “unions,” for, to say they wanted to defeat “workers” might give the actual working class and middle class workers an idea that they are under attack by the ruling elite.
In fact, they are. They have been under attack for decades and it always has been in terms of “defeating the powerful unions.” As in the Wisconsin recall election, the money ruled. Of course, it was not just the money that counted, but it surely tipped the balance in favor of Walker, his mentors, the Koch brothers of Koch Industries, and all the others who have poured hundreds of millions into the U.S.
The floodgates have been opened and the tiny moneyed class has been on a shopping spree, buying up the Congress and the state legislatures, politician by politician. They even write the legislation and give the boilerplate to their minions, for introduction into the legislative process. Few politicians escape the cycle of corruption. Those who do are not long in office. They either are driven out by a challenger who will do the bidding of his or her handlers, or they decline to run for reelection, citing the impossibility of making any meaningful changes in the system.
Jesse Kelly has declared his philosophy over the past few years, included reducing the minimum wage, and then eliminating it.
Not even right-wing pundits have an explanation for the militancy of the French workers, who put a stop to Walker-like actions of government without hesitation, whenever a Walker rears its ugly head. And, in France
What is the difference? Mainly, the difference is in understanding how the political system works and knowledge of politics and knowing when a politician is blowing smoke. They will not be fooled by political rhetoric, at least not all the time. Part of that is being raised in a climate (families, schools, on the job) in which people understand how their lives are affected by politics and the actions of politicians and legislatures. There is little of that in the U.S.
Holding out that carrot is what keeps most American workers in line. Even as they are being abused for decades of their working lives, they have been propagandized to think that unions really are the enemy and Corporate America is really their friend and, possibly, the savior of themselves and their families. So far, that has not worked out too well, but it partly explains why a little more than half the voters decided thatWalker was better than the “unions” and they voted for more of the same for the remainder of the young governor’s term.
Those Walker voters, therefore, should have been more than satisfied with the Republican who ran in this week’s special election for the Congressional seat of Gabrielle Giffords, who resigned after taking a year to recuperate from an assassination attempt. Jesse Kelly, a 31-year-old Iraq War veteran who works for his father’s construction company, has declared his philosophy over the past few years, included reducing the minimum wage, and then eliminating it. That’s for starters. He also thinks that corporate taxes should be eliminated altogether, would not provide much support for Medicare or Social Security, and he rails against government and government spending like a junior Grover Norquist. One of his campaign posters shows him in desert camo, with an assault rifle across his front. The message, written bold across the ad, is “send a warrior to Congress.”
The country and its economy cannot survive this gaping inequality.
Kelly lost to Giffords two years ago and, he lost by a comfortable margin in this week’s election against Giffords’ staffer, Ron Barber, who also was injured in the attempt on Giffords’ life. It will be interesting to see what spin the Republican Right Wingers put on it, especially since Krauthammer declared the Wisconsin vote to be organized labor’s “Waterloo,” meaning that it lost and will not recover from the defeat. At least Kelly went directly after workers, without euphemistically saying he was going after those powerful unions, as do others on the right. If he had his way, Kelly would render all workers powerless in the workplace, first by reducing them to real wage slavery. His handlers have declared during the recent campaign that he has matured, indicating that he no longer engages in name-calling and bravado.
Still, his railing against government is typically Republican, typically hypocritical. His father’s construction company, for which he works, reportedly gets the vast majority of its contracts from government, some $60 million at this time. He is quoted in the local press as having said, paraphrasing here: Somebody is going to get those contracts. Why shouldn’t it be us?
Relatively speaking, the Kelly family operation is like Corporate America in microcosm: While fighting to reduce the size of government (especially the elimination of wage and benefit standards, environmental laws and regulations, occupational safety and health laws, and more), they are busy constructing their own pipeline into government coffers. And the money that they draw off is from one source…the working stiff, the taxpayer, the people who spend every penny they get in their local economy…the people who have kept the economy going.
That largesse is coming to an end and this is not something that the likes of Krauthammer and Kelly and the rest of Corporate America want to hear, not when they look at the final result of their handiwork over the past half-century. The economic chickens are coming home to roost. The disparity in wealth between the 1 percent and the 99 percent stands in stark contrast to the celebration of the stock market’s continued existence. The country and its economy cannot survive this gaping inequality.
As unappetizing as it might be to those on the right, the self-described “patriots,” American workers must take a page from the French workers’ book, become more sophisticated about their politics and their economy, understand thoroughly where their interests lie, and vote with their fellow workers, not with those who have a strong hand on their paychecks and any other wealth they might have under their mattresses, or invested in that mythical American Dream, their home.
This is the time for solidarity among the 99 percent.
BlackCommentator.com Columnist, John Funiciello, is a labor organizer and former union organizer. His union work started when he became a local president of The Newspaper Guild in the early 1970s. He was a reporter for 14 years for newspapers inNew York State. In addition to labor work, he is organizing family farmers as they struggle to stay on the land under enormous pressure from factory food producers and land developers. Click here to contact Mr. Funiciello.
Thursday, June 14, 2012
Californians aren't waiting until all of the scientific results are in. And what they decide at the polling station in November may change what the rest of us eat.
June 13, 2012 by The Guardian/UK
How California's GM Food Referendum May Change What America Eats
The vast majority of Americans want genetically modified food labelled. If California passes November's ballot, they could get it
Last month, nearly 1 million signatures were delivered to county registrars throughout California calling for a referendum on the labeling of genetically engineered foods. If the measure, "The Right to Know Genetically Engineered Food Act", which will be on the ballot in November, passes, California will become the first state in the nation to require that GM foods be labeled as such on the package.
This is not the first time that the issue has come up in California. Several labeling laws have been drafted there, but none has made it out of legislative committee. Lawmakers in states like Vermont and Connecticut have also proposed labeling legislation, which has gone nowhere in the face of stiff industry opposition. And the US Congress has likewise seen sporadic, unsuccessful attempts to mandate GM food labeling since 1999.
What makes the referendum in California different is that, for the first time, voters and not politicians will be the ones to decide. And this has the food industry worried. Understandably so, since only one in four Americans is convinced that GMOs are "basically safe", according to a survey conducted by the Mellman Group, and a big majority wants food containing GMOs to be labeled.
This is one of the few issues in America today that enjoys broad bipartisan support: 89% of Republicans and 90% of Democrats want genetically altered foods to be labeled, as they already are in 40 nations in Europe, in Brazil, and even in China. In 2007, then candidate Obama latched onto this popular issue saying that he would push for labeling – a promise the president has yet to keep.
In Europe, only 5% of food sold contains GMOs, a figure that continues to shrink. In the US, by contrast, an estimated 70% of the products on supermarket shelves include at least traces of genetically engineered crops – mostly, corn and soy byproducts and canola oil, which are ingredients in many of America's processed foods.
Given their unpopularity with consumers, labeling "Frankenfoods" would undoubtedly hurt sales, possibly even forcing supermarkets to take them off their shelves. In one survey, just over half of those polled said they would not buy food that they knew to be genetically modified.
In Europe, only 5% of food sold contains GMOs, a figure that continues to shrink. In the US, by contrast, an estimated 70% of the products on supermarket shelves include at least traces of genetically engineered crops – mostly, corn and soy byproducts and canola oil, which are ingredients in many of America's processed foods.
This makes the financial stakes for November's referendum vote huge. California is not just America's leading agricultural state, but the most populous state in the nation. If companies are made to change their labels in California, they may well do so all over the country, rather than maintain a costly two-tier packaging and distribution system.
Several hurdles will have to be overcome, however, before this happens. The ballot initiative will face fierce opposition from the food and biotech industries, which are expected to spend an estimated $60-100m on an advertising blitz to convince Californians that labeling is unnecessary, will hurt farmers, increase their food prices, and even contribute to world hunger.
One lobbyist the corporations have hired to make this case is Tom Hiltachk, the head of the Coalition Against the Costly Food Labeling Proposition (CACFLP), whose members include the Grocery Manufacturers Association (GMA), Monsanto, BASF, Bayer, Dow and Syngenta, as well as several big food processors and supermarket chains. Hiltachk is no stranger to the shadowy world of industry front groups, according to Alexis Baden-Mayer, political director of the Organic Consumers Association. The food activist reported on Alternet that:
"With a little help from his friends at Philip Morris and RJ Reynolds, he helped organize the Californians for Smokers' Rights group to fight anti-smoking initiatives in the 1980s and 1990s."
Also working to defeat the labeling initiative, according to Baden-Mayer, is the California Citizens Against Lawsuit Abuse (CALA), which likewise receives big bucks from the tobacco industry and assorted other corporations. The consumer watchdog group Public Citizen says that CALA aims "to incite public scorn for the civil justice system, juries and judges, and to pave the way for enactment of laws immunizing corporations from liability for actions that harm consumers."
Whether lobbying groups like these will be able to convince famously independent Californians to reject the labeling initiative in November remains to be seen. But even if the referendum passes, the food industry can be expected to challenge in court the state's right to mandate its own labeling requirements – a function usually reserved for the Food and Drug Administration (FDA), at the federal level.
The FDA's position on GMOs is that they are safe and essentially equivalent nutritionally to conventionally grown food varieties. But critics counter that the FDA has no way of knowing if this is true, since crucial testing of GM foods has never been required by the agency, and indeed, has not yet been conducted. Writes Dr Suzanne Wuerthele, a toxicologist with the US Environmental Protection Agency (EPA):
"We are confronted with the most powerful technology the world has ever known, and it is being rapidly deployed with almost no thought whatsoever to its consequences."
The concern is that genetic modification alters the proteins in foods in ways that researchers do not yet fully understand. Substances that have never existed before in nature are entering our food supply untested. While researchers have not yet found a "smoking gun", which would prove that GM foods as a class are dangerous, there are troubling signs that they may be a factor in the recent epidemic of food allergies. Soon after GM soy was introduced to the UK, for example, soy allergies escalated by 50%.
Rosa Rashall, a nutritionist in Garberville, California, who took part in the petition campaign to get the labeling initiative on the ballot, told the Redwood Times:
"We are all worried for a variety of reasons, from health effects to skyrocketing food sensitivities that have started to come about in the last 20 years. There has been an incredible 400% increase in food sensitivities that coincides pretty well with the unlabeled introduction of GMO food into the marketplace."
Critics also argue that agriculture's increasing dependence on GMOs has coincided with a steep rise in toxic agrochemical use over the last decade. A variety of GM corn sold by Monsanto was developed specifically to withstand punishing doses of the company's bestselling herbicide, Roundup.
Food scientists remain divided on the larger food safety issue. Some say that there is no cause for alarm, while others cite the allergy problem and also animal studies, like one published by the International Journal of Biological Sciences, which showed high levels of kidney and liver failures (the two organs of detoxification) in rats that were fed Monsanto GM corn. Monsanto's biotech corn is designed to produce a pesticide in its cellular structure that wards off insect pests. Nobody knows what effect this toxin will have on the people who eat the flesh of livestock that are fed it.
The bottom line is that we can't be sure what the physiological effects of consuming GM foods are until rigorous human trials are conducted – which is not likely to happen anytime soon.
Californians aren't waiting until all of the scientific results are in. And what they decide at the polling station in November may change what the rest of us eat.
© 2012 Guardian News and Media Limited
Ultimately, these infrastructure deals operate under the same basically predatory, let’s-fuck-the-uninformed-elderly business model that guides companies like J.G. Wentworth. You’ve seen the commercials, of course, where a bunch of cheery-looking opera singers in Wagnerian costumes generously offer to give you money up front for your accident settlement, your annuity, even your lottery winnings. Of course what they don’t tell you in those commercials is that you’re only getting pennies on the dollar in those deals.
Wednesday, June 13, 2012 by Rolling Stone
New York to Repeat Chicago’s
Parking Privatization Catastrophe
A parking meter in New York City. (Getty Images)Readers of my last book, Griftopia, might recall a chapter about the city of Chicago leasing 75 years of its parking meter revenue to a coterie of private investors, some of them from the Middle East. The end result was and is a political obscenity: Native Chicagoans are now completely at the mercy of private interests when it comes to parking rates, collections, even holidays. When elected officials in Illinois can’t shut off the parking meters on Abe Lincoln’s birthday because a bunch of sheiks in Dubai don’t want the revenue stream turned off even for a day, you know something has gone seriously sideways in the national body politic.
Well, Chicago isn’t alone anymore. Hizzoner Michael Bloomberg in New York has decided to do his own version of the Chicago infrastructure bake sale; the city announced that it is putting up nearly 90,000 parking meters for lease. They’re expecting to get over $11 billion in upfront money from the deal, which is great news if you’re Mike Bloomberg, who gets to use that money to patch current budget holes instead of making tough cuts or raising taxes. The news is less awesome for the next half-dozen New York City mayors, or for the citizens of New York, who now will get to spend most of the 21st century grappling with its increasingly monstrous deficits with a major tributary from the city’s revenue stream shut off.
A New York parking meter deal, like the Chicago deal, would be a perfect example of the deeply cynical short-term thinking of many American politicians these days. These deals involve a sitting executive selling off a valuable piece of city property at a steep discount to private financial interests (often, to friends or campaign contributors), in order to solve a current cash flow problem that, surprise, surprise, will still be there the year after you finish spending the proceeds of your sale.
In Chicago’s case, Mayor Richard Daley sold 75 years of meter revenue – worth an estimated $5 billion – for $1.2 billion. So he gets 20 cents on the dollar for the city’s parking meters in 2008, and then in 2009 the city still has a budget problem that’s now worse, because there’s no parking meter revenue anymore, ever. Meanwhile, a bunch of private investors rounded up by Morgan Stanley – these bankers go on road shows here at home and abroad to places like Geneva and the UAE to hawk discount American infrastructure to foreign billionaires and sovereign wealth funds – get to enjoy the fruits of raised rates. In some Chicago neighborhoods, the meter rates went from .25 cents an hour to $1 an hour in the first year of the deal, and then to $1.20 after that.
In Chicago’s case, Mayor Richard Daley sold 75 years of meter revenue – worth an estimated $5 billion – for $1.2 billion. So he gets 20 cents on the dollar for the city’s parking meters in 2008, and then in 2009 the city still has a budget problem that’s now worse, because there’s no parking meter revenue anymore, ever.
The city of New York is insisting that it won’t make the same mistake Chicago made, at least when it comes to rates. Bloomberg helpfully quoted Julie Wood, a spokesperson for the news agency’s namesake, i.e. the mayor:
“We are taking a careful and deliberate approach to avoid mistakes others have made,” Wood said. New York would retain “full control” of rates and violations enforcement, she said.
We have to hope she’s telling the truth, because meter rates in some New York neighborhoods are already at $5 an hour. A Chicago-style price hike for fat-cat investors might leave us paying thirty bucks an hour to oil barons in Qatar and Saudi Arabia in order to park for dinner in the West Village. Unlikely, sure, but how likely was the city of New York selling its parking meters ten years ago?
Ultimately, these infrastructure deals operate under the same basically predatory, let’s-fuck-the-uninformed-elderly business model that guides companies like J.G. Wentworth. You’ve seen the commercials, of course, where a bunch of cheery-looking opera singers in Wagnerian costumes generously offer to give you money up front for your accident settlement, your annuity, even your lottery winnings.
Of course what they don’t tell you in those commercials is that you’re only getting pennies on the dollar in those deals. Companies like J.G. Wentworth feast upon the financial anxiety/desperation of middle America, where most people can’t wait to collect the whole $100,000 they won in court after losing an eye at work, and will settle for $20,000 they can use to pay the rent (or, more often, the doctor or the pharmacist) this week. Money is so tight out there that people will take a bad deal, even a draconian deal, just to make it to next week, especially when the idea is getting rammed into their heads in high-production-value commercials during football games and American Idol broadcasts five hundred times a week.
Money is so tight out there that people will take a bad deal, even a draconian deal, just to make it to next week, especially when the idea is getting rammed into their heads in high-production-value commercials during football games and American Idol broadcasts five hundred times a week.
So you can understand why your average Joe might give in and sell his annuity to a bunch of friendly opera singers to make his rent. But the billionaire mayor of New York City? There’s simply no legitimate rationale for selling off a critically valuable public revenue stream to private interests.
Sure, it makes sense for Bloomberg personally – he gets to govern for another year without having to make tough decisions on budget cuts and taxes – but for the city in the long run, it’s a disaster. Criminal, even. This is like a man with a wife and dozen dependent children selling his family's lottery winnings to J.G. Wentworth so he can go on a skiing vacation in Gstaad with his mistress before the divorce goes through.
Meanwhile, whoever gets to own all of those meters will now be sitting on the ultimate investment. You get all the certainty of tax revenue, but you don’t have any of the accountability attached to public governance. It’s profit without risk, customers without responsibility. Cash now!
© 2012 Rolling Stone
The major reason this recovery has been so anemic is not Europe’s debt crisis. It’s not Japan’s tsumami. It’s not Wall Street’s continuing excesses. It’s not, as right-wing economists tell us, because taxes are too high on corporations and the rich, and safety nets are too generous to the needy. It’s not even, as some liberals contend, because the Obama administration hasn’t spent enough on a temporary Keynesian stimulus.
June 13, 2012 by RobertReich.org
Why The Economy Can’t Get Out of First Gear:
The Rich Have Sucked It Dry
Wealthy inequality and a generation of stagnant wages has left a tattered middle class unable to save the US economy from the ravages of a top-down economy.Rarely in history has the cause of a major economic problem been so clear yet have so few been willing to see it.
The major reason this recovery has been so anemic is not Europe’s debt crisis. It’s not Japan’s tsumami. It’s not Wall Street’s continuing excesses. It’s not, as right-wing economists tell us, because taxes are too high on corporations and the rich, and safety nets are too generous to the needy. It’s not even, as some liberals contend, because the Obama administration hasn’t spent enough on a temporary Keynesian stimulus.
The answer is in front of our faces. It’s because American consumers, whose spending is 70 percent of economic activity, don’t have the dough to buy enough to boost the economy – and they can no longer borrow like they could before the crash of 2008.
All of the gains from economic growth have been going to the richest 1 percent – who, because they’re so rich, spend no more than half what they take in.
If you have any doubt, just take a look at the Survey of Consumer Finances, released Monday by the Federal Reserve. Median family income was $49,600 in 2007. By 2010 it was $45,800 – a drop of 7.7%.
All of the gains from economic growth have been going to the richest 1 percent – who, because they’re so rich, spend no more than half what they take in.
Can I say this any more simply? The earnings of the great American middle class fueled the great American expansion for three decades after World War II. Their relative lack of earnings in more recent years set us up for the great American bust.
Starting around 1980, globalization and automation began exerting downward pressure on median wages. Employers began busting unions in order to make more profits. And increasingly deregulated financial markets began taking over the real economy.
The result was slower wage growth for most households. Women surged into paid work in order to prop up family incomes – which helped for a time. But the median wage kept flattening, and then, after 2001, began to decline.
Households tried to keep up by going deeply into debt, using the rising values of their homes as collateral. This also helped – for a time. But then the housing bubble popped.
The Fed’s latest report shows how loud that pop was. Between 2007 and 2010 (the latest data available) American families’ median net worth fell almost 40 percent – down to levels last seen in 1992. The typical family’s wealth is their home, not their stock portfolio – and housing values have dropped by a third since 2006.
Families have also become less confident about how much income they can expect in the future. In 2010, over 35% of American families said they did not “have a good idea of what their income would be for the next year.” That’s up from 31.4% in 2007.
But because their incomes and their net worth have both dropped, families are saving less. The proportion of families that said they had saved in the preceding year fell from 56.4% in 2007 to 52% in 2010, the lowest level since the Fed began collecting that information in 1992.
Bottom line: The American economy is still struggling because the vast American middle class can’t spend more to get it out of first gear.
What to do? There’s no simple answer in the short term except to hope we stay in first gear and don’t slide backwards.
Over the longer term the answer is to make sure the middle class gets far more of the gains from economic growth.
How? We might learn something from history. During the 1920s, income concentrated at the top. By 1928, the top 1 percent was raking in an astounding 23.94 percent of the total (close to the 23.5 percent the top 1 percent got in 2007) according to analyses of tax records by my colleague Emmanuel Saez and Thomas Piketty. At that point the bubble popped and we fell into the Great Depression.
But then came the Wagner Act, requiring employers to bargain in good faith with organized labor. Social Security and unemployment insurance. The Works Projects Administration and Civilian Conservation Corps. A national minimum wage. And to contain Wall Street: The Securities Act and Glass-Steagall Act.
In 1941 America went to war – a vast mobilization that employed every able-bodied adult American, and put money in their pockets. And after the war, the GI Bill, sending millions of returning veterans to college. A vast expansion of public higher education. And huge infrastructure investments, such as the National Defense Highway Act. Taxes on the rich remained at least 70 percent until 1981.
The result: By 1957, the top 1 percent of Americans raked in only 10.1 percent of total income. Most of the rest went to a growing middle class – whose members fueled the greatest economic boom in the history of the world.
Get it? We won’t get out of first gear until the middle class regains the bargaining power it had in the first three decades after World War II to claim a much larger share of the gains from productivity growth.
This work is licensed under a Creative Commons License
Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest, an e-book, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.
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