What Do We Really Know About Racial Inequality? Labor Markets, Politics, and the Historical Basis of Black Economic Fortunes

By Cynthia Thaler, Alternet.org, January 18, 2013

Excerpt

In 2011, the ratio of employed population to full population among racial groups was 51.7% for African Americans and 59.4% for whites, according to the Bureau of Labor Statistics. That same year, the ratio between the median wealth (assets minus debts) of white households versus that of black households was the largest since the government started collecting such data in 1984, and approximately twice what it had been before the Great Recession of 2007-2009. The racial economic gap — also present in other measures of economic well-being, such as wage and unemployment gaps — has persisted over time in the United States

…racial wage and employment disparities between blacks and whites since the 1940′s have been shaped by both market and non-market factors, including: racial discrimination; political and institutional factors such as social-movement mobilizations; shifting government policies; unionization efforts; and evolving public employment opportunities…

 

…“racial economic gains have relied most directly upon momentary shifts in political mobilization, state strategy, and union power rather than on secular trends in human capital or economic restructuring; yet these shifts (perhaps because they have been so momentary) often failed to sustain or build upon whatever gains have been achieved.”…

…Black voter turnout in 2012 was exceptionally high — and may for the first time have equaled that of whites among eligible voters– suggesting growing political clout, according to the Pew Research Center. A wide variety of contemporary academic literature has also focused on how traditional high-poverty U.S. urban areas are changing in complexion.

Full text

In 2011, the ratio of employed population to full population among racial groups was 51.7% for African Americans and 59.4% for whites, according to the Bureau of Labor Statistics. That same year, the ratio between the median wealth (assets minus debts) of white households versus that of black households was the largest since the government started collecting such data in 1984, and approximately twice what it had been before the Great Recession of 2007-2009. The racial economic gap — also present in other measures of economic well-being, such as wage and unemployment gaps — has persisted over time in the United States. Further, in 2010 the number of African-American households in poverty rose to 27.4%, followed by Hispanic households (26.6%) Asian households (12.1%), and white households (9.9%), according to the U.S. Census Bureau. Traditional explanations of these gaps have focused on the decline in manufacturing, in addition to skills and education disparities in the new service economy.

A 2011 paper in The Journal of Politics & Society, “What Do We Really Know About Racial Inequality? Labor Markets, Politics, and the Historical Basis of Black Economic Fortunes,” reviews and synthesizes a large volume of scholarly work to better understand the reasons for these continuing economic disparities. The researchers, based at the University of Chicago, note that racial wage and employment disparities between blacks and whites since the 1940′s have been shaped by both market and non-market factors, including: racial discrimination; political and institutional factors such as social-movement mobilizations; shifting government policies; unionization efforts; and evolving public employment opportunities.

The paper’s findings include:

“Recent studies in economic history make it clear that the post–World War II era for African Americans was neither an age of steady relative progress nor one of persistent immobility. Instead, these decades might be best characterized as an extended period of racial-inequality stasis bracketed by two quantum-leap advances.”

The first period of rapid gain was in the 1940s, when wartime mobilization and a rejuvenated Great Migration from the South stimulated increases in African American earnings, both in absolute terms and in relation to whites. Traditional explanations for racial gains in wage equality in the 1940’s include the migration of millions of African Americans to northern cities, moving them away from agricultural labor toward industrial work. A second explanation is the rising level of education among this group that partly resulted from this northern migration.

More current research has linked a number of government actions to these decreases in racial disparities in the 1940’s. These include practices of the National War Labor Board, which allowed wage increases for low-paying jobs despite wartime wage controls. In addition, wage inequality among government jobs narrowed, facilitated by initiatives such as the Roosevelt administration’s Fair Employment Practice Committee (FEPC). Furthermore, increased levels of union activity helped raise wages at the lower end of the wage scale, as unions also pressured employers to include anti-discrimination policies; and anti-discrimination laws passed at the state-level  impacted the labor market generally for black men and women.

“A second moment of relative black economic progress took place between the mid-1960s and the mid-1970s, when federal civil rights policies played an especially prominent role in generating wage gains among blacks that significantly outstripped those of whites.” Researchers have identified a number of factors that may have influenced the earnings compression in the period between 1965 and 1975. These included federal civil rights policies, including anti-discrimination mandates in the south, the Civil Rights Act of 1964, and the Voting Rights Act of 1965. Unionization in the public sector also likely had a positive effect on the wages earned by African Americans.

“…Black–white male earnings ratio stood at .62 in 1964, rose to .72 by 1975, then fell to .69 by 1987. Black women experienced a similar increase during this period (relative to the wages of white women and white men), though without the same drop-off thereafter.”

After the mid-1970’s, wage gains for African Americans came to a halt. The authors note that conventional sociological wisdom suggests that the shift from a manufacturing economy to a service economy required new levels of education and new skills. African American workers had difficulty meeting the skills demand for these jobs, especially as public schools declined. But there has been a “revised explanation” among more recent historians. This more recent scholarship argues that the reasons for this change go beyond demand and supply-side economics: These include a drop in the real value of minimum wage; and declines in unionization also likely played a role in overall wage inequality.

An unemployment gap between white and black workers has persisted, even in the 1940’s and 1970’s when African Americans experienced wage gains, and this gap continued through the end of the 20th century. Research has shown that much of this gap since 1960’s cannot be explained by deindustrialization or the mismatch of skills, and the emergence of this gap preceded de-industrialization, first emerging in the 1940’s. Researchers have suggested a number of alternative explanations, including: discriminatory hiring practices; reduced anti-discrimination enforcement; and the effects of the criminal justice system. However, “much remains unknown about the causes of a persistent gap in racial unemployment over the past half-century.”

The authors conclude that “racial economic gains have relied most directly upon momentary shifts in political mobilization, state strategy, and union power rather than on secular trends in human capital or economic restructuring; yet these shifts (perhaps because they have been so momentary) often failed to sustain or build upon whatever gains have been achieved.”

Despite these ongoing economic challenges for the African-American community, other areas merit attention. For example, the national jobs picture for African-Americans also improved slightly in 2012, relative to prior years. Black voter turnout in 2012 was exceptionally high — and may for the first time have equaled that of whites among eligible voters– suggesting growing political clout, according to the Pew Research Center. A wide variety of contemporary academic literature has also focused on how traditional high-poverty U.S. urban areas are changing in complexio

http://journalistsresource.org/studies/society/gender-race/inequality-labor-markets-politics-historical-basis-black-economic-fortunes

 

 

The Empathy Ceiling: The Rich Are Different — And Not In a Good Way, Studies Suggest

by Brian Alexander,  August 10, 2011 by MSNBC

Excerpt

Studies suggest the ‘Haves’ show less empathy than ‘Have-nots’… Their life experience makes them less empathetic, less altruistic, and generally more selfish…the philosophical battle over economics, taxes, debt ceilings and defaults…is partly rooted in an upper class “ideology of self-interest.”… rich people are more likely to think about themselves. “They think that economic success and political outcomes, and personal outcomes, have to do with individual behavior, a good work ethic”…
Because the rich gloss over the ways family connections, money and education helped, they come to denigrate the role of government and vigorously oppose taxes to fund it…There is one interesting piece of evidence showing that many rich people may not be selfish as much as willfully clueless, and therefore unable to make the cognitive link between need and resources…

Full text

The ‘Haves’ show less empathy than ‘Have-nots’

Psychologist and social scientist Dacher Keltner says the rich really are different, and not in a good way: Their life experience makes them less empathetic, less altruistic, and generally more selfish.

In fact, he says, the philosophical battle over economics, taxes, debt ceilings and defaults that are now roiling the stock market is partly rooted in an upper class “ideology of self-interest.”

“We have now done 12 separate studies measuring empathy in every way imaginable, social behavior in every way, and some work on compassion and it’s the same story,” he said. “Lower class people just show more empathy, more prosocial behavior, more compassion, no matter how you look at it.”

In an academic version of a Depression-era Frank Capra movie, Keltner and co-authors of an article called “Social Class as Culture: The Convergence of Resources and Rank in the Social Realm,” published this week in the journal Current Directions in Psychological Science, argue that “upper-class rank perceptions trigger a focus away from the context toward the self….”

In other words, rich people are more likely to think about themselves. “They think that economic success and political outcomes, and personal outcomes, have to do with individual behavior, a good work ethic,” said Keltner, a professor of psychology at the University of California, Berkeley.

Because the rich gloss over the ways family connections, money and education helped, they come to denigrate the role of government and vigorously oppose taxes to fund it.

“I will quote from the Tea Party hero Ayn Rand: “‘It is the morality of altruism that men have to reject,’” he said.

Whether or not Keltner is right, there certainly is a “let them cake” vibe in the air. Last week The New York Times reported on booming sales of luxury goods, with stores keeping waiting lists for $9,000 coats and the former chairman of Saks saying, “If a designer shoe goes up from $800 to $860, who notices?”

According to Gallup, Americans earning more than $90,000 per year continued to increase their consumer spending in July while middle- and lower-income Americans remained stalled, even as the upper classes argue that they can’t pay any more taxes. Meanwhile, the gap between the wealthiest and the rest of us continues to grow wider, with over 80 percent of the nation’s financial wealth controlled by about 20 percent of the people.

Unlike the rich, lower class people have to depend on others for survival, Keltner argued. So they learn “prosocial behaviors.” They read people better, empathize more with others, and they give more to those in need.

That’s the moral of Capra movies like “You Can’t Take It With You,” in which a plutocrat comes to learn the value of community and family. But Keltner, author of the book “Born To Be Good: The Science of A Meaningful Life,” doesn’t rely on sentiment to make his case.

He points to his own research and that of others. For example, lower class subjects are better at deciphering the emotions of people in photographs than are rich people.

In video recordings of conversations, rich people are more likely to appear distracted, checking cell phones, doodling, avoiding eye contact, while low-income people make eye contact and nod their heads more frequently signaling engagement.

In one test, for example, Keltner and other colleagues had 115 people play the “dictator game,” a standard trial of economic behavior. “Dictators” were paired with an unseen partner, given ten “points” that represented money, and told they could share as many or as few of the points with the partner as they desired. Lower-class participants gave more even after controlling for gender, age or ethnicity.

Keltner has also studied vagus nerve activation. The vagus nerve helps the brain record and respond to emotional inputs. When subjects are exposed to pictures of starving children, for example, their vagus nerve typically becomes more active as measured by electrodes on their chests and a sensor band around their waists. In recent tests, yet to be published, Keltner has found that those from lower-class backgrounds have more intense activation.

Other studies from other researchers have not produced the clear-cut results Keltner uses to advance his argument. In surveys of charitable giving, some show that low-income people give more, but other studies show the opposite.

“The research regarding income and helping behaviors has always been little bit mixed,” explained Meredith McGinley, a professor of psychology at Pittsburgh’s Chatham University.

Then there is the problem of Tea Partiers’ own class position. While they are funded by the wealthy, many do not identify themselves as wealthy (though there is dispute on the real demographics). Still, a strong allegiance to the American Dream can lead even regular folks to overestimate their own self-reliance in the same way as rich people.

As behavioral economist Mark Wilhelm of Indiana University-Purdue University Indianapolis pointed out, most people could quickly tell you how much they paid in taxes last year but few could put a dollar amount on how they benefited from government by, say, driving on interstate highways, taking drugs gleaned from federally funded medical research, or using inventions created by people educated in public schools.

There is one interesting piece of evidence showing that many rich people may not be selfish as much as willfully clueless, and therefore unable to make the cognitive link between need and resources. Last year, research at Duke and Harvard universities showed that regardless of political affiliation or income, Americans tended to think wealth distribution ought to be more equal.

The problem? Rich people wrongly believed it already was.

Article printed from www.CommonDreams.org

Source URL: http://www.commondreams.org/headline/2011/08/10-7

Profits of World’s 100 Wealthiest Could End Poverty Four Times Over: Report

- Jon Queally, staff writer, Published on Monday, January 21, 2013 by Common Dreams

Oxfam report shows how extreme global inequality ‘hurts us all’

The profits of the world’s one hundred most wealthy individuals last year would be enough to wipe out world poverty, says a new report. And not just once over, or twice over, but the vast amount of money that has flowed to the top of the world’s financial food chain would be enough to eradicate the worst kind of poverty a full four times over.

Such an explosion in extreme wealth and income inequality represented by these numbers is exacerbating and hindering the world’s ability to tackle poverty, warns international aid group Oxfam International in a new analysis published ahead of the World Economic Forum starting in Davos this week.

According to the report, ‘The cost of inequality: how wealth and income extremes hurt us all,’ the $240 billion net income in 2012 of the richest 100 billionaires would be enough to eliminate extreme poverty four times over. In releasing the report, Oxfam is calling on world leaders to curb today’s income extremes and commit to bringing back inequality levels to at least those experienced in the early 1990′s.

“Concentration of resources in the hands of the top one per cent depresses economic activity and makes life harder for everyone else – particularly those at the bottom of the economic ladder,” said Jeremy Hobbs, Oxfam’s executive director.

“We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true,” he said. “In a world where even basic resources such as land and water are increasingly scarce, we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left.”

“From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favour. It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite.”

In addition, Barbara Stocking, Oxfam’s chief executive, says the world’s extremity of wealth inequality is “economically inefficient, politically corrosive, socially divisive and environmentally destructive”.

Oxfam is calling for a ‘new global deal’ which would stabilize the world’s economic systems and bring equality back in way that would benefit all humanity.

“From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favour. It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite.”

The group estimates that closing tax havens – which hold as much as $32 trillion or a third of all global wealth – could yield an additional $189bn in additional tax revenues. In addition to a tax haven crackdown, elements of the “global new deal” Oxfam envisions would include:

  • a reversal of the trend towards more regressive forms of taxation;
  • a global minimum corporation tax rate;
  • measures to boost wages compared with returns available to capital;
  • increased investment in free public services and safety nets.

According to Al-Jazeera:

The group says that the world’s richest one percent have seen their income increase by 60 percent in the last 20 years, with the latest world financial crisis only serving to hasten, rather than hinder, the process.

“We sometimes talk about the ‘have-nots’ and the ‘haves’ – well, we’re talking about the ‘have-lots’. [...] We’re anti-poverty agency. We focus on poverty, we work with the poorest people around the world. You don’t normally hear us talking about wealth. But it’s gotten so out of control between rich and poor that one of the obstacles to solving extreme poverty is now extreme wealth,” Ben Phillips, a campaign director at Oxfam, told Al Jazeera.

Article printed from www.CommonDreams.org

Source URL: http://www.commondreams.org/headline/2013/01/21-0

 

12 Biggest Right-Wing Lies About America

Blog for Our Future [1] / By RJ Eskow [2]  December 31, 2012  |

Top 12 Political Fallacies for 2012.

1. Austerity works.

2. We need less government spending.

3. Social Security is in ‘crisis’ and we need to cut it.

4. Medicare benefits need to be cut, too.

5. We’re “living beyond our means.”

6. Our problems aren’t anybody’s fault.

7. Banks paid back what they owed us from the bailout.

8. Wall Street-ers didn’t commit any crimes – or they’re too hard to prosecute.

9. “Ideologues” are getting in the way of “bipartisan” and “technocratic” solutions to our problems.

10. A “divided nation” elected a “divided government” through a democratic process.

11. It’s about politicians.

12. We’re helpless.

Full text

Our nation was gripped by so many fallacies and delusions in 2012 that the whole Mayan calendar end-of-the-world thing didn’t even make the list.

Even those apocalyptic prophecies were more plausible than the idea that cutting Social Security will help the deficit, that government spending cuts will jump-start the economy, there were no crimes on Wall Street, or that we live in a “divided nation” whose “center” wants more business as usual in Washington.

Here then, without further ado, are our Top 12 Political Fallacies for 2012.

1. Austerity works.

Last year we said [3] austerity economics was dead. It is. Unfortunately nobody told the politicians. They’re still trying to force it onto the people of Europe, even as its effects make the economies there progressively worse.

They’re trying to force more of it on us, too. The Republicans want to decimate Social Security, Medicare, roads and highways, education, programs for the poor … The Democrats offer a more modest form of austerity, but austerity’s exactly what the President last proposed to Congress.

If austerity’s so good for us, why are they trying to terrify us with the a”fiscal cliff”? T heirMonster In the Closet is austerity. Apparently they don’t see the irony in that. But there’s something else they shouldn’t overlook.

Obama will never run for office again, but most of Democrats on the Hill will. Hope they don’t forget that – because we won’t.

2. We need less government spending.

The flip side of this delusion is the notion that government spending is our problem. It’s not. In fact, right now it’s the solution.

We need more jobs to stimulate the economy. Without them, large segments of the population will continue to live in a prolonged state of deprivation unless government does something about it.

We need more better education and more advancement opportunities for our children. And our roads, bridges and schools are crumbling all around us.

Spending cuts aren’t even the solution to the Federal deficit – not in the short term. Government spending falls as a percentage of GDP when the whole economy grows – and the way to make it grow is by priming the economic pump and building for the future, not with shortsighted spending cuts.

Know who’s a real job creator? Someone with a job.

3. Social Security is in ‘crisis’ and we need to cut it.

No, and No.

Yes, Social Security has a projected long-term shortfall in its ability to pay benefits,starting in 2036 or so. But that projection’s based on a lot of different assumptions – including the assumption that we won’t fix our wage stagnation problem, that we can’t put a lot more people back to work, and that we lack the political will to lift the payroll tax cap to make up for the shortfall in revenue caused by the unexpected increased in six-, seven-, and eight-figure income as the result of growing wage inequity.

And anyone who says that retiring Baby Boomers are part of the problem is peddling snake oil. The last Boomer was born in 1964, and we fixed Social Security in 1983. At least, it was fixed until the top 1 percent – and top 0.1 percent – started hijacking our national income.

What’s changed since 1983? We didn’t produce more Boomers. In 1983 the youngest of them was already old enough to drive to the record store for the latest Huey Lewis and the News album.

What we HAVE produced is more wealth inequity.

4. Medicare benefits need to be cut, too.

Medicare has a serious long-term cost problem. But cutting benefits won’t help – whether it’s done by raising the Medicare age, by limiting what it pays for, or imposing arbitrary caps on what it will spend.

If we do those things, overall health care costs will continue to rise. And we’ll have sicker seniors, more seniors in poverty, and seniors who don’t live as long.

Means-testing won’t cut it, either. Scratch most means-testing proposals and you’ll find they’re not targeting “millionaires and billionaires” – they’re aimed at the middle class.

We already know how to handle “millionaires and billionaires” more fairly: Raise their taxes. That’s simple, clean, efficient, and fair.

The only way to fix our Medicare cost problem is by fixing the impact of unrestrained greed on our health care system. We need to do something about that — now.

We don’t need to cover less. We need to pay less.

5. We’re “living beyond our means.”

More snake oil.It’s undertaxed corporations and billionaires who are living beyond our nation’s means, by claiming an inordinate and unearned share of our nation’s wealth and not paying their fair share of taxes for it.

We have the means to be the country we’ve always been. What we’ve lacked is the political will to buck the moneyed forces who are dismantling a system that’s worked for 75 years.

Ours is a country that won two world wars. We once led the world in economic growth and blazed the way in science, technology, and the arts. We decided to send human beings to the moon and back in ten years … and did it.

Now we’re told it’s “beyond our means” to live as well as we did in 1969. There’s a word for that, but it’s not printable.

6. Our problems aren’t anybody’s fault.

This fallacy might be called the “Sh*t Happens” school of economic thinking. It says that the economy just crashes from time to time, recurrent and unavoidable disasters just like earthquakes.

But we avoided these crises for decades by regulating Wall Street and prosecuting crooked bankers. When we stopped doing those things we got another crisis.

Cause and effect.

7. Banks paid back what they owed us from the bailout.

Here’s why this is a fallacy: First, we don’t have a full accounting even now. Secondly, we’re still responsible for the enormous amount of toxic risk which Wall Street created and the government then assumed on its behalf.

Besides, that’s not how business works. Every major bank in this country was a failing business with intolerable risk exposure. Loans under those conditions are of enormous and inestimable value.

When you ask nothing in return – not partial ownership, not a percentage of the profits, not even an end to their criminal behavior – you’re giving away the store. And when you give those loans to serial crooks and cheaters – people who serially cheat you – people, you’ve been had.

8. Wall Street-ers didn’t commit any crimes – or they’re too hard to prosecute.

Which gets us to our next fallacy, or fallacies. There’s overwhelming evidence, and a mound of billion-dollar settlements, demonstrating that banks — and individual bank executives — broke laws over and over in the run-up to the current crisis.

These mountains of prima facie evidence were ignored, and continue to be ignored, by the Obama/Holder Justice Department.

Now we’ve learned that all the banks knowingly defrauded regulators in a LIBOR scandal. All of them!

LIBOR is like one of those Agatha Christie novels where all the suspects did it.

9. “Ideologues” are getting in the way of “bipartisan” and “technocratic” solutions to our problems.

This is another fallacy – one they’ve been using to sell unwise, unpopular, and unfair policies. It’s usually attached to billionaire-funded corporate agendas like those of the “Simpson Bowles” plan, the Democratic group called Third Way, and the corporate CEOs of “Fix the Debt.”

They always say their plan’s been designed by “technocrats,” but that “ideologues” and “divisiveness” are getting in the way.

But the so-called “ideologues” fighting austerity represent Americans in all walks of life, across the political spectrum. They also represent a growing consensus among most economists who aren’t tied to right-wing institutions – including Nobel Prize winners like Paul Krugman and Joseph Stiglitz, and those who work for the IMF.

There’s a word for the people who keep complaining that the “ideologues” are getting in their way: Lobbyists.

10. A “divided nation” elected a “divided government” through a democratic process.

No. Democrats won the Presidency and the Senate by decisive margins, both state-by-state and in the popular vote. They even won a handsome victory in the House, but lost it because of sleazy GOP gerrymandering.

They won because they promised to defend Social Security and Medicare, and to tax earnings over $250,000. Now the President and Nancy Pelosi are pushing a plan that cuts Social Security, even though there’s no evidence the Republicans are insisting that Social Security be part of the deal.

Think the election would have turned out this way if Obama and Pelosi had told the public what they’d be doing in December?

Republicans aren’t speaking for half of a divided nation. And Democrats who don’t live up to their campaign promises aren’t honoring the small-”d” democratic process.

11. It’s about politicians.

“Obamabots” vs. “Obama bashers”: It’s on. Again. But it’s not about Obama – or Bill and Hillary, or any other political leader. If you attach your hopes to them you’re setting yourself up for a snow job, like Bill’s huckstering of late for the Fix the Debt/Simpson/Bowles corporate austerity plan.

But the flip side – hating or resenting them – is a distraction, and it can eat away at the soul.

Politics is not a celebrity sport. Corporate interests understand that. They’ve gotten a lot of politicians to throw the game by throwing their money around, and even some of the better ones feel they’ll lose if they don’t compromise.

Sure, brave politicians can make a huge difference. (Thank you, Bernie Sanders. And Raul Grijalva. And Keith Ellison. And Jan Schakowsky. It’s a long list, and we hope to add Elizabeth Warren and a couple more names to it soon.)

We still need to “emancipate ourselves from mental slavery” — especially in the form of hero-worshipping or demonizing the human beings who hold or seek high office.

12. We’re helpless.

Yes, it’s a rigged game. Yes, our democracy’s been tainted and compromised.

But mobilized citizens prevented the President from proposing Social Security cuts in his 2010 State of the Union speech. The Occupy movement changed Democratic political rhetoric, which changed poll numbers aand arguably changed the election results.

Some people say, So what? Look at what they’re trying to do now. That’s true — about some of them. But we’ve gained leverage, and we should use it.

While we’re developing new political leaders and institutions, we must stay mobilized for the struggles already underway: To protect Social Security and Medicare. To rein in Wall Street crime. To defend ripped-off homeowners and other mistreated corporate customers. To fight spending cuts and protect the vulnerable. To create jobs — good jobs — for every American who wants to work.

Difficult? Sure. Risk of failure? Definitely. But impossible?

That’s a fallacy.

Source URL: http://www.alternet.org/12-biggest-right-wing-lies-about-america

Links:
[1] http://www.ourfuture.org
[2] http://www.alternet.org/authors/rj-eskow
[3] http://blog.ourfuture.org/20111227/Notable_Death_of_the_Year_RIP_Austerity_Economics_1921-2011
[4] http://www.alternet.org/tags/economy-0
[5] http://www.alternet.org/tags/fallacies
[6] http://www.alternet.org/tags/conservative
[7] http://www.alternet.org/tags/right-wing-0
[8] http://www.alternet.org/%2Bnew_src%2B

Battles of the Budget

By PAUL KRUGMAN, New York Times, January 3, 2013

The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House.

For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war…

According to the normal rules of politics, Republicans should have very little bargaining power at this point…But the G.O.P. retains the power to destroy, in particular by refusing to raise the debt limit — which could cause a financial crisis. And Republicans have made it clear that they plan to use their destructive power to extract major policy concessions.

Now, the president has said that he won’t negotiate on that basis, and rightly so. Threatening to hurt tens of millions of innocent victims unless you get your way — which is what the G.O.P. strategy boils down to — shouldn’t be treated as a legitimate political tactic…

http://www.nytimes.com/2013/01/04/opinion/kurgman-battles-of-the-budget.html?hp&_r=1&

 

 

CEO Council Demands Cuts To Poor, Elderly While Reaping Billions In Government Contracts, Tax Breaks

by Christina Wilke and Ryan Grim, huffingtonpost.com 11/25/2012

WASHINGTON — The corporate CEOs who have made a high-profile foray into deficit negotiations have themselves been substantially responsible for the size of the deficit they now want closed.

The companies represented by executives working with the Campaign To Fix The Debt have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies’ tax bills.

The CEOs are part of a campaign run by the Peter Peterson-backed Center for a Responsible Federal Budget, which plans to spend at least $30 million pushing for a deficit reduction deal in the lame-duck session and beyond.

During the past few days, CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council — most visibly, Goldman Sachs’ Lloyd Blankfein and Honeywell’s David Cote — have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs — Medicare, Medicaid, and Social Security — which would disproportionately impact the poor and the elderly.

As part of their push, they are advocating a “territorial tax system” that would exempt their companies’ foreign profits from taxation, netting them about $134 billion in tax savings, according to a new report from the Institute for Policy Studies titled “The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks” — money that could help pay off the federal budget deficit.

Yet the CEOs are not offering to forgo federal money or pay a higher tax rate, on their personal income or corporate profits. Instead, council recommendations include cutting “entitlement” programs, as well as what they call “low-priority spending.”

Many of the companies recommending austerity would be out of business without the heavy federal support they get, including Goldman Sachs and JPMorgan Chase, which both received billions in direct bailout cash, plus billions more indirectly through AIG and other companies taxpayers rescued.

Just three of the companies — GE, Boeing and Honeywell — were handed nearly $28 billion last year in federal contracts alone. A spokesman for Campaign To Fix The Debt did not respond to an email from The Huffington Post over the weekend.

The CEO council recommends two major avenues that it claims will produce “at least $4 trillion of deficit reduction.” The first is to “replace mindless, abrupt deficit reduction with thoughtful changes that reform the tax code and cut low-priority spending.” The second is to “keep debt under control over the long-term by focusing on the long-term growth of entitlement programs.”

CEOs are encouraged to present a Fix-The-Debt PowerPoint presentation to their “employee town hall [meetings and] company meetings.” To further help get the word out, the campaign borrowed a page from the CEOs this fall who wrote letters encouraging their employees to vote for Mitt Romney, or face job cuts. This time, the CFD has created two templates for bosses to use at their companies.

But in the past week, in order to make their case to the millions of Americans who don’t work for them, CEOs fanned out into television, to convince the rest of the country that slashing the social safety net is the only way to reduce the deficit.

In an interview aired Monday, Goldman Sachs chairman and CEO Lloyd Blankfein said Social Security “wasn’t devised to be a system that supported you for a 30 year retirement after a 25-year career.” The key to cutting Social Security, he said, was simply a matter of teaching people to expect less.

“You’re going to have to do something, undoubtedly, to lower people’s expectations of what they’re going to get,” Blankfein told CBS, “the entitlements, and what people think they’re going to get, because you’re not going to get it.”

Blankfein and Goldman Sachs don’t have to worry about lowering expectations. After receiving a $10 billion federal bailout in 2008, and paying it back a few years later, Goldman Sachs recently exceeded Wall Street analysts’ expectations by announcing $8.4 billion in third quarter revenues for 2012. On the heels of a great year, Blankfein is expected to take home an even larger salary than he did in 2011, when he made $16.1 million.

To understand the importance of banking profits to the members of the deficit council, one need look no further than the two top-ranking members of the Campaign To Fix The Debt’s steering committee, former New Hampshire Sen. Judd Gregg (R) and former Pennsylvania Gov. Ed Rendell, a Democrat. Gregg is currently employed as an international adviser to Goldman Sachs, while Rendell collects his paycheck from the boutique investment bank Greenhill & Co.

Following Blankfein’s evening news appearance on Monday, Cote, the Honeywell CEO, sat down with the same network on Tuesday, and said essentially the same thing that Blankfein did.

Cote ranked 11th on a list compiled in a recent study conducted by the Institute for Policy Studies of executives who have saved the most from the Bush tax cuts. According to the IPS, Cote’s taxable compensation for 2011 was a bit more than $55 million, and he did not pay about $2.5 million thanks to the Bush tax cuts.

After mentioning a few scary-sounding deficit statistics, he suggested the government raise revenue by ending individual tax credits and deductions, which he said amounted to a $1 trillion “giveaway” in 2011. It was clear, however, that Cote hadn’t come on the show to talk about taxes.

“The big nut is going to have to be [cuts to] Medicare/Medicaid … especially with the baby boomer generation retiring. It’s going to literally crush the system.”

But while Cote strongly recommends cutting those benefits, when it comes to the tax obligations of corporations, he’s clear about what he wants: a corporate tax rate of zero.

“From a fairness perspective, nobody would be able to stand [a zero tax rate on corporate profits],” but if the U.S. really wanted to create jobs, he said this spring, “we would have the lowest rate possible.”

At Honeywell, Cote practices what he preaches. Between 2008-2010, the company avoided paying any taxes at all. Instead, the company got taxpayer-funded rebates of $34 million off of profits totaling nearly $5 billion.

Part of what makes the lobbying blitz around the fiscal cliff so complex for CEOs on the Fiscal Leadership Council is that many of them need more than just low tax rates. They also need Congress and the White House to maintain current defense spending levels so they can continue winning enormous contracts.

In 2011, $40 billion of taxpayer money was divided among just nine CFD member companies, led by defense giant Boeing, which raked in $22 billion in federal contracts alone, more than the other eight companies combined. For his efforts as CEO, Boeing’s Jim McNerney took home nearly $23 million in compensation last year.

But even as McNerney lends his name to the deficit commission, his company has quietly begun laying off U.S. workers ahead of defense cuts that are expected to be part of a deficit reduction deal. The company denies that federal spending has anything to do with the job cuts, but defense industry analysts aren’t convinced.

At least one faction of Boeing’s workforce is thriving: Boeing lobbyists in Washington have made $12 million since January fighting proposed cuts to defense and aerospace projects.

http://www.huffingtonpost.com/2012/11/25/deficit-reduction-council-fiscal-cliff_n_2185585.html?utm_hp_ref=daily-brief?utm_source=DailyBrief&utm_campaign=112612&utm_medium=email&utm_content=NewsEntry&utm_term=Daily%20Brief

The Twinkie Manifesto

By PAUL KRUGMAN, New York Times, November 18, 2012

The Twinkie, it turns out, was introduced way back in 1930. In our memories, however, the iconic snack will forever be identified with the 1950s, when Hostess popularized the brand by sponsoring “The Howdy Doody Show.” And the demise of Hostess has unleashed a wave of baby boomer nostalgia for a seemingly more innocent time.

Needless to say, it wasn’t really innocent. But the ’50s — the Twinkie Era — do offer lessons that remain relevant in the 21st century. Above all, the success of the postwar American economy demonstrates that, contrary to today’s conservative orthodoxy, you can have prosperity without demeaning workers and coddling the rich.

Consider the question of tax rates on the wealthy. The modern American right, and much of the alleged center, is obsessed with the notion that low tax rates at the top are essential to growth. Remember that Erskine Bowles and Alan Simpson, charged with producing a plan to curb deficits, nonetheless somehow ended up listing “lower tax rates” as a “guiding principle.”

Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, that’s right, 91 percent, while taxes on corporate profits were twice as large, relative to national income, as in recent years. The best estimates suggest that circa 1960 the top 0.01 percent of Americans paid an effective federal tax rate of more than 70 percent, twice what they pay today.

Nor were high taxes the only burden wealthy businessmen had to bear. They also faced a labor force with a degree of bargaining power hard to imagine today. In 1955 roughly a third of American workers were union members. In the biggest companies, management and labor bargained as equals, so much so that it was common to talk about corporations serving an array of “stakeholders” as opposed to merely serving stockholders.

Squeezed between high taxes and empowered workers, executives were relatively impoverished by the standards of either earlier or later generations. In 1955 Fortune magazine published an essay, “How top executives live,” which emphasized how modest their lifestyles had become compared with days of yore. The vast mansions, armies of servants, and huge yachts of the 1920s were no more; by 1955 the typical executive, Fortune claimed, lived in a smallish suburban house, relied on part-time help and skippered his own relatively small boat.

The data confirm Fortune’s impressions. Between the 1920s and the 1950s real incomes for the richest Americans fell sharply, not just compared with the middle class but in absolute terms. According to estimates by the economists Thomas Piketty and Emmanuel Saez, in 1955 the real incomes of the top 0.01 percent of Americans were less than half what they had been in the late 1920s, and their share of total income was down by three-quarters.

Today, of course, the mansions, armies of servants and yachts are back, bigger than ever — and any hint of policies that might crimp plutocrats’ style is met with cries of “socialism.” Indeed, the whole Romney campaign was based on the premise that President Obama’s threat to modestly raise taxes on top incomes, plus his temerity in suggesting that some bankers had behaved badly, were crippling the economy. Surely, then, the far less plutocrat-friendly environment of the 1950s must have been an economic disaster, right?

Actually, some people thought so at the time. Paul Ryan and many other modern conservatives are devotees of Ayn Rand. Well, the collapsing, moocher-infested nation she portrayed in “Atlas Shrugged,” published in 1957, was basically Dwight Eisenhower’s America.

Strange to say, however, the oppressed executives Fortune portrayed in 1955 didn’t go Galt and deprive the nation of their talents. On the contrary, if Fortune is to be believed, they were working harder than ever. And the high-tax, strong-union decades after World War II were in fact marked by spectacular, widely shared economic growth: nothing before or since has matched the doubling of median family income between 1947 and 1973.

Which brings us back to the nostalgia thing.

There are, let’s face it, some people in our political life who pine for the days when minorities and women knew their place, gays stayed firmly in the closet and congressmen asked, “Are you now or have you ever been?” The rest of us, however, are very glad those days are gone. We are, morally, a much better nation than we were. Oh, and the food has improved a lot, too.

Along the way, however, we’ve forgotten something important — namely, that economic justice and economic growth aren’t incompatible. America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.

http://www.nytimes.com/2012/11/19/opinion/krugman-the-twinkie-manifesto.html?nl=todaysheadlines&emc=edit_th_20121119&_r=0

‘Born on Third Base’: How the Wealthy Inherit the Earth by Common Dreams staff

Common Dreams, September 19, 2012 

The real story told by the Forbes 400 is about privilege and the growing inequality in both wealth and opportunity

Gushing over the wild financial wealth of individuals, The Forbes 400: The Richest People In America In 2012 — released today online and heading to newstands nationwide—pays homage to the clichéd platitude that America is the land of opportunity for hard-working, gutsy entrepreneurs and great wealth is merely evidence of great accomplishment.

Unfortunately, according to a new report by Massachusetts-based United for a Fair Economy, the Forbes 400 does not tell the whole story of wealth in America. In fact, the authors of the report argue, the list of the country’s richest people tells the story of a nation where being born into wealth or inheriting great sums from a departed spouse are by far the most common paths to financial fortune.

Taking a close look at last year’s list of wealthiest people, the UFE discovered that roughly 40% of the individuals who appeared on the 2011 Forbes list received a “significant economic advantage in their lives by inheriting a sizeable asset from a spouse or family member.” Strikingly, more than 20% received sufficient wealth to make the list from this inheritance alone.

Timed to coincide with this year’s list from Forbes, the UFE report, Born on Third Base: What the Forbes 400 Really Says About Economic Equality and Opportunity in America (pdf), seeks to show that the highly-touted list actually misleads about the sources of wealth and opportunity for many of those who appear on it.

“Each story calculatedly glamorizes the myth of the ‘self-made man’ while minimizing the many other factors that enable wealth, such as tax policies, other government policies that favor the wealthy, and the importance of being born to the right family, gender and race.”

Forbes claims that their list of the 400 richest people is ‘the definitive scorecard of wealth’ in the United States, but UFE rebuffs that assertion, saying that the narrative of wealth and achievement pushed by Forbes ignores the other side of the coin— namely, that the opportunity to build wealth is not equally or broadly shared in contempory society.

According to the report:

  • · The net worth of the Forbes 400 grew fifteen-fold between the launch of the list in 1982 and 2011, while wealth stagnated for the averageU.S. household.
  • · The racial wealth divide is starkly apparent from the overwhelming whiteness of the list. The 2011 Forbes 400 had only one African American member.
  • · Women accounted for just 10% of the 2011 list, and of the women on the list nearly 90% inherited their fortunes.

In addition, the report points out that (and the new 2012 list from Forbes shows continuation of this trend) the rich in 2011 got richer as the poor got poorer. The growing wealth inequality, the report says, is not due to any inherent brilliance or dynamism of the wealthy, but because of carefully crafted policy and legislative reforms enacted by government at the behest of the these same individuals.

Two examples cited by the report which directly impact the ability of the rich to retain and pass along their enormous assets:

  • · Tax rates on capital gains have been slashed, which especially benefits members of the Forbes list. The richest 0.1% receive half of all net increases in capital gains.
  • · Drastic cuts to the federal estate tax passed in the Bush tax cuts and the 2010 Obama tax deal allow the Forbes 400 to pass on more of their massive fortunes to their heirs, contributing to the growth of inequality and entrenching a class of super-wealthy heirs.

For its part, and despite the critical tone of the report, United for a Fair Economy says its efforts are not an attempt to “shame or belittle wealth or success.”

“Instead,” the authors maintain, “we aim to ask why certain representative individuals are on the list in order to reach a better understanding of wealth in theUS. Such questions should lead to an important conversation about economic mobility, as well as the rules and loopholes that allow people to create wealth in the first place.”

Check out the ‘Born on Third Base’ tumblr page, where some of the Forbes 400 make the All-Star Team. Read the full report here.

Article printed from www.CommonDreams.org

Source URL: http://www.commondreams.org/headline/2012/09/19-7

 

Where Do Anti-Government Ideas Come From? by Joe Brewer

 Cognitive Policy Works, October 20, 2010

Excerpt

…candidates across the country are engaging in an ideological battle with one side claiming that government is the problem and the other side claiming that we cannot solve our problems without effective government.  This battle is taking place on a dramatically uneven playing field.  It has been stacked against the public good for decades by deep pockets of corporate wealth….For nearly 40 years now, this system has been growing in size and sophistication.  And it is surgical in its precision and effectiveness. The impacts on the US economy and political system have been devastating…

Full text

An article came out this week in the New York Times about a strategy meeting hosted by the Koch brothers, two billionaires who have funded a staunchly anti-government agenda for years.  This event highlights a deeper current of money that has been invested in an anti-government policy agenda that goes back decades.

In the midst of this election season, candidates across the country are engaging in an ideological battle with one side claiming that government is the problem and the other side claiming that we cannot solve our problems without effective government.  This battle is taking place on a dramatically uneven playing field.  It has been stacked against the public good for decades by deep pockets of corporate wealth.

Policy Agendas More Important Than Election Cycles

David Calahan, a researcher who studies the ideological basis of philanthropy, published a major report in 1999 titled “$1 Billion for Ideas: Conservative Think Tanks in the 1990′s” that describes the web of money that flowed through the top 20 Conservative think tanks in the United States.  He identified the strategies that allow a well funded minority to dominate public discourse and set the agenda for the country.  One of his major assertions was this:

“In fact, the more fundamental changes in American politics may not be in election results, but rather in the rise and fall of different ideas and their attendant policy agendas.”

Consider the impacts of the Tea Party Movement that arose after President Obama took office.  A non-election agenda was initiated to frame the debate around anti-government sentiments.  It’s veneer of grassroots populism conceals a vast network of media outlets, high-profile spokespeople, training centers, and deep pocketed funders who made the Tea Party possible.  And yes, the Koch brothers are major donors of the effort.

How were they able to get Tea Party candidates on so many ballots?  Why do even the incumbent Republicans feel that they must conform to the extreme views of people like Sarah Palin, Glenn Beck, and Rush Limbaugh?  The answer is that a massive communications infrastructure has been built to reward those who conform (and punish all the rest).

Investing in the long haul pays off.

After building a vast infrastructure it was pretty straightforward to rile millions of people up, especially since these very people experience the brunt of economic collapse.  The ironies run deep in that those who have been hurt the most by deregulation and privatization are the foot soldiers rallied to the call of freedom by this effective system for mass manipulation of public opinion.

How Far Back Does This Go?
The first major effort to build an anti-government communications system can be traced back to 1971 and the Powell Memo, written by Lewis F. Powell.  It laid out the ideas that influenced wealthy conservative businessmen to build a web of think tanks, media outlets, and recruitment centers that would go on the offensive and destroy public good will toward government.  For nearly 40 years now, this system has been growing in size and sophistication.  And it is surgical in its precision and effectiveness.

The impacts on the US economy and political system have been devastating.  These graphs tell the story well… rising international debt, increasing concentrations of wealth, lost savings of working people, explosive individual debt.  The list goes on and on.  All corresponding with the advance of an anti-government agenda throughout the 80′s, 90′s, and 2000′s.

A toxic attitude was spread like a virus and the harmful policies followed.  We are now living in a country where the top 10% control nearly all of the wealth alongside a working poor living in third world conditions.  The uneven playing field has given obvious advantage to those who had the wealth to begin with.

Where Is The Progressive Response?
All hope is not lost.  A number of progressive donors finally got the wake-up call in 2005 and created the Democracy Alliance.  They began pooling their money to invest in think tanks and media outlets of their own.  Organizations like Campaign for America’s Future, Commonweal Institute, and Center for American Progress have come into being and are attempting to catch up.  But the opposition has a 35 year advantage.

Unfortunately, the progressive movement suffered a major casualty in April of 2008.  The Rockridge Institute closed its doors due to inadequate funding support from donors.  Rockridge was a unique think tank founded by George Lakoff to analyze political frames in public discourse in order to help progressives navigate the toxic culture wars of American politics.  One of the major causes for this loss was the massive flux of money into the 2008 election cycle.  Short-term gains were given myopic focus and the long-term was sacrificed.

I worked at the Rockridge Institute during this period.  On the last day of the institute, Evan Frisch and I made a plea to the progressive community that we must invest in cognitive infrastructure.  Here’s a snippet of what we said:

Create a new progressive infrastructure that embodies our ideals and values. This includes a cognitive infrastructure – the ideas, values and modes of thought that express the progressive vision. Simply churning out more policy proposals and statistical analyses without taking into account what people understand the situation to be will leave the populace bored, confused, and distant from the political process.”

This plea is more timely than ever today.  The progressive response remains inadequate because we don’t share a common vision, nor do we invest in the long-haul.  So we see an election in our midst where Democrats are blamed for the harms caused by anti-government Republicans (and a spattering of Conservative Democrats who have infiltrated the other party).  The instigators of harm are smearing the real heroes.  And it’s working!

If we are to turn the tide on this culture war and reclaim the Spirit of America, we’re going to need to arm ourselves with knowledge about the origins of anti-government sentiments.  And we’re going to need to invest in pro-government, pro-community ideas of our own.

Cognitive Policy Works specializes in providing organizations and individuals with frame analysis, policy briefs, strategic advising, and training.

http://www.cognitivepolicyworks.com/blog/2010/10/20/where-do-anti-government-ideas-come-from/