Friday, October 12, 2012

Triumph of the Wrong: The GOP's Austerity Plan for America

Friday, October 12, 2012 by The New York Times
by Paul Krugman

In these closing weeks of the campaign, each side wants you to believe that it has the right ideas to fix a still-ailing economy. So here’s what you need to know: If you look at the track record, the Obama administration has been wrong about some things, mainly because it was too optimistic about the prospects for a quick recovery. But Republicans have been wrong about everything.

About that misplaced optimism: In a now-notorious January 2009 forecast, economists working for the incoming administration predicted that by now most of the effects of the 2008 financial crisis would be behind us, and the unemployment rate would be below 6 percent. Obviously, that didn’t happen.

Why did the administration get it wrong? It wasn’t exaggerated faith in the power of its stimulus plan; the report predicted a fairly rapid recovery even without stimulus. Instead, President Obama’s people failed to appreciate something that is now common wisdom among economic analysts: severe financial crises inflict sustained economic damage, and it takes a long time to recover.

This same observation, of course, offers a partial excuse for the economy’s lingering weakness. And the question we should ask given this unpleasant reality is what policies would offer the best prospects for healing the damage. Mr. Obama’s camp argues for an active government role; his last major economic proposal, the American Jobs Act, would have tried to accelerate recovery by sustaining public spending and putting money in the hands of people likely to use it. Republicans, on the other hand, insist that the path to prosperity involves sharp cuts in government spending.

And Republicans are dead wrong.

The latest devastating demonstration of that wrongness comes from the International Monetary Fund, which has just released its World Economic Outlook, a report combining short-term prediction with insightful economic analysis. This report is a grim and disturbing document, telling us that the world economy is doing significantly worse than expected, with rising risks of global recession. But the report isn’t just downbeat; it contains a careful analysis of the reasons things are going so badly. And what this analysis concludes is that a disproportionate share of the bad news is coming from countries pursuing the kind of austerity policies Republicans want to impose on America.

O.K., it doesn’t say that in so many words. What the report actually says is: “Activity over the past few years has disappointed more in economies with more aggressive fiscal consolidation plans.” But that amounts to the same thing.

For leading Republicans have very much tied themselves to the view that slashing spending in a depressed economy — “fiscal consolidation,” in I.M.F.-speak — is good, not bad, for job creation. Soon after the midterm elections, the new Republican majority in the House of Representatives issued a manifesto on economic policy — titled, “Spend less, owe less, grow the economy” — that called for deep spending cuts right away and pooh-poohed the whole notion that fiscal consolidation (yes, it used the same term) might deepen the economy’s slump. “Non-Keynesian effects,” the manifesto declared, would make everything all right.

Well, that turns out not to be remotely true. What the monetary fund shows is that the countries pursing the biggest spending cuts are also the countries that have experienced the deepest economic slumps. Indeed, the evidence suggests that in brushing aside the standard view that spending cuts hurt the economy in the short run, the G.O.P. got it exactly wrong. Recent spending cuts appear to have done even more harm than most analysts — including those at the I.M.F. itself — expected.

Which brings us to the question of what form economic policies will take after the election.

If Mr. Obama wins, he’ll presumably go back to pushing for modest stimulus, aiming to convert the gradual recovery that seems to be under way into a more rapid return to full employment.

Republicans, however, are committed to an economic doctrine that has proved false, indeed disastrous, in other countries. Nor are they likely to change their views in the light of experience. After all, facts haven’t gotten in the way of Republican orthodoxy on any other aspect of economic policy. The party remains opposed to effective financial regulation despite the catastrophe of 2008; it remains obsessed with the dangers of inflation despite years of false alarms. So it’s not likely to give up its politically convenient views about job creation.

And here’s the thing: if Mitt Romney wins the election, the G.O.P. will surely consider its economic ideas vindicated. In other words, politically good things may be about to happen to very bad ideas. And if that’s how it plays out, the American people will pay the price.

Empire and Its Consequences

by Robert C. Koehler
Ever notice the way certain basic human values quietly transform into their opposite on their way to becoming national policy?

At the human level, the immorality of murder is fundamental, and most people understand the insanity of armed hatred. Keeping these dark forces under wraps is essential to the existence of human society. So why is it, then, that at the abstract level of nationalism, those forces are honored, worshiped, saluted, extolled as glorious, and given command of an enormous budget?

Why is it that their perpetuation via increasingly sophisticated technology is equated with national security and no one talks about the completely predictable negative consequences of basing security on murder and hatred?

And why does it feel so naïve to be asking such questions?

It’s as though the arrangement was settled four or five millennia ago. Killing is wrong, but we have to kill one another, you know, in self-defense, in order to survive. And hating people is wrong — mocking them, dehumanizing them — but some people ask for it. They do it to us, so we have no choice but to do it back. Hate, dehumanize, eliminate our enemies and . . . voila, we’re safe, at least for the time being. What don’t you get about that?

Criticism of such policy is generally couched in terms that remove the alleged naïveté of the criticism, but I’m wondering if it isn’t time to stare directly at the fundamental wrongness of war. Let me put it as nakedly as I can: A policy of murder and hatred is, in itself, morally wrong as well as strategically untenable. Anything that flows from such a policy, even if it seems to be beneficial — such as regional dominance, access to oil, suppression of an enemy’s power or plain old revenge — is inherently unstable and doomed to disastrous failure. This may be the way empires act, but it’s bad policy. If it creates “collateral damage,” it’s bad policy.

I put it this way because I’m haunted by the statistic that U.S. military veterans are committing suicide at the rate of 18 per day and that the term for the condition of many, maybe most, veterans and soldiers after their deployments in Afghanistan and Iraq is moral injury, as I wrote about last week.

Their lives have been seriously damaged not just by physical and psychological injury but by something else as well — by having transgressed a fundamental spiritual threshold and severed the connection that unites us. We can’t dehumanize others without doing the same to ourselves, and waking up to the reality of such a state is sometimes unbearable.

And it’s not just the deployment — the participation in an inhumane occupation and war — that dehumanizes. The military training that precedes deployment is where it starts. The training is not simply in the craft and technology of killing, but in the dehumanizing of self and other. The U.S. military, whatever else it is, is a cult of hatred with a virtually unlimited budget. This has been born out in the testimony of numerous vets over the years, testimony that could fill volumes, e.g.:
“I joined the Army on my 18th birthday. When I joined I was told racism was gone from the military,” Mike Prysner said during the 2008 Winter Soldier hearings. “After 9/11, I (began hearing) towel head, camel jockey, sand nigger. These came from up the chain of command. The new word was hadji. A hadji is someone who takes a pilgrimage to Mecca. We took the best thing from Islam and made it the worst thing.” Prysner was part of a panel called “Racism and War: the Dehumanization of the Enemy.”

Military recruits march to cadences that celebrate killing children in the marketplace and cry “kill” before they can eat a meal. They’re told they’re animals, stripped of “sentimental” feelings, trained to kill on command with cold efficiency. In that condition they serve U.S. foreign policy.

The argument, of course, is that we have enemies out there who despise us and want what we have, and our only protection is a layer of ruthless, well-armed killers that patrol the perimeter and keep our communities and our children safe. The argument is that our foreign policy is ultimately humane, that it spreads democracy, that it targets only bad guys and protects decent people everywhere.

But this argument breaks down when you look at what we do, from Dresden and Hiroshima to My Lai and Fallujah. It breaks down when you read about the rationale of our massive bombing of Baghdad at the start of the Iraq war, as spelled out by Harlan K. Ullman and James P. Wade in the 1996 Defense Department publication,Shock and Awe: Achieving Rapid Dominance”:
“The intent here is to impose a regime of Shock and Awe through delivery of instant, nearly incomprehensible levels of massive destruction directed at influencing society writ large, meaning its leadership and public, rather than targeting directly against military or strategic objectives. . . .

“The employment of this capability against society and its values, called ‘counter-value’ . . . (consists of) massively destructive strikes directly at the public will of the adversary to resist.”

This is the morality of empire, the morality of domination. We didn’t invent it; we just carry on the tradition, which goes back through colonialism and slavery to the Inquisition (“kill them all, let God sort them out”) to Rome (“they create a wasteland and call it peace”) and beyond, to the dawn of civilization.

I think the consequences have finally caught up with us.

US Supreme Court Finalizes Gift of Immunity to the Telecom Giants

Thursday, October 11, 2012 by The Guardian
Yet again, the Congress, courts, executive branch and the establishment media work together to protect the nation's most powerful actors

by Glenn Greenwald
So pervasive and reliable is the rule of elite immunity - even in the face of the most egregious crimes - that one finds extreme examples on a weekly basis. Six weeks ago, the Obama justice department forever precluded the possibility of criminal accountability for Bush torturers by refusing to bring charges in the only two remaining torture cases, ones involving the deaths of the detainee-victims by torture.The telecom giant has another big win in US courts.

The Obama campaign is now running a new campaign ad against Mitt Romney that rails against a litany of Wall Street "criminals" and "gluttons of greed", but as David Dayen astutely notes, those examples were all imprisoned during the Bush era because the Obama administration has prosecuted no significant Wall Street executives for the 2008 financial collapse and thus have none of their own examples to highlight:

"So the Obama campaign could not fill a list of three Wall Street criminals that the Obama Justice Department actually sent to jail. Heck, they couldn't fill a list of one!
"This is despite Eric Holder telling students at Columbia University in February of this year that his Justice Department's record of success on fighting financial fraud crimes 'has been nothing less than historic.' But not historic enough that his boss could point to, well, one Wall Street criminal behind bars as a result of DoJ's actions.
That's painfully telling. Nobody from Bank of America or Wells Fargo or Citigroup or JPMorgan Chase or Goldman Sachs or Bear Stearns or Morgan Stanley or Merrill Lynch or even Countrywide or Ameriquest was available to stand in as a 'glutton of greed' in this advertisement. Literally no major figure responsible for the financial crisis has gone to jail. So the campaign has to use two CEOs from a decade-old accounting scandal, and a garden-variety Ponzi schemer."
And now, the US supreme court just consecrated one of the most corrupt acts of the US government over the past decade: its vesting of retroactive legal immunity in the nation's telecom giants after they had been caught red-handed violating multiple US eavesdropping laws. Just as the Obama DOJ forever precluded any legal accountability for Bush-era torturers, the supreme court on Tuesday forever precluded any legal accountability for AT&T, Verizon, Sprint and other telecoms for their crucial participation in the illegal Bush NSA warrantless eavesdropping program (the Obama DOJ, needless to say, supported the position of the telecoms).

When the New York Times revealed on 16 December 2005 that the Bush administration was spying on the telephone calls and emails of American citizens without the warrants required by the criminal law, it exposed lawbreaking not only by government officials but also by the nation's largest telecoms. Multiple laws were in place at the time imposing both criminal and civil liability on telecoms for enabling government spying on the communications of their customers without warrants or other legal authority, and that is exactly what these telecoms did. One former AT&T employee, Mark Klein, publicly described how AT&T had even built a separate room with no purpose but to permit the National Security Agency unfettered access to all of its customers' communications.

What was most remarkable about those telecom laws is that - in the wake of the mid-1970s Church Committee investigation finding that the government abused its spying powers to punish and monitor dissidents - those laws were expressly written to prevent telecoms from participating in illegal government spying. They were written with the full participation of telecom lawyers to ensure that the companies' obligations were crystal clear. And most amazingly of all, the laws already contained broad immunity clauses to ensure that telecoms could never be punished for "good faith" violations, but rather only for deliberate, knowing violations of the law.

When civil liberties groups sued the telecoms on behalf of their customers whose communications had been illegally accessed by the government, federal courts began ruling against the telecoms, holding that the immunity they already had under the law would be unavailable to them, because the allegations against them amounted to knowing, deliberate violations of the law. As one federal judge put it in refusing to dismiss a lawsuit against AT&T: "AT&T cannot seriously contend that a reasonable entity in its position could have believed that the alleged domestic dragnet was legal."

But in the US, large and powerful actors must not be and are not subject to the rule of law. So telecoms hired former government officials from both parties to lobby for them and poured money into the coffers of key Democratic Senators such as Intelligence Committee Chairman Jay Rockefeller (who became the chief advocate of telecom immunity).

In 2008, the industry obtained an extraordinary act of Congress that gave them the gift of retroactive immunity from all criminal and civil liability for their participation in the illegal eavesdropping programs aimed at Americans on US soil. The immunity was enacted by an overwhelming bipartisan vote, with the support of leading Democrats including Barack Obama, who had promised - when seeking his party's nomination - to filibuster any bill that contained retroactive telecom immunity.

Immediately after this immunity was vested, groups which had been suing the telecoms and had their lawsuits terminated by the law, such as Electronic Frontier Foundation (EFF) and the ACLU, challenged the constitutionality of this immunity. They argued, among other things, that retroactive telecom immunity "violates the federal government's separation of powers as established in the Constitution" (by having Congress rather than courts resolve cases in favor of telecoms and by allowing executive branch officials full discretion as to which telecoms should be immunized), and "robs innocent telecom customers of their rights without due process of law" (by retroactively barring them from seeking justice in court for the violations of their legal rights).

Federal courts, needless to say, rejected these claims, dismissed the lawsuits against the telecoms, and upheld the validity of telecom immunity. It was these decisions that the supreme court on Tuesday refused to review, thus forever shielding lawbreaking telecoms from any legal accountability. Thus, the same tribunal that regularly consigns ordinary, powerless Americans to prison for decades for even trivial offenses yet again acts to protect the most powerful actors from any consequences for serious crimes: that is the US justice system in a nutshell.

As usual, it is not only the executive branch, Congress and courts which enable this elite immunity, but also the nation's establishment media, which obscures and distorts these issues with flagrantly misleading claims. Yesterday, for instance, CNN purported to report on the supreme court's decision, and told its readers that what "civil libertarians" were objecting to was eavesdropping on "potential terrorists" [my emphasis]:
"The U.S. Supreme Court on Tuesday left in place a law that allows the Justice Department to stop suits against telecommunications companies for participating in wiretaps of potential terrorists.
"The ruling was a key setback for civil libertarians challenging the broader powers of government since the September 11, 2001, attacks on the United States to use electronic surveillance to track potential threats in the name of national security. . . .
"In this case, Verizon Communications, Sprint Nextel, and AT&T were accused of privacy violations by assisting the government with intelligence gathering following the hijack attacks on New York and Washington."
This is all patently misleading. Nobody has ever objected to eavesdropping on "potential terrorists"; nobody objects to the "use [of] electronic surveillance to track potential threats in the name of national security"; and certainly nobody claims there are "privacy violations" from eavesdropping on terrorists.

The issue is and always has been illegality, not eavesdropping. The objection is not to government eavesdropping itself, but to government eavesdropping in violation of the law, by spying without the court warrants required by that law, a law that made it a felony - punishable by up to five years in prison and a $10,000 fine for each offense - to eavesdrop on Americans without first obtaining permission from a court. Moreover, the problem is not that government spying took place against "potential terrorists" but that the communications of all Americans were swept up.

George Bush tried to distort objections to his illegal eavesdropping program into objections to "eavesdropping on the terrorists", and here we have CNN in its headline and lede perpetuating that same claim. The CNN article does eventually note that "the law had previously required the government to justify a national security interest before any phone calls and emails originating in another country could be monitored", that "a federal judge had to sign any search warrant" and that "Bush secretly suspended that requirement following the attacks" (Bush did not "secretly suspend that requirement but rather "secretly broke the law": presidents do not have the power to "suspend laws": that's called "breaking the law").

Despite those caveats, the CNN headline and the lede of the article give the clear impression that the objections are to eavesdropping on terrorists, something no sane or rational person could oppose:

cnn telecoms

So congratulations are once again in order for AT&T, Verizon, Sprint and the other national telecom giants. In a country that imprisons more of its ordinary citizens than any other on the planet by far, and that imposes more unforgiving punishments than any other western nation, our most powerful corporate actors once again find total impunity even for the most serious of lawbreaking.

Skepticism of US journalists
 Relating to all of this, I had what I considered to be a quite revealing Twitter exchange this morning with the New York Times' Matthew Rosenberg, who covers Afghanistan for that paper. Rosenberg intervened in a discussion of US drones in Pakistan by vehemently denouncing the Pakistani government for "outright, unabashed lies", and then arguing: "it's problematic to base analysis off statements from [a government] that repeatedly misleads in public."

When I asked him whether he would apply those same notes of skepticism to the US government, he repeatedly refused to answer, both in response to my question and those from others. He just kept insisting that the issue was irrelevant. But how could it possibly be that Pakistan's propensity to lie is relevant to the drone debate, but the US government's propensity to do so is irrelevant? That's particularly striking given the clear documentation that top US government officials have lied about US drones. I have posted all the relevant Twitter comments here.

Apparently, like so many US journalists, Rosenberg is quite willing and eager to publicly denounce foreign government leaders as liars and to insist that their statements on drones must be taken with great skepticism, but - as an American reporter working for a US newspaper writing about US policy - he refuses to say the same about his own government (he did eventually say that all government claims should be treated with skepticism). Rosenberg has actually done some good journalism, but that double standard perfectly captures the role many establishment journalism plays in the US.

Rape in America’s Prisons

In 2007, Brittney Allen Young, a transgender woman, was incarcerated in the Powledge men’s prison unit in Palestine, TX.  Her cellmate repeatedly overpowered and raped her.  She complained to prison authorities, but they dismissed her complaints for lack of a corroborating witness to the incidents.

Young was eventually transferred to the Hughes Unit in Gatesville, TX, where another inmate, this one HIV-positive, also assaulted and raped her.  She was eventually placed in protection detention where, as reported by the Dallas Voice, Young is today “locked up 23 hours a day, unable to participate in the educational, vocational and religious programs her attackers still enjoy.”

The prison-industrial complex is estimated to cost $80 billion annually to maintain.  It includes federal and state prisons (many run by private, for-profit corporations) as well as county and local jails, juvenile facilities and police lockups, halfway houses and probation programs.  According to the Justice Department (DoJ) data, 2.2 million people were incarcerated in 2010.  The U.S. operates the largest prison system in the world.

A series of recent DoJ reports shine a needed spotlight on rape and sexual victimization in U.S. prisons and jails.  It estimates that nearly 210,000 prisoners are abused annually and that abusers are split relatively evenly between fellow inmates and prison personnel.  In 2008, the DoJ’s Bureau of Justice Statistics found that 4.5 percent of all inmates reported sexual assaults.  Welcome to the American gulag.

* * *

Roderick Johnson is another victim of the Texas “justice” system.  An out gay man, Johnson was incarcerated in the Allred prison, a maximum-security facility in Wichita Falls, TX, for nonviolent charges of burglary, cocaine possession and cashing a bad check.  Following unofficial prison custom, he was forced to become a sex slave for the Gangster Disciples, a major gang, and given the nickname, “Coco.”  As a slave, he made food and cleaned clothes for gang members and was regularly pimped out to other convicts for $10 a trick.

Over an 18-month period, Johnson was repeatedly orally and anally raped in prison cells, stairwells and showers.  According to the Daily Texan, the abuse got even more offensive. Johnson and a mentally ill man were forced to masturbate each other “while forcing the man to repeatedly insert a finger into Johnson’s anus and then lick that finger.”

In 2003, Congress passed and President Bush signed the Prison Rape Elimination Act (PREA) to end such abuse.  It was designed to protect from sexual abuse inmates in all federal, state and local facilities.  Two recent DoJ reports detail the relative progress the prison system has made in stopping sexual abuse.  The “Report on Sexual Victimization in Prisons and Jails” and the “Sexual Victimization Reported by Former State Prisoners, 2008” are powerful indictments of a system in crisis.

Sexual minorities seem to suffer the most abuse.  Transgender adults, gay men, lesbian women and juveniles of both sexes (but especially LGBT) are the principle targets of prison sex abuse. The DoJ study in 2009 found that juvenile LGBT prisoners report sexual assaults 12 times more often than straight youths and National Center for Transgender Equality says transgender adult inmates are sexually abused 13 times more often than other inmates.

Like men’s prisons, women’s prisons are venues of extensive sexual abuse.  It is not uncommon for guards to harass, degrade, grope and sexually abuse female inmates during frisks and body searches.  Also common are stories of guards watching women shower, disrobe or use the toilet as well as trading sex with female inmates for goods and privileges. Bisexual female inmates were targeted for sexual assaults more than heterosexual female inmates.

The survey of former prisoners is based on data collected from 518,800 men and women who were on supervised parole in mid-2008.  It found that 9 percent, 46,700 prisoners, had experienced some form of sexual abuse while incarcerated.

An estimated 3.7 percent (19,200) said they were forced or pressured into having nonconsensual sex with another inmate.  The rate of victimization by other inmates is highest among self-described homosexual (39%) and bisexual males (34%) at rates about 10 times higher than those reported by heterosexual males (3.5%).

Of those victimized, a quarter reported they had been physically held down or restrained and another quarter had been physically harmed or injured.  In addition, nearly a quarter (23%) reported serious injuries, including anal/vaginal tearing (12%), chipped or lost teeth (12%), being knocked unconscious (8%), internal injuries (6%), knife/stab wounds (4%) or broken bones (4%).

The study also found that an estimated 5.3 percent (27,500) of former prisoners surveyed reported an incident that involved prison personnel.  Although any sexual contact between staff and inmates is legally nonconsensual, former prisoners said some incidents were unwilling and some were “willing.”  Respondents reported the sexual contact had involved some form of coercion whether involving favors, special privileges or verbal intimidation.  Surprising, about 7 in 8 reported the perpetrators were of the opposite sex, most often a male inmate with female staff.  Recently, Prison Legal News detailed rape and sexual abuse by prison and jail workers in 39 states.

* * *

Former prisoners and some honest guards, let alone innumerable books and movies, will remind anyone willing to listen that prison is a living hell.  Sexual abuse in prison resembles something out of Dante’s 8th level of Hell, Malebolge, an amphitheater-shaped pit in which the sexually vulnerable are whipped, ducked in boiling pitch and their feet licked by flames.

Those targeted for sexual exploitation in prison suffer innumerable forms of degradation, none worse than sexual violation. They often face bitter slurs and called derogatory names of the opposite gender.  And if they complain, victims face public shame before fellow prisoners and other forms of retaliation.

Prison officials long took a blame-the-victim attitude to dismiss such complaints.  If that failed, they often insisted on a witness’ corroboration, knowing full well it could not be found.  Sometimes things could get more mean spirited with prison employees conspiring with prisoners to beat up or rape gay convicts or placing them in cells with well-known abusers sex predators.

The 2003 PREA legislation has begun to address some of worst aspects of sexual abuse in the prisons.  It calls for additional staff training, more ways for inmates to report sexual abuse privately, increased staff and video monitoring, prompt medical and psychological attention for victims, no cross-gender searches of female inmates by male staff and disciplinary actions for staff or inmate perpetrators.  In addition, it called for improved reporting procedures with audits every three years.  The current DoJ reports are fruits of the Act.

In an excellent piece in the New York Review of Books, David Kaiser and Lovisa Stannow warn that for all PRAE’s positive features, “Enforcement remains an issue, however.”  They remind readers, “Enforcement of the standards will rest in the first instance with corrections agencies themselves: the state departments of corrections and the county sheriffs’ offices that oversee most prisons and jails, respectively.”

They point out, “While there is no procedure for the enforcement of individual complaints under PREA, the attorney general is responsible for making sure that federal prisons comply with the new standards.”  The legislation has little enforcement authority over either state correctional authorities or private prison contractors.  For both, the only enforcement mechanism is the threat of losing either federal funding or a contract.  Sure.

Prison sexual abuse is the most egregious expression of America’s failed system of “justice.”  It’s good that PREA exists.

The prison-industrial complex, like the military-industrial system, is a self-perpetuating racket in which victory means failure.  Like the military-industrial system’s demand for an eternal enemy, the prison-industrial complex would collapse without an inexhaustible stream of criminals.  It’s cheaper at $80 billion a year to run a fractured prison system than address the causes of “crime.”

On Wasting Your Vote

by M. G. PIETY
A disturbing number of Americans are going to end up wasting their votes in this next election. They’re unhappy with the status quo, but instead of changing it, they’re only going to reinforce it. I’m not talking about democrats who are so unhappy with Obama that they’re planning to vote third-party. I’m talking about democrats who are unhappy with Obama, but who are so afraid of Romney that they’re going to vote for Obama anyway and justify that vote by invoking “the lesser of the two evils” argument. It’s about time someone pointed out that it’s the invocation of that argument to defend otherwise indefensible political choices that has driven us relentlessly into our current position between a rock and a hard place.

Albert Einstein is reputed to have said that the greatest invention in human history was compound interest. I beg to differ. I think it’s the “lesser of two evils” argument. It’s brilliant.
Give people two options, neither of which they find appealing, convince them that a third option, a genuinely attractive one, is just not practicable and that they must thus choose between the bad and the worse, and you’ll be able to get them to choose something they would never otherwise choose.

You can get people to do anything that way. You start by offering them a choice between something that is just marginally unpleasant and something that is really repellent. Once you’ve gotten them to choose the marginally unpleasant, you raise the bar (just a little mind you, you don’t want them to catch on to what you’re doing). Now you offer them a choice between something to which they have really strong objections and something that is deeply offensive. Most people, of course, will choose the former, if they think it’s either that or the latter. Now you offer people who’ve become inured to living under objectionable conditions a choice between even worse conditions and something that is truly unthinkable. It’s not mystery what they will choose.

There’s been a lot of angry posturing from Americans who think of themselves as progressive about how the purported political center in this country has been moving inexorably to the right, yet it’s these very people who are directly responsible for the shift. If you vote for a candidate whose farther right than you would prefer, well, then you’re shifting the political “center” to the right. Republicans aren’t responsible for the increasingly conservative face of the democratic party. Democrats are responsible for it. Democrats keep racing to the polls like lemmings being chased by the boogeyman.

“This is not the election to vote for real change” runs the democratic refrain. We’re in a crisis! We must do whatever it takes to ensure that the republicans don’t get in office even if that means voting for a democrat whose policies we don’t really like and which are only marginally distinguishable from those of the republican candidate. That “margin” is important, we’re reminded again and again. That little difference is going to make all the difference.

Even if that were true, which it ought to be clear by now it is not (see Bart Gruzalski’s “Jill Stein and the 99 Percent”), it would still offer a very poor justification for voting for a candidate one doesn’t really like. Why? Because it is an expression of short-term thinking. Thomas Hobbes argued that privileging short-term over long-term goals was irrational, and yet that’s what we’ve been doing in this country for as long as I can remember. Americans are notoriously short-term oriented. As Luc Sante noted in a piece in the New York Review of Books, America is “the country of the perpetual present tense.” Perhaps that’s part of the anti-intellectualism that Richard Hofstadter wrote about. “Just keep the republicans out of office for this election!” we’re always commanded. “We can worry about real change later!”

Of course anyone who stopped to think about it ought to realize that that mythical “later” is never going to come. Our choices are getting worse not better, and if we keep invoking the “lesser of the two evils” to justify them, we are in effect, digging our own graves.

God is not going to deliver to us from the clouds the candidate of our dreams, the candidate who despite his (or perhaps her) wildly populist views somehow manages to win over the corporate powers we have allowed, through our own incorrigible stupidity, to control the political process in this country. If we are ever going to see real political change of the sort progressives purport to want, then we are going to have to be brave enough to risk losing an election. Which shouldn’t require all that much bravery when one thinks about it, because real progressives have been losing elections for as long as anyone can remember in that the democrats haven’t been genuinely progressive for as long as anyone can remember.

If you vote for a democrat because you think of yourself as progressive you are wasting your vote because what you are actually saying is that you are willing to support a candidate who is not really progressive, that the democrats can continue their relentless march to the right and that you will back them all the way. That is, if you vote for a democrat because you say you are progressive, you are saying one thing and doing another. But actions, as everyone knows, speak louder than words. You can go on posturing about how progressive you are, but if you vote for a democrat that posturing is empty.

If we are ever going to see real progressive political change in this country we have to brave enough to openly risk defeat, and we have to have faith that our fellow progressives will be similarly brave. William James makes this point very eloquently in his essay “The Will to Believe.” “A social organism,” he wrote, of any sort whatever, large or small, is what it is because each member proceeds to his own duty with a trust that the other members will simultaneously do theirs. Wherever a desired result is achieved by the co-operation of many independent persons, its existence as a fact is a pure consequence of the precursive faith in one another of those immediately concerned. A government, an army, a commercial system, a ship, a college, an athletic team, all exist on this condition, without which not only is nothing achieved, but nothing is even attempted. A whole train of passengers (individually brave enough) will be looted by a few highwaymen, simply because the latter can count on one another, while each passenger fears that if he makes a movement of resistance, he will be shot before any one else backs him up. If we believed that the whole car-full would rise at once with us, we should each severally rise, and train-robbing would never even be attempted. There are, then, cases where a fact cannot come at all unless a preliminary faith exists in its coming.

Progressive political change will never be a fact unless we have faith in its coming, unless we have faith that others will back us up when we refuse to be forced to vote yet again for a candidate we do not like.

I, for one, abhor cowardice. I’m not going to be intimidated into voting for a candidate I don’t like by threats of the “greater evil.” I do not expect that my candidate will win the election. I expect, however, that my vote will count for something and not merely in the sense that it will allow me to preserve my self respect. I’m not afraid of being condemned as naively optimistic.

Without such optimism we’d never have had democracy in the first place. Democracy, one of the crowning achievements of human history, is precisely the product of the courage to act on one’s conscience and that faith that others will do so as well. If we’ve lost those things, then we will get the president we deserve.

Our Election Based Economy

Thursday, October 11, 2012

The Fracking Frenzy's Impact on Women

Hydraulic fracturing, or "fracking," has generated widespread media attention this year. The process, which injects water and chemicals into the ground to release "natural" gas and oil from shale bedrock, has been shown to contribute significantly to air and water pollution and has even been linked to earthquakes. But little has been reported on the ways in which fracking may have unique impacts on women. Chemicals used in fracking have been linked to breast cancer and reproductive health problems and there have been reports of rises in crimes against women in some fracking "boom" towns, which have attracted itinerant workers with few ties to the community.

Toxins in Fracking Process Linked to Breast Cancer
Not only has the chemical cocktail inserted into the ground been shown to contaminate groundwater and drinking water, but fracking fluid also picks up toxins on its trip down to the bedrock and back up again that had previously been safely locked away underground. Chemicals linked to cancer are present in nearly all of the steps of extraction -- in the fracking fluids, the release of radioactive and other hazardous materials from the shale, and in transportation and drilling related air pollution and contaminated water disposal.

Some reports indicate that more than 25 percent of the chemicals used in natural gas operations have been linked to cancer or mutations, although companies like Haliburton have lobbied hard to keep the public in the dark about the exact formula of fracking fluids. According to the U.S. Committee on Energy and Commerce, fracking companies used 95 products containing 13 different known and suspected carcinogens between 2005 and 2009 as part of the fracking fluid that is injected in the ground. These include naphthalene, benzene, and acrylamide. Benzene, which the U.S. EPA has classified as a Group A, human carcinogen, is released in the fracking process through air pollution and in the water contaminated by the drilling process. The Institute of Medicine released a report in December 2011 that links breast cancer to exposure to benzene.

Up to thirty-seven percent of chemicals in fracking fluids have been identified as endocrine-disruptors -- chemicals that have potential adverse developmental and reproductive effects. According to the U.S. EPA, exposure to these types of chemicals has also been implicated in breast cancer.

The Marcellus Shale in the northeast part of the United States also naturally contains radioactive materials, including radium, which is largely locked away in the bedrock. The New York's Department of Environmental Conservation (DEC) analyzed 13 samples of water, contaminated by the fracking process, as a result of the hydraulic fracturing of the shale during the extraction process. The DEC found that the resulting water contained levels of radium-226, some as high as 267 times the limit for safe discharge into the environment and more than 3000 times the limit safe for people to drink. One gas well can produce over a million gallons of contaminated water. A New York Times expose in 2011, released secret EPA documents that illustrated how this water is sometimes sent to sewage plants that are not designed to process the dangerous chemicals or radiation which in some instances are used in municipal drinking supplies or are released into rivers and streams that supply drinking water.

Emerging data points to a problem requiring more study. In the six counties in Texas which have seen the most concentrated gas drilling, breast cancer rates have risen, while over the same period the rates for this kind of cancer have declined elsewhere in the state. The average of the six counties' rates has risen from 58.7 cases per 100,000 people in 2005 to about 60.7 per 100,000 in 2008. Similarly, in western New York, where traditional gas drilling processes have been used for decades before hydrofracking came along, has been practiced for nearly two centuries, rural counties with historically intensive gas industry activity show consistently higher cancer death rates (PDF) than rural counties without drilling activity. For women, this includes breast, cervix, colon, endocrine glands, larynx, ovary, rectal, uterine, and other cancers.

Toxins linked to Spontaneous Abortion and Birth Defects
Certain compounds, such as toluene, that are released as gas at the wellhead and also found in water contaminated by fracking have the potential to harm pregnant women or women wishing to become pregnant. According to the U.S. EPA, studies have shown that toluene can cause an assortment of developmental disorders in children born to pregnant women that have been exposed to toulene. Pregnant women also carry an increase risk of spontaneous abortion from exposure to toluene. Wyoming, which contains some of the most active drilling fields in the country, failed to meet federal standards for air quality due to fumes containing toluene and benzene in 2009.

Sandra Steingraber, an acclaimed ecologist and author of "Raising Elijah" -- a book on how to raise a child in an age of environmental hazards, takes the strong stand that fracking violates a woman's reproductive rights. "If you want to plan a pregnancy and someone else's chemicals sabotage that -- it's a violation of your rights as a woman to have agency over your own reproductive destiny," she said.

Steingraber sees banning fracking as an issue that both the pro-choice and anti-abortion camps can rally behind. She has been giving talks on why opposition to fracking should be considered a feminist issue. The author won a Heinz award -- which recognizes individuals for their contributions in areas including the environment -- for her work on environmental toxins. She dedicated the $100,000 prize to the fight against fracking.

Crimes Against Women on the Rise in Some Energy Boom Towns
Beyond concerns about cancer and toxins are other societal ills related to fracking that disproportionately impact women. Some areas across the country where fracking has boomed have noted an increase in crime -- including domestic violence and sexual assault. In Dickinson, North Dakota, there has been at least a 300% increase in assault and sex crimes over the past year. The mayor has attributed the increase in crime to the oil and "natural" gas boom in their area.

The Executive Director of the Abuse & Rape Crisis Center in Bradford County, Pennsylvania, Amy Miller, confirmed that there has been an increase in unknown assailant rapes since the gas industry moved into the region -- which are much harder to prosecute. Miller also noted that domestic abuse has spiked locally, with the cases primarily from gas industry families. The county has more than 700 wells drilled, with more than 300 of these operational, and another 2,000 drilling permits have been issued.

The Gas Industry's Pink Rig
Even though fracking and drilling are dependent on a potpourri of carcinogenic chemicals, big energy companies don't hesitate to slap on pink paint in PR campaigns championing breast cancer awareness.

In 2009, a "natural" gas drilling rig in Colorado was painted pink with a percentage of the daily profits from the unit going to the Breast Cancer Foundation. This and other showy gestures by the shale gas and oil industry appear to do little to alleviate concerns about the impact that fracking chemicals and practices may be having on public health and safety.

Wednesday, October 10, 2012

Consumer Choice: As American as a Genetically-Altered Apple Pie

Wednesday, October 10, 2012 by OtherWords
The creation of a new genetically modified apple highlights once again the need for clear labeling of this kind of food.
by Wenonah Hauter
Meet the Arctic apple. In the field-trial stage since 2003, this fruit has had bacterial and viral DNA inserted into it — a genetic modification that prevents browning when bruised or sliced. One company, Okanagan Specialty Foods, has been testing these genetically engineered apples in New York and Washington — the country's biggest apple-producing states. Now, they're up for regulatory review by the Department of Agriculture (USDA).

If approved, most Arctic apples will be used in fresh-cut apple slice processing and by food service businesses, with some going into juice. But traditional apple growers, including trade organizations such as the U.S. Apple Association and the Northwest Horticulture Council, aren't exactly thrilled. Not only could it hurt traditional growers' market share, but nearby organic and traditional orchards may be contaminated with pollen from these newfangled apples and there could be cross-contamination at the processing level as well.

Even the top sliced-apple company is concerned about the food safety and consumer confidence ramifications of these apples because they could mislead consumers into thinking they're about to bite into a fresh, juicy apple rather than one on the verge of rotting.

Are all of the risks really worth it for an apple that resists a minor aesthetic flaw? Millions of research dollars have sunk into this product so that fast food and processing companies can let sliced apples sit around in plastic bags longer.

And, worst of all — as with all genetically modified foods — these apples won't be labeled. Consumers will have no way to tell that they're eating them. Okanagan claims they'll use an Arctic apple sticker and an indication of its "non-browning trait benefit," but there's no law requiring any kind of labeling. While the European Union has required the labeling of most genetically engineered foods for years, there's no such requirement in the United States.

Right now, the vast majority of processed foods contain genetically modified ingredients, particularly corn, soy, and their derivatives. But in recent years, these crops have steadily crept into the produce aisle. Washington has approved a total of 87 since the 1990s, seven of which the Food and Drug Administration approved in 2011 alone.

With little regulatory oversight and even less independent, long-term scientific study on their impact on human health and the environment, it's no wonder that a majority of consumers would not eat this newfangled food and nearly all — 90 to 95 percent — want genetically modified food to be labeled so they can make informed choices.

In California, more than a million voters have signed to have an initiative on the state's November ballot to mandate labeling. So far, Proposition 37 has 61 percent support from voters despite large food and pesticide companies spending at least $35 million to confuse the public with misinformation.

Proposition 37 and several other statewide mandatory labeling initiatives in the works are about giving the power of information back to consumers and ending the tyranny that large corporations have maintained over our food supply. And, if there's one thing more American than the apple, it's our right to make informed choices — in this case, to decide for ourselves whether or not to serve genetically engineered apples in our pie.

The 1 Percent's Cry for Justice

by Jim Hightower
Just twelve of the "Forbes 400" filthy rich for 2012. (AP Photo/Forbes, Michael Prince)

It's out! This year's list of American success stories has just been published, and according to its compiler, it "instills confidence that the American dream is still very much alive."

Maybe you are one of these success stories. You might be a great public school teacher, for example, who motivated students to achieve new heights or an inventor who came up with an energy-saving device and got it to market at a fair price, generating a profit for yourself, the environment and society generally.

No, no, no. Not that kind of success. We're talking money — the flow of mammon beyond regular people's wildest dreams. That's how Forbes magazine measures not only "success," but also a person's value: You are what's in your Swiss bank account. And, just to rank last on this year's "Forbes 400" listing of America's wealthiest people, you need more than a billion dollars in financial wealth. To get into the top 10 requires at least $25 billion. And to be numero uno means you've got $66 billion socked away. Who says America is broke?

As Ray Charles sang, "Them that's got is them that gets." And sure enough, these richest of the riches got a lot richer in 2011 — the magazine gloated that these 400 swells jacked up their cumulative haul last year by $200 billion over the previous year — an average of half-a-billion each!

Now that's success, baby, especially when the typical American family's income dropped by 4 percent.

These ultra-wealthy, goes the Forbes narrative, are the "deserving rich," for they are our economy's makers and producers — as opposed to being takers and moochers, like those commoners who get Social Security, Medicare and other government help.

Before swallowing that, however, note that roughly 40 percent of these "achievers" on the list "achieved" their wealth by being well-born — they inherited the money from Dad and Mom. And all of them have indeed been takers, not only enjoying government programs, but also subsidies and tax advantages available only to the rich.

The Forbes list really says that you got special treatment — not that you are special.

But if the rich need to feel special, they can always count on the editors of Fortune. We should not be surprised that a magazine named Fortune would be empathetic to the feelings of the 1 percent, but — good grief — how embarrassingly sycophantish of the editors to hustle out a piece just before the presidential election titled, "Stop Beating up the Rich."

Written by Nina Easton, the timing of the article was less than fortunate, for it came out just as the infamous video surfaced showing Mitt Romney "beating up" the poor and the middle class, while his audience of fellow multimillionaires laughed, cheered and shouted encouragement.

Despite the timing, Mitt and company undoubtedly appreciated the writer's disdain for those who so insolently dare to criticize and even demonize those worthy ones at the top who, as she explained, "gained their wealth through their own efforts."

Also, you can almost hear the privileged ones applauding appreciatively as she scorns the divide between the 1 percent and the rest of us as a "flawed prism, marred by hyperbole, half-truths and unnecessary pessimism about what it means to succeed in America."

Passionately deploring "diatribes against the 1 percent," Easton assails critics of America's widening wealth inequality as being people who want "to raid the gold pot." On behalf of the pampered rich, she issues her own emotional "grito," wailing that critics must "stop the name-calling."

Does Easton propose any specific remedies for narrowing the wealth gap? You betcha, and it just happens to be one that's a favorite of Mitt and the multimillionaire's club — one that they prescribe for any and all of our nation's economic woes: "corporate tax reform," by which they mean lowering the corporate tax rate. Yeah, three decades of that trickle-down idea has worked so well for the middle-class and the poor, let's give 'em another jolt of it.

It's unclear why Fortune felt the need to print this piece of fluff or why Easton got the assignment, but her credit line does mention that her husband "is senior strategist for the Romney campaign." Curious, huh?

Beware the 'Grand Bargain': Post-Election Deficit Deal Threatens Medicare and Social Security

Tuesday, October 9, 2012 by FireDogLake
The solution is Improved Medicare for All

by Kay Tillow
After the November election, there will be a major effort in Congress to pass a budget deal that will make cuts in Social Security, raise the Medicare and Social Security eligibility age, and perhaps more–unless we act to stop it with a solution that is close at hand.

There is agreement from the Wall Street Journal’s David Wessel to liberal economists Dean Baker and Paul Krugman that the pressure will be on to reach a Simpson/Bowles type of compromise.  Such a bipartisan plan would damage our most cherished programs and excuse the dastardly deed by asserting that the cuts are small and necessary because of the deficit. 

Those who relentlessly scream at us and finance ads to persuade us that the deficit threatens our grandchildren are obscuring the truth.  The fact is that the transfer of wealth from public funds and the rest of us to the super rich is the real crisis.  But those who have gorged themselves on this massive transfer of wealth also seek to undermine the Medicare and Social Security which are our grandchildren’s heritage from generations of struggles for a better life.

The projected cuts are not minor but very harmful.  Even a small decrease in the Social Security Cost of Living Adjustment would deliver an ever increasing downward push on benefits while corporations continue to threaten secure pensions by turning them into lump sums that will fade with the stock market.

Raising the Medicare age to 67 would be disastrous.  There will be no affordable health insurance for those in their 60’s.  The Affordable Care Act allows private insurance companies to charge premiums three times higher based on age.  Under popular pressure, there were regulations placed into the health care reform bill to stop insurance companies from charging higher premiums based on pre-existing conditions.  But the companies were allowed to charge three times the premium based on age.  

Because of this allowed age discrimination, the Kaiser Foundation estimates that an individual of age 60 in 2014 with an annual income of $50,000 will pay a health insurance premium of  over $10,000, or over 20% of income.  That does not include out-of-pocket costs which can add up to an additional $6,000 annually.  That brings the total to 32% of income—a bankrupting figure. 

There is a solution that the single payer movement must place on the nation’s table.   Even Bill Clinton said that we could save $1 trillion a year if we adopted the health care system of any of the other developed countries in the world.  No more stewing over the deficit!

An Expanded and Improved Medicare for All, HR 676, would save Medicare, end the uncontrolled, gargantuan rise in all health care costs, ease the deficit pressure, and actually bring universal health care to the nation. 

This single payer legislation, HR 676, introduced by Congressman John Conyers and co-sponsored by 76 representatives, would divert $400 billion annually from profits and waste generated by the private health insurance industry into care for all.  Care would be expanded and costs bought under control through bulk purchasing, global budgeting, and the elimination of administrative expenses forced upon our system in the pursuit of profit.

Doctors would be freed from insurance industry interference with care.  Patients would be freed to choose their physicians.  Dental, eyeglasses, hearing aids, prescription drugs, long term care, doctors, hospitals, home health, mental health—all medically necessary care would be included. 

Our health care costs would stop driving us over the cliff and level off just as Canada’s did when that country fully implemented their single payer health care.

Co-pays and deductibles would be banned ending today’s growing problem that health insurance policies are so miserly that even the insured forego care because they can’t afford it.

Our country spends about twice per capita what other industrialized nations spend on health care, yet our health care system lags far behind at number 37 in the world. 

So why are we even debating cuts to Medicare, Social Security, and Medicaid when the solution is at hand that would bring us both better care and cost controls?  HR 676, an improved Medicare for All, is sitting in the Congress, awaiting the rising of a movement that will insist upon its passage.

Facebook's New Business Plan: From Utility to Monopoly

In the wake of its IPO debacle, expect Facebook to leverage its market dominance aggressively – with its billion users hostage
by Dan Gillmor
The tweet, posted a little over two years ago by someone with deep connections in the internet world, was illuminating. It said, simply:
"A friend working for Facebook: 'we're like electricity.'"
I recalled that tweet last week when Facebook made two announcements of note. First, as everyone knows by now, it has a billion users – including, I suspect, nearly everyone I know. I scarcely use the social network myself, but I am constantly invited to look at items that others post there – and which are unavailable unless I log in. It is getting more and more difficult to avoid Facebook in daily life, and if Facebook gets its wish, it will be an outright necessity.

The second announcement was relatively minor in the bigger scheme of things – Facebook's plan to charge a fee, rumored to be $7, for users who want to place a post high in their followers' news feeds. Wall Street saw the fee as yet another way Facebook might generate revenues – an ever-stronger mandate from shareholders and the financial community in the wake of the company's fumbled IPO.

Both moves spoke to the growing influence of this still-young company, and to its genuine potential to become what amounts to a public utility. It's not as essential as electricity yet, but that goal is not as far out of reach as you might think.

Facebook's ever-expanding user base is easy to understand. It's the ultimate (so far) positive feedback loop – the network effect run wild. The service does offer value to its users, after all: convenience and connections. Sorry to say, most people value their privacy so little these days that they shrug off just about every new abuse of their personal data because the convenience and connections are worth it. Even people and companies that are deeply suspicious of Facebook's motives – with ample reasons for their suspicions – now feel obliged to use the service anyway, compounding Facebook's authority by posting items there and nowhere else. For people like me, who try to avoid using it, this increasingly means either signing in or not seeing things I'd like to see.

One of Facebook's most audacious initiatives has been in the developing world. As featured in an in-depth piece in the Atlantic magazine's new Quartz business news site, Facebook is subsidizing mobile phone data service, making it "free" for users – but with a catch: for all practical purposes, Facebook then becomes their entry into the internet. The company has made no secret of its desire to become what amounts to an alternative internet, and this is a brilliant – if disturbing – way to make that a fait accompli in a number of places where mobile data services are much more important and ubiquitous than what happens on desktop and laptop personal computers. In such places, Facebook will be wedded to national information networks and the governments that control them.

Electricity? Not exactly. But close enough.

Facebook's goal is not just to connect people with each other, but also to be the ubiquitous entry point for those connections. It wants to become what amounts to a public utility. The more Facebook makes itself an essential part of our lives – or, more accurately, the more we make it so – the easier it will be for the company to start charging us for using it. Users have been the product until now; advertisers buy access to us and our personal data. But the $7 fee, which is surely aimed more at businesses than average users, is a way of ensuring that messages get seen.

Only Facebook (and maybe Twitter) could even attempt to do this kind of thing, because it owns the user experience so completely. In its best walled-garden days, AOL couldn't have pulled this off with email, because even then, it didn't have Facebook's kind of dominance.

Market dominance always leads to distortions. Competition is always the preferred cure. But we have other methods, too, and it's not too soon to be contemplating them. We have antitrust laws designed to curb abuses, and we regulate public utilities because we can't trust them not to abuse their positions.

Will policy-makers awaken anytime soon? They'd better.

Weekly Funnies

Unemployment And Marginal Tax Rates

What the Numbers Tell Us

We, as a nation, are now in our 5th year since the beginning of the greatest recession we’ve seen since the great depression (Federal Reserve Bank of Minneapolis, 2012). Indeed, at least one prominent economist and Nobel Prize winner has made the argument that we are in a second depression (Krugman, 2011). At the same time, perhaps predictably, U.S. school systems have been increasingly under funded with well over one hundred thousand teachers having been laid off nationally, even by the most conservative estimates (Kessler, 2012). But unemployment has been stubbornly high, above 8% for four years running (U.S. Department of Labor, 2012). People are out of work, therefore tax revenues are down, so schools, law enforcement, fire departments, etc. will have to survive on smaller budgets, while they are simultaneously expected to improve their services under increasingly austere conditions. Or so the argument goes. Tax revenues and tax rates cannot be augmented until we have a strong economy once again, so we will have to make due. We cannot possibly consider increasing taxes on anyone during a recession. This is a logical and persuasive argument, or so it would seem, one that many of us have heard trumpeted loudly in recent years.

This argument suggests that the strength of the economy is the driving force that determines the amount of revenue available to fund public services across the country. In other words, a stronger economy will bring in more tax dollars because more people will be employed. Simple enough. Except that for the last three decades, politicians, think tanks, and special interest groups have been making the case that lower taxes will strengthen the economy because it frees up capital for job creators and those in the private sector to then spend, thus keeping businesses thriving and people employed. This argument presupposes a cause and effect relationship. It suggests that low tax rates lead to more money circulating through the system, creating a stronger economy and lower unemployment. To test this claim we can examine, empirically, two essential parts of this equation: We can test the relationship between marginal tax rates and unemployment (with low unemployment acting as an indicator of a strong economy). We can ask the question; do low tax rates correlate with low unemployment and vice versa? If indeed they do, then it would lend validity to the argument that increased tax revenues should only take effect after the economy recovers and unemployment drops.

The Longitudinal Trend in Tax Rates: 1932 – Present

Before we answer this question it is worthwhile to examine recent trends in one part of this equation: marginal tax rates. Pundits, politicians, media personalities, and the person on the street may make the case that current tax rates are “sky high”, suggesting that Americans now pay a higher percentage of their incomes than the historical norms. But does the data support this notion? When we consider the top marginal tax rates since prior to World War II, the answer is an emphatic no (Tax Foundation, 2012). There has been a clear and continuous downward trend in the top marginal tax rates since 1932, and Americans now enjoy the lowest tax rates they have in three generations. The current marginal tax rate for those in the highest bracket is 35%, the same as it’s been for the last decade and the lowest it’s been in 80 years, with one brief exception that we will discuss shortly. When President Clinton was in office the highest bracket was 39.6%. Interestingly, when Reagan was president and tax reduction became a staple of the Republican platform, the highest bracket was 50% for most of his 8 years in office. The two decades prior to that it was 70%, and from 1963 back until 1945 it was 91%. In 1945 it was 94%. So the point is clear when you examine the actual numbers: Taxes have never in modern history been lower in the U.S., except for the following caveat.

There was an interesting anomaly from 1988 to 1992 when the highest tax rate dipped to between 28% and 31% (Tax Foundation, 2012). And what happened to the economy during that time of low taxes? There was a large recession beginning in 1990, one that pales by today’s standards, but a significant one by historical standards (The Economist, 2011). President G.H.W. Bush saw the harm this was doing to the economy and raised taxes, breaking his “Read my lips- no new taxes” pledge. This of course was one of the factors that caused him to lose the election in 1992. Prior to that, in 1982, there was another tax cut (Tax Foundation, 2012) and another deep recession (The Economist, 2011), leading to the two highest back-to-back yearly unemployment rates we have seen since the great depression- 9.7% in 1982 and 9.6% in 1983 (U.S. Department of Labor, 2012). Our latest tax cut went into effect in 2003 and within five years the Great Recession was well underway. It would seem that tax cuts correspond with big recessions. When you subtract the substantial amount of money that wealthy individuals and large corporations contribute to our federal government and the overall economy, bad things tend to happen to that economy.

But while the tax part of our equation shows a clear pattern- a consistent downward trajectory for 80 years, with tax cuts tending to correspond with recessions- the second part is less clear. Since World War II the unemployment rate each year has fluctuated with no discernable pattern to the naked eye, from a low of 2.9% in 1953 to a high of 9.7% in 1982, and a wide variety of levels across the years (U.S. Department of Labor, 2012). So it was determined that inferential statistics would be needed to analyze the relationship between the top marginal tax rates and unemployment since 1948, when the first unemployment statistics where available through the U.S. Department of Labor.

Analysis: Correlating Marginal Tax Rates and Unemployment

The data for the top marginal tax rates (Tax Foundation, 2012) and the unemployment rates for each year (U.S. Department of Labor, 2012) from 1948 to 2011 were compiled. These numbers were entered into a Pearson product-moment correlation analysis, two tailed, to test for the strength and direction of correlation and for statistical significance. The results indicated that there was a statistically significant negative correlation, r(64) = -.31, p = .013, in the relationship between top marginal tax rates and the unemployment rate in the 64 years from 1948 to 2011. This means that when taxes were high, during that same period unemployment tended to be low, suggesting a stronger economy. And when taxes were low, during the same period unemployment tended to be high, indicating a weaker economy. It is important to note that this is not a political argument; it is a mathematical one. This is what the numbers tell us when this statistical analysis is conducted.

Now there are a number of issues to consider in this analysis. First, 64 years is a relatively small sample size (N = 64). With a sample size this small we would often not expect to see a statistically significant correlation. In many cases there simply would not be enough data for the probability to reach .05, much less .013. But even with this relatively small sample size, the association between tax rates and unemployment did prove to be significant, which suggests that longer trend lines, perhaps 80 or 100 years, would reveal a more pronounced relationship between those variables. The more data you have, the clearer the relationship often becomes, as long as that relationship is not due to random chance. And this analysis suggests the relationship between the top marginal tax rates and unemployment is not due to random chance, or at least we are 98.7% certain that it is not.

Another thing to keep in mind is one of the first concepts we teach students in introductory statistics and research courses: correlation is not causation. We cannot make the claim that one variable in this equation causes the other variable, even though they clearly seem to be associated with one another. In fact, we know that unemployment rates do not cause the top marginal tax rates to be what they are at any given time. Top marginal tax rates are set (caused) by the laws implemented by state and federal legislatures. Even if one were to argue that law makers’ decisions on tax policies are influenced by unemployment rates, the election cycle and legislative cycle normally play out over a number of years, sometimes decades, when unemployment often fluctuates a great deal, so it is not reasonable to contend that unemployment rates cause the marginal tax rates to be what they are. However, it is quite plausible that top marginal tax rates have a causal effect on the unemployment rate, particularly since those tax rates have shown a steady and consistent downward pattern and may only change once or twice per decade. In other words, it is possible that the top marginal tax rates may be one of the primary factors that dictate the unemployment rate and the strength of the economy at any given time. But since we are dealing with a correlation, we cannot claim to have isolated that variable as a cause, and it is quite probable that other factors are in play despite the clear relationship between the two variables.

However, a correlation does not rule out causation, of course, and if there is causation in this relationship, then it can only be unidirectional. The unemployment rate cannot dictate tax rates. We know what causes tax rates to be what they are: laws enacted by legislatures. So if there is a cause and effect relationship present, it could only be in the opposite direction, with tax rates influencing unemployment rates. But a critic could legitimately argue that examining tax rates and unemployment rates during the same year is ineffective because if tax rates were indeed affecting fluctuations in the unemployment rate, the impact would not appear until the following year or later. A proponent of the hypothesis that low tax rates allow job creators to expand their businesses could credibly make a case that when tax rates are reduced it takes at least a year or two for the effects to be seen in the unemployment rates, making a year-to-year comparison invalid. Essentially, the possible positive effects of the tax reduction haven’t had a chance to take hold yet in the same year that rates are reduced. The critic could assert that while comparing tax rates to unemployment rates in the same year may show a negative correlation, subsequent years may show a positive correlation once the job creators have had a year or two to put that extra capital back into the system.

For this reason a Pearson correlation was conducted comparing the top marginal tax rates for each year to the unemployment rates the following year for every year from 1948 until 2010 (as of 2012 when the analysis was done, the tax rates for 2011 could not be compared to unemployment rates from 2012 because that data had not been released yet). Put another way, the tax rate from 1948 was compared to the unemployment rate for 1949 and so on until 2010 to account for the possibility that any effect of the tax rates may not appear until the following year. The results again indicated that there was a statistically significant negative correlation between the top marginal tax rate and the unemployment rate the following year, r(63) = -.267, p = .034. Just as in the first analysis, these findings suggest that when top marginal tax rates are low, the unemployment rate the following year tends to be high, and when tax rates are high, the unemployment rate the following year tends to be low.

The question remained as to whether this pattern would hold true if the top marginal tax rates were compared to unemployment rates two years after the fact. In essence, did tax rates appear to influence the strength of the economy two years after those revenues were collected? Based on the initial findings, and to extend the analysis even further, the decision was made to explore the relationship between the top marginal tax rates and the unemployment rates two years, three years, and four years after the fact. When tax rates were compared to unemployment rates two years later, a statistically significant negative correlation again emerged, r(62) = -.259, p = .042. When tax rates were compared to unemployment rates three years later, a statistically significant negative correlation was also revealed, r(61) = -.265, p = .039. For the analysis of four years after the fact, a negative correlation appeared, but in this case it was not statistically significant, r(60) = -.245, p = .059. This final analysis did not meet the criteria for significance for two reasons: First, with each subsequent analysis the sample size was reduced by one year. For instance, for the 2011 tax rates, unemployment figures do not yet exist for two years after that time, so 2011 had to be removed from that analysis and so on for each succeeding analysis.

Likewise, for 2010, unemployment rates do not yet exist for three years after that time. The second and more important reason for the lack of significance in the final analysis is related to the first. With each analysis, when a year was removed for lack of an unemployment statistic to compare it to, the year removed was the next most current one, so the tax data for the years 2011, 2010, 2009, and 2008 were removed with each respective analysis. This was noteworthy because these were all years with historically low tax rates (35%), and when those extremes were removed from the data set the results gravitated towards the historically higher tax rates and the correlation appeared less significant. There is no doubt, however, that when the data for 2012-2017 become available in the coming years and the current low tax rates are compared to unemployment rates for four and five years later from 1948 until the present, there will indeed be a statistically significant negative correlation, just as in the other analyses.

Interpreting the Results

What we see when examining the whole of this data is a consistent pattern: When the top marginal tax rates are compared to unemployment rates for the same year, one year later, two years later, and three years later, nearly identical results emerge. Not only is there a negative relationship in each case, with low tax rates correlating with high unemployment and vice versa, the magnitude of each relationship is nearly identical. So between 1948 and 2011, there appears to be a clear and consistent relationship between top marginal tax rates and the unemployment rate. And since unemployment rates cannot dictate tax rates, any influence must go in the opposite direction, with tax rates influencing the unemployment rates. Because we are dealing with correlations, there is a possibility that a third variable or more variables are also at play, particularly in a dynamic as complex as the U.S. economy. Indeed, it is almost a certainty that other factors are involved. But the unmistakable and highly uniform pattern revealed in the analyses reported here would lead us to believe that the relationship between top marginal tax rates and unemployment is in fact present, even if other factors are also involved.

What we can say with absolute confidence, though, is that there is no evidence here that low tax rates are associated with low unemployment, and by extension, a healthy economy. Similarly, there is no evidence that high tax rates are associated with high unemployment, and by proxy a weak economy. There is simply no empirical basis to make those claims based on this historical data. In fact, everything we see here suggests that just the opposite is true. Low marginal tax rates do not appear to be beneficial to employment rates, and if they are in fact detrimental to employment rates one would be hard pressed to make the case that they are helpful to the economy. In the most basic terms, a healthy economy is one in which the vast majority of citizens who want to work can find that work.

If one were to accept the common contention these days that we must wait until we again have a strong economy before we are able to collect the tax revenues needed to adequately fund public sector services, the data simply does not support that claim. These numbers tell a far different story. They instead suggest that while tax rates remain at historical lows we will continue to have a weak economy and high unemployment. There is no data to suggest that by keeping top marginal tax rates low it will improve the economy or decrease unemployment. For those who insist on low taxes at all costs, it would be worthwhile for them to look at the numbers and realize that pursuing low marginal tax rates, and gutting education and other social services in the process, is not the answer to a weak economy. It may be one of the causes of it, and certainly appears to be a prime factor in the equation. If we continue on the trajectory that we as a country have been on for more than 30 years of demanding lower and lower tax rates in the hopes that it will keep money in our pockets and food on the table, the data tells us we are more likely to have empty pockets and less on the table.

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