Robert Reich: Why Americans Are Fucked and Europeans Are Not

The U.S. economy is picking up steam but most Americans aren’t feeling it.

By Robert Reich / Robert Reich's Blog

March 15, 2015

 

The U.S. economy is picking up steam but most Americans aren’t feeling it. By contrast, most European economies are still in bad shape, but most Europeans are doing relatively well.

What’s behind this? Two big facts.

First, American corporations exert far more political influence in the United States than their counterparts exert in their own countries.

In fact, most Americans have no influence at all. That’s the conclusion of Professors Martin Gilens of Princeton and Benjamin Page of Northwestern University, who analyzed 1,799 policy issues — and found that “the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”

Instead, American lawmakers respond to the demands of wealthy individuals (typically corporate executives and Wall Street moguls) and of big corporations – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

The second fact is most big American corporations have no particular allegiance to America. They don’t want Americans to have better wages. Their only allegiance and responsibility to their shareholders — which often requires lower wages  to fuel larger profits and higher share prices.

When GM went public again in 2010, it boasted of making 43 percent of its cars in place where labor is less than $15 an hour, while in North America it could now pay “lower-tiered” wages and benefits for new employees.

American corporations shift their profits around the world wherever they pay the lowest taxes. Some are even morphing into foreign corporations.

As an Apple executive told The New York Times, “We don’t have an obligation to solve America’s problems.”

I’m not blaming American corporations. They’re in business to make profits and maximize their share prices, not to serve America.

But because of these two basic facts – their dominance on American politics, and their interest in share prices instead of the wellbeing of Americans – it’s folly to count on them to create good American jobs or improve American competitiveness, or represent the interests of the United States in global commerce.

By contrast, big corporations headquartered in other rich nations are more responsible for the wellbeing of the people who live in those nations.

That’s because labor unions there are typically stronger than they are here — able to exert pressure both at the company level and nationally.

VW’s labor unions, for example, have a voice in governing the company, as they do in other big German corporations. Not long ago, VW even welcomed the UAW to its auto plant in Chattanooga, Tennessee. (Tennessee’s own politicians nixed it.)

Governments in other rich nations often devise laws through tri-partite bargains involving big corporations and organized labor. This process further binds their corporations to their nations.

Meanwhile, American corporations distribute a smaller share of their earnings to their workers than do European or Canadian-based corporations. 

And top U.S. corporate executives make far more money than their counterparts in other wealthy countries.
The typical American worker puts in more hours than Canadians and Europeans, and gets little or no paid vacation or paid family leave. In Europe, the norm is five weeks paid vacation per year and more than three months paid family leave.

And because of the overwhelming clout of American firms on U.S. politics, Americans don’t get nearly as good a deal from their governments as do Canadians and Europeans.

Governments there impose higher taxes on the wealthy and redistribute more of it to middle and lower income households. Most of their citizens receive essentially free health care and more generous unemployment benefits than do Americans.

So it shouldn’t be surprising that even though U.S. economy is "doing better," most Americans are not.

The U.S. middle class is no longer the world’s richest. After considering taxes and transfer payments, middle-class incomes in Canada and much of Western Europe are higher than in U.S. The poor in Western Europe earn more than do poor Americans.

Finally, when at global negotiating tables – such as the secretive process devising the “Trans Pacific Partnership” trade deal — American corporations don’t represent the interests of Americans. They represent the interests of their executives and shareholders, who are not only wealthier than most Americans but also reside all over the world.

Which is why the pending Partnership protects the intellectual property of American corporations — but not American workers’ health, safety, or wages, and not the environment.

The Obama administration is casting the Partnership as way to contain Chinese influence in the Pacific region. The agents of America’s interests in the area are assumed to be American corporations.

But that assumption is incorrect. American corporations aren’t set up to represent America’s interests in the Pacific region or anywhere else.

Either we lessen the dominance of big American corporations over American politics. Or we increase their allegiance and responsibility to America.

What’s the answer to this basic conundrum? Either we lessen the dominance of big American corporations over American politics. Or we increase their allegiance and responsibility to America.

It has to be one or the other. Americans can’t thrive within a political system run largely by big American corporations — organized to boost their share prices but not boost America.

Corporations ‘the cancer’ that are slowly killing American middle-class, ‘Wire’ creator David Simon

John Mulholland, The Observer
28 Sep 2014

The writer’s next show, Show Me a Hero, is the true story of a battle over public housing that convulsed New York in the 80s. Here, on location in Manhattan, he talks about how money corrupts US politics, the erosion of the working class, why it’s a crime to be poor in America – and why he likes to argue

At the end of a long day scouting locations for his new TV miniseries, David Simon is sitting in his Upper West Side office in New York describing the type of person who needn’t bother tuning in to his new show. He’s speaking as a TV writer but also as a citizen angered by a political system that he thinks fails many of his fellow countrymen.

“People who think we’re being well governed at the moment… well, there’s no reason for them to watch. People who look at the inertia of Washington, at the partisanship, at the divisive and polarised discourse… people who think that’s the way to build a just society, well, don’t watch the show, because I got nothin’ for you.”

If, on the other hand, “You’re starting to believe that even the vernacular we’re using to argue about solutions to problems is dysfunctional, watch this show because I think it’s a perfect metaphor for what the American government is no longer capable of doing – addressing problems in a utilitarian fashion for the good of most people. American politics has left the room when it comes to finding solutions for our problems.”

Show Me a Hero, which will appear on screens late next year or in spring 2016, is based on a non-fiction book of the same name by former New York Times writer Lisa Belkin. It marks the time, says Simon, when American politics left the room.

The 1999 book’s subtitle, “a tale of murder, suicide, race and redemption” hints at the drama involved. Belkin documents the story through a series of interviews with many of the principals involved. It’s a tale of political and personal destruction that convulsed Yonkers, a city of 200,000 people just 40 minutes’ drive north of Manhattan. At its heart was a row about public housing for low-income residents being built in a part of Yonkers almost exclusively reserved for the wealthy.

Show Me a Hero shows how the fallout engulfed the New York body politic and ultimately brought unwanted national attention to Yonkers. When the dispute was finally settled the New York Times noted how the bitter row “had opened an ugly chapter in the city’s history, tearing apart neighbourhoods, building and destroying political careers and unleashing a heated court battle that nearly drove Yonkers to bankruptcy”.

On a bright, sunny morning last week the Schlobohm housing project, in west Yonkers, the largest low-income public housing site in the city and one of the principal locations for Show Me a Hero, is quiet. Except, that is, for Simon, his director Paul Haggis and other crew members who are here to scrutinise backgrounds, visualise scenes and figure out what angle offers the best view of the Hudson river in the near distance. Schlobohm is one of half a dozen stops they will make as they crisscross the city to finalise locations before four months of filming, which starts this week.

As the crew sweeps through a communal space that doubles as a car park, they pass by a mural. Painted on the side of a low wall that circles the area are five words in large, childlike lettering. They add colour to an urban landscape dominated by the red brick of the low- and high-rises. Spaced about a metre apart, they read “Unity”, “Harmony”, “Peace”, “Pride”, “Safe”.

But when the FBI’s New York field office writes about Schlobohm, it uses a different set of words. One of the most recent entries on its website is headed: “Three charged in connection with December 2013 homicide”. It lays bare the cycle of violence that is visited on places such as this when it notes that the arrest of two dozen gang members two years before had paved the way for a rival to thrive in their absence.

“In late June and early July 2012, federal authorities arrested 20 members of the Strip Boyz on charges of narcotics distribution and/or firearm offences… the arrests of the Strip Boyz left GMF [rival gang the Grimy Motherfuckers] dominant in the Schlobohm housing project.”

If the FBI’s reports were reduced to five words they might read “Narcotics”, “Gangs”, “Murder”, “Shooting”, and “Trafficking”.

The story of Schlobohm to be told by David Simonstarts in 1980, when the local Yonkers branch of the National Association for the Advancement of Coloured People (NAACP), backed by the US justice department, sued the city of Yonkers. The lawsuit alleged that the city’s housing and school policies had, over a period of 40 years, purposely segregated black and Hispanic residents from its more affluent white neighbours. It claimed that Yonkers deliberately placed its poorer (non-white) residents in the west of the city, while the east side remained predominantly white.

In 1985, US federal court judge Leonard Sand ruled in favour of the NAACP and instructed Yonkers to build 200 units of public housing on the east side. That’s when the trouble started.

The six-part miniseries will follow what happened from 1987 to 1994 as local residents and politicians defied the court order in a series of increasingly vocal and public demonstrations that brought the issues of race, housing and deprivation in Yonkers on to the national agenda.

An ABC news report broadcast at the time gives a glimpse of how divisive the dispute was. It features one of the residents at a Save Yonkers meeting (a man named Jack Tracy) making his position clear: “I lived with blacks, I delivered newspapers to blacks, but I can’t live next to what the government has in these projects. If the government wants to put criminals and dope-pushers in the projects I can’t live next to them. The federal judge can find me guilty, the supreme court can find me guilty… but if they think they’re going to integrate with Jack Tracy and his family, they’re going to have to build projects 60 miles north, 80 miles north, they can build them in Maine or wherever they want but I will not live next to a project. And if it means going to Canada, or back to Ireland that is what I will do. That ain’t why I am living in this country.”

In the fury and noise that engulfed Yonkers’s east side, what Jack Tracy and others failed to hear was that the judge’s proposal was not for old style “projects” (ie large-scale, densely populated, high-rise public housing) but for 200 two-storey houses to be distributed in small groups across the east side.

Later in the morning, after we have left Schlobohm and passed on to the noticeably more affluent (and white) east side of Yonkers, Simon and his crew stop at another location. Simon points to a small row of innocuous two-storey houses on this pleasant, leafy street. He says: “Look. That’s them, those are some of the houses. That’s what Yonkers tore itself apart over. And you wouldn’t even know they were public housing.”

What attracted Simon to this story was not the issues of housing or race or deprivation but something more fundamental – the dysfunction of the American political system. The story, Simon says, is tailor-made for showing how US politics now runs on fear and money, two forces that are slowly corroding American society.

“What intrigued me about the story was that it’s an almost perfectly allegorical argument about how our political processes are no longer equipped to recognise or solve problems. You have this mid-size American city, Yonkers, that didn’t have terrifying racial dynamics before the controversy. It had problems like any city but there was no reason that fear should be such an effective currency in the political process. And yet fear and money are the only currencies in the American political process that get their due any more. Nothing makes people more stupid and foolish than money and fear.”

The effect was to split the city in half. The east side set about protecting the value of its homes, livelihoods, children and way of life from the perceived threat from the west side. Looking now at the small clusters of neat, low-rise homes that were eventually built on the east side, its difficult to understand why the fury reached such a pitch.

For Simon, the answer is clear. “Politicians can gain so much by invoking fear and because money is at the core of that fear and the people who are the most frightened were looking towards their real-estate values, the values of their neighbourhoods and what they might personally lose if the neighbourhood went south. Money and fear paralysed Yonkers politically, and caused untold damage to the city’s reputation.”

For Simon, the story of Yonkers is telling for another reason – its timing marks the period in American history when a consensus fractured. The social compact between capital and labour was starting to break. From the 1980s onwards capital won virtually all of its battles with the labour unions in America.

This is a point forcefully made by ex-Clinton labour secretary Robert Reich in his recent film, Inequality for All. He dates the busting of the labour unions and the rupture of the social compact to Ronald Reagan’s firing of 11,000 air traffic controllers in 1981. From then on, the idea that a market-driven society would mutually benefit those who held the capital and those who provided the labour was no longer in place, he says. For Simon, this is the point at which the shared community of interests that walked side by side as the American economy surged after the second world war came apart. The collective will that bound together communities, cities and, ultimately, America started to erode.

“What was required in Yonkers was to ask: ‘Are we all in this together or are we not all in this together?’ Is there a society or is there no society, because if there is no society, well, that’s the approach that says ‘Fuck ’em, I got mine’. And Yonkers coincides with the rise of ‘Fuck ’em I got mine’ in America.

“That’s the notion that the markets will solve everything. Leave me alone. I want maximum liberty, I want maximum freedom. Those words have such power in America. On the other hand ‘responsibility’ or ‘society’ or ‘community’ are words that are increasingly held in disfavour in the United States. And that’s a recipe for cooking up a second-rate society, one that does not engage with the notion of collective responsibility. We’re only as good a society as how we treat those who are most vulnerable and nobody’s more vulnerable than our poor. To be poor is not a crime, except in America.”

These are not new themes in Simon’s work. The Wire was a grand tour of the institutions that were failing Americans, from politics to journalism, and from education to the criminal justice system. It was also an indictment of how capital had decisively won its war against American labour, with enduring consequences for America’s working class. This is the issue that most exercises Simon.

In his long and brilliant introductory essay to the 2009 book The Wire: Truth Be Told (a collection of essays by people involved in the making of the series), Simon wrote: “The Wire depicts a world in which capital has triumphed completely, labour has been marginalised and moneyed interests have purchased enough political infrastructure to prevent reform. It is a world in which the rules and values of the free market and maximised profit have been mistaken for a social framework, a world where institutions themselves are paramount and everyday human beings matter less.

“Unemployed and under-employed, idle at a west Baltimore soup kitchen or dead-ended at some strip-mall cash register – these are the excess Americans. The economy staggers along without them, and without anyone in this society truly or sincerely regarding their desperation. Ex-steelworkers and ex-longshoremen, street dealers and street addicts, and an army of young men hired to chase and jail the dealers and addicts, whores and johns and men to run the whores and coerce the johns – and all of them unnecessary and apart from the new millennium economic model that long ago declared them irrelevant.

“This is the world of The Wire, the America left behind.”

But Simon acknowledges that this wider message may have been lost on some of those who watched the highly acclaimed series, set among the politicians, police, press and drug dealers of Baltimore.

“Sure, there’s people who watch The Wire and go ‘Man I love all these fuckin’ characters but I hate it when the politics comes on… I just want to see the badasses shoot each other.’ And it’s like yeah, well, OK, I get it, you know, I get it, but I didn’t leave journalism to write fuckin’ television for you because that’s just horrific.”

He expresses relief, and some amusement, that the cable channel HBO continues to commission his work in spite of the relatively low ratings his TV work attracts (The Wire, belatedly through word of mouth, drew in a healthy audience. Subsequent series, though highly acclaimed, including Generation Kill and Treme, fared less well).

He jokes about “getting a 2% share” of audience, but appears untroubled about how long his shelf life as a TV writer might be. “You got to commit to something. If you’re a writer you got to write something. You might as well believe in it.”

HBO seems to believe in it too. That much is clear the next day when Simon and co-writer Bill Zorzi (who has been working on Show Me a Hero, on and off, for 10 years) are the star attractions at a start of production meeting in HBO’s Manhattan headquarters. There are close to 50 people here, and another 10 are looped in on a screen from LA. Haggis jokes that “he’s never seen this many people in a room before”.

Before Simon addresses the room, senior HBO executive Kary Antholis steps forward to speak. One of the executives closest to Simon’s projects, he is wholehearted in his praise. “This project is among the most meaningful that David has ever done. In its reflections on race, politics and community, I think it will be a powerful story and will make an important contribution to this country’s social dialogue. It’s one of the great legacies of HBO that we make these contributions to our social dialogue… I believe that Treme lives in that legacy, so does Generation Kill, and The Wire. I am very proud and grateful that David is doing these series for HBO.”

When Simon speaks he emphasises why Show Me a Hero is so prescient. But he goes further too, in pointing out precisely what it is that has gummed up the US political machine. “The most dysfunctional part of the government is Congress, the most loathed institution in America (with approval ratings of 7%), but they are unrepentant about that. The reason to do this project is that it speaks exactly to what is wrong with our country. It happens that this story is about 200 houses that needed to be built, but substitute any other issue… immigration, budgetary issues, almost any foreign policy or environmental issue that requires any systematic action, or thought, and you see it. This is a country that can get nothing done.”

Simon argues forcefully that it’s the US Congress which smothers the body politic and destroys its capacity for action. Money has tilted the balance of power by inserting itself into the political system and now has the power to influence Congress – and the legislation that governs how society organises itself.

“You can buy congressmen so fast. Ideas have nothing to do with it. And that’s the part that’s broken. And that was the part that was broken in Yonkers.

“It has to change. When capital also is entitled to buy the government, that same government that might in some way create the basic standards of behaviour, everything from child labour to environmental protection, to workplace safety, to minimum wages that are consistent with the cost of living… Well eventually it’s going to get to the point where it’s so fuckin’ bad that people are going to throw a brick.”

Simon, at 54, is driven. Driven to write about the issues that exercise him. And driven to engage in intellectual combat. He relishes argument, and thrives on the mental exercise that debate provides. You get a strong sense that, left to his own devices and left all alone, it wouldn’t be long before he was picking a fight with himself. It’s a thirst for intellectual friction, and appetite for a dialectic, that drives all of his work. Plots, characters and narrative are all very well, but only in that they are part of a toolkit needed to construct an argument. Simon is never going to sit down and write a TV drama about people per se: his work will always be about something more elemental, more structural.

Writing in 2009 about the impulses that drove The Wire, he said: “The Wire had ambitions elsewhere. Character is essential for all good drama, and plotting is just as fundamental. But ultimately, the storytelling that speaks to our current condition, that grapples with the basic realities and contradictions of our immediate world – these are stories that, in the end, have some chance of presenting a social, and even political, argument. And to be honest, The Wire was not merely trying to tell a good story or two. We were very much trying to pick a fight.”

Simon has been picking fights since he was a young kid growing up in Washington. He learned his way around an argument at an early age while sitting at his family dinner table. It was how you gained your spurs (your “moxie”) in the Simon family: by holding your own in intellectual fisticuffs. “I lived in a house where argument was sport. Dinner discussions were about what was going on in the world. Not everybody was expected to agree, because then you couldn’t have a good argument, but if people didn’t agree, then you could have a good argument.”

Simon remembers the day he came of age intellectually. In his telling, it sounds like a duel, a rite-of-passage moment. “I was having an argument in my uncle Hank’s house in New York, and I would stake myself out against my father and two of my uncles. I must have been 17 and I just knew they were wrong. And I held them off to a draw for about an hour and a half in my uncle’s den. And I remember my uncle Hank turning to my father and saying, “Who knew he had a brain?” It was the biggest thing for my uncle Hank; it was how you earned moxie in my house.”

The web has given Simon another place to pick fights. Having lain dormant and then only been used for professional announcements, davidsimon.com has now become a place where Simon has, over the last few years, written occasional often coruscating posts on anything from the NSA to the policing of the Ferguson riots. Given time he will engage at length with some of those who post comments. The engagement is robust. He pushes, and is willing to be pushed, if he thinks contributors (and he himself) will learn, develop and mature their argument. It’s the family dinner table again.

When he was setting out what davidsimon.com would become, he wrote, with unerring honesty: “Those who know me understand that while it’s refreshing to meet people with no opinions, I’m not that fellow – I like to argue. I don’t like to argue personally, but rather I like pursuing a good ranging argument.”

Although limited by time and a work schedule that, alongside Show Me a Hero, sees Simon wrestling with three other development projects for HBO, including one about the New York sex industry in the 70s (not to mention a theatre project involving the songs of the Pogues), he still finds time for occasional posts. What he relishes is the opportunity to write in long-form and to develop an argument, see a thought grow, mature and ripen. “I guess what you’re hoping, the equivalent of what often resulted at my family’s dinner table, was that the argument goes somewhere, that it has legs. This is why you engage with people on ideas. At its best ideas can build, arguments can develop.”

The fight that David Simon has most often picked in recent years – and one he will address when he delivers the keynote talk at the Observer Ideas festival next month – is how the power of the market has trumped all other priorities in his country, and destroyed the values that brought America together.

“My conviction is that what made us great as an economic power was transforming our working class into a middle class and making them this economic engine that not only bought all the shit that they needed, but a lot of stuff they didn’t. By the middle of the century, or a little later, the American workforce had been launched into middle-class status and had discretionary income and the ability to construct a future that allowed the next generation to maintain that upward mobility and even advance further on it. That’s a pretty good dream. That’s more than a dream. But it’s no longer true. We’ve been disassembling that middle class slowly by degrees.”

For typical middle-class Americans, the squeeze is on. The certainties they had come to expect no longer exist. Late capitalism is unable to provide the generation-on-generation wealth advances that many had come to assume was normal. The new normal is something very different.

“Now you have an existing upper middle class or upper class that is politically powerful, quite moneyed and is larger than at any time. It’s not just the 1%, it’s the 10%, the 20% that have been carried higher up on the pyramid and who are in those industries that have caught the wave of the information age and for them the American dream seems uninterrupted. What they’re not noticing is that the people who used to be able to send their kids to college and hold down a mortgage on a factory wage or on a mid-level administrative [job] or on a civil servant’s salary, that they’re being crushed.”

Simon is not an outlier in his criticism of the American body politic or in his reflections on unfettered capitalism and the rise of inequality. What is marked is how many voices have joined this debate in the US.

For the last two years the New York Times has been running a series on inequality, curated by the venerable economist Joseph Stiglitz, entitled The Great Divide. It has featured contributions from academics, business people and politicians.

Stiglitz recently wrote about the fracturing of the same postwar consensus, and how it came about. “Corporate interests argued for getting rid of regulations, even when those regulations had done so much to protect and improve our environment, our safety, our health and the economy itself.

“But this ideology was hypocritical. The bankers, among the strongest advocates of laissez-faire economics, were only too willing to accept hundreds of billions of dollars from the government in the bailouts that have been a recurring feature of the global economy since the beginning of the Thatcher-Reagan era of ‘free’ markets and deregulation.

“The American political system is overrun by money. Economic inequality translates into political inequality, and political inequality yields increasing economic inequality.”

More recently, Robert Reich contributed an essay to Salon.com entitled “American democracy is diseased – how we can wrest back power from our corporate overlords”, in which he addresses the same issue. “We entered a vicious cycle in which political power became more concentrated in moneyed interests that used the power to their advantage – getting tax cuts, expanding tax loopholes, benefiting from corporate welfare and free-trade agreements, slicing safety nets, enacting anti-union legislation, and reducing public investments. These moves further concentrated economic gains at the top, while leaving out most of the rest of America.”

Simon is not sanguine about what it will take for corporate and political America (increasingly one and the same) to recognise that if the story continues in this vein it will not end well.

“I think in some ways the cancer is going to have to go a little higher. It’s going to start crawling up above the knee and people are going to have to start looking around and thinking ‘I thought I was exempt. I didn’t know they were coming for me’.

“It’s happened to the manufacturing class, it’s happened to the poor. Now it’s happening to reporters and schoolteachers and firefighters and cops and social workers and state employees and even certain levels of academics. And that’s new. That’s not the American dream.”

Simon reserves particular contempt for the forces in America that have helped strip labour of its dignity, who refuse to see the benefits, or necessity, of people collectively organising in order to protect their interest.

“Unions are part of the equation. They’re not the whole equation – the unions needed to lose as many battles as they won, but they needed to win some. And the demonisation of them has been an astonishing achievement of political disrepute in the west, and particularly in my country.”

Back in his Upper West Side office, Simon is now starting to seem fatigued by a long day of scouting locations, of being photographed, of being interviewed and, frankly, of being angry. It’s time to bring a close to the interview. But Simon’s sense of humour and self-deprecation is still very much intact.

When, at the very close of the conversation, he is asked how, or when, this TV career ends, he replies: “Well, I have enough to keep writing these miniseries nobody will watch for as long as HBO will allow nobody to watch them.” When it’s put to him that the story in development about New York’s sex industry is a sure winner, he retorts: “Just watch that one not get made either.”

In his 2009 introduction to The Wire: Truth Be Told, Simon concluded his essay by referring to The Wire as “an angry show, but that anger comes honestly”.

It’s difficult to think of a more fitting way to describe David Simon.

What Makes the United States So Unequal?

In the United States, the government is doing less to reduce inequality than any other high-income society.

By Robert J.S. Ross

If governments did nothing, Western Europe and the United States would have similar levels of inequality. But governments don’t sit on the sidelines. They collect taxes. They provide social programs. They take steps that can lessen the amount of market inequality. The difference: Governments in European and other high-income societies do much more to reduce inequality than the United States.

Comparisons among the high-income countries usually show the United States as the most unequal.

Comparisons of income inequality among the high income countries usually show the United States as the most unequal, as measured by a standard index called the Gini coefficient. A Gini value of 100 means that all the income is held by one household. A value of 0, on the other hand, means that all income is equally shared.

For the United States, the Gini coefficient runs about 38, according to the OECD, the economic policy tank for the rich countries, or about 48, according to the U.S. Census Bureau. The American Gini rating has risen sharply in the last generation, after falling gradually in the middle of the twentieth century.

By comparison, the Nordic countries– Sweden, Denmark, Norway – have among the lowest Gini coefficients, in the 25-27 range, while Germany has a Gini of 29 and France, 28.

Comparisons that show the United States as the most unequal of high-income societies typically take into account the income households have from market-based activity (work and investments) and government transfer programs (Social Security and unemployment compensation, for instance) and subtract away taxes. Researchers call the end result from these calculations “post tax and transfer” or “disposable” income.

Political decisions determine taxes and transfers. Public policies, everything from minimum wage to labor laws, also influence market-based income. So we should expect inequality levels to differ among developed nations. Even so, the actual differences among developed nations can be surprising.

Political decisions determine taxes and transfers.

On the yardstick of market-based income, the level of inequality in the United States does not come off as particularly extreme. The United States ranks eighth most unequal among the 26 countries that reported 2010 data to the OECD. The United States sports about 7 percent more market-based inequality than the average of all OECD nations.

The extreme inequality status of the United States only kicks in when we go beyond market-based income and look at tax and transfer policies.

In the United States, taxes and transfers are doing much less to reduce inequality than these policies are doing in other developed nations. On average, rich countries’ tax and transfer policies reduce inequality by about 36 percent. The figure in the United States: only about 24 percent.

In Sweden, market-based inequality shows a Gini of about 44, but the disposable income Gini sits at a much more equal 27, a reduction of 39 percent in inequality. In the United States, the market Gini comes in about 50. The disposable income Gini: just 38 in the OECD data, a reduction of only 24 percent.

Over the last generation, major changes in U.S. tax and transfer policies – mainly cuts in the tax rates on high incomes – have actually served to increase inequality.

Inequality, to be sure, is increasing in almost all high-income countries, the consequence of the triumph of global capitalism and its neoliberal policy package: market dominance, privatization, and deregulation. But even in this company, the United States stands out for the depth of its commitment to policies – particularly tax policies – that favor the rich.

The United States stands out for its policies that favor the rich.

Many Americans are, not surprisingly, concerned about excessive taxes. Ours, after all, has been a nation forged in a struggle against a grasping, remote, tax-hungry overlord. Yet when we compare ourselves to other countries about as rich and democratic as we are, it appears we are not highly taxed. Our total taxation level stands at about 24 percent of GDP (the total value of national production and income), a level significantly lower than the 34 percent average of the other high-ncome countries.

Why should we care about how little our tax system reduces inequality? Among the world’s high-income countries, the British epidemiologists Richard Wilkinson and Kate Pickett have powerfully pointed out in The Spirit Level, the more unequal societies – and regions within countries – have more violence, infant mortality, lower life expectancies, and more mental illness. Societies that are more equal, on the other hand, have more trust among people. Our levels of inequality produce fractured community and social resentment, and they drive sour and even violent politics.

Inequality has become like the weather: Everybody talks about it but no one does anything. Unlike the weather, we can fix this mess and heal these wounds. To do so, we may need a reminder from Supreme Court Justice Oliver Wendell Holmes, Jr.: “Taxes are what we pay for civilized society.”

Privatization Is A Ramp For Corruption and Insouciance Is a Ramp for War

Privatization Is A Ramp For Corruption and Insouciance Is a Ramp for War 
The New York Times has acquired a new Judith Miller

Paul Craig Roberts

Libertarian ideology favors privatization. However, in practice privatization is usually very different in result than libertarian ideology postulates. Almost always, privatization becomes a way for well-connected private interests to loot both the public purse and the general welfare.

Most privatizations, such as those that have occurred in France and UK during the neoliberal era, and in Greece today and Ukraine tomorrow, are lootings of public assets by politically-connected private interests.
Another form of privatization is to turn traditional government functions, such as prison operation and many supply functions of the armed services, such as feeding the troops, over to private companies at a large increase in cost to the public. Essentially, the libertarian ideology is used to provide lucrative public contracts to a few favored persons who then reward the politicians. This is called “free enterprise.”

The privatization of prisons in the US is an example of the extraordinary cost and injustice of privatization. Privatization of prisons requires ever higher rates of incarceration in order to build profitability. The US, supposedly “a land of liberty” has by far the highest incarceration rates of all countries. The “free” US has not only the highest percentage of its population in prison but also the highest absolute number. “Authoritarian” China with four times the US population has fewer citizens in prison.

This article shows how well prison privatization works for well-connected private interests: http://www.globalresearch.ca/privatization-of-the-us-prison-system/5377824

It also shows the extraordinary shame, corruption, and discredit that prison privatization has brought to the US.

A few years ago I wrote about the conviction of two judges who were paid by privatized juvenile detention facilities to sentence kids to their facilities.

As Alain of Lille and later Karl Marx said, “Money is all.” In America money is all that is
important to the political system and to the bulk of the population. Essentially, America has no other values.

Another great libertarian fantasy is Wall Street. In the libertarian mythology Wall Street is the mother of entrepreneurs and of the start-up companies that blossom into industrial, manufacturing, and commercial giants. In actual fact, Wall Street is the mother of enormous corruption. As Nomi Prins shows in All The President’s Bankers, it has always been the case.

Recently, there has been a spate of Wall Street whistleblowers. Many are reported by Pam Martens on her site, Wall Street On Parade, http://wallstreetonparade.com/2014/04/insiders-tell-all-both-the-stock-market-and-the-sec-are-rigged/

Unlike libertarian ideologues, Prins and Martens are former Wall Street insiders and know what they are talking about.

All US financial markets are rigged for the benefit of a few. We have had the exposure of high frequency trading front-running buy and sell orders. We have had the exposure of the big banks rigging the LIBOR interest rate and the London gold price fix. We have had the exposure of the Federal Reserve rigging via its dependent bullion banks the price of gold in the futures market. We have had the exposure in Congressional hearings of the rigging of metal and commodity prices. The dollar’s exchange value is rigged. And so forth. Yet no heads have rolled. Recently a SEC prosecuting attorney, James Kidney, retired. Upon his retirement, he proclaimed that his cases against the criminal big banks have been suppressed by SEC higher ups who have their eyes fixed on big jobs with the banks they are protecting while in government service.

So there you have it. The United States government is so overwhelmingly corrupt that even the financial regulatory agencies have been corrupted by the money of the private capitalists they are supposed to regulate.

America the corrupted. That is what we have become.

Not even Vladimir Putin understands how totally corrupt and insensitive to humanity Washington is.

Putin’s response to the Ukraine crisis created by Washington’s coup in Kiev is to rely on
“Russia’s Western partners,” the UN, the Obama regime, John Kerry, etc., to work out a reasonable solution to the crisis.

Putin’s hope for a diplomatic solution is unrealistic. The NATO governments are bought-and-paid-for by Washington. For example, Germany is not a country. Germany is a mere piece of Washington’s empire. The German government will do as Washington says.The German government represents Washington’s agenda. The European governments to whom Putin is speaking are not listening.

Paul Wolfowitz, the neoconservative who as Deputy Secretary of Defense presided over the orchestration of the false evidence used by the Bush regime to launch Washington’s wars in the Middle East, declared the minimization of Russian power as the “first objective” of US foreign and military policy:

“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

What Wolfowitz means by “hostile power” is any power independent of Washington’s hegemony.

Washington overthrew the elected Ukraine government in order to orchestrate a crisis that would distract Russia from Washington’s adventures in Syria and Iran and in order to demonize Russia as an invader rebuilding an empire that is a danger to Europe. Washington will use this demonization in order to break-up growing economic relationships between Russia and Europe. The purpose of sanctions is not to punish Russia, but to break up economic relationships.

Washington’s strategy is audacious and brings risk of war. If the West had an independent media, Washington’s plan would fail. But instead of a media, the West has a Ministry of Propaganda. The New York Times has even found a replacement for Judith Miller. As you might have forgot or never known, Judith Miller was the New York Times reporter who filled the Times with Bush regime neoconservative lies about Iraqi weapons of mass destruction. Instead of examining and exposing the Bush regime’s false claims, the New York Times bolstered the regime’s case for war by using the newspaper’s credibility to advance the neoconservative war agenda.

The new Judith Miller is David M. Herszenhorn, with accomplices Andrew Roth, Noah Sneider, and Andrew Higgins. Herszenhorn dismisses the totality of Russian media accounts of events in Ukraine as “an extraordinary propaganda campaign” designed to hide the fact from the Russian population that the entire Ukraine crisis is the fault of the Russian government: “And so began another day of bluster and hyperbole, of the misinformation, exaggerations, conspiracy theories, overheated rhetoric and, occasionally, outright lies about the political crisis in Ukraine that have emanated from the highest echelons of the Kremlin and reverberated on state-controlled Russian television, hour after hour, day after day, week after week.” http://www.nytimes.com/2014/04/16/world/europe/russia-is-quick-to-bend-truth-about-ukraine.html?ref=davidmherszenhorn&_r=0

I have never read a more blatant piece of propaganda than Herszenhorn’s. He bases his report on two “authorities,” Lilia Shevtsova of the American-funded Carnegie Moscow Center, and Mark Galeotti, a NYU professor.

According to Herszenhorn, the widespread protests in eastern Ukraine are entirely the fault of the protesters who are putting on a show for propaganda purposes. The protests are not a response to words and deeds of the Washington-installed stooge government in Kiev. Herszenhorn dismisses reports of extreme nationalist neo-nazi Russophobia as “sinister claims” and regards the Washington-imposed unelected government in Kiev as legal. However, Herszenhorn regards governments formed as a result of referendums to be illegal unless approved by Washington.

If you place your faith in Herszenhorn, you will dismiss all reports such as those below as lies and propaganda:

http://rt.com/news/eu-no-russian-interference-ukraine-844/
http://news.antiwar.com/2014/04/15/poland-nato-must-ignore-russia-send-ground-troops/print/
http://news.antiwar.com/2014/04/15/eastern-offensive-ukraine-pounds-kramatorsk-killing-four/print/
http://news.antiwar.com/2014/04/15/white-house-endorses-ukraine-crackdown-on-protesters/
http://rt.com/news/ukrainian-tanks-kramatorsk-civilians-840/
http://www.globalresearch.ca/natos-pet-nazis-savage-ukrainian-presidential-candidate/5377948
http://rt.com/news/ukraine-troops-withdraw-slavyansk-940/

The Western World is the World of the Matrix protected by the Ministry of Propaganda. Western populations are removed from reality. They live in a world of propaganda and disinformation. The actual situation is far worse than the “Big Brother” reality described by George Orwell in his book, 1984.

The ideology known as neoconservatism, which has controlled US governments since Clinton’s second term, has the world set on a path to war and destruction. Instead of raising questions about this path, the Western media hurries the world down the path. Read what medical doctors report will be the result of the neoconservative Obama regime’s belief that nuclear war can be won: http://original.antiwar.com/lawrence-wittner/2014/04/14/your-doctors-are-worried/

The Chinese government has called for “de-americanizing the world.” The Russian legislature understands that being part of the dollar payments system is a Russian subsidy to American Imperialism. The Russian legislator, Mikhail Degtyaryov told Izvestia that “The dollar is evil. It is a dirty green paper stained with blood of hundreds of thousands of civilian citizens of Japan, Serbia, Afghanistan, Iraq, Syria, Libya, Korea and Vietnam.” http://rt.com/politics/russian-dollar-abandon-parliament-085/

However, Russian industry spokesmen, possibly on Washington’s payroll but likely just people without a clue, said that Russia was bound by contracts to the dollar system and that perhaps in 10 or 15 years Russia could take a more intelligent approach. That is assuming that Russia would still be capable of acting in its own interests after suffering 10 or 15 years more of US financial imperialism.


Every country that wishes to have an independent existence without living under Washington’s thumb should immediately depart the dollar payment system, which is a form of US control over other countries. That is the only purpose that the dollar system serves.

Many countries are afflicted by economists trained in the US in the neoliberal tradition. Their US education is a form of brainwashing that ensures that their advice renders their governments impotent against Washington’s imperialism.

Despite the obvious threats that Washington poses, many do not recognize the threats because of Washington’s pose as “the greatest democracy.” However, scholars looking for this democracy cannot find it in the US. The evidence is that the US is an oligarchy, not a democracy. http://www.globalresearch.ca/the-u-s-is-not-a-democracy-it-is-an-oligarchy/5377765

An oligarchy is a country that is run for private interests. These private interests–Wall Street, the military/security complex, oil and natural gas, and agribusiness–seek domination, a goal well served by the neoconservative ideology of US hegemony.

The American Oligarchs win even when they lose. Finally, Washington’s notorious torture prison, Abu Ghraib, has been closed. But not by Washington. The Iraqi city fell last week to “defeated” al-Qaeda. Remember, we won the war in Iraq. $3 trillion wasted, but that’s not the way the military/security complex sees it. The war was a great victory for profits. http://news.antiwar.com/2014/04/15/after-al-qaeda-expansion-iraqs-infamous-abu-ghraib-finally-closes/

How much longer will dumbshit americans fall for the flag-waving deception?

The Republicans used the wars in order to create huge budget deficits and national debt that are now being used to dismantle the social safety net, including Social Security and Medicare. There’s talk of privatizing Social Security and Medicare. More profits for Oligarchs in the offering. The gullibility of the American population is really without compare.

The gullibility of the American public will doom the world to extinction.

FCC Wants to Give Corporations Their Own Internet

And now the rights of corporate ownership officially supercede those of individual citizens. this isn't new, but the courts and the bureaucracy are going ahead and getting the big govt sellout locked in so we won't be able to repeal these inane conflicts of interest for a very long time or without extreme difficulty. Fuck corporate rule! Corporations aren't people. They should be dismantled every 20 years with the remaining holdings distributed among their workers, who may then apply for a brand new corporate charter, starting over from scratch every 20 years. It would help to prohibit the ridiculous amount of control a few corporate CEOs  and their executive boards have over our joke of a political process. Lobbying needs to be redefined with stricter limits, as well. And when you are interviewing for jobs in the public and private sector, you need to choose which one you'll stay in for 7 years. No more of this revolving door between regulating agencies and the industries/companies they regulate. It's all a huge shitsoaked conflict of interest that has destroyed a whole generation of workers, at least, and cannot provide any kind of future for the next generations of US citizens. The oligarchy must be destroyed by any means possible. Corporate leadership is far from patriotic: they hold the bulk of their fortunes in tax haven banks overseas to keep from paying taxes, drastically undercutting the federal budget during a crucial period in a failing economy 6 years deep in a "small d" depression, AND these traitors get to dictate policy and handpick their own candidates to do their bidding while holding office? Bullshit! Hang them all high! They betray everything sacred about this country and her consitution, all to make themselves richer at the expense of the nation and her people.

EAT THE RICH! and pile their bones up so high they reach the moon.--jef

++++++++++++++

The New Proposal Mocks Net Neutrality
by ALFREDO LOPEZ


When a federal court trashed its “net neutrality” compromise policy in January, the Federal Communications Commission assured us that the Internet we knew and depended on was safe. Most activists didn’t believe federal officials and this past week the FCC demonstrated how realistic our cynicism was.

The Commission announced last week that among its proposals on the Internet, due for full discussion on May 15, was one which would give access providers the right to sign special deals with content producers for connections that are faster and cleaner than the connections most websites use. It’s precisely the nightmare that court decision threatened.

In the predictable outcry and immediate debate over the FCC’s announcement, however, two major issues seemed to be lost.

To deliver this faster connection, the Internet giants will have to change the Net’s protocols, establishing a fast lane that completely destroys the technological basis of Internet neutrality. They will, effectively, be allowed to set up an alternate Internet.
At the same time, the announcements raise a question about the FCC’s role. To develop this proposal, it has obviously been talking to the very companies it is supposed to regulate and has written regulations based primarily on a concern about their ability to make lots of money.

Isn’t this the opposite of what federal regulation is supposed to do?

When the debate dust settles, it appears that not only may we lose the Internet as we know but we have no agency in government looking out for our interests.

The background has been covered on this website but, to recap:

Access (or service) providers offer connections to put you on the Internet and give you several speeds to choose from. They are mainly cable companies like Comcast and telecommunications companies like Verizon. Content providers use those connections to deliver what you want to see and read. Every website owner is a content provider, including biggies like Netflix.

Net Neutrality is the principle that service providers — like Verizon and Comcast — can’t discriminate in the delivery of content or provision of access based on user, content, site, platform, application, type of attached equipment, and modes of communication. If you go on-line, you can reach everything anyone else can. It was the law until this past January.

That was when a federal court struck down the provision finding that cable companies like Comcast weren’t subject to the neutrality rules that govern telephone companies and so net neutrality, based on the telecom industry’s practices, didn’t apply to high-speed providers. They are, after all, cable companies and anyone who subscribes to cable television with its multiple “programming packages” that give you a monthly dose of sticker shock knows there’s nothing “neutral” about cable.

In short, service provider companies can now charge content providers money to speed up their content delivery and the content providers can limit access to that faster content to people paying a higher price for it.

While the decision was based on cable company practice, it obviously benefits telecoms like Verizon who also offer high-speed service.

Apparently, the FCC wasn’t too unhappy either. Chairman Tom Wheeler (a former telecom industry lobbyist) reacted in stunningly triumphant terms, assuring us all that our access to the Internet will be completely protected. In fact, he said the ruling actually gives the FCC more regulatory power. This new proposal, carving out a slice of the Internet for rich corporations to operate more quickly and cleanly, was apparently what he meant.

In his defense of the current FCC plan, Wheeler explains that we would all still have access to everything on the Internet. The proposal, he explains, “will restore the concepts of net neutrality consistent with the court’s ruling in January.” But that January ruling threw Net Neutrality out the window and it’s clear that with this new proposal our access to certain content will be slower, more prone to start and stop “buffering” and less crisp than the faster connection unless we pay more for it.

It’s like the locksmith assuring us that our broken door lock will remain broken.

If that spasm of regulatory double-speak doesn’t provoke a groan, the argument by decision defenders will: they say that, while the companies will pay for the faster connection, no access provider will charge the consumer more for it.

But the content provider will. Obviously an outfit like Netflix is not going to offer this higher speed service that it is paying the access providers handsomely for to customers without charging them more for it. In fact, if past practice is any indication, even those of us who don’t or can’t pay for faster internet service we will all see our fees for watching this kind of on-line content rise, whether we’re watching it on the faster connection or not. Netflix pays Comcast more and charges the pass-along costs (with some profit mixed in): just the kind of hustle Net Neutrality was invented to prevent.

If the proposal is approved, as is expected, Net Neutrality will be buried. But the true threat to the Internet’s existence isn’t only the “pay for speed” proposal. To make this happen, providing companies will have to restructure their technology to allow for a faster “lane” on the Internet. There already are, of course, various speeds of “high-speed” service and that is maintained by the company’s determining which connecting server the customer is going to access. When you enter the Internet you are immediately connected to a server that handles outgoing and incoming traffic at a specific speed. If you pay for higher speeds, you get the higher-speed systems with their servers.

All of this, however, has up to now been handled at the user or customer level. The Internet itself remains the same. What the FCC is proposing is a new way of regulating speed. Now it is the content provider who is assigned a specific speed lane and any user who pays can access that high-speed content. To make this possible, the access provider will have to establish not a higher speed connection server but a completely separate connection to the Internet. This isn’t a faster lane on the highway; it’s a completely separate highway.

With that “alternate Internet” established, and with a small empire of developers continuously improving it, the power of providers to control all Internet content is now in place. They can start with Netflix, but they legally have power to channel any Internet content over that super-highway, leaving most content providers in the dust. That will certain include most websites your visit, including this one. As speed over the Internet improves with new technological development, guess where most of the development investment is going? As new streaming technology improves, content developers will have to pay to take advantage of it and most of us just don’t have that kind of money.

The impact is also international because the Internet has no national boundaries and the rules governing any U.S. based company apply to all its activities world-wide unless the government of a specific country objects. That objection will rarely happen because most governments won’t care or will take a pay-off (in the form of a tax payment or licensing fee) to shut up. In fact, governments all over the world can now treat this as another form of revenue.

This kind of corporate control over the Internet and our communications is frightening and control is what the corporations are seeking. It’s been the goal of every major company to control as much access as they can, growing their “user-base” and profits in the process. In fact, the prospect of a wide open internet has now attracted a couple of “data giants”: Google and Facebook. Each company is now developing technology to provide access to everyone on earth using signal bouncing balloons (in Google’s case) and drones and satellites (in Facebook’s). While both companies protest that their intentions are altruistic (providing Internet to all humans), the timing of their plans in light of this decision seem like the good old pursuit of profit.

Rhe main question isn’t whether these people will try to do this because that’s answered by their history: Of course they will. The question then is: What is the FCC doing about it?

This week, coalitions of Internet freedom activists were making plans to make their presentations before the FCC and to lobby Congress and to do letter-writing campaigns to just about any concerned person in government. All of this has proven to be important and useful work and it has ended in some successes in the past.

But why should any of us have to do this? Isn’t the very role of the FCC to protect and represent the public? While neo-con steroids that have been driving it for the last two decades, the FCC’s legal responsibilities remain the same: not to protect the interests of corporations but to protect our interests against corporations.

Clearly, with a proposal that represents corporate interests, the FCC isn’t doing any such thing. Some of us aren’t surprised; none of us should be.

Princeton Concludes What Kind of Government America Really Has, and It's Not a Democracy

By Tom McKay April 16, 2014 


The news: A new scientific study from Princeton researchers Martin Gilens and Benjamin I. Page has finally put some science behind the recently popular argument that the United States isn't a democracy any more. And they've found that in fact, America is basically an oligarchy.

An oligarchy is a system where power is effectively wielded by a small number of individuals defined by their status called oligarchs. Members of the oligarchy are the rich, the well connected and the politically powerful, as well as particularly well placed individuals in institutions like banking and finance or the military.
For their study, Gilens and Page compiled data from roughly 1,800 different policy initiatives in the years between 1981 and 2002. They then compared those policy changes with the expressed opinion of the United State public. Comparing the preferences of the average American at the 50th percentile of income to what those Americans at the 90th percentile preferred, as well as the opinions of major lobbying or business groups, the researchers found out that the government followed the directives set forth by the latter two much more often.

It's beyond alarming. As Gilens and Page write, "the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy." In other words, their statistics say your opinion literally does not matter.

That might explain why mandatory background checks on gun sales supported by 83% to 91% of Americans aren't in place, or why Congress has taken no action on greenhouse gas emissions even when such legislation is supported by the vast majority of citizens.

This problem has been steadily escalating for four decades. While there are some limitations to their data set, economists Thomas Piketty and Emmanuel Saez constructed income statistics based on IRS data that go back to 1913. They found that the gap between the ultra-wealthy and the rest of us is much bigger than you would think, as mapped by these graphs from the Center On Budget and Policy Priorities:

Piketty and Saez also calculated that as of September 2013 the top 1% of earners had captured 95% of all income gains since the Great Recession ended. The other 99% saw a net 12% drop to their income. So not only is oligarchy making the rich richer, it's driving policy that's made everyone else poorer.

What kind of oligarchy? As Gawker's Hamilton Nolan explains, Gilens and Page's findings provide support for two theories of governance: economic elite domination and biased pluralism. The first is pretty straightforward and states that the ultra-wealthy wield all the power in a given system, though some argue that this system still allows elites in corporations and the government to become powerful as well. Here, power does not necessarily derive from wealth, but those in power almost invariably come from the upper class. Biased pluralism on the other hand argues that the entire system is a mess and interest groups ruled by elites are fighting for dominance of the political process. Also, because of their vast wealth of resources, interest groups of large business tend to dominate a lot of the discourse. America, the findings indicate, tends towards either of these much more than anything close to what we call "democracy."

In either case, the result is the same: Big corporations, the ultra-wealthy and special interests with a lot of money and power essentially make all of the decisions. Citizens wield little to no political power. America, the findings indicate, tends towards either of these much more than anything close to what we call "democracy" — systems such as majoritarian electoral democracy or majoritarian pluralism, under which the policy choices pursued by the government would reflect the opinions of the governed.

Nothing new: And no, this isn't a problem that's the result of any recent Supreme Court cases — at least certainly not the likes FEC v. Citizens United or FEC v. McCutcheon. The data is pretty clear that America has been sliding steadily into oligarchy for decades, mirrored in both the substantive effect on policy and in the distribution of wealth throughout the U.S. But cases like those might indicate the process is accelerating.

"Perhaps economic elites and interest group leaders enjoy greater policy expertise than the average citizen does," Gilens and Page write. "Perhaps they know better which policies will benefit everyone, and perhaps they seek the common good, rather than selfish ends, when deciding which policies to support.

"But we tend to doubt it."

How We Can Fight Back Against the Supreme Court

Cenk Uygur  

Huffington Post
Host, 'The Young Turks'

04/04/2014

Let me start by quoting two great men and a crook that died the other day.

"The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite." -- Thomas Jefferson

When asked if his payments to politicians had worked,  

Charles Keating replied, "I want to say in the most forceful way I can: I certainly hope so."

When asked outside of Independence Hall if we have a republic or a monarchy, Benjamin Franklin replied, "A republic, if you can keep it."

Well, here we are, aren't we? Right at the point where we are about to find out whether we can keep it or not. The Supreme Court has decided that a small amount of people will get to control our entire political system. Which politician or political party can resist hundreds of millions of dollars put in at once? Maybe one person can resist, maybe one party can resist for a small period of time, but eventually they will succumb.

In Congressional races, 95 percent of the time the person with more money wins. It doesn't matter if they are a Republican or Democrat, conservative or liberal. It doesn't matter what their ideas are or what their ideology is. It doesn't matter what they think at all. You have more money and you will win 19 out of 20 times.

Justice Anthony Kennedy destroyed our republic. We knew Alito, Scalia, Roberts and Thomas were corporate robots. We knew they were going to say disingenuously that corporations or billionaires pouring in millions into our politicians' pockets wouldn't lead to corruption. What an unbelievable joke. But it turns out that Kennedy was the biggest joke of all. He claims that millions in campaign donations won't even result in the appearance of corruption. Can anyone with a shred of intelligence honestly believe that?

So, it was nice while it lasted. Democracy at the national level is dead now. We have replaced it with an open auction. This will not at some future date lead to a worst case scenario. We're already living in that scenario.

You don't have to worry about the top 1 percent. Now, the 0.00024 percent of the country who donate over a $100,000 to politicians will rule us all. Because even the federal limit of $123,200 per election cycle has now been eliminated by the McCutcheon decision. They can now spend unlimited money "contributing" to our politicians.

So, how do we escape this worst case scenario? Congress is corrupt and the Supreme Court is even worse. Luckily, there is one thing above them -- the constitution. Every generation of Americans has amended the constitution so that we may have a more perfect union. Except one. Us.

We must get money out of politics. We must amend.

At The Young Turks, we already knew how bad the situation was because every political story we covered had the same exact answer -- find which side has more money and you'll know who is going to win. So, I founded Wolf PAC, which has only one, unstoppable mission -- amend the constitution to get the corrupting influence of money out of politics. We're not interested in awareness -- we're already quite aware of how screwed we are. We're not interested in consciousness raising or being a respected institution inside Washington, DC. We're interested in results!

I didn't pick the name Wolf PAC by accident. I picked it so we could be super aggressive. I don't want to negotiate with the power brokers in Washington; I want to tear them down. The lobbyists, the special interests, the donors and the politicians who cater to them are what's wrong with our country. They robbed us of our representative government. It's time we stood up and took it back. Let's over turn their apple cart.

Our founding fathers were geniuses. They put a certain provision in the constitution because they knew that a day like this would come. We have never had to use it yet. But we have threatened it many times and that threat has been incredibly effective just as many times. The clause is Article V of the constitution and it says that you don't necessarily need 2/3 of Congress to propose an amendment. You can have 2/3 of the states circumvent a corrupted Washington and propose a convention to get the same amendment. You don't need Washington at all. 34 states propose a convention for this specific issue. 38 states ratify that amendment. And we have our democracy back.

Now, this is the point in the movie when you say -- but that's impossible. The suffragist movement got women the right to vote when they couldn't vote in the first place. Now, that was impossible. And they still got it done.

In fact, four out of the last ten amendments were proposed by Congress because of the threat of an imminent convention. We can make these guys bend to our will. They're not supposed to be the boss of us. We are supposed to live in a democracy where we control our own fate. We are supposed to be the home of liberty. And we can be that again.

Let me tell you what we've done so far without anyone noticing. We have introduced a resolution calling for this convention in ten states and have over 100 state legislators sponsoring and supporting these resolutions all across the country. We have an army of 13,000 volunteers. We are legion and we are coming.

Tell me again what isn't possible.

We were told in Vermont that we had a zero percent chance of getting this resolution passed in the state Senate. That was a week before we got it passed 28-2. How did we turn the impossible into the inevitable? How did we get true bipartisanship on this issue? Well, we have over 90 percent of the American people on our side. Republicans, Democrats, libertarians and independents all agree on only one thing -- our national politicians are bought. When the bills are introduced we get a natural avalanche of support. At the state level, an army of citizens turn out to be hard to resist.

In one of the states where we had success, our volunteers got a politician to do something he didn't want to do. The pressure of angry, concerned citizens clearly switched his position. One of those volunteers wrote me an email afterward and said, "It feels so good to get the power back."

We have gone for so long without being able to affect the course of our government, we have gone so long feeling powerless that we have forgotten what our birthright is. We are born free men and women in this country. If we rise up together, we can be that again.

Join us. Join the fight. Get up, let's get them back!

A simple "Financial Transaction Tax" could fund opportunities for all

America isn't broke. There's plenty of money to build an economy worthy of our ideals and can-do spirit

Jim Hightower

Several pro football franchises have chosen chest-pounding team names meant to symbolize how big, powerful, ferocious, and scary they are--names like the Bears, Panthers, Ravens, and Lions. But, come on, such animalistic monikers are no longer intimidating in our modern world, so I suggest that teams upgrade to names that really would spark terror in the hearts of opponents: "Big Oil Frackers," for example, or "Monsanto Genetic Mutators," "Walmart Middle-Class Crushers," "Big Pharma Price Gougers," and "Wall Street Banksters."

Such corporate predators rule today's economic and political jungle, and a hail storm of statistics confirms the vast and long-term damage they're wreaking on the poor and middle class, our environment, democratic rights, and sense of justice.

Behind those stats, though, are living, breathing, striving humans--an entire nation of real people being knocked down and shut out, unable to realize the aspirations they have for themselves, their families, communities, culture, and country. The elites--to their eternal shame-- literally are stifling the enormous possibilities of America's grassroots people. That's why the public's approval rating of today's aloof Powers That Be is now (as a friend recently told me) "two digits lower than poisonous snakes."

 

Public anger at the raw selfishness of those ruling our economic and political systems is so severe that even Lloyd Blankfein flinched. The $21-million-a-year chief bankster at Goldman Sachs, Blankfein has presided over the bank's multiple acts of fraud against its own customers, grabbed a taxpayer bailout of $12.9 billion in 2008, lobbied furiously against legislation to restrain Wall Street's reckless greed (including especially fierce opposition to proposals for opposition to proposals for restricting CEO pay)--and then declared: "I'm doing God's work."

Last year, however, finally recognizing how despised they are by their fellow Americans, Blankfein and Gang felt an urgent need for an image makeover. Thus came a splashy PR push through the Goldman Sachs Foundation to portray themselves as-- Ta-Da! --"Magnanimous Philanthropists." Their foundation suddenly became America's fourth largest corporate charity, making $241 million in donations in 2012. Impressive, no?

No. That might sound like a big number, but it's a pittance in the pot for this giant, with revenue topping $34 billion last year--and profits of $7.48 billion. That means the bank's ballyhooed beneficence pans out to merely seven-tenths of one percent of its income. Pathetic. America's poor people put these gold sackers to shame, regularly donating an average of 3.2 percent of their meager incomes to charity--nearly five times more generous than the multimillionaire bankers.

Rich folks got your money with politics. You can get it back with politics.
----Woody Guthrie

Goldman's PR shtick (dubbed "reputation redemption" by the New York Times) is a sad replay of a gambit tried by the robber baron of old, John D. Rockefeller. In his later years, the billionaire tycoon carried a pocketful of dimes with him whenever he stepped out for a stroll. Along the way, he would occasionally stop someone walking by--especially if a child was with them--and he would dip into his stash and dole out a shiny dime. Newsreels of the day often showed the richest man in the world handing dimes to children, as if this public show might buff up his sour image.

But, worse, Goldman's slick executives are not even donating their own dimes! Rather than reaching into their own pockets, they're doling out their shareholders' money. Worse yet, it's also our money. By ours, I mean that Goldman's so-called "gifts" are deducted from the income taxes the bank owes, thus, shorting America's public treasury of funds that We The People need for schools, roads, clean water, and other public essentials.

MESSAGE TO WALL STREET: We don't want your hokey "charity." What we want is an end to your destructive greed, and we want an honest, restructured, decentralized banking system focused on the common good. Oh, and one more thing: We want our government back.

Re-fund America

The powerhouses of Wall Street have tunneled directly into the cloistered backrooms of Washington deal making, extracting trillions of dollars worth of government bailouts, special tax breaks, and regulatory favors every year. Yet, in a stupefying act of hypocrisy, they have also been the major force pushing policymakers to embrace extreme laissez-faire bunkum and to inflict the most austere budgetary minginess on the American people.

Through their lobbyists, front groups, economic shills, media hacks, and the politicians they've purchased, these pampered princes of high finance have gained a stranglehold on policy, choking off the public investment that our country desperately needs. In a nonstop drone, their operatives chant: "America is broke. Fiscal doom looms. Government spending is the cause. Austerity policies are our only hope."

And Washington is buying this snake oil. As we've seen, food stamp funding was stripped from the farm bill; benefits for the long-term unemployed are being allowed to expire; job training programs are being cut; Republicans are frantically trying to derail and defund Obamacare to keep millions of uninsured Americans from getting health coverage; and even Obama has said he's open to cuts in Social Security and Medicare.

Seeing all of this, George Will, the GOP's high priest of the plutocratic order, is exultant. In an October Fox News appearance, he declared victory for the laissez-fairyites, noting that they have taken control of Washington's conversation on public spending: "We are now talking entirely on Republican terms, in Republican vocabulary. No taxes, how much is the spending going to be cut? The federal workforce is being cut...."

No doubt the debate in Will's tiny circle is focused entirely on shrinking America into its dark vision of parsimonious plutocracy. But I find that most people, living way outside George's bubble of elites, have a far bigger vision of what America can be, and they're engaged in a less constipated conversation about ways to meet our country's budgetary needs.

If you review opinion polls, hear the results of door-to-door outreach campaigns, or just have a few real conversations at various chat & chew cafes, you'll tap into ordinary people's simmering anger at the Wall Street/Washington axis that's dictating a harsh normal of economic inequality, declining opportunity, and diminished democratic control. The elites are constantly monkeywrenching the public's ability to act together, thus limiting our nation's possibilities and causing America's present drift from world leader to mediocrity.

This goes against the very essence of America, from our egalitarian ideals to our can-do spirit. We must create a politics that directly confronts the narcissistic nabobs who're knocking down our people and our country--and rally an increasingly restive workaday majority to come together in an expansive, aggressive effort to Re-fund America. For example:

• In the richest country in the history of the world, the USA ought to have the TOP public education system, not one of the worst among wealthy nations.
• Forget dismantling Obamacare. Improve it to Medicare-for-all.
• Let's re-establish our technological supremacy, from building the green economy of the future to reaching boldly again into outer space.
• Our priceless system of public parks should be flourishing and expanding, not firing park rangers and locking entry gates.
• Rather than succumbing to a bleak future of low-wage, part-time, temporary, no-security jobs, let's publicly invest in full employment, world-class skills, and technology that works for workers.
• Restore democratic power with public financing of all election campaigns, enact labor law reforms so workers themselves can democratize the workplace, and encourage the development of co-ops as an alternative to corporate control of the economy.

That's an America that is worthy of us--a society of historic democratic vision, genuine opportunity for all, and a shared prosperity. Most people would feel good about bringing children into that world.

"Maybe so," snort the naysayers, "but where are you gonna get the money to pay for it?" Actually, the answer to that is obvious: Get it from where it went.

Follow Willie Sutton

Willie was the 20th Century outlaw who explained that he robbed banks because "That's where the money is." Today, though, bankers are the robbers. During the past 15 years or so, they've pulled off an unprecedented, mindboggling heist in broad daylight. They've stolen the bulk of our country's investment money, pilfered billions of dollars from consumers and small borrowers through fraud, snatched billions more through taxpayer subsidies and bailouts, and quietly siphoned additional trillions out of the Federal Reserve.

Astonishingly, they even stole Wall Street, a place that was lined not so long ago with respectable and cautious investment houses. Those financial firms performed an important and straightforward job: Making capital available to manufacturers, entrepreneurs, supermarkets, health facilities, and all sorts of other enterprises that produce goods or provide services. No more. They've been converted into global casinos that churn trillions of dollars through an ever-changing assortment of exotic, indecipherable gaming devices with gibberish names like "Synthetic Collateralized Debt Obligations."

These are not "investments." They are nothing but bets between the banks that invent the games and the very wealthy gamers who play them--bets that are riskier, less substantial, and much larger than even Vegas allows. They do not create anything for the real economy--i.e., making or doing something of actual, measurable value, something that advances the wider economy or benefits the general public.

The economic term for this activity is "market froth"--as in airy, insubstantial, and worthless. Today's chief players in this casino are called High Frequency Traders (HFTs), and they bring a manic, financially destabilizing nature to any stock, commodity, currency, or other market they enter. This is because they're not investing in a business, but rapidly scanning huge arrays of market prices, looking for, say, the momentary price of an obscure stock that they think could change this week, tomorrow morning, or even in the next minute. Then they buy a mass of that stock or commodity, and if the price changes as they suppose it will, they instantly sell it and cash in. The price might fluctuate by only pennies or fractions of pennies, but they've bet in such volume that they can make a killing on it, and then move on to the next target.

These sweeping, purely speculative financial transactions have been made possible by huge leaps in technology. It's all done by superfast computers controlled--not by humans--but by artificial intelligence that uses mathematical algorithms to search millions of prices at lightning speeds and place the bets automatically. Transaction times are measured in milliseconds. Essentially, this is a global network of "trading robots" that never sleep and whose sole function is to allow the wealthiest speculators to skim quick profits out of our markets--and also empower them to manipulate everything from stock prices to oil prices.

Yes, this is socially useless, predatory, dangerous, and ridiculous. Charlie Munger, a top investment associate of billionaire financial maestro Warren Buffett, says that high frequency traders "have all the social utility of a bunch of rats admitted to a granary."

Yet, the rats now rule. HFT is what "the market" has become. The sheer volume of stock transactions on just the two largest US exchanges (the New York Stock Exchange and the NASDAQ) is stratospheric: there are now more than 400 billion buy-or-sell trades made during the year. HFTs account for about 70 percent of that total, and the amount of money they cast into their high-speed gambles adds up to trillions of dollars a year.

An FTT on HFT

When I buy a $3 pack of toilet paper here in Austin, Texas, I pay an extra 8.25 percent in sales tax. If I buy a cuppa jo, book, bicycle, or blue jeans--same thing.

But if a high-roller in the HFT game buys $10 million worth of corporate stock, $10 million worth of oil futures, and $10 million worth of a Goldman Sachs package of derivatives--he or she pays zero tax on the sales.

First, it's a rank injustice that even the poorest among us are taxed on their purchases while millionaire Wall Streeters who make high-speed computerized purchases skate through this gaping loophole. Second, the profiteering churners and reckless speculators wrecked the country's economy, and they've never paid for the mess they made for so many millions of families that consequently lost jobs, homes, income, and hope. Third, this is a BIG idea that will let our society do big things again. Plugging this loophole with even a small sales tax on purchases by high frequency traders will generate the money America needs to do what needs to be done.

A Financial Transaction Tax. An FTT is not an idea whose time has come, but simply returned. From 1914 to 1966, our country taxed all sales and transfers of stock. The tax was doubled in the last year of Herbert Hoover's presidency to help us recover from the Great Depression. Today, 40 countries have FTTs, including the seven with the fastest-growing stock exchanges in the world. Seven members of the European Union (including Germany and France) voted for a financial transaction tax to help blunt rising poverty, restore services, and put people back to work.

This is no soak-the-rich-idea. Rather than asking the Wall Street crowd to join us in paying a six to 12 percent sales tax, the major FTT proposal gaining support in the US calls for a 0.5 percent assessment on stock transactions. That's 50 cents on a $100 stock buy, versus the $8.25 I would pay for a hundred-dollar bicycle.

Even at this miniscule rate, the huge volume of high speed trades means an FTT would net about $300-350 billion a year for our public treasury. Plus, it's a very progressive tax. Half of our country's stock is owned by the 1 percenters, and only a small number of them are in the HFT game. Ordinary folks who have small stakes in the markets, including those in mutual and pension funds, are called "buy-and-hold" investors--they only do trades every few months or years, not daily or hourly or even by the second, and they'll not be harmed. Rather it's the computerized churners of frothy speculation who will pony up the bulk of revenue from such a transaction tax.

An FTT is a straightforward, uncomplicated way for us to get a substantial chunk of our money back from high finance thieves, and we should make a concerted effort to put the idea on the front burner in 2014 and turn up the heat. Not only do its benefits merit the fight, but the fight itself would be politically popular. One clue to its political potential is that the mere mention of FTT to a Wall Street banker will evoke a shriek so shrill that the Mars rover hears it. That's because they know that this proposal would make them defend the indefensible: Themselves.

First, the sheer scope of Wall Street's self-serving casino business model would be exposed for all to see. Second, they would have to admit that they're increasingly dependent on (and, therefore, making our economy dependent on) the stark-raving insanity of robotic high frequency speculation. Third, it'll be completely ridiculous for them to argue that protecting the multi-trillion-dollar bets of rich market gamblers from this tax is more important than meeting our people's growing backlog of real needs.

Unsurprisingly, then, Koch-funded operatives and other defenders of privilege are rushing out articles that amount to Wall Street blah-blah-blah: "FTT would hurt poor pensioners, farmers, long-term investors, job creation, liquidity... and blah, blah, blah." Note that there's nary a mention of who'll really be pinged: Wall Street's gamblers and thieves. After all, to concede that they'll be hurt, even a little, would elicit a coast-to-coast shout of, "Yes!"

The campaign is on

The Financial Transaction Tax idea is blessed with broad support, ranging from Bill Gates to Occupy Wall Street to the Vatican, and it's been embraced by dozens of major economists, including Nobel laureates Joseph Stiglitz and Paul Krugman. But this fight will be won at the ground level of good politics, and that's well underway. Many grassroots groups and several progressives in Congress have already forged solid coalitions and are going to the country-side with a growing campaign to make Wall Street pay.

A major push is being made under the banner of the "Robin Hood Tax," led by National Nurses United, National People's Action, Health GAP, and Progressive Democrats of America. They and some 150 other organizations are backing the IPA. (This IPA is not a beer, though I suggest the organizers brew one to help popularize, cheer, and lubricate the cause.) It's the Inclusive Prosperity Act, a proposal by Rep. Keith Ellison and others for an FTT. Sen. Tom Harkin and Rep. Peter DeFazio have another version with a more modest tax rate.

This campaign offers a remarkable democratic opening. It widens America's public policy debate from the plutocrats' tired, narrow-minded mantra of defeat: "We're broke. Big undertakings are beyond us. Shrink all expectations for yourselves, your children, and your country's future." Instead, a new conversation can begin, saying: "Look under that rock. There's the money we need to invest in people. Let's get America moving again!"

A sales tax on speculators can deliver tangibles that people need but Wall Street says we can't afford--infrastructure, Social Security, education, good jobs, etc. Just as important, it can deliver intangibles that our nation needs but Wall Street tries to ignore--fairness, social cohesion, equal opportunity, etc. It's a holiday gift card for America's future--a gift that literally would keep on giving.