Winning the Class War - Part III - Unions

The benefits from union membership to society are clear, and yet the Republicans and some conservative Democrats try to blame unions for everything, as though wanting health care, decent pay that shows respect for the worker, and the ability to put some money aside for your children's education and your own retirement, are not normal and worthy goals.

The "right-to-work" law in Virginia is an example: look at the states that have no laws taking the benefits of organizing away from worker, most are the "Blue" states and they (until the recent Wall Street caused recession) were doing very well. California, New York, Connecticut, and Maryland are examples of Blue states that not only have wages higher than(say) Virginia, Texas, Louisiana, and Georgia, they also pay the taxes needed to keep afloat many Red sates like Alaska, North and South Dakota, South Carolina, Georgia, and Florida. If you are looking for the states needing, and demanding, the most in public benefits, you are looking for right-to-work states. There may be another reason why Alaska needs $2 in public spending while it generates $1 federal taxes, but if they can't stand on their own two feet, why are they lecturing the rest of us? When you talk about cutting taxes and spending, remember that Virginia gets $1.50 in federal jobs, mostly in the Northern Virginia and the Tidewater regions, for every $1 we pay in federal taxes. Cutting $1 in taxes will cut atl least $1 in spending right here, and perhaps a lot more. After all, Alaska is not going to give up $2 for every dollar they pay in lower taxes, and they have two senators, just like we do. The only states that might really benefit are the Blue states; they would like to see less of their money going to states that expect the government to keep them afloat.

And it is not just union states: Germany has strong labor unions that set most of the wage scales and working conditions in the county, they have full national health at a cost that would save close to $1 trillion if it was standard in the USA, at least four weeks of annual leave, by law, and U.S. has recently had to ask the German government to buy more from the U.S.A.; the Germans can do with union workers, what U.S. employers can not do with labor they refuse to even pay a living wage to; Germany has strong exports to the USA, China, and the EU. It is not for union workers to slow down, it is for the USA to catch up.

CEOs may find unions annoying, it is always easier to please just the few who are very rich, but nations with a strong union presence give voice the people, which is what a democracy is supposed to be about, not just voice to those who can afford the most ads on television. When labor has voice, things get better for everyone. The United States is behind most industrial nations in many significant areas, and two that are of interest to every family are infant mortality and life expectancy.

Infant Mortality: According to the CIA World Fact Book, the the USA has 6.14 infant deaths for every 1,000 births. is much worse than Sweden (2.74), Iceland (3.21), France (3.31), Spain (3.42), NOrway (3.55), Germany (3.95), Switzerland (4.12), Netherlands (4.66), Taiwan (5.26), and Cuba (5.72) (not all countries are reported here)

Life Expectancy: The USA ranks 49th, behind Japan, Australia, Canada, France, Sweden, Switzerland, Netherlands, Luxembourg, Germany, Belgium, Finland, South Korea, Puerto Rico, Denmark.

The Republicans in congress, and some Democrats, blame union teachers for not doing a better job of educating this nation's children, but neither the congress nor the parents are able to tell this nation's young people that a high school education leads to job with respect and dignity, paying a living wage, or a chance to go to college, and get an even better job.

Let's blame the union teachers for not preparing students when the congress can show that if the students are properly prepared, the result is a reasonable share of the products and services they produce; respect and a living wage.

Winning the Class War - Part II

The War Against Wages
By PAUL KRUGMAN
Published: 6 October 2006

"... after-tax corporate profits have more than doubled, because workers’ productivity is up, but their wages aren’t — and because companies have dealt with rising health insurance premiums by denying insurance to ever more workers.

"If you want to see how the war against wages is being fought, and what it’s doing to working Americans and their families, consider the latest news from Wal-Mart. an internal Wal-Mart memo conceded that 46 percent of its workers’ children were either on Medicaid or lacked health insurance. Nonetheless, the memo expressed concern that wages and benefits were rising, in part “because we pay an associate more in salary and benefits as his or her tenure increases.”

"The problem from the company’s point of view, then, is that its workers are too loyal; it wants cheap labor that doesn’t hang around too long, but not enough workers quit before acquiring the right to higher wages and benefits. Among the policy changes the memo suggested to deal with this problem was a shift to hiring more part-time workers, which “will lower Wal-Mart’s health care enrollment.”

"And the strategy is being put into effect. “Investment analysts and store managers,” reports The New York Times, “say Wal-Mart executives have told them the company wants to transform its work force to 40 percent part-time from 20 percent.” Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won’t get raises. And the company is taking other steps to keep workers from staying too long: in some stores, according to workers, “managers have suddenly barred older employees with back or leg problems from sitting on stools.”
Read full article.

One might think that all the stores could remain competitive by being just as mean (cheap) as Wal-Mart, and that way they could survive, but anyone thinking that be willing to see all workers removed from the class of people that buy things (low wages may mean food, but not rent) and they would need "safety net" services like food stamps, medical care at the emergency room (suggested by president George W. Bush), and HUD housing; lots of services when they are paying almost no taxes. So if everyone socializes all their labor costs, there are no taxes to pay those costs. The second reason that low wages all around will not work is that a manger who is making a living wage can tell a worker that the "company" can not afford to pay a wage that respects his/her work, but mom and pop operations actually have to see and work with the people that they are denying a living wage, and being decent people, they can not be as rude as Wal-Mart,so they pay a bit more, and, in the fullness of time, are pushed over a cliff by the Wal-Marts of the world.

Krugman covers this in his blog, if Wal-Mart pays 40% of its workers minimum wage, and another company pays (just) 15% of its workers the minimum wage, Wal-Mart will have lower labor costs (even if the cost to the taxpayer is much higher) and Wall-Mart wins, pays less in taxes and then benefits have to be cut. It is a win-win for Wal-Mart and lose-lose for those in this country who do not want to see us turn into another India with a huge untouchable class.

Winning the Class War - Part I

Catherine Rampell reports in the New York Times (23 November 2010), "The nation’s workers may be struggling, but American companies just had their best quarter ever...American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago...As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output." (note that the aggregate profit for just six months is as large as the stimulus bill which is spread over three years).

Also in the news, "Real estate agents say Wall Street executives have already begun lining up rentals in the Hamptons for next summer. Dolly Lenz of Prudential Douglas Elliman said the bidding this year was “hotter and heavier” than previous years. “There is a passion now in the market I haven’t seen in a while,” she said.

"She said her clients, almost exclusively from Wall Street, were afraid to lose out. Just recently, Ms. Lenz said, she had three people bidding more than $400,000 for a summer rental in Southampton."

In order to help their bottom line, CEOs have been cutting positions and wages, while corporate profits set records. Bonuses for CEOs are up, as are dividends to stock holders. It is mainly the workers who feel the pain.

Sharron:"It's a daily struggle at this point not to be paralyzed by despair. I am 46, college-educated with excellent references and great skills. I've been told many times I have a great resume. I don't want to be on unemployment. I want a job, but don't even get any interviews."
Read More at True Majority

Full Article Winning the Class War"

By BOB HERBERT

The class war that no one wants to talk about continues unabated.

Even as millions of out-of-work and otherwise struggling Americans are tightening their belts for the holidays, the nation’s elite are lacing up their dancing shoes and partying like royalty as the millions and billions keep rolling in.

Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street who are at the heart of the American aristocracy. They have waged economic warfare against everybody else and are winning big time.

The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. As The Times reported this week, U.S. firms earned profits at an annual rate of $1.659 trillion in the third quarter — the highest total since the government began keeping track more than six decades ago.

The corporate fat cats are becoming alarmingly rotund. Their profits have surged over the past seven quarters at a pace that is among the fastest ever seen, and they can barely contain their glee. On the same day that The Times ran its article about the third-quarter surge in profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.”

Anyone who thinks there is something beneficial in this vast disconnect between the fortunes of the American elite and those of the struggling masses is just silly. It’s not even good for the elite.

There is no way to bring America’s consumer economy back to robust health if unemployment is chronically high, wages remain stagnant and the jobs that are created are poor ones. Without ordinary Americans spending their earnings from good jobs, any hope of a meaningful, long-term recovery is doomed.
More

Update 27 November

The New York Times November 27, 2010 (Full Editorial)
The Unemployed Held Hostage, Again

It is hard to believe, as the holidays approach yet again amid economic hard times, but Congress looks as if it may let federal unemployment benefits lapse for the fourth time this year.

Lame duck lawmakers will have only one day when they return to work on Monday to renew the expiring benefits. If they don’t, two million people will be cut off in December alone. This lack of regard for working Americans is shocking. Last summer, benefits were blocked for 51 days, as senators in both parties focused on preserving tax breaks for wealthy money managers and other affluent constituents.

This time, tax cuts for the rich are bound to drive and distort the debate again. Republicans and Democrats will almost certainly link the renewal of jobless benefits to an extension of the high-end Bush-era tax cuts. That would be a travesty. There is no good argument for letting jobless benefits expire, or for extending those cuts.

The recession that began in 2007 has led to the worst unemployment in nearly 30 years. We have record levels of long-term unemployment. The jobless rate, 9.6 percent, has been essentially unchanged since May, and nearly 42 percent of the 14.8 million jobless workers have been sidelined for six months or more.

Some opponents of unemployment benefits — mostly Republicans but a few Democrats as well — would have you believe those figures are evidence of laziness, enabled by generous benefits. They conveniently ignore three facts. One, there are five unemployed people for every job opening — a profound scarcity of jobs. Two, federal benefits average $290 a week, about half of what the typical family spends on basics and hardly enough to dissuade someone from working. Three, as unemployment has deepened, benefits have become less generous. Earlier this year, lawmakers ended a subsidy to help unemployed workers pay for health insurance and dropped an extra $25 a week that had been added to benefits by last year’s stimulus law. More

Data Sources (thanks to economist Paul Krugman)

You can get corporate profits from the Bureau of Economic Analysis. I compared 1st quarter 2000, the time of the Dow’s previous peak, with 2nd quarter 2006, the most recent available. Data is here, line 15.

A good summary graph on productivity and wages, from the Economic Policy Institute’s “State of Working America,” is at stateofworkingamerica.org.

Real median weekly earnings — the amount a typical worker earns, adjusted for inflation – were lower in the second quarter of 2006 than in the first quarter of 2000. See Bureau of Labor Statistics data, here.

Be Glad You Don't Live in Ireland

Ireland was the darling of capitalists, the "Celtic Tiger", a nation with low taxes, and an educated work force speaking a brand of English that we can understand. Low corporate taxes, and not much bank regulation either. Now it has gone all sour, and rather than the banks and investors taking the hit, most of it has been handed to the taxpayers (those have have not left the country).

Ireland has treated their citizens just about exactly as Republicans George Bush and John Boehner have done, or proposed, for U,S. citizens and the result has been a disaster compounded. The banks and investors have been bailed out (just as Bush bailed out the banks and AIG),and public benefits have been cut, along with wages, including the minimum wage, with no stimulus package, all as Boehner has proposed is what we should have done.

The results show why we do not want to follow the Irish model, and why the stimulus, barely 3% of gross domestic product, has not done as much as we hoped, but stopping the loss of jobs improved our situation in 2009, but did not create a climate that makes people want to hire anyone. Right now consumers want to wait and see if things get better, especially job security. Ireland spent less (no stimulus), made huge cuts in spending and the economy has spiraled down.

Ireland has a very low corporate tax rate,part of a "beggar thy neighbor" plan that has worked, attracting U.S. businesses like Pfizer and Google to move jobs that might,should, have been in the USA, or even Germany (larger markets), but the firms avoided taxes by moving operations to Ireland. The low tax rates deny Ireland much income that could help them now, but instead of raising the corporate rates, they have pounded public workers, cut services, and raised the tax rates on their own citizens.
Read article on Irish corporate taxesThe result, as Paul Krugman predicted months ago, has been more layoffs, and lower tax revenue as people worried about their jobs cut back on spending.Krugman "Eating the Irish" (for the record, my blog quoting Jonathan Swift appeared five days before Krugman chose a similar from the same author. I am not sure if a third party triggered both of us, but,if so, I don't know who it was. The logic of all who refer to this "Modest Proposal"is the same, that the poor pay the costs of the failures of the rich, but never share in the profits).

http://topics.nytimes.com/top/news/international/countriesandterritories/ireland

The banking disaster has been huge in Ireland, but by putting the costs of failure on the public, assuming private debt for the taxpayer to pay, has led many of Ireland's young people to leave the country, those that have stayed to contemplate leaving, and their parents to wonder how the "Celtic Tiger" could die so quickly, and they get the burial fees.

Ireland

Updated: Nov. 23, 2010

Overview

The economic collapse forced the country to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.

Rather than being rewarded for its actions, though, Ireland has been penalized. Its downturn has been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent in 2009 and remains in recession. Joblessness, which had more than doubled, remained above 13 percent, and housing prices fell by a quarter.

In November the government conceded that it had miscalculated the scale of its debt challenge and announced an additional 15 billion euros in savings over four years, bringing the total sum of tax increases and spending cuts to about 30 percent of Ireland’s total economic output. Investors responded by driving up interest rates on Irish government bonds.

Kill The Beast

“I can’t wait for the blood bath in April. ... When debt limit time comes, they’re going to look around and say, ‘What in the hell do we do now? We’ve got guys who will not approve the debt limit extension unless we give ’em a piece of meat, real meat,’ ” (meaning spending cuts). “And boy, the blood bath will be extraordinary,”

-- Alan Simpson, served from 1979 to 1997 as a United States senator from Wyoming as a member of the Republican Party, and was appointed by President Obama to lead the deficit reduction effort.

Simpson is clearly of the radical branch of Republicans who live to "Starve the Beast." Their idea is that bad little government is better than good large government, especially if it is of the kind that today guides Sweden. That kind negotiated a bank failure without giving any taxpayer money to banks, a socialist government that did not socialize debt but took the banks over, just as FDIC in this country does almost every day (it seems), told the stockholders and managers to go home or to jail, and not take any taxpayer money with them. Then Sweden sold the banks to new investors willing to put their own money up and the Swedish government got out of the banking industry. That is one of the governments types that Simpson does not like.

He does not like the government in the Netherlands, they set the standards for medical care, and full care costs less than $150 per person, per month. Not only does Simpson not like that kind of government, he does not like the democratic governments of France, Switzerland, England, Japan, Germany, Norway, Finland, or Taiwan, all of which provide good low cost medical care that their citizens are happy with, and costs that would save American citizens at least $1 trillion a year.

What Simpson and his ilk really hate is good government doing well, and providing better value to its citizens After all, he was elected to make government better, not to poison it.In fact, while he was a senator, he did not work to end lobbyists writing legislation, he did not work to end the practice for lobbyists contributing to the campaign funds of senators and representatives that they would later approach to ask that taxes on the wealthy be cut, or that some other favor or earmark be included in some bill.

He was part of conspiracy to hollow out agencies so they appear to be working for the American citizens who pay their salaries, but they are staffed by industry insiders who will hand the agency over to the worst instincts of the industry and then go back to better pay, as a reward for betraying the American people. Simpson help convert agencies that were supposed to be protecting citizens, to hollow shells,like movie set buildings, a "Potemkin village" of agencies that never carried out their their obligation to protect the voters from risky business like deep water drilling in the Gulf of Mexico.

Simpson did not think that banks or people like Bernie Madoff needed to be regulated or forced to meet any standards, he voted to deregulate banks. He learned nothing from the savings and loan bailouts in 1980's and 1990's which saw 747 S&Ls fail and cost the U.S. taxpayer $25 billion (out of $160 billion lost). Although it was "only" $25 billion paid directly by the taxpayers, they paid the rest in higher bank fees over a period of time; banks don't go into business to give money away, the consumer has to pay the fees. What Simpson learned from that is that banks will fail, and when they do, the consumer will bail them out.

Simpson's entire service was during the period after 1970, when rich campaign contributors were supporting politicians that cut taxes on the super rich by more than 50% and writing laws to keep unions from representing people that wanted a voice in government, but didn't have enough to buy their own politician. Simpson didn't think that your taxes needed to be cut by 50%, as Republican Senate leader Bob Dole said during this time, the work of people who can not hire lobbyists does not get done by congress.

Today, with so many people out of work, through no fault of their own, Simpson wants to lay off more teachers, police, and firefighters, and add to number of people losing their homes. It is kind of blood that he mentions (quote above) that he is eager to see. Good luck to any country has has people like he is, for politicians.

Now that government is starving, Simpson is glad to be able help kill all the programs, like social security, that the have-mores don't need. After all, the rich have what they want, they used government to get it, a government they bought, the best you can buy. Whose fault is it that the poor, perhaps born poor, or denied good wages by government and laws that denied union workers the benefits of organizing? They should have planned ahead and been born rich.

The good news is that nothing is actually going to happen. The fact that is the good news is sad when we are in some much trouble, but there can be no rape of working families unless some Democrats vote with the Republicans, and that will not happen; all the moderate Democrats are gone. There will be no bipartisan cover for lower taxes for the rich and passing all the bills for a failed banking system to the poor.

Palestine - Peace Not Apartheid

Israeli Soldiers Who Used 9 Year Old As Human Shield Face No Jail Time

Two Israeli soldiers received suspended sentences and demotions on Sunday for using a Palestinian child as a human shield during the 2008-2009 Gaza war, an army spokeswoman said.

The soldiers were convicted on October 3 for forcing a nine-year-old boy to search bags believed to be booby-trapped during Israel's 22-day war on Gaza which erupted in December 2008.

The two, who were not identified, were each given suspended terms of three months imprisonment and were demoted from the rank of staff sergeant to sergeant.

"The two Givati soldiers will be on probation for two years and any violation will result in three months in prison. Their rank will be dropped from staff sergeant to sergeant," she said.

Gerard Horton, a spokesman in the West Bank for Geneva-based rights group Defence for Children International (DCI), described the sentence as "unbelievable."

"Do the Israeli authorities think that a three-month suspended sentence is an appropriate punishment for two heavily-armed soldiers treating a nine-year-old boy as a human shield?"

Sourced from Agence France Presse By Alternet.org November 21, 2010, 12:06 pm (Read the full article)

At a time when U.S. taxpayers are being asked to pay more and accept cuts in the benefits and services that the government provides, Congress does not ask the Israelis to accept less than the $500 for each Israeli citizen in foreign aid that the U.S. taxpayers provide, nor are the billions in foreign aid that the U.S. provides to Egypt and Jordan, in order to rent pals for Israel, being cut.

When a nuclear nation, like the USA, backs another nuclear nation, like Israel, in these kinds of human rights violations (and this kind of thing is inflicted on the Palestinians every single day by the Israelis), there is real danger to the security of these United States. When the people of of Iran, Iraq, Egypt, Lebanon, and even India, see the kind of support we give to a nuclear armed nation committing these kinds of crimes, and handing out what is really no punishment, the pressure by the citizens of those and many other nations, on their leaders to obtain nuclear arms is irresistible. It is not just the leaders of Iran that want to be free of the dictates of the USA and Israel, it most of the citizens. Everyone sees the dangers of letting another nation dictate their rules to you, especially when one of dictators has stolen land and water from every one of its neighbors.

We know that Iran seeks nuclear weapons because our treatment of those who lack nuclear weapons makes any other course irresponsible for a nation that is concerned about the security of its people and territory. We know that Iran seeks nuclear weapons, because, lacking the assurance that a non-nuclear nation will get justice, that is exactly what we would do.

If we want to discourage the proliferation of nuclear weapons we must promote a belief in international law, and support human rights in every part of the world, including Palestine. We do not currently do any of these, and our being seen as tyrants who inflict taxation without representation, will only earn us the usual reward; our soldiers being shot at around the world by people who want to be free of domination by super powers, even if they have to acquire nuclear weapons in order to gain their freedom. No matter how you count, tyranny is costing us more than justice will. It is costing us too much to support Israel in their maintenance of ghettos in Gaza and Lebanon, and possible future costs of not getting a grip on nuclear weapons by showing how to get justice without them, will be staggering and very unpleasant.

You Fix the Deficit (on paper anyway)

Using an interactive spreadsheet, you can solve the budget deficit, at least figure out a how it can be done. If you want to do a Tea Party cure, just cut spending, and if you are a tax and spend Democrat, just raise taxes. Don't worry, neither of those will happen, and congress will not come up with any plan that you will like, because they spend all day, every day, with lobbyists who want to see money spent, and know that cutting out things you don't like won't be fun. Let's face it, every cut you make results in hundreds (thousands) of lost jobs and thousands of angry voters. Every tax cut increases the deficit but it makes more people happy than sad, and, most important, a $250 benefit for 150 million tax payers will cost $38 billion and the average taxpayer will not send a dime to contribute to funds needed for re-election, but half that, $15 billion, passed out to appreciative lobbyists will generate at least $15 million in campaign funds. Of course, trading $1 billion dollars for $1 million in campaign funds is not a great deal, but the $15 billion was just taxpayer money.

One of the many problems with exercises like this is that you don't really know what any option will do. Will restoring the Clinton tax rates affect you in a negative way? If you make more than $150,000 a year, yes, but not much. If you make more than $1 million a year, it would be more painful. On the other hand, more money from the rich means less from the middle class and it is middle class spending that drives our economy, and it is the lack of money in the pockets of middle class workers that is killing our economy right now.Billionaires buy yachts, not the stuff you make, or the services you provide. If they get more money they will do what they did last year, invest in China. If you get more money, say $250, you will be more likely to "invest" it in a nice new coat, maybe some shoes, and perhaps they will be made in the USA.

Give fixing the budget a try. Just click on the left side of the page to select the changes you want to pick, and watch the sum shown at the top of the page. You can do it. Higher taxes or spending cuts, flip a coin, you are a winner either way.

When you get done and look at the trillions being spent, think about this: wouldn't it cost you a lot less to pay (say) $25 a year to campaign funds and not have your taxes and income determined by lobbyists? Sure it would. You can't own what you won't pay for, so you get bill for those who do pay.

** Budget Puzzle: You Fix the Budget **