Class Warfare Blog

June 24, 2017

We Don’ Need No Regyoolayshuns … Education Edition

Check out “Multi-state investigation alleges Akron-area charter school founder bilked millions from parents, students, taxpayers” (Akron Beacon Journal/Ohio.com).

The “pro choice” education lobby seems to be more of a “pro-corruption” advocacy group as more and more of these scams are popping up. Politicians, paid for by the scammers, insist no public oversight is needed. After all it is just money we are giving them, and the responsibility to teach our children. Nothing to see here, move along.

June 22, 2017

Trumpcare Will Remove Drug Addiction Treatment Because …

According to Nicholas Kristof’s NY Times column today:

A Times investigation published this month estimated that more than 59,000 Americans died in 2016 of drug overdoses, in the largest annual jump in such deaths ever recorded in the U.S. One reason is the spread of fentanyl, a synthetic opioid that is cheap and potent, leading to overdoses.

About as many Americans are expected to die this year of drug overdoses as died in the Vietnam, Iraq and Afghanistan wars combined.”

Read that last sentence again and then line it up with the GOP plan to remove addiction treatment from insurance policy requirements.

Now you know where their hearts are: the GOP is only interested in tax cuts for the wealthy. The rest of us, very, very little.

May 20, 2017

An Argument for a Minimum Wage

There have been myriad studies about the impact of having a minimum wage. Some indicate that there is no particularly strong linkage between creating a higher wage for low wage workers and some indicate that a rise in the min wage causes unemployment.

The politicians arguing against a min wage use a very simplified argument: namely that if employers have to pay their workers more, they will only be able to hire so many workers, mostly fewer. This is way too simple in thinking this. For one, if people are paid more money, they then spend more money (what goes around, comes around) which is good for business. There are many more facets to this issue.

If labor costs go up, and they have myriad times due to labor contracts, etc. how, oh how, do companies cope? (Yes, I am being sarcastic.) The amount of money that goes to labor in any company is not a fixed amount or even a fixed percentage of the company’s budget. There are many, many ways that those increased labor costs can be offset. For one, you can raise prices for the goods created. You could decrease profits. You could find other ways to reduce operating costs (reduce energy costs by going solar, etc.).

Knee jerk responses to these actions abound, of course. “If we raise prices, we will reduce sales!” Really? Companies never raise prices, then? C’mon, get real. Just raising prices alone, of course, is the lazy way to deal with increased labor costs; a combination of actions would be better.

Most of these minimum wage discussions are shallow and politically motivated. Basically, the opponents of min wage increases give minimal arguments and only add to them if we don’t accept (aka we reject vehemently) their overly simplistic argument.

Let me explain a real reason for min wage increases. Minimum wage increases are justified for the simple reason is that business interests (aka the plutocrats) have conspired to suppress wages for a long, long time. This involves bribing politicians to undermine union powers and privileges, delaying minimum wage increases, changing the laws in favor of employers over employees, etc. They have been particularly effective over the past 40 years (see the chart below as to the effectiveness of wage suppression over the past 40 years). The only power source of ordinary people to oppose these powerful business interests is government. The cabal wants wages low (too low) and so government must set a floor on wages. It is not simple but at least that is the political dynamic.

If you want to see this playing out right now, consider the current stance of the GOP. The GOP has been the champion of local rights for a long time. Education, for example, should not be a federal issue, but should reside in the states, with the states deferring to local communities and their school boards. So, what has been the GOP response to cities who have enacted their own min wage increases? GOP dominated states are passing laws to roll back those democratically achieved minimum wage increases and to bar such local increases in the future. Local control doesn’t mean a fig when the GOP’s paymasters issue directives (You will keep wages down, or else).

April 26, 2017

Dishonesty About Taxes

The Current Administration wants to cut business taxes. They say the current rate, 35%, is too high and a 15% rate would be better for one and all.

Ah, please cut the crap.

When you add up all of the corporate taxes and income for 2016, it turns out that corporations paid about 14% as an effective tax rate. Individuals paid an effective rate of about 13.5%.

The reason these actual tax rates are much lower than the statutory marginal tax rate, is the rate most often stated is the maximum rate which doesn’t kick in until you have made a shitload of money. Even the 28% personal marginal rate doesn’t even begin until you make just under $92,000 dollars in any particular year. On the first bit you pay 10%, the next bit, you pay 15%, after that you pay a 25% on the amount above that amount up to about $91,000, as mentioned. Everybody pays this way. The only way someone can pay close to the maximum rate is to make a shitload of money … and have no deductions.

“‘In each year from 2006 to 2012, at ‘least two-thirds of all active corporations had no federal income tax liability.’ So much for corporations paying their fair share.”

The US Tax Code is a bloated document, not because of statutes that address personal income but because of the myriad tax breaks that sometimes only single companies get. This is why businesses spend money lobbying Congress, it really pays off in tax perks. Somebody recently calculated that for each $1 a company spent in lobbying Washington, it got a return of $28. That is one hell of an investment! According to the GAO “In each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability.” So much for corporations paying their fair share.

There used to be a tax principle that said that people who make money by investing money (the “you know who”) should pay more in taxes than people who made money by the sweat of their brow. This has been reversed so that if you work for a living, you pay more in taxes than those who simply move money around (proportionately, not absolutely). Another tax dishonesty: “The rich pay more in taxes that you!” yeah, 10% of 100 million dollars is a lot more money than 10% of $50,000 but it is still 10%.

It used to be the case that companies paid more tax than individuals. That was back before the companies realized that they could buy the government and stack the deck in their favor.

These are same people who back the claim that corporations are people. Now they want to establish that corporations are better than people. (They worship them and want us to also.)

April 20, 2017

Why Conservatives Used to Fear Big Government and Now Only Pretend To

I used to believe that Conservatives opposed government because government was the only social institution that had the standing to oppose anything they wanted to do. I thought the Party of Big Business was just taking care of business.

But I was wrong and I have to apologize to those previous Conservatives. It is not as simple as I made it out to. So, if there are any Conservatives out there reading this, I apologize for underestimating you.

Here’s what I think the situation is now.

You Know Who

Back in the late 1800’s, Alexis de Tocqueville wrote in Democracy in America:
I seek to trace the novel features under which despotism may appear in the world. The first thing that strikes the observation is an innumerable multitude of men all equal and alike, incessantly endeavoring to procure the petty and paltry pleasures with which they glut their lives. Each of them, living apart, is as a stranger to the fate of all the rest — his children and his private friends constitute to him the whole of mankind ; as for the rest of his fellow-citizens, he is close to them, but he sees them not — he touches them, but he feels them not ; he exists but in himself and for himself alone ; and if his kindred still remain to him, he may be said at any rate to have lost his country. Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications, and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent, if, like that authority, its object was to prepare men for manhood ; but it seeks on the contrary to keep them in perpetual childhood : it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness: it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances — what remains, but to spare them all the care of thinking and all the trouble of living? Thus it every day renders the exercise of the free agency of man less useful and less frequent ; it circumscribes the will within a narrower range, and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things : it has predisposed men to endure them, and oftentimes to look on them as benefits.

After having thus successively taken each member of the community in its powerful grasp, and fashioned them at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided: men are seldom forced by it to act, but they are constantly restrained from acting : such a power does not destroy, but it prevents existence ; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

Sorry for the length of that quote but I think the vision is important, and obviously it was had a long time ago and probably before de Tocqueville. In the 1800’s the American experiment was still quite an odd affair. People governing themselves with no king or emperor? Preposterous. It took World War I to break the pattern of the divine rights of kings. But while Americans were afraid of despots taking over then as now, that is true fascism, de Tocqueville observed that it is quite possible that The Government Itself could become a substitute despot. And de Tocqueville was not alone.

Many Conservatives feared “Big Government” back in those days for that very reason, a good reason. And compared to the size of “government” now, it was puny back then. This anti-Big Government trope became a cornerstone of Conservative ideology that has lasted to this day—Do not let government grow to the point that our lives are ruled by it. So, the insistence that the Founders of the Constitution were small government advocates (most were not) came from there and a lot of other stuff.

But the New Deal, combined with the expansion of the federal government as a response to World War II drove the Conservatives a bit over the edge. A number of them decided that “if you can’t beat them, join them.” Instead of actually opposing big government, they decided that while the posturing would continue, the goal was the capture of the government and the running of the government for their ends into the future.

“So, while it looks like Conservatives fear Big Government,
they do not really fear it any more.
They have accepted that it is despotic,
that they couldn’t defeat it, but they could co-opt it.”

So, while it appears that Conservatives oppose “Big Government” only because it is the only social institution left that can oppose the will of Big Business, that is only a scrim, a stage setting. The monied interests (rich individuals and corporations) have already purchased our governments (sufficient of them in number to constitute a majority). They own the GOP. They have purchased most of the Democrats. They own the Courts. Now “shrinking of the government” is only a guise for the rubes. The drive to “reduce the amount of government regulation” (cue the voice of Foghorn Leghorn) is not to “reduce the size of government,” it is to get government out of business pockets. The drive to have tax reform is not to “reduce the size of government” but to cut taxes on the rich, so they will have even more money to buy governmental interests.

They are now officially, but not openly, okay with big government. (Most people didn’t notice that under the last six presidents, the government grew more under Republicans than Democrats.) Now with regard to government, it is the more the merrier, as long as it address their needs. Can you imaging the howling if the federal government picked out one business, say FedEx, to “defund” and to pull support from as they have done with Planned Parenthood? The howls could be heard on the Moon. But Planned Parenthood? It is okay for the federal government to attack it … now. You will see more of this.

So, while it looks like Conservatives fear Big Government, they do not really fear it any more. They have accepted that it is despotic, that they couldn’t defeat it, but they could co-opt it.

Until we, The People, deal with the oligarchs and roll back despotic government, it will continue to hang like ripe fruit in front of the eyes of rich men and corporations who know what to do with it. And it is for sale, no matter what we might wish.

April 11, 2017

If You Want to Understand Why American Education is Fucked Up—Read This

Filed under: Education,Politics — Steve Ruis @ 12:42 pm
Tags: , , , ,

(Hint: Follow the Money)

https://gadflyonthewallblog.wordpress.com/2017/04/08/standardized-testing-creates-captive-markets/

April 6, 2017

I Don’t Get It

The definition of “it” in the title is probably very, very long (very!). In this case it is our current debate about healthcare.

There is continuing support for certain functions of government to be paid by the government. Unlike knuckle-dragging conservatives, I do not see “government” as being some outside agency closely representing a skin cancer (something you want shrunk and or carved out), but as a representative of “us.” We are completely fine with “single payer” K-12 education. Citizens and non-citizens alike can register their children to attend a neighboring school and there the children receive an education with no further costs. (Yes, I do know there are myriad costs associated with a child in school, but those are not directly related to the education they receive.) This is, accurately, not a “single payer” system as multiple government agencies are involved, so maybe a better description is “government paid” for this schooling. We also have many other services that are “government paid.” For one, the military. For another, our government offices. When you go to your local councilman or alderman’s office for information or a complaint, there are no fees associated with those services. In all of those cases, the “government”—remember that means “us”—picks up the full tab.

The argument goes that those services are “essential,” that is we all need them and money should be a barrier to whether or not you receive those services.

Oh, there are also the police, fire services, the courts, etc. There are many things that fall into this category of “things we all pay so everyone can partake equally.” In some cases, this is the “many” protecting itself from the “few.” Many vaccinations are low cost, even free, to avoid the spread of diseases.

I don’t get why health care is not one of those things.

I understand that people, especially politically conservative people, have bought into a capitalistic “pay as you go” culture, uh, well, kinda sorta. The biggest proponents of “individual liberty/individual responsibility” are not all self-made people, many inherited money. If Donald Trump had invested all of the money he inherited in stock market index funds, he would have four times as much money now as he claims to have, according to some accounts. (So much for him being a good businessman, he has managed to lose only three quarters of his potential net worth. He is, at best, a mediocre businessman.) The Koch brothers inherited millions (and built upon those, yes). Mitt Romney, who claims that nobody helped him, was given two million dollars of “seed money” to help him get started as well as being given access to his really well-connected father’s associates. The Walton clan … well, daddy made the big pot for them.

For those without great wealth in this group are people who received help along the way from government (aka “us”) agencies. Help with their educations, help with business loans, help from other government agencies, etc.

But them poor people, they lack drive and ambition. They should go out and start a business. Really, you mean those business startups that have a 90% failure rate after three years? Where would they get the money to take that very risky venture? The banks? Wall Street? Venture Capitalists? (Sorry, laughing so hard my sides are aching.) If you haven’t noticed, over the last 30-40 years, businesses have stopped investing in their own business. They have accumulated trillions of dollars of cash reserves that are just sitting there. So, these are the people poor people are to emulate? (Step 1 Pile up a mountain of money. Step 2 Sit on it. Neoliberal Business Practices 101)

Poor people need to go out an get a job, then? Oh, do they mean the jobs conservatives have suppressed wages on for decades so they do not pay enough to meet a person’s expenses? Those jobs? All of the anti-union, anti-minimum wage rhetoric is not coming from poor people, it is coming from the same conservative ass holes who are insisting that everyone should “pay as you go.”

I do not want single-payer healthcare. (Currently I have Medicare and a Medicare supplement policy, and I pick up the slack those two do not cover, so there are at least three payers there, certainly at least two.) I want government paid health care. It is at least as important as an education for our kids, if not more so.

There’s more but my spleen just gave out.

* * *

Poverty is not due to a lack of character, it is due to a lack of cash. (I don’t know who said this first.)

March 20, 2017

The New Administration’s Budget

As vague descriptions of the new administration’s 2017-8 federal budget are being circulated, people are shocked, shocked I tell you, that that proposal eviscerates the Environmental Protection Agency and myriad other federal programs that actually help people (Meals on Wheels … gone, Support for Planned Parenthood … gone).

I do not see how anyone could be shocked at these long promised moves. This is the political party that has railed against and taken every opportunity to diminish labor unions, organizations that only exist to protect workers and their rights. It has also railed against Social Security and Medicare, the two most successful programs ever created to avoid poverty, especially in senior citizens.

They have reasons for doing these things, but if you watch carefully, you will see their lips moving, a clear sign they are lying. They are gutting these social programs for one big reason, their paymasters desire it. All of these efforts make working class people more compliant, less likely to strike back, and place as little opposition to what the plutocrats wish to do as possible.

The GOP said it wanted to, it tried to do it before, and now it is doing it. If you are surprised, you are an idiot.

Let me now … warn you in the most solemn manner against the baneful effects of the spirit of party….
It serves always to distract the public councils and enfeeble the public administration.
It agitates the community with ill founded jealousies and false alarms,
kindles the animosity of one part against another….

George Washington, Farewell Address, 1796

In this new era of globalization, the interests of companies and countries have diverged.
In contrast with the past, what is good for America’s global corporations
is no longer necessarily good for the American people.

Ralph Gomory, Former IBM VP

Wake up people, the corporations own this administration.

March 13, 2017

We Have Met the Enemy … and It Isn’t Us

We have met the enemy and it is … our corporations. Consider first a couple of examples:

You have heard, I am sure, of the so-called “skills gap,” which is that American workers just do not have the skills needed for “today’s marketplace,” so we need to issue more foreign worker visas to fill the necessary jobs. One of the fields clamoring for more of these visas has been Information Technology (IT). IBM, a quintessential American IT company, hid the facts for many years but now it is clear. Between 2003 and 2010, IBM fired so many American IT professionals and hired so many engineers and computer programmers in India that the workforce of IBM India is now larger than that of IBM USA. IBM India had a mere 6,000 workers in 2003 but by 2010 had somewhere in the range of 100,000-130,000 workers. How did IBM manage this into the teeth of the worst global recession ever? It did it by firing over 30,000 workers here in the U.S.

IBM calls this “cross border job shifting,” which sounds ever so much more like a transfer than people getting fired here and others getting hired there. And IBM is not alone in doing this, so how can there be a shortage of IT workers in the US when there are so many Americans who used to hold the very same jobs that are claimed are “going wanting?” What is the real rationale for the demand to be issuing more visas for foreign workers? There is no shortage of highly qualified IT workers. This is simply a classic wage-suppression tactic. Bring in foreign workers and pay them less than you would American workers with the same qualifications. This makes it very much harder for Americans to get wage increases here and also harder to form unions that would look into such practices. Foreign workers do not want to anger their employers because if they lose their job, they lose their job sponsor, and it is back to India for them. They will not join a union, period.

Now, consider another quintessential American company, Ford. Can there be a more American story involving business that the creation of the Ford Motor Company from scratch? But in the late 1990’s, Alex Trotman, Ford’s then CEO, admitted “Ford isn’t even an American company, strictly speaking; we’re global.”

And if American companies like these do not consider themselves “American companies,” how much can we expect them to act on our behalf? When I was a young man, many corporations had multiple stakeholders. These corporations considered their customers to be one, along with their workers as another, and their communities, too. And, of course, also their shareholders. Modern business practices, spurred along by quack economists like Milton Friedman, had reduced the number of corporate stakeholders to one: the shareholders. Well, just one stakeholder if you do not count the executive’s self-interest in their own remuneration, which has skyrocketed while worker wages have been experiencing trickle-up growth.

As a union officer in the 1980’s and 90’s I participated in an experiment with management of our enterprise ($150 million annual budget) on creating a more cooperative governance structure. Part of that effort was coming to an understanding of relationships between and among the two groups. One facet of that learning was that “workers” (we all worked for the company) we all tended to imbue our work relationship with trust, that is we put our trust into our employer to some extent. This was not earned trust but, basically, we trusted our employer because we wanted to have a job in which we could trust our employer. This wishful thinking trust usually had no repercussions, but when something happen that a worker or workers did not like, they felt betrayed by someone they had trusted (trusted to do what was never specific, usually it was “the right thing”). Such “betrayals” existed in collective memory for decades. (I know this as when I was hired into this company I heard “stories” from other employees. I found out later that some of them were almost 30 years old.)

We are making that mistake now. We are told by representatives of these “American companies” that we should “trust the marketplace” and “trust them.” But their actions indicate that not only are they untrustworthy but they are not even American companies. Imagine how you would feel if a foreign company, say from China, wanted to come into your community and build a plant, one with a bit of pollution associated with it. Then think how you would view that intention were is an American company? Would your response be the same? Yet, these American companies no longer consider themselves to be American, and have acted accordingly for decades now, but we still “trust” them more than we do others.

These companies have no issue with firing you and hiring a replacement from overseas and ask you to train your cheaper replacement (happens all the time, happened to my ex-wife). These companies have no problem with going through bankruptcy to eliminate their obligation to pay into their worker’s pensions. These companies have no problem with manipulating our tax laws so that they pay no taxes, with the burden to make up the difference shifted to you and me. These companies have no problem in bribing our public officials to do their bidding instead of the people’s. And if you want to know why our recovery from the Mother of all Recessions was so weak, with employment struggling to get back to anything approximating normal, realize that business leaders see every crisis as an opportunity and in this crisis they used the opportunity to outsource even more jobs. They were hiring, just not in the U.S. That is how much loyalty they have to their bottom line and how much they have to you and me.

Ironically, we have just elected a corporate businessman President to fix this mess (drain the swamp). If this were not so ironic, so funny, I would be crying. When are we going to wake up? When are we going to invest our passion and our votes in organizations, like labor unions, that have proven track records for countering these un-American corporate interests?

Wake up people! It is very close to “too late.”

March 8, 2017

GOP Plans to Repeal Dodd-Frank Legislation

Why do we need legislation that prevents big banks from undermining the whole world’s economy with overly risky investments? We can trust them. They are our friends.

Granted the Dodd-Frank legislation didn’t go nearly far enough (millions of dollars per day were spent lobbying against the law in the first place and then against its implementation after it was passed). The Glass-Steagall law should have been re-enacted verbatim, plus a whole lot more, but “burdensome regulation” is undermining progress in this country (whine, whine, sniff). This is why the big banks circumvented the existing regulations, corrupted regulators, and invented unregulated shadow banking in the first place.

We will only be free when big banks can wreak havoc as much as they desire … and, of course, our government bails them out every 6-8 years when it all crashes into ruin. Heck, the last time only cost us $2,000,000,000,000 (yes, that is two trillion dollars) plus several trillion more in lost property values, but that only affected ordinary citizens (they got no bailout, don’t you know).

At this point, I am starting to root for the GOP’s bad ideas. The party has so desperately wanted to do all of these things for years! And they are going to own the repercussions of each and every one of them.

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