Well, duh! Cutting taxes on the rich just makes them richer!

 

Headline from CBS News

50 years of tax cuts for the rich failed to trickle down, economics study says

"The new paper, by David Hope of the London School of Economics and Julian Limberg of King's College London, examines 18 developed countries — from Australia to the United States — over a 50-year period from 1965 to 2015. The study compared countries that passed tax cuts ... with those that didn't, and then examined their economic outcomes. 

"Per capita gross domestic product and unemployment rates were nearly identical after five years in countries that slashed taxes on the rich and in those that didn't, the study found.

"But the analysis discovered one major change: The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates."

Apparently this is news to the newly woke main stream media, where their analysists have been blinded by the light of neoliberalism for the past 40+ years. It is certainly not news to the tens of millions of workers in the US (and around the world) who have been fed the propaganda about "trickle down" while watching the purchasing power of their paychecks dwindle and the wealth of the few, skyrocket.

The failure of the Democratic Party in the US (and social democratic and labor parties in other nations) to understand this and to make it a priority to oppose the rising inequality, is undoubtedly the source of their decline and of the rise of rightwing "populism". By focusing the blame for the increasing divide between the rich and the rest of us on the "other", and appealing to fear and racism, the right has been able to win over significant sections of the working class to support white supremacy and nationalism. The MAGA crowd plays on the fear of working class whites that their status is under attack from below, when the truth is that both white workers and workers of color have been under attack from above.

What's missing in the report and the CBS analysis is any notion of the economic forces that are driving the accumulation of wealth at the top. For a greater understanding of that, we need to look at how the US economy has changed and how the federal government has encouraged and abetted this change over the past 40-50 years. The change has fundamentally altered the nature of capitalism and in the process led to runaway inequality. Raising taxes on corporations and the rich will do a little to slow rising inequality, but unless there are fundamental changes in the structure of the economic system itself, the vast accumulation of society's wealth in the hands of a tiny class of billionaires will continue. More on that in another post.

On the Razor’s Edge – The Crisis in Public Education

In the interest of full disclosure, I am a retired public-school teacher who loved his job. Well, almost all aspects of it. I loved being in the classroom, I loved working with my students, even those who resisted learning with all their might. I had the greatest co-workers - teachers, aides, administrators, janitors and cafeteria workers! And even though I frequently worked 60-70 hours a week, brought grading with me when we went on vacation and, in the early years, struggled to pay my bills I LOVED MY JOB.

As a historian, I understood the role of free public education during the 20^th century in creating opportunity for white working-class children to climb the ladder into the middle class. And it was the demand to extend that ladder to Black children that sparked the Civil Rights movement of the 1960s.  

As the grandson of immigrants, I understood how free, public education attracted millions of immigrants from Europe to come to America and take advantage of that opportunity. And it is that opportunity that continues to pull millions of immigrants from the Global South (particularly Mexico and Central America) to the US. It is a fundamental part of the “American Dream”.

But today, public education is in crisis. While COVID might have been the catalyst for the immediate predicament, it’s been building for a long time. Public schools have been in the crosshairs of both the private equity corporate raiders and banksters and a resurgent white supremacist movement in the US. The former want to privatize education and thereby make another part of the public sphere into a source of their profit; the latter want to reserve quality education for their white children as part of their white privilege. They are busy making common cause and have seized upon the pandemic to intensify their attacks.

I’m sorry to report that they are winning. Throughout the country, school boards are caving to the demands of a vocal minority of white parents who want to roll back the gains of the past 50 years in diversity and equity for students of color, LGBTQ students and students with disabilities. Indeed, attacking teachers and schools over both Covid-19 and “critical race theory” has become a primary Republican Party organizing strategy. As of December of 2021, eight Republican-controlled states had passed anti-democratic laws restricting teachers’ ability to teach the truth about US history. In Tennessee, teachers who teach about the history of racial discrimination risk losing funding for their schools. In Wisconsin, Republican legislators passed a law that would result in multi-thousand-dollar fines for teachers who mention topics like race or equity. In Texas, teachers are being required to teach “both sides” of topics such as the Holocaust and slavery. And in Florida, Governor Ron DeSantis has introduced a bill that would empower parents to sue teachers for teaching the truth about US history. Meanwhile, just last week, a school board in Pennsylvania explicitly instructed teachers not to teach about the January 6 insurrection.

When the pandemic hit, many school systems across the country, particularly those which serve marginalized communities, were already experiencing significant defunding as a result of government “austerity” following the 2008 recession and the transfer of our tax monies to private and charter schools. Under the rubric of school choice, more and more private businesses began to control a significant sector of what was formerly our public sphere, claiming to offer a superior product (a claim that has absolutely no merit). This, coupled with re-segregation under the guise of neighborhood schools, has had the effect of creating greater disparities both within and between school districts. 

Attempts to rectify that situation have been met with stonewalling. For example, in my adopted state of North Carolina, a judicial order resulting from a suit filed more than 25 years ago (known as the Leandro ruling) has still not been implemented by the NC legislature. This ruling required the state to provide funding to overcome inequalities between more and less affluent school districts in the state.  Thus, two plus generations of children from these less affluent communities have been denied their right to a sound education, which is supposedly guaranteed under the NC state constitution.

Now the rightwing extremists (which apparently includes the majority of the Republican Party) along with some “nice white parents” are using the chaos created by the pandemic to discredit public education and in particular, teachers. Which brings me to the crux of the issue. Despite the attempts to degrade public education, the one bulwark that has prevented the collapse of our educational system are its educators. Dysfunctional school boards can create problems; local and state legislatures can screw things up, but the heroes in this story have carried on, and on, and on.  Until now.

It looks like a very substantial number of teachers have had enough. We are certainly hearing it from teachers here in Wilmington, NC. In recent contacts with friends who are still teaching in Montgomery County, MD I’ve heard similar concerns. Teachers whom I respect and who work in a system that by all accounts does not have many of the issues that are confronting most districts, are calling it quits or expressing doubts about how much longer they want to deal with the situation in their schools.

On the national level, polls show that almost ½ of all currently employed teachers are considering leaving teaching. Their complaints run the gamut from lack of resources to lack of respect; from inadequate measures to protect them from COVID to confusion as BOE and administration policies keep changing without their input. Even school administrators in my old district are publicly expressing their dissatisfaction in an open letter to their BOE. In fact, conflicts between school boards, school administrators and teacher organizations are intensifying. This is not a good thing, since it plays into the hands of those who want to destroy public education.

As if COVID and the incredible demands of teaching virtually (not to mention having to switch back and forth between online and in person and sometime even do both at the same time as the pandemic surges and then abates a little) and dealing with the learning loss this crisis has created are not enough, the attacks on public schools and our dedicated educators from the right have exacerbated the stress. To quote the title of an article I read recently, “there is something very wrong with a society that scapegoats its teachers.”

So, the question becomes, what is to be done? Some preliminary thoughts:

·         Support teachers and school staff with all our might! This includes: demands for wages commensurate with their status as HEROES in our current crisis and beyond; demands for making in person teaching SAFE for both staff and students and when that is not possible, ensuring that virtual education is accessible to ALL students; demands for the resources to meet the needs of ALL students; vigorous opposition to attempts to restrict the teaching of the truth about US history and our society and defense of teachers who are to targets of these anti-democratic laws.

·         Continue the struggle to guarantee the full benefits of a quality education to ALL students, particularly those from marginalized communities and those with disabilities. The effects of the chaos in education for the past couple of years are, and will continue to be, most debilitating for students of color, students from low income communities and students with disabilities.

·         Attempt to deal with conflicts within the public school systems (between school boards, administrators and school staff) as disagreements that can (and I would argue, must) be resolved in house, without reinforcing the attacks on public education.

 

If we are to save and extend our democracy, we must fight like hell to protect public education and in particular our teachers. They are the instrument that will shape our future.

 

After a Year of Biden, Why Do We Still Have Trump's Foreign Policy?

 This is far too good for me to try and duplicate, so I decided to post it as is. More to come, when I get a chance.

MEDEA BENJAMIN,  NICOLAS J.S. DAVIES    January 19, 2022 – From Common Dreams

President Biden and the Democrats were highly critical of President Trump's foreign policy, so it was reasonable to expect that Biden would quickly remedy its worst impacts. As a senior member of the Obama administration, Biden surely needed no schooling on Obama's diplomatic agreements with Cuba and Iran, both of which began to resolve long-standing foreign policy problems and provided models for the renewed emphasis on diplomacy that Biden was promising.

Each part of this foreign policy fiasco costs human lives and creates regional–even global–instability. In every case, progressive alternative policies are readily available.

Tragically for America and the world, Biden has failed to restore Obama's progressive initiatives, and has instead doubled down on many of Trump's most dangerous and destabilizing policies. It is especially ironic and sad that a president who ran so stridently on being different from Trump has been so reluctant to reverse his regressive policies. Now the Democrats' failure to deliver on their promises with respect to both domestic and foreign policy is undermining their prospects in November's midterm election.

Here is our assessment of Biden's handling of ten critical foreign policy issues:

1. Prolonging the agony of the people of Afghanistan. It is perhaps symptomatic of Biden's foreign policy problems that the signal achievement of his first year in office was an initiative launched by Trump, to withdraw the United States from its 20-year war in Afghanistan. But Biden's implementation of this policy was tainted by the same failure to understand Afghanistan that doomed and dogged at least three prior administrations and the U.S.'s hostile military occupation for 20 years, leading to the speedy restoration of the Taliban government and the televised chaos of the U.S. withdrawal.

Now, instead of helping the Afghan people recover from two decades of U.S.-inflicted destruction, Biden has seized $9.4 billion in Afghan foreign currency reserves, while the people of Afghanistan suffer through a desperate humanitarian crisis. It is hard to imagine how even Donald Trump could be more cruel or vindictive.

2. Provoking a crisis with Russia over Ukraine. Biden's first year in office is ending with a dangerous escalation of tensions at the Russia/Ukraine border, a situation that threatens to devolve into a military conflict between the world's two most heavily armed nuclear states–the United States and Russia. The United States bears much responsibility for this crisis by supporting the violent overthrow of the elected government of Ukraine in 2014, backing NATO expansion right up to Russia's border, and arming and training Ukrainian forces.

Biden's failure to acknowledge Russia's legitimate security concerns has led to the present impasse, and Cold Warriors within his administration are threatening Russia instead of proposing concrete measures to de-escalate the situation.

3. Escalating Cold War tensions and a dangerous arms race with China. President Trump launched a tariff war with China that economically damaged both countries, and reignited a dangerous Cold War and arms race with China and Russia to justify an ever-increasing U.S. military budget.

After a decade of unprecedented U.S. military spending and aggressive military expansion under Bush II and Obama, the U.S. "pivot to Asia" militarily encircled China, forcing it to invest in more robust defense forces and advanced weapons. Trump, in turn, used China's strengthened defenses as a pretext for further increases in U.S. military spending, launching a new arms race that has raised the existential risk of nuclear war to a new level.

Biden has only exacerbated these dangerous international tensions. Alongside the risk of war, his aggressive policies toward China have led to an ominous rise in hate crimes against Asian Americans, and created obstacles to much-needed cooperation with China to address climate change, the pandemic and other global problems.

4. Abandoning Obama's nuclear agreement with Iran. After President Obama's sanctions against Iran utterly failed to force it to halt its civilian nuclear program, he finally took a progressive, diplomatic approach, which led to the JCPOA nuclear agreement in 2015. Iran scrupulously met all its obligations under the treaty, but Trump withdrew the United States from the JCPOA in 2018. Trump's withdrawal was vigorously condemned by Democrats, including candidate Biden, and Senator Sanders promised to rejoin the JCPOA on his first day in office if he became president.

Instead of immediately rejoining an agreement that worked for all parties, the Biden administration thought it could pressure Iran to negotiate a "better deal." Exasperated Iranians instead elected a more conservative government and Iran moved forward on enhancing its nuclear program.

A year later, and after eight rounds of shuttle diplomacy in Vienna, Biden has still not rejoined the agreement. Ending his first year in the White House with the threat of another Middle East war is enough to give Biden an "F" in diplomacy.

5. Backing Big Pharma over a People's Vaccine. Biden took office as the first Covid vaccines were being approved and rolled out across the United States and the world. Severe inequities in global vaccine distribution between rich and poor countries were immediately apparent and became known as "vaccine apartheid."

Instead of manufacturing and distributing vaccines on a non-profit basis to tackle the pandemic as the global public health crisis that it is, the United States and other Western countries chose to maintain the neoliberal regime of patents and corporate monopolies on vaccine manufacture and distribution. The failure to open up the manufacture and distribution of vaccines to poorer countries gave the Covid virus free rein to spread and mutate, leading to new global waves of infection and death from the Delta and Omicron variants. 

Biden belatedly agreed to support a patent waiver for Covid vaccines under World Trade Organization (WTO) rules, but with no real plan for a "People's Vaccine," Biden's concession has made no impact on millions of preventable deaths.

6. Ensuring catastrophic global warming at COP26 in Glasgow. After Trump stubbornly ignored the climate crisis for four years, environmentalists were encouraged when Biden used his first days in office to rejoin the Paris climate accord and cancel the Keystone XL Pipeline. 

But by the time Biden got to Glasgow, he had let the centerpiece of his own climate plan, the Clean Energy Performance Program (CEPP), be stripped out of the Build Back Better bill in Congress at the behest of fossil-fuel industry sock-puppet Joe Manchin, turning the U.S. pledge of a 50% cut from 2005 emissions by 2030 into an empty promise. 

Biden's speech in Glasgow highlighted China and Russia's failures, neglecting to mention that the United States has higher emissions per capita than either of them. Even as COP26 was taking place, the Biden administration infuriated activists by putting oil and gas leases up for auction for 730,000 acres of the American West and 80 million acres in the Gulf of Mexico. At the one-year mark, Biden has talked the talk, but when it comes to confronting Big Oil, he is not walking the walk, and the whole world is paying the price.

7. Political prosecutions of Julian Assange, Daniel Hale and Guantanamo torture victims. Under President Biden, the United States remains a country where the systematic killing of civilians and other war crimes go unpunished, while whistleblowers who muster the courage to expose these horrific crimes to the public are prosecuted and jailed as political prisoners. 

In July 2021, former drone pilot Daniel Hale was sentenced to 45 months in prison for exposing the killing of civilians in America's drone wars. WikiLeaks publisher Julian Assange still languishes in Belmarsh Prison in England, after 11 years fighting extradition to the United States for exposing U.S. war crimes.

Twenty years after it set up an illegal concentration camp at Guantanamo Bay, Cuba, to imprison 779 mostly innocent people kidnapped around the world, 39 prisoners remain there in illegal, extrajudicial detention. Despite promises to close this sordid chapter of U.S. history, the prison is still functioning and Biden is allowing the Pentagon to actually build a new, closed courtroom at Guantanamo to more easily keep the workings of this gulag hidden from public scrutiny.

8. Economic siege warfare against the people of Cuba, Venezuela and other countries. Trump unilaterally rolled back Obama's reforms on Cuba and recognized unelected Juan Guaidó as the "president" of Venezuela, as the United States tightened the screws on its economy with "maximum pressure" sanctions. 

Biden has continued Trump's failed economic siege warfare against countries that resist U.S. imperial dictates, inflicting endless pain on their people without seriously imperiling, let alone bringing down, their governments. Brutal U.S. sanctions and efforts at regime change have universally failed for decades, serving mainly to undermine the United States’ own democratic and human rights credentials. 

Juan Guaidó is now the least popular opposition figure in Venezuela, and genuine grassroots movements opposed to U.S. intervention are bringing popular democratic and socialist governments to power across Latin America, in Bolivia, Peru, Chile, Honduras - and maybe Brazil in 2022.

9. Still supporting Saudi Arabia's war in Yemen and its repressive ruler. Under Trump, Democrats and a minority of Republicans in Congress gradually built a bipartisan majority that voted to withdraw from the Saudi-led coalition attacking Yemen and stop sending arms to Saudi Arabia. Trump vetoed their efforts, but the Democratic election victory in 2020 should have led to an end to the war and humanitarian crisis in Yemen.

Instead, Biden only issued an order to stop selling "offensive" weapons to Saudi Arabia, without clearly defining that term, and went on to okay a $650 million weapons sale. The United States still supports the Saudi war, even as the resulting humanitarian crisis kills thousands of Yemeni children. And despite Biden's pledge to treat the Saudis' cruel leader, MBS, as a pariah, Biden refused to even sanction MBS for his barbaric murder of Washington Post journalist Jamal Khashoggi.

10. Still complicit in illegal Israeli occupation, settlements and war crimes. The United States is Israel's largest arms supplier, and Israel is the world's largest recipient of U.S. military aid (approximately $4 billion annually), despite its illegal occupation of Palestine, widely condemned war crimes in Gaza and illegal settlement building. U.S. military aid and arms sales to Israel clearly violate the U.S. Leahy Laws and Arms Export Control Act. 

Donald Trump was flagrant in his disdain for Palestinian rights, including tranferring the U.S. Embassy from Tel Aviv to a property in Jerusalem that is only partly within Israel's internationally recognized border, a move that infuriated Palestinians and drew international condemnation.

But nothing has changed under Biden. The U.S. position on Israel and Palestine is as illegitimate and contradictory as ever, and the U.S. Embassy to Israel remains on illegally occupied land. In May, Biden supported the latest Israeli assault on Gaza, which killed 256 Palestinians, half of them civilians, including 66 children.

Conclusion

Each part of this foreign policy fiasco costs human lives and creates regional–even global–instability. In every case, progressive alternative policies are readily available. The only thing lacking is political will and independence from corrupt vested interests.

The United States has squandered unprecedented wealth, global goodwill, and a historic position of international leadership to pursue unattainable imperial ambitions, using military force and other forms of violence and coercion in flagrant violation of the UN Charter and international law.

Candidate Biden promised to restore America's position of global leadership, but has instead doubled down on the policies through which the United States lost that position in the first place, under a succession of Republican and Democratic administrations. Trump was only the latest iteration in America's race to the bottom. 

Biden has wasted a vital year doubling down on Trump's failed policies. In the coming year, we hope that the public will remind Biden of its deep-seated aversion to war and that he will respond—albeit reluctantly—by adopting more dovish and rational ways.

 

Figures don't lie - raising the minimum wage doesn't result in few jobs!

Business and their political mouthpieces continue to put forth the argument that we shouldn't raise the minimum wage because it will result in job loses, particularly among low wage jobs. They have been promoting this lie for as long as I can remember, in fact for as long as there has been a minimum wage.

Numerous studies have demonstrated conclusively that this is a LIE. Now comes the latest study which compares two southern states which have a long common border, Virginia and North Carolina, one of which has been raising the minimum wage in stages to $15, the other which is still stuck at $7.25.

And, believe it or not, Virginia has seen MORE job growth overall and in low wage sectors of the economy.

For more detail check out the research from the folks at Carolina Forward. 

https://www.carolinaforward.org/blog/virginia-wages

January 1, 1942 - Eighty years later or "Don't Look Up"

Hope everyone had a great holiday and is looking forward to the New Year. Unfortunately, in the US and around the world, good cheer may be hard to come by. Looking at what’s happening, I have to wonder how my parents might have felt exactly 80 years ago on Jan. 1, 1942, with my mother already pregnant with me.  The Great Depression of the preceding 12 years was just receding when the world was plunged into a life-or-death struggle against fascism. That truly was the greatest generation; let’s hope their grandchildren can rise to the challenges we face today.

 

I find it almost impossible to believe that the richest nation in the history of the world, a self-proclaimed democracy … of the people, by the people and for the people …  continues to find it impossible to pay its working population a living wage; to eliminate childhood poverty; to provide its people with affordable, much less free health care; to meet the challenge of a pandemic, both home and abroad; to address the existential crisis of global warming in any meaningful way; or to provide reparations to those communities of color that have been systematically terrorized and exploited by official and unofficial white supremacy.

 

Wow, that was a long sentence. Unfortunately, it only begins to capture the failure of American society to meet the needs of its people. With the enormous wealth and power that dwarfs any other nation in history, we find ourselves mired in crisis after crisis.

 

I recently watched the Netflix movie “Don’t Look Up”. The movie (which has a star-studded cast) focuses on the discovery of a comet heading toward collision with earth that scientists predict (with a 98% certainty) will exterminate the entire human race unless it can be diverted from its path. The media ignores the gravity of the threat (treating it as a side show), the politicians are more interested in getting elected than in meeting the threat and the billionaires are focused on how much money they can make from the rare earth minerals in the comet. For the rest of us, we are simply told “don’t look up”.

 

The names may have been changed to protect the guilty, but it is more of a documentary than a parody.  It clearly illustrates “the interconnected debasement of America’s politics, pop culture, conventional media, social media, spectacle, tech and corporate elite—and of how the corruption of each element corrupts the other, feeding the general cynicism…” (Robert Kuttner, The American Prospect) Why, we have to ask, are we hurtling down this path? While there are many factors (more even than are pointed to in the movie), I think we need to focus on three.

 

The first is one I’ve been writing about for years, particularly after having read the book Runaway Inequality (BTW, if you don’t have one, I’ll be happy to ship one off to you gratis). In the last 40 years, policies based on neoliberalism (think trickledown economics and deregulation, although it’s more complicated than that) have led to the greatest concentration of wealth in the hands of a few in history. According to Oxfam, the “world's 2,153 billionaires have more wealth than the 4.6 billion people who make up 60 percent of the planet's population”. And that was before COVID! Note, that while people are dying by the thousands because they don’t have medical care, a couple of these billionaires are taking joy rides in space. Thus, the gap between the rich and the rest of us grows to the point where we are living in two totally different worlds. Sort of reminds me of a Dickens’ novel, only on steroids.

 

Don’t get me wrong, I’m not blaming runaway inequality on the greed of these 2,153 billionaires although almost all of them are greedy bastards. The problem is the economic system that allows them to accumulate that wealth (and pass it on to their children, think Donald Trump). Now neoliberalism claims that this system functions in a natural way (the invisible hand of the marketplace) to produce the best possible outcome for society. Competition ensures that everyone gets their “fair share”. The capitalists (those who own the companies) will use their profits to invest in greater productivity and a rising tide will float all boats. The problem here is that the large majority of folks don’t have boats.

 

I’m sorry, but I’m a little too old to believe in fairy tales. While it is true that the capitalists use some of their profits to invest in their businesses (usually with the goal of eliminating some of their workers), they use a lot of it to just multiply their wealth. One grand scheme that they’ve hit upon is stock buybacks. (Note – this used to be illegal, it was considered stock manipulation). In some cases, companies are using ALL their profits (or even borrowing money) to buy back their stock, greatly increasing the value of the stocks still outstanding – which (you guessed it) makes the company CEOs and other big stockholders ever richer. These gains have the added advantage of not being taxable in most cases. It’s a win-win for the 1%, and a lose-lose for the rest of us.

 

Which brings us to the second factor, which I would like to refer to as regulatory capture. To understand this, we need to note that the neoliberals are dead wrong about the invisible hand of the marketplace functioning naturally. From day one of capitalism, the rules of the marketplace have been set and regulated by …  the government! The marketplace is not some Wild West show. Governments set the rules and enforce them; otherwise, there would be chaos. Take patents for example. They can grant exclusive production rights for up to 20 years. The question is in whose interest these rules are made. In the case of patents for COVID vaccines, the government enforces them to the detriment of billions of people around the world. By influencing, or better yet capturing, the government regulatory functions, capitalists can be sure that these agencies work to their benefit.

 

A very clear historical example of this is the Federal Reserve Bank. In the late 1800s, the Populists fought for the banking system to be publicly owned and operated. What they ended up with was the Fed, which is made up of bankers, who regulate the banking system in the US; that is, the bankers regulate themselves. The ultimate in regulatory capture.

 

One thing that the Fed makes sure is to keep inflation under control, because banks (and all creditors) loose money when we have even moderate inflation. That’s because the money they collect on their loans has lost value since they made the loan. Workers, on the other hand can benefit from inflation (if they fight for a cost-of-living increase based on inflation) because they owe money, and when they have to pay it back, it’s actually worth less than when they borrowed it

 

(An aside – The populists did get one public bank, which is still around today, the Bank of North Dakota. Check it out, it is a great example of what a public bank can do to serve the community and it is one of the most stable banks in the country).

 

The 1% does not just want to capture the regulatory agencies of government, they are set on using some of their great wealth to capture control of government and both major political parties. As I’m sure you are way too aware, they’ve been very successful.

 

The third factor is the media. While the media has never been a “neutral” force in politics, prior to the advent of television, it was possible for the working class and its advocates to compete on some levels with the capitalists in getting its message out. TV changed all that. The nightly news replaced the morning edition of the local newspaper. And the corporations who own the networks and the local stations determine what is news and how to report it. On top of that, since the main function of TV was entertainment, the news had to be entertaining too. Ratings were critical to advertising revenue and so the nightly news became a real shit show, for the most part.

With the advent of the internet, there seemed to be hope that this new media would democratize the distribution of information and news. What happened is another case of capture by the very wealthy. On top of that, the social media created a space for the propagation of lies and conspiracy theories which have an emotional appeal to many of those alienated by today’s society.

 

All of this does not present a pretty picture, but one that we need to face if we are going to make (or in some cases, unmake) the changes to return some semblance of democracy and justice in the US. Like the Greatest Generation, we don’t have a choice. We either act or see the world go up in flames. "No more water, the fire next time".

 

In my next post, I’m going to focus on one other critical issue that has continued to prevent American society from addressing the crises that face us - the costs of empire.

 

 

 

 

What’s so bad about inflation?

 

In the past few months much ado has been made about the inflation rate. According to news reports we are seeing the worst inflation in the last forty years. There have been several explanations, some of which don’t hold much water. Many main stream media commentators have been focusing on the role of the stimulus programs of the Biden administration increasing consumer demand. The somewhat weak response of the Democrats is that it’s all due to the supply bottlenecks, which can be ironed out as we deal more effectively with COVID. Neither captures the whole picture.

To begin to understand the current situation we need to ask, just how bad is the current inflation? While the headlines report soaring inflation at the end of 2021, they fail to mention that this followed two years (2019 & 2020) of very low inflation, the lowest since the Great Recession of 2008-09. In other words, prior to 2021 prices were deflated, and now, to a large degree, they are catching up with what would be considered normal inflation rates of 2 to 3 percent. Add to that the effects of COVID on supply chains in some industries (a product of the widespread business practice of maintaining almost no inventory and outsourcing production, all part of globalization) and the difficulties of enticing workers to take jobs where their health might be endangered or where they cannot find child care for young children and what we get are shortages and a temporary burst of rising prices.

And don’t forget that big business has used its power to take advantage of “shortages” (real and manufactured) to extract more than their usual “pound of flesh”.

One of the questions we should be asking is, what’s so bad about inflation for working Americans? Most workers in the US owe money; they are debtors. When there is a period of inflation, the money they use to repay their debts has less value than it was when they borrowed it. Inflation benefits that who haven’t been able to save (either in the bank or under the mattress). It hurts those who have large stockpiles of $$$, since those dollars are now worth less (or if there is enough inflation – think the 1920s in Germany – worthless). That’s why bankers hate inflation (and raise interest rates whenever they think it’s seriously devaluing their $$$) and why the bankers’ bank, the Federal Reserve, does everything possible to keep inflation low. To put it succinctly, moderate inflation is good for ordinary people and bad for banks and the wealthy.

Now there is a caveat to my assertion that inflation is good for working people. They have to make sure that they are getting raises in their pay commensurate with rising prices. In the nineteen fifties and sixties, strong labor unions fought for cost of living raises in their contracts and even in non-union work places, employers frequently offered this benefit to keep workers from looking for another job. Unfortunately, guaranteed COLAs only exist in a few places today.

For the last 40 years, mostly due to the policies of the Federal Reserve, inflation has been kept very, very low. These are the same 40 years that have seen the growth of runaway inequality – the rich getting richer and the rest of us not sharing in that prosperity. Do we need more proof that low inflation benefits that who have $$$ and hurts those who don’t?

So, the real answer to inflation should NOT be how to bring it down to under 2%, but rather how to ensure that workers’ incomes keep pace (or even exceed) the pace of inflation. The question is “what is to be done” to achieve this. Four legislative actions which would drastically change the outlook for working Americans, without cutting the meager benefits of some inflation are:

·         Raising the minimum wage to $15. This directly benefits the lowest paid workers, who are working full-time jobs that pay below the poverty level for a family of 2 or more, but also effects workers currently make more that $15 an hour – “a rising tide lifts all boats” definitely applies here. This would immediately offset the effects of inflation on a significant portion of American workers.

·         Making it easier for workers to join a union. This involves updating the restrictions on employers’ tactics to prevent workers from joining unions AND rigorous enforcement of these restrictions by the NLRB. Think the PRO (Protecting the Right to Organize) Act. Over the past 40 years, corporations have been given relatively free reign in their ability to oppose the right of workers to organize and bargain collectively. As a result, organized labor today represents only 10.8% of all workers in the United States, compared to 20.1% in 1983. This despite the fact that over 60% of workers say they would like to join a union today.

·         Providing universal free high-quality Pre-K. While some may debate just how much children benefit from Pre-K education (there is plenty of evidence that children from marginalized communities do benefit significantly), there is little doubt that this will free up millions of women and men to rejoin the workforce, particularly if it is coupled with a $15 minimum wage and workplace protections against COVID (a mask mandate, for example).

·         Enacting universal, single payer healthcare, with the ability to regulate prescription drug prices. Healthcare expenses are the number one cause of bankruptcy in the US. Lack of healthcare insurance results in thousands of preventable deaths each year. Enough said.

None of the above are designed to reduce inflation, which, based on the analysis above, will moderate over the next year or so without drastic action being proposed by some, particularly raising interest rates. And that’s OK, because inflation isn’t really the problem, it’s the ability of workers’ income to match (or exceed) the increase in prices that needs to be improved.

There is one other action that I haven’t seen anyone else propose, which might moderate inflation to some degree and could have other beneficial effects. While Lizzy Warren and others have proposed a wealth tax, which is a great and long overdue idea, I think it should be coupled with an excess profits tax. Such a tax would disincentivize using the current situation with COVID to rip-off consumers as many corporations are doing (think Dollar Tree and big Pharma) or, failing that, provide revenue for free Pre-K and other social programs.

I know that this sounds like a crazy radical idea, but it’s been done before! In the US! During WW II an excess profits tax was adopted by Congress to “siphon off war profits.” For profits resulting from the war, the tax rate was set at 95 percent. And aren’t we engaged in the different kind of war today?