Understanding Runaway Inequality

If you want to understand runaway inequality, really understand it, you must read Les Leopold's book, aptly titled "Runaway Inequality: An Activist's Guide to Economic Justice".

Leopold, a longtime labor activist, is working to build a national movement around the concepts outlined in the book. The key thing to note about the book is that it explains the concepts in everyday language and simple, clear graphs so that your don't have to be an economist to grasp the ideas. And it shows how runaway inequality is related to the other issues we, ask progressives, care about. As Les concludes "everything is connected to everything else".

I am participating in his "Train the Trainer" workshop this weekend and hope to post a synopsis of the book and the workshop in short order. However, as a teaser, I've copied below a press statement I wrote for the President of the SENC Central Labor Council, based on Les' analysis (and 30 minutes of research on the Internet).

Background - Duke Energy, the largest electric utility in the country and the only one in North Carolina (with the exception, I believe of a couple of very small co-ops) has been storing its waste coal ash in open ponds through out the state. This became an major issue when one of them spilled into the Dan River polluting the drinking water for hundreds of thousands of homes.

Belatedly, Duke has been ordered to clean up some of the ponds. So now Duke has demanded a 17% rate hike to pay for this and future clean ups. To add insult to injury, the way the proposed rate hike is structured it will hit small consumers (working class families) the hardest. The following is the statement read at a press conference and at the rate hike hearing in Wilmington.

Statement by Herb Harton, President, Southeastern North Carolina Central Labor Council.

Duke Energy is demanding a huge rate increase to pay for cleaning up the coal ash ponds, a mess that it created, and for its failure to invest sufficiently in clean energy to prevent future environmental crises.

It’s not that Duke didn’t have the money from its profits over the past ten years. Rather it chose to pay out 17 billion dollars in dividends. It chose to spend billions more to buy back almost one-half of its outstanding stock in 2011, resulting in the value of the remaining stock tripling from $21 a share to $63 a share in just one year. It chose to use its assets to buy Progress Energy for $13.7 billion, paying Progress Energy’s CEO a $44 million golden parachute. Just a note – at the time of the merger, Duke’s CEO stated that it would save customers at least $600 million over 5 years. The 5 years are up, and we’re still waiting!

Who benefited from all these actions. Duke’s CEO and other officers who get paid in stock options on top of their inflated salaries and Duke’s other large shareholders, but certainly not its customers.

Duke claims it needs more money to clean up present and future messes and make necessary investments in infrastructure. They want their customers, working families, most of whom haven’t seen any increase in their meager incomes over the past 10 years, to pony up.

But we have a better idea. Duke needs to start retaining its profits and investing them. If they need more money to invest, they can resell 10% of the 600 million shares of stock they bought back in 2011, which, at current prices, would give them $5 billion cash to invest. That’s what companies would have done 50 years ago, when the growing economy benefitted most Americans, not just a few.

What’s Next for Progressives – A rebuttal

Paul Krugman, in a NYT column on Aug. 7^th, 2017, concludes that Democrats should not take up the fight for single-payer Medicare for All. While his arguments are weak, they still need to be refuted, as they will be taken up by those who oppose any progressive agenda as the way forward for the Democratic Party.

Krugman states that having won a great victory in the battle against “repeal and replace”, progressives should move on to more important issues. More important issues??? WTF. What could be more important than an issue which affects 20% of the economy and every single man, woman and child in the country? An issue that is the largest cause of personal bankruptcy, pain and premature death in the US. An issue which has resulted in spiraling increases in the federal budget.

And since when is a temporary stand-off a great victory? Krugman just declares victory and says, let’s go home. Is it possible that he thinks the Republicans will not come back with a war of attrition, a death by a thousand cuts? I guess he doesn’t read the newspaper he writes for.

The problem he wants us to ignore is that the two main progressive goals for healthcare reform, universal coverage and controlling rapidly rising healthcare costs, were NOT accomplished by the ACA. Simply tweaking it, will not solve these problems. It will leave in place an inefficient and wasteful system with the power in the hands of the private insurance industry and corporate medical providers like Big Pharma.

For some reason (I’ll leave that to your imagination) Krugman wants to leave the insurance industry in control. He supports this by saying that the insurance industry helped save the ACA from Republican plans. Of course, they did; they are not going to bite the hand that feeds them. But they are also not going to resist the changes short of repeal, that the Republicans are likely to enact. Krugman apparently forgets that the insurance industry will always protect its bottom line, not the health of the insured.

On the political level, winning the war over healthcare will require a clear and concise alternative to “repeal and replace”. The goal of “making incremental improvements to the ACA” just doesn’t get it. “Medicare for All” does.

Krugman is right about one thing – getting to single payer will take a lot of work. It will require Democrats to take back the federal government. The actual way in which it will be accomplished needs to be worked out. But as the goal for healthcare reform, it can provide a rallying point (along with several other issues) for Democrats to win back political power.

We are faced with an historic opportunity to fight for the solution to our healthcare crisis. A majority of Americans support the idea that the government should guarantee affordable healthcare insurance to all. The Republicans have been totally discredited; the Democrats have a chance to offer a real alternative.

If we walk away from this opportunity, who knows when it will come again.

Who we honor says a lot about who we are

It is long past the time for our country to come to grips with its history. It has been almost 400 years since the first kidnapped Africans were brought to Virginia against their will, 152 years since the end of the Civil War and the passage of the 13^th Amendment banning slavery, and 63 years since the landmark Brown v Board decision outlawing Jim Crow school segregation. Yet today we still live in a society where separate and unequal define the lives of our black citizens and where racial injustice is defended as “part of our heritage”.

The tragic deaths in Charlottesville and the failure of the President to condemn the white racists and neo-Nazis responsible for the violence is a shocking reminder that we have a long way to go in dealing with our history of systematic racial oppression, our nation’s “original sin”. The promise of America, to affirm the fundamental worth and dignity of ALL people, rings hollow in the ears of millions of our fellow citizens.

To be clear, the Civil War was not about states’ rights, just as opposition to desegregation in the 1950s and 60s wasn’t. The former was about defending a system of chattel slavery, where human beings were treated like property; the latter was about maintaining Jim Crow, which continued the systematic discrimination and hatred that is a fundamental part of our American heritage, both South AND North. That part of our history can only be put behind us when we acknowledge the past and present expressions and thoroughly reject them.

To combat systematic racism, we need to accept that those who fought to maintain this system, regardless of their justification, should not be celebrated as heroes. Robert E. Lee may have been a brilliant general, but he put his skills to work for an immoral cause. To honor him is to celebrate that cause and to support the continuation of the system of racial oppression he fought to maintain.

In fact, we must to do more than just remove those monuments honoring the Confederates who fought to divide our country in order to preserve slavery. In their place, we need to erect monuments to those who fought and died for freedom and equality. They fought for the values that made our country great and are the true heroes in our history. That’s a heritage that we should all celebrate.

LTE Submitted to the StarNews in Wilmington, NC on 8/25/17

WTF – The Empire Strikes Back, Again!

According to a new posting by Common Dreams, 2 tech billionaires have launched an initiative appropriately titled Win the Future (WTF). Apparently Mark Pincus, Reid Hoffman and their corporate elite friends think that the problem with the Democrats is that they are moving away from a “pro-business”, pro-economy” stance and have been pushed too far left.

Wow! History does repeat – the first time as tragedy, the second time as farce. Is this the new iteration of the Democratic Leadership Council? Are we witnessing an attempt at a corporate coup or, in business parlance, a hostile takeover - well really not that hostile?  Do Pincus and Hoffman intend to patent the “Democratic” brand and sell it. They could call it Republican-lite.

WTF – they got that part right.

Politics and the Upper Middle Class

Interesting review of Richard Reeves' new book in The Nation. Reeves makes an important point that not all inequality is the result of the 1% hogging all the benefits from economic growth. He demonstrates that the upper middle class has also benefited to a great extent. The significance is that this class has a great deal of power, political economic and social, and uses that power to preserve its privileges. Think protecting zoning laws and neighborhood schools; think tax benefits for educational savings accounts; think support for "balanced budgets" to preclude tax increases.

Reeves analysis is worth considering when formulating responses to inequality. The upper middle class is a major force behind the neoliberal "solutions" to inequality, arguing (as unfortunately Reeves himself seems to do) that making competition "fairer" by providing a few rungs to the ladder of success is all we need to do. But doesn't competition always lead to winners and losers? Changing the class, race and/or gender of the winners does nothing to overcome the basic inequality of a system that reserves almost all of its rewards for the few winners.

Yes, competition may drive growth, but growth itself should NOT be the goal of economic activity. Should our society serve the economy, or should our economy serve society? And how can we change the narrative from a liberal (or neoliberal) perspective to a progressive one?

We Are the 99 Percent—Except for the Top 20 Percent of Us

In a new book, Richard V. Reeves argues that members of the upper middle class, not just the ultra-wealthy, are making our society profoundly unequal.

THENATION.COM

"It's the Economy, Stupid"

Two recent articles in The Nation have revived my concern about how we should analyze the election of Donald Trump. 

The first is a data driven analysis “Economic Anxiety Didn’t Make People Vote Trump, Racism Did”. After attempting to mystify us with charts and graphs, the authors’ basic conclusion is that Trump voters scored higher than Democratic voters “across several different measures of racial animus” (duh) while not showing any more economic anxiety than Democratic voters, proving that racism, not economic peril, was the basis of Trump’s win.

So, let’s begin by noting what anyone schooled in the social sciences should know – correlation does not demonstrate causation. Yes, large numbers of Trump supporters are racist and with the current political alignment, the Democrats generally don’t appeal to voters motivated primarily by racism. 

But if I’m right and the real issue is not how people voted, but who voted, then this correlation proves little. And, most importantly, it fails to explain the demographics of the election. Why did Trump win in areas that have seen little in the way of economic recovery in the last 8 years and lose in areas which have done significantly better under the neoliberal policies of the last 40+ years? How did Trump carry many areas that voted for Obama in 2008 and 2012? And why was the voter turnout significantly lower than in the past two presidential elections?

Many working class whites did vote for Trump based on their animus towards blacks and immigrants. But what motivated their animus and also gave them a reason to “vent” by voting for the man who gave the establishment the finger? Was it their precarious relationship to the American economy and political structure? Was it the same sort of alienation that has led to the opioid epidemic and the rising death rate among working class whites in the US? And were there large numbers of working class whites (and w-c minorities) who simply didn’t come out to vote because they didn’t see a candidate who was addressing their needs? None of these questions are addressed by this limited statistical analysis. Nor does this give us any understanding of how the resistance should move forward.

In “Trumpism: It’s Coming from the Suburbs”, Jesse Myerson argues that the basis of support for Trump is the petit bourgeois, which he says constitutes the core of fascism “always and everywhere” and populates the suburbs. While his goal, critiquing the establishment liberal dismissal of white workers who supported Trump as racist trailer trash, is commendable, his op/ed does little to promote a deeper understanding of what really happened.

There are many problems with this analysis. To begin with, Myerson’s utilizes Marxist terminology, but then offers a decidedly non-Marxist and very vague definition of petit bourgeois, which allows him to classify the police and Border Patrol agents as petit bourgeois and imply that anyone who has a pension plan and lives in the suburbs is also petit bourgeois. Then he reasons that because the petit bourgeois is always the core of fascism, this must be where Trump’s support came from. As suburbanites, who fled the cities to escape living next door to minorities, Trump’s racist appeals spoke to them and they flocked to his banner. They were not motivated by economic anxiety, but more by status anxiety.

Myerson then states that the working class is limited to those “in and adjacent to poverty” and goes on to claim that, since poor people don’t vote (why should they, I might ask), this group could not have possibly been a major basis of Trump support. The problem here is that it just doesn’t fit the actual demographics of the election. Trump won large majorities in rural areas of the South, Mid-West and West, but not necessarily in the suburban areas of the Northeast and West Coast.

A much more credible theory might look at who came out and who did not. Did Trump bring out the “missing white voters” (poor, working class and petit bourgeois),who saw in his candidacy a chance to fight back against the establishment which has offered them nothing to improve their situation over the past 40 years? Was this a protest vote for many Trump supporters? And did a sizable portion of the working-class electorate (both the white and minority), who were not motivated by Trump’s racist and anti-immigrant appeals, stay home because they saw no reason to come out and vote for the people who have done little or nothing for them over this same period?

I think we would be much better off adopting the classification proposed by the British economist, Guy Standing, a professor at the University of London. (See my earlier posting “The ‘Precariat’ and the Danger of Fascism” – 1/2/16.) Standing has suggested an updated system of economic classification in which he posits a large class (1/3rd to1/2 of the population in developed capitalist countries) called the “precariat”. This class is defined by its precarious economic existence.

According to Standing, the diverse individuals in the precariat share several characteristics:

• They suffer from elevated levels of stress
• They lack meaningful work and have no occupational identity
• They have no access to benefits and no financial security
• Their level of education is frequently above the work they do
• They are both young and old (think of the WalMart greeters and the McDonald’s workers)
• THEY ARE ALIENATED, ISOLATED AND VERY ANGRY

Their ranks have been swelled by 30 years of economic recessions, followed by recoveries that have bypassed them. They have formed the basis of both the left and right populist explosions in Europe and the US, and they offer a fertile ground for the development of fascism, particularly when, absent a strong labor movement, there is a weak countervailing force on the left. Donald Trump appealed to their anxieties (both economic and social) and offered them "hope", while the Democrats offered???

We must therefore ask, can the Democratic Party fill that void on the left? The answer will depend on how we analyze the election of 2016 and the long-term decline of the Democrats and whether the Democrats can shed the neoliberalism of the past 40+ years and regain their former status as the “party of the people”.

A luta continua.

Of Circuses and Wars

Just read an excellent article by Phyllis Bennis in Common Dreams. The title “There is No Strategy Behind Trump’s Wars – Only Brute Force” drew my attention. Phyllis is quite right from the perspective of foreign policy. And her analysis that this is a raw demonstration of power, showing that the bully in the White House has no qualms about unleashing the horrific weapons he has at his command, is spot-on.

But is this a qualitative change in US foreign policy? Although there is a shift to more emphasis on military might and less on diplomacy, what Trump is doing is an extension of the War on Terrorism, which has been conducted by both Republican and Democratic administrations since before 2001. 

Are Trump’s targets restricted to North Korea, Iraq, Syria, Afghanistan, Yemen, etc.? Or are the bombs also aimed at us, the resistance to Trump’s domestic policies. I would propose that there is a strategy, and it is to divert our attention while the Republicans retool their domestic attacks. Unfortunately, it seems to be working.

Wars and circuses are traditional ways in which the public can be “entertained” while an autocratic regime fleeces them. The problem for Trump is that his circus is so outlandish and has been on the road so long that it has lost its appeal. It’s no longer entertaining, just tawdry and disgusting.

On the other hand, wars, particularly those waged with “awesome” weapons, are the perfect diversion. Trump has already accomplished a lot with few, if any, negative consequences. He has reinvigorated his base by appearing tough in his approach to two other autocrats, Putin and Kim Jong-Un. He has put the Democratic Party establishment between a rock and a hard place, unable to criticize policies which are the extension of those they have supported in the past. He has pushed his domestic agenda off the front page, allowing Republicans to regroup (do we hear Repeal and Replace coming back) and push their policies with less visible resistance.

How should the left respond? To begin, it is necessary to expose Trump’s policies in terms of both the terrible cost in human lives (well over 1,000 civilian deaths in Iraq and Syria in March alone) and the racism inherent in United States military actions the Middle East and Africa. In addition, we need focus attention on the fact that dropping the Mother Of All Bombs or firing missiles at Syrian bases have done nothing to make the world or the US any safer. But most importantly we need to connect Trump’s foreign aggressions with his domestic agenda before the “fog of war” engulfs us all.