Archive for the ‘Politics’ Category
Last week fast-food workers walked off the job in over a hundred cities across the country to demonstrate against exploitation and wage slavery in fast-food corporations. Thousands of participants organised to demand a $15 an hour living wage. The tide of indignation is rising. From Walmart to Caterpillar, from Macy’s to the top six fast-food chains public outrage over naked worker exploitation is mounting. Inequality in the United States has reached fever pitch.
I’ve collated data from a series of articles and public policy reports published over the last several months to paint a picture of a nation haunted by the spectre of a growing class divide.
According to the Social Security Administration nearly 40 percent of all workers in the country made less than $20,000 last year. This doesn’t include figures on benefits such as health insurance or pensions. That’s below the federal poverty threshold for a family of four and close to the line for a family of three. On average, these workers earned just $17,459.55.
The New York Times reported on The Economic Policy Institutes findings that the bottom 20 percent of American workers by income — 28 million workers — earn less than $9.89 an hour; “That translates to $20,570 a year for a full-time employee”. Between 2006 and 2012 these workers saw their income fall by 5 percent. The report also found that wages for workers at the 50th percentile — their median pay is $16.30 an hour — have also dipped, falling 3.4 percent, while pay for the top 10 percent rose 3 percent.
A glaring disconnect between the nation’s top corporate executives and their wage earning employees couldn’t be starker. While workers wages have flatlined, executive pay jumped 16 percent last year alone. Citing Equilar, an executive compensation analysis firm, The Times reported that top executives were raking in, on average, $15.1 Million.
The pay gap between CEOs and their employees working in Fast-Food is particularly staggering. Speaking on Democracy Now, Sarah Anderson, author of the new report “Fast Food CEOs Rake in Taxpayer-Subsidised Pay“, gives an inside peak into how the top six fast-food corporations are taking advantage of a perverse tax loophole, one that rewards fast-food CEOs for underpaying employees. The way this “loophole” works is that it allows companies to deduct unlimited amounts from their corporate income taxes to pay their executives. The stipulation that makes this a loophole rather than broad day light robbery is that the deductions only apply to performance pay – things like stock-options, and related bonuses that come out of the cauldron of financial wizardry. Through this corporate handout fast-food executives are able to obfuscate the real costs of production.
Anderson’s study reveals that over the past two years, the CEOs of the top six publicly held fast food chains – YUM Brands (KFC, Taco Bell, Pizza Hut), McDonalds, Wendy’s, Burger King, Dunkin Brands and Dominos – “pocketed more than $183 million in fully deductible ‘performance pay,’ lowering their companies’ IRS bills by an estimated $64 million.”
In syllogistic form it looks something like this: If companies pay their executives more, then they pay less in federal taxes. Companies pay their executives butt-loads more. Therefore tax-payers get reamed. Mind your P’s and Q’s!
Not only is this low-ball business model denying fast-food employees a living wage and affronting their dignity by setting their human value so low that affording basics like food, water, clothing and shelter is impossible without government support, a second-job or illicit income, this business model is externalising its labor expenses. One study conducted by University of California Berkeley found that more than half of frontline fast-food workers depend on at least one public assistance program costing tax-payers a whopping $7 billion annually. What it comes down to is that fast-food company profits are being mystified. The real costs of labor, distorted by government handouts fatter than fast-food itself, is hiding the hidden reality of tax-payer-subsidized profits. Regular costs of doing business are being transformed into plain profits that ascend directly to the top. While Wendy, Colonel Sanders, the Burger King and Ronald McDonald stiff their employees and pocket the spoils millions of Americans are paying them to do it.
The coals of antagonism are smoldering. The wages of working people have levelled down below the costs of their subsistence. At the same time executive pay has soared. Last weeks organised protests against mass exploitation didn’t pit industrial workers against a class of industrial elites. The economy of mass consumption swallowed that of mass production. What last weeks’ calls for dignity and fair living wages express, however, is a new iteration of class struggle. America stands divided and unequal. The spectre of class war is present. “We’ll be back”, protesters chanted as they exited a McDonalds in Times Square.
“We have now an American political party and a European one. Not all Americans who vote for the European party want to become Europeans. But it doesn’t matter because that’s what they are voting for. They are voting for dependency, for lack of ambition and for insolvency.”
Thank you Professor Harvey Mansfield. I will be sure to quote you generously throughout this post to clarify any “misperceptions” that may arise as I try to grasp the meaning of your diatribe.
Mr. Mansfield, Harvard professor and acolyte of Leo Strauss-the reactionary historian of philosophy who sought to reincorporate “premodern” notions into modern philosophy to remind us of the dangers of intellectual inequalities-appeared in a Wall Street Journal interview to chastise “lesser voters”, the “not wise”, “the poor”, “the incompetent”, “the alliance between Ph.D’s and [its] victims” and those who “can’t quite govern their own lives,” in sum, European party supporters.
For starters, dividing liberals and conservatives into a European and American party on the premise that the European party stands for attacking “the common good” with entitlements by way of using “liberty to create more equality,” which according to Mansfield is as “typical” of Europeans as it is for Democrats to be “the party of free condoms” while the American party won’t stand for “mass rule by an ignorant or uncaring governement” is incomprehensible. I’m not sure what you were intending to express Mr. Mansfield, but it seems you were eager to act on some primordial emotional impulse to be understood by the few, who, like you, “have lived the life of Riley” at the expense of being understood by the different kind of victims who are uninterested in “defending the good kind of democracy.” Perhaps that lack of interest stems from the widespread skepticism that the “party of judgement” you call upon to recover America could a.)apporopraitely be called “democratic” and b.) possibly promote “self-government.” When we consider your earlier statement:
All modern social science deals with perceptions, but that is a misnomer because it neglects to distinguish between perceptions and misperceptions
its hard to imagine you not coronating yourself perception arbiter, ruling over which perceptions are valid and invalid, as if you, intellectually more equal than the feckless peons you despise have the divine right to make that distinction.
Thank you again Mr. Mansfield for an insight into the little perspectival corner where you shinest and indoctrinate tomorrows’ leaders, much like Strauss did Rumsfeld.
Fiscal cliff, Taxmageddon, and a committee of CEOs commissioned to assist lawmakers in reducing the deficit is a combination found exclusively in two places: Idiots Guide to Plutocracy and the United States of America. The corporate CEO’s who have made their way into deficit negotiations by way of billionaire and former U.S. Secretary of Commerce under Nixon Peter Peterson’s Campaign to Fix the Debt and it’s self-proclaimed CEO Fiscal Leadership Council all with the obsequious approval of Congress flouts the fact that these same people are substantially responsible for the bloated deficits they are suddenly responsible for trimming.
These guys, 80 plus CEOs from America’s most powerful corporations are charged with the role negotiating a debt deal that continues to provide corporate tax breaks and corporate subsidies while shifting costs to the poor and elderly. The central tenet to their deficit reduction plan is to enact enormous cuts to “social safety-net programs/” It’s bad enough that the banksters and corporate elites at the center of the 2007 financial meltdown have any say at all in fiscal policy. What’s worse is that their recommendations hold real weight with the legislators they are courting, who will, of course, be rewarded handsomely for advancing the campaign’s tax agenda.
The Institute for Policy Studies released a report illustrating how this CEO-led initiative is exploiting the “fiscal cliff” as an opportunity to secure tax-code changes that would result in a multibillion dollar windfall for all 63 corporations represented in the campaign:
The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.
The CEOs backing Fix the Debt personally received a combined total of $41 million in savings last year thanks to the Bush-era tax cuts. The top CEO beneficiary of the Bush tax cuts in 2011, Leon Black of Apollo Global Management, saved $9.9 million on the Bush tax cuts. The private equity fund leader reaped $215 million in taxable income last year just from vested stock.
Of the 63 Fix the Debt CEOs at publicly held firms, 24 received more in compensation last year than their corporations paid in federal corporate income taxes. All but six of these firms reported U.S. profits last year.
Goldman Sachs’ Lloyd Blankfein and Honeywell’s David Cote have done a tour de force PR campaign advocating massive spending cuts to Medicare, Medicaid and Social Security as the sole option to reduce the deficit. Cote took to the airwaves in a CBS news interview not only lobbying for “entitlement” cuts and slashing “low priority spending” but in another interview, when asked by CNBC’s Andrew Ross Sorkin what he thought the effective tax rate should be for corporations Cote responded, “zero.”The Huff Post noted that Cote walks the walk and talks the talk:
“At Honeywell, Cote practices what he preaches. Between 2008-2010, the company avoided paying any taxes at all. Instead, the company got taxpayer-funded rebates of $34 million off of profits totaling nearly $5 billion.”
Obama sought advice from Cote on the economy last week.
A look at the campaign’s member corporations, from military contractors GE, Boeing and Textron-some of the biggest recipients of corporate welfare and entirely dependent on Congress and the White House to maintain defense spending that translates into lucrative federal contracts-to the financial powerhouses, Morgan Stanley, JP Morgan and Bank of America shows the disdain the ruling elites have for those they govern. As the “fiscal leaders” barnstorm the media, a cynical attempt to convince people who aren’t on their corporate boards that they should foot the bill for the federal and corporate largesse that has created this situation, they lift their shoes and tell us we should be honored to taste their soles. As Obama confers with Monsignor Cote, dotes on Bryan Moynihan and gives Lloyd Blankfein carte blanche to voice his vision of how the economy should operate he and the coterie of elites surrounding him and his administration give a warm and sincere fuck you to America’s most vulnerable. This peek into what’s happening behind the “closed door” deficit discussions is a sham. CEO as economic adviser is an incommensurable duality. CEO as policy dictator is more fitting. The priests of Cybele flagellated themselves in violent frenzy before castrating themselves in honor of their goddess. Watching the corporate elites silently as they attempt to hijack fiscal policy once again reminds us that we aren’t too far behind the priests of Cybele.
With the CIA investigating Petraeus and lawmakers pressing inquiries about the Benghazi attacks as couple of weird things have emerged.
Over the Patraeus clatter it has come forth that an agent used sophisticated surveillance and datamining technologies to investigate someone without having received a warrant and with absolutely no oversight is alarming. That Jill Kelly a Tampa Bay “socialite friendly with Patraeus” approached a friend of hers, an FBI agent after receiving threatening emails and a major investigation ensued shows the disturbing reach of the surveillance state and how easily surveillance is conducted for purely personal purposes. Let me summarize the Patraeus scandal: Sexy friend complains to FBI. FBI agent launches his own investigation. Paula Broadwell identified as sender of threatening emails is subjected to invasive surveillance despite there being no evidence that she committed a criminal offense. Every personal email she sent is scrutinized, pics of her lover (“shirtless” apparently) are viewed, her contacts databased and also investigated which revealed her affair with Patraeus and involvement with General John Allen too. And then a scandal breaks loose because Patraeus was getting busy with his hot biographer. The real scandal here is that an FBI agent launched his own investigation not because a crime was suspected but because he felt like getting to the bottom of a friends grievance. So when an investigative agent or a police officer with access to surveillance tools feels like using them on say a wife he suspects of cukoldry or a friends nemesis boss or simply to cast the surveillance camera on someone who caught his eye, those in the internal investigation units are going to pay no attention to their agencies gross overreach of authority unless their spy was involved in a sex affair and was in the organization’s top ranks. And that’s great that the Pentagon is reviewing its ethical standards after a 4 star general got caught with his pants down but how bout showing the same outrage over the litany of other crimes the US military has committed over the past decade; peeing on dead people, killing babies, raping women and torturing war prisoners. The US is a surveillance state and it conducts unaccountable probes into the lives of even the most law abiding citizens. Washington Post’s Top Secret America revealed that “Every day, collection systems at the National Security Agency intercept and store 1.7 billion e-mails, phone calls and other types of communications.” If this scandal is really about Patraeus and his sex life rather than about the tentacular reach of America’s sprawling surveillance apparatus that’s disturbing…
like…the Senate Intelligence Committee reviewing “a detailed chronology of the attack on September 11 that killed Ambassador J. Christopher Stevens” from a “video made from a composite of sources, including Predator drone video of the events that night.” What’s being admitted too here is that investigators have possessed video footage from various sources since the attacks occurred. Dianne Feinstein has been upfront about that. So why the ambiguity surrounding the event? Although the comprehensive surveillance networks are anything but synchronized and comprise a vast and often unnavigable data universe it’s unconscionable that the CIA, NSA and the hundreds of other investigative bureaus responsible for investigating the Benghazi could not see what was occurring in real time or at worst in the immediate aftermath. The strategic vagueness that has shrouded events in Benghazi and the strange contradictions now surfacing as investigations continue is the Obama Administration fumbling “perception management“, the reviled strategy popular during the Bush administration that included creating and disseminating “misinformation” to manipulate public perception of events.
Last night Providence’s Cafe AS220 welcomed WGBH radio show host Mark Levitt, human rights specialist Tara Melish, Yale professor Jennifer Klein, and author Eve Sterne to the Action Speaks series Underappreciated 20th Century Dates That Changed America: Private Rights and Public Fight. The conversation revolved around the question: can and should the government guarantee economic security? A look at FDR’s 2nd Bill of Rights ensued framing the question historically to confront present economic realities.
On January 11, 1944 President Roosevelt gave his State of the Union Address. The Second World War was still raging and America was five months from D-Day when Roosevelt made a plea to the nation to continue the politics of sacrifice. A mass tax was levied to fund the war effort. Back then America paid for its wars up front; future generations weren’t the collateral of war mongers. In return for their sacrifices Roosevelt called for the implementation of a “second bill of rights” arguing that the political and civil rights guaranteed by the constitution and the Bill of Rights had “proved inadequate to assure equality in the pursuit of happiness.” Roosevelt’s remedy was to declare an “economic bill of rights” that guaranteed: decent employment, housing, medical care, education and social security and the freedom for businesses to compete in a competitive market place. Roosevelt sought to redress the economic fears of old age, sickness and accidents by creating governmental programs to protect society’s most vulnerable individuals. Beyond providing a basic safety net Roosevelt also thought recreation was a fundamental right. That same year a monumental work in political economy was published by Freidrich Von Hayek, The Road to Serfdom,in which he “warned of the danger of tyranny that inevitably results from government control of economic decision-making through central planning.”
Hayek’s work is central to libertarian thought. The Road to Serfdom argues that abandoning individualism and classical laissez faire liberalism would result in the loss of personal and political freedoms. A small minority of central planners would have to coerce individuals into submitting to their program. Propaganda would be used to make individuals feel the state’s goals were theirs and as Hayek admonished after studying the rise of Nazism the state will ultimately rely on brutal methods in the service of “social welfare” or the “good of the community.” For Hayek Socialism and Fascism meet at the back door.
Critics of Roosevelt’s New Deal and the “economic bill of rights” he pushed for wielded the same arguments advanced by Hayek. Public relations campaigns waged by the business community and the politicians who supported their interests depicted Roosevelt’s initiatives as a “creature of leftist forces” labeling the New Deal and the economic bill of rights socialist programs that threatened America’s future prosperity. Millions of working class people, small business owners and soldiers returning home to start a new life saw it differently.
The social forces that compelled the Roosevelt administration to establish a liberal version of social democracy stemmed from an organic bottom-up movement. Individuals organized collectively to protect themselves from the turbulent market forces that contributed to massive unemployment and the Great Depression. Unions formed to protect workers from exploitative bosses. As economic woes continued on into the 1930’s and America came nearer to WWII a public discourse was created that centered on: focusing resources on poor and unemployed, bringing radical change to agriculture by limiting production, regulating business and banking practices, “in general promoting schemes for a more participatory form of government that includes the citizenry in economic decision-making process.” Contrary to what Hayek envisioned, a wayward state seizing property and taking money from its workers via punishing taxes to fund its programs and impose the “will of the small minority upon the people”, the people interacted with the state to create programs that would protect them against the dislocating effects of unregulated markets and guarantee them a say in deciding the country’s policies.
Since the New Deal was enacted the Right has tried to systematically dismantle what they see as an unwieldy state apparatus that undercuts economic productivity by interfering with markets, a perceived assault on “freedom” according to the staunchest ideologues. The gains working class people and small business owners made during this moment in history are underappreciated today because of how the ongoing debate about the role and size of government has been framed. Panelist Jennifer Klein described how “today policies are perceived paternalistically as hand-me-downs to freeloaders”. Tara Melish noted “it makes a difference whether or not you frame rights as a governmental responsibility or as [social] tools for the people to demand rights.” We forget how the dynamics underpinning the social movements during the New Deal era were the outcome of people empowering themselves as political agents so that they could demand what kind of rights were appropriate in their society.
In a society where the “sole political definition people have of themselves is as a tax paying home owner”, it’s hard to imagine a political movement that could be as effective in transforming the socio-economic landscape as the union mobilizations and mass political organization of the 1930’s and 1940’s. Melish emphasized the way “cultural memes” are utilized in political rhetoric to associate words like “social program” and “safety net” with “socialism and laziness.” Owning the language with which we describe the economic realities of the 21st century, as the business class and their political party the Republicans do allows vested interests to avert addressing questions like those raised by Action Speaks. Observe how the word security is always addressed by the ruling elite and the Beltway media as an issue of national security. The conversation about economic security has been swept under the rug of terrorism. Notice how today’s public discourse has been reduced to a gallimaufry of culture war sound bites and tax policy battle cries.
Last night’s Action Speaks program aimed to engage the public in a meaningful conversation about the role government should play in 21st century America. Are the laws and rules that govern our country and regulate our economy as Roosevelt said in his State of the Union Address “inadequate to assure equality in pursuit of happiness?” This conversation, adjusted to the historical moment we ourselves are now situated in has been strategically averted for three decades. While rapacious corporations “rebuild” Iraq and Afghanistan as devastated former coal miners hang on for life in sacrifice zones, while stock traders invent and exchange imaginary “products” and millions lose their homes, while public schools are devolving into dropout factories and levees are breaking and bridges collapsing and temporary employees work for a decade at subsistence pay with no benefits and students live as indentured servants with garnished wages by JP Morgan Chase, and people are imprisoned without access to an attorney or due process because they wear black shirts and brew craft beer, and small businesses are devoured by federal subsidized Walmarts and Bass Pro Shops, a national conversation like that held on January 11, 1944 is imperative if we are to confront the economic, political and social realities of America today. These conversations force us to confront ourselves, our propensity for denial and the possibility that we are responsibility for the society we live in.
There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.
Hayek put it more succinctly than I. Let’s change the topic of discussion before we are devoured by our illusions of empire and drowned by our delusions of innocence.
Your triumphant leader couldn’t have been reelected without you and now he will show us how “flexible” he really is. Obama won’t only touch his toes but he’ll begin “compromising” away liberals most cherished programs to avert the concurrent tax increases and spending cuts scheduled for January 1st.
In his first public comment since the election Obama reiterated his promise to middle and lower class Americans: “I refuse to accept any approach that isn’t balanced. I will not ask students or seniors or middle-class families to pay down the entire deficit while people making over $250,000 aren’t asked to pay a dime more in taxes.” This promise is hollow. Obama has already set the tone for how the Democrats will go about negotiating a solution to the impending $700 billion in tax increases and spending cuts-what the Republican Party has labeled the fiscal cliff. The Democrats are “open to compromise.” Speaking of the deficit and tax debates that will begin on Friday, Harry Reid echoed Obama’s conciliatory tone, “everything doesn’t have to be fight.” The problem is, and not for the Democrats but for those who elected them to lead the country, that fighting to save programs like Medicaid, Medicare, Social Security and food stamps from the budget cutting axe were considered paramount by those who voted for the Democrats in this election. Now you have the newly reelected President and his Senate Majority Leader saying that these programs might not be worth fighting for as America faces “immanent Armageddon.” Our susceptibility to politically manufactured distortions proves resilient.
The real catastrophe that middle and lower class Americans face is the trimming to or undoing of the few remaining institutions that protect society’s most vulnerable from the turbulence of markets and the privations of unemployment; not growing deficits. It’s as if the social programs that play an instrumental role in protecting poor and struggling people should take back seat to sound budgets, manageable deficits and strong national credit ratings even though the economy isn’t a person and hasn’t, save in some abstract sense, suffered.
Obama’s admission, “I am not wedded to every detail of my plan” demonstrates his willingness to make concessions before his second term commences putting the economy before people. By offering compromise to an inveterately unyielding Republican Party before first laying down a bold plan Obama is in effect succumbing to stubborn House Republican demands. Republicans and the business elites who invested billions in their campaigns want nothing more than to let “entitlements” continue their 30 year liquidation plan. Despite the nonpartisan Joint Committee on Taxation’s findings that restoring the highest marginal tax rates to what they were under Clinton would generate at least $40 billion in revenue in 2013 Republicans won’t budge on raising taxes on America’s top earners. Democrats know this. Over the past few days Obama has indicated that he would rather negotiate a “Grand Bargain” with Republicans early on than endure a protracted “fight” against axe wielding conservatives that could last well into his second term. In this way Obama will be able to eke out his title as a great compromiser before the year’s end allowing himself an entire second term to shape his legacy.
But the outcome of Obama’s eager compromise won’t look so grand. The “deficit scolds” as Paul Krugman calls them want Obama to accept austerity over the long term. This is the logic:
America stands before a fiscal cliff on the brink of falling off into another recession. Federal overspending has largely gotten us here but America still needs to keep itself safe. If we increase federal revenue by “limiting income tax deductions” and closing tax loopholes we can decrease our deficits while avoiding increasing tax rate hikes for everybody. This still won’t be enough to prevent the country from falling back into recession so we ask Americans to make a small collective sacrifice for the country’s prosperity and agree to spending cuts on Medicare, Medicaid, social security, food stamps and other non-discretionary budget measures. We know you just elected the candidate who ran against cutting this stuff but we have to be flexible if we are going to grow again and we definitely can’t touch the defense budget.
In reality Obama’s posturing as the compromiser will amount to modest tax increase at the two highest marginal rates at best, although lately he seems willing to settle for just capping deductions and closing loopholes. Romney made the same proposal during his campaign. Back them Obama ridiculed that plan as a “sketchy deal” that would fall short of raising the revenue needed to keep the deficits in check. What Obama will give up in his compromise is the decades long fight against the “free-market” ideologues and their efforts to put economy before society. Agreeing to sizable cuts in social programs for modest tax increases on the wealthy is not the deal Americans voted him into office to achieve. Once funding for programs like social security are cut as Obama offered during the deficit debates his first term it is unlikely funding will be restored even if the deficits come under control. Once Medicaid funding is cut or the eligibility age is raised or “means testing” is implemented the program millions of struggling Americans depend on will be stretched even thinner imperiling millions more. Obama vehemently ran against this just a week ago.
As the fiscal myth unfolds throughout the next several weeks you can expect a lot of Democrats vowing to never touch Medicaid, Medicare and Social Security. Although these have been their sacred cows you can be sure they have calculated that their actions will be remembered in context of saving the country from financial collapse as opposed to social program murderers. After a couple of weeks of making themselves remembered as social safety net hard asses those same Democrats will return to the table with conservatives behind closed doors and in the nick of time a deal will have emerged to save the country from financial collapse, the “Taxmaggedon” that threatens America’s future. Obama, your exalted leader will appear before the cameras with a pen in hand next to Boehner and sign into law a swath of cuts to the programs his voters cherished. The media will be abuzz with headlines about this historic compromise, filled with stories about Obama making a stand for economic equality by raising taxes on the rich and so on until the skeptics lynch themselves.
In the upcoming weeks be weary of your elected officials who promise not to touch the programs you elected them to protect. Your leader is amidst a Grand Bargain and your senators and representatives support him. With a new compromise signed into law the rich might get a little less richer, for a couple of years (a republican president will come along and cut taxes again claiming thats how you create jobs), but the most vulnerable Americans with the programs they depend canned iced can expect to get a little poorer.