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The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us.

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

It’s a perfect storm. And I’m not talking about the impending dangers facing Democrats. I’m talking about the dangers facing our democracy.

First, income in America is now more concentrated in fewer hands than it’s been in 80 years. Almost a quarter of total income generated in the United States is going to the top 1 percent of Americans.

The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us.

Who are these people? With the exception of a few entrepreneurs like Bill Gates, they’re top executives of big corporations and Wall Street, hedge-fund managers, and private equity managers. They include the Koch brothers, whose wealth increased by billions last year, and who are now funding tea party candidates across the nation.

Which gets us to the second part of the perfect storm. A relatively few Americans are buying our democracy as never before. And they’re doing it completely in secret.

Hundreds of millions of dollars are pouring into advertisements for and against candidates  — without a trace of where the dollars are coming from. They’re laundered through a handful of groups. Fred Malek, whom you may remember as deputy director of Richard Nixon’s notorious Committee to Reelect the President (dubbed Creep in the Watergate scandal), is running one of them. Republican operative Karl Rove runs another. The U.S. Chamber of Commerce, a third.

The Supreme Court’s Citizens United vs. the Federal Election Commission made it possible. The Federal Election Commission says only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.

We’re back to the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. The public never knew who was bribing whom.

Just before it recessed the House passed a bill that would require that the names of all such donors be publicly disclosed. But it couldn’t get through the Senate. Every Republican voted against it. (To see how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)

Here’s the third part of the perfect storm. Most Americans are in trouble. Their jobs, incomes, savings, and even homes are on the line. They need a government that’s working for them, not for the privileged and the powerful.

Yet their state and local taxes are rising. And their services are being cut. Teachers and firefighters are being laid off. The roads and bridges they count on are crumbling, pipelines are leaking, schools are dilapidated, and public libraries are being shut.

There’s no jobs bill to speak of. No WPA to hire those who can’t find jobs in the private sector. Unemployment insurance doesn’t reach half of the unemployed.

Washington says nothing can be done. There’s no money left.

No money? The marginal income tax rate on the very rich is the lowest it’s been in more than 80 years. Under President Dwight Eisenhower (who no one would have accused of being a radical) it was 91 percent. Now it’s 36 percent. Congress is even fighting over whether to end the temporary Bush tax cut for the rich and return them to the Clinton top tax of 39 percent.

Much of the income of the highest earners is treated as capital gains, anyway — subject to a 15 percent tax. The typical hedge-fund and private-equity manager paid only 17 percent last year. Their earnings were not exactly modest. The top 15 hedge-fund managers earned an average of $1 billion.

Congress won’t even return to the estate tax in place during the Clinton administration – which applied only to those in the top 2 percent of incomes.

It won’t limit the tax deductions of the very rich, which include interest payments on multi-million dollar mortgages. (Yet Wall Street refuses to allow homeowners who can’t meet mortgage payments to include their primary residence in personal bankruptcy.)

There’s plenty of money to help stranded Americans, just not the political will to raise it. And at the rate secret money is flooding our political system, even less political will in the future.

The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work.

We’re losing our democracy to a different system. It’s called plutocracy.

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Cross-posted from Robert Reich’s Blog

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His new book, Aftershock: The Next Economy and America’s Future,is now in bookstores. His book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org.

Mike Lux

By Mike Lux
Author, “The Progressive Revolution: How the Best in America Came to Be”

When the notarization on foreclosures issue suddenly flared up over the last few days, my heart sank. Just as regular homeowners were starting to get some legal traction to fight back against fraud and predatory lending by big banks, it seemed, some bank lobbyist had managed to sneak something through in the dead of night that would screw people over again. It was Washington at its worst: the bank lobbyists in control, and Congress asleep at the wheel.

But then, that most delightful and rare of Washington moments happened: the system worked. Consumer advocates started raising hell on the blogs and in traditional media, the White House started looking more closely at the issue, and literally within a matter of hours, Obama announced that he was not going to sign the bill. No long, painful, drawn out internal debate at 1600 Pennsylvania. No twisting round trying to split the middle on the issue. As soon as the issue was raised, the White House team focused on it, and made the right decision quickly. Elizabeth Warren, the new Assistant to the President and Treasury Secretary, weighed in. Pete Rouse, the new Chief of Staff, got engaged immediately. And the President made the right decision.

So what did we learn? First, that exposing sleazy dead-of-night deals cut by the special interests does sometimes work. And second, that having good people in key government roles really does matter. Obama might well have done the right thing without Warren and Rouse there, but it sure did happen quickly and easily with them around.

So, okay, I haven’t lost it: I know that not all these decisions are going to go the right way as far as progressives and consumer advocates are concerned. But I think it is fair to ask ourselves what happens next and how the progressive community should respond to it. (more…)

Leo W. Gerard

By Leo W. Gerard
USW International President

When Herbert Hoover ran for president in 1928, the Republican party promised his victory would assure the prosperity of  “a chicken in every pot.” This week, Republicans proffered a similar pledge to America.

Hoover won, and in 1929, after a decade of GOP rule in Washington, Republicans did deliver something foul to Americans. It wasn’t the much-anticipated cooking hen. It was the Great Depression.

Now in the Great Recession, also delivered during a GOP presidency, Republicans have presented a new promise. They pledged to withdraw all unspent Recovery Act money to prevent it from employing even one more worker; kill health care reform to stop 30 million Americans from getting affordable insurance; slash $100 billion from federal programs protecting the middle class; preserve tax cuts for the rich and cut government regulation — like oversight of Gulf-oil-gusher-BP and contaminated-egg-producers Jack and Peter DeCoster.

This time, the GOP downsized the “chicken in every pot” promise. Instead they’re pledging a salmonella-poisoned egg.

In 1932, Americans wisely rejected re-electing Republican Hoover, who is regarded as one of the nation’s most inept leaders, and chose instead Democrat Franklin Delano Roosevelt, revered as one of the best. This fall, it’s crucial that Americans choose sagely again, selecting Democrats intent on reforming Washington and protecting the nation’s middle class.

Eight years of Republican rule in Washington climaxed with the worst recession since the Great Depression. Since that downturn officially began in December of 2007, poverty, unemployment and foreclosures have risen while middle class income and health insurance coverage have fallen.

The poverty rate increased to the worst level in 16 years, with 3.7 million people slipping from the middle class to the ranks of the poor in 2009. One in seven Americans now is impoverished. More than 8 million workers have lost their jobs, and 2.3 million families have lost their homes to foreclosure. Nearly one in four mortgage holders is under water, meaning they owe more on their house than it’s worth. Also, last year, the number of uninsured Americans rose by 4.4 million to 50.7 million — 16.7% of the population. It was the largest annual increase since the government began collecting comparable data in 1987.

By contrast, on Wall Street, where unrestrained and unregulated bankster recklessness caused the recession, happy days are here again. The banks that taxpayers bailed out have resumed paying million-dollar salaries and bonuses. The nation’s top 25 hedge-fund managers each took home an average of $1 billion (BILLION) last year. Those hedgers are among the nation’s richest 1 percent, those whose take home pay grew so fast between 1979 and the start of the recession in 2007 that nearly 39 percent of all income growth went to that tiny number of super-wealthy. Only 36 percent went to the bottom 90 percent of the nation’s population.

Democrats, keenly aware of the diverging experiences of the nation’s sucker-punched workers and its well-heeled elite, have worked to aid the beleaguered middle. They passed the $787 billion American Recovery and Reinvestment Act, which the Congressional Budget Office estimated created between 1.4 million and 3.3 million jobs by July.

Democrats reformed health insurance so that children with pre-existing conditions can’t be denied insurance; senior citizens won’t have to pay for “donut hole” medications; young adults up to age 26 may remain on their parents’ plans, and insurance companies can no longer choose doctors or place lifetime limits on coverage or drop the sick. On top of all that, the Democrats’ reform will lower federal deficits by $138 billion.

Now, Democrats are fighting to preserve income tax cuts for the middle class while eliminating breaks for the rich. The Democrats would continue to lower by $1,132 a year the taxes of median wage earners, those with incomes of about $50,000 a year. Under the Democrats’ plan, the super rich – those taking home more than $1 million a year — would still get a tax cut of $6,349 – six times that of the middle class. But Democrats would have the super rich pay $97,651 in taxes a year that they now pocket.

Democrats think the rich have an obligation to pay those taxes. To get where they are, in the top one percent income bracket, they’ve used tax-subsidized public services at significantly higher rates than the other 99 percent of Americans. That includes services such as roads and airports, civil courts, the U.S. patent office, the U.S. Department of Commerce and professional licensing, regulation and inspection departments.

Republicans don’t agree. They believe the middle class should pay so the rich can continue getting breaks. The GOP believes it is fine to give tax cuts to the rich that will cost nearly $1 trillion over 10 years, but not pay for them. Conversely, Republicans have refused to extend unemployment insurance for the middle class jobless unless that’s paid for. The GOP believes it’s appropriate to continue tax breaks for multi-national corporations that ship jobs overseas but it’s not to extend aid to the middle class unemployed to pay for health insurance.

In their Pledge to America, Republicans promise to take care of the rich. They said they’d change Washington by decimating the very regulation that protects middle class workers and their families and by cutting off money that is providing jobs to the unemployed.  The GOP pledges to undermine middle class America.

It might be called a turkey, but even that would inflate its value. It’s a rotten egg hurled at middle America.

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Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama recently appointed him to the President’s Advisory Committee on Trade Policy and Negotiations. He serves as co-chairman of the BlueGreen Alliance and on the boards of the Apollo Alliance, Campaign for America’s Future and the Economic Policy Institute.  He is a member of the IMF and ICEM global labor federations and was instrumental in creating Workers Uniting, the first global union.

Leo W. Gerard

By Leo W. Gerard
USW International President

Glenn Beck made it official on Fox News last week: He’s seeking the office of 21^st Century Marie Antoinette.

The queen of France, beheaded during the revolution, attained infamy for insensitivity toward hungry peasants. Glenn Beck, the Fox talk show host, achieved celebrity for his callousness toward unemployed Americans.

Beck leads a pack of royalist Republicans who have spent the summer mocking, vilifying and denigrating the nation’s 14.5 million unemployed workers. It is the moneyed class smacking down the working class in an attempt to disempower and disenfranchise them. Dispirited workers are less likely to vote – which could give Beck and his gang of royalist Republicans control of Congress.

The unemployed, like France’s 18^th Century peasants, are fighting back, however. The Union of the Unemployed and Working America are organizing the jobless to vote this fall and to demand help from lawmakers. They’re not out to behead Beck and the royalist Republicans, just dethrone them.  

Two and a half years after wanton recklessness by Wall Street banksters crashed the economy, the official unemployment rate remains stuck at 9.5 percent. It rises to 17 percent when statisticians add part-time workers seeking full-time jobs and the jobless who’ve abandoned the search out of hopelessness. With the help of a taxpayer bailout, Wall Street has recovered, and those banksters are taking home multi-million dollar bonuses again. But on Main Street, there still are five unemployed workers for every job vacancy, so no matter how hard the jobless try, there are no openings for 80 percent of them.

Routinely, crowds line up before dawn when job openings are announced. In June, in Longmont, Colo., hundreds queued up to vie for 100 low-paid clerk and stock jobs at a new SmartCo Foods. Hundreds of Louisville residents gathered in the dark on Aug. 9 at the Kentucky Exposition Center to apply for 450 state fair jobs paying $7.25 an hour and lasting a total of 20 days.

In addition to jobs, the people on Main Street are losing their homes and life savings at increasing rates. Bankruptcy filings nationwide reached the highest level in five years between April and June. Banks repossessed 92,858 homes in July, up 6 percent from July 2009. For too many, the situation is so desperate that they’re discussing plans for suicide on an on-line forum for the jobless.

Glenn Beck and the royalist Republicans don’t care about all that. Here’s Beck ranting about those who lose unemployment benefits at 99 weeks:

“Have you heard of the 99ers? These people, some of which I, frankly, I bet you would be ashamed to call them Americans, they think 99 weeks of unemployment benefists are not enough. . .Two years is plenty of time to have lived off your neighbors’ wallets.”

Video of Beck slamming the "99ers" begins at 2 minutes and 33 seconds into this clip.

Beck went on to argue that the jobless who protested last week on Wall Street were not “regular people,” like him and his friends:

 “Are they just regular people? . . They are socialists and anti-capitalists.”

Then, incongruously, Beck condemned a protestor seeking jobs for all unemployed workers with a sign asserting, “A job is a right.”

“No, a job is not a right,” insisted Beck, making it clear that in his world, the unemployed are “un-American” for not landing jobs, but, simultaneously, it’s perfectly moral and fair that the American economy has failed to produce enough jobs for them to fill.

Beck is the TV mouthpiece for the royalist Republicans who champion this view: a job is not a right, and it’s not right to aid the jobless. Republicans, virtually as a block, oppose extending unemployment benefits for the jobless while they support extending tax breaks for the moneyed class – themselves. They opposed legislation to save the jobs of 319,000 public servants – the people who educate our children and protect our lives — teachers, police officers, firefighters. Democrats in Congress paid to preserve those jobs  by eliminating $11 billion in tax loopholes for corporations that ship jobs overseas — a provision that ultimately could create jobs in the United States.

Like Beck, they’ve announced their loathing for the unemployed. Royalists Sharron Angle, Jon Kyl, Andre Bauer, Tom Corbett and Orrin Hatch have derided the unemployed as lazy, spoiled, stupid drug users.

The jobless, however, are mad as hell and aren’t going to take it anymore. They’re organizing. The Union of the Unemployed and Working America, the community affiliate of the AFL-CIO, are mobilizing the jobless.

The Union of the Unemployed is launching a “Bite Back” campaign, targeting those in Congress who tried repeatedly to cut off unemployment insurance and other aid to the jobless. “They will never see us coming,” the first Bite Back ad says, “After all, the politicians whose policies destroyed our lives think we’re ‘lazy’ ‘drug users’ and ‘hobos.’ They are counting on us to be docile as lambs and so depressed we’ll stay in bed on election day.”

Working America, whose members are not in unions but align themselves with the political philosophy of the AFL-CIO, plans to organize hundreds of thousands of the jobless across the nation to vote in workers’ interests. Field organizers will ask the jobless to fill out “Help Wanted” petitions to send to their congressmen and senators asking exactly what they’ve done to create jobs and assist the unemployed.

The jobless removing the royalists from their jobs – nothing could be sweeter, unless this revolution also included dispatching Glenn Beck to his unemployment office.

James Parks

By James Parks
AFL-CIO Senior Writer

In Atlanta—one of the areas hardest hit by foreclosures—residents who are about to lose their homes demanded last week that Big Banks like Wachovia/Wells Fargo reform their policies and protect homeowners on the brink of homelessness.

More than 200 people, including community groups, clergy and labor and government leaders, attended a hearing at an Atlanta church and listened to area residents about to lose their homes explain the Big Banks’ role in the foreclosure crisis. The hearing was sponsored by the Atlanta Fighting Foreclosure Coalition and the AFL-CIO.

In often moving testimony, several Atlanta residents told how they had worked hard to build a life for themselves and their families only to have their dream dashed by losing their homes to foreclosure.

One witness testified his bank told him he was so far behind on his mortgage that he would need to win the lottery to catch up. An Atlanta Legal Aid worker said all the biggest banks jumped in with both feet into the subprime mortgage business.

AFL-CIO Executive Vice President Arlene Holt Baker, one of a panel of leaders who heard the testimony, said:

Foreclosure is not an equal opportunity tragedy. People of color are disproportionately hurt in part because we’re also disproportionately likely to have lost our jobs. But an even uglier factor is that we have been targeted—chosen—for the dangerous lending practices by big banks almost guaranteed to result in disaster.

The hearing comes as the issue of rising foreclosures is being hotly debated across the country, focusing new attention on the role of the Big Banks. The number of U.S. bank foreclosures reached a record high in the second quarter of this year, according to the research firm RealtyTrac. (more…)

Dave Johnson

By Dave Johnson
Fellow with Campaign for America’s Future  

Whirlpool, recipient of federal stimulus “smart grid” dollars, is closing an Evansville, Indiana freezer-topped refrigerator and icemaker production plant and moving the 1,100 jobs to Mexico.

Whirlpool knows that taxpayers will shoulder the unemployment and other costs. Closing a plant like this also means all the supplier, transportation and other third-party jobs go away. For example, 100+ Disabled Workers Could Lose Jobs

Whirlpool employees aren’t the only ones losing their jobs when the plant closes. More than 100 blind or disabled individuals could also be left jobless. The Evansville Association for the Blind has issued a public plea, asking businesses to consider using their employees.

 There will be more home foreclosures, and local businesses are stressed or have to go out of business. Whirlpool is profiting from making all this someone else’s problem.

Whirlpool is even playing nearby Iowa against Indiana, shaking the state down for millions to move just 60 of the 1,100 jobs there.

So, of course, Wall Street celebrates the move, the setting states against each other, the cost-shifting and the resulting “increase in margins.”

The workers are still trying to do something about this. Inside Indiana Business writes about a rally on February 26,

Organizers have invited guests including AFL/CIO President Richard Trumka and Jim Clark, president of the IUE-CWA union with which Local 808 is affiliated.

Employees with the least seniority are expected to lose their jobs first, March 26. The remaining workers will be let go until production ceases in early summer.

Richard Trumka, AFL-CIO President, writes:

The Whirlpool Corp. is closing a refrigerator manufacturing plant in Evansville, Ind., putting more than 1,100 people out of work. Even worse, Whirlpool will continue to produce these refrigerators, but not in Evansville and not anywhere else in America. They are planning to manufacture them in Mexico, where weaker labor and environmental laws make them “cheaper” for Whirlpool to produce.

This is outrageous and unacceptable, especially in light of Whirlpool’s profitability and the $19 million dollars in economic recovery money Whirlpool recently received from the federal government as a part of the American Recovery and Reinvestment Act. Those are OUR economic recovery funds, not Mexico’s.

You can sign their Whirlpool: Keep It Made in America petition here.

Will Congress listen?

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Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

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Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Dean Baker

By Dean Baker
Co-Director, Center for Economic and Policy Research

It is probably best to leave the gods out of discussions of economic policy, but this barrier was breached in November when the CEO of Goldman Sachs, Lloyd Blankfein, told an interviewer that Goldman Sachs was doing God’s work. Most people will never have the opportunity to join Goldman Sachs’s gang of multi-millionaire bankers. However, by Blankfein’s logic, tens of millions of people will have the opportunity to do something at least as heavenly: walk away from their mortgage.

In Blankfein’s assessment, by aggressively taking advantages of profit-making opportunities given to them by the government and the market, Goldman Sachs is accomplishing great good here on earth. That’s a questionable view, especially given the extent to which Goldman has been able to use its political power to tilt the playing field to its advantage, but walking away from an underwater mortgage is one way in which normal homeowners may be able to both help themselves and the economy.

The logic is straightforward. As many as 20 million people owe more than the current value of their homes. In most cases they have little hope of ever accruing equity in their home. There continues to be an enormous glut of housing. Nationwide, vacancy rates are at record highs. Rents are actually falling for the first time since we have reliable data.

Also, temporary government supports in the form of extraordinarily low interest rates and the first time buyers’ tax credit are about to end. It is virtually certain that house prices will soon resume their decline and will remain low for many years to come. This means that people who are underwater today are likely to be even further underwater five or 10 years from now when they plan to sell their homes.

Not only will people end up losing money when they sell their home, but many underwater homeowners are likely to pay far more on their mortgage and other ownership costs than they would to rent the same unit. We did calculations recently that showed that homeowners who bought near the peak in many bubble markets could easily save themselves more than $1,000 a month by renting equivalent units. This means that these underwater homeowners could be throwing out more than $12,000 a year in a desperate effort to keep up on their mortgages. Since most of these homeowners will never have any equity in their home, the mortgage check they send to the bank is money thrown in the garbage.

Many homeowners are concerned about foreclosure damaging their credit record. This is a legitimate concern, but credit issuers want to extend credit. They all know about the growth and collapse of the housing bubble. It is likely that a foreclosure during this period will be treated less harshly than during more normal times.

Not only would it benefit millions of homeowners to send the keys back to the bank, it would also benefit the economy. The money that homeowners save by not paying their mortgage is money that could instead be used to support consumption and boost the economy. If 5 million underwater homeowners saved an average of $10,000 each by becoming renters, this would free up $50bn a year for additional spending. This would have the same impact on the economy as a $50bn tax cut. If we assume a multiplier of 1.5 on these savings, the 5 million walk-aways will generate close to 750,000 jobs.

Unfortunately, the current policy from the Obama administration goes in the opposite direction. Rather than realistically assessing what is best for homeowners, the policy seems intended to do everything possible to persuade people to keep sending checks to the banks, even using taxpayer dollars as an inducement. It would be far better economic policy if they sought to get people out from under their enormous mortgage debt. This could best be accomplished by granting people facing foreclosure the right to rent their home at the market price for a substantial period of time (five-10 years) following a foreclosure. Such a measure would immediately provide housing security to the millions of families facing foreclosure.

This policy requires no new bureaucracy and would cost the taxpayers nothing. Of course, a “right to rent” policy is likely to be costly to the banks. This may explain why it does not appear to be on the agenda at the moment. After all, the money saved by homeowners is money lost to banks, and this figure could easily run as high as $100bn a year.

In short, homeowners who are seriously underwater in their mortgages should check the numbers. Walking away from a home may well be the best economic choice, and in such cases, it is also likely to be the best choice from the standpoint of the economy as a whole. This may not be advancing God’s work, but if millions of people walked away it might educate Goldman Sachs and the rest of Wall Street bankers about what happens when everyone plays by their rules.

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Dean Baker is author of the new book, “Plunder and Blunder: The Rise and Fall of the Bubble Economy,” PoliPoint Press, LLC. This piece was first published on Huffington Post.

Fred Redmond

By Fred Redmond
USW International Vice President for Human Affairs

Today I issued a call to arms to the civil rights activists of the United Steelworkers union.

This was no summons to warfare, though.

To the contrary, I challenged USW civil rights committee members to shield the downtrodden in society, to aid those felled by the current economic crisis, to serve as their brothers’ and sisters’ keepers, not just for labor union companions, but for all fellow community members.

This is a call to arms because it will involve heavy lifting, I warned the USW committees at their 15^th International Civil and Human Rights Conference in Pittsburgh.

We’ll get a feel for it this week as 85 of us lug books and movies to be donated to Pittsburgh’s Children’s Hospital, unpack boxes of food and stock shelves at the Greater Pittsburgh Community Food Bank in Duquesne, and distribute recyclable bags containing fruit to residents of Pittsburgh Housing Authority’s 10 senior citizen communities.

This economic downturn mangled the budgets of our food pantries, churches, schools, charities, even our local governments. The Great Recession has left them under-resourced and under-staffed. And that is hurting our children, our elderly parents, our fragile relatives and our communities’ health.

We hear their plea. It is our communities calling us to arms. And we will reach out in response to them.

That does not diminish our civil rights committees’ traditional duties. These are crucial and will continue. They will investigate civil rights complaints and explain the value of diversity.

These functions simply can’t be set aside. That is what happened in the Civil Rights Division of the Justice Department during the long, dark Bush years. A Government Accountability Office audit of the division’s activity showed a significant drop in litigation in several major anti-discrimination and voting rights areas during the Bush years. The Bush department pursued fewer cases when compared to enforcement during the Clinton years, according to the report released early in December.

This, of course, was deliberate by the Bush administration, which did not believe in enforcing civil rights law. We will not allow our new duties in the community to distract us from vigilantly pursuing civil rights complaints filed with our committees. Instead, we will assume this new function as an additional role.

It is a role that is basic to unions, which have always struggled to improve conditions for their members and their families.

At this moment, it’s vital that labor union civil rights activists everywhere – not just at the USW — take inspiration from the Dr. Martin Luther King Day of Service and intercede for the sake of their communities so hobbled by the effects of Wall Street recklessness.

Families are suffering under the highest unemployment in a quarter century. For every single job opening available, 6.3 unemployed job seekers are desperate to take it. Those who lose out are forfeiting their homes. Every month, banks file another 330,000 new foreclosure notices and seize another 75,000 homes.

Those lucky enough to have jobs have been pinched by pay and benefit cuts, furloughs and shortened hours. The average work week is 33.2, nearly 7 hours short of 40, costing many workers nearly a whole day’s wages. The Center for Economic and Policy Research calculates that workers haven’t endured the worst of it yet. In its report,

Families that can’t make mortgage payments also can’t meet tax obligations. Then local governments and school districts are caught short. Low tax revenues meant

So I propose that union civil rights activists volunteer to do whatever they can to fill those gaps in community service. Like workers across this country, our civil rights activists have suffered layoffs and furloughs and work week reductions. So stepping forward as cash cows is unrealistic. But we can step up as volunteers, in our church groups, community organizations and schools. Our hands can help hold it together during these trying times.

We can link arms to help our communities. That is my call to arms.

Dean Baker

By Dean Baker
Co-Director, Center for Economic and Policy Research

The elites hate to acknowledge it, but when large numbers of ordinary people are moved to action, it changes the narrow political world where the elites call the shots. Inside accounts reveal the extent to which Johnson and Nixon’s conduct of the Vietnam War was constrained by the huge anti-war movement. It was the civil rights movement, not compelling arguments, that convinced members of Congress to end legal racial discrimination. More recently, the townhall meetings, dominated by people opposed to health care reform, have been a serious roadblock for those pushing reform.

Those disgusted by the bank bailouts, and the bankers who brought us this recession, will have a chance to make their views known when the American Bankers Association has its annual meeting in Chicago, October 25-27. A large coalition of labor, community, and consumer organizations are organizing a protest at this “Showdown in Chicago”

A big turnout at this event can make a real difference. Just to review the scorecard, most of the country is still suffering the fallout from the bankers’ irrational exuberance of the housing bubble era. The Congressional Budget Office (CBO) and other forecasters expect the suffering to endure for years to come.

The unemployment rate is about to cross 10 percent, with an additional 9 million workers only able to find part-time work. CBO projects that unemployment will not return to normal levels until 2014. Almost 200,000 people are losing their homes every month through foreclosure. Tens of millions of people who had expected a comfortable retirement just saw most of their wealth disappear with the collapse of the housing bubble. State and local governments are being forced to lay off school teachers and fire fighters under the pressure of enormous budget deficits.

But not everyone is suffering. Thanks to the bailout programs put in place last fall, most of the country’s major banks are back on their feet. In fact, in the most recent quarter, bank profits hit a new record high as a share of all corporate profits.

And the banks are sharing their wealth. Many of their top executives and high performers will be getting bonuses this year worth millions of dollars, in some cases the bonuses will be in the tens of millions.

In the meantime, in elite Washington circles people are busy making plans for a national sales tax so that the government can limit the fiscal damage caused by the bankers’ recession. A sales tax is of course very regressive since low and moderate-income people typically spend the vast majority of their income, while our banker friends will more likely to be able to save some of their income or spend it in other countries where they will not be paying this new sales tax.

To summarize: the bankers wrecked the economy with their greed, ran off with taxpayer dollars in a massive bailout, and now plan to raise taxes for the rest of us. If that picture doesn’t sound quite right, then go to Chicago.

This is a case where the divisions are not left-right, but of the elite against everyone else. When Congress was debating the TARP bank bailout last fall, members of Congress were hearing calls from people across the political spectrum who were outraged that their tax dollars were going to the banks that had wrecked the economy. A higher percentage of Republicans than Democrats ended up voting against this bankers’ piñata.

The policies that will rein in the banks: reform of the Federal Reserve Board to make it democratically accountable, a tax on financial speculation to pay for the bankers’ mess, and restrictions on the bank abuses of consumers that caused the carnage have support from people on both the left and right.

A bill that would require the Fed to disclose what it did with more than $2 trillion in loans to banks and other financial institutions was originally co-sponsored by Ron Paul and Alan Grayson, one of the most conservative and one of the most progressive members of Congress. Due to public pressure, it now has more than 270 co-sponsors.

This is exactly the sort of alliance that gets the elite worried. Reining in the power of the financial industry will be a long hard fought war, but it is one that must be fought. President and Nobel peace prize winner Barack Obama may not have been able to bring the Olympics to Chicago, but everyone who wants to retake our country from the banks can bring their backside there on October 25th.

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 Dean Baker is the author of the new book, “Plunder and Blunder: The Rise and Fall of the Bubble Economy.” 

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This piece was first published on Huffington Post.

Seth Freed Wessler

By Seth Freed Wessler
Researcher at the Applied Research Center

When General Motors filed for bankruptcy on Monday, it left behind a long trail of grievers– twenty-one thousand of them. The loss of these good, union jobs and the many more that will be shed when related businesses close are devastating families and communities. For Black workers, who are highly concentrated in the auto industry, these have long been some of the few reliable jobs that pay living wages, supplying families of color the with the possibility of entering the middle class.

As we now know, high levels of unionization equate with smaller income gaps between people of color and whites. But in the economy we’ve inherited from the last three decades of deregulation and declining union density, people of color are increasingly relegated to low-wage, precarious work that pays too little to support a family. Unless Congress acts now to ensure that work actually pays, these workers will have few options and we’ll only deepen the racial income and wealth divides.

A few months ago, I traveled to Michigan to interview dozens of people for “Race and Recession,” a new report released by the Applied Research Center. I met Leo Shipman, a 24-year-old Black man, who had recently lost his job in an auto parts factory in Detroit. “My biggest worry is my son,” he said about his 3-year-old. “You don’t know how you’re going to feed them. He doesn’t know the bills are running up, but I do.” When I met Shipman, he was on the edge of being evicted from his apartment.

With only a high school education–Shipman’s been trying to enroll in a technical college–securing a living-wage job proves elusive if not impossible. Because he had been underemployed, Shipman had no unemployment check coming in. It’s growing more likely that his only option will be to work a job that makes feeding his son a daily struggle.

As one of the last strongholds of union jobs shrinks, and people like Shipman are cast out, it’s time to confront some tough truths about work in our country. Black workers like Shipman have been hit especially hard by layoffs and closures because their concentration in the auto industry is higher than their overall share of the state’s labor market. In fact, across the labor market, workers of color are overrepresented in occupations with high unemployment rates. These include jobs in the service sector, as well as construction and transportation occupations. The loss of these auto industry jobs strikes a massive blow to the ability of workers, especially Black workers, to earn middle-class incomes, to save enough to pass on to their children and to achieve some financial stability. Indeed, the UAW was one of the first unions to organize Black workers and the implosion of GM further dismantles one of the mainstays of the Black middle class.

The collateral damage of job loss are taking their toll. Sandra Hines, a 55 year old Detroit native who I wrote about last week, lost the home her family owned for 40 years after her sister was laid off from GM and was forced refinance. The family was sold a predatory loan with an adjustable rate and was evicted after payments skyrocketed. As more people lose their jobs, more families will find themselves unable to pay their mortgages and more wealth will be drained. It is now clear that the perils of this situation go beyond these communities. Indeed, as we find in “Race and Recession,” the racially discriminatory predatory lending and foreclosure crisis was a central factor in pushing the economy into this recession.

As a country, we’re reckoning with the fall-out from decades of putting profit above people. As precious union jobs disappear, the time has come to ensure that those who are unemployed–disproportionately people of color–are able to enter employment that actually pays. Congress should immediately pass the Employee Free Choice Act (EFCA) so that workers can demand fair pay without intimidation. Since UAW now has a major ownership stake in the company, the workers who remain there will be taken care of, but the 21,000 workers who are getting pushed out will be less likely to find jobs with sufficient salaries and benefits, especially as the federal minimum wage increase to $7.25 next month still does not approximate a living wage.

Ultimately, as we recover from this recession, we need to make sure that the jobs we create and the economy we build help those who have been most hurt by the recession, which have disproportionately been families of color. Ensuring that good, sustainable jobs go to communities of color across the country is an essential part of building an inclusive and working economy.

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Check out arc.org/recession to learn about how racial inequity rigged the economy and how to change the rules.