John Russo

By John Russo
Co-director, Center for Working-Class Studies, Youngstown State University

As the financial industry celebrates its recovery from the Great Recession with huge bonuses, attention has turned increasingly to jobs.  But that’s not a new concern: over the past three decades first the working class and then the middle class faced unemployment caused by economic restructuring and globalization.  Back in the 70s and 80s, when working-class people were losing thousands of blue collar manufacturing jobs that paid middle-class wages, many economists brushed the problem aside, insisting that new forms of work would soon replace disappearing blue-collar jobs.  Industrial workers and their unions knew better 30 years ago.  They’ve long warned that economic restructuring, globalization, and unfair trade laws would result in the loss of the middle class.  Today we’re learning that they were right.

With the jobless recovery of the early 2000s and the ongoing unemployment crisis of today’s recession, the middle class is discovering that sociologists Richard Sennett and Jonathan Cobb were accurate when they suggested that what it means to be middle class is to be just one job away from poverty.  In Fear of Falling, Barbara Ehrenreich explored the impact of this decline on individual consciousness.  But it is only within the last decade that people who thought they were safely middle class have come to understand the episodic, anxiety-ridden, contingent, low-wage-and-benefit life of many in the working class.

And that experience seems likely to become permanent reality for many.  Unlike in past business cycles, the middle class has not been able to recover so far, despite increases in productivity and stock prices. In “America Without a Middle Class,” Elizabeth Warren documents how the de facto unemployment rate, credit debt, “underwater” mortgages, increased use of food stamps, personal bankruptcies, and the loss of pensions and health care have all dramatically increased.  Middle-class households have depleted their savings and are increasingly accruing debt to pay for college, health care, and other expenses.

The situation continues to worsen.  The latest monthly Bureau of Labor Statistics Employment Report shows an additional 85,000 jobs lost. As the U.S. population grows, the need for jobs increases.  The economy would need 100,000 new jobs just to keep up. In other words, the net effect puts us 185,000 jobs behind where we need to be to stay even with current misery.  To make matters worse, 600,000 gave up looking for work and so were not even counted in the official unemployment rate.  Over the last decade, the data shows no net creation of new jobs.

Some experts believe that the decline in jobs will only continue. For example, Alexandra Levit predicts significant losses in a number of key industries between 2008 and 2018:  semiconductor manufacturing(33.7%), motor vehicle parts manufacturing (18.6%), printing and related jobs (16%), apparel manufacturing (57%), newspaper publishers (24,8%), mining support jobs (76,000 or 23,2%), and the postal service (13%). Corporations are moving many of these jobs offshore or replacing them with technology rather than paying middle class wages and benefits. The economists are right that new jobs are being created in place of these.  But as Jack Metzgar discussed last week, most of the new jobs offer even lower wages and benefits and require less education.

Since private sector jobs cannot or will not be replaced in significant numbers, working people will have to rely on government spending to fill the gap.  The first Obama stimulus, while important (see The Stimulus at Work), has clearly proven insufficient. The limits of this approach can be seen in California, Illinois, and New York.  No wonder business leaders like Warren Buffet, economists like Paul Krugman, and others are calling for second stimulus directed more at creating new jobs.

While many approaches have been offered, the Economic Policy Institute has outlined a simple plan to create jobs and stem the unemployment crisis. It contains five major themes: strengthening the social safety net (including unemployment compensation, COBRA health coverage, and nutrition assistance); providing additional fiscal relief to state and local governments; making renewed investments in infrastructure including transportation and schools; supporting direct creation of public service jobs; and establishing a new tax credit to employers who create new jobs.

No doubt, we need stronger government leadership in creating the jobs that will expand the so-called recovery from the financial sector to the jobs sector.  But making real, lasting change requires something more:  a reexamination of the neoliberal ideology that has been responsible for current economic crisis that is moving so many from the middle class to the working class.  As a recent Special Report in The American Prospect suggests, nothing short of an complete overhaul involving industrial, trade, and foreign policy will do, especially involving the revival of American manufacturing.

Why manufacturing? As Richard McCormack has found, the loss of a single manufacturing job in a single large manufacturing plant, such as the GM Moraine Assembly in Dayton, can result in the loss of 15 additional jobs in the local community and through supply chains – job losses that affect both working- and middle-class workers.  But it’s not just that lost manufacturing jobs have wide-ranging effects.  It’s also that manufacturing jobs, unlike the low-wage service jobs Metzgar wrote about last week, are more likely to pay a liveable wage and provide decent benefits.  Manufacturing jobs can be good working-class jobs, working-class jobs that can in turn help rebuild the middle class.

With a new stimulus package and a revitalized manufacturing sector, the Great Recession may – like the Great Depression before – provide the ideological stimulus to create a more humane economy that is supportive of the working class.  We need such a shift now, especially as the working class increasingly includes thousands who once thought they were solidly middle class.

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John Russo also is coordinator of the Labor Studies Program at the Williamson College of Business Administration at Youngstown State University

Elizabeth Warren

By Elizabeth Warren
Leo Gottlieb Professor of Law at Harvard
And Chair of the Congressional Oversight Panel for the Banking Bailouts 

Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?

Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can’t make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.

Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.

The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s.

But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago — for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance.

To cope, millions of families put a second parent into the workforce. But higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder . Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases — but it hasn’t been enough to save them. Today’s families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer.

Through it all, families never asked for a handout from anyone, especially Washington. They were left to go on their own, working harder, squeezing nickels, and taking care of themselves. But their economic boats have been taking on water for years, and now the crisis has swamped millions of middle class families.

The contrast with the big banks could not be sharper. While the middle class has been caught in an economic vise, the financial industry that was supposed to serve them has prospered at their expense. Consumer banking — selling debt to middle class families — has been a gold mine. Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

And when various forms of this creative banking triggered economic crisis, the banks went to Washington for a handout. All the while, top executives kept their jobs and retained their bonuses. Even though the tax dollars that supported the bailout came largely from middle class families — from people already working hard to make ends meet — the beneficiaries of those tax dollars are now lobbying Congress to preserve the rules that had let those huge banks feast off the middle class.

Pundits talk about “populist rage” as a way to trivialize the anger and fear coursing through the middle class. But they have it wrong. Families understand with crystalline clarity that the rules they have played by are not the same rules that govern Wall Street. They understand that no American family is “too big to fail.” They recognize that business models have shifted and that big banks are pulling out all the stops to squeeze families and boost revenues. They understand that their economic security is under assault and that leaving consumer debt effectively unregulated does not work.

Families are ready for change. According to polls, large majorities of Americans have welcomed the Obama Administration’s proposal for a new Consumer Financial Protection Agency (CFPA). The CFPA would be answerable to consumers — not to banks and not to Wall Street. The agency would have the power to end tricks-and-traps pricing and to start leveling the playing field so that consumers have the tools they need to compare prices and manage their money. The response of the big banks has been to swing into action against the Agency, fighting with all their lobbying might to keep business-as-usual. They are pulling out all the stops to kill the agency before it is born. And if those practices crush millions more families, who cares — so long as the profits stay high and the bonuses keep coming.

America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child’s education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

America without a strong middle class? Unthinkable, but the once-solid foundation is shaking.

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Elizabeth Warren is the Leo Gottlieb Professor of Law at Harvard and is currently the Chair of the Congressional Oversight Panel created to oversee the banking bailouts. 

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Elizabeth Warren is the author or co-author of several books including, “All Your Worth,” “The Two-Income Trap,” and “Bankruptcy and Article 9.”

Leo W. Gerard

By Leo W. Gerard
USW International President

The meeting got testy. Voices rose last Thursday among Democrats over differences in the Senate Finance and Health committee versions of insurance reform.

Max Baucus defended his committee’s bill, voted out last week with one Republican, but lacking a public option and burdening the middle class. He said, according to reports by Sen. Evan Bayh:

“We are doing the best we can.”

Maybe Baucus is doing the best he can, considering the fact that his committee, in search of Republican support, has been kissing elephant trunk so long it doesn’t know which end is up.     

Democrats must stop appeasing elephants whose intent, frankly, is to squash health care reform. Dems have a supermajority in the Senate. They have the support of the American people for health insurance reform – with the latest polls showing more than 60 percent back the public option. And the power of opponents is waning, as last week’s failed attempt by the insurance lobbying organization America’s Health Insurance Plans (AHIP) to scuttle the Senate Finance Committee bill showed.

On Tuesday, as the Senate Finance Committee moved toward a vote, Baucus admonished:

“Colleagues, this is our opportunity to make history. Our actions here will determine whether we extend coverage to more Americans . . . Now is the time to get this done.”            

That’s all true. Except there’s one more thing: it must be done right. There’s no “best we can” when Democrats have a supermajority in the Senate and massive popular support for reform.

Right includes a public option. This is crucial to lower costs. Don’t take my word for it. Take that of Nobel Prize winning economist Paul Krugman. He noted in his Oct. 16 column in the New York Times that AHIP objected to the public option because public plan officials would negotiate for better prices. “Isn’t that an argument for, not against, such a plan?” Krugman asked. The public option, which is offered in the Senate Health Committee bill and House versions of reform, would create competition where there is none. Competition would drive down costs, which have risen exponentially, inexorably and annually – prompting too many companies to drop coverage for workers or increase fees and co-pays to the point where coverage is unaffordable.

The right way means passing reform without burdening the middle class. The Baucus bill smacks a 40 percent tax beginning in 2013 on plans valued at $8,000 for individuals or $21,000 for families, with some adjustments. The Congressional Joint Committee on Taxation estimated that this would quickly affect 40 percent of all plans. Officially, this tax would be levied on insurers, but there’s no question that they would pass that cost forward to the insured– further hiking up the price of insurance. The House legislation offers a much better approach – a surcharge on millionaires. They’ve gotten eight years of huge tax breaks under the Bush administration. It’s time for them to give a little back. 

The right way also means that all employers must pay their share of costs. More than 160 million Americans receive health insurance as a benefit at work, but more than $1,000 of the cost of those family plan premiums goes to cover the cost of the uninsured. And those uninsured are mostly people whose employers fail to provide health insurance. The only way to apportion these costs fairly is to require employers to provide health insurance or, alternatively, contribute a meaningful sum toward the cost of workers’ coverage.

The right way to reform does not penalize individuals who cannot afford to obtain coverage more than employers. Health care reform must ease the burden on workers and families, not worsen it.

Baucus is correct about one thing. This is an historic moment. But the “best we can” must include the public option. It must mandate that employers pay their fair share of costs. And it must not further burden workers. Forget the elephants and serve the Americans desperate for real health insurance reform.

Leo W. Gerard

By Leo W. Gerard
International President

Let’s go back, just for a minute, to a time before screaming teabaggers, before Republicans decided to kill health insurance reform as a means to politically destroy this country’s first African-American president.

Try and remember what it was like before discussion of health insurance reform raised voices, a time when instead it raised concern. Recollect Aug. 7, 2007, during the Democratic primaries, when then-60-year-old retired and disabled steelworker Steve Skvara stood at a microphone during a political debate and told his story with tears in his eyes and a catch in his throat.

He’d worked more than 30 years at LTV Steel in East Chicago, Ind., and assumed like many who earned pensions and retiree health coverage that those benefits were guaranteed. But then LTV went bankrupt and ditched its obligations. Skvara told the candidates:

“Every day of my life, I sit at the kitchen table across from the woman who devoted 36 years of her life to my family and I can’t afford her health care. What’s wrong with America, and what will you do to change it?”

Skvara asked that question two years ago when 45 million Americans lacked health insurance. Now 46.3 million are without it.

And yet, teabaggers and Republicans are bent on preventing reform. They want to ensure only one thing – that another million Americans suffer no health coverage two years from now.

President Obama invoked Skvara’s name at the AFL-CIO convention in Pittsburgh on Sept. 15 in a speech about the middle class.

Mostly Skvara is a symbol of health insurance failure. But to Obama, he’s an emblem of something much bigger. It is a struggle of economic philosophies. For the past 20 years, the winning view has been that government should give breaks to big corporations and rich individuals. Obama told the AFL-CIO he believes in something different — an economy built on a vibrant and wide middle class.

Here’s what he said:

“For over half a century, the success of America has been built on the success of our middle class. It was the creation of the middle class that lifted this nation up in the wake of a great depression. It was the expansion of the middle class that opened the doors of opportunity to millions more. It was a strong middle class that powered American industries, propelled America’s economy, and made the 20^th Century the first American Century.

And the fundamental test of our time is whether we will heed this lesson; whether we will let America become a nation of the very rich and the very poor, of the haves and the have nots; or whether we will remain true to the promise of this country and build a future where the success of all of us is build on the success of each of us.”

Because of the extraordinary cost of health care in this country, insurance is a middle class issue. Health insurance can make or break a family – place it firmly in the middle class if an employer provides a good plan or bankrupt it if a family loses coverage during a serious illness.

Obama said as much to the AFL-CIO: “We’ll grow our middle class by finally providing quality, affordable health insurance in this country.”

Just this week, the Kaiser Family Foundation released a report showing premiums for family coverage rose 130 percent over the past decade. They now average $13,375, which is about the same as the entire annual take-home pay of a minimum wage worker.

Coverage is not affordable. The price of it is pushing families down the economic ladder. Look what it did to Skvara.  He had been a middle class steelworker and remained in the middle class after retirement. But he moved toward poverty after the LTV bankruptcy cost his wife her health insurance coverage. Loss of health insurance and the ensuing medical bills robs families of their life savings, their homes, everything until they’re bankrupt.

Skvara asked the candidates what was wrong with America and what would they do to fix it. Obama’s plan for fixing health insurance would forbid dropping or denying coverage because a person is sick or has a pre-existing condition.

He wants the public option to provide competition so that rates are affordable. That public option would cover Skvara’s wife – at a reasonable cost. So he could remain in the middle class and not find himself asking heartbreaking questions at public meetings.

The teabaggers are apoplectic because this isn’t just about health care. This is about the values of a government.

The Obama administration fails to fawn over the affluent.

Instead, Obama talked of downtrodden workers in the former Jones & Laughlin Steel mill in Aliquippa. Bosses there fired a dozen workers shortly after the National Labor Relations Act passed in 1935. The workers, mostly union organizers, challenged the dismissals all the way the U.S. Supreme Court, securing a landmark win that not only got them their jobs back, but also affirmed the constitutionality of the labor law that led to the burgeoning of union organizing, and the growth of America’s large, stable middle class.

To win that case, Obama told the AFL-CIO convention, workers of different ethnicities and faiths had to work together and stick together. That will be necessary to win this struggle to reform health insurance as well. But that reform is only the first part of Obama’s plan for the middle class:

“We will make possible the dreams of middle class families and make real the promise of the United States of America.”

That’s worth fighting for.

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In the months following the Wall Street meltdown, we’ve seen a stealth marketing campaign that is profound for its boldness — a marketing campaign designed to make us believe that very wealthy people are suffering the most.

We’ve seen this campaign in Wall Street spokespeople insisting that a $500,000-a-year salary isn’t very big, in a New York Times style section that asserts that it’s impossible to live in the city on a half million dollars; in a punditburo that says millionaires are oppressed and can’t afford to pay $9,000 a year more in taxes for universal health care; and in a national press corps that seeks to portray any effort to raise taxes on the richest 1 percent as unfair; and a business press that threatens a class war if President Obama moves forward with his promise to make the payroll tax more progressive. As I said, this is a marketing campaign, and a fairly well coordinated one.

That’s why I wasn’t surprised to see this audacious Washington Post piece over the weekend which reports — with a straight face — that those making $300,000 a year are “barely squeaking by” in this economy. I s*** you not:

Laura Steins doesn’t mind saying that she is barely squeaking by on $300,000 a year… As a vice president at MasterCard’s corporate office in Purchase, N.Y., she earns a base pay of $150,000 plus a bonus. This year she’ll take home 10 percent less because of a smaller bonus. She receives $75,000 a year in child support from her ex-husband. She figures she will pull an additional $50,000 from a personal investment account to “pick up the slack.”

The nanny and property taxes take $75,000 right off the top, but Steins considers both non-negotiable facts of her life and not discretionary. When she bought out her husband’s share of the house after their 2006 divorce, she assumed the costs of keeping it afloat — $8,000 to $10,000 a month. There’s a pool man, a gardener and someone to plow the snow from the quarter-mile-long driveway.

As tight as money is, she has decided that living in a 4,000-square-foot house on three acres is the practical thing to do.

I’m not going to take up text space going off about how absurd this all is, except to say (as I have before) that in a country where the recession is obviously most crushing the middle-class, I’m playing the smallest violin in the world for those making $300,000 a year (ie. the top 5 percent of the country) — especially those who whine about their plight while refusing to cut back on their nannys and gardeners.

What’s fascinating here is not how incredibly out of touch with Middle American reality the super wealthy are, but how willing the media are to promote the super wealthy’s whines as legitimate and justified. The entire economic narrative on Main Street is about how the average family making $50,000 a year is going to put food on the table — and the entire economic narrative in the elite media is about the top 5 percent’s concerns that they might have to cut back on mansion expenses.

This is the real “Two Americas” — the elites and the media outlets they control, and the Rest of Us. And clearly, the former doesn’t give a s*** about the latter. David Sirota is the bestselling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008). Find his blog at OpenLeft.com or e-mail him at ds@davidsirota.com

Joe Bageant

In looking back on growing up, I always remember 1957 and 1958 at “the two good years,” They were the only years my working class redneck family ever caught a real break in their working lives, and that break came because of organized labor. After working as a farm hand, driving a hick town taxi part ti me, and a dozen catch as catchcan jobs, my father found himself owning a used semi-truck and hauling produce for a Teamster unionized trucking company called Blue Goose.

Daddy was making more money than he’d ever made in his life, about $4,000 a year. The median national household income at the time was $5,000, mostly thanks to America’s unions. After years of moving from one rented dump to another, we bought a modest home, ($8,000) and felt like we might at last be getting some traction in achieving the so-called “American Dream.” Yup, Daddy was doing pretty good for a backwoods boy who’d quit school in the sixth or seventh grade — he was never sure, which gives some idea how seriously the farm boy took his attendance at the one-room school we both attended in our lifetimes.

This was the golden age of both trucking and of unions. Thirty-five percent of American labor, 17 million working folks, were union members, and it was during this period the American middle class was created. The American middle class has never been as big as advertised, but if it means the middle third income-wise, then we actually had one at the time. But whatever it means, one third of working folks, the people who busted their asses day in and day out making the nation function, were living better than they ever had. Or at least had the opportunity to do so.

From the Depression through World War II the Teamsters Union became a powerful entity, and a popular one too because of such things as its pledge never to strike during the war or a national emergency. President Roosevelt even had a special designated liaison to the Teamsters. But power and money eventually drew the usual assortment of lizards, and by the mid-fifties the Teamsters Union had become one corrupt pile of s$&* at the top level. So rotten even the mob enjoyed a piece of the action. The membership, ordinary guys like my dad, was outraged and ashamed, but rendered powerless by the crooked union bosses in the big cities.

My old man was no great follower of the news or current events, but he tried to keep up with and understand Teamster developments. Which was impossible since his reading consisted of anti-union Southern newspapers, and the television coverage of Teamster criminality, including murders, and the ongoing courtroom trials.

All this left him conflicted. His Appalachian Christian upbringing defined the world in black and white, with no gray areas. Inside he felt he should not be even remotely connected with such vile things as the Teamsters were associated with. And he sometimes prayed for guidance in the matter. On the other hand, there was the pride and satisfaction in providing for his family in ways previously impossible. He’d built a reasonable working class security for those times and that place in West Virginia. Being a Teamster certainly made that possible. But for damned sure no one had handed it to him. He drove his guts out to get what he had.

There were rules, and log books and all the other crap that were supposed to assure drivers got enough rest, and ensure road safety and fairness for the truckers. Rural heartland drivers saw it for the bull it was, but it was much better paying bull. For a little guy hauling produce from Podunk USA  to the big cities, it still came down to heartburn, hemorrhoids, and longer hauls and longer hours than most driver’s falsified log books showed. And sometimes way too much Benzedrine, or “bennies.”

Bennies were a type of speed commonly used by truckers back then because of the grueling hauls. As a former doper who has done bennies, I can avow they are some gritty nerve jagging s$%*. Their only virtue is making you wide awake and jumpy, and after you’ve been awake on them a couple days, which many drivers were, crazier than a s&%*house rat.  Nearly every truck stop sold bennies under the counter. Once while hallucinating on bennies Daddy nearly wiped out a roadside joint. He recalled “layin’ on the jake brake, down shifting, and watching hundreds of the witches like in The Wizard of Oz come down out of the sky in the dark.” Somehow he got 30,000 pounds back onto the road while several folks inside the diner were pissing themselves in the window-side booths.

My daddy ran the eastern seaboard in a 12-wheeler — there were no 18 wheelers yet. It had polished chrome and bold letters that read, “BLUE GOOSE LINE”. Parked alongside our little asbestos sided house, I’d marvel at the magic of those bold words, the golden diamond and sturdy goose. And dream of someday “burning up Route 50″ like my dad.

Old U.S. Route 50 ran near the house and was the stuff of legend if your daddy happened to be a truck driver who sometimes took you with him on the shorter hauls: “OK boy, now scrunch down and look into the side mirror. I’m gonna turn the top of them side stacks red hot.” And he would pop the clutch and strike sparks on the anvil of the night, downshifting toward Pinkerton, Coolville and Hanging Rock. It never once occurred to me that his ebullience and our camaraderie might be due to a handful of bennies.

Yessir, Old 50 was a mighty thing, a howling black slash through the Blue Ridge Mountain fog. A place where famed and treacherous curves made widows and truck stops and cafes bloomed in the tractor trailers’ smoky wakes. A road map will tell you it eventually reaches Columbus and Saint Louis, places I imagined had floodlights raking the skies heralding the arrival of heroic Teamster truckers like my father. Guys who’d fought in Germany and Italy and the Solomon Islands and were still wearing their service caps these years later, but now pinned with the gold steering wheel of the Teamsters Union. Such are a working class boy’s dreams.

I have two parched photos from that time. One is of me and my brother and sister, ages ten, eight and six. We are standing in the front yard, three little redneck kids with bad haircuts squinting for some faint clue as to whether there was really a world out there, somewhere beyond West Virginia. The other photo is of my mother and the three of us on the porch of that house on route 50. On the day my father was slated to return from any given run we’d all stand on the porch listening for the sound of air brakes, the deep roar as he came down off the mountain. Each time my mother would step onto the porch blotting her lipstick, Betty Grable style hair rustling in the breeze, and say, “Stand close, your daddy’s home.”

And that was about as good as it ever got for our family. Daddy’s heart later gave way from a congenital defect and he lost everything. He was so scrupulously honest about debts he could never recover financially. Unable to borrow money, uneducated and weakened for life, he set to working in car washes and garages. After his union trucking days were over, we were assigned to the margins of America, a million miles from the American Dream, joining those people never seen on television, represented by no politician and never heard from in halls of power.

Now it was only a little house by the side of the road with not enough closets and ugly asbestos shingle siding. But it was ours, just like the truck and the chance to get ahead that it offered. And we had felt like we were some small part of America as it was advertised. All because of a union job during the heyday of unions in this nation.

It was also a period of Teamsters Union corruption, replete with criminal moguls such as Dave Beck, George Meany and Jimmy Hoffa. Yet the history of the few top lizards on the national rock of greed is not the history of the people.

If a few pricks and gangsters have occasionally seized power over the dignity of labor, countless more calculating, bloodless and malevolent pricks — the capitalist elites — have always held most of the card — which is why in 1886 railroad and financial baron Jay Gould could sneer, “I can always hire one half of the working class to kill the other half.” And why a speaker at the U.S. Business Conference Board in 1974 could arrogantly declare, “One man, one vote has undermined the power of business in all capitalist countries since World War II.”  And why that same year Business Week magazine said, “It will be a hard pill for many Americans to swallow — the idea of doing with less so that big business can have more. Nothing in modern economic history compares with the selling job that must now be done to make people accept this new reality.”

The new reality is here, and has been since 1973, the last year American workers made a wage gain in real dollars. Hell, it’s been here so long we accept it as part of America’s cultural furniture. Only about 12% of American workers are unionized and even with a supposedly union friendly Democratic Congress, unions are still fighting to exist (although government employees are unionized at 36%, because the Empire allows some leeway for its commissars ). In fact, things are worse than ever. Employers can now force employees to attend anti-union presentations during the workday, at captive audience meetings in which union supporters are forbidden to speak under threat of insubordination. Back in 1978 when I was working to organize the local newspaper, the management was not even allowed to speak to the workers on the matter until after the union vote results were in.

Then there’s President Obama, the guy soft headed liberals think is going to turn this dreadful scenario around. He talks a good game about unions, when he is forced to. But Obama is working on the things that will “create a legacy,” such as health care (which is simply a new way to pay the insurance industry’s blackmail) or the economy (by appointing the same damned people who fucked it up to fix it), and immigration reform, a nicely nebulous term that can mean whatever either side of the issue wants it to mean. Obama’s not going to publicly ignore the unions. But he’s not going to sink much political capital into this corporatized nation’s most radio-active issue either. For him, union legislation is just a distraction from the “legacy building” of a very charming, savvy, and ambitious politician. That is the assessment of Glenn Spencer of the U.S. Chamber of Commerce, one of the most anti-union institutions in America. (Many thanks to Washington writer Ken Silverstein for publishing Spencer’s astute observations).

Things are changing though. Union membership climbed 12 percent last year. Twelve percent of twelve percent ain’t s&$*, but at least it’s forward motion. At that rate it will only take us 21 years to get back to the 1956 level of union membership. We can expect no miracles, top union leaders are still among the Empire’s elites. And they are still technically accountable to whatever membership will still have jobs when the 2012 elections roll around. The least they could do is make it harder for Obama to lick off those millions of hard earned union support dollars from the top of the campaign contribution ice cream cone as he did in ‘08.

But who can be sure? Because the new union elites and their minions are lawyers and marketing professionals. They’ve never come down off the mountain with both stacks red hot, or gathered on the porch of a crappy but new roadside bungalow, proud because they owned it, and stood up straight because, “Boys, your daddy is coming home.”

I’m not going into the current brouhaha about the Employee Free Choice Act (EFCA) or the “card check” bulls%&* here. Because what it’s gonna take to restore dignity to laboring America, ain’t gonna be more legislative wrangling. What it takes won’t be pretty, maybe not even legal in this new police state, and sure as hell won’t be “within the system.” Because the system is the problem.

So it will be up to us, just like it always has been … the writer, the Nicaraguan janitor, the forty year old family man forced to bag groceries at Walmart, the pizza delivery guy, the welder and the certified nurse … the long haul trucker and the short order cook. And they will snicker at us from their gilded roosts on Wall Street and Pennsylvania Avenue.

Some people are bound to get hurt in the necessary fight. In fact, people need to be willing to get hurt in the fight. That’s the way we once gained worker rights, and that’s the way we will get them back. The only way to get rid of the robbers’ roost is to burn the f*#$er down.

Anyone got a match?

***

For more of Joe Bageant’s thoughts, visit his web site: http://www.joebageant.com/joe/2009/06/worker-rights-no-balls-no-gains.html

In June of 2007, Pennsylvania Senator Arlen Specter was the only Republican to vote with Democrats to end debate on the Employee Free Choice Act. The motion failed, 51 to 48, because 60 votes are needed in the Senate to end debate.

Now that Democrats presumptively have 59 votes in the Senate (with Democrat Al Franken the expected winner of the contested seat in Minnesota), Specter has announced he won’t repeat his vote to end debate on the Employee Free Choice Act, legislation which would make forming unions at workplaces less difficult.

What do you think of Specter’s reversal?

Specter’s loyalties lie with Big Business

It’s clear that his first vote to support cloture (to end debate) was simply political calculus.  He did vote against his party, but obviously knowing that the motion would fail and his vote would have no practical effect.  Thus, allowing him to have his cake and eat it too.  Something ALL politicians love to do.  Now that his vote would have the practical effect of making the EFCA law, we can see his true loyalties.  They obviously lie with the Republicans and Big Business and not with working class Americans.

Charles Sellers
San Diego, Calif 

Can’t count on Specter

As a former resident of Pennsylvania, I’m very disappointed to hear that Arlen Specter has changed his mind on the EFCA, but I am not surprised. The guy has always been a weasel and someone you really can’t count on for help with the middle class. I hope he loses his bid for re-election in 2010. Good riddance!

Dan Zurosky
Lexington, S.C.

Specter: always there when you don’t need him

I’m not surprised at all about Specter’s reversal on key labor legislation, in this case EFCA, Employee Free Choice Act.  Senator Specter, like many other so-called moderate members of Congress, who claim to be labor-friendly, is always there when you don’t need him.  Look at his vote in June of 2007.  It was doomed for failure, so the Republican leadership released him to curry favor with labor.  Unfortunately, this is a pattern for many other fair weather friends of labor, as well as Senator Specter.  They vote with labor often enough to earn or keep labor leaders’ support but, when “key” legislation like trade bills, anti-strike breaking laws and labor law reform like EFCA come along, they turn their back on workers.

This practice is not surprising nor is the practice of unions giving these legislators a pass and, in most cases, an endorsement when they run for reelection.  So, no, I’m not surprised by the reversal of Senator Specter on EFCA, and I won’t be surprised when he receives support from many unions in his upcoming reelection bid.  The rationale we will hear is “he’s with us (labor) on many issues.”  And he is.  But try finding him and other “moderates” when it really matters.

Jan D. Pierce
Quaker City, Ohio

Senator Flip Flop

The best way to deal with Senator Flip Flop is to put in his seat a Democrat who will not flip flop.  Is Ed Rendell interested and wouldn’t he be reliable on such issues?

Herbert G. Reid
Emeritus Professor of Politics, University of Kentucky
Lexington, Kentucky

Is this a new, ratty philosophy from Specter?

Anyone who has worked in a non-union shop and tried to organize a union knows the barriers placed before them: the rumor-mongering, the open threats, the veiled threats, the workplace changes that nearly but don’t quite cross NLRB rules and so on. Just getting the minimum number of cards signed means that a great many more support unionization but for various reasons are reluctant to sign. The EFCA is a self-evident no-brainer, and even if the EFCA is passed, the odds are still stacked against the unions. Passing the EFCA would, however, begin to reverse the anti-union tide that was accelerated by Reagan’s destruction of the Air Traffic Controllers union in 1981.

That sharp reversal of union power has led to a wage depression over the last 40 years, and this has a close connection to our current economic crisis. High wage earners don’t need subprime mortgages, tend not to default, and do create a domestic market to sustain a vibrant economy– low wage earners (the result of de-unionization) do not.

Specter is not a fool, and he surely understands all the above. But, did he vote pro-union in 2007 because he could do the math and realize then that he could appear pro-union but with no effect? Or was he sincere then, but now is running scared of a primary challenge within an increasingly right-wing, anti-people, anti-union, marginalized Republican Party? I guess that amounts to asking “was he always a rat or is this something new?”

David Arnow
Brooklyn, New York

Repuglican coward and corporate lapdog

 What do I think of the Republican’s reversal?  Specter rolled over and is a Repuglican coward and corporate lapdog.

The more important question is what do I think, as a resident of Colorado, of our “appointed” new Democratic(?) Senator Michael Bennet? 

I think even less of Bennet after his failure to come out in support of the Employee Free Choice Act than I do of Arlen Specter.  Bennet’s been ducking the issue like a shy prostitute, in other words how oxymoronic of him to be a Democrat(?) who can’t choose between supporting labor or supporting corporate power.

 Mary Ann Meyers
Littleton, Colorado

Specter prefers credit cards over union cards

Specter apparently favors credit cards and payday loans as the preferred “union cards” in this country.  Disgusting!  American workers deserve a living wage, and the only way to that end is unionization. 

Jacqualyne Cody
Rhinelander, Wis. 

Organizing a perceived right, not a real one

Had Senator Specter not reversed his decision, Senators would have been forced to show the vote.  Where I come from, it’s called the Employer Free Choice Act and undoubtedly it’s a perceived “right” not a real one. Been there, Still there. Ready to move forward. Put away the past.

 Kerry Joel Sudberry
Royal, Tenn.

Votes for workers when there’s not gain

It looks like Senator Spector’s big business masters allowed him to vote the way workers in Pennsylvania would prefer as long as he could safely do so without actually achieving gains for workers.  Now that the balance has shifted, he must show his true colors and tow the corporate line.

Karen Grainey
Savannah, Ga.

Time for Specter to be a statesman

The skills of a great politician include a mastery of showmanship, compromise, deal making, fund raising, and most important of all, knowing how to get reelected each and every time.  The skills of a great statesman are the courage and wisdom to dismiss all the potential rewards from those political skills to do something that you know is right and will improve the lives of the greatest number of people.

Senator Arlen Specter has shown his skills as a great politician throughout his entire career and now is the time for him to show his skills as a great statesman by voting to end the debate on the Employee Free Choice Act.

As the senior Senator from the great state of Pennsylvania, Arlen Specter knows better than anyone the damage done to working and middle class Americans by thirty years of union busting, trickle down, voodoo economic policies.  He knows that only a resurgence of strong healthy collective bargaining units across the America workforce will stop the decline in living standards and economic opportunities for all American wage earners across this great country.

The Employee Free Choice Act is a once in a generation piece of legislation that will have such a positive impact on so many lives.  It is time for Senator Specter to rest his laurels as a great politician, and step up to the plate as the great statesman that he is and vote to end the debate on the Employee Free Choice Act.

John O’Connor
North Smithfield, R.I.

Specter seeking both sides

He’s walking both sides of the street.  He knows how poorly Pennsylvanians are doing (and that the state went for Obama in the election), and he doesn’t want to appear to be unsupportive of his constituents.  But on the other side of the street, he worries about his party exacting a political price in the future for his support of Democrats.  He can tell his constituents a half-truth in his next campaign–that he voted for it–knowing most people don’t really know or bother to look up individual votes on various bills.

Gloria Aukland
Mesa, Ariz.

Pressure from RNC

I think Specter was pressured by the RNC and most likely told that he would not receive funds for his upcoming run for re-election.

Bruce Jenkins
Sunnyvale, Calif.

Buckling under pressure of the nasties

Ever since the rise to power of the nasty breed of Republican that seeks to make government a zero-sum political game — I’m thinking Newt Gingrich, Rush Limbaugh, etc. — there have been distinguished, experienced senators quitting the senate while expressing dismay at how the institution had deteriorated.  I have always seen Arlen Specter as one of the old-style, respectable men willing to continue trying to make the legislature something all Americans can be proud of.  But lately, I’m afraid, he has been buckling under the pressure of the nasties. 

It’s very sad.

Bob Persons
Newton, Mass.

Reversal provokes questions about intent

Senator Specter’s “change of heart” with regard to the Employee Free Choice Act makes one wonder.  Was he cynical when he supported it knowing that it would not pass?  After all, he scored some points with working people by his assumed support.

And, now, has he had a change of heart, or simply been overwhelmed with pressure from corporations and lobbyist?  Or was he opposed to the EFCA all along?

Mauna Richardson
La Madera, N.M.

Specter clueless about survival today

I wonder if Mr. Specter has ever had to work for his income, do a dirty job, do something he doesn’t want to, but had to, because without doing said job, there would be no food on his children’s table.  I doubt it.  Senators and Congresspeople have absolutely no idea what it is like to survive in this day and age of, at the minimum, two jobs to make ends meet. 

Or maybe they all should be laid off, given their proverbial pink slips, because those buffoons got us into this mess in the first place.  I am referring to the fact that it was Congress, which, when they stripped away the banking controls that had been enacted in the last depression, caused this current depression.  They should have to clean toilets for a while; you know, get a feel for what the rest of us have to suffer through.  

I’d be happy to make six figures to sit on my butt and listen to lobbyists all day, and I don’t want to hear about how hard these government officials work because you and I don’t have an army of staff members doing our job for us.  Don’t get me started.

Vincent Falcone
Biotechnology student, Hocking College
Amesville, Ohio

Specter tows typical GOP anti-union line

I think it is very disappointing to hear that Sen. Specter will not vote as he did in 2007. I am wondering what prompted him to vote for the Employee Free Choice Act in the first place and then change his mind this year. I have respected some decisions/stances he has taken in the past (ie voting for this in 2007) but to hear that he is towing the typical Republican party line of anti-unionism is upsetting. I am disgusted to see time and time again, politicians who are supposed to be “for the people” or the voice of the people, continue to vote for the best interests of the corporation rather than the people, the worker.

Janet Hada
Snohomish, Wash.

Sounds like RNC threats

Sounds like the RNC threatened him, doesn’t it?

Could be just general cussedness; he’s done that before, but my guess is that the party made it known that if  Specter voted against their line, he could lose support.

Again, there’s precedent for that. 

Mary Carter
Endicott, N.Y. 

Senate should change filibuster rules

When will Sen. Reid have the good sense to change the filibuster rules so that a mere majority can pass a bill in the Senate?

Jack McKissen
Grand Coulee, Wash.   

Reversal surprising and disappointing

Sen. Specter: Your reluctance to support this legislation is surprising and disappointing.  In the name of fairness, please reconsider your position.

Rev. Wesley E. Blaha
Monroeville, Pa.

Seek support of others

I think we must leave Senator Arlen Specter to vote his conscientious in peace.  He needs the support of Republicans. Let’s reason instead with the others and seek to develop additional allies among them.

David A. Crosbie
Pittsburgh, Pa.

Specter made a major mistake

Specter has made a major mistake if he is planning to run for re-election.  Several hazards await him: (1) he could be defeated by a strong candidate who is a liberal and pro-labor Democrat, of course; but he could also (2) run into terrible troubles in his party’s primary.  Far-right GOPs like to run a candidate against him, as they did last time, though he managed a narrow victory.  BUT Democrats, possibly faced with a primary in which the choice is obvious or an easy winner, could (temporarily switch parties and) vote in the Republican primary for the far-rightist in order to help insure that Specter goes down.  (There are many ways to skin a fat cat!) 

Gerald L. Houseman,
Spokane, Wash. 

Specter’s weasel votes

A reversal from Specter is no big surprise. He will vote with us whenever he knows the vote won’t matter. He votes with the Republican leadership when it counts. Look at his weasel words on the Clinton impeachment votes. His only saving grace is that any other Republican from Pennsylvania would be worse (or maybe not – integrity is something to value even if it’s in one’s opponents).

Tom Wolfinger
Centreville, Va.   

Specter sell-out

There is no sinister conspiracy behind the EFCA to thwart an employee’s freedom to choose or not to choose union representation as some opponents would have the public believe.  The EFCA is a straightforward attempt to reverse the anti-union bias that has perverted US law for nearly thirty years. Arlen Specter knows that. His refusal to support EFCA this time around is nothing short of a sell-out to political expediency now that his incumbency is challenged by strong right-wing opposition in the forthcoming Pennsylvania Republican primary election. Shame on you Arlen Specter.

David A. Blythe
Oxford, Mich.

Specter pressured by Republicans and right

I think it is awful.   Senator Specter has had a lot of pressure put on him by Republicans and the Right in general.  We need to get our folks out there with emails, calls, etc. in support of his progressive votes of late. We also need the same kinds of action to show him how many people are in favor of the Employee Free Choice Act.  Each member must contact family and friends to do the same.  We must get this act through now, at this point in history. Other potential Republicans might be Susan Collins and Olympia Snowe.  We need mass action now!

Judith Richards
Lathrup Village, Mich.

Exigencies of politics

Even as a dyed-in-the-wool Democrat, I have always admired Senator Specter’s honesty. I don’t want to think that he would vote to end debate only when he knew his vote was safe; when his vote would not be the 60th. Yet, I believe he is up for election this year and that his seat is not safe. The exigencies of politics are such that, should his vote be the 60th, he would lose his seat. I’d rather see him hold back this time with the hope that this decent man will be returned to his Senate seat.

Barbara Gunther
Bayport, NY

Tragedy for Employee Free Choice Act

I guess soul-selling is the accepted way to go when you are up for reelection. He finds ways to placate his conscience by pretending he is in the Senate to serve the people. Isn’t this par for the course among too many of our politicians?

What a tragedy when The Employee Free Choice Act hangs in the balance!

Elaine Babian
Far Rockaway, N.Y.  

Senator, you have to go

Hon. Sen. Specter, Sir: Thank you for nothing.  After sending us two identical “‘boiler-plate” letters, one on 12/22/08 and the other on 3/24/08, on your ostensibly supportive position of the EFCA, yesterday you turned around and announced your opposition to it.

Most troubling, was the report from The Patriot-News, by Charles Thompson: “On the Senate floor, Specter said he was troubled by the bill’s proposed elimination of the secret ballot, which he called ‘the cornerstone of how contests are decided in a democratic society’.”

This is troubling because you know “the elimination of the secret ballot” is absolutely false, and not part of the bill.

The article suggests your decision was politically motivated.  This is the political reality:  You have had the support of moderate Democrats in the past because of the moderate positions you have shown.  To stray to the far right would be a mistake.  Should you do that, we would actually welcome the candidacy of far right lunatics like Pat Toomey, so that he would be crushed in November of 2010.  Sorry, but if we can’t rely upon you for non-partisan votes, then you have to go.

Randi & Tom Alba
Ambler, Pa.

Specter kneeling at the alter of big business

Spector is a gutless punk who pandered to labor when there was no chance of the bill passing. Now that we have a real shot at passing this bill, he is showing his true colors. He is kneeling at the altar of big business. Unions and their members in Pennsylvania should not forget this double cross. 

Steven Elliott
Danbury, Conn.

Specter should vote for fairness

Are all Republicans the same?  We had one on our road, who signed a right-of-way for the road to be paved when a Republican was governor, but when it was a Democratic governor, he wouldn’t sign one.  They never vote on the fairness side of any issue.

Without unions our country will not survive as the leader of the free-world.  Education on union backed issues is the key to enlightenment of people who through no fault of their own, stand on the wrong side of issues.

Ronnie Young
Waynesville, N.C.

Vote change inconceivable

I cannot understand how Senator Specter could even consider changing his vote. This bill is a “no-brainer. It is vital for our economy. How could anyone not support it – where are the thoughts of those missing Democrats – amazing that we would elect persons like this to “represent” us in Congress.

Howard Lord
Montezuma, Iowa

Make the Republicans filibuster

 I think it is time to make the Republicans filibuster against the working man if that is their choice.

Robert Hooker
Upper Marlboro, Md.

A jolt

I think somebody needs to kick Arlen upside the head. 

Robert Young
Nashville, Tennessee

Specter feels threatened

I hope that Specter (and others in the GOP) have the courage to vote in good conscience for the interest of working people in Pennsylvania and the country. It’s apparent that he feels threatened by the CFG (Club for Growth) contingent, who are interested in a business agenda that is disconnected from the needs of working people. If only politicians on either side of the aisle would stand up to this anti-worker agenda, people would respond in support.

It’s very disheartening to see the path that Specter and so many others in government are taking while the middle class continues to be undermined across the U.S., by denial of basic union organizing rights and protections granted in most “civilized” nations.

Brent McFarlane
Seattle, Wash.

Specter votes for his own advantage

Arlen Specter has been a successful politician for a very long time.  

Successful politicians, for the most part, do what is in their best interests.  When Specter voted FOR the Employee Free Choice Act, he did so in order to position himself with the Democratic Party, at a time when that party’s fortunes were on the rise.  Now, he is fighting against the EFCA because he has more to gain from his fellow Republicans, and the business interests that support them, by doing so, than can be gained by siding with the Democrats. Politics as usual.

Victoria LoSchiavo
Mentor, Ohio

Specter’s decision all GOP politics

It’s about politics. The Republicans see Barack Obama succeeding beyond their and many others’ (including Democrats) expectations and so now they see themselves circling the wagons lest they help the President succeed. I say the President, because he has expressed strong support for Employee Free Choice, so anything that furthers that success will be opposed by the GOP. Come election time, they’ll come around. We need to remember that, including let’s not forget the biggest traitor of all, Senator Joe Lieberman.

Angel Rodriguez, a former copper miner from Morenci, Ariz.
Glendale, Ariz.

Specter a straw in the wind

I think Senator Specter is still smarting from the beating his fellow Republicans administered after his vote on the stimulus bill, so he is trying to assert his ideological purity with this vote. I can remember when he first ran for the Senate; he was a decent, principled former DA with crime-fighting credentials. Now he seems more like a straw in the wind, hell-bent on keeping his seat, no matter who gets hurt.

I guess we’ll have to get some other help with this….

Barbara Bruce
Mandan, N.D.

Replace Specter with pro-union Democrat

I am not surprised. After all, he is a Republican. The union members of Pennsylvania need to replace Specter with a pro-union Democrat. Unions do have an ally with Secretary of Labor Hilda Solis. We could urge Obama and Biden to resort to the nuclear option. The first step is getting all Democrats to support EFCA.

William Joseph Miller
Los Angeles, Calif.

Specter’s response unfortunate

Senator Specter’s response was unfortunate, and it probably was due to his fear of being defeated in the next Republican primary because of a YES vote.  It may be possible to deal with his concerns and to eventually gain his support, but if not, surely there are other ways to gain a Republican vote. I think the solution is to compromise- make a deal – give up something, to gain something else. Perhaps the key is with President Obama. Maybe he can help put a deal together that satisfies labor and one Republican senator.  Please recall that Specter, Snowe and Collins helped Obama before, for something I am sure each of them wanted.

Bill Weiss
Morgantown, W.Va. 

Votes for middle class when it doesn’t count

Mr. Specter has done this before.  He votes for the middle class so long as his vote won’t count; but when it counts, he always votes for the corporate hierarchy. He is a true Republican, but tries to conceal the fact.  I was surprised when he voted with Collins and Snowe for the stimulus, the only time I have seen him break his rule.

David G. Wagner MD
Portland, Ore.  

Union members must vote their interests

I think Senators are allowed to vote for their constituents when it won’t affect the outcome, but must vote with the party when required to do so or face primary opposition. 

As long as union members–or the 60 million who want to become union members–fail to vote (or vote Republican), the Employee Free Choice Act has an uphill fight. 

My county brags about being one of the “most Republican in the nation” — and 60% of the parents of public school kids are not registered. 

Arlen Specter should have been voted out long ago.  Yet, he can’t have been elected without the votes–or apathy– of labor. 

Judy Ferro
Caldwell, Idaho

Sally Kalson

They are manufacturing lies to keep workers from joining unions

By Sally Kalson
Pittsburgh Post-Gazette Columnist

In the annals of big lies, it’s hard to top the tobacco companies’ insistence that smoking (a) did not cause lung cancer and (b) was inexorably linked to America’s rugged individualism.

Then along came the campaign to kill the Employee Free Choice Act, legislation that would make it easier for workers to form unions and harder for companies to intimidate and fire them if they try. The law would reverse decades of impotence on the part of the National Labor Relations Board, which has been reduced to a toothless body that employers barely bother to acknowledge anymore.

The assault against the free choice act rivals the tobacco campaign for sheer chutzpah by insisting that union busting (a) does not erode the middle class and (b) is inexorably linked to business’s deep regard for the sacred “freedom” of American workers. Which might be true if you’re talking about the freedom to be paid less for working more with no health insurance, pension or job security, but otherwise is a real laugh riot. MORE

Sally Kalson is a columnist for the Post-Gazette and a 25-year member and longtime officer of The Newspaper Guild/CWA Local 38061 (skalson@post-gazette.com, 412-263-1610). More articles by this author

David Sirota

By David Sirota
Author of “The Uprising: An Unauthorized Tour of the Populist Revolt”

Millionaires and corporations continue to convince lawmakers to shield them from the taxman and balance budgets on the backs of everyone else. That’s what’s going on in revenue-starved states right now: Governors are preparing to slash middle-class programs and are resisting calls to raise taxes on the wealthy.

For most of us, Benjamin Franklin’s words in 1789 still apply: “Nothing is certain but death and taxes.”

However, millionaires, by definition, are not most of us. While they can’t stave off the grim reaper, they can convince lawmakers to shield them from the taxman and balance budgets on the backs of everyone else.

That’s what’s going on in revenue-starved states right now: governors are preparing to slash middle-class programs and are resisting calls to raise taxes on the wealthy. Nowhere is this class war more pronounced than in New York — the home of the financial thieves who killed the economy.

Having halved its top tax rate over the last three decades, New York today faces a $15.4 billion deficit. In response, Democratic Gov. David Paterson might have asked his state’s Gordon Gekkos to pay higher taxes, especially considering the idea’s popularity in polls and the news that Wall Street’s elite are still swimming in money. Indeed, according to CBS News, the allegedly beleaguered financial industry is so flush with cash it plans to dole out $14 billion in executive bonuses this year.

Yet, far from forcing robber barons to pay their fair share, Paterson told The New York Times that taxing millionaires is “the last place you want to go.” Instead, he proposes to punish Joe and Jane Six-pack by hiking the taxes and cutting the programs that disproportionately impact them. Specifically, he wants to increase sales taxes, college tuitions and licensing fees and slash education and low-income health programs.

Paterson defended his proposals by telling PBS’s Bill Moyers “that when you tax the wealthy in the downturn of an economy, you have an automatic link of a loss of job opportunities and then a loss of population.” The rationale sounds intelligently pragmatic — until you peruse the relevant data.

When New Jersey recently raised taxes on the wealthy, Princeton University researchers found that most of those who later left the state moved to places with higher taxes, meaning there is no causative link between levies on the rich and residential flight. Likewise, when New York temporarily raised high-income taxes after 9/11, the state added 127,000 jobs, meaning no link exists between higher taxes on the rich and job loss.

During times of surpluses, governors could get away with the unsubstantiated nonsense Paterson is peddling. But now, 43 states confront shortfalls, and because states cannot run deficits, the dollars and sense of these arguments matter. Lawmakers must choose what policy will create the best chances for economic recovery: spending cuts or tax increases, and if the latter, on whom?

The answer isn’t rocket science. As Nobel Prize-winning economist Joseph Stiglitz says, “Reductions in government spending on goods and services (are) likely to be more damaging to the economy in the short run than tax increases focused on higher-income families.”

That’s because government cuts automatically decrease the consumptive spending programs that broadly stimulate the economy whereas tax increases, when aimed at the wealthy, more often impact funds socked away in savings. “The more that the tax increases (are) focused on those with lower propensities to consume (i.e., the rich),” Stiglitz notes, “the less damage is done to the weakened economy.”

Incredibly, Paterson acknowledges how destructive his budget is, admitting that his own “education cuts are draconian, the health-care cuts are prohibitive [and] the taxes that are being levied … are not fair.”

So why would he — or any governor — nonetheless try to legislate such idiocy? Because millionaires are the ones who finance gubernatorial candidacies, and their campaign contributions buy tax protection. The result is what another New York royalist promised.

“Only the little people pay taxes,” said Leona Helmsley — a doctrine that will exacerbate this recession if states keep making it true.
David Sirota’s new book is “The Uprising.” He is a fellow at the Campaign for America’s Future and a board member of the Progressive States Network. His blog is at www.credoaction.com/sirota