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The Farm Bill that is expected to pass the U.S. House this week explains income inequality in America.
The Republican-sponsored proposal slashes food stamps for poor children and pads farm subsidies for wealthy agri-businessmen.
This comes just a week after Senate Republicans refused to protect the poorest students from doubled college loan interest rates because that required closing tax loopholes that benefit big corporations. It comes just weeks after a new study showed the Walmart heirs, among the richest people in the world, pay their workers so little that taxpayers fork over billions to subsidize Walmart’s payroll through programs like – food stamps.
This all violates America’s cherished ideal of equal opportunity. Americans strive to achieve believing they have the same chance at success as everyone else and, more importantly, that the egalitarian American system will provide their children with a level playing field on which to attain their full potential. Americans believe their government should maintain that level field. But it does not. Not when poor students are denied access to low-interest college loans while Washington charges Wall Street virtually no interest. Not when the House farm bill feeds the rich and starves the poor.
Republican Congressman Stephen Fincher of Frog Jump, Tenn., is the ugly face of the feed-the-rich public policy. He is a seventh generation millionaire agri-businessman. He raked in $3.5 million in federal farm subsidies from 1999 to 2012. That averages out to $269,000 a year in farm welfare. It makes him one of the largest farm welfare recipients in Tennessee history as well as among members of Congress.
This politician, who thrived on the government dole, raking in $738 a day in farm welfare over the past 13 years, is among the loudest advocates for increasing subsidies to agribusiness by about $10 billion and slashing food stamps by $20 billion.
That would take food from 2 million poor people. They get an average of $133 a month in food stamps. That’s less than $5 a day for the poor – not the $738 a day that Fincher got.
Fincher justified taking food out of the mouths of poor people by quoting the Bible, 2 Thessalonians 3:10, to be specific: “For even when we were with you, we gave you this command: Anyone unwilling to work should not eat.”
Citing that verse shows a frightening level of cluelessness. First, Fincher took it out of context. It was intended as an admonishment of those who’d stopped working in anticipation of the Second Coming, not as a castigation of generic non-workers.
Second, 49 percent of those receiving food stamps are children. Would Fincher have five-year-olds work for their supper? How about infants?
Finally, the food stamp program encourages work, and the number of recipients who do tripled in the first decade of the century.
Among the working poor are Walmart employees. Generally, to qualify for food stamps, a family can’t earn more than 130 percent of poverty level, which would be $25,000 for a family of three. A typical Walmart worker earning $8.81 an hour, slightly more than minimum wage, receives $15,576 a year.
An analysis by the Democratic staff of the U.S. House Committee on Education and the Workforce found that such low wages harm families and burden taxpayers. Government benefit programs – such as food stamps – enable Walmart’s low wage workers to barely scrape by, the report says.
Using data from Wisconsin’s Medicaid program, the staff determined that the average Walmart Supercenter there costs taxpayers between $904,542 and $1.7 million each year. That’s for programs like Medicaid and food stamps.
The report also notes: “Rising income inequality and wage stagnation threaten the future of America’s middle class. While corporate profits break records, the share of national income going to workers’ wages has reached record lows.”
Walmart provides the perfect example of that. The corporation made $17 billion last year, while paying its workers poverty wages. As Walmart workers use government programs to get by, the six Walmart heirs now have more wealth than the bottom 42 percent of Americans combined. Between 2007 and 2010 the wealth of the six richest Walmart heirs rose from $73 billion to $90 billion while the wealth of the average American declined from $126,000 to $77,000.
This results from government policy. The government doesn’t require Walmart to pay a living wage. Instead, the government uses taxpayer dollars to minimally subsidize low-paid Walmart workers while cutting taxes on the wealthy Walmart heirs.
The government subsidizes Walmart the way it does millionaire famers like Fincher. Though low-income workers receive the food stamps, essentially that government aid is welfare for Walmart. A food stamp applicant must prove poverty to qualify for government aid. But not big business. Not agri-business.
The number of food stamp recipients increased dramatically since 2008 because of the great recession, an event caused by reckless gambling on Wall Street. House Republican policy calls for the victims of the recession to suffer and the perpetrators to continue receiving low interest federal loans.
This policy, this funneling of money to the top, increases inequality and decreases opportunity. A child who goes to school hungry, for example, has a very hard time learning.
Universal Studios is among the corporations that have institutionalized inequity. At its parks, middle-class parents and their children wait for hours for entrance to attractions, but the wealthy and their scions simply cut in line. The children of the wealthy don’t have to wait. Universal facilitates this with expensive VIP tickets that entitle rich children to park privileges. The VIP package includes hand sanitizer in case a rich kid accidently touches a “regular Joe” kid, as Universal called them. Also, VIP families get exclusive breakfast and lunch service.
America feeds the rich. Equal opportunity is dead.
When a kid snatches an old lady’s purse, it’s punished as a crime. But when a corporation manipulates bankruptcy law to deny thousands of retired coal miners benefits they labored their entire lives to earn, it’s endorsed by federal court.
Late last month, a bankruptcy judge sanctioned a scheme in which corporations create shill companies with a dram of assets and a sea of retiree responsibilities. Such a debt-burdened outfit quickly goes bust. Bankruptcy court, the judge said, can’t consider the intent of a company’s creation, but can approve a plan to reorganize it by betraying decades of promises to retirees.
Corporations have reneged many times before on pledges for pensions and retiree medical benefits. This, however, is a new twist on that old scam. It’s alarming because what the bankruptcy court approved provides a template for companies angling to reduce costs by abandoning their commitments to retirees. It’s a swindle that must be stopped.
Of course, lots of people get hurt in bankruptcies, not just workers. All kinds of creditors – from the local accounting firm to the big copy paper provider – get stuck with cents on the dollar owed. But this case, the Patriot Coal Corp. case, is different. That’s because Patriot’s bankruptcy was deliberate. Peabody Energy kneecapped Patriot on purpose at the outset.
“There can be no Patriot Coal stock to dispute, or tonnage payments to negotiate, or companies to reorganize, unless there are men and women willing to bend their knees to excavate coal.”
So said Bankruptcy Judge Kathy A. Surratt-States in her decision. Peabody and Patriot would not exist without those bended knees.
The judge also noted the suffering of workers, more than 900 of whom wrote to her:
“Many discuss the horrendous conditions of the coal mines when those individuals first began to work, and how hard it was to achieve the promises made pursuant to both the previous and the current CBAs (collective bargaining agreements). Some discuss how physically, mentally and emotionally grueling being a coal miner was, many of whom worked as coal miners for over 30 years – a sacrifice made with due consideration of the promised health care from cradle to grave. . .
“Many coal miners talk of six (6) and seven (7) day work-weeks, of over 12 hours a day. Some letters discuss various injuries sustained while working in coal mines, limbs of self and relatives lost, and the lives lost of relatives and friends. . .And, as counsel for the UMWA (United Mine Workers of America) so eloquently stated, many current and retired coal miners do not have cost spreading abilities, because, for many, cost spreading ‘means cutting your pills in half. Cost spreading abilities for retirees means making a choice today over medicine or food.’”
And then she said none of it mattered. She contended she was forbidden from considering that. She also insisted that under bankruptcy law she couldn’t take into account whether Peabody, the world’s largest private-sector coal company, deliberately established Patriot in such a way that it would fail so that it could receive sanction through bankruptcy to desert its retiree health care obligations.
Peabody “spun off” Patriot coal in 2007 in what sounds like a pretty bad deal for Patriot. Peabody gave Patriot 13.3 percent of Peabody’s coal reserves and 72 percent of Peabody’s health care liabilities.
Patriot showed a fondness for debt, however. In 2008, it bought Magnum Coal Co., a similarly debt-hobbled firm. Arch Coal set up Magnum in 2005 by giving it 12.3 percent of Arch assets and 96.7 percent of Arch’s retiree health care liabilities.
Five years after its creation, Patriot employs about 4,200 and bears inherited responsibility for five times that many retirees.
It’s no wonder then, that by 2010, saddled with debt loaded on it by both Peabody and Arch, Patriot began losing money. It filed for bankruptcy in 2012.
The bankruptcy judge explained it this way: “There are several events that catalyzed Debtors’ (Patriot’s) bankruptcy filing. Above all other reasons however are the liabilities that Debtors (Patriot) inherited from Peabody and Arch.”
Patriot’s obligations to retirees and their family members exceeded $1.6 billion. But more than 90 percent of the miners owed these benefits never worked a day for Patriot. They were employed by Peabody, Arch and their subsidiaries.
The bankruptcy judge approved a plan under which Patriot would replace that obligation with a $300 million fund – a fund worth less than 19 percent of what was promised the retirees. Also, Patriot would place in the fund royalty payments that the bankrupt company contends could be worth “tens of millions” of dollars. Finally, the UMWA would receive 35 percent ownership of the bankrupt company – an “asset” the court contended could be sold to help finance the retiree health care fund.
None of this gets close to covering $1.6 billion in obligations. Thousands of miners and retirees have protested Patriot’s efforts to escape its commitments, marching in the streets of St. Louis and Charleston, W.Va. And the UMWA, which represents about 60 percent of Patriot’s hourly workforce, has said it will appeal.
The judge noted that the bankruptcy code requires that the court treat all parties fairly and equitably and that this standard was intended to disperse the burden of saving a company and to ensure that debtors did not seek reorganization on the backs of retirees.
Still, the judge allowed Patriot to reorganize on the backs of retirees. And on the backs of current workers whose labor contract will be broken and whose pay and benefits will be slashed.
When employers promise pensions or retiree health care, workers count on it as deferred compensation. It is money earned now but received later. When a bankruptcy judge approves rescinding those earned benefits, the court grants the corporation authorization to take money out of workers’ wallets – permission to pickpocket. It’s a crime when committed on the street. It’s a crime bankruptcy courts should forbid when it’s clear the failed company was set up to go bust and rob retirees of earned benefits. If the UMWA loses on appeal, Congress must change the federal bankruptcy code to forbid this new method of mugging workers.
Marcus Hedger was wrongly fired. That’s what the National Labor Relations Board (NLRB) determined. Despite that, Mr. Hedger lost his Antioch, Ill., home. His case got mired in allegations that the board that heard it was illegitimate.
Similarly, West Virginia’s Cannelton miners wrongly lost their jobs. The NLRB said so twice. But quarrels over NLRB quorums effectively nullified both decisions. Three of the miners have died waiting for justice.
“And that’s the way, uh-huh uh-huh, the rightwing likes it! Uh-huh uh-huh!”
Achieving such spectacular defeats of worker rights took Republicans years of focused, dedicated and relentless scheming. They’ve abused the filibuster process at a record rate. They’ve manipulated Senate recess to unprecedented levels. They’ve delayed and appealed decisions. Government disgusts Republicans, so obstructing it makes sense to them. They’re equally repulsed by unions, now representing a grand total 11.3 percent of all American workers, largely as a result of decades of effort by the GOP to destroy worker protections and worker rights. Senate Majority Leader Harry Reid, D-Nev., can hobble this right-wing campaign against working people by deploying the nuclear option. He’s got nothing to lose and workers have everything to gain.
There is no doubt about GOP intent. Sen. Linsey Graham, R-S.C., stated it loudly and clearly. He threatened to filibuster all of President Obama’s nominees to the NLRB because: “The NLRB as inoperable could be considered progress.”
Republicans have used the filibuster interminably to prevent confirmation of President Obama’s nominees, to the NLRB, to judgeships, to administrative posts. Democrats did it too during George W. Bush’s presidency. But it was nothing like the level to which Republicans have exploited the filibuster during the Obama presidency. Nothing. No comparison.
President Obama responded, exactly as other Presidents have, with recess appointments. These selections, made while Congress is not in session, are temporary and don’t require Senate approval.
The GOP cried foul, saying Congress wasn’t really recessed. The lawmakers had left town for a break, true enough. No business was being conducted, true enough. But the GOP-controlled House had refused to approve a Senate recess, so a member would drive to the Capitol once every few days during the break, slam down a gavel and announce the place was open for business. For a minute. Then end business with another strike of the gavel.
Two appeals courts have now approved this tactic. In a split decision, the Third Circuit Court of Appeals ruled invalid President Obama’s 2010 recess appointment to the NLRB. And the D.C. Circuit Court of Appeals ruled invalid the President’s three 2012 recess appointments to the NLRB. The White House is appealing to the Supreme Court.
One of those two appeals courts – the D.C. Circuit Court – leans Republican hard. Until last week, the court operated with four judges appointed by Democratic Presidents and nine jurists appointed by Republicans, including senior judges who routinely hear cases.
For two and a half years, Senate Republicans delayed a vote on President Obama’s first nominee to fill a vacancy on the D.C. Circuit court – so long the candidate withdrew. Last week, the Senate finally confirmed a judge nominated by President Obama.
That means the court now uses 14 judges – five nominated by Democrats and nine by Republicans. And it still has three vacancies. To retain the GOP stranglehold, Republicans have proposed legislation eliminating those three slots. It was introduced by Sen. Chuck Grassley, R-Iowa, who had no problem with the size of the court when he voted to approve Bush’s nominees to fill its bench.
Losing three Democrat-appointed judges on this bench would mean that next time the GOP wants this key court to rule against Wall Street regulation or environmental protection or an NLRB appointment, Republicans would pretty much know they had the decision in the bag.
If the GOP had won the Presidency, a Republican could fill those three slots. But the GOP did not win. Instead, it wants to jettison those judges until, of course, the next time a Republican is in the White House.
The D.C. Circuit Court and Third Circuit Court decisions voiding the recess appointments to the NLRB raise questions about the validity of all NLRB decisions during the time when those appointees served – nearly three years of rulings. Rulings affecting the lives of workers like Mr. Hedger and the Cannelton miners.
That’s fine with Republicans like Graham. They want to eliminate the NLRB, which has for three quarters of a century protected workers’ rights. Even if the appeal to the Supreme Court on the recess appointments goes against the GOP, they’ve got another poison pill up their sleeve.
That’s ensuring the NLRB can’t operate. The board hasn’t had a full contingent of five members since August, 2003. For more than two years beginning Jan. 1, 2008, the board had only two members. The Supreme Court ruled that two-member board invalid.
The board now has three members, including one whose term expires Aug. 27. His loss would render the board inoperable. Exactly what Republicans want.
President Obama has nominated five candidates to serve, including two Republicans. Graham has made it clear he intends to filibuster any and all of them, thus killing the board on Aug. 27.
When Republicans controlled the senate, Democrats filibustered Bush nominees and engaged in “pro forma” recesses – but nowhere near the level the GOP is doing it now. During the Bush administration, the GOP threatened to change the rules to prevent filibustering of nominees. That’s the nuclear option. If Republicans went nuclear, Democrats said they’d scuttle Bush’s entire legislative agenda. So Republicans didn’t.
Now, however, Democrats have nothing to lose if they go nuclear. There’s no threat in Republicans saying they’ll stymie President Obama’s legislative agenda. They already do that. They say no to everything. Even measures essential to prevent financial disaster.
Harry Reid stepped back from the nuclear option earlier this year. Now, however, is the time to use the nuke. The Cannelton miners, Mr. Hedger, all American workers need that protection.
You and I, we're the same.
Live and die, we're the same.
Hear my voice, know my name,
you and I, we're the same. ~ Avett Brothers, Live and Die
Although Gap, the world’s third largest apparel company, used that Avett Brothers song in commercials last fall, the corporation does not believe we’re really the same.
By refusing to join other clothing retailers in a binding agreement to protect Bangladeshi workers, more than 1,200 of whom have died in factory fires and collapses in recent months, Gap is saying: You and I, we’re not the same; I don’t hear your voice or want to know your name.
H&M and Inditex, both among the world’s largest apparel companies, and 36 other American and European firms signed the pact requiring them to finance rigorous safety inspections and repairs over five years. They jointly took responsibility for trying to ensure safety and decency for workers in the factories sewing the clothes on which they profit. Because we are all the same and all deserve respect at work, Gap, Walmart and other major apparel firms must join them in fulfilling their ethical obligations. And at the same time, the European Union and United States must suspend Bangladesh’s duty-free access to Western markets until it increases its minimum wage and guarantees internationally recognized rights to workers.
Last month, the Rana Plaza building, housing several clothing factories, collapsed in Bangladesh, killing 1,127 workers in the most lethal disaster in garment manufacturing history. Five months earlier, 112 workers died in a fire at the Tazreen Fashions factory in Bangladesh, which trails only China in exporting clothing, with 5,000 factories employing millions of workers, mostly women and girls, earning the lowest minimum wage in the world: $37 a month.
Earlier fires and collapses killed hundreds of Bangladeshi workers, including a blaze two and a half years ago that killed 29 workers in a factory where Gap labels were found.
The Rana catastrophe renewed efforts by IndustriALL, a union federation with 50 million members in 140 countries, and Uni Global Union, a worldwide federation of 20 million retail and service workers, to persuade clothiers that profit from Bangladeshi factories to take responsibility for the safety of the workers.
The horror of the Rana Plaza photos fresh in mind, the coalition succeeded in getting 38 retailers to sign the Joint Memorandum of Understanding on Fire and Building Safety.
But giants Gap and Walmart refused. They said they’d go it alone. In other words, don’t expect much from them. Gap, which owns the Gap, Banana Republic and Old Navy stores, promised $22 million in loans for repairs to the 78 Bangladeshi factories it uses. That is $22 million in loans – from a corporation that made $333 million in profits in the first three months of this year alone.
Gap objected to arbitration and legal liability in the Joint Memorandum. Gap suggested instead that the remedy for noncompliance be expulsion from the program.
What Gap is saying is this: We don’t really want to take responsibility. We want to be able to slink away if safety costs are high or if we disagree with an inspector’s report.
Gap contends it fears legal accountability, but American companies Abercrombie & Fitch and PVH, owner of Tommy Hilfiger, Calvin Klein and Izod brands, signed.
This is Gap saying, yeah, they buy garments from Bangladeshi vendors, but Gap is not responsible for the blood of crushed workers on the clothes. That’s like the guy who buys a watch off the arm of a street hustler then claims he’s not responsible for receiving stolen property because it was the vendor, not him, who beat and robbed the watchmaker.
At first blush, Gap’s and Walmart’s promises sound decent. The problem is that they’re not binding and not transparent. They claim they’re going to do stuff, but the Joint Memorandum requires signatories to actually accomplish goals. In addition, the Joint Memorandum mandates public reporting. After a factory is inspected, the results are to be released.
Gap could inspect a sweatshop, find it unsafe, pocket the report and move its work to a different factory, maybe one a European retailer already paid to upgrade. That would leave the original workers still imperiled. And unaware.
Even if Gap, Walmart and other major retailers eventually sign on, not all of Bangladesh’s factories will be inspected and improved. So workers themselves must be empowered. They must be legally entitled to form unions so they can protect each other and stand up to reckless bosses.
One worker, who survived the Rana Plaza collapse, said she went into the building that day, even though she was fearful after seeing cracks. She did it because she couldn’t protect herself. When she told a boss she didn’t want to enter, he slapped her and ordered her to work. In other cases, workers died in fires because bosses locked doors and claimed those yelling fire were lying.
Just last week, CBS news visited the Monde Apparels factory in Bangladesh and found workers sewing boxer shorts for Walmart in a factory with missing fire extinguishers and exits blocked off by tall piles of boxes.
Last year, a Bangladeshi labor rights activist was tortured and murdered. The government has brought no one to justice. The government has also beaten, water cannoned and tear gassed garment workers demonstrating for better pay.
It should be the opposite. A government should represent its people, not the interests of foreign apparel retailers. Until the Bangladeshi government gives workers the right to organize and collectively bargain for decent wages and health and safety improvements, the EU and United States should suspend its special trade status.
Bangladeshi, American and European workers are the same. We live and die together. When giant retailers shirk their responsibility to protect workers from unnecessary dangers, they are guilty of receiving bloody property.
***
Join United Students Against Sweatshops, the International Labor Rights Forum and consumer and human rights groups who demonstrated at the Gap shareholder meeting last week in demanding Gap sign the Joint Memorandum of Understanding.
The IRS, always friendless, now is a pariah. Republicans can’t stop condemning it. Democrats can’t stop agreeing.
Targeting Tea Party groups for scrutiny, even if through incompetence, not intention, turned the IRS into a nasty carbuncle on the governing body.
Carbuncles are never good. Strength-sapping, painful, ugly, they’re to be avoided. Here’s the thing, though: while every politician in Washington is cursing the carbuncle, hardly one has complained of the cancer killing the patient. Allowing unlimited, unaccounted-for corporate spending in elections is a malignancy threatening the life of the republic. Permitting Tea Party, left-wing, libertarian, middle-of-the-road – whatever – groups to define themselves as untaxed social welfare organizations that may accept unlimited, untaxed, secret corporate gifts and sponsor political ads is a sarcoma on democracy.
Nobody wants the IRS singling out applicants based on politics. The American people do, however, want someone, if not the IRS, someone else, somewhere to do something about the perversion of election finance. The IRS is hardly a good candidate for that job. The Securities and Exchange Commission (SEC) could help. A constitutional amendment would be better.
The IRS has some regulatory power. In the Tea Party case, the IRS was examining applications for “social welfare” or 501(c)(4) status, which is commonly used to circumvent campaign finance laws.
The tax code defines 501(c)(4) groups like this: “civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.” These are different from charity organizations, called 501(c)(3), such as food banks and homeless shelters. And they are different from political outfits, which have their very own place – Section 527 – in the tax code.
Over the past decade, an increasing number of political groups sought “social welfare” status instead. That’s because of a 2001 law requiring political outfits to disclose their donors. “Social welfare” organizations don’t have to do that. Politicized “social welfare” groups sprouted even faster after the U.S. Supreme Court decided in the Citizens United case in 2010 that corporations are people free to spend unlimited cash in elections.
“Social welfare” groups provided corporations with the ability to spend untold millions on candidates while keeping that a secret from customers and shareholders.
But here’s the problem: the tax code requires these groups to work “exclusively” to promote social welfare. Regulations permit some political activity but forbid these groups from functioning primarily for politics.
Despite that, many of these groups, from the right-wing Crossroads GPS to the lefty Priorities USA, clearly operate primarily for politics. They spent hundreds of millions in the last Presidential election. Watchdog groups have filed a dozen complaints in the past two years objecting to this apparent violation. The IRS never responded.
Not much enforcement there.
The IRS made a little effort in 2011, but backed off when GOP leaders complained.
Gifts to charities are tax exempt, but those to “social welfare” groups are not. Well, they’re not supposed to be. The IRS sent letters to a group of big donors two years ago informing them that gifts to “social welfare” groups may be subject to tax. Immediately, Republican senators Orrin G. Hatch and Jon Kyl accused the IRS of partisanship. After which the IRS “folded like wet cardboard,” said Sheila Krumholz and Robert Weinberger of the Center for Responsive Politics in a New York Times article.
No enforcement there.
Another government entity that could help cure the dark money disease is the SEC.
No enforcement there either, though.
Languishing at the SEC is a proposal to require publicly-traded companies to disclose the money they pour into these “social welfare” groups – funds described as “dark money” because the source is concealed. The idea is that shareholders have a right to know how their investment is used. And it’s a popular concept, with more comments filed on this proposal than on any other suggested rule in SEC history – half a million – the vast majority in favor.
Citing the IRS scandal, Republicans demanded last week that the SEC kill the proposal to require corporations to unveil their attempts to influence elections. New SEC Chair Mary Jo White refused.
Good sign. But still no actual enforcement.
One method of enforcement is on the move. It is a proposed amendment to the U.S. Constitution that would reverse the Citizens United decision that corporations are people with First Amendment rights to free speech, which includes spending unlimited money on politics. Already, 13 states and more than 300 municipalities have called for approval of the Democracy is For People Amendment. It was introduced in Congress by Independent Vermont Sen. Bernie Sanders and Florida Democratic Rep. Ted Deutch.
It says natural persons who are citizens of the United States may make campaign contributions. Corporations do not fit that definition of human beings, and as a result would be prohibited from making political gifts.
It would allow contributions from Political Action Committees, which are comprised of human beings who get together and donate under the IRS' political committee rules - Section 527. So groups of union members or wealthy CEOs could continue donating.
Move to Amend activists were heartened by a Pennsylvania judge’s recent decision that corporations are not people and thus do not have a constitutional right to privacy. Washington County President Judge Debbie O’Dell-Seneca is no Supreme Court justice. But she understands that there’s an important distinction in the fact that people can be heartened while corporations can’t be. Her decision included this analysis:
“It is axiomatic that corporations, companies and partnership have no “spiritual nature,” “feelings,” “intellect,” “beliefs,” “thoughts,” “emotions,” or “sensations,” because they do not exist in the manner that humankind exists. . .They cannot be ‘let alone’ by government, because businesses are but grapes, ripe upon the vine of the law, that the people of this Commonwealth raise, tend, and prune at their pleasure and need.”
Corporations can’t “suffer” illness. They can, however, kill democracy.
To stop toxic corporate interference in elections, the American people could demand that the IRS, which is supposed to be non-partisan, decide exactly what constitutes political activity. They could hope the SEC will do the right thing. What they should do, however, is pass a constitutional amendment clarifying once and for all that corporations are not human and can’t usurp the rights of human beings.
President Obama went to Austin, Texas, last week in pursuit of an industrial and employment revival. He wants to launch manufacturing institutes to foster American innovation and job creation.
Republicans responded by ridiculing the President, in the same arrogant way that the blooded aristocrats on the British television series Downton Abbey scorned a chauffeur who sought to marry into the patrician Crawley family. “No opportunity for the downtrodden!” the GOP and wealthy vow.
Watching Downton Abbey would be pure escapism, a simple respite from the grind of work and duties of home. That is, except for the disquieting reality that Downton Abbey’s classist mores increasingly intrude on American life. The wealth gap between America’s rich and poor has widened to the point where it was in Downton Abbey days. And that is abetted by the GOP practice of continually cutting taxes on the rich while constantly cutting government services that provide opportunity to everyone else.
Income inequality in America is wide and widening. Just get this: while income stagnated for the middle class, the average annual income of the top .01 percent of U.S. households from 2002 to 2007 rose by 123 percent – a gain of $20 million each.
Even after the crash of 2008, the wealthiest .01 percent did just fine. Now, the stock market and corporate profits are soaring. But only the wealthy are benefitting. The New York Times reported earlier this month that corporate profits in the third quarter of 2012 took the largest share of national income for any time since 1950, while the portion that went to workers fell to the lowest point since 1966.
While making those huge profits, corporations aren’t creating jobs. For those who do have jobs but aren’t in the top 10 percent income bracket, wages fell 7 percent from 2007 to 2008. Unlike the rich, workers didn’t recover after the crash, with median household income declining 1.5 percent in 2011.
And then there’s the poor. In the richest country in the world, the U.S. Census Bureau found 46.2 million people living in poverty in 2011, the highest number in the 53 years that the Census has collected the statistic. These are America’s economic equivalent to Downton Abbey serfs and servants.
This poverty is by far the highest rate among developed countries, while the rate at which taxes and transfer programs reduce American poverty is the lowest for developed countries. Transfer programs include unemployment compensation, a crucial lifeline for millions when the jobless rate remains above 7 percent.
For those unemployed, for the struggling who saw no benefit from record corporate profits and stock market highs, President Obama went to Texas to announce formation of three manufacturing hubs, where innovation would be nurtured and good-paying industrial jobs created. By executive order, these three will be financed with $200 million from five federal agencies.
The President has asked Congress to dedicate $1 billion to create a network of 15 industrial institutes, but Republicans laughed at the proposal.
Instead of investing in America, they insist on tax cuts for the rich. They demand austerity for the rest. They love the sequester, which cut Head Start for poor children and Meals on Wheels for old folks. They’re fine with the sequester costing 700,000 jobs. All those single mothers thrown out of jobs can always work as prostitutes, like Downton Abbey maid Ethel Parks did after being fired for sleeping with a moneyed patrician, right?
Both private sector and government economists have said unemployment would be significantly lower and economic growth significantly higher if Congress had continued stimulating the economy, as it did when President Obama was first elected and Democrats were in control. Republicans reversed that successful course. When Republicans took control of the House of Representatives and began abusing the filibuster in the Senate, the GOP forced the country onto the austerity path that has devastated Greece, Spain, Portugal, Italy and Ireland.
President Obama continues to push for stimulus and jobs because he believes the American government, founded on the premise that all men are created equal, should promote equal opportunity to achieve.
In the three decades after World War II, the government stimulated the economy by constructing interstate highways, sending veterans to college and supporting home ownership. Taxes on the rich were among the highest in the nation’s history. The economy thrived and income inequality declined. Opportunity for every child increased.
Republicans want to kill the government that accomplished that. They want to go back to Downton Abbey days. The rich stay rich; the poor stay servants. There’s a set of rules for the rich: An unmarried Lady Mary deserves forgiveness for sleeping with a distinguished foreign visitor. But there’s another set of rules for the rest: unmarried Ethel Parks gets fired for sleeping above her station in life. The Wall Street bankers whose gambling took down the economy get a bailout. The Main Street bank robber gets a prison term.
Republicans don’t seem to understand that a political system that favors the wealthy in the 21st century while failing the majority is unsustainable. Americans believe everyone is equal. They believe the system of government that their forbearers created should guarantee equity of opportunity to make a life, get a job, buy a picket-fenced home and raise a couple of kids. The New World rejected the Downton Abbey philosophy of privilege based on blood lines and inherited money.
Turn off the TV, GOP.
A century ago, workers were a lot more “flexible” than they are now. Veritable Gumbies in the mills and mines and factories they were, distorting their lives to slog 10 or 12 hours a day, six –even seven – days a week.
Then came the 40-hour week. And weekends. And eventually sick days. And paid vacation days. Now, bosses at mills and mines and factories regard these rules as coddling and consider the workers accustomed to them as unyielding to corporate demands.
The GOP has an app for that. It’s called the Working Families Flexibility Act. This legislation that the Republican majority in the U.S. House is expected to pass this week would force some old-time flexibility into 21<sup>st</sup> century workers. The forced flexibility act would award bosses the power to “offer” compensatory time off instead of overtime pay. Bosses, not workers, would determine when the comp time could be taken. The proposal puts control in corporate hands, obliging wage earners to bend over backward for bosses exactly like their Gumby ancestors were compelled to.
<a href="http://blog.usw.org/wp-content/uploads/2013/05/sad-gumby.jpg"><img class="aligncenter size-medium wp-image-20825" title="sad gumby" src="http://blog.usw.org/wp-content/uploads/2013/05/sad-gumby-300x210.jpg" alt="" width="300" height="210" /></a>
Trade unionists and labor rights activists died to achieve the goal of eight-hour days and 40-hour weeks. They were<a href="http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=2&psid=3192"> shot and beaten in the streets</a> during demonstrations organized by the eight-hour movement. <a href="codyjhunter">Their slogan was</a>: “Eight hours for work; eight hours for rest; eight hours for what we will.”
Finally, <a href="http://www.epi.org/publication/issuebriefs_ib190/">in 1938, President Franklin Delano Roosevelt signed the Fair Labor Standards Act</a> (FLSA) as part of the New Deal, which gave workers and families rights and security that previously had been exclusive to the wealthy.
<a href="http://www.epi.org/publication/issuebriefs_ib190/">FLSA enforces the 40-hour week with a simple measure</a>. It requires employers to pay time and a half to wage earners for each hour worked beyond 40 in a week. That creates a financial disincentive for bosses to order work beyond 40 hours. That also creates a financial incentive for companies to avoid overtime pay by hiring more workers. That was a significant bonus during the Great Depression.
Employers still could require overtime when they needed it, but it cost them, the way it costs workers who must pay extra for child care or miss coaching a Little League game or forego Sunday dinner with parents.
Now, Republicans want to relieve corporations of their share of the cost. In fact, the GOP scheme <a href="http://www.epi.org/publication/issuebriefs_ib190/">enables corporations to profit on overtime at the expense of workers</a>. It would reduce the financial disincentive of requiring work beyond 40 hours, which means it would also reduce the financial incentive to hire more workers. That would be a tragedy during the Great Recession.
The forced flexibility act would enable employers to give workers comp time off instead of overtime pay. Republicans contend it would be the worker’s choice, but in reality bosses foreclose options when they make it extremely clear they want comp time selected.
And they’ll want workers to “choose” comp time. That’s because <a href="http://www.epi.org/publication/issuebriefs_ib190/">workers won’t be able to specify when they’ll take the compensatory time off</a>. Bosses will have veto power on those requests. And as workers accrue more and more hours of overtime – <a href="http://www.businessmanagementdaily.com/35373/house-bill-would-offer-empl... to 160 a year</a> – to be compensated later as time off, the corporation retains an increasing share of the value of their work.
With overtime pay, the worker gets the money in the next paycheck and spends or saves it as he pleases, earning interest if he banks it. Under the GOP forced flexibility proposal, the boss can deny time off requests for as long as a year, after which the company must pay the wage earner for the extra time worked. By then, <a href="http://www.epi.org/publication/issuebriefs_ib190/">the corporation has kept the workers’ earnings</a>, and the interest on them, for 12 months.
And if the company goes bankrupt before paying for the accumulated overtime, the GOP provides no protection for workers. Workers would lose the earnings that they would have received immediately if they had been paid time-and-a-half in the next check.
The GOP is hyping their forced flexibility bill as a measure to help women. <a href="http://www.usatoday.com/story/news/politics/2013/04/30/house-gop-mommy-b... websites and blogs popular among women, the GOP bought ads</a> asking Democrats if they will “stand up for” working moms by forcing women to contort themselves to employers’ whims. The same party that defeated equity measures for women like the Equal Rights Amendment and the Paycheck Fairness Act now wants the women who voted against them big time in the last election to believe the GOP forced flexibility act is good for them.
Republicans are right that women need flexibility it their work lives. The flexibility to earn 100 percent of what men do in the same jobs, instead of 23 percent less, would be great. But not so great would be a federal law giving bosses the flexibility to force women to work extra hours with a vague promise of compensatory time off some day in the future if the boss feels like granting it.
The GOP forced flexibility act is part of a list of proposals House Majority Leader Eric Cantor, R-Virginia, calls <a href="http://www.nytimes.com/2013/04/25/us/politics/majority-leaders-quest-to-... Life Work.”</a> That’s right, Republicans intend to make life nothing but work. No eight hours for sleep. No eight hours for anything you will. Just work, Gumby, just work.
You are not safe. Not at work. Not at home in your bed. The biggest threat is not terrorism. It’s corporate negligence leading to a blast or collapse or release of toxic chemicals.
Terrorism killed 3,000 Americans on 9-11. But in the dozen years since then, terrorists on American soil have taken the lives of fewer than 25, including those at the Boston Marathon and Fort Hood. By contrast, every year, more than 4,000 perish in American workplaces. These deaths are commemorated every April 28 on Workers Memorial Day. It’s every April 28 because workplace fatalities are relentless.
The explosion earlier this month at the fertilizer plant in West, Texas, that killed 11 first responders and three town residents is a warning to community members that they too may fall victim to workplace dangers. That massive blast should shake Americans out of the delusion that careful corporations and vigilant regulators keep them safe. They don’t. Industry won’t improve safety unless forced. And regulators can’t begin to adequately compel them until properly fanged and funded.
Between the deaths in Boston and West, my union, the United Steelworkers (USW), issued a report on the threat posed to workers and communities by a highly toxic chemical widely used in oil refining. The report is called “A Risk Too Great.” That’s because no industrial process endangers more lives from a single accident than alkylation with deadly hydrogen fluoride (HF).
It’s used by 50 refineries across the country, each storing an average of 212,000 pounds. That endangers 26 million Americans.
Six years ago, at the CITGO refinery in Corpus Christi, Texas, two workers were injured, one critically, when a failure caused a hydrocarbon and HF release, followed by an explosion and fires that burned for days. According to an investigation by the U.S. Chemical Safety Board (CSB), approximately 42,000 pounds of HF was released. Of that, the CSB estimated, 4,000 pounds likely escaped into the atmosphere. Luckily, it blew into an unpopulated area.
At the 23 refineries surveyed by the USW, there were 131 HF releases or near misses over a five year period. That includes one in 2009 at the Sunoco refinery in Philadelphia in which a 22-pound release sent 13 workers to hospitals and one in which a 54-year-old worker died in 2012 after he was exposed to a mixture of HF and propane at the Valero Energy Corp. refinery in Memphis.
The USW has warned about HF for years, but the response from industry is, basically, “Don’t worry, be happy.” OSHA, the CSB and other federal and state agencies lack the regulatory teeth and the funding to effectively respond to the threat.
The fertilizer plant explosion in West is another example of regulatory feebleness. Because of the inherent weakness of self-reporting requirements and because of inadequate funding for OSHA, federal officials were virtually unaware of the dangers at the plant.
After the 9-11 attacks, Congress mandated that any entity with 400 pounds of the explosive fertilizer ammonium nitrite report to Homeland Security. This may be because home-grown terrorist Timothy McVeigh used 4,000 pounds of it to blow up the federal building in Oklahoma City in 1995, killing 168. Or maybe it was the nation’s worst industrial catastrophe, in which a ship loaded with ammonium nitrate docked at the Port of Texas City in 1947 caught fire, exploded and killed nearly 600 people.
Either way, the owner of the West fertilizer plant never reported to Homeland Security that it routinely stored 540,000 pounds of ammonium nitrate next to a school, playground, apartment building and nursing home in the town of 2,800. So, of course, Homeland Security didn’t know.
Long before 9-11 or Oklahoma City, long before the current owner bought the fertilizer plant, OSHA inspected it in 1985. OSHA didn’t return in the ensuing 28 years. But that’s not surprising considering OSHA has so few inspectors that it would take 131 years for it to examine every American workplace one time.
The West plant did submit a risk management plan to the EPA because it kept 54,000 pounds of another hazardous fertilizer, anhydrous ammonia, which could kill large numbers of people if leaked. In its most recent plan, the plant reported no risk of fire or explosion, saying the most serious threat was a 10-minute release of anhydrous ammonia.
The underfunded and overworked CSB, which has only 20 investigators nationwide, recommended in 2002 that the EPA require reporting of hazardous materials like ammonium nitrate. But agriculture and fertilizer lobbyists opposed that, and the anti-regulation Bush administration took no action.
Over the years, the plant in West vented anhydrous ammonia in violation of its permits and moved tanks without informing authorities as required, but encountered only finger wagging and minor sanctions from state regulators in Texas which boasts of its anti-regulatory regime.
Corporations aren’t moral entities. They won’t follow safety rules unless forced.
That’s the problem in Bangladesh. No one enforces safety at the country’s garment factories sewing clothes for U.S. and other Western retailers. A fire at the Tazreen factory in Dhaka in December killed 112 workers who found exit doors locked. Collapse of a factory building in Dhaka last week killed more than 375 and injured 1,000. It occurred after police ordered evacuation, but factory bosses threatened to dock the pay of garment workers who didn’t return.
Whether it’s deadly HF wafting into an unsuspecting community, an ammonium nitrate explosion taking out a nursing home or hundreds of other risks posed by industry to communities and workers, corporations aren’t going to voluntarily limit dangers. The history of deaths shows government must force them. Wimpy regulations and fund-starved inspectors can’t do that.
Americans can pay for safety. Or they can accept thousands of workplace deaths each year as well as workplace catastrophes that kill unsuspecting residents of surrounding communities.
Iciness is the defining feature of Margaret Thatcher, the United Kingdom’s first and only female prime minister, who died last week. She was the cold-as-steel Iron Lady. President Obama, warm, friendly, shaking hands, hugging the bereft, is the opposite.
It’s the same with their philosophies. President Obama, who worked as a community organizer, believes in the power of consensus and collective action. Thatcher, a conservative, scorned compromise and community.
It’s inexplicable, then, that a Thatcher policy would appear in the White House budget released last week. Thatcher once argued for taking milk from the mouths of babes, lobbying to restrict free milk for school children. Similarly, the White House budget proposes taking money out of the pockets of the elderly by cutting Social Security cost-of-living payments. Social Security is community action. It is Americans coming together to care for their parents and grandparents. Thatcher would definitely cut it. Republicans in Congress would. But Democrats should never allow the mean spirit of Margaret Thatcher to materialize in a progressive policy document.
Even in death, which tends to ease loathing, Thatcher is reviled by vast swaths of the United Kingdom. Graffiti gives her a rocky send off. The writing on the wall says: Iron Lady? Rust in Peace. Reaction to a glowing obituary in The Daily Telegraph was so vile that the paper shut down all comment boards on articles about her. Those who still despise her held “death parties” and used social media last week to push the 1930s song, “Ding Dong, The Witch Is Dead,” to the top of the U.K. singles chart.
She evokes this response because she slashed the fabric of British society. She took office in 1979 amid high inflation and unemployment and left office in 1991 amid high inflation, unemployment and a widened gap between rich and poor. In her dozen years in office, she cut social welfare programs, eviscerated trade unions, deregulated, sold state-owned companies and utilities and closed coal mines. All this killed good jobs that supported families and villages across the countryside. Lives were destroyed, communities devastated. This, however, was in keeping with her philosophy of every man for himself, as she said in a 1987 interview:
“There is no such thing as society. There are individual men and women and there are families.”
She refused to allow the United Kingdom to fully join the community of the European Union. The individualist wouldn’t let her country unify with continental society.
Barack Obama is no Margaret Thatcher. In his first inaugural address, he spoke of the need for concerted action for the wellbeing of country and community. In his second, he said it bluntly:
“But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.
“For we remember the lessons of our past, when twilight years were spent in poverty and parents of a child with a disability had nowhere to turn. We do not believe that in this country freedom is reserved for the lucky or happiness for the few. We recognize that no matter how responsibly we live our lives, any one of us at any time may face a job loss or a sudden illness or a home swept away in a terrible storm. The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative.
“They strengthen us.
“They do not make us a nation of takers. They free us to take the risks that make this country great.
“We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity.”
In many ways, the budget offered by the White House last week reflects President Obama’s belief in community. For example, to create jobs, it includes $166 billion over 10 years for repair and construction of roads and rails and to launch an infrastructure bank to finance more public works. Also to ease high unemployment, the budget contains aid to states for job training and to retain teachers and first responders.
To pay for these and other programs, the plan proposes eliminating special deals and loopholes that have allowed the rich and privileged to pay a decreasing portion of their income toward the cost of government. It would require the wealthy and corporations to step up and fulfill their responsibilities to the American community that facilitated their prosperity. Millionaires would have to pay a minimum rate of 30 percent. Deductions for the rich would be limited. Loopholes enabling some corporations to pay no taxes at all would be closed.
But the budget also offers to change the calculation for cost-of-living increases given to Social Security recipients to a formula called Chained CPI. Senior citizens, injured veterans, the disabled, children who have suffered the death of a parent would all receive less to offset inflation.
The budget mitigates this loss for poorer and older beneficiaries, but the change would be painful for millions of senior citizens.
President Obama has said he would not change Social Security without the tax increases he has proposed for the rich. But Republicans leaders like House Speaker John Boehner, R-Ohio, immediately demanded the nation dive into the wallets of old people while leaving those of the rich perfectly well lined. This is the philosophy of Margaret Thatcher.
British political columnist Hugo Young, a biographer of Thatcher, wrote of her in 2003:
“What happened at the hands of this woman’s indifference to sentiment and good sense in the early 1980s brought unnecessary calamity to the lives of several million people who lost their jobs. . . More insidiously, it fathered a mood of tolerated harshness. Materialistic individualism was blessed as a virtue, the driver of national success. Everything was justified as long as it made money – and this, too, is still with us.”
Democrats must exorcise the evil specter of Margaret Thatcher and promote a budget that respects Americans’ time-honored commitment to each other and to community.
As the U.S. Commerce Department released a report late last month showing corporate profits at a 60-year high, suddenly the big news was about how cheating surely must be rampant in social security disability.
Wait, what?
Also late last month, a Washington Post investigation showed that the 30 companies that make up the Dow Jones industrial average pay a dramatically smaller portion of their profits in taxes than they did a half century ago. Instead of discussing how that impacts government services, all of Washington is talking about slashing Social Security and Medicare.
It’s bait and switch.
CEOs and 1 percenters have elevated that old con to a whole new level. To them, bait is not a lure to a store but a taunt about the poor. “Look over there, a welfare queen!” they goad. “Look, someone not-quite-dirt-poor might get Medicaid,” they needle. Then they laugh all the way to their secret accounts in the Caymans as the 99 percent fight among themselves over how many pennies the government throws at the poor. The rich snicker as the vast majority of Americans are so distracted they don’t focus on record corporate profits, on record low corporate tax payments or on lobbyists buying tax breaks for corporations and loopholes for offshore accounts.
In defense of the 99 percent, it’s hard to concentrate on the big economic picture when household finances are so grim. The Commerce Department reported that in January personal income fell 3.6 percent. Overall, considering taxes and inflation, the decline was the largest in 57 years.
This bad news follows what the Economic Policy Institute (EPI) calls a lost decade for most American families. In its 12th edition of The State of Working America, EPI writes:
“A quarter century of wage stagnation and slow income growth preceded this lost decade, largely because rising wage, income and wealth inequality funneled the rewards of economic growth to the top.”
The top made out like, well, like bandits. Over the past 30 years, CEO compensation rose from 42 times the average blue collar worker’s pay to 380 times.
But CEOs say, “Look away, America. Look away!” Focus instead, CEOs say, on minimum wage! Why should some guy earning the minimum wage of $7.25 an hour, a whopping total of $15,080 a year, get a raise, as President Obama proposes, when the average worker has not? That needling comes from CEOs pulling down 380 times a blue-collar worker’s pay.
Never mind that both blue-collar and minimum wage workers should get raises. Especially since the Commerce Department says corporate profits increased to 25.6 percent in 2012, the highest in any year since 1950 and far higher than the 19.9 percent level common in the years just before the economic collapse.
Corporations have the money for raises. They’re just not giving it to the people whose labor produced the profits.
And they’re sure as hell not giving it to the government either. Citizens for Tax Justice and the Institute on Taxation and Economic Policy evaluated 280 of the Fortune 500 companies and found that 30 paid no federal income taxes at all from 2008 through 2010. The following year, 26 paid no income taxes. None. Zip. Zero.
Some corporations pay. But not much. A Washington Post analysis found that about 50 years ago, corporations included in the current Dow Jones industrial average routinely listed federal tax expenses as 25 to 50 percent of worldwide profits. Now, the Post found, they report less than half that.
These are companies whose lobbyists whine and cry to Congress that the nation’s 35 percent top corporate tax rate is just too terribly high. Among those singing that sad song is Procter & Gamble, which the Washington Post found pays 15 percent. P&G, the world’s largest manufacturer of consumer products, insisted in a statement last year that the United States must “reduce the corporate tax rate.”
Right, so then Procter & Gamble would pay a smaller percentage than a blue collar worker.
“Look away, workers, look away,” the CEOs say. “Look over there, where someone on food stamps is buying cigarettes! If they can buy a pack of cigarettes, then they don’t deserve food stamps, right? Attack food stamp recipients!” the CEOs urge, inciting the 99 percent to fight among themselves.
Last week, the International Consortium of Investigative Journalists began releasing information regarding offshore bank accounts and shell companies belonging to the world’s 1 percenters. The information came from a cache of 2.5 million files leaked to the Washington, D.C.-based group. The files include the names of 4,000 Americans who stashed money in tax havens like the Caymans, where secrecy aids and abets tax evasion and money laundering.
Don’t take the bait as these formerly-secret account holders try to distract you. Ignore them as they try to shift attention to some hapless pregnant teenager on welfare. Instead, focus the mind on this: the politicians who allow off-shore tax evasion, the politicians who establish loopholes so corporations pay no income taxes at all, the politicians who refuse to enforce the provision of the Dodd-Frank financial reform law requiring corporations to report the difference between CEO compensation and average workers’ pay. Time to vote and switch those politicians out of office.
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