Monday, October 20, 2014

Scenes from the class warfare the rich are waging against everyone else

By Marc Jampole 

For days, images of the Philadelphia public school system have haunted me. More than 30 children in one class share 11 math books. Bathrooms locked because there aren’t enough hall monitors. What’s most heartbreaking is to know that just a few miles away other school students attend some of the highest rated public and private schools in the nation, where they are lavished with cutting edge technology and enrichment opportunities. 

Then there are the images of elected officials turning a deaf ear to the protests of the students, teachers and parents angered at the extreme cuts. And the image of the Philadelphia Board of Education voting to cancel the contract with the teachers’ union. Shame on the board and shame on everyone else who blames Pennsylvania’s and American’s crisis in public education on teachers or believe the solutions to the problem all involve taking money out of the pockets of these highly skilled professionals.

Most people agree that the immediate cause of the public school crisis in Philadelphia is the extreme cuts—50%!!—to public education enacted by Pennsylvania under right-wing Republic Governor Tom Corbett. These cuts have led to resource shortages, less enrichment and larger classes throughout Pennsylvania.  According to polls, Corbett is going to pay at the polls for these Draconian cuts, his attempts to limit the voting franchise and his opposition to implementing the Affordable Care Act.

But all that means is Corbett will go back to some cushy job at a major law or lobbying firm. What about the tens of thousands of children who will receive inferior education because of his cuts?

The other thought that haunts my mind lately is a claim that I am unable to substantiate that a major nonprofit health institution in the western part of Pennsylvania makes job applicants pay the cost for background checks that are part of the hiring process. The checks cost $57.50 for a job paying $11.51 an hour, barely more than the purchasing power of the minimum wage in the 1960’s. I heard from several people I know that it is standard for some nonprofits to ask job applicants to pay for these security clearances.

I connect the charging of job applicants to the gutting of state support of public education. Both are little pieces of the wealth-and-income pie taken in the 35-year program to give a larger share to the rich folk and less to the poor and middle class.

The logic of cutting aid to public school makes perfect sense if you want to transfer wealth up the economic ladder. The cuts by definition will negatively affect teacher compensation, if for no other reason than it will increase the pool of teachers looking for jobs. The cuts will also make poor folk less able to climb the economic ladder because they will receive inferior education. Finally, it drives the middle class into private schools, translates into support of the education of the rich, who have always taken the private route.  That’s maiming three birds with one stone, the glorious topper to which is that the money saved from harming public education goes directly to the wealthy without passing Go. Brilliant strategy!

Cutting public education may be brilliant class war strategy, but making people pay to apply for low-paying jobs is merely sadistic. The message is, “we have the job and we can do anything we want.” It equates to Lebron James spiking the ball in the face of a fifth-grader.  Of course, anything to save a buck. That’s the excuse that gives for not paying its employees for the half hour it takes for each to go through the security screening process before and after work.

You would think that the extremity with which corporations and right-wing state governments are going would sicken the electorate. After all, 99% of us are not gaining from the continual grabbing by the wealthy of our government benefits and income. Now I know some vote with the right wing because of its 19th century views on women, gays and race. But all surveys suggest that number is decreasing rapidly in all parts of the country.

What I think drives the 99% away from the Democrats is that they aren’t much better than the Republicans. Massive contributions from billionaires and multinational corporations have colored the views of most Democrats on public education, tax policy and unionism. For six years now, President Obama has started negotiations on economic, taxation and budgetary matters by giving away the store, so eager has he been to make a deal—any kind of deal—with the factotums of the 1%.

It doesn’t help people trying to distinguish between Democrat and Republican that the Obama Administration continues to build on the Bush II security state and still uses bombing and troops as the primary tools of foreign policy—save the ending of the Bush II torture gulag.

Note how popular are the candidates like Elizabeth Warren and Bill De Blasio who have articulated a progressive vision. But instead of following their lead, the Democratic Party in general is consolidating into a centrist position that resembles 1950’s Republicanism without the racism and sexism: in other words, more progress on social issues than economic ones. 

Monday, October 13, 2014

USC law & business professor latest to pretend rich pay enough taxes in the United States

By Marc Jampole

Reading Professor Edward Kleinbard’s opinion piece titled “Don’t Soak the Rich” in the New York Times reminds me of Mark Twain. Not that Kleinbard can write fluently and passionately in a variety of styles and dialects. No, Kleinbard makes me think of America’s greatest novelist because in Twain’s expression, “Figures never lie, but liars figure,” Kleinbard would be the liar. 

I’m not accusing Kleinbard of telling out-and-out fibs, at least not more than maybe one. What the good doctor does is use figures to lie.

Kleinbard, a professor of law and business at the University of Southern California, manipulates statistics and gives only part of the facts to make his case, which is simple:  Government spending is the key to reducing inequality and social welfare programs help the economy, but we should finance them like they do in Europe, by raising everyone’s taxes, not just the taxes of the wealthy. Kleinbard reports that here in the United States, we pay on average 22% of our taxes, whereas in economically strong Germany, people pay 41%. He proposed funding more needed government programs by raising our average to match Germany’s. He never gives a reason why rich folk shouldn’t pay more than others except to say that a chief executive officer earning 200% more than her employees does not get 200 times the benefit from our investments in highways, which is a back-handed argument that the rich should pay less of a percentage of their income in taxes than the poor and middle class do.

It all seems to make sense if you look at his words uncritically. But take a closer look and you can quickly recognize four types of lies he tells to make his case:
1.      Kleinbard lies by omission: He advocates more government spending on social services and infrastructure without raising taxes on the wealthy, while forgetting to mention that we used to have a pretty good social service net and a wonderful research, development and infrastructure investment program back in the days when the rich were paying more in taxes than they do now. The two super trends of the last 35 years of Reaganomics are lower taxes on the wealthy and less government spending.  By not mentioning this history, Kleinbard can pretend that we have a clean slate and are trying to figure out how best to fund an increase in government spending.
2.      Kleinbard tells a straight-out lie: Kleinbard’s explicit whopper is to assert that a CEO who makes 200 times what her employees does not get 200 times the benefit of government spending.  Dear Dr. Kleingloss—I mean Kleinbard—do you think that a CEO doesn’t benefit every time a consumer, employee or vendor drives to her facilities on a road paid by government spending? And do you think the CEO’s benefit is not greater than the employees who take a smaller piece of the wealth pie created by that economic activity? How about the spending on security that not only protects customers, but gives them the confidence to venture out and shop?  We only see a law of diminishing returns in benefits from taxes if we look solely at the individual and ignore, as Kleinbard does, the benefit derived by the individual through benefits to other individuals. As an economist, Kleinbard should understand this concept, which I why I believe he is fibbing when he avers that the CEO does not get 200 times the benefit from tax spending that her employees do.
3.      Kleinbard lies by his use of hypothetical numbers: As noted, in building his weak case for keeping taxes low on the wealthy, Kleinbard compares the income made by a hypothetical CEO to what her employees make. The problem is the 200 to one ratio is so far off the mark that it constitutes a lie because it makes us think that 200 to one is close to the truth. But it’s not. Recent surveys compute that U.S. CEOs make on average from 331 to 345 times what their average employees make, and CEOs of the l00 largest public companies make 774 times the minimum wage. By the way, in Germany, CEOs make 142 what their average employees make; in Spain it’s 127 and in Switzerland, it’s 147. Most readers will assume that Kleinbard’s 200 to one is realistic, when in fact it’s a gross underestimate of the enormous difference in earning capacity between those at the very top of the heap and everyone else in the United States.
4.      Kleinbard lies by making an incomplete comparison: Kleinbard compares the 22% that we all pay in taxes in the United States to 41% in Germany. But he neglects the other part of the comparison—that German (and other Western European and Japanese) executives get a smaller part of the income pie to begin with. You can’t just compare the apples to apples, you also have to compare the oranges, and when you do, it should rapidly become apparent that we can’t raise everyone’s tax load to 41% unless we also split the income pie more equitably so that CEO’s make a smaller multiple of their average employees.

To his benefit, Kleinbard never tries to make the disproven case that you have to have low taxes on (rich) job creators, so they can do their thing. But the case he does make—just raise taxes on everyone—is full of logical holes that he tries to cover with his multiple deceptions.

On second thought, Kleinbard’s essay reminds me less of Twain than of the French writer Julien Benda, who wrote “The Betrayal of the Intellectuals” in which he bemoaned the fact that so many intellectuals in western Europe in the 19th and early 20th centuries went against what their expertise told them was true so they could support false notions such as racism held by the ruling elite. Kleinbard is one of a large number of mediocrities who prefer to propose specious arguments that support the 1% than to address our real economic challenges.   It’s the 21st century betrayal of the intellectuals. 

Saturday, October 11, 2014

Editorial: Health Obstruction Breeds Contagion

The best thing Americans can do to eliminate the threat of the deadly Ebola virus in the United States would be to hasten the implementation of the Affordable Care Act so that every American with a fever and/or an upset stomach can see a doctor without fear of losing their job or emptying their savings.

Cable TV “news,” according to its business model, has whipped up hysteria over the Ebola threat in the US. Demagogues have demanded that the government stop all traffic with West Africa — which health professionals say is unnecessary and could even make the situation worse.

Thomas Freiden, director of the US Centers for Disease Control and Prevention, said on CNN Oct. 6 that if those countries with outbreaks were to be isolated, “the ability to stop the outbreak there” would become “very problematic.” If airlines only fly medical supplies and health workers into West Africa, and can’t fly travelers back, those routes quickly become unprofitable, American citizens (including health workers) won’t be able to return to the US and governments in those countries will get less stable, Frieden said.

The facts are that Thomas Eric Duncan, a Liberian national, showed no signs of illness when he flew from Liberia, to Belgium Sept. 19. He appeared well when he arrived at Dallas/Fort Worth Airport Sept. 20 to visit his fiancee. He showed up at Texas Health Presbyterian Hospital in Dallas on Sept. 25 with fever and abdominal pain but no insurance. He told medical personnel he had recently arrived from Africa, but he apparently did not mention being around sick people. (He had helped take a pregnant neighbor to a clinic in Liberia. She later died and Duncan may not have known she had Ebola.) Duncan was released with antibiotics but his condition continued to worsen and when he returned to the ER Sept. 28 he was placed in isolation. He was diagnosed with Ebola two days later. He died Oct. 8. Officials are watching at least 10 people with whom Duncan had contact before he was hospitalized.

Duncan, as a visitor to the country, probably would not have had insurance anyway (which argues in favor of implementing a single-payer system that covers everybody in the nation). The threat of a contagious disease spreading throughout the population is greatly increased when a major part of the population lacks health insurance and hospitals have to consider how much care they can give the uninsured, since they know a large portion of that care will be uncompensated with fiscal “conservatives” in charge. And a breadwinner with a fever and an upset stomach has to weigh the cost of taking time off to get checked out by a doctor, at his own expense, or going ahead to his job at a restaurant, for example.

Laurie Garrett, a senior fellow for global health at the Council on Foreign Relations writing in the Chicago Tribune Oct. 2, noted that even with the millions who have gained health insurance under the Affordable Care Act, 13.8% of Americans — about 43.3 million individuals — still lack health insurance. Millions more have policies whose “copays” for medical services are exorbitant for working people.

“These are the Americans who routinely tough out the flu, fever, aches and pains because seeking medical care is prohibitively expensive. If they become sick enough to feel desperate, the uninsured and underinsured of America go to public hospital emergency rooms for care, where waiting times in often-crowded settings can stretch on for hours. This reality is compounded by a weakened public health infrastructure: 52 health agencies, including 48 states, three territories and Washington, D.C., have reported budget cuts since 2008,” she wrote.

Republican attempts to obstruct the implementation of the Affordable Care Act, which is designed to make health insurance affordable to people whose bosses refuse to provide health coverage, greatly increases the risk of an epidemic.

The risk of an Ebola outbreak — which requires close contact with a sick person who is showing symptoms — is relatively small in the United States. The risk of a flu epidemic — which is spread by an airborne virus, requires 200,000 hospitalizations and contributes to the deaths of more than 24,000 Americans a year — is much more likely. Republican obstruction of health coverage makes it worse.

Keep the Senate Democratic

If you are unhappy with President Obama, the last thing you should do is refrain from voting for Democrats in the mid-term election on Nov. 4 — and that goes double in states with hot US Senate races. People on the left who think there is no appreciable difference between Democrats and Republicans and giving the GOP full control of Congress haven’t been paying attention.

When progressives stayed home in 2010 to punish Democrats for not pushing progressive initiatives far enough, Republicans seized power in states such as Florida, Ohio, North Carolina, Pennsylvania and Wisconsin. They then steamrolled Democratic minorities with a right-wing legislative agenda provided by the Big-Business dominated American Legislative Exchange Council that included measures to bust unions, make it more difficult for low-paid workers to get affordable health care, suppress the vote of the working-class and seniors and other affronts to the working class while enriching the corporate class. It might take a generation to reverse those defeats.

Many on the center-left are working to overturn the 2010 Citizens United decision, as well as other rulings by the right-wing majority on the Supreme Court. But that takes two-thirds majorities in both the House and Senate and ratification by three-fourths of the states (that is, 38). It’s good to get started on an amendment to challenge corporate personhood but, in the meantime, there is nothing wrong with the Court that a strategic funeral (from natural causes) couldn’t fix. Remove one of the doctrinaire Republican justices and a newly configured Court could revisit the objectionable rulings. However, that only works if Obama is in position to get a replacement choice confirmed by the Senate. That isn’t going to happen if Sen. Chuck Grassley (R-Iowa) is in charge of vetting those nominees at the Judiciary Committee. (Be very afraid if departures from the Court come from among the liberal justices and the right wing doesn’t need occasional voice of reason Justice Kennedy to form a majority.)

Democrats hold a 55-45 majority in the Senate, including independents Bernie Sanders of Vermont and Angus King of Maine, who caucus with the Dems. Republicans need to gain six seats to capture control of the Senate and Republicans expect to pick up seats from retiring Democratic incumbents in Montana, South Dakota and West Virginia. Key battleground races include Alaska, Arkansas, Colorado, Georgia, Iowa, Kansas, Kentucky, Louisiana, Michigan, New Hampshire, North Carolina and perhaps South Dakota. Nine of those dozen hot seats are now held by Democrats. Republicans hoped to capture the seat of retiring Sen. Carl Levin (D-Mich.), but Rep Gary Peters (D-Mich) appears to be pulling away from the Republican challenger in Michigan. Democrats in South Dakota also have a good if underfunded progressive populist candidate in Rick Weiland, a former aide to ex-Sen. Tom Daschle (D-S.D.) for the seat Sen. Tim Johnson (D-S.D.) is giving up. Former Gov. Mike Rounds, the Republican nominee, and former Republican Sen. Larry Pressler, running as an independent, are splitting the GOP vote. Weiland could win it with 40% of the vote — which Dems ought to be able to muster. And at least three incumbent Republicans are threatened. Alison Lundergan Grimes appears to be giving Minority Leader Mitch McConnell the fight of his life in Kentucky; Michelle Nunn (D) is pushing businessman David Perdue, who made his fortune outsourcing jobs, for the Georgia seat of retiring Sen. Saxby Chambliss (R); and centrist independent Greg Orman is leading Sen. Pat Roberts (R-Kansas).

And, for God’s sake, Minnesota, please send Al Franken back to the Senate with a big enough margin that he can feel comfortable using his considerable sense of humor again. — JMC

From The Progressive Populist, November 1, 2014
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Selections from the November 1, 2014 issue