Wednesday, February 23, 2011

The Magnificent Nina Simone (1933-2003)


"There's no other purpose, so far as I'm concerned, for us except to reflect the times, the situations around us and the things we're able to say through our art, the things that millions of people can't say. I think that's the function of an artist and, of course, those of us who are lucky leave a legacy so that when we're dead, we also live on. That's people like Billie Holiday and I hope that I will be that lucky, but meanwhile, the function, so far as I'm concerned, is to reflect the times, whatever that might be."

"I had spent many years pursuing excellence, because that is what classical music is all about... Now it was dedicated to freedom, and that was far more important."

"Slavery has never been abolished from America's way of thinking."
--Nina Simone


The late, GREAT Nina Simone (1933-2003) in a typically incendiary and riveting performance on German television in Berlin in 1967. This is posted in celebration of Nina's 78th birthday on Monday, February 21, 2011. I'm very happy to report that I was fortunate enough to see and hear Nina perform LIVE many times in Detroit, Chicago, New York, and Boston from 1968 on. NEEDLESS TO SAY SHE WAS ABSOLUTELY AMAZING EVERY SINGLE TIME. Check out still many more video performances below from this bona fide GIANT and Genius of the last truly 'Golden Age' of African American artists and culture (1920-1980)...ENJOY...


The Backlash Blues
by Langston Hughes (1902-1967)

(Sung and recorded by Nina Simone, 1968)

Mister Backlash, Mister Backlash,
Just who do you think I am?
You raise my taxes, freeze my wages,
Send my son to Vietnam
You give me second class houses,
Second class schools.
Do you think that colored folks
Are just second class fools?

When I try to find a job
To earn a little cash,
All you got to offer
Is your mean ole white backlash.

But the world is big,
Big and bright and round--
And it's full of folks like me who are
Black, Yellow, Beige, and Brown.

Mister Backlash, Mister Backlash
What do you think I got to lose?
I'm gonna leave you, Mister Backlash,
Singing your mean old backlash blues.

You're the one
Will have the blues.
Not me--
Wait and see!

The Insidious Role of the Koch Brothers and Other Wealthy Capitalists in Attacking and Trying to Destroy Public Sector Unions

Left, Robert Caplin For The New York Times; Dave Williams/Wichita Eagle, via Associated Press
David H. Koch, left, and Charles G. Koch have long used their wallets to promote fiscal conservatism and combat regulation.

Fred R. Conrad/The New York Times
Paul Krugman


Once again Paul Krugman eloquently identifies what's really at stake in the current pitched battle between the public employee unions and the new draconian Republican governor in Wisconsin (and by extension the fights taking place in over 40 other states in the country who are also currently facing massive budget crises). If only the President and the inept and opportunist Democratic Party generally had the political courage, intellectual clarity, ideological insight, and simple bedrock commitment to real social and economic change on behalf of the masses of the poor and workingclass people in this country that Krugman has. But that's like wishing for the sun to come out at night at this point...


Wisconsin Power Play

February 20, 2011

New York Times

Last week, in the face of protest demonstrations against Wisconsin’s new union-busting governor, Scott Walker — demonstrations that continued through the weekend, with huge crowds on Saturday — Representative Paul Ryan made an unintentionally apt comparison: “It’s like Cairo has moved to Madison.”

It wasn’t the smartest thing for Mr. Ryan to say, since he probably didn’t mean to compare Mr. Walker, a fellow Republican, to Hosni Mubarak. Or maybe he did — after all, quite a few prominent conservatives, including Glenn Beck, Rush Limbaugh and Rick Santorum, denounced the uprising in Egypt and insist that President Obama should have helped the Mubarak regime suppress it.

In any case, however, Mr. Ryan was more right than he knew. For what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.

Some background: Wisconsin is indeed facing a budget crunch, although its difficulties are less severe than those facing many other states. Revenue has fallen in the face of a weak economy, while stimulus funds, which helped close the gap in 2009 and 2010, have faded away.

In this situation, it makes sense to call for shared sacrifice, including monetary concessions from state workers. And union leaders have signaled that they are, in fact, willing to make such concessions.

But Mr. Walker isn’t interested in making a deal. Partly that’s because he doesn’t want to share the sacrifice: even as he proclaims that Wisconsin faces a terrible fiscal crisis, he has been pushing through tax cuts that make the deficit worse. Mainly, however, he has made it clear that rather than bargaining with workers, he wants to end workers’ ability to bargain.

The bill that has inspired the demonstrations would strip away collective bargaining rights for many of the state’s workers, in effect busting public-employee unions. Tellingly, some workers — namely, those who tend to be Republican-leaning — are exempted from the ban; it’s as if Mr. Walker were flaunting the political nature of his actions.

Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes.

So it’s not about the budget; it’s about the power.

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.

You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions.

And now Mr. Walker and his backers are trying to get rid of public-sector unions, too.

There’s a bitter irony here. The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence.

So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t.

Billionaire Brothers’ Money Plays Role in Wisconsin Dispute

February 21, 2011
New York Times

WASHINGTON — Among the thousands of demonstrators who jammed the Wisconsin State Capitol grounds this weekend was a well-financed advocate from Washington who was there to voice praise for cutting state spending by slashing union benefits and bargaining rights.

The visitor, Tim Phillips, the president of Americans for Prosperity, told a large group of counterprotesters who had gathered Saturday at one edge of what otherwise was a mostly union crowd that the cuts were not only necessary, but they also represented the start of a much-needed nationwide move to slash public-sector union benefits.

“We are going to bring fiscal sanity back to this great nation,” he said.

What Mr. Phillips did not mention was that his Virginia-based nonprofit group, whose budget surged to $40 million in 2010 from $7 million three years ago, was created and financed in part by the secretive billionaire brothers Charles G. and David H. Koch.

State records also show that Koch Industries, their energy and consumer products conglomerate based in Wichita, Kan., was one of the biggest contributors to the election campaign of Gov. Scott Walker of Wisconsin, a Republican who has championed the proposed cuts.

Even before the new governor was sworn in last month, executives from the Koch-backed group had worked behind the scenes to try to encourage a union showdown, Mr. Phillips said in an interview on Monday.

State governments have gone into the red, he said, in part because of the excessively generous pay and benefits that unions have been able to negotiate for teachers, police, firefighters and other state and local employees.

“We thought it was important to do,” Mr. Phillips said, adding that his group is already working with activists and state officials in Indiana, Ohio and Pennsylvania to urge them to take similar steps to curtail union benefits or give public employees the power to opt out of unions entirely.

To union leaders and liberal activists in Washington, this intervention in Wisconsin is proof of the expanding role played by nonprofit groups with murky ties to wealthy corporate executives as they push a decidedly conservative agenda.

“The Koch brothers are the poster children of the effort by multinational corporate America to try to redefine the rights and values of American citizens,” said Representative Gwen Moore, Democrat of Wisconsin, who joined with others in the union protests.

A spokesman for Koch Industries, as well as Mr. Phillips, scoffed at that accusation. The companies owned by Koch (pronounced Coke) — which include the Georgia-Pacific Corporation and the Koch Pipeline Company — have no direct stake in the union debate, they said. The company has about 3,000 employees in Wisconsin, including workers at a toilet paper factory and gasoline supply terminals. The pending legislation would not directly affect its bottom line.

“A balanced budget will benefit Koch Industries and its thousands of employees in Wisconsin no more and no less than the rest of the state’s private-sector workers and employers,” said Jeff Schoepke, a Koch Industries lobbyist in Wisconsin. “This is a dispute between public-sector unions and democratically elected officials over how best to serve the public interest.”

Certainly, the Koch brothers have long used their wallets to promote fiscal conservatism and combat regulation, another Koch Industries spokesman said Monday.

But the push to curtail union benefits in Wisconsin has been backed by many conservative groups that have no Koch connection, Mr. Phillips noted.

Americans for Prosperity came to Wisconsin more than five years ago and has thousands of members, he said. The state chapter organized buses on Saturday for hundreds of Wisconsin residents to go to the Capitol to support the governor’s proposals.

“This is a Wisconsin movement,” said Fred Luber, chief executive of the Supersteel Products Corporation in Milwaukee, who serves on Americans for Prosperity’s Wisconsin state advisory board. “Obviously, Washington is interested in this. But it is up to us to do.”

Political activism is high on the list of priorities for Charles Koch, who in a letter last September to other business leaders and conservatives explained that he saw no other choice.

“If not us, who? If not now, when?” said the letter, which invited other conservatives to a retreat in January in Rancho Mirage, Calif. “It is up to us to combat what is now the greatest assault on American freedom and prosperity in our lifetimes.”

Campaign finance records in Washington show that donations by Koch Industries and its employees climbed to a total of $2 million in the last election cycle, twice as much as a decade ago, with 92 percent of that money going to Republicans. Donations in state government races — like in Wisconsin — have also surged in recent years, records show.

But the most aggressive expansion of the Koch brothers’ effort to influence public policy has come through the Americans for Prosperity, which runs both a charitable foundation and a grass-roots-activists group. Mr. Phillips serves as president of both branches, and David Koch is chairman of the Americans for Prosperity Foundation.

The grass-roots-activists wing of the organization today has chapters in 32 states, including Wisconsin, and an e-mail list of 1.6 million supporters, said Mary Ellen Burke, a spokeswoman. She would not say how much of last year’s $40 million budget came from the Koch family, but nationwide donations have come in from 70,000 members, she said, offering it as proof that it has wide support.

The organization has taken up a range of topics, including combating the health care law, environmental regulations and spending by state and federal governments. The effort to impose limits on public labor unions has been a particular focus in Ohio, Indiana, Pennsylvania and Wisconsin, all states with Republican governors, Mr. Phillips said, adding that he expects new proposals to emerge soon in some of those states to limit union power.

To Bob Edgar, a former House Democrat who is now president of Common Cause, a liberal group that has been critical of what it sees as the rising influence of corporate interests in American politics, the Koch brothers are using their money to create a façade of grass-roots support for their favorite causes.

“This is a dangerous moment in America history,” Mr. Edgar said. “It is not that these folks don’t have a right to participate in politics. But they are moving democracy into the control of more wealthy corporate hands.”

During a demonstration outside the Wisconsin Capitol Monday, one protester made a similar point, holding a sign saying: “Gov. Walker: Kick the Koch Habit.”

But Mr. Phillips and members of his group and other conservative activists, not surprisingly, see it very differently.

Just as unions organize to fight for their priorities, conservatives are entitled to a voice of their own.

“This is a watershed moment in Wisconsin,” Mr. Phillips said. “For the last two decades, government unions have used their power to drive pensions and benefits and salaries well beyond anything that can be sustained. We are just trying to change that.”

Steven Greenhouse contributed reporting from Madison, Wis.

The Central Importance of Public Employees To the National Economy and the Role of Unions

Protesters in Wisconsin on February 19, 2011. (Photo: mrbula)


Still more truth and consequences...


The Betrayal of Public Workers
by Robert Pollin and Jeffrey Thompson
16 February 2011


The Great Recession and its aftermath are entering a new phase in the United States, which could bring even more severe assaults on the living standards and basic rights of ordinary people than we have experienced thus far. This is because a wide swath of the country’s policy- and opinion-making elite have singled out public sector workers—including schoolteachers, healthcare workers, police officers and firefighters—as well as their unions and even their pensions as deadweight burdens sapping the economy’s vitality.

The Great Recession did blow a massive hole in state and municipal government finances, with tax receipts—including income, sales and property taxes—dropping sharply along with household incomes, spending and real estate values. Meanwhile, demand for public services, such as Medicaid and heating oil assistance, has risen as people’s circumstances have worsened. But let’s remember that the recession was caused by Wall Street hyper-speculation, not the pay scales of elementary school teachers or public hospital nurses.

Nonetheless, a rising chorus of commentators charge that public sector workers are overpaid relative to employees in comparable positions in the private sector. The fact that this claim is demonstrably false appears not to matter. Instead, the attacks are escalating. The most recent proposal gaining traction is to write new laws that would allow states to declare bankruptcy. This would let them rip up contracts with current public sector employees and walk away from their pension fund obligations. Only by declaring bankruptcy, Republican luminaries Jeb Bush and Newt Gingrich argued in the Los Angeles Times, will states be able to “reform their bloated, broken and underfunded pension systems for current and future workers.”

But this charge is emanating not only from the Republican right; in a front-page story on January 20, the New York Times reported on a more general trend spreading across the country in which “policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”

Considered together, state and local governments are the single largest employer in the US economy. They are also the country’s most important providers of education, healthcare, public safety and other vital forms of social support. Meanwhile, the official unemployment rate is stuck at 9 percent—a more accurate figure is 16.1 percent—a full eighteen months after the recession was declared over. How have we reached the point where the dominant mantra is to dismantle rather than shore up state and local governments in their moment of crisis?

Why States Need Support During Recessions

The Wall Street–induced recession clobbered state and local government budgets. By 2009, state tax revenues had fallen by fully 13 percent relative to where they were in 2007, and they remained at that low level through most of last year. By comparison, revenues never fell by more than 6 percent in the 2001 recession. Even during the 1981–82 recession, the last time unemployment reached 9 percent, the decline in state tax revenues never exceeded 2 percent. These revenue losses, starting in 2008, when taken together with the increased demand for state services, produced an average annual budget gap in 2009–11 of $140 billion, or 21 percent of all state spending commitments.

Unlike the federal government, almost all state and local governments are legally prohibited from borrowing money to finance shortfalls in their day-to-day operating budgets. The state and local governments do borrow to finance their long-term investments in school buildings, roads, bridges, sewers, mass transit and other infrastructure projects. They have established a long record of reliability in repaying these debt obligations, even during the recession. Nevertheless, these governments invariably experience a squeeze in their operating budgets during recessions, no matter how well they have managed their finances during more favorable economic times.

If, in a recession, states and municipalities are forced to reduce their spending in line with their loss in tax revenues, this produces layoffs for government employees and loss of sales for government vendors. These cutbacks, in turn, will worsen conditions in the private market, discouraging private businesses from making new investments and hiring new employees. The net impact is to create a vicious cycle that deepens the recession.

As such, strictly as a means of countering the recession—on behalf of business interests as well as everyone else in the community—the logic of having the federal government providing stimulus funds to support state and local government spending levels is impeccable. The February 2009 Obama stimulus—the American Recovery and Reinvestment Act (ARRA)—along with supplemental funds for Medicaid, has provided significant support, covering about one-third of the total budget gap generated by the recession. But that leaves two-thirds to be filled by other means. ARRA funds have now run out, and the Republican-controlled House of Representatives will almost certainly block further funding.

In 2010 roughly another 15 percent of the budget gap was covered by twenty-nine states that raised taxes and fees-for-services. In general, raising taxes during a recession is not good policy. But if it must be done to help fill deepening budgetary holes, the sensible way to proceed is to focus these increases on wealthier households. Their ability to absorb such increases is obviously strongest, which means that, unlike other households, they are not likely to cut back on spending in response to the tax hikes. In fact, ten states—New York, Illinois, Connecticut, North Carolina, Wisconsin, Oregon, Hawaii, Vermont, Rhode Island and Delaware—have raised taxes progressively in some fashion.

Of course, the wealthy do not want to pay higher taxes. But during the economic expansion and Wall Street bubble years of 2002–07, the average incomes of the richest 1 percent of households rose by about 10 percent per year, more than three times that for all households. The richest 1 percent received fully 65 percent of all household income growth between 2002–07.

One charge against raising state taxes in a progressive way is that it will encourage the wealthy to pick up and leave the state. But research on this question shows that this has not happened. We can see why by considering, as a hypothetical example, the consequences of a 2 percent income tax increase on the wealthiest 5 percent of households in Massachusetts. This would mean that these households would now have $359,000 at their disposal after taxes rather than $370,000—hardly enough to affect spending patterns significantly for these households, much less induce them to relocate out of the state. At the same time, a tax increase such as this by itself will generate about $1.6 billion for the state to spend on education, healthcare and public safety.

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But even with the ARRA stimulus funds and tax increases, states and municipalities have had to make sharp cuts in spending. More severe cuts will be coming this year, with the ARRA funds now gone. These include cuts that will reduce low-income children’s or families’ eligibility for health insurance; further cuts in medical, homecare and other services for low-income households, as well as in K–12 education and higher education; and layoffs and furloughs for employees. The proposed 2012 budgets include still deeper cuts in core areas of healthcare and education. In Arizona, the governor’s budget would cut healthcare for 280,000 poor people and reduce state support for public universities by nearly 20 percent. In California, Governor Brown is proposing to bring spending on the University of California down to 1999 levels, when the system had 31 percent fewer students than it does today.

State and Local Government Workers Are Not Overpaid

Even if state and local government employees are not responsible for the budgetary problems that emerged out of the recession, are they nevertheless receiving bloated wage and benefits packages that are holding back the recovery? Since the recession began, there has been a steady stream of media stories making such claims. One widely cited 2009 Forbes cover article reported, “State and local government workers get paid an average of $25.30 an hour, which is 33 percent higher than the private sector’s $19…. Throw in pensions and other benefits and the gap widens to 42 percent.”

What figures such as these fail to reflect is that state and local government workers are older and substantially better educated than private-sector workers. Forbes is therefore comparing apples and oranges. As John Schmitt of the Center for Economic Policy Research recently showed, when state and local government employees are matched against private sector workers of the same age and educational levels, the public workers earn, on average, about 4 percent less than their private counterparts. Moreover, the results of Schmitt’s apples-to-apples comparison are fully consistent with numerous studies examining this same question over the past twenty years. One has to suspect that the pundits who have overlooked these basic findings have chosen not to look.

State Pension Funds Are Not Collapsing

Not surprisingly, state and local government pension funds absorbed heavy losses in the 2008–09 Wall Street crisis, because roughly 60 percent of these pension fund assets were invested in corporate stocks. Between mid-2007 and mid-2009, the total value of these pension funds fell by nearly $900 billion.

This collapse in the pension funds’ asset values has increased their unfunded liabilities—that is, the total amount of benefit payments owed over the next thirty years relative to the ability of the pension funds’ portfolio to cover them. By how much? In reality, estimating the total level of unfunded liabilities entails considerable guesswork. One simply cannot know with certainty how many people will be receiving benefits over the next thirty years, nor—more to the point—how much money the pension funds’ investments will be earning over this long time span. The severe instability of financial markets in the recent past further clouds the picture.

Thus, these estimates vary by huge amounts, depending on the presumed rate of return for the funds. The irony is that right-wing doomsayers in this debate, such as Grover Norquist, operate with an assumption that the fund managers will be able to earn returns only equal to the interest rates on riskless US Treasury securities. Under this assumption, the level of unfunded liabilities balloons to the widely reported figure of $3 trillion. To reach this conclusion, the doomsayers are effectively arguing that the collective performance of all the Wall Street fund managers—those paragons of free-market wizardry—will be so anemic over the next thirty years that the pension funds may as well just fire them and permanently park all their money in risk-free government bonds. It follows that the profits of private corporations over the next thirty years will also be either anemic or extremely unstable.

But it isn’t necessary to delve seriously into this debate in order to assess the long-term viability of the public pension funds. A more basic consideration is that before the recession, states and municipalities consistently maintained outstanding records of managing their funds. In the 1990s the funds steadily accumulated reserves, such that by 2000, on average, they were carrying no unfunded liabilities at all. Even after the losses to the funds following the previous Wall Street crash of 2001, the unfunded share of total pension obligations was no more than around 10 percent. By comparison, the Government Accountability Office holds that to be fiscally sound, the unfunded share can be as high as 20 percent of the pension funds’ total long-term obligations.

A few states are facing more serious problems, including New Jersey, Illinois and California. New Jersey is in the worst shape. But this is not because the state has been handing out profligate pensions to its retired employees. The average state pension in New Jersey pays out $39,500 per year. The problem is that over the past decade, the state has regularly paid into the system less than the amount agreed upon by the legislature and governor and stipulated in the annual budgets. For 2010 the state skipped its scheduled $3.1 billion payment altogether. However, even taking New Jersey’s worst-case scenario, the state could still eliminate its unfunded pension fund liabilities—that is, begin running a 100 percent fully funded pension fund—if it increased the current allocation by about 4 percent of the total budget, leaving 96 percent of the state budget allocation unchanged.

In dollar terms, this worst-case scenario for New Jersey would require the state to come up with roughly $4 billion per year to cover its pension commitments in an overall budget in the range of $92 billion. Extracting this amount of money from other programs in the budget would certainly cause pain, especially when New Jersey, like all other states, faces tight finances. But compare this worst-case scenario with the bankruptcy agenda being discussed throughout the country.

To begin with, seriously discussing a bankruptcy agenda will undermine the confidence of private investors in all state and municipal bonds—confidence that has been earned by state and municipal governments. When the markets begin to fear that states and municipalities are contemplating bankruptcy, this will drive up the interest rates that governments will have to pay to finance school buildings, infrastructure improvements and investments in the green economy.

Then, of course, there is the impact on the pensioners and their families. For the states and municipalities to walk away from their pension fund commitments would leave millions of public sector retirees facing major cuts in their living standards and their sense of security. Something few Americans understand is that roughly one-third of the 19 million state and local employees—i.e., those in fifteen states, including California, Texas and Massachusetts—are not eligible for Social Security and will depend exclusively on their pensions and personal savings in retirement. In addition, public sector pensions are not safeguarded by the federal Pension Benefit Guaranty Corporation. Unlike Wall Street banks, state pensioners will receive no bailout checks if the states choose to abrogate their pension fund agreements.

Getting Serious About Reforming State Finances

Of course, there are significant ways the public pension systems, as well as state and local finances more generally, can be improved. The simplest solution, frequently cited, involves “pension spiking”—that is, practices such as allowing workers to add hundreds of hours of overtime at the end of their careers to balloon their final year’s pay and their pensions. This has produced serious additional costs to pension obligations in some states and municipalities, but it is still by no means a major factor in explaining states’ current fiscal problems.

But states and municipalities also have to follow through on the steps they have taken to raise taxes on the wealthy households that are most able to pay. They should also broaden their sources of tax revenue by taxing services such as payments to lawyers, as well as by taxing items purchased over the Internet. And they have to stop giving out large tax breaks to corporations as inducements to locate in their state or municipality instead of neighboring locations. This kind of race to the bottom generates no net benefit to states and municipalities.

Finally, state and local governments are in the same boat as the federal government and private businesses in facing persistently rising healthcare costs. As was frequently noted during the healthcare debates over the past two years, the United States spends about twice as much per person on healthcare as other highly developed countries do, even though these other countries have universal coverage, longer life expectancies and generally healthier populations. These costs weigh heavily on the budgets of state and local governments, which finance a large share of Medicaid and health benefits for state employees. The problem is that we spend far more than other countries on medications, expensive procedures and especially insurance and administration. We also devote less attention to prevention. It remains to be seen how much the Obama healthcare reform law—the 2010 Patient Protection and Affordable Care Act—will remedy this situation. It is certainly the case that more must be done, especially in establishing effective controls on the drug and insurance industries.

These are some of the long-run measures that must be taken to bolster the financing of education, healthcare, public safety and other vital social services, as well as to support investments in infrastructure and the green economy. If states declare bankruptcy they will break their obligations to employees, vendors, pensioners and even bondholders, which will undermine the basic foundations of our economy. As we emerge, if only tentatively, from the wreckage of the Great Recession, this is precisely the moment we need to strengthen, not weaken, the standards of fairness governing our society.

Robert Pollin is a professor of economics and co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts. One of his most recent books (co-written) is A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States.

Jeffrey Thompson is an assistant research professor at the Political Economy Research Institute (PERI) at the University of Massachusetts.

Whose Side Are You On Mr. President?


Please LEAD for once Mr. President and aggressively stand up to your and most importantly OUR many vile enemies in the government and the general economy...We really need you to show some genuine FIGHT for a change...As always the question is and must remain: Whose Side Are You On?


Politics of Wisconsin Labor Fight Spread to Washington
February 18, 2011
New York Times

President Obama and his political rivals in Washington have jumped into the epic battle in Wisconsin between organized labor and the state’s newly elected Republican governor over the rights and benefits of state workers.

Efforts by Scott Walker, the state’s Republican governor, to slash collective-bargaining rights of public employees prompted days of protests at the state capitol by thousands of union workers, fueled and organized in part by Mr. Obama’s own political apparatus in Washington.

Even as Democratic lawmakers in Wisconsin fled their own state in an attempt to stall a vote in the Republican-controlled state senate, Mr. Obama decried the tactics of Mr. Walker as “an assault on unions.”

That prompted House Speaker John Boehner to rip into Mr. Obama, accusing him of having “unleashed the Democratic National Committee to spread disinformation and confusion in Wisconsin.”

Mr. Boehner, in a statement, praised Mr. Walker and other Republican governors for making the tough decisions to cut spending. And he chided the president for siding with the wrong side in the contentious Wisconsin debate.

“Rather than shouting down those in office who speak honestly about the challenges we face, the president and his advisers should lead. Until they do, they are not focusing on jobs, and they are not listening to the American people who put them in power.”

The sharp-edged retorts from Mr. Obama and Mr. Boehner reflect the broader debate in the nation’s capital as Democrats and Republicans dig in to rigid positions about spending, investment, the deficit and changes to entitlement programs.

In the next two weeks, Democrats and Republicans in Washington are set to play a game of chicken with the federal budget. The government’s authority to spend money runs out on March 4 and could force a shutdown in federal services unless the parties can agree on a new spending plan.

But despite recent calls for bipartisanship and promises to work together in Washington, the standoff in Wisconsin is a preview of how easily discussions could disintegrate into chaos.

For Mr. Boehner, the Wisconsin debate is another opportunity to preach a message of fiscal restraint in the face of demanding unions and government employees. Republican governors in several states, including Wisconsin, have said they must make drastic cuts to deal with huge budget problems.

By jumping quickly to condemn Mr. Obama’s comments, Mr. Boehner explicitly questioned the president’s leadership, suggesting he is unwilling to make the deep sacrifices necessary to put the country on the right fiscal path.

Other Republicans, too, see opportunity in the imagery coming out of Wisconsin. Senator Orrin Hatch of Utah, who is trying to head off a primary challenge from the Tea Party in his state, praised Mr. Walker and other Republican governors for making “tough choices” in their budgets.

“It is too bad that Washington Democrats are attacking them rather than following their lead,” Mr. Hatch said on Thursday. “President Obama’s comments today were, frankly, way off base. The only assault is from a bunch of self-interested government union employees who are putting their interests ahead of the interests of the Wisconsin taxpayers who have been funding their runaway spending.”

He added: “This is not the way public servants should behave.”

Representative Paul Ryan of Wisconsin, the Republican chairman of the budget committee in the House, said on MSNBC’s “Morning Joe” that “It’s like Cairo has moved to Madison these days.”

For Mr. Obama and the Democrats, the Wisconsin debate provides an opportunity to stand by their supporters in organized labor in a part of the country that is likely to be an important battleground during the 2012 presidential election campaign.

It also allows Democrats to once again raise questions about Mr. Boehner’s willingness to see government jobs lost.

This week, Democrats seized on Mr. Boehner’s comment that if government jobs were lost because of the cuts that Republicans are calling for, then “so be it.” Democrats now view the situation in Wisconsin as another example of Mr. Boehner taking sides against workers.

Former Representative David Obey of Wisconsin on Thursday accused Mr. Walker of acting like Hosni Mubarak, the deposed president of Egypt, as protestors marched in the streets of Cairo.

“I think what Gov. Walker is trying to do amounts to political thuggery,” Mr. Obey told Talking Points Memo. “It is one thing to say that these are tough times — everybody’s got to cut back and public employees are going to have to take cuts like the rest of us … but he’s using it as an excuse to gut the ability of workers to organize and bargain collectively. In my view that’s outrageous.”

A spokesman for the Democratic National Committee declined to respond to Mr. Boehner’s accusation of spreading disinformation. But officials confirmed that Organizing for America, an arm of the party, has been “quietly, but significantly, involved in
building grassroots energy and organizing protests.”

The political efforts on behalf of the union workers in Wisconsin were undertaken at the direction of Tim Kaine, the D.N.C. chairman, according to officials at the party.

In addition to helping build crowds for two rallies in Madison this week, O.F.A. organized 15 “rapid-response phone banks” aimed at getting supporters to call state lawmakers. The effort covered 10 cities in Wisconsin, officials said.

Volunteer leaders of O.F.A. helped organize the rallies and youth leaders at college campuses brought buses to help transport people. Another O.F.A. program sought to get letters published in 23 targeted newspapers in Wisconsin. O.F.A. also used blogs, Facebook, Twitter and e-mail messages to rally opposition to Mr. Walker’s efforts.

Mr. Boehner, in his comments Thursday, said Mr. Obama should call a stop to those efforts.

“I urge the president to order the D.N.C. to suspend these tactics,” Mr. Boehner said. “This is not the way you begin an ‘adult conversation’ in America about solutions to the fiscal challenges that are destroying jobs in our country.”

The Class War in the United States is Real and Wall Street, the Banks, and the Corporate World Are Leading the Attack!


To all those who foolishly and naively think that we are not smack dab in the middle --as always!--of a vicious Class War in the United States--Read this...


GOP tries to slash Wall Street law
By Meredith Shiner
February 18, 2011

The federal agencies charged with enforcing last year’s Wall Street reform law are starving for money, short staffed and worried about being able to implement the far-reaching crackdown on the financial industry.

And that’s exactly what top Republicans in charge of banking and Wall Street oversight want.

As top key administration officials appeared before the Senate banking committee on Thursday to plead for more money to enforce the so-called Dodd-Frank act, Republicans admitted that they were aiming to dismantle and defund the law.

“We should slow a lot of that down,” said Alabama Sen. Richard Shelby, the top Republican on the panel. “A lot of us voted against and oppose Dodd-Frank. Obviously, we’d repeal it. So I certainly don’t think we should rush to implement it.”

When asked whether taking down funding levels is a “legitimate” way to slow the process of implementation, Shelby responded: “Always.”

The stalled continuing resolution bill being debated in the House is threatening funding for the financial reform law, and agencies need more money by a July deadline if they’re going to start enforcing a wide range of new rules.

But there’s a risk for Shelby and other Republicans who want to break up the Wall Street law — financial reform didn’t rattle voters the same way the health debate did. The GOP will have a tougher case to make against Dodd-Frank while still appearing sensitive to the causes of the 2008 financial meltdown and its residual effects.

Senate Majority Whip Dick Durbin (D-Ill.) warned Thursday that failure to fund the reform law will be “a step backwards, and it is a dangerous step for the American economy.”

But at the rate Congress is going on the fiscal 2011 continuing resolution, Shelby’s hoped-for “slowdown” is more of a possibility than the law’s most vocal Democratic supporters would like to admit.

The two agencies hit hardest by the failure to pass a full 2011 budget are the Securities and Exchange Commission and the Commodity Futures Trading Commission. Both the SEC and the CFTC — which were given a substantial increase in power by the regulatory reform law — were slated to get significant funding bumps this year. The chiefs of both agencies said Thursday they don’t have the resources for day-to-day operations, let alone enough manpower to deal with the workload of implementing the sweeping overhaul.

The president called for the SEC budget to grow from $1.1 billion to $1.4 billion in fiscal 2012 and asked for an allocation of $308 million for the much smaller CFTC, up from the agency’s $168 million budget prior to the passage of the Wall Street reform bill.

House Republicans cut funding levels for both agencies, however, slashing $56.8 million from the CFTC and $25 million from the SEC. Republicans have also called for the new Consumer Financial Protection Bureau — perhaps their least favorite part of the law — to receive $80 million, a significant cut from the $143 million the agency had hoped for.

SEC Chairwoman Mary Schapiro told senators that the agency doesn’t “have the capacity” currently to take on the additional responsibilities required by Dodd-Frank.

“With respect to our current core functions, we are feeling the pressure of the continuing resolution,” Schapiro said. “In order to operationalize any of the rules we are writing, we will need more funds.”

CFTC Chairman Gary Gensler had an even more dire outlook.

“If [the CFTC] were to return to the 2008 levels, we wouldn’t be able to fulfill our statutory mission,” Gensler said.

But none of these concerns seemed to rattle Republicans, who didn’t seem troubled by the problems the government might have enforcing the Dodd-Frank law.

In the hearing’s most telling moment, Tennessee Sen. Bob Corker asked the Obama officials whether it would “make sense” for Congress to try to slow down regulators who admitted they are under duress because of budgetary constraints.

“I’ve heard from a number of them about the problems they’re having because of funding,” Corker said after the hearing. “You don’t have the staff you need. A lot of people are concerned about how rapidly these regulations are being created and how much real thought is going into them, so might it make sense, because of the budgetary issues our country is dealing with and them directly, might it make sense just to slow the process down so they’re not rushing through implementing things that could create?”

But Democrats, who still staunchly defend the law they passed on mostly a party-line vote, aren’t buying the move and vow to fight for funding.

New Jersey Sen. Robert Menendez told the banking committee Thursday he is concerned that if Democrats allow funding for the agencies to dry up, passing Dodd-Frank will amount to a “hollow promise to the American people of what we said we were going to do.”

And Durbin, who chairs the appropriations subcommittee that oversees the SEC and CFTC, was even more emphatic in his message to Republicans.

“We’ve got to do everything in our power to make sure they have the resources. I have the SEC and the CFTC in my appropriations subcommittee,” Durbin said. “What Speaker [John] Boehner and House Republicans want to do will devastate their current responsibilities, and they’ll be unable to even get close to the responsibilities under Dodd-Frank.”

Underneath the rhetoric for and against the law from both parties is the reality of the budget fight on the Hill. The temporary funding resolution passed last December, which did not include funds to support Dodd-Frank, is set to expire in March. House Majority Leader Harry Reid (D-Nev.) told reporters Wednesday he’s already dispatched Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) to work on another temporary measure.

Rep. Barney Frank (D-Mass.), one of the Wall Street law’s namesakes, introduced an amendment to the House funding resolution that would increase SEC funding by offsetting it with funds transferred from the treasury. Though the House was slated to vote on the amendment Thursday, it’s unlikely to have an impact, as the reform law is unpopular with the GOP majority and Obama already has promised to veto the House version of the bill.

Despite the tricky legislative logistics, fighting for the Wall Street reform law could still give Democrats space for a political victory. The measure is significantly more popular than its health care counterpart, and the specter of a market crash that continues to affect Main Street economy still looms.

“We’re going to try to make the argument that, without a robust regulatory scheme, we’d be in danger again of another fiscal crisis,” Sen. Jack Reed (D-R.I.), a top member of the banking committee, told POLITICO. “To keep what we did under the Bush administration — to deregulate by defunding — could lead us exactly back to the crisis we saw in ’08 and ’09 and particularly now in a much different marketplace.”

© 2011 Capitol News Company, LLC

Tuesday, February 22, 2011

The Unholy Alliance of President Obama's National Budget and the Priorities of the Republican Right

President Barack Obama delivers remarks on education and budget priorities, while Jack Lew, director of the US Office of Management and Budget (right), looks on at Parkville Middle School and Center of Technology, in Baltimore, Maryland, on February 14, 2011. (Photo: Drew Angerer / The New York Times)


See what I mean?...


18 FEBRUARY 2011

On President Obama's Budget
15 February 2011

by Richard D. Wolff | MR Zine | Op-Ed

President Obama's basic budget for fiscal 2012 is mostly a done deal supported by the entire political establishment. The hyped choreography of forthcoming battles between Democrats and Republicans is a very secondary sideshow. The battles clothe basic agreement in a disguise of fierce oppositions perhaps aimed to mollify each party's none-too-discerning militants.

Both sides agree that the US private economy is in such a poor and dangerous condition that it needs massive fiscal stimulus from the federal budget: classic Keynesian policy. Washington thus plans to spend roughly $3.5 trillion while taking in tax revenues of roughly $2 trillion: hence a deficit of $ 1.5 trillion. In the light of such numbers, the debates of Democrats and Republicans over spending cuts likely to be between $40 and 60 billion are inconsequential. They become yet more inconsequential in light of the fact that the federal budget's projected deficit of $1.5 trillion will carry an annual interest cost of $40 to 60 billion. That interest will be an additional budget outlay offsetting the likely cuts arrived at the end of loudly publicized debates over spending reductions.

Both sides agree that government spending will continue to follow the old "trickle down" theory, despite its failure to date. Massive federal outlays on the largest banks, insurance companies, and selected other large corporations produced a "recovery" for them but not in the rates of unemployment, home foreclosures, and state and local austerity budgets that keep crippling the US economy. Federal largesse has yet to trickle down, but both parties proceed on the assumption that it eventually will. Neither party tallies the economic and social costs of massive unemployment, home loss, and state and local austerity budgets. Neither party offers any alternative to "trickle down" as if no alternative exists or is worth debating.

Yet of course there are alternatives. In the 1930s, capitalism's last major global breakdown, then President Roosevelt eventually pursued the alternative "bubble up" theory. Between 1934 and 1940 he created and filled 11 million federal jobs with unemployed workers. Their incomes enabled them to maintain mortgage payments and buy goods and services that provided jobs to millions of others and profits to many US businesses. That alternative to trickle down economics did not suffice to overcome the Great Depression. However, it certainly alleviated more of the economic damage and individual suffering of that breakdown than Bush's and Obama's trickle down economics have achieved in this one. Then too there is the alternative of taxing corporations and the rich to finance federal stimulus without huge deficits and increasing costly national debts. That alternative is even more taboo in Washington than a bubble up government employment program.

Politically, Roosevelt's bubble up approach won him the greatest outpouring of electoral support ever achieved by any US president. So it might today for Obama. Why then would a politically besieged President hesitate to repeat some variant of Roosevelt's successful strategy? During the 1930s, a powerful labor movement (the CIO was successfully recruiting millions of workers into unions) and influential and growing socialist and communist parties organized pressure from below. Today those movements are either gone or extremely weakened. Then, the flow of money into US politics from corporations and the rich was relatively less powerful than it has now become in terms of campaign contributions and legislative lobbying funds dependent on those sources. Republicans and Democrats alike depend on them. No wonder they and the President agree on so much and dare not consider or debate alternatives that their benefactors might disapprove.

Of course, the groups immediately affected by specific federal budget cuts will suffer. Democrats will posture as their defenders and, by extension, defenders of the environment or poor people or pregnant women that those groups champion. Republicans will posture as the punishers and reducers of an arrogant, outsized, and inefficient state as well as champions of reduced tax burdens on businesses and people. No matter what their sideshow yields, the basic prognosis for the fiscal 2012 federal budget combined with the current crisis in state and local budgets is grim. The social safety net is being further frayed; public employee layoffs will increase and thereby worsen unemployment; ecological concerns will continue to be neglected, and no significant individual tax relief is anywhere on the horizon.

In the US, the federal government is the tail that definitely does not wag the dog. This capitalist crisis is being "resolved" the way crises usually are. As unemployment deepens and lasts, wages and benefits decline. As businesses close, the costs of second-hand machines, the rents for office and factory space, the fees of business-serving professionals (accountants, lawyers, etc.) drop. Eventually, when those cost declines proceed far enough, capitalists will see enough profit in resuming production to generate a broad and sustainable economic upturn. In short, just as the crisis was brought on by the profit-seeking investments and speculations of the private sector, so now we wait until the private sector sees a profit in resuming production and thus ending this crisis. The federal government fusses and fumes about it all. It throws public money at the private sector to keep it afloat. It debates details with great fanfare. But all the while the mass of people tighten their belts, do without, and wait for this economic system to rebound. The vast social and personal costs of this irrational economic absurdity -- tens of millions unemployed, one third of US productive capacity unutilized (rotting and rusting), and vast quantities of needed output foregone and lost -- are ignored lest they raise the uncomfortable question: why do we retain a system as dysfunctional as this?

Richard D. Wolff is Professor of Economics Emeritus at the University of Massachusetts in Amherst and currently a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York. He has a PhD in Economics from Yale University as well as degrees from Harvard University (history BA) and Stanford University (economics MA). Wolff has authored or co-authored 10 books and over 50 scholarly articles and 75 popular articles. His recent work has concentrated on analyzing the causes and alternative solutions to the current global economic crisis.

His documentary film on that crisis, Capitalism Hits the Fan, can be previewed at He also published a book of essays on the current crisis in 2010 entitled Capitalism Hits the Fan: the Global Economic meltdown and What to Do About it. Detailed information on and copies of his many writings, audios and videos of his media interviews, lectures, and classes, and his speaking schedule are all available at his website:

Political Narratives, Standing On Principle, and Protecting the Social Safety Net


More truth, more consequences...


The President as Storyteller in Chief
Monday 14 February 2011
by: Dean Baker, t r u t h o u t | Op-Ed

The celebrations surrounding the 100th anniversary of Ronald Reagan's birth overlooked an important part of Reagan's success: his ability to craft an image to serve as the focus of his political argument. When he was running for president in 1980, Reagan invented two great tales that highlighted the worldview he was selling to his supporters.

One of these tales was the story of the welfare queen. She drove to the welfare office in a Cadillac every month to pick up her welfare check. The other story involved a man who bought an orange with food stamps and then used the change to buy a bottle of vodka. Never mind that these stories were almost certainly not true: they crystallized an image of the world that Reagan campaigned against.

Unfortunately, in this respect, President Obama is no Ronald Reagan. He has persistently refused to give the country a story of the economic downturn. As a result, the center and right have eagerly filled the void.

The center-right story centers on government excess: large budget deficits, overpaid public employees and bloated government social programs. Just as was the case with President Reagan's stories, these stories are not true.

The large budget deficits were an outcome of the crisis: tax collections plummeted and spending on countercyclical programs like unemployment insurance rose. The deficits in the years preceding the crisis were actually relatively small when measured against the size of the economy.

As far as the pay of public employees, there have been a number showing that, after controlling for education and experience, state and local employees are paid slightly less than their private-sector counterparts. It is possible to find examples of public employees who are arguably overpaid, but the data show this is the exception, not the rule.

Finally, we have the story of out-of-control social programs. There are two different stories here. There are a number of programs focused on helping low-income people that even collectively don't amount to a hill of beans in terms of the total budget. We can stop paying for nutrition for poor children or buying heating oil for low-income seniors, but even zeroing out these programs entirely barely makes a dent in the budget.

Then, we have the universal programs, like Social Security and Medicare. These programs cost a lot of money, but people are willing to pay for them. Furthermore, the story of exploding growth in these "entitlements" stems entirely from our broken health care system.

If per person health care costs in the United States were the same as in any other wealthy country, we would be looking at enormous budget surpluses, not deficits. Everyone in Washington knows this, but they are scared of the drug companies, the insurance companies, the doctors' lobbies, and other powerful interest groups, so instead they push for cutting these essential programs.

In short, the center-right story's can easily be shown to be nonsense. However, President Obama has put up nothing to counter it. He has backed away from telling the public the truth: the country faces an enormous economic hole right now because the financial industry ran wild over the last decade and the Fed and other government regulators let them.

It would not be difficult to come up with salacious images of people like Angelo Mozilo of Countrywide or Robert Rubin of Citigroup living the good life, while tens of millions of people suffer unemployment and/or foreclosures because of the fallout from their greed. President Obama could also highlight the incredible incompetence of top economic officials like Alan Greenspan and Ben Bernanke, who let the $8-trillion housing bubble grow unchecked.

This would provide a compelling and truthful narrative to focus the nation's attention. Polls consistently show that the public has an intense dislike of Wall Street. What better place to direct people's anger than on those who are actually responsible for the economic crisis?

However, President Obama has opted to go in a different direction. He has instead embraced the false narrative pushed by the center-right, actually implying the problem is somehow out-of-control government spending, as though the housing bubble were not the source of the economic crisis. This may endear him to the Wall Street crew, but this narrative is a disaster for those who care about putting people back to work, providing workers with a secure retirement and protecting the gains that unions have helped to secure for workers in both the public and private sector.

At the time of his election, many progressives hoped that President Obama could play the same transformational role in this crisis as President Roosevelt did during the Great Depression. The more limited hope was that he could be an inspirational leader to his base in the same way as Ronald Reagan was for the right. At this point, the best hope is that he doesn't open the door to unwinding 75 years of economic and social progress.

The Brazen Weakness of the President's Proposed Budget For 2011


These are the very ugly but undeniable facts Jack...We've ALL got to continue to tell the WHOLE TRUTH AND NOTHING BUT THE TRUTH about what is really going on, WHO'S DOING IT, and why or we'll never be able to change anything. That goes DOUBLE for the President...WHY? Because he's in power and his input is absolutely essential to running the federal government, THAT'S WHY...


Obama Should Be Ashamed of His Budget!
Guest Commentary

"This freeze would cut the deficit by more than $400 billion over the next decade, bringing this kind of spending -- domestic discretionary spending -- to its lowest share of our economy since Dwight Eisenhower was President. Let me repeat that...."

That was our president announcing his 2012 budget. And indeed let's repeat that - and note a few things he didn't say.

While around 22 million Americans are looking for work...

And almost 62 million workers are working for sub-poverty wages...

While one out of three kids is living in poverty...

And nearly 3 million families have lost their homes in the last year alone...

While spending on war grows, another $118 billion this year, and military contractors like Lockheed Martin and Boeing see record profits....

And studies show that $2.2 trillion is needed to bring infrastructure to the basic level businesses need.

...Domestic spending will be at its lowest level since Dwight Eisenhower???

Between 1979 and 2005, the CBO numbers show, the average after-tax income of households in the top 0.01 percent quintupled - from just over $4 million to nearly $24.3 million. In 2009, as million of workers lost their jobs, on Wall Street at the thirty-eight biggest firms, investors and executives earned $140 billion -- the highest sum ever.

James Madison famously wrote that the new American republic was to be "a government which derives all its powers directly or indirectly from the great body of the people," not aristocratic privilege or hereditary right. Yet in 2010 undisclosed private donors and multinational corporations funneled millions of dollars into our media, saturating the airwaves and skewing the election.

As all this has been shaping up, as Jacob Hacker and Paul Pierson point out, government in our era not only failed to push back on the tide rising at the top but "put its thumb on the scale, hard. . . on the side of those who had more weight."

While all that: "This share of spending will be at its lowest level since. . ." Well, since Dwight Eisenhower warned of the anti-democratic threat of a runaway military industrial complex?

We should be ashamed to let our president get away with this. And he should be ashamed of proposing it.

The F Word is a regular commentary by Laura Flanders, the host of GRITtv and editor of At The Tea Party, out now from GRITtv broadcasts weekdays on DISH Network and DIRECTv, on cable, and online at and Follow GRITTV or GRITLaura on Twitter and be our friend on Facebook.