Monthly Archives: April 2015

How America Became an Oligarchy

by Ellen Brown

The politicians are put there to give you the idea that you have freedom of choice. You don’t. . . . You have owners. — George Carlin, The American Dream

According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America’s political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites.

“Making the world safe for democracy” was President Woodrow Wilson’s rationale for World War I, and it has been used to justify American military intervention ever since. Can we justify sending troops into other countries to spread a political system we cannot maintain at home?

The Magna Carta, considered the first Bill of Rights in the Western world, established the rights of nobles as against the king. But the doctrine that “all men are created equal” – that all people have “certain inalienable rights,” including “life, liberty and the pursuit of happiness” – is an American original. And those rights, supposedly insured by the Bill of Rights, have the right to vote at their core. We have the right to vote but the voters’ collective will no longer prevails.

In Greece, the left-wing populist Syriza Party came out of nowhere to take the presidential election by storm; and in Spain, the populist Podemos Party appears poised to do the same. But for over a century, no third-party candidate has had any chance of winning a US presidential election. We have a two-party winner-take-all system, in which our choice is between two candidates, both of whom necessarily cater to big money. It takes big money just to put on the mass media campaigns required to win an election involving 240 million people of voting age.

In state and local elections, third party candidates have sometimes won. In a modest-sized city, candidates can actually influence the vote by going door to door, passing out flyers and bumper stickers, giving local presentations, and getting on local radio and TV. But in a national election, those efforts are easily trumped by the mass media. And local governments too are beholden to big money.

Continue reading How America Became an Oligarchy

The Minimum Wage: Could the Democrats Please Give Consideration to the Idea of Ceasing to Betray Working People?

By Lambert Strether of Corrente.

Let’s begin by noting that the current minimum wage is miserably inadequate and a flat insult to working people. The MIT Living Wage Calculator project [1] has this to say:

While the minimum wage sets an earnings threshold under which our society is not willing to let families slip, it fails to approximate the basic expenses of families in 2013 [or today]. Consequently, many working adults must seek public assistance and/or hold multiple jobs in order to afford to feed, cloth, house, and provide medical care for themselves and their families.

An analysis of the living wage using updated data from 2013 and compiling geographically specific expenditure data for food, childcare, health care, housing, transportation, and other basic necessities, finds that:

The minimum wage does not provide a living wage for most American families. A typical family of four (two working adults, two children) needs to work more than 3 full-time minimum-wage jobs (a 68-hour work week per working adult) to earn a living wage. Across all family sizes, the living wage exceeds the poverty threshold, often used to identify need. This means that families earning between the poverty threshold ($23,283 for two working adults, two children) and the median living wage ($51,224 for two working adults, two children per year before taxes), may fall short of the income and assistance they require to meet their basic needs. 

Three jobs, 68 hours… It’s hard work — and extremely time-consuming! — to be part of the working poor.

Is raising the minimum wage popular?

Yes, it is. Rasmussen (a Republican-leaning polling firm) finds that 54% of American Adults favor an increase in the minimum wage, and 32% are opposed. That may be why increasing the minimum wage did so well in the 2014 election:

Voters in four red states approved ballot initiatives to raise their state minimum wages on Tuesday, sending another message to Washington that Americans support a higher wage floor.

In fact, the margins were, in some cases, greater than those of the Rasmussen poll (22%); Alaska’s initiative won by 38%, Arkansas’ by 31%, and Nebraska’s by 20%.

So 2014 was a debacle for Democratic candidates, but not for the sort of policy that, given their brand identity, one would expect Democrats to be backing. Perhaps the Democrats should give consideration to not s*cking on policy if they want to win?

But by what amount should the minimum wage be raised?

There are several ways of looking at this question, depending on the sort of social contract you consider wage labor to be.

$21.72. If by productivity, $21.72. Here the social contract is that if workers become more efficient, then their wages should increase in proportion to the efficiency gains. Oldthink, I know! But if that’s your theory, $21.72 is the result.CEPR:

Between the end of World War II and 1968, the minimum wage tracked average productivity growth fairly closely. S ince 1968, however, productivity growth has far outpaced the minimum wage. If the minimum wage had continued to move with average productivity after 1968, it would have reached $21.72 per hour in 2012–a rate well above the average production worker wage. If minimum-wage workers received only half of the productivity gains over the period, the federal minimum would be $15.34. Even if the minimum wage only grew at one-fourth the rate of productivity, in 2012 it would be set at $12.25.
Continue reading The Minimum Wage: Could the Democrats Please Give Consideration to the Idea of Ceasing to Betray Working People?

The Minimum Wage Is Too Damn Low

by John Schmitt, Senior Economist at the Center for Economic and Policy Research, in Washington, D.C.
CEPR, Issue Brief, March 2012

It is coming up on three years since the last increase in the federal
minimum wage – to $7.25 per hour – in July 2009. By all of the most
commonly used benchmarks – inflation, average wages, and productivity
– the minimum wage is now far below its historical level.

By all of these benchmarks, the value of the minimum wage peaked in
1968. If the minimum wage in that year had been indexed to the official
Consumer Price Index (CPI-U), the minimum wage in 2012 (using the
Congressional Budget Office’s estimates for inflation in 2012) would be
at $10.52. Even if we applied the current methodology (CPI-U-RS) for
calculating inflation – which generally shows a lower rate of inflation than
the older measure – to the whole period since 1968, the 2012 value of the
minimum wage would be $9.22. (See Figure 1.)

Using wages as a benchmark, in 1968 the federal minimum stood at 53
percent of the average production worker earnings. During much of the
1960s, the minimum wage was close to 50 percent of the same wage
benchmark. If the minimum wage were at 50 percent of the production
worker wage in 2012 (again, using CBO projections to produce a full-year
2012 estimate), the federal minimum would be $10.01 per hour.

Continue reading The Minimum Wage Is Too Damn Low

Reminder: Illinois Republicans Are Still Dumber Than Rocks

Once again, the Illnois GOP demonstrates how tone deaf it is to voters, even though they “listened” and “listened” and “listened” some more to the good citizens during the 2014 campaign.

Billionaire  Republican  Governor Bruce Rauner (a Scott Walker-wannabee and a favorite of Koch-wannabee Uline-owner Dick Uihlein) was elected over incumbent governor Pat Quinn  (D) by a 4% margin and is now trying to outdo Scott Walker.  Rauner even got JFK’s FCC Commissioner Newton Minow to endorse him.

But already, Rauner’s approval ratings are dropping and some state Republicans are worried about their own jobs.  Like most bad marriages, saying one thing (during the campaign) and doing another (once elected) is bad news for any politician. 

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Meet Bruce Rauner, the Mitt Romney of Illinois politics

The 2014 election campaign theme was to fix Illinois’ perceived budget problems, which are estimated in the billions as a result of prior Republican and Democrat administrations’ policies (let’s give money to the rich and steal from the workers’ pensions).

Once Rauner was governor, he has started with a lot of ALEC-inspired moves that aren’t popular with Illinois voters. And actually do nothing to fix the budget problems, but in reality make it worse.

First, he tried to make Illinois a right-to-work state by executive order.  He was sued by the unions.

Next, he proposed cutting state park funding.

Then he proposed cutting state school funding.

He proposed cutting the winter heating program.

He proposed cutting education.

He proposed cutting public transit.

He proposed cutting substance-abuse funding.

What about raising taxes on the wealthy and big business?  Perish that thought!

Continue reading Reminder: Illinois Republicans Are Still Dumber Than Rocks

Canada: End of home mail delivery to be challenged in Federal Court

by Ella Bedard, published October 16, 2014

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Photo: flickr/Michael

The plan to end home delivery of mail violates the Charter of Rights and Freedoms.

That’s the argument behind a legal challenge against the Federal Government by the Canadian Union of Postal workers (CUPW), seniors’ groups, and organizations for people with disabilities.

The coalition intends to file a case with the Federal Court of Canada under the Charter of Rights and Freedoms. They also argue that the decision to end door-to-door delivery is beyond the Crown Corporation’s authority and should be made by the Parliament of Canada.

“This is a decision which will affect people across Canadians, particularly seniors and people with disabilities,” said John Anderson of the Centre for Canadian Policy Alternatives. “Canada post has done this without any real consultation.”

The Canada Post charter was up for public review this year, but the review has yet to occur.

“We need a national debate on this issue, but we haven’t had that debate,” said Anderson, who has written about postal banking as an option for Canada Post.

In December 2013, Canada Post CEO Deepak Chopra announced that the crown corporation would be ending door-to-door delivery for five million Canadians, incurring a loss of at least 8,000 jobs as well as an increase in service costs. This would make Canada the only G8 country without home delivery.

Continue reading Canada: End of home mail delivery to be challenged in Federal Court

Alas, poor post office: Newsweek broods on the demise of the Postal Service

from Save The Post Office, published April 6, 2015

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Last week Newsweek ran an opinion piece entitled “Do We Need a Postal Service?”  It originally appeared on the website of the Brookings Institute with the title, “The U.S. Postal Service’s existential problem.”

“The U.S. Postal Service has an existential problem,” begins the op-ed, and twice more in the space of just 840 words it refers to the “existential crisis” and “existential question” facing the postal system.

The essay is about how the Postal Service is becoming obsolete and pointless and headed for “a day of reckoning,” sooner or later.  “To be clear,” it says, “the Postal Service cannot be abolished; at least, not immediately.”

Some readers consequently thought that the essay was looking forward to that day when we would be done with the Postal Service, but then in response to a reader’s comment, the author backs off and says, “Just to be clear, nothing in my op-ed advocated abolishing USPS.

To abolish or not to abolish, that is the question.

R Street and Newsweek

The Newsweek op-ed is by Kevin Kosar, who, as his bio says, is a senior fellow at the R Street Institute.  Before joining R Street, he covered postal issues for the Congressional Research Service (CRS) for more than a decade.

Continue reading Alas, poor post office: Newsweek broods on the demise of the Postal Service

Student Debt Strike? Read This Texas Mom’s Powerful Words

by David Halperin, published April 6, 2015

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The 100-plus former students of for-profit Corinthian Colleges who have boldly asserted that they won’t pay back their student loans have garnered widespread attention and provided a powerful jolt to the debates about predatory colleges and our nation’s mounting student debt. A measure of the students’ impact is the meeting they were able to obtain last week to make their case to top officials of the U.S. Department of Education.

I hope these officials will listen — and act boldly themselves. The clock is running out on the Obama Administration’s efforts to curb the abuses of for-profit colleges, and while President Obama has shown that he clearly understands this scam and its harmful impact on students and taxpayers, other politicians, from John Boehner to Jeb Bush, have been all too ready to demonstrate their fealty to an industry that lives off taxpayer dollars and, to protect that flow of cash, floods Washington with campaign contributions.

There are wrongs to be righted. And they go way beyond Corinthian.

Continue reading Student Debt Strike? Read This Texas Mom’s Powerful Words

Stanford just made tuition free for families earning less than $125,000 per year

by Libby Nelson, published April 1, 2015 (h/t to Mish’s Global Economic Trend Analysis)

Families with incomes lower than $65,000 won’t have to contribute to room and board, either.

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  1. Stanford University will provide free tuition to parents of students who earn less than $125,000 per year — and if they make less than $65,000, they won’t have to contribute to room and board costs, either.
  2. Students are still expected to pay $5,000 toward college costs from summer earnings and working part-time while enrolled in college.
  3. The announcement is an expansion of Stanford’s old financial aid policy, which previously applied to students from families making less than $100,000 per year.
  4. Most universities can’t afford to offer such generous financial aid to their students. But they could draw a lesson from the plan’s simplicity.

How Stanford’s financial aid works

f a student’s parents make less than $125,000 per year, and if they have assets of less than $300,000, excluding retirement accounts, the parents won’t be expected to pay anything toward their children’s Stanford tuition. Families with incomes lower than $65,000 won’t have to contribute to room and board, either.

Students themselves will have to pay up to $5,000 each year from summer earnings, savings, and part-time work. There’s no rule that parents can’t cover their students’ required contribution.

Continue reading Stanford just made tuition free for families earning less than $125,000 per year

How Criminals Built Capitalism

by Clive Crook, published April 6, 2015

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Naval hero, fraudster, builder of capitalism? Photographer: Kim Traynor via Wikimedia Commons  

Whenever buyers and sellers get together, opportunities to fleece the other guy arise. The history of markets is, in part, the history of lying, cheating and stealing — and of the effort down the years to fight commercial crime.

In fact, the evolution of the modern economy owes more than you might think to these outlaws. That’s the theme of “Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance” by Ian Klaus. It’s a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism.

And what a cast of characters. Thomas Cochrane is my own favorite. (This is partly because he was the model for Jack Aubrey in Patrick O’Brian’s “Master and Commander” novels, which I’ve been reading and rereading for decades. Presumably Klaus isn’t a fan: He doesn’t note the connection.)

Cochrane was an aristocrat and naval hero. At the height of his fame in 1814 he was put on trial for fraud. An associate had spread false rumors of Napoleon’s death, driving up the price of British government debt, and allowing Cochrane to avoid heavy losses on his investments. Cochrane complained (with good reason, in fact) that the trial was rigged, but he was found guilty and sent to prison.

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Rahm Emanuel: Symbol of a Sick America

by Paul Buchheit, mirrored from Common Dreams

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Rahm Emanuel is Mayor 1%. He speaks a politician’s words to entice many Chicagoans to vote for him, but his actions are on behalf of his friends and colleagues in the business world. (Image: DonkeyHotey/flickr/cc)

America’s is a sickness of the mind, the unwavering belief by people in power that free-market capitalism will somehow work for everyone.

As with a virus that refuses to die, the effects are insidious, because the very rich have convinced themselves that they made it on their own, and that others have only themselves to blame if they are poor.

Rahm Emanuel is Mayor 1%. He speaks a politician’s words to entice many Chicagoans to vote for him, but his actions are on behalf of his friends and colleagues in the business world.

Snubbing the Needs of Average People 

Journalist Kari Lydersen, author of Mayor 1%: Rahm Emanuel and the Rise of Chicago’s 99%, tells the story of Helen Morley, a resident of the southwest side of Chicago and a regular patient at one of the mental health clinics closed by Mayor Emanuel. At Chicago’s 175th birthday party in 2012, Morley pleaded, “Mayor Emanuel, please don’t close our clinics! We’re going to die…There’s nowhere else to go.” Emanuel ignored her. According to Lydersen, Morley and others believed that the mayor “didn’t understand the role these specific clinics played in their lives and the difficulty they would have traveling to other locations.”

Continue reading Rahm Emanuel: Symbol of a Sick America