Safety Nets for the Rich

By BOB HERBERT, NY Times, October 20, 2009

The headlines that ran side by side on the front page of Saturday’s New York Times summed up, inadvertently, the terrible fix that we’ve allowed our country to fall into.

The lead headline, in the upper right-hand corner, said: “U.S. Deficit Rises to $1.4 Trillion; Biggest Since ’45.”

The headline next to it said: “Bailout Helps Revive Banks, And Bonuses.”

We’ve spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government — while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they’ve wanted.

And we still don’t seem to have learned the proper lessons. We’ve allowed so many people to fall into the terrible abyss of unemployment that no one — not the Obama administration, not the labor unions and most certainly no one in the Republican Party — has a clue about how to put them back to work.

Meanwhile, Wall Street is living it up. I’m amazed at how passive the population has remained in the face of this sustained outrage.

Even as tens of millions of working Americans are struggling to hang onto their jobs and keep a roof over their families’ heads, the wise guys of Wall Street are licking their fat-cat chops over yet another round of obscene multibillion-dollar bonuses — this time thanks to the bailout billions that were sent their way by Uncle Sam, with very little in the way of strings attached.

Nevermind that the economy remains deeply troubled. As The Times pointed out on Saturday, much of Wall Street “is minting money.”

Call it déjà voodoo. I wrote a column that ran three days before Christmas in 2007 that focused on the deeply disturbing disconnect between Wall Streeters harvesting a record crop of bonuses — billions on top of billions — while working families were having a very hard time making ends meet.

We would later learn that December 2007 was the very month that the Great Recession began. I wrote in that column: “Even as the Wall Streeters are high-fiving and ordering up record shipments of Champagne and caviar, the American dream is on life support.”

So we had an orgy of bonuses just as the recession was taking hold and now another orgy (with taxpayers as the enablers) that is nothing short of an arrogantly pointed finger in the eye of everyone who suffered, and continues to suffer, in this downturn.

Whether P.T. Barnum actually said it or not, there is a sucker born every minute. American taxpayers might want to take a look in the mirror. If the epithet fits...

We need to make some fundamental changes in the way we do things in this country. The gamblers and con artists of the financial sector, the very same clowns who did so much to bring the economy down in the first place, are howling self-righteously over the prospect of regulations aimed at curbing the worst aspects of their excessively risky behavior and preventing them from causing yet another economic meltdown.

We should be going even further. We’ve institutionalized the idea that there are firms that are too big to fail and, therefore, “we, the people” are obliged to see that they don’t — even if that means bankrupting the national treasury and undermining the living standards of ordinary people. What sense does that make?

If some company is too big to fail, then it’s too big to exist. Break it up.

Why should the general public have to constantly worry that a misstep by the high-wire artists at Goldman Sachs (to take the most obvious example) would put the entire economy in peril? These financial acrobats get the extraordinary benefits of their outlandish risk-taking — multimillion-dollar paychecks, homes the size of castles — but the public has to be there to absorb the worst of the pain when they take a terrible fall.

Enough! Goldman Sachs is thriving while the combined rates of unemployment and underemployment are creeping toward a mind-boggling 20 percent. Two-thirds of all the income gains from the years 2002 to 2007 — two-thirds! — went to the top 1 percent of Americans.

We cannot continue transferring the nation’s wealth to those at the apex of the economic pyramid — which is what we have been doing for the past three decades or so — while hoping that someday, maybe, the benefits of that transfer will trickle down in the form of steady employment and improved living standards for the many millions of families struggling to make it from day to day.

That money is never going to trickle down. It’s a fairy tale. We’re crazy to continue believing it.

Cantor To Uninsured Woman With Growing Tumors: Get ‘An Existing Government Program’ Or Find Charity

From Think Progress

At the Richmond Times-Dispatch “public square” forum yesterday, Rep. Eric Cantor (R-VA) fielded open questions from his constituents on the health reform debate for the first time this summer.

Patricia Churchill relayed a story about a close family member who recently lost a high paying job and her health insurance. Churchill told Cantor that her relative was dying of stomach tumors and needs an operation as soon as possible. Cantor responded by suggesting that Churchill’s relative should seek “existing government programs” or find charity.

Cantor, who serves as the chief whip for his party, has said that he cannot support a health reform bill with a public option. But despite his political opposition to government insurance programs, Cantor then emphasized to Churchill that every American should be given an “option” for health care, including a government program:

CHURCHILL: I have a very close relative, a woman in her early forties, who did have a wonderful, high-paying job, owns her own home and is a real contributing member of society. She lost her job. Just a couple of weeks ago, she found out that she has tumors in her belly and that she needs an operation. Her doctors told her that they are growing and that she needs to get this operation quickly. She has no insurance. [...]

CANTOR: First of all I guess I would ask what the situation is in terms of income eligibility and the existing programs that are out there. Because if we look at the uninsured that are out there right now, there is probably 23, 24% of the uninsured that is already eligible for an existing government program [...] Beyond that, I know that there are programs, there are charitable organizations, there are hospitals here who do provide charity care if there’s an instance of indigency and the individual is not eligible for existing programs that there can be some cooperative effort. No one in this country, given who we are, should be sitting without an option to be addressed.

In an interview with ThinkProgress after the event, Churchill explained that her relative, who needs help now, probably won’t qualify for a low-income government program like Medicaid and that there are very long waiting periods for charity programs. Asked about Cantor’s response to her question, Churchill said, “it was helpful in a sense, but of course nowhere near as helpful as having this healthcare reform bill passed so that we could know that she could definitely go and get taken care of.”

Today, Cantor called for “scrapping” President Obama’s proposed public option insurance program

Cantor to Uninsured Woman: Get a Government Option or Public Charity

The Numbers and Health Care Reform

NY Times Editorial, Sept. 22

Two authoritative surveys in recent days have underscored why all Americans have a stake in successful health care reform. Too many people are being hit with relentlessly rising premiums or are at serious risk of losing their coverage to allow the status quo to continue.

A survey by the Kaiser Family Foundation found that, once again, health insurance premiums rose faster last year than either wages or general inflation. A study by the Treasury Department found that almost half of all Americans below Medicare age have gone without insurance at some point over the last decade.

The Kaiser study, conducted jointly with the Health Research and Education Trust, an affiliate of the American Hospital Association, found that the average premium for a family policy offered at work rose above $13,300 in 2009 — up from $5,800 in 1999. The average employer paid more than $9,800 of that, while the workers contributed more than $3,500. The workers were also hit with larger co-payments and deductibles, while their policies often offered fewer benefits.

The premium increase this year was a relatively modest 5 percent, far below the 13 percent rate in two previous years. But that still far outpaced a 3.1 percent growth in wages and a small decrease in inflation. Absent meaningful reform, worse is sure to come.

Kaiser estimates that, if increases revert to the average of the last 10 years, health insurance premiums in 2019 will average a whopping $30,800, which it calls “a very scary number.” More immediately, a fifth of the employers surveyed said they are very likely to increase the amount that employees pay for premiums next year.

Meanwhile, the Treasury Department’s study highlighted how vulnerable Americans are to losing their coverage.

It found that, between 1997 and 2006, 48 percent of nonelderly Americans went without health insurance for at least one month, 41 percent lacked coverage for at least six months and 36 percent were uncovered for a year or more. That happened during a decade of strong economic growth. The number of uninsured is likely to be higher over the next decade, the study warns.

The argument for reform seems clear. Americans without insurance need guaranteed access to coverage. Those with insurance need a guarantee that they will not be dropped by their insurers and will be able to buy an affordable policy if their employers decide to drop coverage. And ways must be found to slow the rise in health care costs and ease the burden of paying for insurance.

A War Against Organizing

Note from Greetings: Does anyone notice a pattern between this story and the following one on China's overtaking of the U.S. as a superpower? Perhaps maintaining a viable middle class... AND our own manufacturing.

By Kate Bronfenbrenner, washingtonpost.com
Wednesday, June 3, 2009

Angel Warner, an employee at a Rite Aid distribution center, sat next to me recently in a congressional briefing room and described what happened when she and her fellow workers tried to form a union in their California workplace. She talked about the surveillance, constant threats and harassment they endured; how she and other workers were repeatedly taken aside and interrogated, one on one, about how they planned to vote; how two co-workers were fired; and how the rest lived in fear that any day they, too, might get a pink slip. The union filed numerous charges of unfair labor practices and eventually won the organizing election. But three years after the campaign began, Warner and her fellow Rite Aid workers still don't have a contract.

Like most U.S. companies, Rite Aid takes full advantage of current labor law to try to keep workers from exercising their full rights to organize and collectively bargain under the National Labor Relations Act. Far from an aberration, such behavior by U.S. companies during union organizing campaigns has become routine, and our nation's labor laws neither protect workers' rights nor provide disincentives for employers to stop disregarding those rights.

Late last month I published a study, "No Holds Barred," that was presented at the hearing at which Angel spoke. I looked at a random sample of more than 1,000 union elections over a five-year period to determine the parameters of employer behavior during union representation elections in the private sector and the limitations of the labor law system established to regulate that behavior.

In 34 percent of the elections I studied, companies fired employees for union activity. In 57 percent of elections, employers threatened to shut down all or part of their facilities, and in 47 percent, employers threatened to cut wages and benefits.

In 63 percent of campaigns, supervisors met with workers one on one and interrogated them about their union activity or whether they or others were supporting the union. In 54 percent of the elections, supervisors used these one-on-ones to threaten individual workers.

The bottom line is that there has been a steady decline of workers' rights in the past several decades. Colleagues and I have examined this issue in a series of studies over the past two decades. My new data show that employers are more than twice as likely as they were in the 1990s to use 10 or more tactics -- including threats and firings -- to thwart workers' organizing efforts, and they are more likely to use more punitive and aggressive tactics such as interrogations, discharges and threats of plant closings, while shifting away from softer tactics such as social events, promises of improvement and employee involvement programs.

For the vast majority of workers who want to join unions today, the right to organize and bargain collectively -- free from coercion, intimidation and retaliation -- is at best a promise indefinitely deferred. In election campaigns overseen by the National Labor Relations Board, it is now standard practice for companies to subject workers to threats, interrogation, harassment, surveillance and retaliation for union activity.

The failure of the system to defend workers' rights in a timely manner multiplies the obstacles workers face when seeking union representation, creating delays that favor employers. Employers appeal a high percentage of the cases to the NLRB, and in the most egregious instances, the employer can count on a final decision being held up by three to five years.

A key aspect of proposed labor law reform, the Employee Free Choice Act, concerns revisions to the rules surrounding arbitration of the first contract. My findings show that this provision may be among the most crucial of the legislation. Fifty-two percent of workers who form a union are still without a contract a year after they win an election, I found, and 37 percent remain without a contract two years after the election. For employers, labor law provides yet another means to indefinitely delay unionization.

It doesn't have to be this way. My survey data from the public sector portray an atmosphere in which workers may organize free from the kind of coercion, intimidation and retaliation that so taints the election process in the private sector. Most of the states in the public-sector sample have laws allowing workers to choose a union through card check or voluntary recognition. And more than a third of public-sector workers in the United States are members of unions.

Unless Congress passes serious labor law reform with real penalties, only a small fraction of the workers who seek union representation will succeed. If recent trends continue, there will no longer be a functioning legal mechanism to effectively protect the right of private-sector workers to organize and collectively bargain. Our country cannot afford to make workers defer their rights and aspirations for union representation any longer.

The writer is director of labor education research at Cornell University's School of Industrial and Labor Relations. Her paper "No Holds Barred -- The Intensification of Employer Opposition to Organizing" was published last month by the nonprofit Economic Policy Institute.

Beijing's Favorite Capitalists

By Harold Meyerson, Washingtonpost.com
Wednesday, June 3, 2009

Marx railed against "the idiocy of rural life," by which he meant its isolation and its lack of social differentiation, but 20 years ago, it was that very "idiocy" on which the Chinese Communist Party depended to maintain its hold on power. Once Deng Xiaoping decided to suppress the demonstrators in Tiananmen Square by force, the challenge for the Chinese leadership was to find army units that wouldn't shy from shooting unarmed Chinese students.

Deng's henchmen quickly despaired of finding such soldiers in the cities; they had been contaminated by too much contact with the very kinds of people they'd be called upon to kill. The military units that rolled into Beijing 20 years ago today came chiefly from the sticks. Isolated by geography and indoctrination from the liberalism flowing through Chinese cities and packed into Tiananmen Square, they were the perfect shock troops for Deng's murderous reassertion of authoritarian power.

Two decades later, however, the troops who pulled the triggers have reason to wonder who won and who lost in the class-and-culture war in which Tiananmen was but the bloodiest battle. Today, the Communist Party has proven itself, in all but one particular, a friend to the urbanites and professionals who now prosper in China's cities -- socioeconomically, the very kinds of people it gunned down in Tiananmen Square. All it asks of them in return is that they not actively seek democratic rights. For their part, the hundreds of millions of beneficiaries of China's new prosperity have kept up their end of that bargain. Knowing that they'd face the brute wrath of the party and state if they did, they've made an understandable decision.

In the countryside, where hundreds of millions of Chinese still reside, the benefits of the nation's economic miracle are far harder to detect. For many, the backbreaking drudgery of peasant life persists as it has for centuries. Some Sinologists believe that one reason the urban Chinese haven't demanded more rights is their fear that in a democratic China, they'd be outvoted by a peasantry that would demand a more equitable distribution of the nation's wealth.

According to the nostrums of Reagan Age America, the current Chinese system -- in equal measure capitalist and authoritarian -- cannot actually exist. Capitalism spread democracy, we were told ad nauseam by a steady stream of conservative hacks, free-trade apologists, government officials and American companies doing business in China. Given enough Starbuckses and McDonald's, provided with sufficient consumer choice, China would surely become a democracy.

And yet, it hasn't. And this week, Treasury Secretary Timothy Geithner has traveled there to assure its government that America won't permit China's massive investment in our government's notes to diminish in value, even if that means we have to cut back on needed public programs.

In explaining China's rise and America's decline, historians may well note that capitalism -- American capitalism, anyway -- far from spreading democracy, actually has played a key role in transforming China into an authoritarian superpower. The transfer of manufacturing from the United States to China -- driven by the rise of mega-retailers such as Wal-Mart that have been able to enforce a regime of low wages all along their global supply chains -- has diminished our middle class and expanded theirs. American companies such as Wal-Mart have not been deterred in the slightest by China's authoritarian practices; indeed, before China enacted a law that infinitesimally increased workers' rights last year, the American chambers of commerce in China joined with communist hard-liners in opposing the statute.

The attraction of authoritarian regimes to America's more authoritarian business executives is long established, if seldom noted. Henry Ford, who routinely spied on and abused his employees until the United Auto Workers came along, built and owned factories in Stalin's Soviet Union. Wal-Mart, which used to lock its night-shift stock clerks and janitors inside a number of its stores until the morning managers arrived, prefers production in Guangdong to manufacturing in the Midwest. Indeed, the director of purchasing for Wal-Mart is based in China.

As historian Nelson Lichtenstein and others have documented, Wal-Mart inspires in its managers an almost fanatical allegiance to the company's cause. In Wal-Mart world, the provincialism (if not "idiocy") of rural life is fused with a brilliance in the art of low-cost, low-wage logistics to create a company that is both authoritarian in its inner workings and a friend of authoritarian regimes abroad. The butchers of Beijing could not have found any more compatible capitalists.

meyersonh@washpost.com

Smothering the American dream

By BOB HERBERT
SYNDICATED COLUMNIST

Working families were in deep trouble long before this mega-recession hit. But too many of the public officials who should have been looking out for the middle class and the poor were part of the reckless and shockingly shortsighted alliance of conservatives and corporate leaders that rigged the economy in favor of the rich and ultimately brought it down completely.

As Jared Bernstein, now the chief economic adviser to Vice President Joe Biden, wrote in the preface to his book, "Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)":

"Economics has been hijacked by the rich and powerful, and it has been forged into a tool that is being used against the rest of us."

Working people were not just abandoned by big business and their ideological henchmen in government, they were exploited and humiliated. They were denied the productivity gains that should have rightfully accrued to them. They were treated ruthlessly whenever they tried to organize. They were never reasonably protected against the savage dislocations caused by revolutions in technology and global trade.

Working people were told that all of this was good for them, and whether out of ignorance or fear or prejudice or, as my grandfather might have said, damned foolishness, many bought into it.

They signed onto tax policies that worked like a three-card monte game. And they were sold a snake oil concoction called "trickle down" that so addled their brains that they thought it was a wonderful idea to hand over their share of the nation's wealth to those who were already fabulously rich.

America used to be better than this.

The seeds of today's disaster were sown some 30 years ago. Looking at income patterns during that period, my former colleague at The New York Times, David Cay Johnston, noted that from 1980 (the year Ronald Reagan was elected) to 2005, the national economy, adjusted for inflation, more than doubled. (Because of population growth, the actual increase per capita was about 66 percent.)

But the average income for the vast majority of Americans actually declined during those years. The standard of living for the average family improved not because incomes grew but because women entered the workplace in droves.

As hard as it may be to believe, the peak income year for the bottom 90 percent of Americans was way back in 1973, when the average income per taxpayer, adjusted for inflation, was $33,000. That was nearly $4,000 higher, Johnston pointed out, than in 2005.

Men have done particularly poorly. Men who are now in their 30s -- the prime age for raising families -- earn less money than members of their fathers' generation did at the same age.

It may seem like ancient history, but in the first few decades following World War II, the United States, despite many serious flaws, established the model of a highly productive society that shared its prosperity widely and made investments that were geared toward a more prosperous, more fulfilling future.

The American dream was alive and well and seemingly unassailable. But somehow, following the oil shocks, the hyperinflation and other traumas of the 1970s, Americans allowed the right-wingers to get a toehold -- and they began the serious work of smothering the dream.

Ronald Reagan saw Medicare as a giant step on the road to socialism. Newt Gingrich, apparently referring to the original fee-for-service version of Medicare, which was cherished by the elderly, cracked, "We don't get rid of it in Round One because we don't think it's politically smart."

The right-wingers were crafty: You smother the dream by crippling the programs that support it, by starving the government of money to pay for them, by funneling the government's revenues to the rich through tax cuts and other benefits, by looting the government the way gangsters loot legitimate businesses and then pleading poverty when it comes time to fund the services required by the people.

The anti-tax fanatic Grover Norquist summed the matter up nicely when he famously said, "Our goal is to shrink the government to the size where you can drown it in a bathtub." Only they didn't shrink the government, they enlarged it and turned its bounty over to the rich.

Now, with the economy in free fall and likely to get worse, Americans -- despite their suffering -- have an opportunity to reshape the society, and then to move it in a fairer, smarter and ultimately more productive direction.

That is the only way to revive the dream, but it will take a long time and require great courage and sacrifice.

The right-wingers do not want that to happen, which is why they are rooting so hard for President Barack Obama's initiatives to fail. They like the direction that the country took over the past 30 years. They'd love to do it all again.

Bob Herbert is a columnist with The New York Times. Copyright 2009 New York Times News Service.

Hope Amid the Gloom

By BOB HERBERT

Is the end of the war in sight?

I don’t mean Iraq. I’m talking about the war against working people in the U.S. that has taken such a vicious economic toll over the past three decades.

Even as Americans by the thousands sign up for jobless benefits in this horrendous holiday season, or line up to declare bankruptcy, or stand sorrowfully aside as their homes are foreclosed upon, there are some slender reasons to hope.

On Friday, George W. Bush, in the slapstick final weeks of his disastrous presidency, grudgingly announced that, yes, emergency loans would be made available to prevent the collapse of the U.S. auto industry. He looked like a boy who had been forced to eat his spinach, or drink his castor oil.

But the economy is in such an awful state that even the most backward administration of our lifetime recognized that risking the chain reaction of a complete auto industry meltdown was not an option. (The Bush deal is unfairly onerous to auto workers, but the loans will serve as a bridge to the Obama era, when, presumably, a more equitable arrangement could be worked out.)

Mr. Bush’s announcement came a day after it was learned that President-elect Obama had chosen Representative Hilda Solis of California, a fierce advocate of workers, to be his labor secretary. The Obama administration also is committed to moving quickly on an economic stimulus package that could reach $1 trillion over two years.

These are developments that portend a radically different environment for the nation’s workers. From Ronald Reagan’s voodoo economics to Henry Paulson’s $700 billion Troubled Asset Relief Program, we’ve put the mighty resources of the national government overwhelmingly on the side of those who were already rich and powerful.

Ordinary workers have suffered. It took years to get a lousy little boost in the minimum wage for the working poor. Attempts to expand health insurance coverage were fought almost to a standstill. Guaranteed pensions vanished. And the maniacs who set fire to the economy with their incendiary financial instruments (yet another form of voodoo) were hot to privatize Social Security.

As Andy Stern, president of the huge Service Employees International Union, told me on Friday: “We’ve had a 25-year experience with market-worshipping, deregulating, privatizing, trickle-down policies, and it has ended us up with the greatest economy on earth staggering, and with the greatest amount of inequality since the Great Depression.”

The contempt for workers over this long period has hardly been hidden. Until Mr. Bush was forced by circumstances to tap the TARP program for the auto industry loans (small potatoes compared with the gargantuan Wall Street bailouts), the administration had gone out of its way to keep the program’s hundreds of billions of dollars reserved for the elites of the financial services industry and their associates.

These elites, of course, were the geniuses who ruined the most powerful economy on earth. When Citigroup went into yet another swoon last month, the rush to rescue it was breathtaking. Posses don’t come more elegant: the outgoing treasury secretary, Hank Paulson; the incoming treasury secretary (and president of the Federal Reserve Bank of New York), Timothy Geithner; and a former treasury secretary (not to mention Citigroup board member), Robert Rubin.

They materialized magnificently, armed with hundreds of billions in taxpayer bailout cash.

Leo Gerard, president of the steelworkers union, summed up the government’s attitude nicely when he said: “Washington will bail out those who shower before work, but not those who shower afterwards.”

Working people have been treated like enemies, a class to be preyed upon. Labor unions were ferociously attacked. Jobs were shipped overseas by the millions. People were hired as temps or consultants so benefits could be denied.

All of this may finally be changing. It remains to be seen how strong a voice Ms. Solis will have in the Obama administration, but she is pro-worker to her core, a politician who actually knows what it’s like to walk a picket line.

And there have been other promising developments. More than 200 laid-off workers staged a successful six-day sit-in at a factory in Chicago this month, demanding and eventually getting severance pay and benefits that they were owed by law.

A more substantial victory occurred in Tar Heel, N.C., last week when workers, after a brutal 15-year struggle, succeeded in organizing the notorious Smithfield Packing slaughterhouse, the largest hog-killing and processing plant in the world.

These are shaky steps in the overall scheme of things, to be sure. But at long last, they are steps in the right direction.

Gail Collins is off today.