Wal-Mart: 50 Years of Gutting America’s Middle Class July 8, 2012Posted by rogerhollander in Economic Crisis.
Tags: big-box, economy, labor, middle class, retail business, roger hollander, sam walton, stacy mitchell, walmart
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Walmart’s explosive growth has gutted two key pillars of the American middle class: small businesses and well-paid manufacturing jobs
Movie poster detail from the documentary, ‘Walmart: The High Cost of Low Price’.
Sam Walton opened the first Walmart store in Rogers, Arkansas, 50 years ago this month. Sprawled along a major thoroughfare outside the city’s downtown, that inaugural store embodied many of the hallmarks that have since come to define the Walmart way of doing business. Walton scoured the country for the cheapest merchandise and deftly exploited a loophole in federal law to pay his mostly female workforce less than minimum wage.
That relentless focus on squeezing workers and suppliers for every advantage has paid off since July 1962. Walmart is now the second-largest corporation on the planet. It took in almost half-a-trillion dollars last year at more than 10,000 stores worldwide.
Walmart now captures one of every four dollars Americans spend on groceries. Its stores are so plentiful that it’s easy to imagine that the retailer has long since reached the upper limit of its growth potential. It hasn’t. Walmart has opened over 1,100 new supercenters since 2005 and expanded its U.S. sales by 35 percent. It aims to keep on growing that fast. With an eye to infiltrating urban areas, Walmart recently introduced smaller “neighborhood markets” and “express” stores.
Whatever we may have saved shopping at Walmart, we’ve more than paid for it in diminished opportunities and declining income.
While the big-box business model Sam Walton pioneered half a century ago has been great for Walmart, it hasn’t been so great for the U.S. economy.
Walmart’s explosive growth has gutted two key pillars of the American middle class: small businesses and well-paying manufacturing jobs.
Between 2001 and 2007, some 40,000 U.S. factories closed, eliminating millions of jobs. While Walmart’s ceaseless search for lower costs wasn’t the only factor that drove production overseas, it was a major one. During these six years, Walmart’s imports from China tripled in value from $9 billion to $27 billion.
Small, family-owned retail businesses likewise closed in droves as Walmart grew. Between 1992 and 2007, the number of independent retailers fell by over 60,000, according to the U.S. Census.
Their demise triggered a cascade of losses elsewhere. As communities lost their local retailers, there was less demand for services like accounting and graphic design, less advertising revenue for local media outlets, and fewer accounts for local banks. As Walmart moved into communities, the volume of money circulating from business to business declined. More dollars flowed into Walmart’s tills and out of the local economy.
In exchange for the many middle-income jobs Walmart eliminated, all we got in return were low-wage jobs for the workers who now toil in its stores. To get by, many Walmart employees have no choice but to rely on food stamps and other public assistance.
Walmart’s history is the story of what has gone wrong in the American economy. Wages have stagnated. The middle class has shrunk. The ranks of the working poor have swelled. Whatever we may have saved shopping at Walmart, we’ve more than paid for it in diminished opportunities and declining income.
And the worse things get, the more alluring Walmart’s siren call of low prices becomes. While the Ford Motor Co. once profited by creating a workforce that could afford to buy its cars, today Walmart profits by ensuring that Americans cannot afford to shop anywhere else. The average family of four now spends over $4,000 a year at Walmart.
Such market concentration is unprecedented in U.S. history, as is the concentration of wealth it has engendered. Sam Walton’s heirs own about half of Walmart’s stock and have a net worth equal to the combined assets of the bottom one-third of Americans — about 100 million people. This year alone, the Waltons will pocket $2.7 billion in dividends from their Walmart holdings.
They are among the few Americans who have reason to celebrate Walmart’s 50th birthday. As for the rest of us, the milestone offers a good moment to reflect on the company’s business model and where it might lead us if we allow Walmart’s growth to continue full-steam for another 50 years.
Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance, which challenges the wisdom of economic consolidation and works to advance policies that build strong local economies. Stacy directs initiatives on community banking and independent retail. She is the author of Big-Box Swindle and produces a popular monthly bulletin called the Hometown Advantage.
Would We Be Better Off If John McCain Were President? August 1, 2011Posted by rogerhollander in Barack Obama, John McCain.
Tags: 2008 election, democratic party, domestic policy, Economic Crisis, economy, foreign policy, John McCain, obama administration, obama's wars, politics, presidency, Republican Party, roger hollander, war
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corporations behind them. A President McCain may have at least triggered a true
Democrats were united on one issue in the 2008 presidential election: the
absolute disaster that a John McCain victory would have produced.
And they were right. McCain as president would clearly have produced a long
string of catastrophes: He would probably have approved a failed troop surge in
Afghanistan, engaged in worldwide extrajudicial assassination, destabilized nuclear-armed
Pakistan, failed to bring Israel’s Benjamin Netanyahu to the negotiating table, expanded prosecution of whistle-blowers, sought to
expand executive branch power, failed to close Guantanamo, failed to act on climate change, pushed both nuclear energy and opened new
areas to domestic oil drilling, failed to reform the financial sector enough to prevent another financial catastrophe, supported an extension of the
Bush tax cuts for the rich, presided over a growing divide between rich and poor, and failed to lower the jobless rate.
Nothing reveals the true state of American politics today more than the fact
that Democratic President Barack Obama has undertaken all of these actions, and
even more significantly, left the Democratic Party far weaker than it would have
been had McCain been elected. Few issues are more important than seeing behind
the screen of a myth-making mass media, and understanding what this demonstrates
about how power in America really works—and what needs to be done to change
First and foremost, McCain would have undoubtedly selected as treasury
secretary an individual nominated by Wall Street—which has a stranglehold on the
economy due to its enjoying 30 to 40 percent of all corporate profits. If he
didn’t select Tim Geithner, a reliable servant of financial interests whose
nomination might have allowed McCain to trumpet his “maverick” credentials,
whoever he did select would clearly have also moved to bail out the financial
institutions and allow them to water down needed financial reforms.
Ditto for the head of his National Economic Council. Although appointing
Larry Summers might have been a bit of a stretch, despite his yeoman work in destroying financial regulation—thus enriching
his old boss Robert Rubin and helping cause the Crash of 2008—McCain could
easily have found a Jack Kemp-like Republican “supply-sider” who would have
duplicated Summers’ signal achievement of expanding the deficit to the highest
levels since 1950 (though perhaps with a slightly higher percentage of tax cuts
than the Obama stimulus). The economy would have continued to sputter along,
with growth rates and joblessness levels little different from today’s, and
possibly even worse.
But McCain’s election would have produced a major political difference: It
would have increased Democratic clout in the House and Senate. First off, there
would have been no Tea Party, no “don’t raise the debt limit unless we gut the
poor,” no “death panel” myth, no “Obama Youth” nonsense. Although there would
have been plenty of criticism from the likes of Rush Limbaugh, the fact remains
that McCain, a Republican war hero, would never have excited the Tea Party
animus as did the “Secret-Muslim Kenyan-Born Big-Government Fascist White-Hating
Antichrist” Obama. Glenn Beck would have remained a crazed nonentity and been
dropped far sooner by Fox News than he was. And Vice President Sarah Palin,
despised by both McCain and his tough White House staff, would have been
deprived of any real power and likely tightly muzzled against criticizing
McCain’s relatively centrist (compared to her positions) policies.
Voters would almost certainly have increased Democratic control of the House
and Senate in 2010, since the Republicans would have been seen as responsible
for the weak U.S. economy. Democrats might even have achieved the long-desired
60 percent majority needed to kill the filibuster in one or both houses.
Democratic control of the House and Senate fostered by disastrous Republican
policies would have severely limited McCain’s ability (as occurred with George
W. Bush) to weaken Social Security, Medicare, Medicaid, unemployment insurance
and other programs that aid those most in need. (Yes, domestic spending might
have been cut less if McCain had won.)
Had McCain proposed “health insurance reform,” because health insurers saw a
golden opportunity to increase their customer base and profits while retaining
their control, the Democrats would at least have passed a “public option” as
their price for support. And possible Health and Human Services Secretary Newt
Gingrich—placed in that position in a clever move to keep him away from economic
or foreign policy—might have even accelerated needed improvements in
computerizing patient records and other high-tech measures needed to cut health
care costs, actions that he touted in his book on the subject.
In foreign and military policy, McCain would surely have approved Gen. David
Petraeus’ “Afghanistan surge,” possibly increasing the number of U.S. troops
there by 40,000 instead of 33,500. But Gen. Stanley McChrystal would probably
have remained at the helm in Afghanistan, since he and his aides would never
have disparaged McCain to Rolling Stone. McChrystal
might have continued a “counterinsurgency” strategy, observing relatively strict
rules of engagement, unlike his successor, Petraeus, who tore up those rules and
has instead unleashed a brutal cycle of “counterterror” violence in southern
Afghanistan. (Yes, far fewer Afghan civilians might have died had McCain
McCain, like Obama, would probably have destabilized nuclear-armed Pakistan
and strengthened militant forces there by expanding drone strikes and pushing
the Pakistani military to launch disastrous offensives into tribal areas. And he
would have given as much support as has Obama to Israeli Prime Minister
Netanyahu’s opposition to a peace deal because he believes that present policies
of strangling Gaza, annexing East Jerusalem, expanding West Bank settlements and
walling off Palestinians are succeeding. (It is possible that a McCain secretary
of state might not have incited violence against unarmed American citizens—as
did Hillary Clinton when she stated that Israelis, who
killed nine unarmed members of the 2010 Gaza flotilla, “have the right to defend
themselves” against letter-carrying 2011 Gaza flotilla members.)
While McCain would have wanted to keep 100,000 U.S. troops in Afghanistan
until 2014, he might have been forced to reduce their numbers, as has Obama. For
McCain would have faced a strengthened and emboldened Democratic Congress, which
might have seen electoral gold in responding to polls indicating the public had
turned against the Afghanistan War—as well as a far stronger peace movement
united against Republicans instead of divided as it now is between the desires
for peace and seeing an Obama win in 2012.
Most significantly, if McCain had won, not only would Democrats be looking at
a Democratic landslide in the 2012 presidential race, but the newly elected
Democratic president in 2013 might enjoy both a 60 percent or higher majority in
both houses and a clear public understanding that it was Republican policies
that had sunk the economy. He or she might thus be far better positioned to
enact substantive reforms than was Obama in 2008, or will Obama even if he is
re-elected in 2012.
Franklin Delano Roosevelt took office in March 1933 after a 42-month
Depression blamed entirely on the Republicans. Although he had campaigned as a
moderate, objective conditions both convinced him of the need for fundamental
change—creating a safety net including Social Security, strict financial
regulation, programs to create jobs, etc.—and gave him the congressional
pluralities he needed to achieve them. A Democratic president taking office in
2013 after 12 years of disastrous Republican economic misrule might well have
been likewise pushed and enabled by objective events to create substantive
Furious debate rages among Obama’s Democratic critics today on why he has
largely governed on the big issues as John McCain would have done. Some believe
he retains his principles but has been forced to compromise by political
realities. Others are convinced he was a manipulative politico who lacked any
real convictions in the first place.
But there is a far more likely—and disturbing—possibility. Based on those who
knew him and his books, there is little reason to doubt that the
pre-presidential Obama was a college professor-type who shared the belief system
of his liberalish set: that ending climate change and reducing nuclear weapons
were worthy goals, that it was important to “reset” U.S. policy toward the
Muslim world, that torture and assassination were bad things, that
Canadian-style single-payer health insurance made sense, that whistle-blowing
and freedom of the press should be protected, Congress should have a say in
whether the executive puts the nation into war, and that government should
support community development and empowering poor communities.
Upon taking office, however, Obama—whatever his belief system at that
point—found that he was unable to accomplish these goals for one basic reason:
The president of the United States is far less powerful than media myth
portrays. Domestic power really is in the hands of economic elites and their
lobbyists, and foreign policy really is controlled by U.S. executive branch
national security managers and a “military-industrial complex.” If a president
supports their interests, as did Bush in invading Iraq, he or she can do a lot
of damage. But, absent a crisis, a president who opposes these elites—as Obama
discovered when he tried in the fall of 2009 to get the military to offer him an
alternative to an Afghanistan troop surge—is relatively powerless.
Whether a Ronald Reagan expanding government and running large deficits in
the 1980s despite his stated belief that government was the problem, or a Bill
Clinton imposing a neoliberal regime impoverishing hundreds of millions in the
Third World in the 1990s despite his rhetorical support for helping the poor,
anyone who becomes president has little choice but to serve the institutional
interests of a profoundly amoral and violent executive branch and the
corporations behind them.
The U.S. executive branch functions to promote its version of U.S. economic
and geopolitical interests abroad—including engaging in massive violence which
has killed, wounded or made homeless more than 21 million people in Indochina
and Iraq combined. And it functions at home to maximize the interests of the
corporations and individuals who fund political campaigns—today supported by a
U.S. Supreme Court whose politicized decision to expand corporations’ control
over elections has made a mockery of the very notion of “checks and balances.”
The executive branch’s power extends to the mass media, most of whose
journalists are dependent on executive information leaks and paychecks from
increasingly concentrated media corporations. They thus serve executive power
far more than they challenge it.
No one more demonstrates what happens to a human being who joins the
executive branch than Hillary Clinton, a former peace movement supporter whose
1969 Wellesley commencement address stated that “our prevailing, acquisitive, and
competitive corporate life is not the way of life for us. We’re searching for
more immediate, ecstatic and penetrating modes of living”; praised “a lot of the
New Left [that] harkens back to a lot of the old virtues”; and decried “the
hollow men of anger and bitterness, the bountiful ladies of righteous
degradation, all must be left to a bygone age.” Clinton the individual served on
the board of the Children’s Defense Fund, promoted helping the poor at home and
Third World women abroad and at one point was even often compared to Eleanor
Although her transformation began once she decided to try to become
president, it became most visible after she joined the executive branch as
secretary of state. The former peace advocate has now become a major advocate
for war-making, a scourge of whistle-blowers and a facilitator of Israeli
But while rich and powerful elites have always ruled in America, their power
has periodically been successfully challenged at times of national crisis: the
Civil War, the Progressive era, the Depression. America is clearly headed for
such a moment in the coming decade, as its economy continues to decline due to a
parasitic Wall Street, mounting debt, strong economic competitors, overspending
on the military, waste in the private health care sector and elites declaring
class war against a majority of Americans.
Naomi Klein has written penetratingly of Disaster Capitalism, which
occurs when financial and corporate elites benefit from the economic crises they
cause. But the reverse has also often proved true: a kind of “Disaster
Progressivism” often occurs when self-interested elites cause so much suffering
that policies favoring democracy and the majority become possible.
The United States will clearly face such a crisis in the coming decade. It is
understandable that many Americans will want to focus on re-electing Obama in
2012. Although Democrats and the country would have been better off if McCain
had won in 2008, this is not necessarily true if a Republican wins in
2012—especially if the GOP nominates Sarah Palin or Michele Bachmann.
But however important the 2012 election, far more energy needs to be devoted
to building mass organizations that challenge elite power and develop the kinds
of policies—including massive investment in a “clean energy economic
revolution,” a carbon tax and other tough measures to stave off climate change,
regulating and breaking up the financial sector, cost-effective entitlements
like single-payer health insurance, and public financing of primary and general
elections—which alone can save America and its democracy in the painful decade
the New York Times, the Washington Post, the New Republic, and other
publications. He is the author of several books on the Indochina War.
Making the US Economy “Scream” June 10, 2011Posted by rogerhollander in Democracy, Right Wing.
Tags: Allende, Chile, cia, congress, democracy, economy, Obama, Republican Party, republicans, right wing, robert parry, roger hollander
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Roger’s note: this article is interesting because of its creative association of the current tactics of the neo-fascist right in the US with the tactics used by the US government to destabilize foreign governments that were attempting social change in a way considered to be a threat to US geopolitical interests (and setting a bad example). One wonders why the author failed to mention the most radical example of this in recent history, the not so secret assault on the Sandinista government in Nicaragua via support for the bloody Contras. Nevertheless, it is a most perceptive comparison. Sadly, however, the article soon descends into an analysis of party politics in the US that misses the point by a mile. It fails to see the Democratic Party and President Obama’s complicity and implies that control by the Democratic Party of the branches of government will somehow right the situation, as if it were its mostly impotent liberal wing that really guides the Democratic Party. Obama’s escalation of the wars in Afghanistan and Pakistan and the invasion of Libya, his cabinet choices in the areas of economics and defense (war), Secretary Clinton’s aggressive neo Monroe Doctrine approach to Latin America, the president’s failure to come out in support of labor in Wisconsin … these are just some of the areas where the president and the Party have shown themselves to be genuine Republicrats. The article suggests that some of Obama’s supporters have become disillusioned because of how he has been stymied by Republican obstruction. I argue that Obama himself has given enough reason for such disillusionment. If one is to take seriously the stated thesis of the article about the domestic tactics of the Republican Party, with the obeisance and support of the mainstream media, then it is clear that we are in serious trouble, that a comparison with Nazi tactics in Weimar Germany need to be looked at; and that simply electing Democrats to Congress and the presidency is by far not the solution. And being attacked by the radical Republican right does not confer political sainthood. I remember when the John Birch Society accused Eisenhower of being a Communist.
Modern Republicans have a simple approach to politics when they are not in the White House: Make America as ungovernable as possible by using almost any means available, from challenging the legitimacy of opponents to spreading lies and disinformation to sabotaging the economy.
Over the past four decades or so, the Republicans have simply not played by the old give-and-take rules of politics. Indeed, if one were to step back and assess this Republican approach, what you would see is something akin to how the CIA has destabilized target countries, especially those that seek to organize themselves in defiance of capitalist orthodoxy.
To stop this spread of “socialism,” nearly anything goes. Take, for example, Chile in the early 1970s when socialist President Salvador Allende won an election and took steps aimed at improving the conditions of the country’s poor.
Under the direction of President Richard Nixon and Secretary of State Henry Kissinger, the CIA was dispatched to engage in psychological warfare against Allende’s government and to make the Chilean economy “scream.”
U.S. intelligence agencies secretly sponsored Chilean news outlets, like the influential newspaper El Mercurio, and supported “populist” uprisings of truckers and housewives. On the economic front, the CIA coordinated efforts to starve the Chilean government of funds and to drive unemployment higher.
Worsening joblessness could then be spun by the CIA-financed news outlets as proof that Allende’s policies didn’t work and that the only choice for Chile was to scrap its social programs. When Allende compromised with the Right, that had the additional benefit of causing friction between him and some of his supporters who wanted even more radical change.
As Chile became increasingly ungovernable, the stage was set for the violent overthrow of Allende, the installation of a rightist dictatorship, and the imposition of “free-market” economics that directed more wealth and power to Chile’s rich and their American corporate backers.
Though the Allende case in Chile is perhaps the best known example of this intelligence strategy (because it was investigated by a Senate committee in the mid-1970s), the CIA has employed this approach frequently around the world. Sometimes the target government is removed without violence, although other times a bloody coup d’etat has been part of the mix.
Home to Roost
So, it is perhaps fitting that a comparable approach to politics would eventually come home to roost in the United States, even to the point that some of the propaganda funding comes from outside sources (think of Rev. Sun Myung Moon’s Washington Times and Australian media mogul Rupert Murdoch’s News Corp.)
Obviously, given the wealth of the American elites, the relative proportion of the propaganda funding is derived more domestically in the United States than it would be in a place like Chile (or some other unfortunate Third World country that has gotten on Washington’s bad side).
But the concept remains the same: Control as much as possible what the population gets to see and hear; create chaos for your opponent’s government, economically and politically; blame if for the mess; and establish in the minds of the voters that they’re only way out is to submit, that the pain will stop once your side is back in power.
Today’s Republicans have fully embraced this concept of political warfare, whereas the Democrats generally have tried to play by the old rules, acquiescing when Republicans are in office with the goal of “making government work,” even if the Republicans are setting the agenda.
Unlike the Democrats and the Left, the Republicans and the Right have prepared themselves for this battle, almost as if they are following a CIA training manual. They have invested tens of billions of dollars in a propaganda infrastructure that operates 24/7, year-round, to spot and exploit missteps by political enemies.
This vertically integrated media machine allows useful information to move quickly from a right-wing blog to talk radio to Fox News to the Wall Street Journal to conservative magazines and book publishing. Right-wing propagandists are well-trained and well-funded so they can be deployed to all manner of public outlets to hammer home the talking points.
When a Democrat somehow does manage to get into the White House, Republicans in Congress (and even in the Courts) are ready to do their part in the destabilization campaign. Rather than grant traditional “honeymoon” periods of cooperation with the president’s early policies, the battle lines are drawn immediately.
In late 1992, for instance, Bill Clinton complained that his “honeymoon” didn’t even last through the transition, the two-plus months before a new president takes office. He found himself facing especially harsh hazing from the Washington press corps, as the mainstream media – seeking to shed its “liberal” label and goaded by the right-wing media – tried to demonstrate that it would be tougher on a Democrat than any Republican.
The mainstream press hyped minor “scandals” about Clinton’s Whitewater real estate investment and Travel-gate, a flap about some routine firings at the White House travel office. Meanwhile, the Right’s rapidly growing media was spreading false stories implicating Clinton in the death of White House aide Vince Foster and other “mysterious deaths.”
Republicans in Congress did all they could to feed the press hysteria, holding hearings and demanding that special prosecutors be appointed. When the Clinton administration relented, the choice of prosecutors was handed over to right-wing Republican Appeals Court Judge David Sentelle, who consciously picked political enemies of Clinton to oversee zealous investigations.
The use of scandal-mongering to destabilize the Clinton administration finally peaked in late 1998 and early 1999 when the Republican-controlled House voted impeachment and Clinton had to endure (but survive) a humiliating trial in the Senate.
The Republican strategy, however, continued into Campaign 2000 with Vice President Al Gore facing attacks on his character and integrity. Gore was falsely painted as a delusional braggart, as both right-wing and mainstream media outlets freely misquoted him and subjected him to ridicule (while simultaneously bowing and scraping before Republican candidate George W. Bush).
When Gore managed to win the national popular vote anyway – and would have carried the key state of Florida if all legally cast ballots were counted – the Republicans and the Right rose up in fury demanding that the Florida count be stopped before Bush’s tiny lead completely disappeared. Starting a minor riot in Miami, the Republicans showed how far they would go to claim the White House again.
Five Republican partisans on the U.S. Supreme Court – wanting to ensure that the new president would keep their side in control of the courts and recognizing that their party was prepared to spread disorder if Gore prevailed – stopped the counting of votes and made Bush the “winner.”
Despite this partisan ruling, Gore and the Democrats stepped back from the political confrontation. The right-wing press cheered and gloated, while the mainstream news media urged the people to accept Bush as “legitimate” for the good of the country.
For most of Bush’s disastrous presidency, this dynamic remained the same. Though barely able to complete a coherent sentence, Bush was treated with great deference, even when he failed to protect the country from the 9/11 attacks and led the nation into an unprovoked war with Iraq. There were no combative investigations of Bush like those that surrounded Clinton.
Even at the end of Bush’s presidency – when his policies of deregulation, tax cuts for the rich and massive budget deficits combined to create the biggest financial crisis since the Great Depression – the prevailing message from the Establishment was that it was unfair to lay too much blame on Bush.
Shortly after Barack Obama took office in 2009, a Republican/right-wing talking point was to complain when anyone took note of the mess that Bush had left behind: “There you go again, blaming Bush.”
Immediately, too, the Republicans and the Right set to work demonizing and destroying Obama’s presidency. Instead of allowing the Democrats to enact legislation aimed at addressing the financial and economic crisis, the Senate Republicans launched filibuster after filibuster.
When Obama and the Democrats did push through emergency legislation, such as the $787 billion stimulus package, they had to water it down to reach the 60-vote super-majority. The Republicans and the Right then quickly laid the blame for high unemployment on the “failed” stimulus.
There also were waves of propaganda pounding Obama’s legitimacy. The Right’s news media pressed bogus accusations that Obama had been born in Kenya and thus was not constitutionally eligible to be president. He was denounced as a socialist, a Muslim, a fascist, an enemy of Israel, and pretty much any other charge that might hit some American hot button.
When Obama welcomed American students back to school in 2009, the Right organized against his simple message – urging young people to work hard – as if it were some form of totalitarian mind control. His attempt to address the growing crisis in American health care was denounced as taking away freedoms and imposing “death panels.”
Soon, billionaires like oil man David Koch and media mogul Murdoch, were promoting a “grassroots” rebellion against Obama called the Tea Party. Activists were showing up at presidential speeches with guns and brandishing weapons at rallies near Washington.
The high-decibel disruptions and the “screaming” economy created the impression of political chaos. Largely ignoring the role of the Republicans, the press faulted Obama for failing to live up to his campaign promise to bring greater bipartisanship to Washington.
Hearing the discord framed that way, many average Americans also blamed Obama; many of the President’s supporters grew demoralized; and, as happened with Allende in Chile, some on the Left turned against Obama for not doing more, faster.
By November 2010, the stage was set for a big Republican comeback. The party swept to victory in the House and fell just short in the Senate. But Congress was not the Republicans’ true goal. What they really want is the White House with all its executive powers.
However, following Obama’s success in killing Osama bin Laden on May 2 and with what is widely regarded as a weak Republican presidential field, the Right’s best hope for regaining complete control of the U.S. government in 2012 is to sink the U.S. economy.
Already, the Republican success in limiting the scope of the stimulus package and then labeling it a failure – combined with deep cuts in local, state and federal government spending – have helped push the economy back to the brink where a double-dip recession is now a serious concern.
Despite these worries – and a warning from Moody’s about a possible downgrade on U.S. debt if Congress delays action on raising the debt limit – the Republicans are vowing more brinksmanship over the debt-limit vote. Before acting, they are demanding major reductions in government spending (while refusing to raise taxes on the rich).
So, Obama and the Democrats face another conundrum. If they slash spending too much, they will further stall the recovery. However, if they refuse to submit to this latest round of Republican blackmail, they risk a debt crisis that could have devastating consequences for the U.S. economy for years – even decades – to come.
Either way, the right-wing media and much of the mainstream press will put the blame on Obama and the Democrats. They will be held accountable for failing to govern.
The Republican propaganda machine will tell the American people that they must throw Obama and the Democrats out of office for stability to return. There will be assurances about how the “magic of the market” will bring back the bright days of prosperity.
Of course, the reality of a new Republican administration, especially with a GOP Congress, would be the return of the old right-wing nostrums: more tax cuts for the rich, less regulation of corporations, more military spending, and more privatization of social programs.
Any budget balancing will come at the expense of labor rights for union employees and shifting the costs for health care onto the backs of the elderly. Yet, all this will be surrounded by intense propaganda explaining the public pain as a hangover from misguided government “social engineering.”
There is, of course, the possibility that the American people will see through today’s Republican CIA-style strategy of “making the economy scream.” Americans might come to recognize the role of the pseudo-populist propagandists on Fox News and talk radio.
Or Republicans might have second thoughts about playing chicken on the debt limit and running the risk of a global depression. Such a gamble could redound against them. And, it’s hard to believe that even their most ardent billionaire-backers would find destruction of their stock portfolios that appealing.
But there can be a momentum to madness. We have seen throughout history that events can get out of hand, that thoroughly propagandized true believers can truly believe. Sometimes, they don’t understand they are simply being manipulated for a lesser goal. Once the chaos starts, it is hard to restore order.
That has been another bloody lesson from the CIA’s operations in countries around the world. These covert actions can have excessive or unintended consequences.
Ousting Allende turned Chile into a fascist dictatorship that sent assassins far and wide, including Washington, D.C. Ousting Mossadegh in Iran led to the tyranny of the Shah and ultimately to an extreme Islamist backlash. Ousting Arbenz in Guatemala led to the butchery of some 200,000 people and the rise of a narco-state. Such examples can go on and on.
However, these CIA-type techniques can be very seductive, both to U.S. presidents looking for a quick fix to some international problem and to a political party trying to gain a decisive edge for winning. These methods can be especially dangerous when the other side doesn’t organize effectively to counter them.
The hard reality in the United States today is that the Republicans and the Right are now fully organized, armed with a potent propaganda machine and possessing an extraordinary political will. They are well-positioned to roll the U.S. economy off the cliff and blame the catastrophe on Obama.
Indeed, that may be their best hope for winning Election 2012.
How the McEconomy Bombed the American Worker May 9, 2011Posted by rogerhollander in Economic Crisis, Labor.
Tags: andy kroll, Economic Crisis, economy, fast food workers, gas prices, housing market, jobs, labor, labor history, labour, mcdonalds, mceconomy, mcjobs, roger hollander, unemployment, unions, wages, workers, working class
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www.tomdispatch.com, May 8, 2011
While President Obama has seen a sizeable jump in his approval ratings in the wake of the killing of Osama bin Laden, scratch beneath the surface of those polls and you’ll find another story entirely. Check out his figures when it comes to the economy, and there, Osama bin Laden and all those “USA! USA!” chanting crowds aside, his approval rating just hit a new low.
Killing bin Laden, Libya’s Gaddafi, and Iran’s Ahmedinejad, for that matter, isn’t likely to win an election for an American president these days. As in Bill Clinton’s famed 1992 election campaign against George H.W. Bush (who also garnered headlines for foreign policy “successes”), the mantra is still: “It’s the economy, stupid.” The job market (or lack of it), rising food and gas prices, a housing market that remains in a state of collapse — you know the story. Right now, it looks as if someone had flown a hijacked plane directly into the economy. For example, among young people, a key Obama demographic, more than four million Americans ages 16 to 24 are out of work.
And if you think that the usual numbers are dismal, just wait until you dig under them with TomDispatch Associate Editor Andy Kroll and consider the way the American economy and its workers are being Third-World-ized. This remains a wealthy country with significant resources, which makes it all the eerier that it’s beginning to feel as if the phrase “banana republic” might one of these days apply. (To catch Timothy MacBain’s latest TomCast audio interview in which Kroll discusses what grim news lurks under the monthly unemployment figures, click here, or download it to your iPod here.) Tom
How the McEconomy Bombed the American Worker
The Hollowing Out of the Middle Class
By Andy Kroll
Think of it as a parable for these grim economic times. On April 19th, McDonald’s launched its first-ever national hiring day, signing up 62,000 new workers at stores throughout the country. For some context, that’s more jobs created by one company in a single day than the net job creation of the entire U.S. economy in 2009. And if that boggles the mind, consider how many workers applied to local McDonald’s franchises that day and left empty-handed: 938,000 of them. With a 6.2% acceptance rate in its spring hiring blitz, McDonald’s was more selective than the Princeton, Stanford, or Yale University admission offices.
It shouldn’t be surprising that a million souls flocked to McDonald’s hoping for a steady paycheck, when nearly 14 million Americans are out of work and nearly a million more are too discouraged even to look for a job. At this point, it apparently made no difference to them that the fast-food industry pays some of the lowest wages around: on average, $8.89 an hour, or barely half the $15.95 hourly average across all American industries.
On an annual basis, the average fast-food worker takes home $20,800, less than half the national average of $43,400. McDonald’s appears to pay even worse, at least with its newest hires. In the press release for its national hiring day, the multi-billion-dollar company said it would spend $518 million on the newest round of hires, or $8,354 a head. Hence the Oxford English Dictionary’s definition of “McJob” as “a low-paying job that requires little skill and provides little opportunity for advancement.”
Of course, if you read only the headlines, you might think that the jobs picture was improving. The economy added 1.3 million private-sector jobs between February 2010 and January 2011, and the headline unemployment rate edged downward, from 9.8% to 8.8%, between November of last year and March. It inched upward in April, to 9%, but tempering that increase was the news that the economy added 244,000 jobs last month (not including those 62,000 McJobs), beating economists’ expectations.
Under this somewhat sunnier news, however, runs a far darker undercurrent. Yes, jobs are being created, but what kinds of jobs paying what kinds of wages? Can those jobs sustain a modest lifestyle and pay the bills? Or are we living through a McJobs recovery?
The Rise of the McWorker
The evidence points to the latter. According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were “low-wage” (those paying $9-$13 an hour), 49% of new jobs added in the sluggish “recovery” are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.
As a point of comparison, that’s much worse than in the recession of 2001 after the high-tech bubble burst. Then, higher wage jobs made up almost a third of all new jobs in the first year after the crisis.
The hardest hit industries in terms of employment now are finance, manufacturing, and especially construction, which was decimated when the housing bubble burst in 2007 and has yet to recover. Meanwhile, NELP found that hiring for temporary administrative and waste-management jobs, health-care jobs, and of course those fast-food restaurants has surged.
Indeed in 2010, one in four jobs added by private employers was a temporary job, which usually provides workers with few benefits and even less job security. It’s not surprising that employers would first rely on temporary hires as they regained their footing after a colossal financial crisis. But this time around, companies have taken on temp workers in far greater numbers than after previous downturns. Where 26% of hires in 2010 were temporary, the figure was 11% after the early-1990s recession and only 7% after the downturn of 2001.
As many labor economists have begun to point out, we’re witnessing an increasing polarization of the U.S. economy over the past three decades. More and more, we’re seeing labor growth largely at opposite ends of the skills-and-wages spectrum — among, that is, the best and the worst kinds of jobs.
At one end of job growth, you have increasing numbers of people flipping burgers, answering telephones, engaged in child care, mopping hallways, and in other low-wage lines of work. At the other end, you have increasing numbers of engineers, doctors, lawyers, and people in high-wage “creative” careers. What’s disappearing is the middle, the decent-paying jobs that helped expand the American middle class in the mid-twentieth century and that, if the present lopsided recovery is any indication, are now going the way of typewriters and landline telephones.
Because the shape of the workforce increasingly looks fat on both ends and thin in the middle, economists have begun to speak of “the barbell effect,” which for those clinging to a middle-class existence in bad times means a nightmare life. For one thing, the shape of the workforce now hinders America’s once vaunted upward mobility. It’s the downhill slope that’s largely available these days.
The barbell effect has also created staggering levels of income inequality of a sort not known since the decades before the Great Depression. From 1979 to 2007, for the middle class, average household income (after taxes) nudged upward from $44,100 to $55,300; by contrast, for the top 1%, average household income soared from $346,600 in 1979 to nearly $1.3 million in 2007. That is, super-rich families saw their earnings increase 11 times faster than middle-class families.
What’s causing this polarization? An obvious culprit is technology. As MIT economist David Autor notes, the tasks of “organizing, storing, retrieving, and manipulating information” that humans once performed are now computerized. And when computers can’t handle more basic clerical work, employers ship those jobs overseas where labor is cheaper and benefits nonexistent.
Another factor is education. In today’s barbell economy, degrees and diplomas have never mattered more, which means that those with just a high school education increasingly find themselves locked into the low-wage end of the labor market with little hope for better. Worse yet, the pay gap between the well-educated and not-so-educated continues to widen: in 1979, the hourly wage of a typical college graduate was 1.5 times higher than that of a typical high-school graduate; by 2009, it was almost two times higher.
Considering, then, that the percentage of men ages 25 to 34 who have gone to college is actually decreasing, it’s not surprising that wage inequality has gotten worse in the U.S. As Autor writes, advanced economies like ours “depend on their best-educated workers to develop and commercialize the innovative ideas that drive economic growth.”
The distorting effects of the barbell economy aren’t lost on ordinary Americans. In a recent Gallup poll, a majority of people agreed that the country was still in either a depression (29%) or a recession (26%). When sorted out by income, however, those making $75,000 or more a year are, not surprisingly, most likely to believe the economy is in neither a recession nor a depression, but growing. After all, they’re the ones most likely to have benefited from a soaring stock market and the return to profitability of both corporate America and Wall Street. In Gallup’s middle-income group, by contrast, 55% of respondents claim the economy is in trouble. They’re still waiting for their recovery to arrive.
The Slow Fade of Big Labor
The big-picture economic changes described by Autor and others, however, don’t tell the entire story. There’s a significant political component to the hollowing out of the American labor force and the impoverishment of the middle class: the slow fade of organized labor. Since the 1950s, the clout of unions in the public and private sectors has waned, their membership has dwindled, and their political influence has weakened considerably. Long gone are the days when powerful union bosses — the AFL-CIO’s George Meany or the UAW’s Walter Reuther — had the ear of just about any president.
As Mother Jones‘ Kevin Drum has written, in the 1960s and 1970s a rift developed between big labor and the Democratic Party. Unions recoiled in disgust at what they perceived to be the “motley collection of shaggy kids, newly assertive women, and goo-goo academics” who had begun to supplant organized labor in the Party. In 1972, the influential AFL-CIO symbolically distanced itself from the Democrats by refusing to endorse their nominee for president, George McGovern.
All the while, big business was mobilizing, banding together to form massive advocacy groups such as the Business Roundtable and shaping the staid U.S. Chamber of Commerce into a ferocious lobbying machine. In the 1980s and 1990s, the Democratic Party drifted rightward and toward an increasingly powerful and financially focused business community, creating the Democratic Leadership Council, an olive branch of sorts to corporate America. “It’s not that the working class [had] abandoned Democrats,” Drum wrote. “It’s just the opposite: The Democratic Party [had] largely abandoned the working class.”
The GOP, of course, has a long history of battling organized labor, and nowhere has that been clearer than in the party’s recent assault on workers’ rights. Swept in by a tide of Republican support in 2010, new GOP majorities in state legislatures from Wisconsin to Tennessee to New Hampshire have introduced bills meant to roll back decades’ worth of collective bargaining rights for public-sector unions, the last bastion of organized labor still standing (somewhat) strong.
The political calculus behind the war on public-sector unions is obvious: kneecap them and you knock out a major pillar of support for the Democratic Party. In the 2010 midterm elections, the American Federation of State, County, and Municipal Employees (AFSCME) spent nearly $90 million on TV ads, phone banking, mailings, and other support for Democratic candidates. The anti-union legislation being pushed by Republicans would inflict serious damage on AFSCME and other public-sector unions by making it harder for them to retain members and weakening their clout at the bargaining table.
And as shown by the latest state to join the anti-union fray, it’s not just Republicans chipping away at workers’ rights anymore. In Massachusetts, a staunchly liberal state, the Democratic-led State Assembly recently voted to curb collective bargaining rights on heath-care benefits for teachers, firefighters, and a host of other public-sector employees.
Bargaining-table clout is crucial for unions, since it directly affects the wages their members take home every month. According to data from the Bureau of Labor Statistics, union workers pocket on average $200 more per week than their non-union counterparts, a 28% percent difference. The benefits of union representation are even greater for women and people of color: women in unions make 34% more than their non-unionized counterparts, and Latino workers nearly 51% more.
In other words, at precisely the moment when middle-class workers need strong bargaining rights so they can fight to preserve a living wage in a barbell economy, unions around the country face the grim prospect of losing those rights.
All of which raises the questions: Is there any way to revive the American middle class and reshape income distribution in our barbell nation? Or will this warped recovery of ours pave the way for an even more warped McEconomy, with the have-nots at one end, the have-it-alls at the other end, and increasingly less of us in between?
Andy Kroll is a reporter in the D.C. bureau of Mother Jones magazine and an associate editor at TomDispatch. The son of two teachers, he grew up in a firmly — and happily — middle-class household. His email is andykroll (at) motherjones (dot) com. To listen to Timothy MacBain’s latest TomCast audio interview in which Kroll discusses what grim news lurks under the monthly unemployment figures, click here, or download it to your iPod here.
Copyright 2011 Andy Kroll
A Taxing Situation: Ontario’s HST June 17, 2010Posted by rogerhollander in Canada, Economic Crisis, Humor.
Tags: Canada, economy, government, hst, Humor, humour, ontario, sales tax, tax dollars, taxes, taxpayers
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TIPS ON HOW TO SPEND YOUR HARMONIZED SALES TAX SOP
Foreclosure Fiasco Continues: The Bush-Obama Strategy of Throwing Billions at Banks Doesn’t Work June 27, 2009Posted by rogerhollander in Uncategorized.
Tags: bailout, Ben Bernanke, Bush, citigroup, commodity futures, economy, Federal Reserve, food banks, foreclosure, gary gensler, gene sperling, glass-steagall, Goldman Sachs, Larry Summers, mortgage, mortgage crisis, ned, Obama, obama administration, poverty, Robert Scheer, roger hollander, Wall Street
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Americans are now $14 trillion poorer. Many who thought they were middle class have now joined the ranks of the poor.
It’s not working. The Bush-Obama strategy of throwing trillions at the banks to solve the mortgage crisis is a huge bust. The financial moguls, while tickled pink to have $1.25 trillion in toxic assets covered by the feds, along with hundreds of billions in direct handouts, are not using that money to turn around the free fall in housing foreclosures.
As The Wall Street Journal reported Tuesday, “The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing.” The same association said that the total refinancing under the administration’s much ballyhooed Home Affordable Refinance Program is “very low.”
Aside from a tight mortgage market, the problem in preventing foreclosures has to do with homeowners losing their jobs. Here again the administration, continuing the Bush strategy, is working the wrong end of the problem. Although President Obama was wise enough to at least launch a job stimulus program, a far greater amount of federal funding benefits Wall Street as opposed to Main Street.
State and local governments have been forced into draconian budget cuts, firing workers who are among the most reliable in making their mortgage payments–when they have jobs. Yet the Obama administration won’t spend even a small fraction of what it has wasted on the banks to cover state shortfalls.
California couldn’t get the White House to guarantee $5.5 billion in short-term notes to avert severe cuts in state and local payrolls, from prison guards to schoolteachers. Compare that with the $50 billion already given to Citigroup, plus an astounding $300 billion to guarantee that institution’s toxic assets. Citigroup benefits from being a bank “too big to fail,” although through its irresponsible actions to get that large it did as much as any company to cause this mess.
How big a mess? According to the Federal Reserve’s most recent report, seven straight quarters of declining household wealth have left Americans $14 trillion poorer. Many who thought they were middle class have now joined the ranks of the poor. Food banks are strapped and welfare rolls are dramatically on the rise, as the WSJ reports, with a 27 percent year-to-year increase in Oregon, 23 percent in South Carolina and 10 percent in California. And you have to be very poor to get on welfare, thanks to President Clinton’s so-called welfare reform, which he signed into law before he ramped up the radical deregulation of the financial services industry, enabling our economic downturn.
Citigroup, the prime mover for ending the sensible restraints of the Glass-Steagall Act of 1933, is now a pathetic ward of the state. But back in the day President Clinton would tour the country with Citigroup founder Sandy Weill touting the wonderful work that Weill and other moguls were doing to invest in economically depressed communities. It wasn’t really happening then, and now millions of folks in those communities have seen their houses snatched from them as if they were just pieces in a game of Monopoly that Clinton and his fat-cat buddy were playing.
Once Weill got the radical deregulation law he wanted, he issued a statement giving credit: “In particular, we congratulate President Clinton, Treasury Secretary Larry Summers, NEC [National Economic Council] Chairman Gene Sperling, Under Secretary of the Treasury Gary Gensler, Assistant Treasury Secretaries Linda Robertson and Greg Baer.”
Summers is now Obama’s top economic adviser, Sperling has been appointed legal counselor at Treasury, and Gensler, a former partner in Goldman Sachs, is head of the Commodity Futures Trading Commission, which he once attempted to prevent from regulating derivatives when it was run by Brooksley Born. Robertson worked for Summers in pushing through the Commodity Futures Modernization Act, which freed the derivatives market from adult supervision and contained the “Enron Loophole,” permitting that company to go wild. Robertson then became the top Washington lobbyist for Enron and was recently appointed senior adviser to Fed Chair Ben S. Bernanke. Baer went to work as a corporate counsel for Bank of America, which announced his appointment with a press release crediting him with having “coordinated Treasury policy” during the Clinton years in getting Glass-Steagall repealed. As a result of deregulation, B of A too spiraled out of control and ended up as a beneficiary of the Treasury’s welfare program.
Why was I so naive as to have expected this Democratic president to not do the bidding of the banks when the last president from that party joined the Republicans in giving the moguls everything they wanted? Please, Obama, prove me wrong.
Robert Scheer is Editor in Chief of Truthdig and author of a new book, The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.
Where’s the Outrage Over Workers Getting the Shaft? March 31, 2009Posted by rogerhollander in Labor.
Tags: afl-cio, anti-union, arlen specter, Bush, club for growth, congress, conservatives, deomcrats, economy, elections, employee free choice, financial crisis, free choice act, house, jobs, labor, labour, law, marie cocco, Media, pat toomey, politics, president obama, republicans, roger hollander, senate, unions, workers rights
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By Marie Cocco
www.truthdig.com, Posted on Mar 30, 2009
No cable television rants. No congressional hearing staged to publicly whip those responsible for so transparent a betrayal. Not a pitchfork in sight.
You would be hard-pressed to know that American workers suffered a cruel defeat last week when Pennsylvania Sen. Arlen Specter—the lone Republican to have once supported a measure that would make it easier for workers to form unions and more likely that employers would negotiate in good faith—effectively killed the effort for this year.
A Specter vote for the proposed Employee Free Choice Act, organized labor’s top legislative goal, was needed to break the expected filibuster by his fellow Republicans.
The immediate cause of his flip-flop was a primary challenge that Specter is expected to face from former Rep. Pat Toomey, a card-carrying member of the vast right-wing conglomerate. Toomey, who came within a breath of toppling Specter in the 2004 primary, is president of the Club for Growth, an organization of conservatives that has as its guiding principle a fealty to pretty much every economic precept that has gotten us where we are today.
The club’s view of sound economics is to make permanent the Bush tax cuts, which drain $2.2 trillion from the treasury over a decade and which, according to the nonpartisan Tax Policy Center, bestow the largest benefits on the top one-tenth of 1 percent of households—those with incomes of $3 million or more. The club also wants to permanently repeal the estate tax. This year, the Tax Policy Center found, about two-thirds of this tax will be paid by about 700 estates. The inheritors of these estates represent 0.03 percent of all anticipated heirs in 2009.
Indirectly but indisputably, Toomey and the ideological brain trust that has given us such skewed policies have also managed to kill the most significant chance American workers had to push back against decades of job losses, benefit cuts and stagnant wages.
But neither Toomey nor Specter did this alone. Business made defeat of the pro-union measure its top priority. It argued, deceptively, that it was ardently in favor of workers maintaining the right to vote for or against unions in secret-ballot elections when, in truth, such elections under current law are called not by workers but by employers who refuse to accept initial results of card check-offs that favor unionization.
Nonetheless, the economic downturn swiftly shredded the cloak of rhetoric about democracy. Business reverted to arguing that allowing workers to bargain for decent wages and benefits is a cost they should not bear. Even Specter took up this cant, arguing against “adding a burden” to business at the wrong time.
So here is the essence of it: Largely unencumbered by unions, which now represent only about 7 percent of private-sector workers, American businesses have shipped jobs overseas, unilaterally cut benefits, kept wages stagnant or falling for most of the decade and laid off millions. The doctrine of nonintervention in the marketplace that is now the central argument against the proposed Employee Free Choice Act is the very same dogma that led us into the current financial crisis and the worst recession in at least three decades.
Workers who did nothing to create the current economic crisis must now be kept powerless lest they create some future economic crisis we cannot yet imagine.
The public—Pennsylvanians among them—voted against this sort of illogic just four short months ago. The AFL-CIO spent $250 million in last year’s elections on behalf of Barack Obama and many other Democrats it believed would be sympathetic to labor. But Obama, who endorsed the free choice act as a candidate, began obscuring his position almost as soon as he took office. And though Specter’s about-face is the most visible backstabbing, a handful of Senate Democrats worried about their own re-elections also were uncertain in their support and almost hostile in their public statements. It is unclear whether the measure would have passed the Senate even if Specter had voted to break his party’s filibuster and allowed a vote.
American workers do not need friends whose subservience to the politics of self-preservation makes them indistinguishable from enemies. Remember this the next time these same so-called leaders join the frenzy over an irresponsibly greedy corporate culture—and then act decisively to keep it in place.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
© 2009, Washington Post Writers Group