Many say we should “run government like a business” and “save money” by “cutting spending” and “making government smaller.” Does this work? Do We the People really save money by doing these things?
Have you heard the phrase “penny-wise and pound-foolish”? How about “a stitch in time saves nine”? Maybe “eating the seed corn?” When government “saves money,” all of these snippets of time-honored wisdom, warning of what happens to those who try to “do it on the cheap,” should come to mind.
You can “save money” by not changing the oil in your car. But have you ever seen a car that has never had its oil changed? After a while white smoke pours out the back because the rings are ruined. Other parts of the engine are also being ruined. Eventually the engine will seize up and quit and you have to either replace the engine or scrap the car. A simple and inexpensive procedure every few months would have prevented many thousands of dollars in expenses later.
With corporate-conservative calls for full or partial privatization of the United States Postal Service (USPS) escalating, groups are sounding the alarm about new nominees to the USPS Board of Governors.
The Senate is scheduled soon to consider the nominations of Mickey D. Barnett, James C. Miller III and two other nominees. Miller is a notorious privatization advocate and Barnett is a payday lender lobbyist. The Leadership Conference, a civil & human rights coalition, has sent a public letter to Senate Majority Leader McConnell and Minority Leader Reid asking them to oppose the nominees. (Since all four nominees are to be voted on as a package, the Leadership Conference is asking that the entire slate be voted down. At Naked Capitalism, in Epic Fail for the Postal Service: The Wrong Model and the Wrong Board, the other two nominees are described as not particularly bad for the USPS, but are “… a reflection of a system that treats public service as a revolving door for political and economic elites. This leaves a permanent imprint of the one percent on government and may be one of the primary reasons for cynicism in the electorate.”)
Alongside Friday’s good employment data, there is a brouhaha on the Internets over claims that the government’s employment numbers are a “big lie.” Jim Clifton, Chairman and CEO of the Gallup polling company penned “The Big Lie: 5.6% Unemployment,” claiming that “the media” is “cheer-leading” and the White House is “scor[ing] political points” over phony numbers that the government makes up to make things look better than they are.
In fact, the “top line” unemployment number – now 5.7 percent, representing 9 million people, does not factor in people who have given up looking, 6.8 million part-time workers who want to work full-time, 2.2 million “marginally attached” people, people who are grossly underpaid, etc. But everyone knows that, and the government reports that. The “official” number has a specific definition, the “U-6 “alternative measure of labor under-utilization” reports the more accurate 13.5 percent number. So somewhere between 15 and 20 million Americans count as un- or underemployed. But even that doesn’t count those who have given up. It’s still bad out there, but the government’s figures are not being manipulated.
Intentionally High Unemployment
I want to suggest that this high un- and underemployment is intentional. Here is why. Two things that the government could easily do right now would pretty much get rid of unemployment. But our government is blocked from doing those things by extremely wealthy people, who benefit from the low wages, and a desperate and “cowering” reserve army of unemployed status quo.
First, balancing the trade deficit would by itself bring back more than 5 million jobs. This is based only on the 3.1 million lost to the China trade deficit, 1 million lost to NAFTA and 900,000 lost to the Japan trade deficit. We also have trade deficits with Germany, South Korea, and others.
A way to visualize this is to imagine the effect on our economy of $500 billion of new orders coming in to businesses that make and do things inside the U.S. Then another $500 billion next year and every year after that. Our annual trade deficit is $500 billion. Fixing that means $500 billion of new business here, now, and continuing every year from now on. What you are visualizing is the damage this trade regime has done to us since Wall Street and the right’s “free trade” ideology took over.
Second, we have deferred maintaining our infrastructure since the Reagan era started the cycle of tax cuts and spending cutbacks. To bring the country’s infrastructure up to standards (never mind modernizing) we would need to spend $360 billion each year for 10 years, according to the American Society of Civil Engineers’ Infrastructure Report Card. If you conservatively estimate that each $1 billion spent on infrastructure creates 30,000 jobs, $350 billion translates to 350×30,000 = 10.5 million jobs.
So that’s conservatively 15.5 million jobs if we just go back to doing what the country did before the Reagan era. (This gives you a hint at the damage Reagan’s “trickle down” economics, and “free trade” market ideology have done. Look around. The extreme inequality that resulted tells you why it was done.)
Balance trade and fix up our aging infrastructure means at least 15.5 million jobs. (Think about what that would mean for wages, too.)
But That’s Just Catch-Up
But those things are just playing catch-up. It comes close to giving jobs to the unemployed, part-time for economic reasons and “marginally attached” workers. It doesn’t even start to dig into the people who have given up and left the labor market.
We got here by cutting taxes for the rich, gutting government, deferring maintenance, a and letting a few billionaires harvest our public wealth through privatization, etc. We’ll get out of it by fixing the trade deficit, repairing our infrastructure, undoing policy mistakes that have continued since the Reagan era, and ending “trickle down” tax cuts.
How do we take this a step further? The following things would employ tons of people and bring a long-term economic return far above any “cost.”
First, retrofit buildings and homes to be energy-efficient. Start with the basics: plug leaks and drafts, paint roofs white. These simple things could employ tons of people who we call “low skilled.” Take it a step further, and install energy-efficient windows, insulation, modern heating and cooling systems, solar on the roofs, etc. — all made in America, of course — and we will employ millions more. The energy payoff would be enormous, and we would go into the future with a much more efficient economy.
Next, engage in 21st century infrastructure projects like high-speed rail across the country and into Canada and Mexico — just like China is already doing. (See: “New Silk Road.“) We’ll create jobs, and end up with a massively more efficient, competitive economy. Then, modernize our power grid and install wind turbines across the plains states. Again, we end up with a massively more efficient, competitive economy. Requiring American-made supplies boosts the return to our economy.
What about building out national, high-speed, fiber internet? Imagine the innovation that would result.
There is so much we could do to first bring about full employment, and then move our economy into the 21st century. But we are held back by this weird Reagan/Wall Street/conservative ideology that tells us not to believe that We the People deserve a government that spends to make our lives better. That spending boosts us up now, makes our lives better, and more than pays for itself later. But we are kept from dreaming and doing because that return on our investment would go to us, instead of into the pockets of a few billionaires.
Martin Luther King Jr. outlined his dream 50 years ago this weekend. We made much of it happen. Let’s dream some more. Let’s dream about what we could do in the next 50 years.
Fifty years ago Martin Luther King Jr. led the March on Washington for Jobs and Freedom and famously told the country “I have a dream.” Fifty years later there is progress and there are setbacks. We no longer have segregation — separate schools and bathrooms and the rest. Many states finally allow everyone to marry the person they love, but at the same time many states are returning to apartheid-era restrictions of voting rights.
One huge part of the “Jobs and Freedom” Dream that still evades us is the goal of full employment or an income until a job becomes available.
On August 16, 1967 King delivered a speech titled, “Where Do We Go From Here?” addressing the need for everyone to have a job or an income,
…our emphasis must be twofold: We must create full employment, or we must create incomes. People must be made consumers by one method or the other. Once they are placed in this position, we need to be concerned that the potential of the individual is not wasted. New forms of work that enhance the social good will have to be devised for those for whom traditional jobs are not available. In 1879 Henry George anticipated this state of affairs when he wrote in Progress and Poverty:
The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power and enriches literature and elevates thought, is not done to secure a living. It is not the work of slaves driven to their tasks either by the, that of a taskmaster or by animal necessities. It is the work of men who somehow find a form of work that brings a security for its own sake and a state of society where want is abolished.
A Country Based On A Dream
Our country was founded on the dream that We the People can do things for each other instead of depending on the rich and powerful to throw us scraps.
If you look at our Constitution you see that our country is supposed to be for We the People. And I mean just look at it, not read it. The only words you see from any distance are the words “We the People.” The Founders were making a point.
The Constitution told the world about a dream that “We the People” would build a country that protects and empowers us, where together we do things for the common good, to make our lives better. And for a while we did that.
We have lost sight of that dream. We no longer seem to recognize who our country is for. We no longer talk about the common good.
Who is our country for? Who is our economy for? Certainly a We the People economy would at the very least guarantee that We the People have jobs and an income until a job is available.
There is a big push going on to again reduce tax rates for the giant multinational corporations. See if you can guess who will make up the difference? (Hint: it will be you paying through cuts, and smaller companies that are trying to challenge the incumbency of the giant multinationals.)
Recently in the post Beware the New Corporate Tax-Cut Scam: LIFT Is A Big LIE, I warned about the LIFT coalition of large corporations trying to get rid of taxes on profits made outside the country. Of course this would result in giant companies moving jobs, factories and profit centers out of the country.
The executives who run the giant multinationals want to be let off the hook for paying taxes on profits they make outside our borders. As an Apple executive said to The New York Times, giant multinationals “don’t have an obligation to solve America’s problems.” And to prove it, American corporations are holding $1.7 trillion in profits outside the country – just sitting there – rather than bringing that money home, paying the taxes due and then paying it out to shareholders or using it to “create jobs” with new factories, research facilities and equipment.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
The conservative argument of the last 30-40 years boils down to this: “Hey look at this big pile of seed corn. Let’s eat it!” Almost 30 years after the “Reagan Revolution” our infrastructure is crumbling around us. Since the Reagan-era tax cuts we have been deferring maintenance of (and never mind modernizing) our infrastructure, and as a result have become less competitive in the world economy.
Meanwhile our economic competitors, countries like China and India, have been building infrastructure like crazy. Other countries are investing, educating, improving public services because they know these things make the economy explode later. A major component of China’s stimulus was infrastructure and public services – including public welfare – because of the economic benefits that come later.
Now for those countries it is later, while for us it’s just becoming too late. Their investment is paying off while we’re having trouble paying off the accumulated Reagan/Bush tax-cut debt.
How did we get here?
Public infrastructure is the roads, courts, education, etc. that enable an economy to prosper. We got ourselves out of the Great Depression with a big investment in public infrastructure. The government taxed the wealthy and built or improved modern roads, bridges, post offices, courthouses, shipyards, schools and other public structures that enabled business to take off.
And then business took off. The idea was, of course, that business would give back some of the returns to keep that process going. But instead the big companies and wealthy families funded a conservative propaganda machine that convinced people to let them just keep it. Look at this chart from 14 Ways A 90 Percent Top Tax Rate Fixes Our Economy And Our Country:
You can clearly see that the money that should have been invested in maintaining and modernizing our infrastructure instead has gone to a few wealthy people at the top of the food chain. (We’re the food.) And of course, we all can clearly see the results of this in today’s economy. They ate the seed corn, America is crumbling.
Now, here we are later and we are seeing the result of the Reagan Revolution. The American Society of Civil Engineers (ASCE) Infrastructure Report Card estimates that we are $2.2 trillion behind just on maintaining the existing infrastructure, never mind modernizing. Please click through and explore what ASCE is saying there. (Conservatives — there are lots of pictures!)
What do we do?
The answer is obvious. It is called public investment. Ask the big companies, the banks and the wealthy to pay back some of the incredible amounts of money they have been piling up as a result of the past investment that We, the People made in building that infrastructure that enabled the economy to boom. Use that money to invest in maintaining and modernizing the infrastructure so that the economy can again thrive for all of us.
We can employ the unemployed and bring our infrastructure up to par at the same time. There is a lot of work that needs doing and we have a lot of people out of work.
The payback will be enormous. The economy will explode. And we can build sustainability into the process this time.
What is in the way?
The problem now is that the corporate/conservative propaganda machine has gone way past talking people into cutting taxes for the rich and cutting back on public spending for infrastructure and our people. Now they have become very extreme, convincing a number of people that government spending – We, the People spending on the common good – and government itself – We, the People making the decisions for ourselves – is the wrong approach. They believe that any government at all is “socialism” — run for the benefit of all of us — and that all public services must be “privatized” — meaning run for the benefit of a few. They believe it is wrong, even immoral to have public schools, public transit, public health care, regulations that restrict what companies can do to consumers or the environment, etc.
They have the megaphone because they have the money. We have to confront this head on.
More to come!
This is another story of a wealthy few selling off the country’s people and future. This is another story of gains for a few at the expense of the rest of us. These stories are becoming all too common. This is the Reagan Revolution coming home to roost, and I will continue to write about the terrible price we are paying and will be paying for a long time for the failed experiment in conservative ideology.
Sign up here for the CAF daily summary.
This post originally appeared at Speak Out California
dday, writing in Giving Away The Tax Argument at Digby’s Hullabaloo blog, asks why so many California newspapers have “tax increase calculators” but no calculators that show people how much the budget cuts affect them.
In my life, I have never seen a “spending cut calculator,” where someone could plug in, say, how many school-age children they have, or how many roads they take to work, or how many police officers and firefighters serve their community, or what social services they or their families rely on, and discover how much they stand to lose in THAT equation. Tax calculators show bias toward the gated community screamers on the right who see their money being “taken away” for nothing. A spending cut calculator would actually show the impact to a much larger cross-section of society, putting far more people at risk than a below 1% hit to their bottom line.
[. . . The media already highlights the tax side of the equation over spending, dramatically portraying tax increases while relegating spending cuts to paragraph 27. It feeds the tax revolt and distorts the debate. And it’s completely irresponsible.
In Why Are Public Assets Being Cut Right When We Need Them Most? Jay Walljasper, of OnTheCommons.org wonders why public transit, libraries and other things the government does for us are all being cut at exactly the time people need them? As the economy turns downward more people need to take the train or bus, or use the library. Jay makes the connection,
Minnesota governor Tim Pawlenty, one of the leading contenders for the Republican presidential nomination in 2012, proposes closing the state’s budget gap by reducing corporate taxes and slashing state aid to local governments. This will mean painful cuts in public assets, such as transit and libraries.
. . . This loss of our public assets is an alarming threat to our society. The things we all own in common and depend upon–libraries, transit, parks, water systems, schools, public safety, infrastructure, cultural programs, social services–are being gradually but steadily undermined.
For many years I have been blogging at Seeing the Forest, often coming back to a question, “Who is our economy for?” For some time now regular incomes have stagnated, while incomes at the very top just go up and up. The GDP keeps rising, productivity keeps going up, but regular people see less and less of the benefit of this increase. In fact, if you look at charts and data, the stagnation of incomes started almost exactly at the same time as President Reagan took office and started implementing the corporate agenda of anti-tax and anti-government policies. So is this a coincidence?
Throughout human history we have seen one scheme after another wherein a few people seize power and devise a system to hold it and use it to enrich themselves at the expense of everyone else. This is human nature and through history we have seen it happen over and over.
America formed in reaction to the British monarchy’s exploitation of its people. We, the People formed our government to band together and protect each other from attempts by the powerful few to exploit us. Our Constitution was supposed to be include a system of checks and balances to account for the nature of power.
It is time for the people to take back that power and use it to again benefit each other. And it is time for California’s newspapers to do something for We, the People and include a “budget cuts calculator” as well as tax increase calculator. It is just as important, maybe more so, that we all understand how we’re injuring and jeopardizing our future with the budget cuts the Republicans required in this year’s budget negotiations.
Click through to Speak Out California
In Europe they get 5 weeks vacation, fully-paid health care for everyone, generous pensions at an earlier age, full maternity benefits AND child care.
They get PROTECTION from poison in their food, workers getting injured by their jobs, companies dumping crap in their air and water, corporate scams and other general exploitation of the public.
They get some say in how big corporations are run, and the corporations BENEFIT THE PEOPLE.
When McCain complains that Obama is going to “spread the wealth around” … COMPLAINS about that!! I think maybe everyone in the entire country might just turn out to vote for Obama. Except a few, very few, fatcat corporate executives who are stealing everything they can get their hands on, at our expense. HELL yes, spread the wealth around! HELL yes!
Socialism — another name for things that work. Compare that to what we’ve had here for twenty or thirty years. Is there even a question? Sign me up!
Who is our economy FOR, anyway?
This post originally appeared at Speak Out California
As I wrote the other day, the California Chamber of Commerce has come out with their annual list of “job-killer” bills. The list only targets bills by Democrats, and the bills are all acts that would help the people of California by improving the environment, worker wage and safety, public health, etc.
The California Chamber of commerce is a lobbying association. They represent their members: businesses, many of which are large corporations. This is about private greed vs. the public good. The Chamber’s job is to convince the legislature to pass laws that enrich the owners of the corporations that fund them. Nothing more, nothing less.
If that involves convincing the public of something, then they do that. Hence the label “job killer.”
But the companies represented by the Chamber are the real job killers. They outsource jobs to other countries. They lay people off when they calculate it will maximize their profits. They employ as many people as needed to maximize the income to and wealth of their owners. Nothing more, nothing less.
The very idea that the Chamber of Commerce would care if something is a “job killer” is ludicrous when you understand their function. They are a lobbying association that represents the interests of companies that eliminate as many jobs as they want to, at their discretion, and then use some of the money that would have been paid in salaries to pay the Chamber to convince us to support their interests — and the rest of it to enrich themselves, which is their primary interest.
That is how corporations work in the modern, “free-market” world that we find ourselves in since the Reagan era. Not for the public benefit, not necessarily even for the company’s benefit, but for the financial benefit of the executives and (some of) the owners of the company.
Private greed vs. public good. Nothing more, nothing less.
So there isn’t really an argument about whether the “job-killer” bills on this year’s list really do or do not “kill jobs.” That is not the point of the label. Instead it is up to us to understand who we are hearing from. If we get caught up in arguing about whether these bills create more jobs than they might cost, we’re missing the point. Their arguments are propaganda with no basis in reality, designed to do nothing more than sway opinion. The point of the “job-killer” label is to make people afraid for their jobs, not to actually argue that these bills will or will not actually “kill” any jobs.
For example, a bill to require energy efficiency in new housing construction obviously creates many new jobs in the new, innovative “green” industries. But such a bill might lower the profits that go into the pockets of the executives and owners of some of the companies that the California Chamber of Commerce represents. (The LA Times on Wednesday said the Chamber’s agenda “seems dominated by development and energy interests”.) And, again, it is irrelevant whether the bill might or might not really cost jobs in some of those companies. The Chamber doesn’t care. That is not their function.
The use of the label “job killers” is about scaring the public. Nothing more, nothing less. It is about fear. It is about creating a climate in which people who are afraid for their jobs will go along with measures designed to enrich the owners of the companies that the Chamber — a lobbying association — represents.
So please don’t be fooled. Don’t be swayed by propaganda designed to make you afraid. As I wrote above, it is up to us to understand who we are hearing from.
Click through to Speak Out California
What Happened to the California Dream? originally appeared at Speak Out California.
How long have people been making fun of us left-coast, tree-hugging, frisbee-tossing, granola-crunching, animal-loving, tofu-eating, yoga-practicing, peacenik eco-nuts?
The thing is, people are starting to realize that all of these ridiculed things are good for us— and for the country and the planet. They are the right choices.
Sure, everyone had a good laugh. But it’s a few years later now and the consequences of years of bad choices are catching up. People who mocked tofu-eaters and Frisbee-tossers are realizing they don’t want to be fat and out of shape–some are even dying of heart attacks and diabetes. Granola and tofu are good for you, especially compared to the fast food, meat and white breat that were being eaten in their stead.
And what about the eco-nuts? They aren’t looking all that nutty today, are they? The people who laughed about tree-hugging econ-nuts are spending $60 to fill their gas tanks and worryng about their coastal property values declining as the water rises. Meanwhile Californians are driving hybrids in proportions greater than the rest of the country. Who is laughing now?
The Bush Administration is about to let a drug company sell one of our few remaining effective antibiotics for use on livestock. This is so the drug company can make higher profits. They do not care that this decision could kill a LOT of us.
Here is what is going on: These days people don’t think of infections as serious, not to mention potentially fatal. This is because we have antibiotics to kill the germs. But throughout human history bacteria were one of the biggest – if not the biggest – causes of death. All the way up until the discovery of penicillin – less than 100 years ago – people used to die from things as simple as a cut getting infected.
The germs have been fighting back. They build up resistance to the drugs we use against them, and over time the drugs stop working. This is the reason doctors tell people to be sure to take ALL of the antibiotics in a prescription even if they start to feel better — you need to kill ALL of the germs or the ones that survive develop resistance. The other reason is that drugs are given to livestock because they help them get fatter quicker. Over time, through simple evolution and natural selection, the germs become resistant to the antibiotics and we all are put at risk. One after another the antibiotics have become nearly useless. In fact, we only have a few effective antibiotics left.
Think about what would happen if germs get a chance to build resistance to the few remaining effective antibiotics. Now read this news story: