Feb 152012

As state governments wrestle with massive budget shortfalls, a Wall Street giant is offering a solution: cash in exchange for state property. Prisons, to be exact.

Chris Kirkham, Huffington Post

English: Daugavpils prison

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Support the privateers and this is what you get. It starts with rigged banking, trade and tax policy that bleeds the average citizen and starves the government­. Once they’ve sucked enough wealth out of the general population and have government on life support, the privateers strike, offering their poisoned transfusio­n to save the dying body. These corporatio­ns and the people who support them are counter-pa­triots. They will sacrifice the wellbeing of our nation in order to line their pockets with the spoils of economic war.

Privateering is a parasitical process that’s grown increasingly prominent since the economic collapse of 2008. Seeking hosts that can be tapped and drained, predator companies prey upon weakened public entities with which they can strike their Faustian bargain. Roads, bridges, ports . . . even parking meters are on the auction block; private prisons just happen to be one of the most lucrative and fast growing targets of those who seek to exploit the commons for personal gain.

But just like the proverbial poison apple, while these deals may seem to offer immediate relief for public budgets depleted of revenue in a stagnant economy, what they deliver is lethal venom for the public good.

Chicago residents learned this lesson the hard way, when their city officials made a pact with Morgan Stanley to lease rights to the city’s 36,000 parking meters. The deal that gave a largely foreign group of investors (a huge slice going to Abu Dhabi) control for 75 years, went for just over $1 billion. Surely a nice infusion of cash, but considering that the devil’s deal gave the new Chicago Parking Meters LLC complete control, including the ability to charge the city for any loss of revenue, the long term prospects for the city were far less rosy.

Indeed, the people of Chicago soon found parking rates previously set at $0.25 per hour were hiked to $1.00 and more. They also found that they were unable to close streets or perform maintenance without compensating the privateers who billed the city at rates that valued the billion-dollar lease at $5 billion. Late last year, the city received a $13 million invoice from CPM for “lost revenue from drivers who used disabled parking placards to get free parking at the city’s meters.

The reality is that private company profits and the “general Welfare” for which our nation and public entities are constituted are often mutually exclusive goals. Numerous studies, looking at everything from schools and healthcare to security and military, have shown how cost-ineffective privatization can be. One recent study completed by the Project on Government Oversight (POGO) concluded that “the government pays billions more annually in taxpayer dollars to hire contractors than it would to hire federal employees to perform comparable services.

Hard facts consistently belie the arguments used to support privatization, and nowhere are the myth and reality more contradictory than when it comes to private prisons. Not only was the U.S. Department of Justice forced to conclude that the cost savings promised by private prisons “have simply not materialized,” but risks regarding incarceration rates, recidivism, rehabilitation and safety are also often made worse.

The bottom line is that privatization most often benefits only the privateers. It doesn’t take a nuclear physicist to understand that misaligned interests tend to result in divergent outcomes. As a society, we should seek to establish a system that maximizes our human resources by putting people to work in the most productive manner possible. That goal is naturally at odds with those who seek to profit from increasingly incarceration — the least productive of human activities.

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Feb 232011
Union members picketing outside the National L...

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Article first published as The War on Working Americans and the Battle of Wisconsin on Technorati.

First they came for the factory jobs, but Americans didn’t speak out, because most didn’t work in factories.

Then they came for the construction jobs, but again Americans didn’t speak out, because they didn’t work in construction either.

Then they came for the public employee jobs, and some Americans did speak out, but others fought against their efforts, because they believed that their fellow American workers were to blame for unbalanced budgets and economic strife.

Then they came for . . . who will it be next? Might it be you and yours?

Who will be left to speak out for you?

The fight for workers rights in Wisconsin is an issue that should concern all working Americans. Unions there have agreed to the severe cuts proposed by Governor Scott Walker, but still he refuses to move on ending their right to collective bargaining. Efforts there to cloak union busting as responsible fiscal policy are nothing more than the most recent attempt to squeeze working Americans in order to pile more into the coffers of our nation’s economic elite.

The origin of the demise of the American worker goes back more than 30 years. It was conceived in the stagflation of the 1970s and born out of the anti-labor policies of Ronald Reagan. It was Reagan’s 1981 firing of 13,000 striking air traffic controllers that was the shot heard around the world, the shot that started the war against labor that continues to this day.

Reagan was an anti-labor zealot who stacked the NRLB (National Labor Relations Board) with management types who were against unions. The result was an NRLB that sided with employers 75% of the time, a marked increase from the 33% rate under Nixon. Under Reagan the labor department was turned into an anti-labor department; OSHA was cut by one-third; training programs were cut back; he tried to lower the minimum wage for youths and even attempted to replace thousands of federal employees with temporary workers who would not be protected by a union.

Things weren’t as bad under George Bush Sr., but ignoring what Ross Perot called the “giant sucking sounds” from the south, the senior Bush worked diligently to establish free trade under NAFTA (North American Free Trade Agreement). President Bill Clinton signed the agreement into law in December of 1993, and as predicted by Perot, American jobs and money were siphoned off at a record pace.

Hundreds of thousands of manufacturing jobs were lost during Clinton’s presidency, but those losses pale when compared to what happened under George W. Bush. By the end of the junior Bush’s first term, the U.S. trade deficit with Canada and Mexico had swelled to 12 times its pre-NAFTA level, and 2.8 million manufacturing jobs had been lost. Many factors contributed to these losses, but trade policy that allows unfair conditions and tax policy that promotes offshoring have been major factors leading to the 20 million high-paying manufacturing jobs that were lost between the 1970s and the present.

The impact of the loss of manufacturing jobs cannot be overstated. Their loss marked an American shift from being an exporter nation to having huge trade deficits. And because manufacturing jobs are generally considered to provide the largest job multiplier, actually creating around 2.5 jobs for each manufacturing job, their loss has been particularly burdensome on the economy. As always, it’s middle and working class Americans who paid the price through lost jobs and declining wages as corporation after corporation ramped up profits with cheap overseas labor.

While nobody except Wall St. bankers, corporate CEOs and politicians were safe when the economy collapsed in 2008, it was the construction industry that took the most severe hit. While banks were packing away record profits and bankers record bonuses, their plunder of more than a quarter of the wealth of the middle class took with it 8 million American jobs, and the lion’s share were in the trades. Unemployment in construction hit its highest level on record in March 2010, rising to 27.1%.

Today, construction is still plagued with high unemployment levels, lingering at 22.5% this January. Add to this the deleterious effects of the intrusion of illegal immigrants into the industry, estimated at around 17% of the overall construction workforce, and what was once a sector that promised opportunity for hard working Americans is now a wasteland of skilled craftspeople who can’t afford the houses they worked to build.

So, with manufacturing jobs decimated and construction on the ropes, the wave of Republican governors who swept into office this past November have placed their sights on public employees. Their itchy trigger finger of blame is now pointed at civil servants. Their story is that public employee pensions are the reason behind why so many states can’t balance their budgets; state workers are over compensated and underworked, the story goes.

A hurting public, where unemployment is still at 9.4%, wages have stagnated for 30 years, healthcare is too expensive and prospects too few has been all too quick to accept this fairy tale. Those who want to hide the truth have used these conditions to successfully divert scrutiny and assign blame. But people accept their treachery at a high personal cost that can easily be avoided by looking a bit deeper.

The fact of the matter is that state budgets are in turmoil because of the loss of economic activity, which is the direct result of the bankster’s plunder, the failure of both the President and the Congress to hold anyone accountable, and the GOP’s obstruction of anything that might stimulate job creation. It is true that some pension plans may need to be renegotiated, but the unions have been open to such efforts. And it’s also important to keep in mind that underfunded pensions weren’t as large a concern before the funds were victimized by the Wall St. extraction.

On the topic of public employee pay . . . well, the truth is quite different from the political spin. According to Keith Bender, economic professor at the University of Wisconsin, the compensation of state and local employees are lower than for private sector workers of equal education. His recent study concluded that, on average, their total compensation was 6.8% lower than in comparable private sector jobs.

In the final analysis, whether or not people believe that the maligning of public employees is completely absent of factual basis, they need to see the present attacks for what they are — a play for power. The truth of the matter is that the reason people see public employees as advantaged isn’t because the teachers, firefighters, police, nurses and the rest have done so well; it’s because without unions to represent them, the vast majority of private sector employees have been bled for lower wages and fewer benefits to the point of collapse.

The facts are readily available and the conclusions completely obvious, all that’s needed is the desire to know the truth. The truth is that pay for the average American has stagnated for decades while income for the upper 1% has skyrocketed, rising to a record 17.1% of all income by 2007. This dynamic has created a situation where that top 1% now holds more financial wealth than the bottom 95% of Americans.

Couple this good fortune for the economic elite with the first decline in median household income since 1967 and the slowest rate of job growth since 1945, and it’s pretty easy to understand why people are pissed. But that anger shouldn’t be directed at fellow victims of the plunder. The problem is that 98% of all Americans are being increasingly exploited by a small minority who sit atop the economic pyramid and pull the puppet strings of the politicians on both sides of the aisle. It is in their direction that the ire of the American people should be directed.

Unions were never the problem. In fact, it was unions that gave us most of the benefits now experienced in the workplace. Without unions we wouldn’t have a 40-hour workweek, nor would we have an 8-hour workday. Paid vacation and sick leave, working wages, health benefits, unemployment insurance, workers compensation, and yes — pensions — all were made possible by unions.

It’s time for all Americans to join together and say “enough!” Enough shipping our jobs overseas. Enough concentration of wealth. Enough tax cuts for the wealthy paid for on the backs of American workers. Enough lying and blaming others for the pain caused by the constant squeeze to get more profits. And enough union busting bullshit being sold as unavoidable fiscal discipline!

Wisconsin is ground zero in the fight to restore prosperity to the American middle class. Keep your eye on the ball America, and don’t let any more con men like Scott Walker distract you while they pick your pocket. Remember, if you’re a working American, it’s not a question of “if” they will come for you and yours — it’s a question of “when” — and they just might come for you next.

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Jan 262011
Logo of General Motors Corporation. Source: 20...
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Article first published as Capitalism and Democracy, Out of Balance in America? on Technorati.

Accountants, plumbers, teachers . . . lawyers, barbers, technicians — people and societies have many needs and many professions to fill them. If your car’s broken, you take it to a mechanic. If it’s your body that’s ailing, you call a doctor. But what do you do when it’s the society itself that’s in need of emergency care?

America is hurting, and even those who love to wave the flag and speak of our greatness are hard pressed to argue otherwise. We have 15 million people out of work and long-term unemployment at a record high; 44 million Americans now live below the poverty line, with many millions unsure of the source for their next meal; real median household income has been in decline since the turn of the century, and those people now lucky enough to find a job often do so at a significant reduction in pay.

From coast to coast, American infrastructure is in decay, needing more than $3 trillion in repairs. Our healthcare costs continue to spiral out of control, with per-capita spending as a nation more than double the OECD (Organization for Economic Cooperation and Development) average — and in return we achieve inferior outcomes. The federal debt is presently over $14 trillion, about 94% of GDP, and the budgets of 46 states across the Union are in crisis, some approaching default.

Our education system is in disarray; we can’t seem to break our dependence on foreign oil and fossil fuels; we’re destroying our environment with pollution and activities like hydraulic fracturing; the foreclosure crisis is still wreaking havoc on the middle class; our manufacturing base has been decimated; private debt is at an all-time high; our trade balance is upside down — and worst of all — the American people seem more divided than at any time in modern history.

The fact of the matter is that if America were a car, it would be in desperate need of an overhaul; if it were a person, the transplant of multiple organs would be in order. Few and far between are any Americans who would argue that we’re not headed toward disaster, but fewer still are those who offer any real solutions. So, where do we turn for answers? Who do we call?

It is the responsibility of the government to “ensure domestic Tranquility” and “promote the general Welfare.” So, with the domestic climate being anything but tranquil, and the welfare in recent years far from general, it would seem sensible to look to government for leadership — after all, this is the reason for its existence. Our elected representatives are then the people we should call . . . but alas, that really hasn’t been working very well.

The problem is that far too many of those representatives have, in practice, changed employers. They no longer work for the American people. They’re now employed by our nation’s largest corporations. You see, elections are expensive. The 2010 edition ran up a tab exceeding $4 billion. And the sad truth is that the candidate who doesn’t have a sufficient war chest doesn’t get elected. So, unless they’re independently wealthy, candidates are forced to fill their chests with the donations of those willing and able to give. That all too often means taking money from those who the government is established to oversee.

Sadly, for the American people, the average citizen is but a pawn in this national game of influence purchasing. Even the capacity of organized labor, a favorite villain of the right, pales when compared to the might of Big Business to fund elections. In the 2010 campaign alone, business outspent labor by more than 15 times over — paying out nearly $1.3 billion to labor’s paltry $81 million. And make no mistake, those corporate donors don’t support candidates for altruistic reasons — they act only for profits, and they demand favors for their contributions.

Tragically (again, for the American people), many of the corporations controlling Congress actually have no national loyalties whatsoever. In fact, 83 of the 100 largest American corporations maintain foreign bank accounts and shelter their income in tax havens — many paying nothing in U.S. income tax. In fact, it’s so bad that General Electric, fourth on the Fortune 500, made profits of $10.3 billion in 2009, and Uncle Sam wound up owing them $1.1 billion. It’s estimated that companies using tax havens manage to evade more than $100 billion in U.S. taxes every year. The problem is actually so widespread that estimates conclude one-third of all global wealth is stashed in offshore accounts.

The realization that has thus far somehow escaped the American public is that we live today in a globalized economy, and the paradigm that “what’s good for General Motors is good for America” is a relic of times gone by. In all too many cases, what’s good for “American” corporations is actually a poison pill for the average American. And the loss of tax revenues stolen by multinational corporations that use American taxpayer funded infrastructure and services, from roads and utilities to police and fire protection, all without paying their fair share, is only the tip of the iceberg.

All one has to do to see the disconnect between corporate wealthfare and the wellbeing of the American people is to look at Wall Street’s recovery over the past two years and compare it to Main Street’s continued struggle. The Dow Jones, after dropping below 7,000 in March of 2009, was invigorated by the second TARP payout and climbed steadily to finish 2010 at 11,577 — a 77% rise. Bankers rejoiced and passed out record bonuses, $20.3 billion for 2009 and promises of even larger handouts for last year.

Meanwhile on Main Street, 2009 began with unemployment at 7.3% and climbed right along with the Dow to peak in October 2009 at just over 10%. Federal stimulus dollars helped to provide some relief, and 2010 ended with some improvement but still with the jobless rate at 9.4%, and the more reflective U6 rate, which includes the underemployed, stuck at nearly 17%. Yet, as bad as this sounds, the situation is worse still — much worse. The stark truth hidden beneath the published rates is that we now have the lowest labor force participation rate since April 1984 . . . long term unemployment is still rising and people are just not being counted anymore.

And what are those “American” corporations doing? Well, they are creating lots of jobs; it’s just that the majority of them are not in the U.S.. According to the Economic Policy Institute, “American” corporations created 2.4 million jobs in 2010, but nearly 60% of them, 1.4 million went to foreign nations.

Fueled by cheap foreign labor, free trade and government subsidies, the profits of American businesses are soaring. Posting their highest profits ever, $1.659 trillion in the third quarter of 2010, things are good for corporate America. There was a time when that would have translated into prosperity for the average American, but not so anymore. Today, American workers are in a race to the bottom. Their compensation is dropping while commodity prices are climbing. They struggle to provide the basic essentials for their families, while politicians and pundits are increasingly selling the tale of an unavoidable economic shift.

Americans are being sold a bad bill of goods that insists that they accept a new normal . . . one with high unemployment, low wages, weakened social safety nets, and in the final analysis — a lower standard of living. This is the path to continually increasing corporate profits in a globalized economy. Such profits require cheap labor, which means that unemployment will not stem until Americans are willing to work for third-world wages. This is the tyranny of the elite, and it’s a direct result of corporate control of the United States government.

Adam Smith’s invisible hand of the market is alive and well, and it’s painting a new America, one that’s increasingly focused on the wellbeing of We the Corporations instead of We the People. Fortunately, it doesn’t have to be this way, but it’s not going to change through the voluntary actions of a government that’s bought and paid for by those who benefit from exploiting the populace.

The bottom line is that Big Business and American politicians have developed a symbiotic relationship that’s poisonous to the people. Big Business thrives on low taxes, deregulation and cheap labor, and American politicians fund their elections on Big Business donations. The quid pro quo in Washington is operating with unprecedented precision, firing on all cylinders and serving well the needs of the economic elite.

The unavoidable truth is that American democracy has let down the American people —there is nobody to call when those charged with service have been corrupted and no longer seek the greater good. So, what do you do when there’s nobody to call? You do the best you can to tend to the matter yourself. In this case, that starts with asking a new question: what’s good for America?

Without doubt, the answer will most assuredly be in perfect harmony with what’s good for most Americans. And as was the design of the Founding Fathers — that will be a society consisting of a strong democracy intended to curb the excesses of its capitalism, not vice versa.

We need to get the money out of politics, and you can help.

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