Article 43


Monday, December 31, 2012

Austerity American Style Part 5 - Selling Out The Public


“With the Bush administration, the underlying evil that informs systems of government that are based on “power over” instead of “liberty for” is coming out from hiding in the shadows”
- War On Consciousness, Paul Levy, June 2007

The game isn’t over in the US, but the smart money is that the first revolution in the US isn’t going to be a revolution of the left, its going to be a nutbar revolution from the right, and it is going to be extraordinarily ugly. In the meantime, if you have to stay, make sure you’re on good terms with your neighbors, your spouse, your friends and your family.  Figure out how to grow food wherever you are and how to reduce your dependence on anything but people you trust.  (Don’t trust any corporation.) And, if you can, organize.  Organize locally, organize at the State level, organize nationally.  Understand the age of compromise is over. It is now too late to save the old system.  It’s over.  We tried, and we failed.  It is beyond reform, it is GOING TO FLAME OUT, the only question is how many people it will burn to death as it does so.
- An American Future, Newshoggers, December 2010

The idea that raising taxes on the rich in these dismal economic times in any way represents some injustice is such baloney that one should wonder how any American can possibly eat this Republican garbage. Similarly, the nonsense about job creators somehow not creating new jobs because of higher taxes flies in the face of reality, because very low taxes have not caused them to create significant new jobs. Nor did higher taxes for some decades for decades after World War II stop high rates of new job creation.
- Are you A Victim Of Political Propoganda, August 30, 2012

The problem from the standpoint of conventional economics with the fiscal cliff is that it amounts to a double-barrel dose of austerity delivered to a faltering and recessionary economy.  Ever since John Maynard Keynes, most economists have understood that austerity is not the answer to recession or depression.

...the entire economic policy of the United States is dedicated to saving four banks that are too large to fail. The banks are too large to fail only because deregulation permitted financial concentration, as if the Anti-Trust Act did not exist.
- The “Fiscal Cliff” Is A Diversion, Paul Craig Roberts, December 17, 2012

“The simple truth is that Social Security has not contributed a nickel to the national debt so it makes no sense for it to be part of deficit negotiations,
- Senator Bernie Sanders, November 27, 2012

“Every time I hear a political speech or I read those of our leaders, I am horrified at having, for years, heard nothing which sounded human. It is always the same words telling the same lies. And the fact that men accept this, that the peoples anger has not destroyed these hollow clowns, strikes me as proof that men attribute no importance to the way they are governed; that they gamble - yes, gamble - with a whole part of their life and so called ‘vital interests.’”
- Albert Camus, 1937

We must remember that every right, we enjoy has been wrestled from the hands of power, at great personal cost by ordinary people like you and I.  We have been entrusted with the honor of remembering their struggle and defending these rights by helping to educate others and holding to the belief that compassion and understanding arise from an awareness that we are all just reflections of each other.
- Tom Feely, Information Clearinghouse


Obama Hits Social Security In Fiscal Cliff Offer Friendlier To The Wealthy
President Barack Obama, with his latest fiscal cliff offer, proposes extending the Bush tax cuts for everyone earning less than $400,000 a year, and paying for it by increasing taxes on the middle class and cutting Social Security and Medicare.

By Ryan Grim
Huffington Post
December 18, 2012

Obama’s offer would allow the payroll tax holiday to expire, meaning middle class workers will see smaller paychecks in 2013. Economists have warned that the recovery is too fragile to risk a broad tax hike on workers. IT WOULD also gradually reduce Social Security, pension and Medicare benefits seniors are due to receive, taking a small bite up front, but building up to much larger cuts over time.

Obama’s concession to Republicans is opposed by a majority of Americans, according to a HuffPost/YouGov poll. Fifty-two percent of survey respondents said the payroll tax cut should be extended to avoid raising taxes on the middle class, while 22 percent said that it should be allowed to expire to help pay down the debt. Extending the payroll tax cut received bipartisan support: 64 percent of Democrats and 57 percent of Republicans in the survey said they supported the extension. 

MOVE ON, the largest online progressive organization in Washington, reacted angrily Monday night to reports that Obama was softening. The group’s quick reaction to a possible deal that has yet to be announced publicly shows there will be fierce opposition to cuts that hit Social Security, Medicare or Medicaid beneficiaries.

One top GOP aide predicted a deal, within the next day, that House Republicans would have no choice but to accept. A second said that many details still needed to be filled in, and that the president was dug in at $1.2 trillion in revenue, more than Republicans wanted.

Obama, according to Senate Majority Leader Harry Reid (D-Nev.), had previously told fiscal cliff negotiators that “Social Security is not going to be part of this.” That TURNED OUT TO BE A FALSE ASSERTION, given Monday’s offer to target the elderly. The proposed Social Security reform is known as “chained CPI” and is an alternate measure of inflation that accounts for the way consumers react to higher prices by switching to similar products that are less costly. Or, as the Bureau of Labor Statistics put it, “If the price of pork increases while the price of beef does not, consumers might shift away from pork to beef.”

The CHAINED CPI proposal is unpopular across the political spectrum. Fifty-six percent of Republicans, along with 67 percent of Democrats and 46 percent of independents, said they thought the proposal was a bad idea. Older Americans were most likely to oppose the measure, with 77 percent of those age 65 and older saying that the proposal was a bad idea. Adults under 30 were the least likely to have an opinion: 50 percent said they weren’t sure whether the proposal was a good or bad idea, while 21 percent said it was a good idea and 29 percent said it was a bad idea.

Justin Ruben, head of MoveOn, said in a statement that the group’s members agree. “MoveOn members overwhelmingly oppose cuts to Social Security, Medicare, and Medicaid benefits, and they’ve made clear that they would see any fiscal agreement that cuts such benefits as a betrayal that sells out working and middle class families—whether the cuts come via a chained CPI, increased Medicare eligibility age, or in some other form,” Ruben said.

Ruben said that his organization would encourage Democrats to block such a bargain. “If such a deal were proposed by the president and speaker, MoveOn members would expect every Senate and House Democrat to do everything in their power to block it,” Ruben said. “Senate Majority Leader Reid would play a crucial role, as MoveOn members would count on him and other senators to remain true to their repeated promises to keep Social Security benefits off the table.”

Reid has indeed been adamant. “I have made it very clear, I have told anyone that will listen—including everyone in the White House, including the president—that I am not going to be part of having Social Security as part of these talks relating to this deficit,” Reid told reporters earlier.

Alex Lawson, executive director of Social Security Works, which opposes cuts to the program, said the chained CPI is painful policy. “Almost every elected official just spent an entire election season saying they wouldn’t cut the benefits of those 55 and older. The truth is the chained CPI hits everyone’s benefits on day one,” he said. “It hits the oldest of the old and disabled veterans the hardest. If it wasn’t being bandied about as being ‘on the table,’ I would guess that it was created as an office joke to see who could create the most noxious and offensive policy possible.”

Boehner included the chained CPI in his counteroffer to Obama earlier, which also called for broader reform of social insurance programs. In 2011, Boehner and Obama reportedly agreed to a “Grand Bargain” that included the chained CPI, but the deal fell apart.



Proposed Social Security Bargain Makes No Sense for the Elderly

By Dean Baker
Center For Economic Policy And Research
December 18, 2012

According to reliable sources, the Obama administration is seriously contemplating a deal under which the annual cost of living adjustment for Social Security benefits would be indexed to the chained consumer price index rather than the CPI for wage and clerical workers (CPI-W) to which it is now indexed. This will lead to a reduction in benefits of approximately 0.3 percentage points annually. This loss would be cumulative through time so that after 10 years the cut would be roughly 3 percent, after 20 years 6 percent, and after 30 years 9 percent. If a typical senior collects benefits for twenty years, then the average reduction in benefits will be roughly 3 percent. 

There are a few quick points worth addressing:

The claim that the chained CPI provides a more accurate measure of the cost of living;

Whether Social Security benefits are now and will in the future be sufficient to allow for a decent standard of living for retirees; and

Whether this is a reasonable way to be dealing with concerns over the budget.

This are taken in turn below.

Is the Chained CPI More Accurate?

While many policy types and pundits have claimed that the chained CPI would provide a more accurate measure of the cost of living for seniors, they have no basis for this claim. The chained CPI is ostensibly more accurate for the population as whole because it picks up the effect of consumer substitution as people change from consuming goods that increase rapidly in price to goods with less rapid price increases.

While this is a reasonable way to construct a price index, it may not be reasonable to apply the consumption patterns and the substitution patterns among the population as a whole to the elderly. The Bureau of Labor Statistics (BLS) has CONSTRUCTED AN EXPERIMENTAL ELDERLY INDEX (CPI-E) which reflects the consumption patterns of people over age 62. This index has shown a rate of inflation that averages 0.2-0.3 percentage points higher than the CPI-W.

The main reason for the higher rate of inflation is that the elderly devote a larger share of their income to health care, which has generally risen more rapidly in price than other items. It is also likely that the elderly are less able to substitute between goods, both due to the nature of the items they consume and their limited mobility, so the substitutions assumed in the chained CPI might be especially inappropriate for the elderly population.

While the CPI-E is just an experimental index, if the concern is really accuracy, then the logical route to go would be for the BLS to construct a full elderly CPI. While this would involve some expense, we will be indexing more than $10 trillion in Social Security benefits over the next decade. It makes sense to try to get the indexation formula right.

Are Social Security Benefits Adequate?

While some people have tried to foster a myth of the elderly as a high living population, the facts dont fit this story. The median income of people over age 65 is LESS THAN $20,000 A YEAR. Nearly 70 percent of the elderly rely on Social Security benefits for more than half of their income and NEARLY 40 PERCENT RELY ON SOCIAL SECURITY FOR MORE THAN 90 PERCENT OF THEIR INCOME. These benefits average less than $15,000 a year.

The reason that seniors are so dependent on Social Security is that the other pillars of the retirement stool, employer pensions and individual savings, have largely collapsed. Defined benefit pensions are rapidly disappearing. Defined contribution plans, like 401(k)s have also proved grossly inadequate. Only around half of the work force even has a defined contribution plan available to them at their workplace. In a period of stagnant wages and limited employer contributions, workers have generally been unable to accumulate much wealth in these plans. According to the Retirement Research Center at Boston College, the median value of 401(K) and other defined contribution plans for those near retirement who have a plan is $120,000, ENOUGH TO GET AN ANNUITY PAYING $575 PER MONTH.

For most workers the vast majority of their wealth was in their homes. The collapse of the housing bubble destroyed much of this equity. Counting all forms of wealth, including equity in a home, the median household approaching retirement HAD JUST $170,000 IN WEALTH IN 2011.

The proposed cut in the annual cost of living adjustment will be a substantial hit to a population that for the most part is ill-prepared to see a cut in its income. The effect of this cut on the income of the typical beneficiary will be larger, measured as a share of income, than the return to Clinton era tax rates on the richest 2 percent will be to the people affected. It is also worth noting that this cut to benefits will affect current retirees, not just people who will be collecting benefits 10 or 15 years in the future, who might have some opportunity to adjust to a cut.

Is the Chained CPI a Reasonable Way to Deal with the Budget

It is important to remember that under the law Social Security is supposed to be treated as a separate program that is financed by its own stream of designated revenue. This means that it cannot contribute to the budget deficit under the law, because it is only allowed to spend money from the Social Security trust fund.

This is not just a rhetorical point. There is no commitment to finance Social Security out of general revenue. The projections from the Social Security trustees show the program first facing a shortfall in 2033 after which point it will only be able to pay a bit more than 75 percent of scheduled benefits. While this date is still fairly far in the future, at some point it will likely be necessary to address a shortfall.

It is reasonable to expect that the changes needed to keep the program fully funded will involve some mix of revenue increases and benefit cuts. However if the chained CPI is adopted as part of a budget deal unconnected to any larger plan for Social Security then it effectively means that there will have been a substantial cut to Social Security benefits without any quid pro quo in terms of increased revenue. This hardly seems like a good negotiating move from the standpoint of those looking to preserve and strengthen the program.

There is also the question of whether the Social Security trustees will even score this cut accurately. In the 1990s there were changes to the CPI that had the effect of reducing the measured rate of inflation by at least 0.5 percentage points annually (Economic REPORT TO THE PRESIDENT 1998 Box 2-6). This would have implied a reduction in the annual cost of living adjustment by this amount and a corresponding improvement in the Social Security trust fund’s prospects. However, there is no evidence of this improvement in the programs finances during this period. In fact the projected rate of real wage growth (the difference between the nominal rate of wage growth and the measured CPI) was 1.0 PERCENT IN 1995, before the changes to the CPI. The projected long-run rate of real wage growth had actually been lowered to 0.9 percent in the 1998 TRUSTEE REPORT (Table II.D.1) which was issued after all the reductions in the CPI had been put in place.

It is important to remember that the trustees projections come from the trustees, not the professional staff of the Social Security Administration. Four of the six trustees are political appointees of the president. It is certainly possible that the cuts associated with the adoption of the CPI will not be factored into the trustees projections just as the even larger cuts associated with the changes in the CPI in the 1990s were not factored into the trustees projections.

Finally, it is worth commenting on the idea of tampering with statistical measures to achieve budgetary goals. The United States has been fortunate in having independent statistical agencies that have fiercely resisted efforts to manipulate data for political ends. In fact, in the 1990s there was considerable pressure placed on the Bureau of Labor Statistics to make adjustments to the CPI which would reduce Social Security and other indexed benefits. Katherine Abraham, the then head of the agency was steadfast in refusing to make any changes to the index that were not justified by BLS research.

The current effort has the spirit of using statistics for political ends, for example by refusing to have BLS produce a full elderly CPI so we would actually know the inflation rate experienced by the elderly. There also has been some discussion of leaving some programs, such as Supplemental Security Income, tied to the current CPI so as not to hurt a seriously disadvantaged population.

Congress can decide the benefit formula for these programs as it chooses. The honest way to cut benefits is for Congress to explicitly vote to cut benefits, not to try to hide a cut behind a statistical manipulation. This is the sort of behavior that encourages public contempt for politicians and the political process. 



I May Lose My Unemployment Benefits

By Jennifer Liberto
CNN Money
December 20, 2012

This could be Karen Duckett’s worst New Year, ever.

Duckett, 51, of Laurel, Md., is among 2.1 million jobless Americans whose unemployment benefits will end on Dec. 29, if Congress doesn’t act.

After a 30-year career, managing housekeeping staff at a retirement community, Duckett was laid off last year. Despite looking for a job every day, she hasn’t been able to find work. Duckett says if her unemployment benefits run out, she and her 14-year-old grandson, who lives with her, won’t have enough money to eat.

“It’s been a very difficult year,” Duckett said. “The check keeps a roof over our head. ... I can’t even imagine what we’re going to do without that check.”

She is among 2.1 million Americans who will no longer be able to apply for unemployment benefits in the New Year. Another 1 million people who don’t have jobs will also exhaust their state benefits in early 2013 and lose their benefits, according to the National Employment Law Project, an advocacy group.

During the recession, as unemployment rates rose over 10%, the government put in place an emergency program to extend federal benefits to the jobless, whose state unemployment insurance had run out. Currently, federal unemployment benefits are available for up to 47 weeks, depending on the state.

The cost to extend the benefits by another year is $30 billion, according to the Congressional Budget Office. It’s a little piece of the $7 trillion in tax increases and spending cuts that will take effect as part of the fiscal cliff. It’s also a relatively small cost compared to other expenses, such as the payroll tax cut, which will cost $115 billion.

Majority of Americans have received government aid

Democrats have championed an extension of the benefits. President Obama said Wednesday during a press conference that he wasn’t willing to give tax breaks to millionaires while “not providing unemployment insurance for 2 million people who are still out there looking for work.”

Republicans have been cool to the extension. They say they’re open to the idea only if it doesn’t add to federal deficits. Finding $30 billion to “pay for” rising deficits could be tricky enough to scuttle a deal.

Several economists have said the economic recovery needs it.

“It is important to continue on with the emergency unemployment insurance program. It is providing a boost to economic growth,” said Mark Zandi, chief economist of Moody’s Analytics.

If Congress does extend unemployment benefits, it would be the 10th extension since the Great Recession began in December 2007. Congress first enacted an extension to the federal benefits package in June 2008.

Some 40% of the roughly 12 million people currently unemployed have been jobless for more than six months, according to NELP.

Duckett is one of the long term unemployed. That’s why she hit Capitol Hill on Tuesday, along with 50 other unemployed workers—organized by the Philadelphia Unemployment Project. The advocacy group hoped their stories would push lawmakers to work toward a deal to extend federal benefits until the economy improves.

“I opened my mailbox a week ago and got the notice warning me that I would not be receiving any more checks,” said Duckett, a breast cancer survivor, with tears streaming down her cheeks. “That gives me two weeks to see what we’re going to do.”



Obama’s Grand Charade: Say No to the Staged Dismantling of Medicare and Social Security

By Margaret Flowers
Global Research
December 7, 2012

Here we go again. President Obama is in round three of his ongoing efforts to cut our important social insurances, such as Social Security and Medicare. Whether he succeeds or not is up to us. We can create a stronger economy and healthier population by strengthening and expanding our social insurances and switching to a green energy economy.

Round 1: In April, 2010, shortly after President Obama signed into law a health bill that further privatizes our health care system and while all attention was on this “historic achievement,” Obama created the NATIONAL COMMISSION FOR FISCAL RESPONSIBILITY AND REFORM. He appointed Alan Simpson and Erskine Bowles as chairs of what was commonly known as the Deficit Commission and loaded the panel with 14 deficit hawks out of the total of 18 appointees. The commission was given the power to create a deficit plan that would go to Congress for an up or down vote.

If there was still any question about the intent of the commission, those should have been answered by the fact that the PETER G. PETERSON FOUNDATION was working closely with them, providing support staff and hosting the America Speaks gatherings in the summer of 2010. Billionaire Pete Peterson has SPENT DECADES arguing for cuts to social insurances.

I attended an America Speaks event in Detroit in June, 2010 and it felt very similar to the Health Care House Parties that the Obama campaign promoted in December, 2008. The event materials were designed to manufacture consensus on how much to cut our social insurances. But, the people weren’t fooled and when the question of how much to cut Medicare was raised, many people demanded Medicare for all as a choice.

I also testified before the Deficit Commission in late June, 2010, arguing that Medicare for all would solve both our health and financial crises. But the Commission wasnt concerned with effective solutions, instead it was laying the groundwork for the Grand Charade that would lead Americans to believe we have a deficit crisis and accept austerity measures.

The commissionwas unable to get enough votes among its members by its December deadline for issuing a report, so there was no vote in Congress on their recommendations, but many of their ideas appeared in Paul Ryan’s “Path to Prosperity” in early 2011. Simpson and Bowles also issued their own report which is often mistakenly labeled the report of the commission.

Round 2: In August, 2011, another committee was created and given the same power as the Deficit Committee. This group of 12 members of Congress, 6 from each body and 6 from each party, was known as the Super Committee.  This small committee with extraordinary power was unprecedented and represented a serioususurpation of the democratic process.

The Super Committee held hearings during the fall and was required to issue recommendations by Thanksgiving. From the start, the committee stated that everything was on the table, including social insurances. While they went through the motions of public hearings, the agreements were already being made in secret negotiations and they included cuts to vital programs.

In fact, by this time it was clear that President Obama was not only willing to accept cuts to Social Security and Medicare, two programs that are the pride of the Democratic Party, but was DRIVING THE PROCESS. Documents leaked show that Obama offered Boehner a “Grand Bargain” that included cuts to a broad array of social programs that would have hurt every American.

Like the Deficit Committee, the Super Committee failed to reach a consensus by the deadline. No doubt mobilized resistance to cuts to social programs made their task more difficult. The Occupy movement was in full swing, occupiers protested the Super Committee and some even walked to DC from NY, Philadelphia and Baltimore to protest. In Washington, DC, the occupation at Freedom Plaza held our own Super Committee Hearing.Our report, The 99%s Deficit Proposal: How to create jobs, reduce the wealth divide and control spending, showed that there were real solutions to our crises that were better for the people and were supported by supermajorities of the population.

Round 3: The so-called Fiscal Cliff is the current attempt to convince people that we will have to accept cuts to important programs. If enough people can be convinced that the sky is falling, then President Obama can make the cuts he has sought to make for years. No doubt giving Wall Street what it has wanted for a long time will be rewarded with high-paid speeches to big business when his presidency ends.

And this time, the President has the help of more than 80 CEOs, led by Simpson and Bowles, to get the job done. The new “Fix the Debt” campaign is starting with a budget of $60 million for public ads and lobbying Congress. Why is big business getting involved? Cuts to social insurances will allow further cuts in corporate taxes.

This is reminiscent of a similar campaign called “Health Care for America Now” that helped the President pass a Wall Street health care bill. Like Health Care for America Now, the public will be convinced through a strategic propaganda campaign to make demands from Congress that go against their own interests. But, we shouldn’t expect anything less from a president who WON marketing campaign of the year in 2008.

So, the president has upped the ante in this ongoing Grand Charade. And unless we take action, cuts to our important programs will cause real suffering and more preventable deaths. There are solutions to all of the crises that we face. We must demand that human needs and protection of the planet be a higher priority than corporate profits.

For example, if we improved Medicare and expanded it to every person in the US, we could effectively control our health care costs which are growing faster than GDP. Former president CLINTON ACKNOWLEDGED that the U. S. could save $1 trillion each year by adopting a single payer system like almost every other developed nation. We would also improve health outcomes and end bankruptcy due to medical illness and costs.

Just like with health care, if we put in place the right policy for retirement we solve the problem and help the economy. The CENSUS BUREAU REPORTS that in the last decade there has been a 78% increase in Americans over 60 facing the threat of hunger and one in six seniors live in poverty.  DOUBLING SOCIAL SECURITY would bring seniors out of poverty and be a giant stimulus to the economy. It would also be a great relief to every family.

Another popular solution is the GREEN NEW DEAL promoted by the Jill Stein campaign. The Green New Deal would create high quality jobs and transition the US to a renewable energy economy.

It’s time to end this Grand Charade. We mustn’t be fooled by this Wall Street agenda. AS WE’VE SEEN IN EUROPE, austerity measures are harmful to people and the economy. For ideas on organizing resistance to these measures, see SOLIDARITY AGAINST AUSTERITY and VIA 22.

Margaret Flowers is co-director of IT’S OUR ECONOMY, co-host of Clearing the FOG Radio and an organizer of the occupation of Freedom Plaza in Washington, DC. She is also with the Health Care is a Human Right campaign in Maryland.



Americas Deceptive 2012 Fiscal Cliff, Part II - The Financial War Against the Economy at Large

By Michael Hudson
Naked Capitalism
December 31, 2012

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure - via PRIVATIZATION - and now even the EDUCATIONAL SYSTEM. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they FEAR TO STRIKE or even to complain about working conditions. LOSING WORK means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the BANKRUPTCY LAWS to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.

The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

The emerging financial oligarchy seeks to shift taxes off banks and their major customers (real estate, natural resources and monopolies) onto labor. Given the need to win voter acquiescence, this aim is best achieved by rolling back everyones taxes. The easiest way to do this is to shrink government spending, headed by Social Security, Medicare and Medicaid. Yet these are the programs that enjoy the strongest voter support. This fact has inspired what may be called the Big Lie of our epoch: the pretense that governments can only create money to pay the financial sector, and that the beneficiaries of social programs should be entirely responsible for paying for Social Security, Medicare and Medicaid, not the wealthy. This Big Lie is used to reverse the concept of progressive taxation, turning the tax system into a ploy of the financial sector to levy tribute on the economy at large.

Financial lobbyists quickly discovered that the easiest ploy to shift the cost of social programs onto labor is to conceal new taxes as user fees, using the proceeds to cut taxes for the elite 1%. This fiscal sleight-of-hand was the aim of the 1983 Greenspan Commission. It confused people into thinking that government budgets are like family budgets, concealing the fact that governments can finance their spending by creating their own money. They do not have to borrow, or even to tax (at least, not tax mainly the 99%).

The Greenspan tax shift played on the fact that most people see the need to save for their own retirement. The carefully crafted and well-subsidized deception at work is that Social Security requires a similar pre-funding - by raising wage withholding. The trick is to convince wage earners it is fair to tax them more to pay for government social spending, yet not also to ask the banking sector to pay similar a user fee to pre-save for the next time it itself will need bailouts to cover its losses. Also asymmetrical is the fact that nobody suggests that the government set up a fund to pay for future wars, so that future adventures such as Iraq or Afghanistan will not run a deficit to burden the budget. So the first deception is to treat only Social Security and medical care as user fees. The second is to aggravate matters by insisting that such fees be paid long in advance, by pre-saving.

There is no inherent need to single out any particular area of public spending as causing a budget deficit if it is not pre-funded. It is a travesty of progressive tax policy to only oblige workers whose wages are less than (at present) $105,000 to pay this FICA wage withholding, exempting higher earnings, capital gains, rental income and profits. The raison de’tre for taxing the 99% for Social Security and Medicare is simply to avoid taxing wealth, by falling on low wage income at a much higher rate than that of the wealthy. This is not how the original U.S. income tax was created at its inception in 1913. During its early years only the wealthiest 1% of the population had to file a return. There were few loopholes, and capital gains were taxed at the same rate as earned income.

The governments seashore insurance program, for instance, recently incurred a $1 trillion liability to rebuild the private beaches and homes that Hurricane Sandy washed out. Why should this insurance subsidy at below-commercial rates for the wealthy minority who live in this scenic high-risk property be treated as normal spending, but not Social Security? Why save in advance by a special wage tax to pay for these programs that benefit the general population, but not levy a similar user fee tax to pay for flood insurance for beachfront homes or war? And while we are at it, why not save another $13 trillion in advance to pay for the next bailout of Wall Street when debt deflation causes another crisis to drain the budget?

But on whom should we levy these taxes? To impose user fees for the beachfront reconstruction would require a tax falling mainly on the wealthy owners of such properties. Their dominant role in funding the election campaigns of the Congressmen and Senators who draw up the tax code suggests why they are able to avoid prepaying for the cost of rebuilding their seashore property. Such taxation is only for wage earners on their retirement income, not the 1% on their own vacation and retirement homes.

By not raising taxes on the wealthy or using the central bank to monetize spending on anything except bailing out the banks and subsidizing the financial sector, the government follows a pro-creditor policy. Tax favoritism for the wealthy deepens the budget deficit, forcing governments to borrow more. Paying interest on this debt diverts revenue from being spent on goods and services. This fiscal austerity shrinks markets, reducing tax revenue to the brink of default. This enables bondholders to treat the government in the same way that banks treat a bankrupt family, forcing the debtor to sell off assets - in this case the public domain as if it were the family silver, as Britain’s Prime Minister Harold MacMillan characterized Margaret Thatcher’s privatization sell-offs.

In an Orwellian doublethink twist this privatization is done in the name of free markets, despite being imposed by global financial institutions whose administrators are not democratically elected. The International Monetary Fund (IMF), European Central Bank (ECB) and EU bureaucracy treat governments like banks treat homeowners unable to pay their mortgage: by foreclosing. Greece, for example, has been told to start selling off prime tourist sites, ports, islands, offshore gas rights, water and sewer systems, roads and other property.

Sovereign governments are, in principle, free of such pressure. That is what makes them sovereign. They are not obliged to settle public debts and budget deficits by asset selloffs. They do not need to borrow more domestic currency; they can create it. This self-financing keeps the national patrimony in public hands rather than turning assets over to private buyers, or having to borrow from banks and bondholders.




The Biggest Bubble In History: Fraud

By Washington’s Blog
January 24, 2013

Forget the Housing, Bond or Derivatives Bubbles Fraud Is the Biggest Bubble of All Time

The housing bubble which burst in 2007 or so was the BIGGEST BUBBLE OF ALL TIME.

Many argue that the bubble in U.S. bonds has surpassed the housing bubble as the largest ever.

Of course, given that the derivatives market is more than A THOUSAND TRILLION DOLLARS, and that is is backed by THOUSANDS OF TIMES LESS collateral, a good case can be made for arguing that derivatives are the biggest bubble.

But if you really think about it, the largest bubble in history is fraud, because it includes all of the above and more.

Specifically, the housing crisis was CAUSED BY FRAUD.  The government ENCOURAGED FRAUD, AND HELPED COVER IT UP.

Huge swaths of the derivatives market are manipulated by fraud.  See THIS, THIS, THIS and THIS. But instead of cracking down on the fraud, the government is BACKING IT.

And the bubble in bonds was caused by super-low interest rates.  See THIS, THIS, and THIS.

Low interest rates - in turn - are caused by the government’s zero interest rate policy and QUANTITATIVE EASING.

And how did the government sell these programs? By saying that they were necessary to help the economy and create more jobs.

But in reality, zero interest rate policy is just ANOTHER STEALTH BAILOUT FOR THE BIG BANKS.  And quantitative easing ONLY HELPS THE SUPER-ELITE...and hurt the economy and the little guy (Bernanke KNEW BACK IN 1988 that QE doesn’t work for its advertised purposes.)

In other words, the governments low interest rate policies were based upon a FUNDAMENTAL MISREPRESENTATION as to their purpose and probable effect.

Indeed, experts say that ALL BUBBLES are enabled by fraud.

But there are signs that the fraud bubble is collapsing.

Trust is falling to all-time lows as to many government and private institutions.  Why?  Because institutional corruption is so rampant that it is becoming obvious to everyone from JOE SIXPACK to amateur and SOPHISTICATED PROFESSIONAL INVESTORS.

While liberals tend to distrust big corporations and conservatives tend to distrust the federal government, we all agree that the MALIGNANT, SYMBIOTIC RELATIONSHIP between the two is the root problem.  Indeed, when GOVERNMENT SND CORPORATISM MERGE, it is hard for anyone to trust what is going on.

When government officials are AS CORRUPT as the CRIMINAL ENTERPRISES they are suppose to regulate, even the mainstream media CAN’T IGNORE IT ANY LONGER.

And the people lose all trust in the system.

No matter HOW HARD the boys WORK to COVER UP THEIR ONGOING MISDEEDS, the fraud bubble may finally be popping

See examples of a popping fraud bubble HERE, HERE, and HERE.



Treasury approved excessive pay for executives at bailed-out AIG, GM and Ally

Associated Press
January 28, 2013

A government report Monday criticized the U.S. Treasury Department for approving “excessive” salaries and raises at firms that received taxpayer-funded bailouts during the financial crisis.

The Special Inspector General for the Troubled Asset Relief Program said Treasury approved all 18 requests it received last year to raise pay for executives at American International Group Inc., General Motors Corp. and Ally Financial Inc. Of those requests, 14 were for $100,000 or more; the largest raise was $1 million.

Treasury also allowed pay packages totaling $5 million or more for nearly a quarter of the executives at those firms, the report says.

Also noted: A $200,000 raise was approved for an executive of Allys mortgage-lending subsidiary Residential Capital LLC just weeks before ResCap filed for bankruptcy protection. Ally was GMҒs financial arm until it was taken over by the government in the bailout.

“We ... expect Treasury to look out for taxpayers who funded the bailout of these companies by holding the line on excessive pay,” said Christy Romero, the special inspector general for TARP. Treasury cannot look out for taxpayers’ interests if it continues to rely to a great extent on the pay proposed by companies that have historically pushed back on pay limits.

The report says Treasury bypassed rules under the 2008 bailout that limited pay. Treasury approved raises that exceeded pay limits and in some cases failed to link compensation to performance, it notes.

Romero said the guidelines say compensation should not exceed the 50th percentile of pay for executives in similar positions at other financially distressed companies.

But pay surpassed that level for 63 percent of the executives whose pay was approved, according to the report.

The report also said Treasury officials had been warned a year ago that the department needed to reform its procedures to ensure that the pay guidelines are followed.

Patricia Geoghegan, the Treasury official who approved the raises, disputed the findings of the report.

In a letter to Romero, Geoghegan said it’s unfair to call the pay excessive. She said Treasury must strike a balance between limiting compensation and approving pay packages that are consistent with executives in similar jobs.

Geoghegan called the 50th percentile “a benchmark” She noted that some pay packages at the three companies exceeded that level in 2012. But she said more than half at AIG were at or below that level, while nearly half at GM and Ally were below it.

A Treasury Department spokesman had no additional comment Monday and referred to Geoghegans letter.

The three companies received a total $248.7 billion in the financial bailout in 2008. AIG has repaid the $182 billion it received; GM still owes $21.5 billion on the $49.5 billion it received and Ally owes $11.4 billion on $17.2 billion in aid.

In a statement, AIG said it has overhauled its compensation practices to align pay with the company’s goal of balancing profit and risk. The company also is reviewing pay policies to ensure that compensation is tied to performance, AIG said.

GM and Ally said they are complying with all pay restrictions under the bailout rules.



Obama Pushes Austerity in the Guise of Defending the Middle Class

By Patrick Martin
World Socialist Web Site
February 12, 2013

In the days leading up to Tuesday nights State of the Union address, the Obama administration has combined calls for austerity measures to slash social spending with demagogic attacks on congressional Republicans for advocating even larger cuts in domestic social programs.

Obama’s speech comes as back-room discussions continue between the White House and congressional leaders of both parties, driven by two imminent deadlines: the March 1 sequester, when $85 billion in across-the-board spending cuts take effect, and the March 27 expiration of authorization for spending by all federal government departments.

The sequester is a consequence of the 2011 Budget Control Act, a bipartisan deal between Obama and congressional Republicans, while the March 27 cutoff comes as a result of the expiration of another bipartisan agreement, the six-month continuing resolution passed last October to avoid a shutdown of the federal government during the 2012 election campaign.

If the sequester takes effect, budget cuts will hit both defense spending and a wide range of domestic social programs. The military cuts would have only a marginal effect in the vast Pentagon budget, which dwarfs the combined military spending of the next 15 countries in the world. The domestic cuts largely spare the major entitlement programs, Social Security, Medicare and Medicaid, but will devastate smaller programs like Head Start education for pre-kindergarten children.

On Friday, the White House published a list of the most egregious consequences of the domestic spending cuts looming under sequestration, as part of an effort to blame the Republicans for cuts for which both corporate-controlled parties are responsible. The list details the cumulative effect of the cuts, which total nearly $500 billion in domestic spending over the next ten years. Among the cutbacks:

An estimated 600,000 women and children would lose food stamps.

100,000 formerly homeless people would lose their government-financed housing.

Head Start cuts would eliminate early education slots for as many as 70,000 poor children.

Federal support would be eliminated for 7,200 school employees who serve special-needs children.

Job safety and food safety inspectors would face unpaid furloughs.

Federal loans to small businesses would be reduced by $500 million.

President Obama devoted his Saturday radio and Internet address to the sequester, warning of thousands of federal layoffs or furloughs and a huge blow to middle class families and our “economy as a whole” if the cuts took effect.

He argued, At a time when economists and business leaders from across the spectrum have said that our economy is poised for progress, we shouldn’t allow self-inflicted wounds to put that progress in jeopardy. This is a transparent effort to put the blame on congressional Republicans for a deepening economic crisis that implicates the entire capitalist system and all its political representatives, as reports in the US and globally suggest that world capitalism is already sinking back into renewed slump, more than four years after the Wall Street crash.

At the same time, Obama has renewed his appeal to the Republicans to join him in reaching a grand bargain that will include unprecedented cuts in Social Security, the government retirement benefits program, and Medicare, the federal health care program for the elderly.

Obama’s alternative to the sequester is simply a different set of deficit-reduction measures. In his Saturday address, he called for a balanced mix of “spending cuts” and the closure of “tax loopholes.” There’s certainly no reason that middle class families and small businesses should suffer just because Washington couldn’t come together and eliminate a few special-interest tax loopholes, or government programs that just don’t work, he concluded.

One policy choice by Obama speaks volumes about the real class basis of his administration. He proposed a pay raise for federal civilian workers of only one percent, after several years in which their pay has been frozen. According to the National Treasury Employees Union, federal workers have already accounted for $103 billion in deficit-reduction from the pay freeze and increased pension contributions. Since statutory pay guidelines call for at least a 1.8 percent pay raise, matching the level in equivalent non-government jobs, Obama’s 1.0 percent raise would take another $18 billion out of the pockets of federal workers.

The White House is seeking to conceal its anti-working-class program with another deluge of demagogy about Republicans defending the super-rich. White House senior adviser Dan Pfeiffer, in a blog post on the White House web site, decried the refusal of the Republicans to close loopholes for millionaires and billionaires.

The cynicism of this rhetoric is demonstrated by reports that Obama will name his longtime financial backer Penny Pritzker, heiress to the billion-dollar Hyatt Hotel fortune, as his next secretary of commerce, and choose the CEO of REI sportswear, Sally Jewell, a former Mobil oil executive, for the post of secretary of the interior.

In the presidents radio speech, and in statements by other spokesmen, the Obama administration has laid special emphasis on the need to avoid cuts in military spending. Obama cited the Navy’s decision to delay dispatch of a second aircraft carrier to the Persian Gulf, due to the uncertainty of funding.

Outgoing Secretary of Defense Leon Panetta issued several warnings about the supposedly catastrophic impact of the minor trim in Pentagon spending, and the uniformed chiefs of the various armed services are to appear before congressional committees Tuesday and Wednesday to reinforce the message.

An Army memorandum to Congress complained of a rapid atrophy of unit combat skills with a failure to meet demands of the National Military Strategy by the end of this year, while the Air Force warned that shortfall and sequestration will have drastic/long lasting impacts on the US nuclear arsenal.

While sections of the congressional Republicans associated with the ultra-right Tea Party have called for the sequester to go ahead, as a down payment on the gutting of federal domestic spending, those Republicans with the closest ties to the military-intelligence apparatus have joined forces with Panetta and Obama to oppose the sequester.

The Foreign Policy Initiative sent a letter to congressional leaders opposing the sequestration cuts in military spending, signed by the bulk of the neo-conservative Republicans who spearheaded the war in Iraq, including William Kristol, Robert Kagan, Paul Bremer and Elliott Abrams, as well as Robert Gates, defense secretary in both the Bush and Obama administrations, and former senators Joseph Lieberman, Jim Talent (a top Romney adviser) and Norm Coleman.

Senate Democrats have drafted a measure to largely eliminate the cuts in the Pentagon budget, reducing it by only $3 billion a year instead of the planned reduction of more than 15 times that amount. The military cuts would be offset by equivalent deficit reduction through cuts in farm subsidies and implementation of the so-called Buffett Rule imposing a minimum tax rate on multi-millionaires.



Austerity cant solve crises of capitalism

By Gene Clancy
International Action Center
February 8, 2013

Millions of workers across the United States received a rude and unpleasant jolt this January when they discovered that their take-home pay had just shrunk by 2 percent. The Social Security payroll tax cut of 2009 was restored, costing workers an average amount of $850 a year, a significant wage decrease for workers on the edge of financial ruin.

This de facto pay cut is part of a march towards government austerity going on in the U.S. and around the world. What austerity really means is cutting government spending for social benefits and/or raising taxes to guarantee loan payments to banks. Austerity is an article of faith not only for the right wing, but for centrist politicians like the Obama administration and most European governments.

There was little to no discussion of the increase in the payroll tax, which will have a far greater negative economic impact than the small increases in taxes on the very rich that were ballyhooed in December.

More dangerous even than restoring the payroll tax are the proposed cuts in federal spending, including cuts to Social Security benefits. A preposterous lie, generated by the ruling class and its lackey media, is that Social Security and other benefits based on earlier contributions are somehow responsible for the large deficit, and that ғreforms must be made in order to ԓsave them.

In reality, Social Security has $2.6 trillion in its trust fund, enough to adequately fund it for at least the next 25 years, according to Jack Lew, President Barack ObamaԒs former budget director and new nominee for secretary of the Treasury. (, July 13, 2011)

Social Security should not even be included as part of the federal budget, and certainly not seen as a way to reduce the deficit.Ӕ Its trust fund has been accumulated from the lifetime contributions of millions of workers through its own payroll taxes and should be used for that purpose only. To reduce the benefits of older workers in order to reduce the deficit is outright robbery of the working class.

Deficits, austerity and economic growth

There are many reasons why most capitalist governments worldwide have inadequate revenue to cover costs. For the U.S., they include outrageous military spending (over a trillion dollars on the Iraq and Afghanistan wars alone), tax cuts for big business and the very wealthy, and gigantic bailouts for the banks.

Most important though is the worldwide economic crisis, which has impoverished the working class by permanently removing tens of millions of jobs, thus reducing the tax base. There has been no capitalist upturn following the 2008 crash. Every attempt to start new production involves bringing in new technology that destroys more jobs than it creates. Thus, capitalism has reached a dead end.

The ruling classes, desperate to have governments guarantee loan and interest payments to banks, have ignored the advice of many of their own economists and agencies, and embarked on a policy of governmental austerity that only exacerbates the overall capitalist crisis.

For example, an International Monetary Fund study of 17 countries that implemented austerity plans in the last 30 years showed that alleged debt-reduction plans, aimed at reducing debt and leading to prosperity, on the whole failed to do so. (, Jan 29)

Moreover, says the IMF, Income and employment donӒt fully recover even five years after the austerity program is enacted. (Washington Post, May 7)

Since the IMFԒs own study shows that its austerity policies reduce economic growth, why does it continue to dictate such measures to governments all around the globe, especially in Africa, Asia and Latin America, and lately in southern Europe?

Policies please the banks, corporations

The answer is that these policies please the big capitalists and imperialists, especially the banks. They also please multinational corporations since they weaken unions and lower labor costs. The IMFs real goal is not to grow any economy but to increase the power of capital over labor and the power of the imperialist countries and their allies over oppressed nations.

For example, five years of austerity in Greece has resulted in deep economic depression and increasing misery for Greek workers. The Greek gross domestic product, which is a measure of the value of the total goods and services produced in a country, stands at only 70 percent of what it was before the European Union and IMF imposed austerity measures on Greece.

The 17 eurozone governments, which have embarked on a policy of severe austerity, have not only produced a “double dip” recession throughout Europe. They have not even been able to significantly decrease their debt. (See “Eurozone Debt Burden Stuck Amid Low Growth,” AP, Jan 23)

The latest official estimate of U.S. economic growth, released Jan. 30 by the Department of Commerce, has provided further proof that budgetary austerity depresses the economy. According to this report, “the just-completed fiscal cliff deal is expected to trim anywhere from 1 to 1.7 percent from economic growth this year.” With economic growth averaging 1.8 to 2.4 percent over the past three years, the impact of the just passed budget packageŅ may bring economic growth to a standstill. (, Feb 1, 2013)

Capitalism is, in fact, AT A DEAD END. Unable to solve the economic crisis which it caused, the ruling classes seek to squeeze a solution out of the world’s working and poor people through a combination of higher taxes and draconian cuts in needed health and social services. Progressives around the world must see to it that the rulers lies are exposed and that workers are not made to pay the price for the crises caused by capitalism.



GOP sequester strategy: Hurt the poor, harm national security, and destroy jobs to screw old folks

By Jed Lewison
Daily Kops
February 25, 2013

Let’s be clear about one thing: the harsh automatic budget cuts of the sequester that will kick in on March 1 have nothing to do with responsible fiscal policy. They are a political gimmick run amok and despite their bipartisan origins, the political party that is now most intent on wielding them as a weapon is the GOP. Their goal: enact deep cuts to Social Security, Medicare, and Medicaid benefits while preserving benefits from tax loopholes and deductions for the wealthiest Americans.

Congressional Republicans are standing their ground, a position they say is strategic. The federal governments growing debt cannot be controlled through the spending at the annual discretion of Congress, and after the cuts take effect, that part of the federal budget will drop to levels not seen in five decades as measured against the size of the economy. Long term, the problem is entitlements, especially Medicare and Social Security.

The pain of further cuts to discretionary programs could bring Mr. Obama to the negotiating table on them by the spring, if not by midsummer, when Congress must once again raise the government’s borrowing limit.

“Because the Democratic-controlled Senate and the president refuse to negotiate, the only way to potentially bring them to the table to negotiate is to go forward with the spending reductions as they are,” [Georgia Republican Rep. Tom] Price said.

They aren’t satisfied with the chained CPI Social Security benefit cut President Barack Obama has said he would be willing to accept in exchange for closing loopholes and deductions. They look at the fact that the budget deficit has dropped by roughly half since President Obama’s first year and scoff. They hear that projected Medicare spending has already dropped by more than Simpson-Bowles originally sought and think to themselves that this is a good idea:

Nearly two million people who have been out of work for more than six months could see unemployment payments drop by 11 percent in checks that arrive in late March or the first days of April, according to the White House budget office, an average of $132 a month. [...]

The National Institutes of Health, for instance, would need to cut about 5 percent of its annual budget in just seven months, meaning hundreds fewer research grants, said Kathleen Sebelius, the health secretary. Money for food safety inspection and air traffic controllers would also be cut.

Roughly 600,000 low-income women and children would stop receiving food aid.

There’s no question that President Obama and congressional Democrats shoulder some of the responsibility for getting us to this point. But for the most part, the thing they’ve done wrong is failing to fight against insane Republican ideas - and to assume that today’s GOP is capable of operating in good faith. But what Republicans are doing here is going after one group of vulnerable Americans to screw over another group of vulnerable Americans, and this pattern of destructive crisis after destructive crisis isn’t going to stop until they stop.


Posted by Elvis on 12/31/12 •
Section Dying America • Section Next Recession, Next Depression • Section Austerity American Style
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Investing in America’s Economy 2013


“Economics 101 tells you that when you have a massive economic crisis, the government must step in to fill the gap until the economy can recover. The United States government, unlike, say, a state or a country like Greece, does not have to balance its budget. The U.S. has its own currency and is well-equipped to provide stimulus money to states to make up for budget shortfalls. What gets in the way of meaninful action is political obstruction, not economics. Federal stimulus dollars and other grants have made up for some of the cuts to mental healthcare, but thanks to constant efforts to block adequate stimulus measures, not enough. And if conservatives have their way, budget cuts to programs like Medicaid will continue to ensure that high-risk people cant get help.”
- Lynn Stuart Parramore, AlterNet, December 14, 2012

“If the unemployment rate was back at the 4.7 percent rate of 2007 the bulk of the deficit would disappear.”
- Dean Baker, Huffington Post, July 27, 2011.

The New Deal increased U.S. GDP and resulted in a substantial decrease in U.S. unemployment, both during its initial phase (1933-37) and after FDR turned back 1937-38 Republican pressure to balance the budget (1939-41). The fiscal stimulus provided by the New Deal worked
- Did The New Deal End The Depression?

Check out THIS VIDEO - Thom Hartmann spars with neocon Neal Asbury.

Did you see Senator BERNIE SANDERS’ fiery SPEECH to Congress the other day about austerity:

Most important, in the coming weeks and months, the Democrats must demand that deficit reduction is done in a way that is fair and not on the backs of the elderly, the children, the sick and the poor. At a time when real unemployment remains close to 15 percent, we must also focus on creating the millions of jobs that our people need.

In America today, we have the most unequal distribution of wealth and income of any major country on Earth. Incredibly, the top 1 percent owns 42 percent of the nationגs wealth while the bottom 60 percent owns just 2.3 percent. In the last study done on income distribution, we learned that 93 percent of all new income generated between 2009 and 2010 went to the top 1 percent while the bottom 99 percent split the remaining 7 percent. This extraordinary unfairness is not only morally reprehensible, it is bad economics. It will be very difficult to create the jobs that our people need when so many Americans have little or no money to spend.

Congress must pass legislation to create a major jobs program to put millions of people back to work rebuilding our crumbling infrastructure. Throughout our country, we need a massive effort to improve our roads, bridges, water and wastewater systems, airports, rail, broadband and cellphone service. Rebuilding our infrastructure makes us more productive and internationally competitive and creates millions of new jobs.

In terms of deficit reduction, let us not forget that in 2001, when Bill Clinton left office, this country had a $236 billion surplus.

Daily KOS made some INTERESTING POINTS about social security and the minimum wage:

One also wonders that since social security is tied to wages and productivity has been rising for years, why don’t we just raise the minimum wage a lot like James K. Galbraith said? That fix has an all around benefit to the entire economy and it benefits SS by transferring production from young to old as it is supposed to. But do we hear about that? No. We heard about the supposed need for another Greenspan Commission to cut benefits as the first Greenspan commission did raising the full retirement age to 67 where it is now when president Obama agreed with Mitt Romney on SS in the first debate. We either need to raise wages because it is a much needed fix all around or The White House just needs to shut up about Social Security which isn’t in trouble and cannot go insolvent because we can always pay our debts with instantly created currency.

We also need the Employee Free Choice Act is just a first step and a much needed one. No more free trade agreements or WTO pacts giving corporate welfare in the from of patents to Big Pharma as economist Dean Baker lays out in his free online book.


The near-term budget deficit is largely a symptom of the poor economy; therefore any fiscal proposal must include a plan to get the economy back on track.

Tax and budget policy should share the same goal as broader economic policy: providing rising living standards and greater economic opportunity and security for all Americans.

A truly sustainable budget provides future generations not only with manageable debt levels but also the building blocks of a prosperous economy: increased investments in infrastructure, education and R&D, and a strong safety net to ensure that future generations have at least the same baseline levels of economic security on which millions of households currently rely.

“This proposal demonstrates that addressing the fiscal cliff can and should be done by boosting job growth; plans that would take a different approach by cutting benefits or engaging in austere spending reductions would have a negative effect on our recovery,” Thiess said.

“Everyone gives a nod to the imperative of job creation and economic recovery, but we put our money where our mouth is - we finance $2.2 trillion of extra government spending over the next three years to rapidly restore and sustain full employment, which absolutely must be the top economic policy objective,” Fieldhouse added.

The plans five guiding principles are as follows:

Create jobs now. The main obstacle to economic growth continues to be a huge shortfall in aggregate demand. This shortfall is driven by insufficient spending by households and businesses, spending that pulled back in the aftermath of a housing bubble that wiped out trillions of dollars in household wealth and froze residential and commercial construction. Therefore, boosting aggregate demand with deficit-financed fiscal stimulus remains the most effective policy lever for addressing the jobs crisis. Long-run fiscal sustainability is more difficult to achieve when a long-term jobs crisis has caused people to defer or forgo educational attainment, poverty and malnutrition to rise, human capital to atrophy, business to refrain from investing and physical stock to depreciate from disuse.

Let the Bush tax cuts expire. The Bush tax cuts have already added more than $3 trillion to the national debt and will add another $4.3 trillion over the next decade, if extended. They should fully expire on schedule, and to alleviate the impact of their expiration on lower- and middle-income households, refundable tax credits should be consolidated and expanded. Specifically, a work credit and a family tax credit should replace the personal exemption, standard deduction, and Earned Income Tax Credit and Child Tax Credit.

Preserve and strengthen the social safety net. Benefits should not be reduced. Instead, the safety net on which millions of Americans rely should be strengthened by expanding unemployment compensation, eliminating the payroll tax cap to solidify Social Security’s finances, and attaining long-run efficiency savings and cost containment in the provision of health care.

Return fairness and progressivity to the tax code. Taxing wealth the same as ordinary income, reinstating more progressive estate tax parameters, adding new tax brackets on taxable income over $2 million and enacting a net wealth tax would reverse the weakening of the progressivity of the tax code that has occurred over the past few decades.

Tax goods and services that have significant social costs. Pricing carbon emissions, taxing financial transactions and leverage, and levying taxes on products that pose public health risks would compel businesses to internalize costs that would otherwise spill over to society.



Here’s some more voice of reason - from MOVE ON:

The “Fiscal Cliff” Is A Myth. As Paul Krugman put it, “The looming prospect of spending cuts and tax increases isn’t a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.’s attempt to take the economy hostage."1 Republicans are manufacturing this crisis to pressure Democrats to extend the Bush tax cuts for the wealthy and accept painful cuts to Social Security, Medicare, and Medicaid.

The Bush Tax Cuts Finally End December 31. If Congress does nothing, the ax will fall on all the Bush tax cuts on New Year’s Eve.2 Then, on January 1, the public pressure on John Boehner and House Republicans to extend the middle-class tax cuts (already passed by the Senate and waiting to be signed by President Obama) will become irresistible.3 So the middle-class tax cut will eventually get renewed, and we’ll have $823 billion more revenue from the top 2% to do great things with.4

The Sequester. The sequester is another political creation, forced on Democrats by Republicans in exchange for lifting the debt ceiling last year to avoid crashing our economy.5 It’s a set of cuts (50% to a bloated military budget and 50% to important domestic programs) designed to make both Republicans and Democrats hate it so much that they’d never let it happen.6 And the cuts can be reversed weeks or months into 2013 without causing damage.7

The Big Three. Nothing happens to Social Security, Medicare, and Medicaid benefits on January 1unless Republicans force painful cuts to beneficiaries in exchange for tax increases on the wealthy, which are going to happen anyway if Congress does NOTHING.8 So, there’s literally no reason benefits cuts should be part of the discussion right now.

We Should Be Talking About Jobs. The real crisis Americans want Congress to fix is getting people back to work. And with just a fraction of that $823 billion from the wealthiest 2%, we could create jobs for more than 20,000 veterans and pay for the 300,000 teachers and 52,000 first responders, which our communities so desperately need.9 That’s not to mention jobs from investing in clean energy and our national infrastructure.


Fiscal Cliff Letter: Small Business Owners Urge End Of Bush Tax Cuts

By Zach Carter
Huffington Post
November 20, 2012

More than 600 small business owners and executives wrote a LETTER to every member of Congress urging them to end the Bush-era tax cuts for the wealthy under any deal brokered to avert the so-called “fiscal cliff.”

“As businesses owners, none of us hire more employees simply because someone gives us a tax cut. We hire more employees when our customers demand more of what we have to sell,” the letter reads. “When a teacher, firefighter, or construction worker building public infrastructure loses his or her job, many of us also lose a customer.”

The letter also emphasizes that the Bush tax cuts for the wealthy do not generally aid small businesses, and suggests that the money could be better spent on infrastructure projects, education, or other efforts to strengthen the economy.

“Those who claim that tax cuts help small businesses are guilty of identity theft,” the letter continues. “Less than 3 percent of tax filers with any business income make over $200,000 (individuals) or $250,000 (couples) per year, and many of those are not small business owners, much less small business owners with employees. They include K Street lobbyists, Wall Street investment partners, big business CEOs paid to sit on the boards of other big corporations, and wealthy people renting out their vacation homes.”

The letter was organized by the American Sustainable Business Council and Business for Shared Prosperity, two non-partisan small business groups that have long advocated against the Bush tax cuts for those making more than $250,000 a year.

Supporters of tax breaks for the wealthy often cite potential harm to small businesses as a consequence of ending the tax cuts, but many small businesses emphasize that tax policy is generally irrelevant to their hiring and investment decisions, which are based on pre-tax profit.

“No business will make a decision based on what the tax structure happens to be this year or next year,” said Barry Cik, who runs Naturepedic, an organic mattress manufacturer in northeast Ohio with 50 employees. “If we’re making a profit, we’re in business. If we’re not making a profit, we’re not in business.”

Josh Knauer, one of the small business owners who signed the letter, runs Rhiza, a 10-employee software company based in Pittsburgh.

“One of the big challenges that we have is in hiring and finding enough people to fill the demand we have from our customers,” Knauer told HuffPost. “I see these tax cuts, and then I look at the state of our educational system in our country, and the fact that we are underfunding the education of our kids. Young people are graduating without the skills to be hired by companies like mine.”

Knauer said he is currently seeking five additional employees.

“If the wealthy are getting huge profits and storing them in the Cayman Islands, I think they should participate more,” Cik told HuffPost. “I don’t think my business is gonna make any decisions one way or the other depending on tax policy.”

The Letter:

Dear Member of Congress,

We, the undersigned business owners and executives, urge you to oppose any efforts to extend the Bush tax cuts for income over $250,000.

In the last decade, we have been cutting taxes on the wealthiest Americans and underfunding vital programs to pay for them. The large and growing budget cuts approved by Congress and supported by the President have had a severe impact on business, particularly micro and small business and job creation - reducing funding for infrastructure improvements, community economic development programs, housing, job training, and much more. America’s failing infrastructure is starved of funds and falling further behind our global competitors’. These cuts have hurt Americas small- and medium-sized businesses and our communities.

Huge tax cuts for the richest Americans have not trickled down to increase small and medium-sized business investment, broad based consumer purchasing power, or job creation. More budget busting tax cuts for the top won’t help Main Street, won’t lead to business innovation, more hiring, or more people being educated for the jobs we have and can create.

As businesses owners, none of us hire more employees simply because someone gives us a tax cut. We hire more employees when our customers demand more of what we have to sell. When a teacher, firefighter, or construction worker building public infrastructure loses his or her job, many of us also lose a customer.

Those who claim that tax cuts help small businesses are guilty of identity theft. Less than 3 percent of tax filers with any business income make over $200,000 (individuals) or $250,000 (couples) per year, and many of those are not small business owners, much less small business owners with employees. They include K Street lobbyists, Wall Street investment partners, big business CEOs paid to sit on the boards of other big corporations, and wealthy people renting out their vacation homes.

The high-end tax cuts are hurting our economy. It’s time to end them, not extend them. It would be an important step in rebuilding an economy that grows our small businesses and middle class.


Time For Wealthy & CEOs To Thank The Middle Class For 30+ Years Of Sacrifice

By Egberto Willies
November 21, 2012

The election is over and by a 3% margin Americans have decided to reelect President Obama. I will be the first to say that I believe President Obama governed like a centrist Republican in his first term. I think he did that to ensure a second term.

After-all the President’s stimulus was heavy on tax cuts, Republican candy that has a lower effective multiplicative effect to stimulate the economy. His signature healthcare bill The Affordable Care Act lovingly call Obamacare maintained the inefficiencies of having private for profit insurance companies that transfer middle class wealth via healthcare premiums to the mostly wealthy shareholders of the insurance companies. In every policy or bill he passed he compromised to appease Republicans for which he got no buy in from them.

My hope is that in his second term he will mobilize America to allow his inner most liberal to raise its head. Conservative supply side economics has decimated the middle class for 30+ years as the wealthy have morphed into an effective plutocracy.

It is time for the wealthy to thank the middle class and give its Right Wing puppets the authority to work with the president to increase their taxes for the better good of the country and to ease the pain on the middle class they have provably pilfered since the institution of Reagan’s supply side economics. They used our government to create policies that placed most of the middle class in peril. These are not just empty words but facts that are reflected in the charts that illustrate the income and wealth disparity in America.

This is not sustainable. This is immoral. This will change either peacefully or by force when the population realizes they have no further recourse and have been had by a few deceitful titans of finance led politicians.

Politicians must begin by passing legislation to ensure that the policies which currently are effectively legalized theft are dismantled and corrective recovery of the pilfered occurs. Before any discussion on the reduction of the safety net occurs it must be ensured that all income is treated at least equally.

Passive income should actually carry higher tax rates than the income from somebody who goes to work every day. In other words capital gains from stocks or the appreciation of any asset should have no preferential tax treatment from someone who works. It is the only way that we can ensure that either the working person has unmitigated access to real wealth.

Legislation that makes it easy for ALL workers to unionize is essential. Businesses all have unions in the Chamber of Commerce and the dozens of other trade organizations that lobby on their behalf. The individual worker has no wage recourse by themselves and said disadvantage is evident with their wage decline as unions have declined.

We must not be fooled by the catered and tested messages to misinform the citizens to vote against their own interest. The same middle class decimating policies is what the GOP is attempting to maintain even though most Americans are clamoring for the ability to succeed.

It is important that we stand up once and for all for middle class policies. We are the job creators. We are the brains. We are the intellect. We are the creators of products. We are the providers of services. Those that move capital are just movers of capital. They have no other inherent value to society and as such a system that gives them more worth must be dismantled. That starts with the middle class taking back their government and dictating policy that rewards those that really produce.



Top Economists Told Obama that Economic Recovery Required a Reduction In Private Debt
But Obama and His Economic Team Chose the Big Banks Instead

Washington’s Blog
November 24, 2012

Weve extensively documented that too much PRIVATE HOUSEHOLD DEBT IS KILLING OUR ECONOMY.

While Ben Bernanke and other economists who are running our economic policy literally believe that the amount of PRIVATE DEBT DOESN’T MATTER and isn’t even important to quantify, economists at the ”CENTRAL BANK’ CENTRAL BANK” - the Bank of International Settlements - and many other LEADING ECONOMISTS SAY that high levels of private debt create a tremendous drag on the economy.

And Obama cant plead ignorance.

Business Insider NOTES today:

A number of economists privately told Obama that his recovery policies were weak in one key area: They didn’t do enough to address the mountain of homeowner debt.

The Washington Post REPORTED yesterday:

One year and one month before President Obama won reelection, he invited seven of the worlds top economists to a private meeting in the Oval Office to hear their advice on what do to fix the ailing economy. “I’m not asking you to consider the political feasibility of things,” he told them in the previously unreported meeting.

There was a FORMER FEDERAL RESERVE VICE CHAIRMAN, a NOBEL LAUREATE, one of the world’s foremost EXPERTS ON FINANCIAL CRISIS and the CHIEF ECONOMIST OF THE INTERNATIONAL MONETARY FUND, among others. Nearly all said Obama should introduce a much bigger plan to forgive part of the mortgage debt owed by millions of homeowners who are underwater on their properties.


[The Obama administration pooh-poohed the need to reduce homeowner debt.] The meeting highlighted what today is the biggest disagreement between some of the world’s top economists and the Obama administration. The economists say the president could have significantly accelerated the slow economic recovery if he had better addressed the overhang of mortgage debt left when housing prices collapsed. Obamas advisers say that they did all they could on the housing front and that other factors better explain why the recovery has been sluggish.


Former budget director Peter Orszag has said that ”A MAJOR POLICY ERROR” was made. And Christina D. Romer, formerly Obama’s top economist, has said that the driving ideas ”MAY HAVE BEEN TOO LIMITED” and that there needs to be a bigger focus on reducing mortgage debt - a process known as “principal reduction.”

“The new evidence on the importance of household debt has convinced me that we are likely going to need to help homeowners who are underwater,” SHE SAID last month. “Many of these troubled loans will need to be renegotiated and the principal reduced if we are going to truly stabilize house prices and get a robust recovery going.”


ATIF MIAN, now a Princeton professor, came to focus on how finance can destabilize an economy. He saw how foreign money had flooded Latin America in the 1980s and Southeast Asia in the 1990s, leading to borrowing booms and financial crises.

Not long before the U.S. recession, Mian and another young economist, AMIR SUFI of the University of Chicago’s business school, saw a similar trend here. “The common link to the emerging market crises,” Mian said, “is that it all starts with leverage.”

The two economists COMPARED WHAT HAPPENED in U.S. counties where people had amassed huge debts with those where people had borrowed little. It had long been thought that when property values declined in value, homeowners would spend less because they would feel less wealthy.

But Mian and Sufi’s research showed something more specific and powerful at work: People who owed huge debts when their home values declined cut back dramatically on buying cars, appliances, furniture and groceries. The more they owed, the less they spent. People with little debt hardly slowed spending at all.


“Historically,” Sufi said, “places that have bigger recessions usually have stronger comebacks.” But his CALCULATIONS SHOWED that since the end of the recession, places with high levels of debt have not had robust recoveries.

Other economists - from both political parties - were making the same point around the time Obama came to office. BLINDER, a Clinton administration official, and MARTIN FELDSTEIN, a Reagan administration official, developed plans calling on the government to commit hundreds of billions of dollars to restructure millions of mortgages with lower interest rates and principal balances.

Said JOHN GEANAKOPOLOS, a Yale economist who proposed a plan to reduce principal: “I think the missed opportunity to forgive principal at the end of 2008 and beginning of the 2009 was the biggest mistake the administration made in trying to deal with the crisis.”

So why didn’t the Obama administration accept the proposals to reduce homeowner debt?  The Post notes:

But despite exploring many proposals, the administration did not see a plan that did not have the potential to cause effects worse than the cure,Ӕ he said, such as cratering the financial system by forcing banks to absorb huge losses.

In other words, the government CHOSE THE BIG BANKS over the little guy, DOOMING BOTH.

The administration under the false banner of “homeowner relief” simply threw money at the big banks to ”FOAM THE RUNWAY֔ so they wouldn’t suffer a crash landing.

As some of the LEADING MODERN ECONOMISTS ARGUE, forcing big banks, bondholders and other creditors to writedown some of their bad debts is the ONLY WAY OUT of our economic malaise.  We need a DEBT JUBILEE.



Rein in the Rich: How Higher Taxes Could Lift the Economy

By John B. Judis
The New Republic
December 12, 2012

As the negotiations over the fiscal cliff continue, President Barack Obama has insisted on retaining the Bush tax cuts for the middle class, while letting the cuts for the wealthy lapse. Republicans have insisted that raising taxes on the rich would cost jobs as many as 700,000, ACCORDING TO House Speaker John Boehner.

Obama, for his part, says that a tax increase would not cost jobs; that it would help the economy by reducing the deficit; and that it would be fairer than imposing new taxes on the middle class. “I’m not going to ask students and seniors and middle-class families to pay down the deficit while people like me who make more than $250,000 are not asked to pay a dime more in taxes,” he has DECLARED.

Obama is right that a tax increase on the rich would not cost jobs; and he is certainly right that it would be fairer to tax the wealthy whose incomes have shot up, even during the downturn. And he is also correct that taxing the rich will actually benefit the economy--but not primarily for the reasons he cites. If the government extracts income from the wealthy, and then spends it on a $50 billion infrastructure program, an extension of unemployment insurance, and a Social Security payroll tax cut, as Obama has PROPOSED, that will not only boost the recovery, but will also discourage the wealthy from rerouting their savings into the kind of speculative activity that helped create the Great Recession. A closer approximation of income equality is not only better for our souls - it’s also better for the economy. The question of fairness aside, the rich have been making relatively too much money for the country’s good.

Last September, the Congressional Research Service published a REPORT COUNTERING REPUBLICAN CLAIMS that lowering top tax rates would lead, or had led, to higher economic growth. “Changes over the past 65 years in the top marginal rate and the top capital gains tax rate do not appear correlated with economic growth,” the report concluded. Republican Minority Leader Mitch McConnell responded by HAVING THE REPORT SUPRESSED, but its findings were incontrovertible. 

The CRS rested its findings, however, on the lack of a correlation between marginal tax on the wealthy and growth. It didn’t try to explain why higher rates might have contributed to faster growth, and lower rates to slower growth, and even recessions. This view remains highly controversial today, even among liberals, but during the 1930s many New Dealers took this position. Recently, Rutgers economic historian James Livingston has reasserted it in an excellent book, AGAINST THRIFT. There is a weaker and a stronger version of the argument.

The weaker argument goes like this: The modern American economy is driven by consumer demand; the consumer sector, which includes services, is where new jobs emerge, and where growth is spurred. During economic downturns, purchases of consumer durables, including automobiles and new houses (which economists technically label investment), have been most likely to ignite a recovery. The lower a persons income, the more likely he or she will use additional income to consume goods and services; the higher the income, the more likely it will be saved. In Keynesian terms, middle and lower income taxpayers have a much high marginal propensity to consume. Therefore, it makes much more sense to give them rather than the wealthy a tax break.

The weaker argument shows that it is better in a faltering economy to reduce tax rates on the less wealthy than the wealthy. The stronger argument shows that with incomes soaring in the upper brackets, it is a good idea to raise tax rates on the wealthy. This idea comes from historical evidence showing that today’s economy differs from that of the older pre-Great Depression industrial economy.

In the first period of American industrialization—roughly from the Civil War through the mid-1920s—the economy was driven by the production of capital goods, from steel and petroleum to machine tools and threshers. More workers became engaged in producing these goods than in manufacturing consumer goods. In countries that are rapidly industrializing in this manner think of China today - both workers and owners have to sacrifice their consumption in order to provide consumer goods for the growing number of workers who are making capital goods that they cannot consume.

But sometime in the 1920s, these relationships were inverted. In 1890, consumer purchases accounted for about 36 percent of GDP; in 1925, 40 percent. (Similarly in CHINA TODAY, consumption accounts for only about a third of GDP and investment for half.) But in the United States today, consumer purchases account for about 70 percent of GDP, and investment for only 15 or 20 percent. And the growth of consumption at the expense of investment hasnt entailed any decline in output, including that of capital goods. 

Due to modern technology - from electrification to the computer and the Internet - and to the increasingly sophisticated organization of work, it has become possible to produce more goods without a net increase in workers and capital. The output of capital and consumer goods has continued to grow, but most of the increase in the labor force over the last eighty years has been in government and services. From 1990 to 2008 (before the recession), the United States lost almost a million jobs in capital goods production. 

As a result, the consumer sector no longer has to sacrifice its output and income in order to fund a capital goods sector that is growing more rapidly than it is. And instead of the economy being driven by the demand for capital goods, it is driven by the demand for consumer goods and services. The danger in the older economy was conspicuous consumption by capitalists and growing wage demands from workers, which threatened the funds available for investment in capital goods. The looming danger in the new economy in the failure of capitalists to consume or invest and the failure of workers, crippled by debt, unemployment or falling wages, to consume.

Government economic policy has to be, or at least should be, very different in this economy. It should not consist of giving tax breaks to the middle class and the wealthy, but of redistributing income downward--whether through tax policy, social programs, or labor regulations. If it doesn’t do that, or worse still, if it acts as if it were 1925 and encourages a growing gap between the rich and everyone else, it will threaten consumer demand. During the Coolidge and Hoover administrations, the top one percent increased their share of total income by 19 percent. And that happened, too, in George W. Bush’s administration. Such policies not only slow a recovery, but spur a slowdown by putting money in the wrong hands.

Regressive policies can also lead to financial crises. When firms suffer from global overcapacity or merely from domestic overproduction - when a glut arises of automobiles, ships, textiles semiconductors or fiber optic cable—as happened in the late 1920s and again in the earlier part of the last decade, the wealthy, joined by corporate treasurers and bankers, have tended to pour their money into speculation rather than productive investment. The financial sector has become a casino for the rich, where they have gambled away funds that could have fueled the economy. So redistributing income through tax policy isn’t just fair; it is one way to began restructuring the economy to prevent future slowdowns and crashes.

Republican pleas to retain tax breaks for the wealthy and corporations and to eviscerate social programs do suggest a Romneyesque indifference to the 99 percent; they also presume an economy that no longer exists. “These incentives,” Livingston writes, “are merely invitations to inflate speculative bubbles.” Obama’s concession to arguments about the deficit, which come from Tea Party Republicans and business groups like Fix the Debt, is understandable, but unfortunate. There will come a time—when unemployment dips, say, below six percent, and the countries businesses are at full capacity - when it will be important to reduce government deficits. And raising marginal taxes on the wealthy will be one way - along with other measures - to bring the deficit down. 

But bringing down the deficit should not be the principal objective right now. Whats important is to continue the recovery from the Great Recession and to take measures to prevent future crises. Supply-siders were right about one thing: the best way to reduce the government deficit is to create economic growth. Obama’s proposal to raise taxes on the wealthy and to transfer those revenues to workers and the unemployed isnt just the fair thing to do; it is exactly whatҒs right for the economy.


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Saturday, December 29, 2012

Time To Protect Unions


Time To Protect Unions

By John Jordan
NY Daily News
October 20, 2005

One by one, America’s great industrial unions are being defanged. Where once presidents of these unions could march into the White House and leave with a pledge by President John F. Kennedy to end a strike on favorable terms, they are now sitting in bankruptcy court watching as unelected judges rip their contracts to shreds - or “negotiating” massive givebacks.

The first union to be broken in this way was the United Steel Workers of America, or USWA. In 2002 and 2003, the global steel industry was in crisis. Every major American steel company was insolvent or nearly so. The union cut the best deals it could for its members. But its overarching goal became working to ensure corporate profitability. For all practical purposes, the once mighty Steel Workers Union is now a management subsidiary.

Next to be broken were airline industry unions. Nearly every large airline has filed for bankruptcy protection. Managers of companies that haven’t filed for protection have used the threat of bankruptcy to slash workers’ wages and benefits, sometimes by as much as 50%.

Now it’s the United Auto Workers’ turn to feel the full brunt of 21st century America’s definition of labor rights. Delphi, the largest auto parts supplier in the country, just filed for bankruptcy protection. Before it did, management told the UAW it wanted the union’s members to swallow wage and benefits cuts of 60%. The UAW rejected this out of hand - as Delphi management knew it would. Now it’s up to a bankruptcy court judge to slash Delphi workers’ wages, benefits and jobs.

How did we get to the place where labor rights are so unprotected that bankruptcy court judges are the final arbiters of wage, benefits and working conditions in what are still some of our most important industries? There are a number of answers. First are judges who have simply assumed this role. Bankruptcy court judges agreeing with management and tearing up union contracts as a matter of course is a recent innovation.

The second development that has fatally undermined labor rights is a federal government that, regardless of which political party is in power, consistently sides with management in labor disputes.

The final development is a situation that affects nearly every employee - and employer - in the country: America’s horribly mismanaged and inefficient health care system. Analysts estimate health care costs add from $1,000 to $1,500 to the price of every automobile produced in the United States. Manufacturers in no other advanced economy face these costs, since health care is funded by their national governments. America’s dysfunctional health care system even dissuades investment here. Honda recently decided to build a new North American plant. It chose to build it in Canada. One of its stated reasons: our neighbor to the north’s universal health care system.

The protection of labor rights in America has regressed to where this country stood in the 1920s. The result is neutered unions, stagnant wages, shrinking benefits and more insecurity.

There’s a growing unease in the country, a sense the American Dream is unattainable to those who lack the right pedigree or the right connections. It’s time for government and others to address the roadblocks that prevent everyone from sharing in our economy’s gains. A rediscovery of labor rights is a good place to start.

Jordan, a former union organizer and strategist, is President of Washington-based Principor Communications



6 Ways to Juice Up the Labor Movement
Some of the smartest organizers and thinkers we know give us their suggestions on how to build a reinvigorated, vibrant labor movement.

By Sarah Jaffe
December 23, 2012

The passage of a so-called “right-to-work” law in Michigan recently left the labor movement feeling gut-punched.

The law, which defunds unions by allowing workers in shops represented by a union to opt out of paying for the cost of representing them, was a blow at the once-mighty unions that made manufacturing work, particularly Michigan’s famed auto manufacturing, a middle-class career. It came in the heart of union country, and while after Ohio and Wisconsin (not to mention RTW’s passage in Indiana last year as well) it was hardly a surprise that the wealthy businessmen who fund the Republican party WANTED TO DESTROY THE LABOR MOVEMENT once and for all, the swift passage of the bill (in just days) despite the protests of thousands outside still felt demoralizing.

To make matters worse, it came on the heels of some of the most exciting labor organizing in years; the strikes of hundreds of workers across the country at WALMART stores and warehouses, the strikes of FAST FOOD WORKERS in New York and similar organizing in Chicago. It came not long after Chicago’s teachers union struck and pushed back against a wave of corporate-backed education reform policies.

While Michigan’s unions regroup and begin the twin processes of trying to survive and retain dues-paying members in the face of RTW and trying to find a way to overturn the law, it’s clear that the national labor movement needs to do more than just fight defensive battle after defensive battle. To kick-start a conversation, AlterNet spoke with several of the smartest organizers and labor thinkers we know, and asked them for their suggestions on how labor can go on the offensive in the next year.

Stephen Lerner, architect of the Justice for Janitors campaign

“It’s time to reinvent the strike - the strike as guerrilla warfare,” says Lerner. The strike is the traditional weapon of organized workers, but employers have gotten pretty good at beating those strikes. But in his work with “Justice for Janitors,” Lerner learned that bosses weren’t ready for short, quick strikes. “If you look at the strike as a way to make them pay a price for how they treat you, you do short strikes, in and out strikes,” he notes. “Part of the reason it’s so difficult to organize workers now is most people work multiple jobs, they have not a moment to participate. If you view the strike as having multiple goals, one is it allows workers to publicly declare and demonstrate they’re unhappy. Second, because they’re not at work they can talk to the media, go to churches. Third, it’s something very concrete that they can do that does start to make the bosses a little crazy.”

The second thing Lerner suggests is a re-politicization of bargaining. “We need bargaining not to just be about workers but what’s good for the community,” he says, “So that we’re bargaining for broader issues, especially in the public sector. So that it’s not bargaining for the few, it’s bargaining for the many.” “Chicago’s teachers,” he notes, “raised the issue of the city divesting from banks that were foreclosing on people.” “We need to make it so that people see that when those workers win, we all win, rather than they’re negotiating for something we don’t have.”

Jonathan Westin, executive director, New York Communities for Change, organizer of recent fast food strikes

“We believe that the future of the labor movement is really organizing LOW WAGE service sector jobs. These are the jobs we’re stuck with, we need to make them livable jobs,” says Westin, whose organization, despite not being a labor union, has been organizing low-wage workers across New York City, from McDonald’s and Wendy’s to grocery stores and car washes.

“It’s not just about who you’re organizing,” Westin notes, “it’s also about how you do it. It’s about constantly pressuring employers from as many angles as possible. It’s leveraging NOT ONLY NLRB elections but back wage claims to pressure the employers, leveraging community pressure, boycotts, strikes. We did a strike at the car wash in the Bronx and they came to the table. That’s the lesson, it’s not just any one strategy, you have to come at them at every different angle.”

Because, of course, the BIG MONEY and CORPORATIONS ARE COMING AT WORKERS FROM EVERY POSSIBLE ANGLE, from RTW laws and attacks on collective bargaining to wage theft and erratic scheduling. “There’s so many sectors of low-wage workers that are affected,” Westin says, “Who’s to say that we can’t organize multi-sector campaigns together? It’s not just we’re targeting an industry, but we’re targeting the entire service economy, looking to build that sector of workers in a big way.”

Ruth Milkman, Professor of Sociology at the CUNY Graduate Center, Academic Director at the Joseph S. Murphy Institute for Worker Education and Labor Studies

“Don’t mourn, organize!” says Milkman, whose research has focused both on the American auto industry and recently, on low-wage immigrant workers.  “Forget the NLRB system,” she continues; “that system has become largely dysfunctional for the workers who are covered by it, and for many it’s simply not a question - they’re not included in its protections, so they have to find other solutions.”

“This is the time to rebuild from the bottom up, with a focus on low-wage workers, both immigrants and the U.S. born,” Milkman says.  “Organizing should be based on alliances with community groups, faith leaders, and pro-labor elected officials, drawing on the full spectrum of historical strategies and tactics.”

Bill Fletcher Jr., longtime organizer and author most recently of They’re Bankrupting Us And 20 Other Myths About Unions

“We’re living with the consequences of a movement that ceased being an economic justice movement,” Fletcher says. To get back to those roots, he’s advocating some serious change and rebuilding for labor.

In Michigan, for instance, Fletcher points out the need for internal as well as external organizing, for really explaining to members what unions are all about, and the nature of an economic justice movement. “We need leadership that truly gets neoliberal globalization,” he notes. “From there,” he points out, “it’s important to teach members as well.”

Internally, he believes that unions need to re-examine their structure, evaluate positions, committees, and connect them to the overall mission of the union. Externally, too, he calls for a reevaluation of central labor councils and other forms of geographic organizationorganizing across a city or metropolitan area. “What these central labor councils allowed us to do was position organizing as an economic development strategy.”

Beyond that, he’s calling for leadership that is willing to take risks - including knowing when to step downand to build new alliances. “We need new leadership that understands that alliances are not about hiring the Hessians. This tendency of some unions to believe that alliances with other forces is about funding those groups to do what we want them to do.”

As far as politics, Fletcher says, “The strategy that I’ve advocated for a number of years is not a go-it-alone labor electoral strategy. It basically is labor playing a role with key community based organizations in developing a platform and organizational form for doing electoral work inside and outside the Democratic party. It’s about organizing politically in neighborhoods and communities where union members are and building leverage that way rather than depending on a party.”

Jane McAlevey, longtime organizer and author of Raising Expectations (And Raising Hell)

McAlevey points out that the entire structure of work has changed over recent years. That means that there are many workers who don’t see how unions could work for them, and who have to be reintroduced to the entire concept of unions. “The way that unions can keep any kind of skin in the game is by rethinking their relationship to their own rank and file and rethinking their relationship to their broader community, she says.”

“How about budgeting the time and recruiting a ton of your top rank and file leaders to go out and meet with damn near every single member of the union, in their worksites, in their neighborhoods, in community meetings?” She suggests that from there, workers themselves could chart and track the relationships they have in their community, figure out their connections. “What is the social fabric of the relationships that the 16 million members of unions in this country hold?”

“16 million,” she notes, “isn’t a lot when it comes to the percentage of the workforce (7 percent of the private sector), but it’s still a lot of people who have a lot of connections and can have conversations with their community. “But to get there, the union members have to feel connected, have to take responsibility, and have to feel like they own their union and they care about their union. “There’s no reason to expect that a rank and file member is going to prioritize and make time to reintroduce the value of their union to their community unless they value their union.”

“This kind of work can be done,” she notes, “and must be done - the same way unions put together a Get-Out-The-Vote machine for presidential elections.”

Eric Robertson & Ben Speight, Teamsters Local 728, Georgia

“When it comes to organizing under so-called right to work laws,” Robertson and Speight know all about it. “What Scott Walker tried to do in Wisconsin is our status quo here. In Georgia, there’s no recourse. You can literally be told ‘I’m firing you for that union button, get out.’ There’s no board to petition for unfair labor practices. The only ability we have to organize is the discretion of the employer,” Speight says.

Robertson wants to see the labor movement create plans for growth across sectors, and evaluate whether they really have the resources to carry out those plans. “The issue of archaic structures that impede growth is a huge weight that is hanging around our collective necks.”

“Labor has to think far beyond the confines of what has been permitted for us to organize,” Speight says. “The solutions to labor’s challenges now come from a recognition that we can only truly grow at the scale that’s needed to bring about balance in our society and economy if we’re able to compel owners to drop their weapons. That either comes through comprehensive labor law reform that brings in workers traditionally excluded from the protections of the NLRA, or,” he notes, “through massive action from working people and allies, making it impossible for owners to keep operating their businesses until they deal fairly with workers. It’s time for mass action,” Speight says. “There’s the old saying that you can have collective bargaining at the table or have it in the streets.”

“We need to teach people, even longstanding union members, in practice what collective action looks like, how do we identify targets, how do we escalate tactics to make those targets say yes. To get there,” he notes, “labor needs to embark on a deep relationship-building effort with our allies, so that struggles, attacks on labor are not viewed as an attack on labor in isolation, but are viewed as attacks on fundamental democratic rights.”



How do we build low-wage worker power in 2013?

By Laura Clawson
Daily Kos

It’s been a mixed year for unions and for workers’ struggles. On the one hand, you’ve got the misery in Michigan and lockouts around the country. On the other, you’ve got Walmart workers and fast food workers fighting their terrible wages and working conditions and the routine intimidation and oppression they face in unprecedented ways. You’ve got Chicago teachers striking against the odds. As much as the law is tilted toward businesses and the odds are against workers, we’re seeing workers rise up and fight. We need more of that. But what are the most effective strategies? Sarah Jaffe asked six organizers and labor scholars to talk about how labor can go on the offensive.

“It’s time to reinvent the strike - the strike as guerrilla warfare,” according to Stephen Lerner, organizer of the SEIU’s successful Justice for Janitors campaign. Similarly, Jonathan Westin, executive director of New York Communities for Change, a community organization that is organizing low-wage workers in New York City, says:

“It’s about constantly pressuring employers from as many angles as possible. It’s leveraging not only NLRB elections but back wage claims to pressure the employers, leveraging community pressure, boycotts, strikes. We did a strike at the car wash in the Bronx and they came to the table. That’s the lesson, it’s not just any one strategy, you have to come at them at every different angle.”

Like Westin, labor scholar Ruth Milkman urges a focus on low-wage workers; Bill Fletcher, Jr., Jane McAlevey, and Eric Robertson and Ben Speight offer suggestions for internal union organizing, strengthening how unions relate to their existing members and from there to the community at large.

Corporations have the political power from the top, and the day to day power over workers’ lives. They have the money. They have the fear factor. But increasingly we’re seeing signs that workers are ready and willing to fight, and that fear won’t be as much of a barrier anymore. With creative organizing and lots of struggle, could 2013 be the year the balance starts to shift back toward workers?

A fair day’s wage


According to findings from the Center for Responsible Lending’s newest report, The State of Lending in America and Its Impact on US Households (State of Lending), the typical household has just $100 left each month after paying for basic expenses and debt payments. After controlling for inflation, the typical household had less annual income at the end of 2010 than it did at the beginning of the decade.. Moreover, as worker productivity increased, the workplace has seldom rewarded them with higher pay.



Organizing McDonalds and Walmart, and Why Austerity Economics Hurts Low-Wage Workers the Most

By Roberty Reich
November 30, 2012

What does the drama in Washington over the “fiscal cliff” have to do with strikes and work stoppages among Americas lowest-paid workers at Walmart, McDonald’s, Burger King, and Domino’s Pizza?


Jobs are slowly returning to America, but most of them pay lousy wages and low if non-existent benefits. The Bureau of Labor Statistics estimates that seven out of 10 growth occupations over the next decade will be low-wage - like serving customers at big-box retailers and fast-food chains. That;s why the median wage keeps dropping, especially for the 80 percent of the workforce that’s paid by the hour.

Its also part of the reason why the percent of Americans living below the poverty line has been increasing even as the economy has started to recover - from 12.3 percent in 2006 to 15 percent in 2011. More than 46 million Americans now live below the poverty line.

Many of them have jobs. The problem is these jobs just don’t pay enough to lift their families out of poverty.

So, encouraged by the economic recovery and perhaps also by the election returns, low-wage workers have started to organize. 

Yesterday in New York hundreds of workers at dozens of fast-food chain stores went on strike, demanding a raise to $15-an-hour from their current pay of $8 to $10 an hour (the median hourly wage for food service and prep workers in New York is $8.90 an hour).

Last week, Walmart workers staged demonstrations and walkouts at thousands of Walmart stores, also demanding better pay. The average Walmart employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.

These workers are not teenagers. Most have to support their families. According to the Bureau of Labor Statistics, the median age of fast-food workers is over 28; and women, who comprise two-thirds of the industry, are over 32. The median age of big-box retail workers is over 30.

Organizing makes economic sense.

Unlike industrial jobs, these can’t be outsourced abroad. Nor are they likely to be replaced by automated machinery and computers. The service these workers provide is personal and direct: Someone has to be on hand to help customers and dole out the burgers.

And any wage gains they receive arent likely to be passed on to consumers in higher prices because big-box retailers and fast-food chains have to compete intensely for consumers. They have no choice but to keep their prices low.

That means wage gains are likely to come out of profits - which, in turn, would affect the return to shareholders and the total compensation of top executives.

That wouldn’t be such a bad thing.

According to a recent report by the National Employment Law Project, most low-wage workers are employed by large corporations that have been enjoying healthy profits. Three-quarters of these employers (the fifty biggest employers of low-wage workers) are raking in higher revenues now than they did before the recession.

McDonald’s bellwether for the fast-food industry - posted strong results during the recession by attracting cash-strapped customers, and its sales have continued to rise.

Its CEO, Jim Skinner, got $8.8 million last year. In addition to annual bonuses, McDonald’s also gives its executives a long-term bonus once every three years; Skinner received an $8.3 million long-term bonus in 2009 and is due for another this year. The value of Skinner’s other perks - including personal use of the company aircraft, physical exams and security - rose 19% to $752,000.

Yum!Brands, which operates and licenses Taco Bell, KFC, and Pizza Hut, has also done wonderfully well. Its CEO, David Novak, received $29.67 million in total compensation last year, placing him number 23 on Forbes list of highest paid chief executives.

Walmart - the trendsetter for big-box retailers is also doing well. And it pays its executives handsomely. The total compensation for Walmart’s CEO, Michael Duke, was $18.7 million last year putting him number 82 on Forbes’ list.

The wealth of the Walton family which still owns the lion’s share of Walmart stock now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.

Last week, Walmart announced that the next Wal-Mart dividend will be issued December 27 instead of January 2, after the Bush tax cut for dividends expires ח thereby saving the Walmart family as much as $180 million. (According to the online weekly Too Much,Ӕ this $180 million would be enough to give 72,000 Wal-Mart workers now making $8 an hour a 20 percent annual pay hike. That hike would still leave those workers making under the poverty line for a family of three.)

America is becoming more unequal by the day. So wouldnt it be sensible to encourage unionization at fast-food and big-box retailers?

Yes, but here’s the problem.

The unemployment rate among people with just a high school degree - which describes most (but not all) fast-food and big-box retail workers - is still in the stratosphere. The Bureau of Labor Statistics puts it at 12.2 percent, and that’s conservative estimate. It was 7.7 percent at the start of 2008.

High unemployment makes it much harder to organize a union because workers are even more fearful than usual of losing their jobs. Eight dollars an hour is better than no dollars an hour. And employers at big-box and fast-food chains have not been reluctant to give the boot to employees associated with attempts to organize for higher wages.

Meanwhile, only half of the people who lose their jobs qualify for unemployment insurance these days. Retail workers in big-boxes and fast-food chains rarely qualify because they haven’t been on the job long enough or are there only part-time. This makes the risk of job loss even greater.

Which brings us back to whats happening in Washington.

Washington’s obsession with deficit reduction makes it all the more likely these workers will face continuing high unemployment even higher if the nation succumbs to deficit hysteria. That’s because cutting government spending reduces overall demand, which hits low-wage workers hardest. They and their families are the biggest casualties of austerity economics.

And if the spending cuts Washington is contemplating fall on low-wage workers whose families are under the poverty line - reducing not only the availability of unemployment insurance but also food stamps, housing assistance, infant and child nutrition, child health care, and Medicaid - it will be even worse. (It’s worth recalling, in this regard, that 62 percent of the cuts in the Republican budget engineered by Paul Ryan fell on America’s poor.)

By contrast, low levels of unemployment invite wage gains and make it easier to organize unions. The last time Americas low-wage workers got a real raise (apart from the last hike in the minimum wage) was the late 1990s when unemployment dropped to 4 percent nationally - compelling employers to raise wages in order to recruit and retain them, and prompting a round of labor organizing.

That’s one reason why job growth must be the nation’s number one priority. Not deficit reduction.

Yet neither side in the current “fiscal cliff” negotiations is talking about Americas low-wage workers. They’re invisible in official Washington.

Not only are they unorganized for the purpose of getting a larger share of the profits at Walmart, McDonalds, and other giant firms, they’re also unorganized for the purpose of being heard in our nation’s capital. There’s no national association of low-wage workers. They don’t contribute much to political campaigns. They have no Super-PAC. They don’t have Washington lobbyists.

But if this nation is to reverse the scourge of widening inequality, Washington needs to start paying attention to them. And the rest of us should do everything we can to pressure Washington and big-box retailers and fast-food chains to raise their pay.


Posted by Elvis on 12/29/12 •
Section American Solidarity
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Republican Redux 13


What Could Have Been: The Most Important Bills Blocked by Republicans in 2012
The bills we could have passed if it wasn’t for GOP obstructionism—from a minimum wage increase to the Buffett Rule.

December 28, 2012

1. A minimum wage increase.

House Democrats proposed legislation in June that would have RAISED THE NATIONAL MINIMUM WAGE to $10 an hour, but Republicans blocked it. The minimum wage is currently $7.25 an hour, even though it would need to be raised to $9.92 to match the borrowing power it had in 1968. If it was indexed to inflation, it would be $10.40 today.

2. Campaign finance transparency.

The DISCLOSE ACT OF 2012, repeatedly blocked by Congressional Republicans, would have allowed voters to know who was funding the attack ads that flooded the airways from secretive groups like Karl Rove’s CROSSROADS GPS.

3. The Buffett Rule.

Senate Republicans in April FILIBUSTERED THE BUFFET RULE, which would have set a minimum tax on millionaires. HUGE MAJORITIES OF AMERICANS consistently support the rule, which would raise TENS OF BILLIONS OF DOLLARS per year from Americans who have seen their incomes explode while their tax rates plummeted.

4. The Employment Non-Discrimination Act.

ENDA, which would prohibit discrimination in hiring and employment on the basis of sexual orientation or gender identity, has LANGUISHED IN CONGRESS for decades, and Speaker John Boehner (R-OH) ”HASN’T THOUGHT MUCH” about bringing it to a vote.

5. U.N. treaty to protect the equal rights of the disabled.

Republicans BLOCKED RATIFICATION of the United Nations treaty to protect the rights of disabled people around the world, falsely claiming it would undermine parents of disabled children. In fact, the treaty would require other nations to revise their laws to resemble the Americans With Disabilities Act and had overwhelming support from veterans and disabilities groups. It failed by 5 votes.

6. The Paycheck Fairness Act.

Its about to be 2013, and women are still getting paid less than men FOR THE SAME JOB. This year the Paycheck Fairness Act came up for a vote again (previous efforts to pass the law have been unsuccessful), but the Senate GOP STILL COULDN’T GET IT TOGETHER to pass the legislation. Republicans oppose the measure, saying it helps trial lawyers instead of women. But the country’s female DOCTORS, LAWYERS, and CEOs might be inclined to disagree.


Republican Redux
[1] - [2] - [3] - [4] - [5] - [6] - [7] - [8] - [9] - [10] - [11] - [12] - [13] - [14]

Posted by Elvis on 12/29/12 •
Section Dying America
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Finding a Job Without A College Degree


The central problem is not an inadequate supply of educated workers; it is inadequate demand. The Bureau of Labor Statistics now PROJECTS that of the ten occupational groups that will add the MOST JOBS between 2010 and 2020, five do not even require a high-school education. Three require high school, and one category requires a two-year associate degree. The tenth, Educational, Training and Library Jobs, requires a doctorate or a professional degree but is largely in sectors that depend on government funds; as a result, it is much less likely to be a major source of growth in an age of public-sector austerity.
- Fixing The Depression, May 2012

In our view, the policy pronouncements of either school of SBTC thought are not consistent with their own findings. In particular, both schools stress the need to greatly expand college completion. The canonical model, however, shows a sizable deceleration in the relative demand for college graduates starting around 1992. The job task analysis shows no increase in relative demand for high-wage occupations relative to middle-wage occupations in the most recent business cycle, 2000 - 2007, and occupation-driven employer requirements for college graduates decelerated in the 1990s. Both of these findings help explain why college graduate wages and benefits have been relatively stagnant for ten years and the wages and benefits of entry-level college graduates have fallen. It goes unstated that sharp increases in college completion will result in falling college wages, especially among men and young college graduates.
- Assessing the job polarization explanation of growing wage inequality, EPI, January 2013

If you follow my posts, you’ll know I consider education today in America a big, worthless ripoff.  There are no jobs for all ages and all education levels, and college is expensive.  The only reason I have to support getting a degree is because hiring employers insist on a college diploma.


For many people who worked their way up, the lack of degree was never an impediment until they lost their jobs.

By Debra Donston-Miller
The Ladders

Bill Gates never graduated from college. Neither did Michael Dell nor Steve Jobs. Outside of the tech world, Richard Branson has done pretty well for himself without a college degree, as has Barry Diller.

But Sharon Willis is a more common example of the challenges to American workers WHO NEVER GRADUATED FROM COLLEGE.

Since February, Willis has been the acting vice president for external affairs at UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES, a medical and health-sciences graduate school of 850 students. She will continue in that role until some time in the fall, when she will resume her position as deputy vice president. The VP ROLE is one she wanted to apply for when it became vacant but couldn’t, even though she had the experience and knowledge. Why? She doesn’t have a bachelors degree.

Willis started at the university 28 years ago as a clerk typist and worked her way up through the ranks. She describes herself as the “go-to” person for just about everybody with whom she works. Willis has done the job of vice president, and the college president knows she is up to the task on a permanent basis, yet her lack of a college diploma - a job requirement means she does not qualify for the position.

Willis has hit a professional wall at the university, and she realizes that things would likely not be different elsewhere.

“When we have vacancies here, I see the qualifications of the applicants, many of whom have master’s degrees,” said Willis. “I realize that if I were to leave here, I would probably rank at the bottom of the applicant pool because of my lack of a degree, despite excellent experience, job stability, a very strong work ethic and great references. It’s disheartening.”

What Willis suspects to be true about the world outside the university is only too real for many of the millions of people the recession unleashed upon the job market. Many of these people started at a company in an entry-level position and worked their way up the ladder. Not having a college degree may not have mattered - until the time came to apply for a new position.

Bruce Hurwitz, president and CEO of HURWITZ STRATEGIC STAFFING said he sees this issue come up regularly. “Every time I have tried to get a client to waive the college-degree requirement in light of the candidates exemplary work experience, I have been refused,” he said. “They almost always say that it is their policy that all employees have at least a college degree.”

Such jobs now account for most of the economy. Nearly 60 percent of American jobs now require at least a bachelor’s degree, according to “Help Wanted: Projections of Jobs and Education Requirements Through 2018,” a JUNE 2010 REPORT [local copy] released by the Center on Education and the Workforce at Georgetown University. That number jumped from 28 percent in 1973 to 59 percent in 2008 and is expected to rise to 63 percent over the next decade, the report said.

Resume and Networking Solutions

So is your dream job, even most jobs, out of reach if you don’t have a college degree?

Not necessarily. Experts who spoke with TheLadders said solid, long-term professional experience and proven results can often supersede the need for a college diploma.

“I believe that employers want the right person for the job,” said Karla Porter, director of workforce development and HR for the Greater Wilkes-Barre Chamber of Business and Industry and a private consultant on HUMAN CAPITAL AND NEW MEDIA. “They’re not looking for a certificate, a degree, a piece of paper; they are looking for a solution provider. If there is a person who can do that for them and has a proven track record and can show what they’ve accomplished for other companies, I believe they will be considered.”

All of this must be conveyed in a carefully constructed resume. “To replace the college-degree situation on a resume, the person needs to stress the results they have been able to achieve due to their extensive experience,” said Dianne Durkin, president and founder of LOYALTY FACTOR, a consulting and training firm.

“Make sure the resume is very, very well done,” Porter said. “If it’s not, it will go to the ‘C’ pile.”

Tony Deblauwe, senior HR partner at Citrix Systems and founder of HR4CHANGE, agreed: “Your resume has to be rock-solid. It has to demonstrate your experience, your skills, your accomplishments. You’re promoting your best skills so that people focus on that and not get to the end and say, ‘Well, where’s your degree?’ “

Cheryl Palmer, president of CALL TO CAREER, said she has worked with many people who have been to college but never got the degree. When writing a resume for a person in this situation, she mentions the college major and degree program but does not state that that he has a degree. “I’m being truthful, but not drawing undue attention to the fact that they don’t have a degree.”

This strategy will also help you get your resume past the APPLICANT TRACKING SYSTEM (ATS) software that most companies use to screen resumes.

“If [a job description] says ‘bachelor’s degree required’ and you don’t have a bachelor’s degree, your resume can say ‘bachelor’s degree not completed or not attained’ so the system will pick up the keywords ‘bachelor’s degree,’” Porter said. “You don’t want to say anything that is not true, but you want your resume to get in front of people. Make sure your resume contains the same keywords that the job description contains, and then rearrange them to how they fit for you.”

All the experts who spoke with TheLadders emphasized the importance of describing any training, CERTIFICATIONS or licenses you have to show that you have invested in some training for yourself. “I haven’t found too many scenarios where people have done nothing,” Deblauwe said. “They’ve at least taken some college classes or gotten some certifications or something to talk to. Or something internal from a previous company.”

“It’s commonly understood that NETWORKING is one of the most important things you can do when pursuing a new job, but it’s even more critical if you don’t have a degree,” said Palmer. “If you don’t have a degree, the whole idea of networking is much, much more critical,” she said. “Employers prefer to hire someone that they know something about. They prefer people who have come referred. If you are trying to land a job in this very competitive job market and you don’t have a degree, you really have to take that networking to another level, to get around the fact that most employers are looking for a bachelor’s degree at an absolute minimum.”

Along those same lines, strong recommendations from clients, former employers, co-workers and associations can go a long way toward making up for the lack of a college degree.

It’s Never Too Late

So, what else can you do if you don’t have a college degree? Well, you can get one or at least begin working toward one, no matter what your age.

Once enrolled in a program, you can writeon a resume that a degree is “in progress,” experts suggested.

That’s just what the Uniformed Services University’s Willis is doing.

A busy single mother of three, Willis is taking classes in business management in the hopes that she can break through the barriers put up by the lack of a degree. Willis said her boss is very supportive and is giving her whatever time she needs. In addition, because she works for a federal institution, she gets tuition reimbursement. All of this, along with flexible options such as online classes, has allowed Willis to start on a path she hopes will lead to a higher-level position.

“I think in the long run, people are much better off just going ahead and pursuing the degree, no matter how hard it may be,” she said. “That’s what everyone will be looking for. You do get to a certain point where you just can’t go any further, and that’s where I am right now.”

Debra Donston-Miller covers work-life issues and difficult job-search situations for TheLadders.



Home-Schooled Teens Ripe for College
Myths about unsocialized home-schoolers are false, and most are well prepped for college, experts say.

By Kelsey Sheehy
US News

Between deciphering college FINANCIAL AID AWARDS and settling into a shoe-box sized dorm room with a perfect stranger or two, making the move from HIGH SCHOOL to college can be a shock to the system for even the most put-together teenager.

The transition, many may assume, would be even more jarring for students coming from a home-schooled environment.

“Transitioning from home school to college can be a daunting experience, especially with the lack of socialization that is associated with home schooling,” says Los Angeles-based therapist Karen Hylen, who counsels people she says have not made the transition successfully.

But parents and students from the home-schooling community say the nontraditional method yields teens that are more independent and therefore better prepared for COLLEGE LIFE.

More than 2 million U.S. students in grades K-12 were home-schooled in 2010, accounting for nearly 4 percent of all school-aged children, according to the NATIONAL HOME EDUCATION RESEARCH INSTITUTE. Studies suggest that those who go on to college will outperform their peers.

Students coming from a home school graduated college at a higher rate than their peers - 66.7 percent compared to 57.5 percent - and earned higher grade point averages along the way, ACCORDING TO A STUDY that compared students at one doctoral university from 2004-2009.

They’re also better socialized than most high school students, says Joe Kelly, an author and parenting expert who home-schooled his twin daughters.

“I know that sounds counterintuitive because they’re not around dozens or hundreds of other kids every day, but I would argue that’s why they’re better socialized,” Kelly says. “Many home-schoolers play on athletic teams, but they’re also interactive with students of different ages.”

Home-schooled students often spend less time in class, Kelly says, giving them more opportunity to get out into the world and engage with adults and teens alike.

“The socialization thing is really a nonissue for most home schoolers,” he says. “They’re getting a lot of it.”

Jesse Orlowski seconds Kelly’s sentiment.

Home schooled from the age of 3, the 18-year-old San Diego native played baseball for two years in high school, started a flag football league, is a “big fan” of swing dancing, and is an active street performer.

“I had a lot of time to pursue outside interests - to really zone in on things,” Orlowski says. “If I wanted to make something happen I usually could, with a little wiggle room.”

Extracurricular activities were not the only opportunities Orlowski seized. The flexibility of home schooling allowed him to focus on his passions: math and science.

As a junior, Orlowski convinced a physics professor at San Diego State University to let him sit in on an upper-level electrodynamics class. He later helped that professor with research projects.

“I can go out and say, ‘OK, what class do I want to take, from what professor, at what college in San Diego?’ and then I just go out and try and contact them,” he says. “Most people would be skeptical at first and then I’d meet with them and they’d say, ‘Alright, let’s give this a try.’”

Orlowski enlisted the help of admissions counselor and author Marjorie Hansen Shaevitz, who previously worked in the office of the dean of students at Stanford University, to help craft his home-schooling experience into a high school transcript.

Home-schooled students often choose academic and social pursuits because they find them important and meaningful, and college admissions officers are drawn to that authenticity, Shaevitz says.

“They have to take account of time that other students have structured,” she says. “The possibilities of showing all the kinds of things that colleges are looking forŗcuriosity, confidence, resourcefulness, ability to deal with challengesyou name it. That’s a part of being a home-schooled student.”

Rather than a hindrance, home-schooling was an asset, Orlowski says, one that landed him acceptance into 10 top-tier schools, including Princeton University, Vanderbilt University, and the Massachusetts Institute of Technology.

Orlowski will attend MIT in the fall and plans a double major in math and physics. His advice to other home-schooled teens:

“The flexibility that home-schooling gives you, you can leverage that into getting all sorts of opportunities,” he says. “Seize the day by using home-schooling as a springboard to college admissions.”


Posted by Elvis on 12/29/12 •
Section Dealing with Layoff
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