California Free Press

Off the Top of My Head

Starter Homes Cost More Than $1 Million in 237 American Cities

by John Lawrence

In many US cities a starter home costs more than $1 million making it unaffordable for most young people who make less than $400,000. CBS News reports:

If you put 20% down on your $1 million home, you would need an $800,000 mortgage for the remainder of what you owe on the purchase. In this case, your mortgage payment would be $7,739 per month, inclusive of estimated property taxes and homeowners insurance costs. That amounts to about $92,868 per year in mortgage payments. 

With 0% down, you can expect to pay $9,070 per month inclusive of estimated property taxes and homeowners insurance costs. With less than 20% down, you should also expect to pay for private mortgage insurance (PMI), which would cost about $1,250 per month. That works out to a total of $10,320 per month, or $123,840 in annual mortgage payments. 

Based on these figures, you would need to earn $331,671.43 annually to afford a $1 million home with a 20% down payment if you follow the 28% rule. Or, you would need to earn about $442,285.71 annually to afford the same home with no down payment based on this rule. 

Obviously, only very rich families with parental support can afford to buy a starter home in 237 American cities. So what is the solution? If you're young, move to an American city where the average price of a starter home is around $200,000. Cities like South Bend, Indiana, Cleveland, Ohio, or Topeka, Kansas. Indianapolis, Indiana has cheap starter homes. The median price for a housing unit in Indianapolis is $232,000. However, think twice about cities that are desirable or undesirable due to climate change. I wouldn't buy a house in a city in the south, for instance. Also there are several other factors like what's the job situation. As time goes on, some areas of the country will become virtually uninhabitable due to climate change. In general you have to consider the topography. Are you close to a river or creek that could flood? Are you close to a forest that could burn? Does the area have adequate water resources? What about infrastructure? I wouldn't want to be too close to the ocean as climate change raises ocean levels and shore lines are washed away.

Young people should be given a path to home ownership like returning GIs from World War II. They could buy a house with nothing down. Their mortgages were guaranteed by the government. In exchange for a two year commitment to the American Climate Corps, young people should also be able to buy a house with nothing down. Home ownership is the time proven way to build middle class wealth. Renters will never build wealth. The government should be in the business of creating a strong middle class. This can only be accomplished by encouraging wide spread home ownership, and this has to start with young people getting into homes.

Off the Top of My Head

Biden Should Run on Tax Cuts for Middle Class

by John Lawrence

There are only two issues Republicans have: the border and tax cuts. The American people are expecting a tax cut if a Republican is elected to the Oval Office. That's the reason they are complaining about the economy. The American people have gotten a lot of good economic stuff out of the Biden administration. Now they want their tax cuts. Every Republican administration in recent history has promised tax cuts. Biden should steal that thunder and run on tax cuts for the middle class and tax increases for the very wealthy. He started sounding this note during the last election cycle. He needs to reemphasize this medley. Biden needs to take these issues away from Republicans. I wrote previously about the fact that Biden should go full Trump on the border issue. It's ridiculous that the US has 750 military bases around the world, and seeks to control every other country's borders but can't control its own. A majority of these bases are equipped with modern military equipment and airfields. According to a report, the U.S. had about 750 military bases across 80 countries in the world and had deployed 173,000 troops in 159 different countries as of July 2021.

Let's review the Biden record on the economy which is truly epic. Biden has added 14 million jobs in less than three years, bringing the Black unemployment rate to a record low and reducing student loan debt by billions. That's for starters. The astoundingly strong labor market is arguably the White House’s biggest victory. In some ways, the bump was inevitable — Biden took office at a time when millions were still out of work because of the pandemic. Even so, the rapid job gains in recent years have blown past economists’ expectations and have fueled the economy’s blockbuster growth. To date, the White House has canceled some $132 billion in student loan debt for more than 3.6 million Americans. It has also increased federal Pell Grants to low- and middle-income students, allowing them to take on less debt. As a result, outstanding student loan balances have been falling for six months. 

The American Rescue Plan passed in March 2021, injected a $1.9 trillion stimulus into the U.S. economy. It included financial safety nets like payments of $1,400 to households earning up to $75,000, extended unemployment benefits, and an expansion to the child tax credit. Collectively that cut overall poverty by 44%, according to the Brookings Institution, and lifted Americans’ financial health to new heights. Biden’s $1 trillion Infrastructure and Jobs Act was the next major spending package to win congressional approval in November 2021. It fulfilled the president’s campaign-trail promise to refurbish the country’s roads and bridges, while expanding access to clean water and broadband internet. It will support an additional 600,000 new jobs by the end of next year and 800,000 jobs in 2025, according to Moody’s Analytics.

 

The passage of the so-called “Chips and Science” plan allowed Biden to cement an industrial-policy legacy and fulfill a bipartisan desire to rely less on China’s semiconductor industry. More than 460 companies have shown interest in its $53 billion of research and production subsidies, the Commerce Department said last month. And the relationship between public and private investment is something to brag about. Micron Technology’s (MU.O), opens new tab $100 billion outlay for a New York chip factory is expected to create nearly 50,000 jobs in the state. Intel’s (INTC.O), opens new tab $20 billion expansion in Arizona is expected to support 3,000 new jobs. The Inflation Reduction Act gave Biden a chance to revive progressive proposals before the 2022 midterm elections. Though the final plan was whittled down from $1.8 trillion to $430 billion of new spending, it still included Biden’s plans for clean energy tax credits and Medicare drug price negotiation. Bank of America estimates it has already spurred $132 billion of investment across more than 270 new clean energy projects.

 

So what is the American people's response to these clear economic gains that Biden has been responsible for? Now we want our tax cuts so we will elect Trump since that is what he provided after his election in 2016. This is an ominous predilection for the reelection of Joe Biden. He can neutralize this threat by out promising Trump on the issue of tax cuts for the American people. At the same time he can balance this by his previous promise of not increasing taxes on anyone making less than $400 million a year. This would make Biden's policy on tax cuts more fiscally responsible than Trump's. Trump's tax cuts added $7 trillion to the national debt, something Republicans weren't too concerned about. Biden should take the wind out of Trump's sails on tax cuts while also providing a more responsible policy regarding the national debt.

Off the Top of My Head

Bidenomics: The US Finally Gets an Industrial Policy

by John Lawrence

The Republican policy that the government should be hands off regarding the economy is out the window. Trickle down is a failed policy. Bidenomics gets the government involved in crucial areas of the economy. The export of jobs to parts of the world where labor is cheapest is replaced with a policy of creating jobs within the US. Deregulation is replaced with regulations to protect the environment and combat climate change. The traditional Democratic alliance with unions is back in vogue. Bidenomics is all about building the economy from the middle out and the bottom up instead of from the top down. Bidenomics is about shaping the economy in a way that is propitious for the middle class and the environment. Infrastructure building is more important than accelerating the consumer economy. Putting our house in order is more important than giving away fattening goodies to consumers. People are being put to work doing jobs which actually make US society a better place instead of encouraging jobs in frivolous pursuits. This is not necessarily what the American consumer wants.The American consumer wants more money in their pockets so they can buy more gadgets and aspire to making millions as a pro athlete or an entertainer. They don't actually want to work at the good jobs Biden is creating building infrastructure or making semiconductors. CNN reported:

Trickle-down economics, which was at the heart of President Ronald Reagan’s policies and continues to be the guiding light of Republican lawmakers, typically revolves around tax cuts for the wealthy and large companies. Supporters say the benefits flow down to middle-class and working Americans, boosting economic growth more broadly. But many experts dispute the effectiveness of this practice at lifting all boats.

Biden argues that supply-side, trickle-down economics has cost jobs and hollowed out the middle class. He has long focused on that group of Americans, serving as chair of the Middle Class Task Force when he was vice president in the Obama administration.

“Folks, let me say it as clearly as I can: (The) trickle-down approach failed the middle class and failed America,” said Biden.

To fund Bidenomics, the president once again calls for ensuring the wealthy and large corporations pay their fair share of taxes.

The problem is that now that the American people have had  a good taste of Democratic programs, they want more: Republican tax cuts. They want their cake and eat it too. They know that Republicans will have no problem with the national deficits and debts as long as they come in the form of tax cuts. So from the American consumer's point of view they have got about all they can expect to get out of Bidenomics. Now they want a tax break to boot.

The Biden administration has focused on infrastructure, clean energy and semiconductors, Lael Brainard, director of the National Economic Council, said. The Infrastructure Investment and Jobs Act, Inflation Reduction Act, and CHIPS Act each include direct funding and tax incentives for public and private manufacturing construction. Biden outlined how states will receive more than $42 billion in federal funding for high-speed internet service, which was part of the 2021 infrastructure law. It is aimed at bringing connectivity to more Americans and closing the digital divide. The administration is comparing it to President Franklin Delano Roosevelt’s Rural Electrification Act, which brought electricity to homes throughout the country. And 35,000 new projects – including roads, bridges and ports – have received funding through the bipartisan infrastructure law, the White House said.

E.J. Dionne Jr. said in the Washington Post:

Bidenomics has also gone global. One indicator is the exceptional and ongoing debate Sullivan’s speech provoked in proposing a “new consensus” to replace “a set of ideas that championed tax cutting and deregulation, privatization over public action and trade liberalization as an end in itself.” The old formulas, Sullivan argued, not only failed to address new problems; they didn’t work on their own terms.

“In the name of oversimplified market efficiency,” he said, “entire supply chains of strategic goods, along with the industries and jobs that made them, moved overseas.” The idea that freer trade “would help America export goods, not jobs and capacity, was a promise made but not kept.” He stressed the need for “a modern American industrial strategy” and the benefits of “moving beyond traditional trade deals to innovative new international economic partnerships.”

Can the dumbed down and self seeking American people even understand much less appreciate the great things that Bidenomics has brought forth? Biden has changed the narrative on taxes by repeating ad nauseum that he wouldn't raise taxes on anyone making less than $400,000 a year. Big idea: raising taxes doesn't mean raising taxes on everyone and a tax break does nor mean lowering taxes on everyone. The meme about raising taxes which Republicans have endeavored to attribute to Democrats ("tax and spend") and tax breaks which Republicans have endeavored to attribute to themselves has been change by Biden. "Tax the rich" has become the Democrats' motto thanks to Bernie Sanders and AOC.The immense inequality that Reaganomics has resulted in is being addressed by Bidenomics. The American people say "Ho Hum". They are more interested in spectator sports which is exemplified by the fact that news programs on TV are routinely bounced in favor of sports events. In short the American people don't appreciate Biden because they don't take the time to understand Bidenomics.

Biden has done much good for America and Americans. He is the least appreciated great President in American history. It's a reflection on the American people themselves that all they're interested in is their own personal situation. If they are well off, they could care less about social programs that help the poor. If they have a good job, they could care less about the unemployed. American have been taught to be totally selfish and not to care about the wider world or about the improvement of society in general. Corporations by law are only supposed to consider the financial well being of their share holders and nothing else. These attitudes in and of themselves preclude the concerns of minorities, whether racial or economic, because the US is a majoritarian society. In politics the majority rules. Concern about the welfare of minorities and of the world in general and in particular the environment is not a consideration. Meanwhile, global warming is taking out individual families who are victims of tornadoes or other particular manifestations of global warming on a daily basis. It has yet to sink in that perhaps concerns for larger interests than just ourselves might be a paradigm change we might have to make.

For the American people, it's not abut how much Biden has done, it's about how much have you done for me lately, Mr Biden, and, more importantly, how much more are you going to do? If there are many more carrots, then maybe I'll vote for you. Otherwise, I'll take the tax break Republicans are offering. The American national character is selfishness personified. Ayn Rand would be proud.

Off the Top of My Head

Biden: The Least Appreciated Great President in American History

by John Lawrence

President Biden has gotten more real work done for the American people than any President with the exception of Franklin D. Roosevelt. So why is his job approval rating so low - just 39%? Chalk it up to the fickleness of the American people. They don't know a great President when they see one. Biden has been able to do so much with much narrower margins in Congress than FDR had in all his terms as President. In fact Roosevelt had Democratic majorities in both the House of Representatives and the Senate from 1933 until his death in 1945, and in those days the filibuster was a speaking filibuster that delayed but didn't terminate legislation and so was of little consequence compared to the fact that today 60 Senators are required to pass any bill.

So what are some of Biden's accomplishments? The Inflation Reduction Act is a historic legislative achievement that lowers costs for families, combats the climate crisis, reduces the deficit, and finally makes the largest corporations pay their fair share. For the first time, Medicare is able to negotiate the price of certain high-cost drugs, a month’s supply of insulin for seniors is capped at $35, Medicare beneficiaries pay $0 out of pocket for recommended adult vaccines, and seniors’ out of pocket expenses at the pharmacy will be capped at $2,000 a year. Historically low unemployment at 3.5%. A manufacturing boom is occurring. Companies have announced nearly $300 billion in manufacturing investments in the United States. These investments are ensuring the technologies of the future are made in America, and bringing back supply chains from overseas. And they are creating good-paying jobs, including union jobs and jobs that don’t require a four-year degree. As part of the bipartisan CHIPS and Science Act, the Department of Commerce is overseeing $50 billion to revitalize the U.S. semiconductor industry, including $39 billion in semiconductor incentives. The first funding opportunity seeks applications for projects to construct, expand, or modernize commercial facilities for the production of leading-edge, current-generation, and mature-node semiconductors. This includes both front-end wafer fabrication and back-end packaging. The Department will also be releasing a funding opportunity for semiconductor materials and equipment facilities in the late spring, and one for research and development facilities in the fall.

President Biden signed the American Rescue Plan to change the course of the pandemic and jump start our economic recovery. The American Rescue Plan funded our successful vaccination campaign, safely re-opened schools for in-person learning, helped 200,000 child care providers keep their doors open, and delivered relief to American families. Biden forged a consensus and got the Bipartisan Infrastructure Law passed – a once-in-a-generation investment in our nation’s infrastructure. We are rebuilding our roads, bridges, ports, and airports, upgrading public transit and rail systems, replacing lead pipes to provide clean water, cleaning up pollution, providing affordable high-speed internet to every family in America, delivering cheaper and cleaner energy to households and businesses, and creating good-paying jobs – including union jobs, and jobs that don’t require a four-year degree.

President Biden signed into law the PACT Act – the most significant expansion of benefits and services for toxic exposed veterans in more than 30 years. This law also enables the Department of Veterans Affairs to move more quickly in the future to determine if illnesses are related to military service, and it offers critical support to survivors who were harmed by exposures. And, the law authorized 31 new clinical sites and provides VA several tools and resources to ensure effective implementation of the law. The Biden Administration announced debt relief of up to $20,000 for Americans earning less than $125,000 per year who had Pell Grants in college, and up to $10,000 for all other borrowers below that income threshold. More than 40 million borrowers stand to benefit from this action, and about 20 million would see their debt entirely wiped out - and nearly 90% of this relief will go to borrowers earning less than $75,000 per year. In early 2023, the Biden-Harris Administration announced a plan to provide millions of borrowers with more affordable monthly student loan payments through changes to income-driven repayment plans.

The U.S. is positioned to achieve our ambitious climate goals of cutting our emissions in half by 2030 and net-zero emissions by 2050. The President has taken executive action and signed legislation to develop clean energy at home, accelerate the adoption of electric vehicles, and reduce pollution that endangers overburdened communities. And, the President is lowering energy costs for families, creating good paying jobs, and ensuring America leads the global clean energy economy. The President also protected more lands and waters in his first year than any President since John F. Kennedy. President Biden took action to lower the cost of health care for millions of Americans. Right now, four out of five people who sign up for health insurance through the Affordable Care Act can find health care coverage for $10 a month or less and millions of Americans on Obamacare are saving an average of $800 a year. Since he took office, there has been a combined 50 percent increase in enrollment in states that use HealthCare.gov and the nation’s uninsured rate is historically low at 8 percent. Over 16 million Americans signed up for quality, affordable health coverage, the highest number ever produced in an open enrollment period.

So what are Biden's most significant achievements? In my opinion infrastructure and climate action lead the way. These areas have been neglected too long, and the Biden initiatives will just barely make amends. In and of themselves, they are probably insufficient, but they are a good start, a start that has been delayed too long. Changing the narrative on taxation, I think, is a major accomplishment. Making it clear that a tax bill does not have to apply to everyone. By not raising taxes on anyone making less than $400,000, an oft repeated phrase, the narrative has been changed from "tax and spend" to "tax the rich and spend on helping the poor and middle class". Deficit reduction doesn't mean necessarily to stop spending on social programs as it means getting more money into government coffers by taxing the rich. Inequality is out of control; taxing the rich ameliorates this situation. What Biden did to get us through the COVID crisis is remarkable. It could have been an economic disaster for everyone; it wasn't. Student debt relief was a great achievement although it is still not clear how that will play out in the courts.

The American people by and large don't appreciate all that Biden has done compared to what any Republican administration would have done. Clearly, Democrats are on the side of rationality and helping the American people. Republicans are on the side of winning at all costs and helping the rich. They don't give a damn about helping the American people especially the middle class and the poor. The Republican mantra of reducing the deficit and the debt would have you believe that it can only be done in one way, that is by reducing spending. No, it can also be done by taxing the rich which would also reduce inequality. But this is all the Republicans have, that and the discredited policy of tax breaks for the rich that have done little to "trickle down" and have greatly contributed to the national debt. Enhancement of Obama's landmark health care legislation is another major achievement although Obama deserves much of the credit. It's a testimony of what the Democratic party is able to achieve for the country. The fact that Biden accomplished so much in a bipartisan way is something few other politicians could have hoped to accomplish especially in the political environment that exists today.

My criticism of Biden has to do with the Ukraine war. On the one hand he has prevented it from becoming a world war as of yet. However, in the negotiations preceding the war, I believe more could have been done to prevent the war in the first place. By not acknowledging or being sensitive to Russia's concerns about the encroachment of NATO on its borders which started during the Clinton administration and was hastened by Secretary of State Madeleine Albright, Biden and other diplomats missed an opportunity to defuse the crisis. Their policy was a de facto attempt to bully Russia into accepting the fact that Ukraine would also become part of NATO. Now the US is entrenched in a policy of Ukraine "winning" and Russia "losing" instead of a policy of a negotiated settlement to end the war, a negotiated settlement which could have been had before the war even started IMHO, for instance, by delaying Ukraine's admission to NATO for a period of time during which Russia's security concerns might have been addressed. In effect Ukraine has become a vassal state of the US instead of its historic situation of being a vassal state of Russia.

Off the Top of My Head

A Tree Planting Alternative for the Jobless

by John Lawrence

Modern Monetary Theory (MMT) proposes a Job Guarantee (JG) program that would employ the unemployed instead of just paying them unemployment insurance. This would be an automatic program whose numbers would very according to those employed in the private sector. When the private sector is supplying lots of jobs, the number in the JG would diminish and vice versa. So why not employ all those in the JG planting trees? This in no way competes with the private sector and doesn't require training or any skills whatsoever. The homeless could do it; the prison population could do it. The unemployed could do it. The pay would provide an automatic minimum wage, and the economy would be fully employed. There would be no wage inflation because people in the JG would not be competing for jobs with people employed in the private sector. When the private sector needed more workers, they could hire them out of the JG. Because these workers are employed, their work skills will not diminish like those sitting idle doing nothing but collecting unemployment insurance.

Conventional economic theory is based on the Philips curve which predicts that there must be a certain number of unemployed people in order to tamp down inflation. The inflation rate is contained based on the misery of the necessary number of unemployed people who are historically from minority communities. MMT replaces the Philips curve with an analysis that predicts that inflation can be contained and a full employment economy can be achieved because JG workers are not competing with those employed in the private sector, and, therefore, there is no wage inflation. Those workers are available for hiring out of the JG by offering them slightly more than the minimum wage which is set automatically by the government by the pay offered to those in the JG which would be a living wage, in other words enough so that they are above the poverty level. Therefore, a number of birds are killed with one stone. 1) The minimum wage is automatically set at the Federal level. 2) The unemployment compensation program and the money budgeted for it can be eliminated. 3) A full employment economy is achieved. 4) Climate change is addressed. 5) People's job related skills are not diminished as they would be if they were sitting idle.

This is from the Modern Monetary Network:

"A government job guarantee is a proposed program where the government would provide a job with a basic wage and benefits package to anyone willing and ready to work. The job guarantee is one component of an overall program to stabilize an economy. The job guarantee is financially feasible when a sovereign government’s currency uses a floating exchange rate.

"The job guarantee provides a floor for wages and benefits, creating a buffer stock of labor. The program is intended to “hire off the bottom,” i.e. those with less qualifications or skills. A job guarantee program hires people who otherwise cannot find employment. Once implemented, a job guarantee would be a permanent program, operating during good times and recessions alike.

"In times of recession, private sector employers typically lay off workers. This swells the ranks of the unemployed. Laid off workers cannot spend money, and this hurts the economy. With a job guarantee in place, laid off workers could take a job guarantee job. This would increase the size of the job guarantee workforce during recessions, and at the same time inject more money into the economy, helping to take the edge off of the recession. As the economy recovered, people would leave their job guarantee jobs and go to better-paying private sector jobs. As the number of people in the job guarantee workforce diminished, government spending would also fall.

"The job guarantee would also serve as a mechanism to ensure price stability within the economy by fixing the price of employed labor.

"The concept of a job guarantee dates back to at least the New Deal of the Roosevelt Administration. There were several programs that had job guarantee attributes, such as the Civilian Conservation Corps (CCC), and the Works Progress Administration (WPA). After the Second World War, many industrialized economies embraced full employment. For example, Australia had an implicit buffer stock of jobs that were always available, both in the private and public sectors. Hyman Minsky also conceptualized an Employer of Last Resort (ELR) program during the 1960s. Most recently, L. Randall Wray, William Mitchell, and Warren Mosler have proposed a job guarantee program in conjunction with their work in Modern Monetary Theory (MMT)."

So why not address climate change this way? There are never enough trees on planet earth, Workers in the Civilian Climate Corps (CCC) will never run out of work. The state governments will never have to pay unemployment compensation again, and the private sector will have a buffer stock of already employed working people to choose from when their needs arise for an increased work force. In effect the Federal government will take over the responsibility for unemployment insurance relieving the states of this burden.

Why the PRO Act is Critical

by Robert Reich

Wednesday, June 2, 2021

Something I’ve just learned about Amazon – one of America’s most profitable and fastest-growing corporations, headed by the richest man in the world: 

According to the Labor Department’s Occupational Safety and Health Administration, Amazon warehouse workers sustained nearly double the rate of serious injury incidents last year as did workers in non-Amazon warehouses. 

In addition, largely because Amazon failed to provide its workers adequate protective equipment during the pandemic, the corporation admits that nearly 20,000 employees were presumed positive for the coronavirus.

Workers who spoke out about these unsafe workplace conditions were fired.

Amazon boasts of paying its workers at least $15 an hour. But that comes to about $30,000 a year, hardly enough for a family to get by on.

The explosive growth of Amazon’s army of poorly-paid and ill-treated hourly workers is emblematic of the long-term decline of America’s middle class and levels of economic inequality America hasn’t seen since the late nineteenth century’s Gilded Age. 

This has strained the social fabric of the nation – fueling anger and frustration, a rising tide of drug overdoses and deaths of despair, even tempting some working-class people to embrace Trumpism and white nationalism. 

The success of Amazon’s “shock and awe” campaign against workers who dared try to bring a union to their Bessemer, Alabama warehouse exemplifies the immense political power the architects of this growing inequality now wield. 

It’s an alarming omen of the future. 

In Amazon warehouses like Bessemer, workers are treated like robots. Algorithms relentlessly impose dangerous production quotas. They get two 30-minute breaks each ten-hour day. Every movement is monitored. 

Amazon delivery drivers report being instructed to turn off their safety apps so they can meet their quotas. 

Others report having to urinate into bottles because of delivery timing pressures. 

Even though public support for unions is as high as it’s been in 50 years – 60 million American workers would join a union today if they could – Bessemer workers were outgunned by a behemoth whose market capitalization exceeds Australia’s GDP.   

The National Labor Relations Act makes it illegal for employers to fire workers for trying to organize a union. But the penalties for violating the Act  are so laughably small (rehiring the worker and providing back pay) that employers like Amazon routinely do it anyway.

Amazon may be the future of the American economy, but if that future is to have room for the kind of prosperous working families that fifty years ago defined American capitalism, unions are critical. 

In March, the House of Representatives passed legislation designed to level the field. It’s called the Protect the Right to Organize Act (PRO Act). The Senate version has 47 Democratic co-sponsors. It needs three more to give the PRO Act a fighting chance of getting to Joe Biden’s desk. 

The PRO Act would end many of the practices Amazon used to defeat the union effort in Bessemer. Real penalties would be imposed on companies and corporate officers who retaliate against union advocates or otherwise violate the National Labor Relations Act.

The PRO Act would make it easier for workers to form a union, with the aim of protecting them from unfair working conditions.

The PRO Act alone won’t end economic inequality or return prosperity and opportunity to America’s working families. But passage of the PRO Act would help. 

It would also send a clear signal that ours is truly a government “of the people” – such as the million people who work for Amazon today, not the one multi-billionaire at the top, and of the vast majority of Americans who are working harder than ever today and getting nowhere, in America’s Second Gilded Age. 

Pay a Living Wage or 'Flip Your Own Damn Burgers': Progressives Blast Right-Wing Narrative on Jobs

Published on Friday, May 07, 2021

by Common Dreams

"If one in four recipients are making more off unemployment than they did working, that's not an indictment of $300 a week in UI benefits. It's an indictment of corporations paying starvation wages."

by Kenny Stancil, staff writer

 

38 Comments

Food delivery driver Jorge Vargas honks a horn while driving his vehicle in a car caravan strike by fast food workers and their supporters on February 9, 2021 in Los Angeles. (Photo: Frederic J. Brown/AFP via Getty Images)

Pushing back on the right-wing narrative about the reason for real or perceived labor shortages in some markets nationwide, progressives on Friday told corporations that if they want to hire more people, they'll need to start paying better wages.

Soon after the Labor Department released its April jobs report, the U.S. Chamber of Congress blamed last month's weak employment growth on the existence of a $300 weekly supplemental jobless benefit and began urging lawmakers to eliminate the federally enhanced unemployment payments that were extended through early September when congressional Democrats passed President Joe Biden's American Rescue Plan. 

"We do not have a shortage of willing workers in this country. We have a shortage of employers who are willing to pay workers enough to live."
—Morris Pearl, Patriotic Millionaires

"No. We don't need to end [the additional] $300 a week in emergency unemployment benefits that workers desperately need," Sen. Bernie Sanders (I-Vt.) said in response to the grumbles of the nation's largest business lobbying group. "We need to end starvation wages in America."

"If $300 a week is preventing employers from hiring low-wage workers there's a simple solution," Sanders added. "Raise your wages. Pay decent benefits."

According to the Chamber's analysis, the extra $300 unemployment insurance (UI) benefit results in roughly one in four recipients taking home more pay than they earned working.

In response to that claim, Sanders' staff director Warren Gunnels said: "If one in four recipients are making more off unemployment than they did working, that's not an indictment of $300 a week in UI benefits. It's an indictment of corporations paying starvation wages."

"Raise your wages and benefits or flip your own damn burgers and sweep your own damn floors," Gunnels added.

Other progressives like former labor secretary Robert Reich and Rep. Alexandria Ocasio-Cortez (D-N.Y.) also chimed in.

"We do not have a shortage of willing workers in this country," Morris Pearl of the Patriotic Millionaires said in a Friday afternoon statement responding to the Chamber. "We have a shortage of employers who are willing to pay workers enough to live."

"Claiming that today's disappointing jobs report is a result of expanded unemployment insurance is nothing more than a cruel tactic to pressure the administration into helping companies that they represent to continue to underpay and exploit their workforce," Pearl continued. "Our leaders are supposed to be helping to increase wages for low paid workers, not helping employers to keep wages down."

"Instead of blaming struggling workers," Pearl continued, "large corporations that do not pay their employees a liveable wage... should take this moment to self-reflect. Maybe—just maybe—paying their workers more than starvation wages would incentivize workers to reenter the workforce."

Writing for Jacobin earlier this week, Sandy Barnard noted that another overlooked factor is the increased morbidity rates among food and agricultural workers, which increased more than any other occupation during the Covid-19 pandemic, according to a recent study from the University of California–San Francisco.

"Living, breathing people... have decided they do not want to risk their lives for $7.25 per hour and no health benefits," Barnard wrote.

Rep. Ilhan Omar (D-Minn.) responded to the Chamber's call for an end to enhanced unemployment benefits by arguing that "the interests of big business are at war with the interests of the working class."

"They will spend millions of dollars to take $300 a [week] away from you and your family, to force you to work for them for pennies," she added. "Their greed has no bounds."

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Off the Top of My Head

Joe Biden's Trillion Dollar Budget Plan

by John Lawrence

Don't worry about how to pay for it. Any nation with a sovereign currency (let alone the world's reserve currency) and a floating exchange rate can never go bankrupt. The Federal Reserve can issue the money. In fact in the real world this is exactly how it works for any budgetary legislation passed by Congress and signed by the President. Let's say, for example, Biden's $2 trillion infrastructure plan is signed by him into law. The US Treasury has an account at the Federal Reserve bank. Let's say there is only a trillion dollars in that account. What happens next is that the Fed just augments the Treasury's account by a trillion dollars by means of a few keystrokes on a computer. Bingo the government now has all the money it needs to spend on infrastructure. It didn't have to receive tax money in advance of the money it needed to spend. At the same time the Treasury Department creates a trillion dollars worth of Treasury bonds and sells them to the primary dealers who are required by law to buy them. These are mainly big Wall Street banks. These banks sell the bonds in the secondary market. If they can't find enough buyers, the Fed "adds liquidity to the market" by taking the Treasuries onto its balance sheet in return for marking up the Wall Street banks accounts at the Fed with the appropriate amounts of cash. Now everybody is happy. The US government has the money it needs in its Treasury's account at the Fed. The Wall Street banks have plenty of liquidity in their reserve accounts at the Fed, and the amazing thing is that it didn't require any money from additional taxes.

Another amazing thing is that most politicians are totally ignorant about how government financing actually works. The Republican Governor of Ohio, Mike DeWine gets on TV and opines about the fact that the US is going into too much debt and how will our grandchildren ever pay it off. "Here in Ohio," I'm paraphrasing," we have to pay our bills and pay down our debts. Every household has to be fiscally responsible and pay their debts." Well households and states are in a different category from the Federal government. They actually do have to pay their debts. So what he is claiming is a half truth. States and households cannot issue a sovereign currency whereas the Federal government can. States and households use the Federal government's currency. The big lie, however, is that the US government has to pay off its debts. It never does, and no entity can force it to do so. The other constraint that Larry Summers and others worry about is inflation or currency devaluation. Inflation could be a problem, and that problem, should it arise, can be dealt with by sucking money out of the economy by means of taxes. Biden's plan to tax the rich will suck some of their superfluous wealth out of the economy thus forestalling inflation while tending to reduce the runaway economic inequality that is now threatening democracy in the US.

The Federal government is not like a household or a state. Households and states actually do have to pay back the money they borrow plus interest. That's why it's so important that the various COVID rescue plans provide the states and municipalities with money. Otherwise, they could become financially insolvent and go bankrupt like Orange County in California did a few years ago. Birmingham, AL also got itself in hot water and went bankrupt. Countries in the Euro zone have the same problem as states in the US. They gave up their sovereign currencies when they joined the EU. So now countries like Greece and Italy have to beg the European Central Bank for relief, relief they could have provided for themselves if they had retained their sovereign currencies like Britain did. Britain will not have any problem with financial shortages because, like the US, its government can issue whatever currency is deemed necessary to weather any storm.

So in addition to the Big Lie that Trump won the election, politicians of both parties are perpetrating another Big Lie that the US actually has to borrow the money to pay for Biden's trillion dollar infrastructure and safety net programs. Some politicians, like Bernie Sanders and AOC, actually know the truth, and, evidently, they have convinced Joe Biden thereof as well although they won't actually come out and say it to the media: the US government can just issue money into the private economy. It doesn't need to borrow it or even tax for it in advance in order to spend. So the real policy of the Biden administration is not tax and spend. It's spend and maybe tax later, but target those taxes on the wealthiest among us. As opposed to the Republican philosophy of giving tax breaks to the wealthy and taking the social safety net away from the poor.

Off the Top of My Head

The Stock Market is Too Big to Fail

by John Lawrence, April 2, 2021

Just as the big Wall Street banks are too big to fail, so now is the stock market. The stock market will never take another radical dive downward because the Federal Reserve won't let it. The way the economy is shaping up Treasury bonds, which hardly pay any interest, are just a safe place to store your money and also for foreign nations which need the world's reserve currency (the US dollar) to have a savings account because they need dollars to conduct business. There is no worry that the US will have to pay off the trillion dollars in Treasuries that China owns because they need those dollars to do business with the US and other nations. If they did want to dump all their Treasuries for some reason the Fed could just create the money to pay them and effectively take the Treasuries on its own balance sheet.

So the stock market is the only game in town for those who want to actually "invest" their money. There is so much 401(k) money in the stock market that that is reason enough to never let it fail. Instead it will continue on its merry way upward while the Fed keeps interest rates at approximately zero so that not much in the way of interest will have to be paid on US debt. There is no reason to fear that Joe Biden's $2 trillion infrastructure plan will bankrupt the US. Since the US dollar is a sovereign currency, the Fed can print as much money as it wants. If international investors don't want to buy this debt, it ends up on the Fed's balance sheet which is an effective black hole from which it never has to emerge.

Then why is there all this kibuki theater about "how to pay for it," the $2 trillion infrastructure plan I mean. It's just that most Americans including most Congressmen are under the illusion that a country with a sovereign currency like the US faces any constraints in paying for anything. Well, there is one constraint - inflation. This is probably of little concern as long as the money is targeted at the lower middle class an the poor which haven't seen wages rise in 40 years. The real inflation in the economy is the asset inflation that the rich are mostly responsible for. That includes the stock market and real estate. Inflation in the stock market will be carefully controlled by the Fed. We've seen that the stock market moved up even during the pandemic. The real problem is inflation in the real estate market which has made housing unaffordable for many. It continues to get worse as the extra dollars the wealthy have to invest are driving up prices. That's why it makes sense to tax the rich ostensibly to pay for the infrastructure bill. The real reason, however, is that inequality is getting out of hand in the American and the world economy. Taxing the rich is the only effective means to reduce inequality to a reasonable level. It will also help to bring inflation in the real estate market under control.

The real problem that Biden's infrastructure bill will have to deal with is changing the nature of the US economy. When the economy was in full employment under Trump, there were still 4% unemployed. 5% unemployment is considered "full employment," but that still leaves about 15 million people out of work. Biden's infrastructure plan will put those 5% back to work. It had been considered by conservative neoliberal economists that 5% unemployment was necessary to ward off inflation, but that theory has been debunked by Modern Monetary Theory. While inflation will still be a concern with all of Biden's stimulus spending, the main concern is restructuring the US economy from an entertainment economy to a constructive labor economy. Trump's economy was arguably a full employment economy (except for the 4% unemployed), but it was an economy the jobs of which were mainly in the entertainment and military industries. In other words, in my opinion, it was an economy based on false unbeneficial values. An economy based on labor participation rebuilding American infrastructure will be an economy based on necessary and fundamentally beneficial values. This might mean that some of those presently employed in frivolous industries might be incentivized to change jobs. Reducing the entertainment and military sectors while increasing those employed rebuilding infrastructure would be, in my opinion, be a good thing.

 

Off the Top of My Head

Contrary to Larry Summers Biden's Relief Bill Will Not Cause Increased Inflation

by John Lawrence, February 8, 2021

Joe Biden's almost $2 trillion pandemic relief deal will not be inflationary despite Larry Summers' opinion. Inflation occurs when there is too much money sloshing around in the economy chasing too few goods, services and human resources. That is not the case here. First of all it will reemploy the unemployed. This is a presently unused resource. Secondly, it will suck up unused or unsold goods and services funding things that are currently unfunded like child care, and thirdly, it will serve to pay off debt and replenish savings. Any money going into savings or paying off debt is not inflationary. It's deflationary in the sense that the banks will lose money due to interest they won't collect if loans are paid off. The middle class that did have savings or credit in many cases has had to use those to survive the pandemic. That's why giving money to higher earning, but not wealthy, families is a good thing. To hear some people talk only money should be given to those who are desperate and living from paycheck to paycheck. Yes, those are the families most in need who should be given money first, but higher earning families who have depleted their savings or gone into debt need to be resuscitated also.

So here is what Larry Summers says about inflation:

"First, while there are enormous uncertainties, there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability. This will be manageable if monetary and fiscal policy can be rapidly adjusted to address the problem. But given the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply."

Summers fails to take into account the deflationary effects of the relief bill. Money going to states and municipalities will actually be deflationary because much of it will be used to pay down debts and loans. Many state budgets are in horrible shape and employees such as police, librarians and firemen have been laid off. People paying back rents and mortgages will have a deflationary effect on the economy. People on the lower end of the economic spectrum who are living paycheck to paycheck will be able to get a little ahead and also save. This will not add a lot to inflation. Also money can always be withdrawn from the economy by taxing the rich, those who actually added to their wealth and income during the pandemic. This is the only reason that taxes might need to be raised because the US government has the ability to spend without raising taxes. The only reason to tax would be to fight inflation and those taxes can be targeted towards wealthier families and individuals. The Federal Reserve has not been able to achieve its target rate of 2% inflation recently despite maintaining almost zero percent interest rates. It wants more money sloshing around in the economy.

There are other ways to suck money out of the economy to offset inflation. Modern Monetary Theory (MMT) recommends Medicare for All which would result in much less money spent on health care while providing better health outcomes. This would be deflationary which would counteract any inflationary propensities of government deficit spending. Conventional economic thinking is that there is a tradeoff between unemployment and inflation. The more people unemployed there are, the more inflation is diminished. Therefore, full employment as defined by economists is not really employment where everyone is employed. It is that level of unemployment which just keeps inflation in check. However, according to "The Trade-off between Inflation and Unemployment in an MMT World: An Open Economy Perspective" by Emilio Carnevali and Matteo Deleidi, MMT it is contended that inflation "occurs when the system reaches the point of full utilization of its productive capacity, both in terms of capital utilization and in terms of availability of workers. At this point, the government should curb inflation forces cooling down the effective demand. This is another fundamental task of taxes." As long as there is unused capacity in human or production terms, increased employment will not be inflationary. So Larry summers need not worry that putting all those unemployed people back to work will lead to inflation.

Biden's putting a $15.00 an hour minimum wage in the relief bill is also what MMT advocates in relation to a Federal job guarantee. Real full employment at a minimum wage of $15.00 an hour does not need to be inflationary especially if it is in areas that don't compete with already employed workers. Biden's relief bill will have the effect of putting almost everyone to work with at least an hourly pay of $15.00 an hour. People who are living paycheck to paycheck and employed at $15.00 an hour are not going to contribute to inflation since their demands on the economy are those that can be easily accommodated by existing production and easily increased production. Deficit spending is not a problem. Former Chair of the Federal Reserve Alan Greenspan said, "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." So the real limit on government spending is inflation which can be controlled by taxes on those sectors of the economy which are not easily upscaled to provide more supply.

There is much unused capacity in the current US economy both in human and material or physical terms. People should be put back to work with a minimum wage of $15.00 per hour. A follow-on bill that would address infrastructure rebuilding and a Green New Deal also needs to be done. Resources may have to be managed by government to control inflation, but the important thing is that work needs to be done in these areas and people need to be put back to work. Inflation can also be offset by the deflationary effect of withdrawing funds form a bloated defense sector.

Off the Top of My Head

Is Full Employment Possible or Even Desirable?

by John Lawrence, January 14, 2021

The important and crucial consideration is what kinds of jobs does the full employment society consist of? The type and quality of the jobs is something to be concerned with. After all Hitler had a full employment society. Everyone had a job in his full employment society. Ditto for Mussolini. Once the US got involved in the Second World War, the US had a full employment society. That ended the Great Depression. Trump bragged about presiding over a full employment society pre-COVID. The question is fully employed at what? Our infrastructure is crumbling, approaching Third World status. Republican economists don't give a hoot about the composition of jobs in the US as long as they're all in the private sector and not in the public sector. Meanwhile, China has built 24,000 miles of high speed rail in its own country and a $4-billion, 470-mile-long rail line, the first electrified cross-border rail system in Africa, Ethiopia-Djibouti Railway.

Modern Monetary Theory (MMT) favors a Federal Job Guarantee. The answer to the grievance that many Americans have about the disappearance of good paying jobs is to guarantee them a job. In The Deficit Myth, Stephanie Kelton writes:

"The MMT solution to involuntary unemployment is to introduce a federal job guarantee that establishes a legal right to a good job at good wages with good benefits. This would address one of the most pernicious effects stemming from trade - the unemployment that is too often visited upon whole communities as jobs are lost to foreign competition. It's not enough just to provide training and other temporary forms of assistance to workers whose jobs are lost to foreign competition. ...something more is needed.

"That something is a federal job guarantee. By no means is it a panacea, but at a minimum, it begins to tackle the problem of unemployment directly (as opposed to subsidizing the effects of unemployment). Through the thick and thin of the business cycle, we leave tens of millions of Americans idle in the belief that this makes political, economic and social sense. ...

"The benefits of a federal job guarantee not only include the production of goods, services and income. The guarantee also features on-the-job training and skill development; poverty alleviation; community building and social networking; social, political and economic stability; ... With a program like this in place, the government would have mitigated the localized devastation of communities that directly experienced the loss of well-paying US industrial jobs.

"It may be hard to imagine an economy that doesn't allow millions to fall by the wayside. But that's because America has almost never achieved anything like true full employment. It's something we've rarely experienced outside of wartime. One of the most important features of a job guarantee program is that it maintains a form of full employment by immediately hiring the unemployed into public service work, providing them with income and the retraining required when they are displaced by trade shocks. In this way, the job guarantee can can serve as the core of a response to both "free trade" and the "trade war." With a job guarantee, free trade is no longer a threat to full employment, and trade wars are no longer necessary to prevent unemployment."

Many of the grievances of right wing workers and Trump supporters can be tied to the fact that their communities have been destroyed as good decent paying union jobs have been moved overseas where labor costs are cheaper. MMT argues that those disenfranchised workers should be automatically reemployed especially when their labor is greatly needed to build green infrastructure in order to combat climate change. That's the real war we face right now - not against an imagined enemy - but against the fossil fuel economy which, if left unchecked, will surely destroy the habitability of the planet. It should be obvious that more workers are needed to fight the pandemic and other public health crises likely to happen in the future. It's also obvious that instead of spending a trillion dollars a year on a military-industrial complex which has to instigate another cold war to justify its existence, we should be spending money subsidizing jobs that are really necessary to make the lives of Americans and others around the world better as we move forward.

Right now the US dollar is the world's reserve currency, interest rates on Federal debt are around zero, and there is no reason why the Federal Reserve cannot issue the money necessary to implement a federal jobs guarantee if there is not enough tax money available to cover it, the way it created the money with a few keystrokes on a computer to bail out the Big Banks during and after the Great Recession. The Federal Reserve is the loaner of last resort to the banks, and, since the US dollar is a sovereign currency, as much money as necessary can always be created to support a federal jobs guarantee. Taxes should function as a means to reduce economic inequality but they are not necessary to fund the government as MMT has shown. As long as productive resources in human or material terms are idle, putting them to work will not cause inflation.

The trillions created and spent by the Federal Reserve to bail out the banks have not caused inflation nor have they caused a depreciation of the dollar which is still in great demand by other nations around the world. The old thinking is that the government has to fund itself out of taxes or go into debt which it has to pay back. That certainly applies to households and states, but, with the ability to print its own sovereign currency, the US is in the position that the national debt is just an accounting entry on the Fed's balance sheet. The provision of a good paying job as a guarantee will help to ameliorate the grievances of Trump supporters and move them to the other side of the political spectrum.

Off the Top of My Head

by John Lawrence, November 25, 2020

Why Janet Yellen is the Perfect Choice for Treasury Secretary?

Because as former Fed Chairman she knows where the bodies are buried, figuratively speaking of course. She was the first woman to head the Federal Reserve from 2014 to 2018, and now will be the first female Treasury Secretary. She knows that the Federal Reserve has the capacity to just print money and that money does not get added to the national debt or the deficit. The charade that goes on between Mnuchin and Nancy Pelosi represents an unnecessary exercise in futility The Fed has printed trillions of dollars to bail out the banks, and it has swallowed large amounts of Treasury bills if nobody wants to buy them at auction. The Fed's charter is 1) to insure full employment and 2) to check inflation. With all the money the Fed has printed so far with their policy of "quantitative easing", there has been no inflation. So money printing is a viable strategy to keep the economy functioning, but so far it has only functioned well for rich people. Now there can and should be a policy of "quantitative easing for the people." If Congress won't cooperate, Janet Yellen could do an end run around Congress and make a deal between her and the present Fed Chairman, Jerome Powell.

Joe Biden is going to need a lot of money to build green infrastructure, and Congress, if under Republican control, will deny him that money. Is that blunt enough? If MItch McConnell is leader of the Senate, he will make sure that what he did to Obama, he will do to Joe Biden, that is to deny him the wherewithal for any of his progressive programs even if they are less progressive than the left wing of the Democratic party wants. So let's expose this fiction that money is not available for a Green New Deal which amounts to doing what might not even be sufficient to forestall climate change. It would also create millions of good paying jobs by the way. What's wrong with that? Republicans will say that it will add trillions of dollars to the national debt. But did the trillions spent bailing out the big banks add trillions to the national debt? No, it didn't add a penny. That's because the Fed just printed the money, and it didn't increase inflation either. So the money is available for much needed social programs involving renewable energy and green infrastructure. A by product is eliminating unemployment and creating good paying jobs just like the Federal Reserve is tasked to do.

Fed Chairman Jerome Powell has spoken out to encourage more spending to help the economy. He knows that the Fed can and will pick up the slack by buying Treasury bills and deep sixing them on the Fed's balance sheet even as politicians keep up the fiction that Congressional leaders are concerned about the deficit:

Federal Reserve Chairman Jerome Powell on Tuesday urged Congress to spend more money to limit the economic damage of the COVID-19 pandemic, the latest in a chorus of current and past Fed officials to tell lawmakers that inaction could lengthen the recession.

“There’s a reasonable probability that more will be needed both from you, and from the Fed,” Powell told the Senate Banking Committee, echoing nudges he has made in nearly every public statement since the pandemic began.

Powell has noted that COVID-19’s economic devastation has fallen hardest on low-income workers — 40 percent of individuals making under $40,000 lost their jobs during the crisis.

Sen. Chris Van Hollen, D-Md., asked whether congressional spending would be a more effective response than the Fed’s monetary policy.

“In the short and medium term, yes: fiscal policy,” Powell said, adding that, in the long term, fiscal and monetary policies encouraging maximum employment were the way to go.

Powell’s urging has been voiced more explicitly by other Fed leaders past and present in recent days. Former Fed Chairman Ben Bernanke co-wrote a letter to congressional leadership Monday that was also signed by Janet Yellen, another former leader of the Fed, and 131 other economists.

“Insufficiently bold congressional policy responses to the Great Recession unnecessarily prolonged suffering and stunted economic growth,” Bernanke wrote, along with Washington Center for Equitable Growth CEO Heather Boushey and Cecilia Rouse, dean of the Woodrow Wilson School at Princeton. “Congress should not make this mistake again.”

In the past week, regional Fed presidents have also asked Congress to do more — not just to respond to the pandemic, but to encourage more inclusive growth as Black Lives Matter protests continue across the nation.

“Systemic racism is a yoke that drags on the American economy,” Raphael Bostic, president of the Atlanta Fed and the only African American to lead a regional Fed bank, wrote in a blog post on the regional bank’s website. “A commitment to an inclusive society also means a commitment to an inclusive economy.”

Those comments have been matched by the heads of the Fed’s San Francisco, Richmond and Dallas branches in recent days.

These comments reveal the barely disguised fiction that Congress has to act first in order to open up the flood gates of Federal Reserve money printing. However, even if that is the case, Congress needs to get off its butt. Because of arcane laws, the Fed can't act directly. Powell's barely disguised Fed speak is implying that money is available for bailing out the economy, and that the powers that be should just go ahead and use it. The argument that it would add to the national debt is null and void. The secret that some Congressional leaders want to maintain is that the Fed's trillion dollar bailout of the big banks in 2008 did not add to the national debt. Nevertheless, some Congressional leaders are aware of Modern Monetary Theory which maintains that Deficits Don't Matter. In 2014 the author of this book, Stephanie Kelton, was designated as Chief Economist for the Democratic Minority Staff of the Senate Budget Committee and later became an economic advisor to the Bernie Sanders campaign.

So money is available for a massive Green New Deal which will benefit both the economy and the salvation of the planet from global warming. Other aspects of Joe Biden's and Kamala Harris' agenda are also doable if the US can get off its butt and use the facilities that were available to bail out the big banks for the benefit of middle class and poor Americans and save the planet while doing it.

Off the Top of My Head

Many Essential Workers are Undocumented

by John Lawrence, September 12, 2020

Trump said: "When Mexico sends its people, they’re not sending their best. ... They’re bringing drugs. They’re bringing crime. They’re rapists." Guess what else they are? Essential workers. Most essential agricultural workers are undocumented. Immigrant field workers have been told to keep working despite stay-at-home directives, and given letters attesting to their “critical” role in feeding the country. They live in fear of being deported despite the fact that America now calls them "heroes." Heroes work here, and most of them are undocumented. They are ordered to go to work and risk getting COVID for minimum wages. What's wrong with this picture. Trump is in effect saying well OK you can stay for now as long as you keep picking our vegetables and packing our meat.

The New York Times reported:

For many workers, the fact that they are now considered both illegal and essential is an irony that is not lost on them, nor is it for employers who have long had to navigate a legal thicket to maintain a work force in the fields.

“It’s sad that it takes a health crisis like this to highlight the farmworkers’ importance,” said Hector Lujan, chief executive of Reiter Brothers, a large family-owned berry grower based in Oxnard, Calif., that also has operations in Florida and the Pacific Northwest.

Mr. Lujan, whose company employs thousands of field workers, described them as unsung heroes for guaranteeing that Americans have food security.

“Maybe one of the benefits of this crisis is that they are recognized and come out of the shadows,” said Mr. Lujan, whose company has been lobbying Congress to pass a bill that would legalize immigrant farmworkers.

About half of all crop hands in the United States, more than one million, are undocumented immigrants, according to the Agriculture Department. Growers and labor contractors estimate that the share is closer to 75 percent.

In addition to picking our vegetables and packing our meat, undocumented workers are also employed heavily in the construction and leisure and hospitality industries. They are building houses and cleaning hotel rooms in large numbers. So far from being a crisis in illegal immigration as Trump suggests, undocumented workers are keeping what remains of the US economy running in the age of COVID and taking chances with their lives in doing so. Oh and by the way they pay American taxes with no hope of ever getting social security. So when is Trump going to put up a big sign on his "wall" that says "Thank you Mexican workers for bailing out the US economy and keeping the food chain up and running."

Pew Research Center estimates that about 11.3 million people are currently living in the U.S. without authorization, down from a peak of 12.2 million in 2007. More than half come from Mexico, and about 15 percent come from other parts Latin America. CBS News reported:

Further studies show that the importance of this population of workers will only grow in coming years. For example, in 2014, unauthorized immigrants made up 24 percent of maids and cleaners, an occupation expected to need 112,000 more workers by 2024. In construction, the number of additional laborers needed is estimated at close to 150,000. And while only 4 percent of personal care and home health aides are undocumented, the U.S. will soon require more than 800,000 people to fill the jobs necessary to take care of retiring baby boomers.

So Trump can demonize "illegal aliens" all he wants to gain political points. Let's see his supporters who are irate about losing their jobs go to work in the fields picking vegetables and working in meat packing plants after all the undocumented workers are sent back to Mexico. And after he has exacerbated the relationship with China where American corporations have sent all the American manufacturing jobs, let's see if Americans will still have access to all the products they consume which are manufactured there. It sure didn't help that in the initial stages of the pandemic critical supplies were unavailable because most of them were manufactured in China. Antagonizing essential workers in the American economy as well as the US' major trading partner will only land up the US in a pickle in which not only food but consumer goods might be unavailable in the future.

Off the Top of My Head

#GreenNewDeal + #BlackLivesMatter = #TheWayForward

Affirmative Action for Blacks, Latinx and Native Americans in a Green New Deal

by John Lawrence, June 29, 2020

Living with the COBID pandemic could be the new normal. Assurances of a vaccine by the end of the year might be meaningless. Here's why: for many viruses including HIV, Ebola, malaria and tuberculosis there are no vaccines available despite years of study and years of effort to develop one. It took 100 years from the first polio epidemic in the US until a vaccine wiped out polio. Just as the Trump administration misled the American people in minimizing the effects of COBID including that things would normalize after we "flattened the curve" and giving dates by which we could "open up", they misled us by raising expectations that a vaccine would be available by the end of the year. Read the book, "Spillover", if you want authoritative scientific information about viruses and how long vaccine development takes if ever.

So, if the pandemic is something we have to live with indefinitely which could well be the case, the economy, in the way it existed before the pandemic, would never be coming back. So how do we create a new economy which works for the American people which, arguably, it was not working before the pandemic despite quasi full employment. Number 1: we refund the CDC and WHO which are the major institutions dealing with viruses and pandemics. Trump tried to defund CDC, and he did defund WHO in the midst of the pandemic. Politifact reported: "As for funding, there’s no question that the Trump administration sought to cut key CDC budget categories. But thanks to Congress, that funding was restored and even increased in bills that Trump ultimately signed." He had better luck and actually did defund WHO.

The biggest thing that could be done to minimize the bad outcomes for this and future pandemics is to get rid of Donald Trump as President of the US. A Democratic President would refund the CDC and WHO. The second thing would be to take a page out of FDR's book by reinstituting the Reconstruction Finance Corporation (RFC) which financed the New Deal including many infrastructure projects. In fact the Federal Reserve could finance a #GreenNewDeal without even tweaking the law. With the Special Purpose Vehicles (SPVs) it is now resorting to, it is financing debt relief not only for banks but for hedge funds, private equity funds, bankrupt corporations and even rich individuals. It is taking trillions on its balance sheet with quantitative easing. The SPVs require deal making with the Treasury Department. It would be a very small step for the Fed using a SPV to fund a Green New Deal. The US is about $4 trillion in arrears on infrastructure rebuilding and development. Instead of just bailing out bankrupt institutions the Fed could take a more positive role and actually fund productive development. By the way the RFC actually made money on repayment of loans and user fees as opposed to the Fed which just swallows US debt.

If no vaccine is found for COBID in a timely manner, the whole economy should be restructured because many businesses are not coming back. Many including Herz, J. Crew, Neiman Marcus and Chesapeake Oil have already filed for bankruptcy. A Green New Deal could take up the slack reducing the GDP from 70% consumerism to 50% which would be in line with the EU consumption component of GDP while increasing government investment by 20%. That would represent a full employment economy but it would be reoriented from consumption to building green infrastructure.

Minority hiring for a Green New Deal could be along the lines of affirmative action with African Americans, Latinx and Native Americans being hired first. This would go a long way to reduce inequality in America while being a form of reparations in light of the fact that slave labor built much of this country and Jim Crow redlining was responsible for the fact that black families have not been able to accumulate wealth at the same rate as white families. #BlackLivesMatter plus a #GreenNewDeal could help to restore the balance while at the same time creating a full employment economy.

Off the Top of My Head

A House Built Upon Sand: the US Economy

by John Lawrence, June 26, 2020

The wise man built his house on rock, and it withstood the rains and the floods and the wind. The foolish man built his house on sand and it collapsed. An apt metaphor for the US economy in the midst of a pandemic that is only getting worse. Before the pandemic hit, it was a full employment economy in which half the people couldn't survive a $400. emergency. It was an economy built on consumerism. Consumerism was 70% of GDP. About half the economy was small business, but these jobs and this economic activity was vulnerable. Much of it was non-essential. It was bars (by the way you can drink at home); it was restaurants (by the way you can eat at home). It was travel and hospitality (by the way you can sleep at home if you're willing to make your own bed).

The essential parts of the economy continued to operate even when the pandemic hit. It isn't fair that minimum wage workers were more exposed to the coronavirus, but, be that as it may, with some exceptions these workers did not get sick in higher ratios than anyone else. If more of the jobs were essential, productive and less frivolous, there would have been fewer jobs lost and much less unemployment. The economic house was built on sand and when the pandemic hit, it collapsed. At the same time the fault line of black racism and inequality was fully exposed. It's as if the hurricane of the pandemic cut away the underbrush and exposed this situation for what it is thanks to #BlackLivesMatter.

The Homestead Act signed by President Abraham Lincoln which gave free land to white people allowed whites to build equity and wealth while blacks who were promised 40 acres and a mule after slavery were denied even that. They ended up in many cases working the same land as sharecroppers and living in worse poverty than when they were slaves. After World War II the G.I. Bill aimed to help American veterans adjust to civilian life by providing them with benefits including low-cost mortgages, low-interest loans and financial support. African Americans did not benefit nearly as much as White Americans. Historian Ira Katznelson argues that "the law was deliberately designed to accommodate Jim Crow". In the New York and northern New Jersey suburbs 67,000 mortgages were insured by the G.I. Bill, but fewer than 100 were taken out by non-whites.

Additionally, banks and mortgage agencies refused loans to blacks, making the G.I. Bill even less effective for blacks. Once they returned from the war, blacks faced discrimination and poverty, which represented a barrier to harnessing the benefits of the G.I. Bill. So whites were able to build wealth through home ownership while blacks were denied that opportunity. Wealth from home ownership is the difference between the middle class and the poor. Home ownership became the means for the intergenerational transfer of wealth for white people. Each generation of black people started out from zero. There was an intergenerational transfer of poverty instead.

Blacks who were able to get manufacturing jobs after the Second World War did fairly well, but those jobs have by and large fled the country. In the financial crisis of 2008, the Great Recession, blacks were screwed as well. While the Federal Reserve bailed out the banks and mortgage companies hundred cents on the dollar, blacks who needed help paying their mortgages did not get it and were foreclosed on. The government could have bailed them out instead, but it didn't.

So now the country is faced with not only a public health crisis but also an economic, financial and racial crisis which would be much less severe if those manufacturing jobs still existed. The economy is not coming back as it was constructed pre-pandemic. There is no way that small business based on 100% occupancy is going to survive based on 50% occupancy. Many of the businesses like professional sports, cruises and even churches are predicated on high occupancy. People will not be comfortable with high occupancy unless a vaccine is found for COBID, but finding a vaccine is not a foregone conclusion. There are some viruses for which a vaccine has never been found including HIV, malaria and tuberculosis.

It takes a lot of money to develop a vaccine, and that money has been lacking from US budgets. There are two obstacles to faster progress, said Dr. Gregory A. Poland, director of the vaccine research group at the Mayo Clinic. “One is scientific, and one is embarrassing,” he said. The embarrassing part is the lack of investment. It takes 10 years and more than $1 billion to develop a vaccine — a small fortune for a medical advance but a pittance for a weapons system. While defense research is driven by one mega-customer, the Pentagon, vaccine researchers face a confusing hodgepodge of potential backers. In short the US has spent its money on weapons of war instead of protecting its people from pandemics which are far more deadly than terrorist attacks. 405,000 Americans died in WW II. Over half that amount have already died in this pandemic, and it's getting worse due to American foolishness at the top levels.

There is a chance now for America to start out on a new path, and that path would be more or less what Bernie Sanders and other progressives have identified as their agenda: a Green New Deal would create good jobs for millions of unemployed Americans and it could give priority to black people so that they could get started on wealth building. Low cost housing loans and subsidies could give black people the same advantages they didn't get with the Homestead Act and the G.I. bill. At the same time a Green New Deal would be converting the country to renewable energy and rebuilding infrastructure, both of which are necessary if earth is to remain habitable for the human race. Medicare for All would only bring the US up to the level of most other civilized countries.

We have to reset our priorities, reduce the military-industrial complex and make peace and have cooperation with our so-called enemies. We can quibble about Russia's and China's internal affairs or we can cooperate with them as peers to forestall global warming and create a planet worth inhabiting. We can spend our money on war or we can spend it forestalling future pandemics. The solution to many of our myriad problems is clear, and it doesn't require a revolution necessarily. Reform is all that's necessary to implement Medicare for All. Reform is all that's necessary to implement a Green New Deal. But countries that do not do what's necessary and obvious to meet the needs of the people create a situation in which violence may ensue. It's no longer a question of capitalism vs socialism. Most countries of the earth including Russia and China are a combination of both. I started with a Biblical reference so I will end with one: "Blind guides! You strain your water so you won’t accidentally swallow a gnat, but you swallow a camel!" God bless the USA.

Off the Top of My Head

Instead of Helping American Workers, the Fed Prints Money and Swallows US Debt

by John Lawrence, June 25, 2020

The Federal Reserve is printing trillions of dollars and buying US government debt. The market for US Treasury bonds is a hard sell these days because they pay so little interest: 1.37% for a 30 year bond, less than the inflation rate. China is dumping its Treasuries. It will probably accelerate the rate of dumping if tensions between the 2 countries continue. China was the US' largest creditor till recently when Japan took over that role. While the Federal Reserve has set interest rates effectively at zero, credit card companies are still charging as much as 30% interest which creates a huge number of Americans debtors especially when you throw in student loan debt which stands at $1.5 trillion. In fact, revolving consumer credit card debt reached nearly $1.1 trillion at the end of February 2020, according to the Federal Reserve G19 Report. Americans were paying as much as $121 billion in interest and fees combined by the end of 2019. That's no surprise since the Federal Reserve reported in February 2020 that the average interest rate on credit cards reached an astronomical 16.61%. While billionaires can borrow money at zero percent interest, average Americans pay 16% and up.

The effect of zero interest rates on savings accounts and Treasury bonds is to force everyone into the stock market which, although we're in a recession bordering on depression, continues to go up. It is totally divorced from reality; it wouldn't go down even in a depression like it did during the Great Depression. The Fed is keeping it artificially pumped up because so much American wealth is at stake there.

The Fed is buying Treasuries and mortgage backed securities (MBSs) to the tune of trillions of dollars. Wolf Street reported:

In March (2020) and April combined, the Fed monetized 100% of the additional Federal debt. Over the two-month period of March and April, the US government increased its debt by $1.56 trillion (most of it in April); and over the same two-month period, the Fed bought $1.56 trillion in Treasury securities (most of it in March) and thereby monetized 100% of the additional pile of debt during the two-month period.

The Fed is just swallowing all kinds of debt which is enriching the richest Americans and foreign banks even more. Problem is this forced feeding of cash by the Fed is not trickling down to the American people. It is not creating jobs. Now the Fed is creating even more ways to monetize debt by creating Special Purpose Vehicles (SPVs). These SPVs can buy assets the Fed is not allowed to buy, and they can lend to entities and rich individuals to buy certain assets. Under the arcane Federal Reserve Act, these SPVs require taxpayer backing from the Treasury Department to protect the Fed from losses. The SPVs can buy asset backed securities (ABSs) on a non-recourse basis which means that, if there are any problems, taxpayers take the losses. Indirectly via its Special Purpose Vehicles and its Primary Dealers, the Fed can buy even old bicycles, as long as taxpayers take the losses.

Wolf Street reported:

These ABS can be backed by credit card loans, auto loans, student loans, equipment loans, floor plan loans, insurance premium finance loans, some loans guaranteed by the Small Business Administration (SBA), and eligible loans on receivables. The loan amounts will be “equal to the market value of the ABS less a haircut and will be secured at all times by the ABS,” the Fed says.

A little history on Term Asset-Backed Securities Loan Facility (TALF) : At the end of 2010, under orders from Congress, the Fed released data on over 21,000 transactions it performed during the Financial Crisis, which revealed among many other outrageous acts, that the Fed lent to well-connected individuals and all kinds of hedge funds and others under its TALF program so that they would buy certain assets, such as these consumer loan ABS, drive up their prices, sell them to pension funds and others later for a huge profit, and pay back the loans to the Fed.

These well-connected individuals included John A. Paulson, Michael Dell, Christy K. Mack (wife of former Morgan Stanley CEO John Mack), Kendrick R. Wilson III (former Goldman executive and top aide to Hank Paulson Jr.), H. Wayne Huizenga (founder of AutoNation and Waste Management), Jonathan S. Sobel (head of Goldman’s mortgage department), etc. Some very wealthy people made a lot of money off the Fed’s bailout programs even as workers and the economy was in deep trouble.

So the Fed is paying John Paulson money by means of an SPV. Paulson is the guy who bet against the subprime mortgage market in 2007 and made one billion dollars in one day. Goldman Sachs had to pay him off, but eventually due to all the legerdemain in the financial markets, it was French and German taxpayers that paid him for his astute bet. That's casino capitalism at its best. Now he has direct access to the Federal Reserve's money printing press. Why? When there are so many poor and unemployed people in the US, why is the Fed intent on only bailing out financial markets, meaning rich people? Suffice it to say that the Fed is able to buy most anything from rich people and monetize their debt. Because of this and the fact that the rich can borrow at zero percent interest, they engage in risky bets. If they win, they pocket the money. If they lose, the Fed bails them out at zero percent interest.

Compare this with how the situation was dealt with during the Great Depression. Instead of force feeding wealthy people with interest free cash and adding trillions to the US National debt, FDR created the Reconstruction Finance Corporation (RFC). The original legislation establishing the RFC did not limit it to lending to financial institutions; it was also authorized to provide loans for railroad construction and crop lands. In other words it created jobs for average Americans. An amendment passed in July 1932 allowed the RFC to provide loans to state and municipal governments. The purpose of these loans was to finance projects like dams and bridges, and the money would be repaid by charging fees to use these structures. To help with unemployment, a relief program was created that would be repaid by tax receipts. Under the New Deal, the powers of the RFC were greatly expanded. The agency now purchased bank stock and extended loans for agriculture, housing, exports, businesses, governments, and disaster relief. The RFC actually made money on these loans.

So the RFC could actually create jobs for average working people (and not just for hedge fund managers) doing constructive things like building houses and infrastructure. Part of the New Deal was the Works Progress Administration (WPA) relief program which made the federal government by far the largest employer in the nation. A Green New Deal would create money much as the Fed does with a few keystrokes on a computer, but, instead of just providing liquidity to banks, hedge funds and rich people, it would provide money for productive jobs paid for by the government. The government needs to be employer of last resort in order to recreate a full employment economy.

A Green New Deal would convert the American economy from a fossil fuel dependent economy to one fueled by renewable energy. In so doing it would provide good paying jobs for those in American society who have been left out or left behind. The Fed should monetize the $3 trillion backlog in American infrastructure repair and rebuilding. Making the Fed a public bank instead of a bank whose main purpose is to swallow US government debt and give money to rich people in order to provide "liquidity" would go a long way to reducing inequality and bringing the American poor including minorities into the middle class. IMHO the COBID pandemic will insure that the old economy based on 70% consumerism is not coming back. The new normal will be based on government spending to create a Green New Deal or will sputter along at about half its former level.

Off the Top of My Head

The Power Structure Wants the Discussion Circumscribed to Systemic Racism, Not Systemic Inequality

by John Lawrence, June 17, 2020

Let's just talk about systemic racism and not about an economic system in which a few people control all the wealth and the rest get crumbs from the table. The power structure does not want the discussion extended into that area. Let's just integrate black people into the system so that they are not disproportionately poor, only poor proportionally to their percentage of the population. Blacks compose 12% of the American population. 27% of black people are in poverty so the good old American way is to reduce the percentage in poverty to 12%. Then blacks would be proportionately and not disproportionately poor. That's the American way. Don't question systemic poverty and inequality; Confine the discussion to systemic racism.

The American way is to have a few rich people among every ethnic group and then to use this as an example that anyone can get rich in America. So what if the majority are poor. It's more important that you have examples of huge wealth among black people, and that is certainly the case today. American black billionaires on the 2019 Forbes list included American investor Robert Smith with $5 billion, businessman David Steward with $3 billion, media mogul Oprah Winfrey with a net worth of $2.5 billion and American sports executive Michael Jordan with $2.1. There are 615 billionaires in the US; only 6 are black so to be proportionate we'd need about 74 more black billionaires.

Blacks comprised 13.6 percent of the U.S. population according to the 2010 Census, but account for only 1.4 percent of the top 1 percent of households by income. Whites are the overwhelming majority of the top 1 percent of households by income, comprising 96.2 percent. There are 18.6 million total millionaires in the US, but only an estimated 35,000 are black. That may sound like a lot, but the U.S. population of millionaires is 76 percent White. Blacks, Hispanics and Asians make up about 8 percent each. So problem solved if we add another 4% to the black millionaires list. Then they would be proportionately rich at least at the million dollar level.

Many black athletes and entertainers are millionaires or multi-millionaires. Take the NBA, for example, in which 80% of the players are black. The total annual revenue of the NBA is $8.7 billion of which about 50% goes to the players. Since there are 30 franchises with 15 players per franchise, there are 450 active players. That means that the share of NBA revenues going to black NBA athletes is ($8.7 billion)x(1/2)x(.8) = $3.48 billion or an average of $7.7 million per black player. Bingo! The NBA has created way more black millionaires than it has created white ones. That's for sure.

This is the thinking of the power structure, mainly the Republican power structure which is not threatened by having a few more black millionaires and billionaires. However, they are threatened when you talk about everyone, black or white, having a living wage, everyone, black or white having decent housing, medical care and free public education from pre-school through college. They are threatened by talk of taxing the wealthy, taking from the rich and giving to the poor, as it were. That would be socialism much like the People's Republic of France or the People's Republic of Germany or even the People's Republic of Sweden. The power structure can't tolerate that kind of debate. Let's just make black people equal in the number of millionaires, but not change anything else. Then all the poor blacks and whites, for that matter, can aspire to pull themselves up by their own bootstraps as many of their counterparts have done.

Whatever happens we can't change the system to make it inherently more equal, inherently more naturally producing of equal outcomes. Instead, it must produce inherently unequal outcomes so that those who make it in the system will feel like they have really accomplished something and can serve as role models for others to strive harder. Republicans recoiled at all the hippies in the 60s who were having too much fun and not working hard enough. They were even getting free tuition in the California University system and elsewhere. On August 23, 1971, prior to accepting Nixon's nomination to the Supreme Court, Lewis Powell wrote a memo to the US Chamber of Commerce entitled "Attack on the American Free Enterprise System," an anti-Communist and anti-New Deal blueprint for conservative business interests to retake America from the hippies and left wingers. It was based in part on Powell's reaction to the work of activist Ralph Nader, whose 1965 exposé on General Motors, Unsafe at Any Speed, put a focus on the auto industry putting profit ahead of safety, which triggered the American consumer movement. Powell saw it as an undermining of the power of private business and an ostensible step towards socialism.

So they changed the system to criminalize all sorts of behaviors mainly involving drugs so they could incarcerate mainly black people and so they could saddle mainly white people with a ton of student loan debt. Then they would have to work hard paying off their debt instead of partying, surfing, having free love and doing drugs. Well, it certainly has worked. In 2014, African Americans constituted 2.3 million, or 34%, of the total 6.8 million correctional population. About 1 in 3 black boys will have served some time in the penal system during their lifetimes. Profits are up for the private penitentiary corporations and American millenials are buckling at the knees from the weight of $1.5 trillion in student loan debt. So if the percentage of black people in prison gets down to 12%, then this should make the American system non-racist? Wouldn't it be better to eliminate the root causes of incarceration which have to do with poverty and get the incarceration rate down to zero for everyone?

Off the Top of My Head

Racist Economics

by John Lawrence, June 8, 2020

Is it racism when the schools in predominantly black neighborhoods are worse than schools in predominantly white neighborhoods? Schools in many parts of the country are funded with local property taxes. It stands to reason that property values in poor neighborhoods are less than property values in rich neighborhoods, and, therefore, property tax revenues and hence school funding is less. So the worse schools are found in poor "predominantly black" neighborhoods. A word you hear often these days is "predominantly". Nothing is totally black and white, but, when black people are affected in a way that is greater than their percentage of the population, one could say it is a "predominantly black" situation. When police arrest black people at a greater rate than they do white people, we could say that the police are a racist institution.

It has been said that the only mistake that the looters at the current protests made was that they didn't form a hedge fund first before they started looting. Martin Luther King said, “The black revolution is much more than a struggle for the rights of Negroes. It is forcing America to face all its interrelated flaws—racism, poverty, militarism, and materialism. It is exposing the evils that are rooted deeply in the whole structure of our society. It reveals systemic rather than superficial flaws and suggests that radical reconstruction of society itself is the real issue to be faced.” Republicans have breathed a sigh of relief that so far the Black Lives Matter movement has had little to say about poverty, economic inequality, militarism and materialism. Some though are getting to the heart of the problems in our society that affect us all but affect black people "disproportionately."

Writing in the New Yorker Keeanga-Yamahtta Taylor said:

The [1992] uprising in L.A. shared with the rebellions of the nineteen-sixties an igniting spark of police abuse, widespread violence, and the fury of the rebels. But, in the nineteen-sixties, the flush economy and the still-intact notion of the social contract meant that President Lyndon B. Johnson could attempt to drown the civil-rights movement and the Black Power radicalization with enormous social spending and government-program expansion, including the passage of the Housing and Urban Development Act of 1968, which produced the first government-backed, low-income homeownership opportunities directed at African-Americans.

By the late nineteen-eighties and early nineties, the economy was in recession and the social contract had been ripped to shreds. The rebellions of the nineteen-sixties and the enormous social spending intended to bring them under control were wielded by the right to generate a backlash against the expanded welfare state. Political conservatives argued that the market, not government intervention, could create efficiencies and innovation in the delivery of public services. This rhetoric was coupled with virulent racist characterizations of African-Americans, who relied disproportionately on welfare programs. Ronald Reagan mastered the art of color-blind racism in the post-civil-rights era with his invocations of “welfare queens.” Not only did these distortions pave the way for undermining the welfare state, they reinforced racist delusions about the state of black America that legitimized deprivation and marginalization.

The 1990s saw Democrats agreeing with Republicans that problems in the black community were largely caused by overly generous social programs. President Bill Clinton promised to "end welfare as we know it." Senator Joe Biden jumped right on board the push to reduce welfare programs by saying, "“the culture of welfare must be replaced with the culture of work. The culture of dependence must be replaced with the culture of self-sufficiency and personal responsibility. And the culture of permanence must no longer be a way of life.” Biden championed the 1994 “crime bill” that pledged to put a hundred thousand more police on the street, called for mandatory prison sentences for certain crimes, increased funding for policing and prisons, and expanded the use of the death penalty. By the 1980s Ronald Reagan decried "welfare queens."

Taylor continues:

So, though Biden desperately wants us to believe that he is a harbinger of change, his long record of public service says otherwise. He has claimed that Barack Obama’s selection of him as his running mate was a kind of absolution for Biden’s dealings in the Democrats’ race-baiting politics of the nineteen-nineties. But, from the excesses of the criminal-justice system and the absence of a welfare state to the inequality rooted in an unbridled, rapacious market economy, Biden has shaped much of the world that this generation has inherited and is revolting against.

More important, the ideas honed in the nineteen-eighties and nineties continue to beat at the center of Biden’s political agenda. His campaign advisers include Larry Summers, who, as Clinton’s Treasury Secretary, was an enthusiastic supporter of deregulation, and, as Obama’s chief economic adviser during the recession, endorsed the Wall Street bailout while allowing millions of Americans to default on their mortgages.

Biden was chiefly responsible for the 2005 bill that took away bankruptcy protection from student load debtors (presumably disproportionately black). Credit card companies, many of whom are headquartered in Biden's state of Delaware, have been major Biden campaign contributors. Biden was known as the Senator from MBNA. Biden should just turn over the Democratic nomination to Bernie Sanders who has been on the right side of issues which are now coming to the forefront in American life.

Taylor continues:

In 1968, King, in the weeks before he was assassinated, said, “In a sense, I guess you could say, we are engaged in the class struggle.” He was speaking to the costs of the programs that would be necessary to lift black people out of poverty and inequality, which were, in and of themselves, emblems of racist subjugation. Ending segregation in the South, then, was cheap compared with the huge costs necessary to end the kinds of discrimination that kept blacks locked out of the advantages of U.S. society, from well-paying jobs to well-resourced schools, good housing, and a comfortable retirement. The price of the ticket is quite steep, but, if we are to have a real conversation about how we change America, it must begin with an honest assessment of the scope of the deprivation involved. Racist and corrupt policing is the tip of the iceberg.

We have to make space for new politics, new ideas, new formations, and new people. The election of Biden may stop the misery of another Trump term, but it won’t stop the underlying issues that have brought about more than a hundred thousand COVID-19 deaths or continuous protests against police abuse and violence. Will the federal government intervene to stop the looming crisis of evictions that will disproportionately impact black women? Will it use its power and authority to punish police, and to empty prisons and jails, which not only bring about social death but are now also sites of rampant COVID-19 infection? Will it end the war on food stamps and allow African-Americans and other residents of this country to eat in the midst of the worst economic crisis since the Great Depression? Will it finance the health-care needs of tens of millions of African-Americans who have become susceptible to the worst effects of the coronavirus, and are dying as a result? Will it provide the resources to depleted public schools, allowing black children the opportunity to learn in peace? Will it redistribute the hundreds of billions of dollars necessary to rebuild devastated working-class communities? Will there be free day care and transportation?

In short we need good paying union jobs (Green New Deal) that will deal with the issue of climate change (Green New Deal), forgiveness of student loan debt (the least Biden can do since he was largely responsible for creating the situation), Medicare for All (since hospitals in black neighborhoods compare unfavorably with those in white neighborhoods), public housing (to end homelessness and guarantee everyone the right to have a roof over their head). If we want to solve the problem of institutional racism in this country, we need to address the fundamental problems of economic inequality. Where do we get the money? Not only by defunding the police which claim the lion's share of local budgets, but by demilitarizing the bloated military-industrial complex and taxing the rich at 1955 levels (91%). The Federal Reserve can always take a few more trillion on its balance sheet; it has taken trillions on its balance sheet already and given the money to the big banks. How about Quantitative Easing for the people? Economic inequality is a problem which affects black people disproportionately (there's that word again), but the solution of which will contribute to the benefit of white people as well.

Off the Top of My Head

Black Lives Matter: Police Reforms Benefit Whites as Well

by John Lawrence, June 7, 2020

No more "carotid restraints" or chokeholds is a police reform caused by the Black Lives Matter movement, but obviously it applies to whites as well. We don't know how many of the 237 times Minnesota police used chokeholds, blacks were targeted, but probably like all police violence it was disproportionate. Police reforms such as ending "no knock warrants" also obviously apply to whites as well as blacks. The point is that what black people are demanding in terms of police reform doesn't just affect black lives. It affect all lives.

So why stop with just police reform? How about prison reform.Though African Americans and Hispanics make up approximately 32% of the US population, they comprised 56% of all incarcerated people in 2015. African Americans are incarcerated at more than 5 times the rate of whites. The imprisonment rate for African American women is twice that of white women. Although only a small percentage are in prison for minor drug offenses, marijuana possession in small quantities should be made legal on a national basis. Many are in jail awaiting trial. Every day, 465,000 people are held in local jails even though they have not been convicted; legally, they are presumed innocent. Many are there because they cannot afford bail.

Let's not stop at prison reform. How about political reform? Mail-in ballots should be legalized and encouraged in every state. How many poor people can afford to take time off from work to go and vote? These people are probably disproportionately black, but it would help poor people who are white as well. Let's make the election of President be based on popular vote and not the electoral college. Let's do away with the filibuster which prevents legislation from being passed democratically. Let's limit the power of the leader of the Senate to even stop legislation from being introduced. Make it mandatory that legislation created in the House be debated and voted upon in the Senate. Let's outlaw lobbying which lets the richest and most powerful individuals and corporations determine the political agenda.

How about economic justice? That was basically Bernie Sanders' agenda. Let's eliminate poverty and homelessness in the US. Blacks are disproportionately poor and homeless, but there are plenty of poor and homeless whites as well. Instead of spending a trillion dollars a year on the military and military-industrial complex, instead of wasting money on fruitless wars, let's have a Green New Deal and rebuild American infrastructure while at the same time creating hundreds of thousands of good paying jobs. Let's cancel student loan debt which disproportionately affects blacks, but whites will benefit too. Let's have Medicare for All instead of an outrageously expensive health care system which is twice as expensive as any other country's while producing only half as good results.

You get the picture? All the reforms which could come from the Black Lives Matter movement will also bring those same reforms for whites, browns and any other colors. Let's protest to change the course of this whole country for all citizens. Then we have to help the rest of the world with a Green New Deal if we want to create a habitable planet for our children and grandchildren. Black people are leading the way for social justice, for political and economic justice, justice which will turn this country around and help turn this planet around. Let's keep on going.

Off the Top of My Head

10 Million Jobs Lost in Leisure and Hospitality Sector

by John Lawrence, May 17, 2020

It seems like there have been huge job losses in inessential industries like leisure and hospitality. These are jobs in which the lower half of America economically serves the upper half. They are bartenders, waiters, servers, baristas, casino workers. They are service workers for the upper middle class. They are the bottom half of Americans who are living paycheck to paycheck and can't cover a $400 emergency. Nevertheless, they contributed to a full employment economy and added considerably to GDP. It seems that perhaps 25% of American workers prior to the pandemic worked in areas that weren't really essential. So what is essential and what is inessential? If you pay me $10 to tell you jokes for an hour, I'm an employed worker, and that $10. adds to GDP. However, it's not what I would call an essential job.

Wouldn't be better if all those bartenders, servers, baristas and casino workers were rebuilding  infrastructure or doing something more constructive? Aren't there essential jobs which aren't being done? Maybe necessary would be a better word for it. Necessary work is not being done because there is a market demand for inessential, unnecessary workers in a full employment society in which the top 50% have money to spend on bars and restaurants, cruises, concerts, spectator sports and casinos. Perhaps all the unemployed bartenders could be trained to do real jobs involving the rebuilding and expansion of much needed infrastructure. The problem is that these jobs would be public sector jobs. The private sector left to itself will provide unnecessary, in essential jobs catering to those who have money to spend in the private economy. They constitute the leisure class.

"The Theory of the Leisure Class" by Thorstein Veblen written in 1899, is a treatise on economics and a detailed, social critique of conspicuous consumption, as a function of social class and of consumerism, derived from the social stratification of people and the division of labor, which are social institutions of the feudal period  that have continued to the modern era. Today the neo-feudal working class services the needs for amusement and conspicuous consumption of the upper middle and upper classes.

Left to itself the private economy will just think of more and more ways for people to spend money amusing ourselves rather than doing necessary work which will replace bridges, roads, levees and dams that are falling apart. The public economy is that economy which is concerned with public health, public infrastructure, converting from a fossil fuel to a green economy fueled by renewable energy among other things.  Left to itself the private economy will continue on its merry way belching smoke and contributing to global warming. Left to itself the private economy will continue shipping jobs to wherever the workers are cheapest and reimporting cheap consumer goods into the US. That leaves jobs in the leisure and hospitality sector. You might also include tattoo parlors which provide employment for many people. It's a question of what types of jobs are available and how important is it that those jobs get done. Is it important that, when you drive over a bridge, you can know that it hasn't exceeded its "replace by" date?

The fact that the food supply chain had to convert from selling agricultural products to restaurants to selling them to grocery stores when the lockdown went into effect, and this is what caused the bottleneck at grocery stores because over half of food products were sold to restaurants before the pandemic hit tells you something. This in itself is somewhat amazing. When I was a kid, people rarely went out to eat. Most meals were consumed at home. Mother made them. Today mothers hold down full time jobs outside the home in order that the family can afford mortgage payments on a home and car payments for two cars. Not that long ago most families had only one car. Mother didn't need one because she stayed home and raised the kids, prepared the meals and did the housework. Perhaps she even tended a garden and canned or froze vegetables to save on the grocery bill.Today the kids have to be cared for by child care workers, a whole relatively new category of jobs that didn't used to be necessary.

Would America be better off if many of the inessential workers in the leisure and hospitality industry were employed instead in industries which actually made America a better place and in jobs which paid a decent wage? Today many local economies are hurting because tourism has gone down the tubes. An economy based on tourism is an economy based on inessential and unnecessary work to a large extent. There is much more important, essential and necessary work that should be getting done instead of basing an economy on amusement and stuff that in many cases does not contribute to the health and welfare of people or society. Voltaire said we'd all be better off if we tended our gardens. A full employment economy based on unnecessary work is not necessarily a healthy economy.

Off the Top of My Head

Meat Plant Workers and CNAs Should Quit Their Jobs Unless They Get Hazard Pay

by John Lawrence, May 2, 2020

President Trump can order meat plants to stay open, but he can't order workers to work. That stopped after emancipation. Certified Nursing Assistants (CNAs) are the minimum wage workers who staff nursing homes as well as hospitals. These two classifications of workers are the lowest paid workers working the most hazardous jobs. The way capitalism works is, if you don't like your job, you have a right to quit. They should all quit, and then their employers will have to offer more money to get anyone to work those jobs. The reason they don't quit is that they need the money, as minimum wage as it is, and you don't get unemployment if you quit a job.

With white people protesting and demanding that the economy reopen, what they are implicitly demanding is that the lowest wage workers, who used to be called service workers, but now are called essential workers, keep doing their jobs because they know that black and brown people have been contracting the virus and dying disproportionately to their percentage of the population, but white people have been relatively unscathed.. If these white people want the economy reopened and are going to brandish their AK-47s to make their point, let them go to work in meat packing plants and let them go to work as CNAs. It doesn't take much training to be a CNA. Basically all you need to know is how to change a bed and empty bedpans.

And by the way do we really live in a democracy when one man, Mitch McConnell, can control any legislation that gets passed or one Senator can filibuster any legislation so that nothing except what those Senators want passed gets passed? No, it is an aristocracy except it's an elected aristocracy rather than a hereditary one. At least they had noblesse oblige. There is no noblesse oblige among this current bunch of kleptocrats.

So how do we get to the crossroad where the lowest paid workers, who are mostly black and brown, turn out to be the most essential workers? It took a pandemic to expose this fault line in a society which is fundamentally exploitative and growing more unequal by the day. Mere inequality was the situation before the pandemic occurred. Now the lowest workers on the totem pole are not only the most exploited financially but the most exploited in terms of getting sick and dying. How ironic that they are considered the most essential by those of us who are financially so well off that we can shelter in place without having to go to work. Then we turn around and complain that we won't be able to purchase a top sirloin.

Perhaps this is a lesson that we should eat less meat. Maybe this is what the coronavirus is teaching us. Industrialized agriculture, particularly the beef industry, contributes huge amounts of global warming while being harmful to ecology in many other ways. A plant based diet would not only be better for us in terms of our own personal health, but would be far better for the planet. Beyond Meat is a step in the right direction. As some of their spokespeople have pointed out, why not take plants and create a good tasting product instead of running the plants through a cow to get one. It is far healthier and far better for the planet.

To sum up why would anyone making minimum wage consent to work in a hazardous industry if they could quit their job and work somewhere else? Trump can order meat packing plants to stay open, but he cannot force workers to do those jobs. Capitalism requires incentives to get people to work, and the incentive would be much more pay than what they are now getting. Otherwise, they should just quit their jobs and get retrained as software engineers.

Off the Top of My Head

A Jobs Program for Inessential Workers
by John Lawrence, April 30, 2020

Turn inessential workers into essential workers by putting them to work building green infrastructure. This is essential work that is not getting done. Much of the previous inessential work they did is better left undone even in a recovery. It is still inessential. It'll always be inessential compared to what needs to be done in creating and building green infrastructure. Building out solar and wind renewable energy could employ thousands if not millions of people. Repairing roads, bridges, waterways, clean water systems, airports, railroads and all other infrastructure could employ millions. This is essential work that has remained undone despite the fact that the American Society of Civil Engineers has given the US a D rating for infrastructure. High speed rail needs to be built. The widespread adoption of electric cars has to be mandated, and construction of a national electric vehicle charging network to power them has to be built.

Unemployed people still need jobs. Mark Cuban said on CNN this morning that there should be a jobs program similar to that of the New Deal. He is exactly right although he didn't make the necessary connection about the essential work that's still being left undone and the inessential work that doesn't need to be done even in a recovery. Forget Cuban's sports and entertainment enterprises. I hate to tell you that they are basically inessential. What is essential is greatly expanding the public health undertakings of the Federal  government which has been totally behind the curve in this pandemic.

We must ask ourselves what is essential and not go back to a new normal in which all the inessential businesses of the past are brought back just in order to provide employment to the millions who have lost their jobs. The pre-pandemic economy was 70% consumerism. The economy post epidemic should be much less a consumerist economy and much more an investment economy. The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. Of these government spending must be ramped up to provide the essential jobs in infrastructure building as well as in the areas that the pandemic has made clear are indeed essential: health care, education, transportation, agriculture.

Government spending must go up; personal consumption must go down. It's as simple as that. As for business investment, it's a lost cause as business will only do what's profitable for itself as has been made abundantly clear. Investment in fossil fuels and plastics which the big oil companies are making is only destructive to a green economy, not constructive. As far as exports are concerned, the dollar has already been weakened as much as it could possibly be by zero interest rates, so increased exports, although desirable, are not likely to happen any time soon.

Private enterprise knows only one thing in terms of the economy "reopening": get back to consumer spending. It ain't going to happen. People are still afraid of the virus. The pandemic is not over. They will use their money to pay off debts instead of going in debt to the hilt like they are used to. People will save their money instead of entertaining themselves to death. Why? Maybe they have learned their lesson that a high employment economy predicated on the fact that people will always have a job and always have a prepensity to consume is just a chimera. Rather than living paycheck to paycheck, I hope people will understand that there may come a rainy day, and they need to save for that. That lesson has really been brought home by the coronavirus pandemic.

The true heroes are essential workers not the military. The military itself was brought to its knees by COBID-19. There is a lesson there. It's more important to spend our collective money on preparing for the coming pandemic of global warming than on a bloated military. It is more important to house the homeless and guarantee the economic rights of shelter and health care to all Americans as in the 1948 UN Declaration of Human Rights. It is more important to help people all over the world escape from extreme poverty because poverty breeds health crises which then can spread all over the world. It's more important to make peace with our rivals rather than try to control them with military threats and sanctions.

May the next President (and I hope to heaven that it's not Donald Trump) see the light of a more rational, compassionate and humane world, one more concerned about the health and welfare of all the world's peoples. I hope Governor Cuomo's values of being tough, smart, disciplined and most importantly loving spread to every corner of US and world society, and we get on with essential business instead of the inessential business of amusing, entertaining and consuming ourselves to death.

Off the Top of My Head

All Those Americans Who Didn't Have $400 to Cover an Emergency Now in Food Lines

by John Lawrence, April 17, 2020

If you don't have $400 to cover an emergency, you sure don't have enough money to cover a pandemic. Ten thousand cars waited hours in line for emergency food assistance in San Antonio last week. Meanwhile lawmakers are deadlocked over a bill to create more money for small businesses. Democrats want money also for hospitals and states and local governments. Governor Cuomo has stated that New York state is totally broke, and expenses are only increasing. San Diego Mayor Kevin Faulkner announced that there would be a $250 million budget shortfall which would be partly made up by laying off city employees. San Diego relies on the tourist industry and the Tax on Transiency (TOT taxes) which are collected by the hotels. Right now tourists are staying home and self-isolating.

Almost 40% of American adults wouldn't be able to cover a $400 emergency with cash, savings or a credit-card charge that they could quickly pay off according to the Federal Reserve's "Report on the Economic Well-Being of U.S. Households in 2018" published in May 2019. This gem is from the report's executive summary:

Results from the survey show that many adults are financially vulnerable and would have difficulty handling an emergency expense as small as $400. In addition, volatile income and low savings can turn common experiences—such as waiting a few days for a bank deposit to be available—into a problem for some. At the same time, there is evidence of coping strategies, such as supplementing income through gig work and seeking financial support from family members.

If waiting a few days for a bank deposit to be available creates a hardship, how much of a hardship must it be to lose your job and not know where your next meal is coming from with a pandemic going on for months. Even though Americans, as many as 40%, have little or no savings, they are encouraged to go out and spend, spend, spend. Maybe the government should run ads encouraging Americans to save, save, save. Most Americans are in debt up to their eyeballs, yet they are encouraged by all the propaganda on TV to buy more stuff. It's practically a criminal enterprise, and yet consumer spending comprises 70% of GDP. There is no incentive for Americans to save. Banks are paying zero interest and threatening  to go to negative interest rates. That means you would be encouraged to spend your money at an even greater rate or put it in the stock market. The Federal Reserve will do whatever it takes to prop up the stock market because, if it tanked, the 50% of Americans that have 401ks would see all their accumulated wealth go down the drain. The government has a vested interest in seeing that that does not happen.

The function of the Federal Reserve used to be "to take the punch bowl away just as the party got started." Otherwise, the economy would overheat and inflation would take off. Now the last thing they're worried about is inflation. They pump as much money into the economy as necessary to keep the economy going, and, since consumers are the main engine in energizing the economy, the Fed is suddenly concerned about consumers. But consumers don't have huge amounts of reserves, and neither do small businesses which provide about 50% of the jobs. So the Fed's job now is to just keep pumping more punch into the punch bowl. Inflation is not a problem any more since unions don't have the power to demand higher wages as they used to do. The union movement has been incapacitated by corporations which have moved jobs to China and elsewhere - wherever they could get the cheapest labor.

In the 2008 Great Recession it was banks, not consumers, that needed a bailout. Most consumers did not lose their jobs so they could continue to consume, and the Fed as well as the Federal government ignored the plight of Americans who lost their homes since there weren't that many of them comparatively. Now it's a different story. Banks are flush, and vast hordes of people are wondering where their next meal is coming from and when the pandemic will be over.

Off the Top of My Head

Maybe the Shut Down of Non-Essential Businesses Should Be Made Permanent

by John Lawrence, March 27, 2020

As long as we have electricity, the internet, clean water, waste water disposal, full grocery markets, pharmacies, excellent health care, gas stations, trash collection and other essential businesses, perhaps the shut down of non-essential businesses is a good thing. Already it has cleaned up the environment and significantly reduced the emission of greenhouse gasses. What about all those unemployed people, you say? Put them to work in the Green New Deal building and repairing infrastructure throughout the country. If this COVID-19 thing lasts till January 20, 2021, I'm hoping President Joe Biden will do just that. And we should help build essential businesses in other parts of the world instead of engaging in military adventurism. Billions of people don't even have clean water, adequate sanitation, the internet, full grocery markets and other essential businesses.

Once these essential needs are taken care of for the entire world's population in such a way that GHG emissions are reduced to zero, then maybe some non-essential businesses could be reestablished. The pandemic goes to show that much of the US economy is based on non-essential businesses and the provision of non-essential goods and services. In fact not only are many of them non-essential, they are downright deleterious. Consider the gambling industry: downright deleterious. The movie and TV industry: about 70% deleterious. The fast food industry: 90% deleterious creating obesity and diabetes. Why isn't the school system educating people about nutrition? Many people have essentially a fast food diet. The food is cheap and ubiquitous, and people don't have time to create nutritious meals any more the way Moms used to when they didn't have to work to pay the mortgage and car payments.

The American way of life including may non-essential businesses is sickness producing. The profit oriented health care industry makes money off of sick people, not keeping people healthy. If everyone were healthy or were encouraged to lead healthy lifestyles, there would be far less sickness. But the stress induced by both spouses having to work leads to unhealthy lifestyles. Some families need 2 or 3 jobs just to make ends meet. The children are also subjected to a competitively oriented style of learning in which they are forced to compete with other children to get good grades so they can get into the best colleges. Instead maybe they should be encouraged to think in terms of what they want to do in their lives which would be a service to society in addition to affording a comfortable living for themselves.

More businesses considered to be non-essential:

Theaters, Salons and Spas, Racetracks, Shopping malls, Bowling alleys, Sporting and Concert Venues, Liquor stores, Bars, Cruises, Golf Courses, Resorts, Hair and Nail Salons.

Highly polluting industries and activities which are non-essential:

Most airline travel, the cruise industry, the travel and tourism industry, most automobile travel (use mass transit instead), most of the trucking industry (use rail instead), the beef industry, the hog industry, agribusiness (encourage small organic farms instead), most military and military-industrial complex, the plastic industry, the fossil fuel industry.

In Coronavirus Will Change the World Permanently. Here’s How. Mark Lawrence Schrad writes:

America has long equated patriotism with the armed forces. But you can’t shoot a virus. Those on the frontlines against coronavirus aren’t conscripts, mercenaries or enlisted men; they are our doctors, nurses, pharmacists, teachers, caregivers, store clerks, utility workers, small-business owners and employees. Like Li Wenliang and the doctors of Wuhan, many are suddenly saddled with unfathomable tasks, compounded by an increased risk of contamination and death they never signed up for.

When all is said and done, perhaps we will recognize their sacrifice as true patriotism, saluting our doctors and nurses, genuflecting and saying, “Thank you for your service,” as we now do for military veterans. We will give them guaranteed health benefits and corporate discounts, and build statues and have holidays for this new class of people who sacrifice their health and their lives for ours. Perhaps, too, we will finally start to understand patriotism more as cultivating the health and life of your community, rather than blowing up someone else’s community. Maybe the de-militarization of American patriotism and love of community will be one of the benefits to come out of this whole awful mess.

The same sentiments hold true for teachers and other caregivers. People that take care of people and encourage people to have better lives are the true heroes. The Peace Corps and AmeriCorps should be the preeminent national services not the Army, Navy, Air Force, Coast Guard and Marines. We need to spread good will in the world by spades instead of bullying the rest of the world with US sanctions. We should develop the equivalent of China's Belt and Road initiative and start building clean water plants, sanitation plants, industries which decrease pollution and plastic trash in the ocean. We need to clean the environment around the world not contribute to dirtying it. We need to help bring home all the refugees in refugee camps and guarantee the safety and security of Latin Americans so they don't become migrants and refugees.

Off the Top of My Head

Bernie Socks It To Them

by John Lawrence, February 25, 2020

The critics have piled on Bernie about how he's going to pay for his proposals for Medicare for All, a Green New Deal, forgiving student loan debt and free college tuition. Now Bernie has come out with a detailed plan about how to do it. The obvious answer is how do other countries do it? Most other advanced countries have free universal health care and free college tuition. They take it for granted. I had some passengers from Calgary, Alberta whom I asked 'how do you like the Canadian health care system?'. He replied, "It's free." I said, "Yeah, but don't you have to pay for it in your taxes?" He said, "I guess so." So he wasn't really concerned that he was paying taxes through the nose to pay for "free" health care. He didn't even know what percentage of his taxes went to health care. I suspect that once the tax structure changes here so that rich people pay more and poor people pay less that everything will be like that too.

It will cost $2.2 trillion to make public colleges, universities and trade schools tuition-free and to cancel all student debt over the next decade. It is fully paid for by a modest tax on Wall Street speculation that will raise an estimated $2.4 trillion over ten years. A Financial Transaction Tax has been talked about for years. Bernie is the only one bold enough to actually make it part of his campaign platform. It needs to be done. The financialization of the economy is what led to the 2008 economic debacle in which the banks were bailed out by the American people to the tune of trillions of dollars. So now even though it's years later, let them pay to bail out the American people. It's a good thing.

Bernie’s bill to expand Social Security will increase benefits for low-income senior citizens and people with disabilities by more than $1,300 a year. It is fully paid for by making the wealthiest 1.8 percent of Americans – those with incomes over $250,000 a year – pay the same rate into Social Security as working families. I like that a lot. Right now even though I'm still working and paying into social security, I'm receiving less than $700. a month in social security. Another $1300. a month would bring my social security up to $2000. a month. Why it's even enough to rent an apartment!

Bernie’s proposal to guarantee housing as a human right and to eliminate homelessness will cost $2.5 trillion over the next decade. It is fully paid for by a wealth tax on the top one-tenth of one percent – those who have a net worth of at least $32 million. (Bernie’s wealth tax will raise a total of $4.35 trillion.) A wealth tax on the rich! I love it. Eliminating homelessness and finally implementing the 1948 UN Declaration of Human Rights - priceless! It's time the millionaires and billionaires paid to eliminate poverty in this country. The wealth tax will also pay for universal child care and pre-school. By the way maybe the Congress should get on board and finally ratify the 1948 Declaration.

The Green New Deal will transform this country and be the first step in saving the planet from ultimate destruction. It needs to be extended to the rest of the world eventually as well. We need to cooperate with other countries to implement it and share renewable energy technology. This means joining China's Belt and Road initiative in terms of making sure everything under development is based on renewable energy and is non-polluting. It goes without saying that the US should rejoin the Paris Accords on climate change, but extend it even further.

All in all Bernie's plans are a wonderful and refreshing change of pace for the US of A and the rest of the world. If they come to pass, i will be proud of my country again for implementing both humanitarian policies and policies which will save the earth from a global warming catastrophe.

Off the Top of My Head

It Must Be Done: Full On Renewable Electrification of the World

by John Lawrence, February 12, 2020

The next President has to mandate the full scale replacement of the current infrastructure with infrastructure supplied with renewable electricity. That means only plug-in cars and trucks allowed on the road. All rail transit is electrified. Planes to be grounded until they figure out how to supply them with renewable energy. All ships must be mandated to use only wind or electric energy supplied by renewables. Mass public electrified transit built out. Only this type of extreme effort is going to save earth from a global warming catastrophe. Forget self driving cars and trucks. The energy and inventiveness has to go into full electric vehicles driven by actual human beings.

Fossil fuels have to be eliminated overnight. How's that for a Brave New World - one which will actually save the planet from a horrible denouement. The next President and Congress have to put the economy at a lower priority than the full scale rejuvenation and renewable electrification of the economy. Economic growth has to take second place to investment in a green economy. Zero fossil fuel emissions have to be accomplished literally overnight as if someone had a gun to our head because, quite literally, a gun is at the head of every human living today and who will be born in the next 10 years - a gun placed there by the greed and ambition of the human race.

But doing this full on attack on global warming in the US is not enough. It must be carried out in the rest of the world in association with global partners. Instead of the militarization of the world by US forces and unending wars, which is the kind of scenario the US has perpetrated on the rest of the world in the recent past, the fight in cooperation with the rest of the world must be on global warming. We must renewably electricfy the rest of the world getting coal fired power plants offline and replacing them with renewable energy resources. This must be mandated, dictated if you will. The future of life on earth is at stake.

If there is an economic slump while this transformation takes place, so be it. At least there will be plenty of jobs. Robots can't do it all. There will be plenty of pick and shovel work. Trinkets and gadgets may be in short supply while this work gets done, but so be it. The US may have to go from a 70% consumption economy to a 70% investment economy - an investment in a renewably electrified future. At the same time clean water and sanitation should be guaranteed as a human right to every person in the world. Instead of reigning destruction on the world community, which is the US' wont, the world community must be salvaged from dirty water and lack of sanitation. A clean non-industrialized food supply must be guaranteed to all. Adequate housing supplied with renewable energy must be guaranteed to all as a human right.

You think there is a lot of work that needs tom be done? You're right. There won't be any unemployment. This Globalized Green New Deal for the world should be all encompassing. There was a well driller from my home town whose motto was "It Must Be Dunn" and that should be the motto for the green electrification of the whole world: It Must Be Done.

Off the Top of My Head

It's Not the Economy, Stupid; It's Global Warming, Stupid

by John Lawrence, February 11, 2020

Trump is trying to make his reelection all about the economy. In 1992 James Carville uttered the phrase “It’s the economy, stupid.” Carville was a strategist in Bill Clinton’s successful 1992 presidential campaign against incumbent George H. W. Bush. It may have been about the economy then, but now it's about global warming. If we don't make this the top issue, then there may be no economy in the coming years.

The economy as it presently exists is antithetical to an economy in which the campaign against global warming has the highest priority. Why? Because the economy as it presently exists is based on oil. How can politicians not have noticed this? How can they say they want to fight global warming and then turn around and say we want to do more fracking or we want to export more oil? Making the fight against global warming the highest priority means that we will have to sanction the production and use of oil. We might have to ban gas guzzlers and only allow hybrid or fully electric cars on the road. What if the state of California restricted gas burning car use? What if they hugely incentivized the use of mass transit where it existed or built more where it didn't exist?

San Diego has a good trolley, bus and light rail system. The only problem is hardly anyone except poor people use it. It could be mandated that cars could only be used 2 days a week, for example. Then people would be forced to use public transit. Greenhouse gas emissions would then be radically reduced which is what needs to happen. Continuing on the present course will not reduce greenhouse gas emissions. In fact they are increasing year after year even despite the widespread knowledge that they are driving climate change and causing more wildfires and floods. Despite the fact that many cities are now experiencing sunny day flooding and will only see more and more incidences of that as time goes on if nothing substantial is done, American society is still leaving it up to the free market system to solve the problem which it is not doing.

People in the fossil fuel industry do need to lose their jobs. Those people can be transitioned to other jobs in a Green New Deal, but the nation needs to be put on the same footing as it was put on during the Great Depression  when drastic action was taken. The problem is that in the fossil fuel economy we have right now there are plenty of jobs. During the Great Depression most Americans were on the same page that drastic action needed to be taken because they didn't have jobs. Now most people want to hang onto their jobs. Rather than being for a drastic shakeup of the economy, they would rather continue business as usual and convince themselves that either global warming doesn't exist or that a gradual market based approach will solve the problem. Then there are those who don't care if the earth becomes uninhabitable some day because they think they'll probably not be around to see it. Therefore, they want to maximize the benefits to their lifestyle while they're still here rather than make any sacrifices for future generations.

We might as well say sayonara to the earth and future generations if we don't as a society get behind a candidate like Bernie Sanders who is the most likely candidate to radically change the economy in terms of a Green New Deal. The idea is to take drastic action to change the economy from an oil oriented economy to an economy based on renewable energy. Included in the concept is the transitioning of workers to jobs in the new economy. Will enough workers get behind this concept or will all they see is the fact that they will be losing their present jobs and vote to hang onto them at any cost, that cost being the sacrifice of future generations to a horrible demise on an uninhabitable earth?

Off the Top of My Head

Trump Will Run on the Economy

by John Lawrence, January 20, 2020

What's not to like about the economy? Lowest unemployment in 19 years. The stock market is through the roof. Low income workers have made the biggest gains in wages. According to the Wall Street Journal: "The lowest-paid Americans saw weekly earnings grow more than 5% in the second quarter from a year earlier, more than the national median gain of 1.7% for all workers, according to a quarterly survey of households produced by the Labor Department. Workers with less than a high-school diploma saw their wages grow almost 6%, and younger workers’ pay grew almost 3%." So is trickle down really working?

The Fed stands by to give more money to the rich if the economy shows a sign of faltering. The Big Banks are too big to fail. Unlimited prosperity, right? Except all this economic growth is adding to rather than subtracting from global warming.  More people are traveling while jets are spewing more jet fuel effluent into the atmosphere. The automobile industry has a huge investment in fossil fuel cars. Every year more carbon dioxide goes into the atmosphere as oil still predominates in world markets. The American as well as the Chinese consumer economy is providing more middle class goodies each year which are tossed away creating more and more waste. Plastics are piling up in the oceans. More and more weedkillers are used to grow crops whose residues end up in human blood streams. Feed lot animals are fed a diet of antibiotics to make them grow quicker so they can be slaughtered sooner. This creates the situation in which they are not really useful for overcoming human diseases any more. The American way of life, which the whole world aspires to, is polluting the planet and despoiling the atmosphere, but it keeps the economy churning. Entrepreneurs are thinking up even more ways to sell us useless products and vapid entertainment.

The economy is predicated on waste, inefficiency and destructive weapons production including nuclear weapons. More and more money goes into the military-industrial complex to develop more and more expensive planes and battleships which are so complex they don't work half the time. But we are promised a computer fix after they alter a few lines of code. And all those people making a living off the military-industrial complex waste would be out of a job if peace broke out. All those people involved in the labyrinthine insurance industry would be out of a job if Bernie's Medicare for All came to fruition. The economy thrives on inefficiency and waste. If things were done rationally, so many people would be out of a job that the economy would grind to a halt.

Wall Street is not about to change its policy of promoting companies which seek maximum short term profits instead of sustainable growth that benefits all stakeholders including Mother Earth who in the final analysis is the most consequential stakeholder. But Americans and humans in general don't want to tighten their belts in order to save the planet. They would rather have short term profits and growth particularly if it can be tailored to fit into their lifespans. After their death all hell can break loose, but they won't be here to experience it. They had a good life at the expense of future generations. Ta ta, future babies. Trump will win because people care more about their present life than they do about the future generations of life on earth. Besides all those people in the military-industrial complex, which in the larger sense includes anyone who has ever been in the military, will vote for Trump because association with the military, whether pecuniary or not, represents masculine pride, virility and vanity. Ayn Rand would approve.

Jobs, the Environment, and a Planet in Crisis

Published on Tuesday, August 06, 2019

by TomDispatch

Unions vs. Environmentalists or Unions and Environmentalists?

by Aviva Chomsky

 

3 Comments

Despite challenges from parts of both the labor and the environmental movements, which its sponsors had undoubtedly hoped would be among its strongest supporters, Markey and Ocasio-Cortez's Green New Deal resolution has gone a remarkably long way toward putting a genuine discussion of what an effective and just climate policy might look like in the public arena for the first time. (Photo: Emelia Gold)

When it comes to heat, extreme weather, wildfires, and melting glaciers, the planet is now in what the media increasingly refers to as "record" territory, as climate change's momentum outpaces predictions. In such a situation, in a country whose president and administration seem hell-bent on doing everything they conceivably can to make matters worse, the Green New Deal (GND) seems to offer at least a modest opening to a path forward.

You know, the resolution introduced this February in the House of Representatives by Alexandria Ocasio-Cortez (D-NY) and Edward Markey (D-MA). Unsurprisingly, the proposal has been roundly attacked by the right. But it's stirred up some controversy on the left as well. You might imagine that labor unions and environmental organizations would be wholeheartedly for a massive federal investment in good jobs and a just transition away from fossil fuels. But does organized labor actually support or oppose the Green New Deal? What about environmental organizations? If you're not even sure how to answer such questions, you're not alone.

That 14-page resolution calls for "a new national, social, industrial, and economic mobilization on a scale not seen since World War II and the New Deal era." Its purpose: to reduce U.S. carbon emissions to net zero within a decade, while guaranteeing significant numbers of new jobs and social welfare to American workers. Read it and you'll find that it actually attempts to overcome historical divisions between the American labor and environmental movements by linking a call for good jobs and worker protection to obvious and much-needed environmental goals.

In the process, the GND proposal goes impressively far beyond the modest goals of the Paris Climate Accords and other international agreements. It supports specific, enforceable targets for bringing climate change under control, while drawing clear connections between social, labor, and environmental rights. Acknowledging in blunt terms the urgency of making systemic change on a rapidly warming planet, it calls for the kind of national mobilization Americans haven't experienced since the end of the Second World War. Described that way, it sounds like something both the labor and environmental movements would naturally support without a second thought. There is, however, both a history of mistrust and real disagreement over issues, which both movements are now grappling with. And the media is doing its part by exaggerating labor's opposition to the proposal, while ignoring what environmental organizations have to say.

One Green New Deal controversy focuses on the future role of fossil fuels in that plan. A number of environmental organizations believe that such energy sources have no place in our future, that they need to stay in the ground, period. They cite climate science and the urgent need to move rapidly and drastically to eliminate carbon emissions as the basis for such a conclusion. As it happens, the Green New Deal avoids directly challenging the fossil-fuel industry. In fact, it doesn't even use the term "fossil fuels."

From another perspective, some unions hope that new technologies like carbon capture, utilization, and storage (CCUS) will make those fuels more efficient and far cleaner. If the addition of carbon to the atmosphere could be reduced significantly or offset in some fashion, while humanity still burned natural gas, oil, or even coal, they say, jobs in those sectors could be preserved. And the unions have other concerns as well. They tend, for instance, to look skeptically on the GND's promises of a "just transition" for displaced fossil-fuel workers like coal miners, given the devastation that has fallen on workers and their communities when industries have shut down in the past. They also fear that, without accompanying trade protections, polluting industries will simply export their emissions rather than reduce them.

Being more of a statement of purpose than an elaborated plan, the Green New Deal is short on both detail and answers when it comes to such issues. The actual roadmap to achieving its goals, the proposal states, "must be developed through transparent and inclusive consultation, collaboration, and partnership with frontline and vulnerable communities, labor unions, worker cooperatives, civil society groups, academia, and businesses." Both unions and environmental organizations are already mobilizing to make sure their voices are part of the process.

The right wing was quick to mockingly publicize the Green New Deal not just as thoroughly unrealistic but as utterly un-American. Under the circumstances, perhaps it's not surprising that a recent poll found 69% of Republicans but only 36% of Democrats had heard "a lot" about it. Similarly, 80% of Republicans already "strongly opposed" it, while only 46% of Democrats strongly supported it. And 40% of those polled said that they had heard "mostly negative" things about it, while only 14% had heard "mostly positive" things. One reason for this disparity: Fox News has devoted more time to the topic than any other television news outlet. And President Trump naturally pitched in, tweeting that the GND would eliminate "Planes, Cars, Cows, Oil, Gas & the Military." Such claims, however fantastical, have already spread widely. But even the mainstream media has tended to play up the negative.

Both right-wing and mainstream media outlets have promoted the idea that unions are in firm opposition to the Green New Deal, frequently exaggerating and distorting the nature of what opposition there is. As for the concerns of environmentalists, readers would largely have to follow radical online publications or search out the websites of green organizations.

'The Civil Rights Movement of Our Time': Climate Action Advocates and Progressive Leaders Join Sanders for Latest Town Hall

Published on Tuesday, December 04, 2018 by Common Dreams

"Instead of spending well over a trillion dollars on weapons of destruction to figure out how we kill each other, think about making that investment in transforming our energy system. Think about how we can bring the entire world together in common cause."

by Julia Conley, staff writer

 

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Sen. Bernie Sanders (I-Vt.) on Monday night hosted a town hall dedicated to discusssing bold solutions to the climate crisis, including a Green New Deal. (Photo: @DanielJCamacho/Twitter)

With the corporate news media devoting only a tiny fraction of its coverage of California's recent wildfires to the climate crisis, which set the stage for the historically destructive blazes, hundreds of thousands of Americans on Monday night turned to Sen. Bernie Sanders (I-Vt.) and a panel of climate experts and activists for a discussion on the stark reality of the crisis and bold proposals to help avert further catastrophe.

In his latest town hall sponsored by progressive media companies including NowThis News and The Young Turks, Sanders and his panelists made the case for the Green New Deal and a sustainable economy, outlined bipartisan efforts that have so far succeeded in shifting toward renewable energy, and spoke of the climate crisis as a top issue that young voters, people of color, and low-income communities must unite to defeat as they decide who will lead the country in 2020.

"We are living in a moment in history that has never existed," Sanders said. "Instead of spending well over a trillion dollars on weapons of destruction to figure out how we kill each other, think about making that investment in transforming our energy system. Think about how we can bring the entire world together in common cause."

"This is going to be the Great Society, the moon shot, the civil rights movement of our generation," Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.) added. "That is the scale of the ambition that this movement is going to require."

Fighting climate change is the Civil Rights movement of our generation! @Ocasio2018 #ClimateTownHall #climatechange #ClimateChangeIsReal #ClimateJustice pic.twitter.com/4BaZBPIXEH

— Jake Turner (@Astro_journey) December 4, 2018

Dr. Brenda Ekwurzel, head of the Union for Concerned Scientists (UCS), stressed that Americans are already facing the effects of the climate crisis, with California's wildfires burning through more than three million acres, increasingly powerful hurricanes causing more than $200 billion in damage, and the country's first known climate refugees being forced to flee parts of Louisana.  

"You have a diaspora in the country moving to other states," Ekwurzel said. "They may be temporary, they may be long term. These people are on the move, creatures are on the move, adapting to climate change. But it doesn't have to be that bad."

350.org founder Bill McKibben, activists Shailene Woodley and Xiuhtezcatl Martinez, and Republican Mayor Dale Ross of Georgetown, Texas, who has embraced renewable energy, were also among the panelists.

The town hall came as Ocasio-Cortez and other progressive politicians have been fighting to form a House Select Committee whose mandate would include proposing a Green New Deal. The proposal would shift the U.S. to a renewable energy economy by 2035, working toward zero carbon emissions by 2050—and creating at least 10 million jobs in order to build the new infrastructure. So far, grassroots pressure from the youth-led Sunrise Movement has forced 18 representatives to endorse the Green New Deal.

"The core of a Green New Deal is simple: leave no person behind," said Ocasio-Cortez. "We cannot move forward into our future until every single American is part of that future."

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Finding a Job in California

With employers expecting to hire 4 percent more graduates from the Class of 2018 than in the previous year, the personal-finance website WalletHub today released its report on 2018’s Best & Worst States for Jobs. To ease the process of finding employment for job seekers, WalletHub compared the 50 states across 29 key indicators of job-market strength, opportunity and economic vitality. The data set ranges from employment growth to median annual income to average commute time.   Finding a Job in California (1=Best; 25=Avg.)  40th – Job Opportunities 16th – Employment Growth 42nd – Monthly Average Starting Salary 38th – Unemployment Rate 46th – Median Annual Income (Adjusted for Cost of Living) 7th – Avg. Length of Work Week (in Hours) 45th – Avg. Commute Time (in Minutes) 12th – Job Satisfaction For the full report, please visit: https://wallethub.com/edu/best-states-for-jobs/35641/

 

Vulture Hedge-Fund Capitalism Still Devouring U.S. Jobs. Will We Ever Do Something?

Published on Thursday, March 22, 2018 by philly.com

In a perfect world, our politicians in Washington would rein in the abuses of vulture capitalism.

by Will Bunch

 

5 Comments

Toys R Us’s management has told its employees that it will sell or close all of its U.S. stores.  (Photo: Mike Mozart/flickr/cc)

It was either Mark Twain or Rod Stewart who once said that every picture tells a story … don’t it? But while a picture is still worth 1,000 words and all that other good stuff, sometimes that actual story isn’t exactly what we think it is. Consider a photograph of young Denver Post journalist Elizabeth Hernandez, sobbing on a colleague’s shoulder, that went viral after she and her colleagues were told that 30 people on their already emaciated news staff will be losing their jobs in the coming weeks — the latest blow to the ever-shrinking American newspaper industry.

Hi, @rgay. I'm the journalist crying in this @washingtonpost column (https://t.co/OrjTojqDCk ) on cuts to the @denverpost newsroom by a greedy hedgefund trying to destroy newspapers. Know anyone who likes democracy and has the means to buy us from our owner?

— Elizabeth Hernandez (@ehernandez) March 17, 2018

I know, I know … you’ve heard this story a million times as the agony known as the 21st century has unfolded. The internet is killing American journalism. No one reads newspapers anymore, and there’s no real way for anyone to make money from the nano-pennies earned from every online click (unless you’re a massive vampire squid like Facebook or Google), and so the money to pay young and once enthusiastic journalists like 25-year-old Elizabeth Hernandez just isn’t there. Too bad.

The only problem is that this is not the real story of why Hernandez — No. 1 on the layoff list since she was just hired back at the Post three weeks ago, by editors who had no clue that a financial neutron bomb was about to go off — and her colleagues wept. While the bigger problems of modern journalism are as true in Denver as everywhere else, the real problem at the Post is the shady financial shenanigans of the vulture capitalists who bought the paper’s parent a few years back, stripped it down like a Pittsburgh steel mill, and left a major American city with a tiny Alamo-like band of journalists surviving to report on its civic life and keep an eye on its politicians.

The Best Places to Find a Job

From WalletHub:

With the unemployment rate at a 17-year low and employers expecting to hire 4 percent more college graduates from the Class of 2018 than from the previous graduating cohort, the personal-finance website WalletHub today released its report on 2018’s Best Places to Find a Job. To determine the strongest local job markets in the U.S., WalletHub compared more than 180 cities across 26 key metrics. The data set ranges from job opportunities to employment growth to monthly average starting salary.   Best Cities for Jobs   Worst Cities for Jobs 1 Chandler, AZ   173 Mobile, AL   2 Scottsdale, AZ   174 Montgomery, AL   3 San Francisco, CA   175 Fresno, CA   4 Peoria, AZ   176 Hialeah, FL   5 Gilbert, AZ   177 New Orleans, LA   6 Plano, TX   178 Birmingham, AL   7 Portland, ME   179 Columbus, GA   8 Irvine, CA   180 Newark, NJ   9 Madison, WI   181 Detroit, MI   10 Boston, MA   182 Shreveport, LA     Best vs. Worst Columbia, Maryland has the highest median annual household income (adjusted by cost of living), $89,013, which is 3.4 times higher than in Hialeah, Florida, the city with the lowest at $26,352.   San Jose, California has the highest monthly average starting salary (adjusted by cost of living), $5,441, which is 3.1 times higher than in Brownsville, Texas, the city with the lowest at $1,778.   South Burlington, Vermont, the city with the lowest unemployment rate, 2.1 percent, which is 5.2 times lower than in Detroit, the city with the highest at 10.9 percent.   Plano, Texas, the city with the fewest number of part-time employees for every 100 full-time employees, 37.63, which is 3.6 times fewer than in Burlington, Vermont, the city with the most at 134.34.   South Burlington, Vermont is the city with the lowest share of workers living in poverty, 1.90 percent, which is 10.1 times lower than in Tallahassee, Florida, the city with the highest at 19.28 percent. To view the full report and your city’s rank, please visit:  https://wallethub.com/edu/best-cities-for-jobs/2173/

 

'Conned' by Trump: Hundreds of Boeing and Carrier Workers to Lose Their Jobs

Published on

Friday, June 23, 2017

by

Common Dreams

 

 

 

"When he spoke at our plant, he acted like no one was going to lose their job."

 

by

Jake Johnson, staff writer

 

23 Comments

"[Boeing's] South Carolina plant was Trump's first company visit outside the Beltway after he became president," the Chicago Tribune noted. (Photo: Jim Young/Reuters)

In a move that appears to negate President Donald Trump's numerous vows to fight for American workers at risk of losing their jobs due to corporate outsourcing and layoffs, Boeing told CNN on Thursday that around 200 workers based in South Carolina would be fired in an effort to cut costs.

"Because of corporate greed, company leaders are racing to the bottom, to find places where they can pay the least." 
—Chuck Jones, former president of United Steelworkers 1999

The layoffs, according to reports, will come from several factories throughout the state, including one Trump visited just a few months ago.

"The South Carolina plant was Trump's first company visit outside the Beltway after he became president," the Washington Post noted.

In a memo to employees on Thursday informing them of the layoffs, Joan Robinson-Berry, vice president and general manager of Boeing South Carolina, wrote that "there may be more to come."

The news comes just as Carrier, another company Trump has frequently criticized for outsourcing, is set to send 600 of its Indianapolis factory jobs to Mexico, a move many view as a direct refutation to Trump's boasts and a betrayal of his promises.

Amazon Go: The End of Jobs?

by John Lawrence from the San Diego Free Press

Amazon Go is the latest job destroyer by virtue of the fact that it is a grocery store with no check-out lines. High tech devices will monitor every item you put in your high tech grocery basket so you just load up and go. Your credit card will be charged the correct amount. It isn't clear if a robot will bag your groceries or if you'll do that yourself. This feat of automation is only the harbinger of things to come. With artificial intelligence and robots, jobs will be automated out of existence except for a few software engineers who will design the various systems.

So far there is only one store open and that's in Seattle, but soon ... soon check-out cashiers can kiss their jobs good-bye. By the same token truck drivers will be losing their jobs to self-driving trucks. This technology is well along (it's in beta as they say in the tech world). Already self checkout is underway at Home Depot and many supermarkets. Amazon Go is just taking self-checkout to the next level. I suppose, if they're out of an item, Amazon Prime will have it delivered to your house by drone within a few hours. Bank tellers have already been replaced by ATM machines although a few are still needed for those sticky situations that only a human can deal with.

I suppose the shopping experience will also include text messages or alerts which sense what you want to purchase and then try to upsell you. Why buy that hunk of cheese when for just a few dollars more you could get artisan cheese made locally at a vintage shop? And as for coupons, that will all be handled electronically. You would just scan them with your smartphone, and they would automatically be deducted from your bill. As you continue to shop, Amazon would be gathering valuable information about your purchases so it can suggest other items you might be interested in.

It’s not that retail tech companies haven’t already been hard at work tracking people as they explore physical stores and shop. A host of companies with names like RetailNext, Euclid, and Nomi, among others, are all part of this trend. It’s in a store’s interest to track people because they can target and upsell customers on more products and in-store promotions. When you go home and go online, the first ad you see might be for a product that the data acquired during your shopping experience suggests that you might need or want.

Just Tell Alexa What You Need

The Amazon app Alexa already responds to voice commands in your home. It's not a stretch that this technology might be incorporated in your smartphone so all you'd need to do is say "Hey, Alexa, where's the craft beer, and also I need a bouquet of flowers." Then Alexa might come back and say, "Why don't you get that special someone a box of chocolates too?" Then you'd say, "That's a great suggestion, Alexa, I'd like a dozen red roses, but I want to have them delivered to her home on Valentine's day." Alexa would come back, "No problem, Mr. Mertz." You see Alexa already knows the address of that special someone.

Or why even go to the store? Just tell Alexa your shopping list and she'll have it delivered within the next couple of hours. You'll need a personal robot, however, to put all the stuff away. That may be coming soon.

Amazon is capable of deploying an array of cameras and sensors to control this whole process but all it really needs is a souped up RFID (Radio Frequency IDentification). So instead of running each product through a bar code scanner, each product would have a label containing a little chip that would transmit it's ID to a receptor wherever that receptor is located. It could be in the shopping cart or at the door. There might be a number of them located throughout the store. It's a bar code on steroids.

And for fast food - it will be automated too as advocated by Trump's pick for Secretary of Labor (now defunct), the owner of Carl's Jr and Hardee's, Andrew Puzder. No need for minimum wage workers any more. Robots don't require bathroom breaks or sick leave. Puzder can now get back to automating minimum wage workers out of his fast food chains.

Robot Baristas Will Make Your Coffee

It's not only grocery stores and supermarkets that will be automated. Robotic baristas will churn out your coffee drinks without the need for the intervention of human hands. Cafe X has created an automated barista and a “coffee shop”. According to Forbes:

Cafe X is 100% automated from the ordering and payment system that can be from within the app or the order/payment screens on the front of the system to the preparation and delivery of the coffee. The system is by far faster than any current coffee shop experience. Once the amortization of the system has been met, the cost to operate this “coffee shop” is orders of magnitude lower than the 2.5 baristas a single system replaces.

According to the San Diego Union, February 22, 2017:

Franco’s barista was a robot. It’s part of an automated coffee shop called Cafe X — the latest example of the San Francisco’s dual infatuations: artisanal coffee and automated technology.

“It’s incredibly convenient,” said Franco, who has used Cafe X twice since it opened Jan. 30. “And the coffee is really good, too.”

Moments earlier, Franco had ordered her coffee using the Cafe X mobile app. Now a white robotic arm, the same kind used in car manufacturing facilities, was moving around a paper cup, pushing on syrup levers and brewing her a hot cup of coffee.

“I prefer this because you don’t have to wait,” said Franco, whose coffee was made in less than a minute. “It even accepts PayPal.” ...

On the speed front, Cafe X can make a hot espresso beverage in less than a minute and is able to pump out 120 coffee drinks in an hour. A Cafe X kiosk can occupy as little as 50 square feet, although its footprint in San Francisco’s Metreon shopping mall is a little over 100 square feet and was most recently home to another automated tenant: a Bank of America ATM.

Encased in plexiglass, the kiosk contains two coffee machines equipped to brew Americanos, espressos, cappuccinos, lattes and flat whites. Customers can order their drink from the Cafe X mobile app or at one of two iPads mounted outside the kiosk. The entire transaction is cashless, and customers even get a notification on their phone when their coffee is ready.

“It’s similar to calling an Uber,” said Hu, who sees his kiosk as filling a void. “It’s for people who want a grab-and-go coffee, who want consistency.” ...

Automation helps keep costs low for business owners, which in turn makes products and services more affordable for consumers, Ling said. That’s why automation — particularly in the food service and hospitality industries — seems inevitable. ...

“This is just the leading edge,” said Martin Ford, author of “Rise of the Robots: Technology and the Threat of a Jobless Future.” “The really significant thing will be when the big chains — the McDonalds, the Burger Kings, the Starbucks — begin to adopt these technologies. Eventually it is going to create a big problem for us.”

As of May 2015, the largest overall occupations in the United States, according to the Bureau of Labor Statistics, were retail salespersons (4.6 million), cashiers (3.5 million), and food preparation and service workers (3.2 million).

Ford quotes the co-founder of a start-up dedicated to the automation of gourmet hamburger production: “Our device isn’t meant to make employees more efficient. It’s meant to completely obviate them.”

Basically every job that doesn't have to do with the FIRE (Finance, Insurance and Real Estate) sector or the military-industrial complex is in the process of being eliminated. However, janitorial jobs, child care and fruit and vegetable picking will probably always be with us. It might be hard to get anyone to fill those job positions as Trump plans to deport most of the people who have been doing them. Any job that could remotely be considered manufacturing will be gone. That's why corporations are investing more in the US rather than abroad. However, their investments are not creating jobs; they're eliminating them.

According to Our Automated Future by Elizabeth Kolbert:

During the recent Presidential campaign, much was said—most of it critical—about trade deals like the North American Free Trade Agreement and the Trans-Pacific Partnership. The argument, made by both Bernie Sanders and Donald Trump, was that these deals have shafted middle-class workers by encouraging companies to move jobs to countries like China and Mexico, where wages are lower. Trump has vowed to renegotiate NAFTA and to withdraw from the T.P.P., and has threatened to slap tariffs on goods manufactured by American companies overseas. “Under a Trump Presidency, the American worker will finally have a President who will protect them and fight for them,” he has declared.

[But], such talk misses the point: trying to save jobs by tearing up trade deals is like applying leeches to a head wound. Industries in China are being automated just as fast as, if not faster than, those in the U.S. Foxconn, the world’s largest contract-electronics company, which has become famous for its city-size factories and grim working conditions, plans to automate a third of its positions out of existence by 2020.The South China Morning Post recently reported that, thanks to a significant investment in robots, the company already has succeeded in reducing the workforce at its plant in Kunshan, near Shanghai, from a hundred and ten thousand people to fifty thousand. “More companies are likely to follow suit,” a Kunshan official told the newspaper.

Jobs in Oil Fields Decline Despite Trump

So-called President Trump promised to bring back all those good paying blue collar jobs by going full steam ahead with oil production. But guess what? The oil companies are going full steam ahead with automation eliminating all those good paying jobs. Some of the workers losing their jobs in the oil patch are even migrating to the renewable energy industry! Did Trump get it wrong? In an article entitled Texas Oil Fields Rebound From Price Lull, But Jobs Are Left Behind, Clifford Krauss writes:

Oil and gas workers have traditionally had some of the highest-paying blue-collar jobs — just the type that President Trump has vowed to preserve and bring back. But the West Texas oil fields, where activity is gearing back up as prices rebound, illustrate how difficult it will be to meet that goal. As in other industries, automation is creating a new demand for high-tech workers — sometimes hundreds of miles away in a control center — but their numbers don’t offset the ranks of field hands no longer required to sling chains and lift iron. ...

Indeed, computers now direct drill bits that were once directed manually. The wireless technology taking hold across the oil patch allows a handful of geoscientists and engineers to monitor the drilling and completion of multiple wells at a time — onshore or miles out to sea — and supervise immediate fixes when something goes wrong, all without leaving their desks. It is a world where rigs walk on their own legs and sensors on wells alert headquarters to a leak or loss of pressure, reducing the need for a technician to check.

The message is that blue collar jobs, jobs for those with only a high school education, are going bye-bye. There's not much that Trump can do about it to assuage his Red State base, the "forgotten men." So he will be left in the position of convincing them that those jobs have come back as an alternative fact of an alternative reality, something he and his cohorts are really good at.

Professional Jobs Will Be Taken Over By Robots Too

Machines are also getting smarter so that not only are they replacing manual laborers, but they are replacing people employed in white collar jobs as well. For instance, a highly skilled radiologist may soon be replaced by a machine whose powers of pattern recognition exceed those of humans. So while the doctor may find his job going by the wayside, his executive assistant's job could be more secure. After all bringing him his coffee and delivering it with a smile is something far more difficult for a robot.

The belief that the digital revolution, automation and robotization will create more jobs than they destroy is wishful thinking according to Charles Hugh Smith.

Charles Hugh Smith writes in A Radically Beneficial World: Automation, Technology and Creating Jobs for All: The Future Belongs to Work That Is Meaningful:

Issuing more STEM degrees doesn’t create jobs for the graduates.

This faith that technology will magically create more jobs than it destroys is wishful thinking. This theology arose as a result of the transition from low-skill agricultural labor to low-skill factory labor in the First Industrial Revolution (1750 – 1860, steam, railways, factories, etc.) and the Second Industrial Revolution (1870-1930) (mass production, electric lights, autos, aircraft, radio, telephones, movies). Each transition offered millions of new low-skill jobs to those displaced by technology and created increasing numbers of higher-skill jobs in design, technology, marketing and management. But history is not repeating itself in the latest Industrial revolution....

Since automation/software is now eating higher-skill jobs, advancing the skills of workers does not automatically create jobs for them. Pushing the entire populace to get a college diploma does not automatically create jobs that require college diplomas.

The conventional narrative overlooks a key dynamic in the Third Industrial Revolution: the number of skilled workers needed to eliminate entire industries of highly skilled employees is much smaller than the work forces being eliminated. 

Some are suggesting that everyone needs to have a universal basic income since their labor power will not be needed in the future. Robert Reich thinks that there has to be a way to recycle money from the owners of the robots to all the people those robots will displace so that money can continue to circulate and the American economy which depends 70% on consumption will continue to function. How else are consumers to consume unless they have the wherewithal to do so? Researchers estimate that half of all US jobs will be automated in the next two decades.

Smith disagrees with Reich because he doesn't believe that taxing the Googles, Facebooks and Apples of the world will generate enough money to support the masses in a super welfare state. Besides that he doesn't believe that just being a consumer can ever satisfy human needs for having productive and dignified work. A society of people who do nothing but consume will lead not to a utopia but to a dystopia because human beings have a need to be something more than just consumers.

But perhaps both Smith and Reich miss the point. There is no need to recycle money from the taxation system to provide a basic income for everyone. A Central Bank that was controlled by the people instead of by Wall Street, which is what we have now, could generate money the way Abraham Lincoln did. Lincoln endorsed the printing of $450 million in US Notes or “greenbacks” during the Civil War. The greenbacks not only helped the Union win the war but triggered a period of robust national growth and saved the taxpayers about $14 billion in interest payments. Instead of debt based money created by Wall Street through loans, the government could just print and distribute it directly to the people.

Is the Green Party a Good Alternative?

by John Lawrence from the San Diego Free Press

Noam Chomsky advocates voting for Dr Jill Stein of the Green Party in states which are securely Democratic and voting for Hillary in swing states where every vote counts. This makes a lot of sense to me as it's one way, maybe the only way, to build a third party in this country. Due to our antiquated voting system, a third party can never be successful. However, it could conceivably replace one of the two present day mainstream parties at some point.

Jill Stein stands for a lot of the things that Bernie and other Progressives stand for. But even if, by some stretch of the imagination, she were to be elected in November, she would still face a Republican Congress. Hillary is right when she seeks to tone down Bernie's rhetoric and make more modest claims because, if elected President, she will face an intransigent Congress which will thwart her at every turn. Even though the Dems might be able to take back the Senate, it will not be filibuster-proof, and they probably will not be able to take back the House. So the Repubs will block all the good stuff in the Democratic party platform, and Hillary will be blamed for not delivering what she had promised.

If Hillary is not able to implement any bit of the Democratic platform, a platform shaped by Bernie Sanders, the high expectations of those who will vote for her will be smashed with the result that people will turn on her, and Donald Trump could come back to haunt us in four years.

Dr Jill Stein doesn't have that dilemma. She can state her positions clearly and unequivocally knowing that she will never have to try to get them implemented because she probably will never gain the Presidency. But still it's worthwhile to get those viewpoints out there before the public and let the public ruminate on them the same way Bernie Sanders did. If he had gained the Democratic nomination, he would have been in even worse shape than Hillary who at least had the perspicacity to tone down claims of what she would do as President to be somewhat more in tune with reality.

What does Jill Stein Stand For?

So what does Dr Jill Stein stand for? Here is a sampling:

1) Guarantee economic human rights, including access to food, water, housing, and utilities, with effective anti-poverty programs to ensure every American a life of dignity.

This is none other than the implementation of Article 25 of the UN Declaration of human rights which states

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

Economic human rights are something Republicans are dead set against. They say it's not in the Constitution and it's unAmerican; only political rights are mentioned in the Constitution. Jill Stein's plan to implement economic human rights would end poverty and guarantee everyone a basically decent existence. The crux of the matter is that those of us who have been fortunate enough to accumulate great wealth should use some of that wealth to support those of us who are less fortunate, not by means of philanthropy or charity, but through the intermediary of government and the tax code. So far human greed has made this outcome impossible. Will human nature change and in particular the American psyche become less selfish? We'll see, but I wouldn't count on it. It would entail rewriting the Constitution to reflect those values.

2) Create living-wage jobs for every American who needs work, replacing unemployment offices with employment offices. Advance workers' rights to form unions, achieve workplace democracy, and keep a fair share of the wealth they create.

In Sweden unemployment offices have been replaced by employment offices. These offices can be found in Stockholm and other cities and towns and are state run. In order to get a job all one must do is go in to this office, input one's qualifications and credentials, and they will help you search a database of every available job in the whole country. If a suitable job comes up, the applicant has a right not to accept it, and a new search is undertaken. However, after three rejections, his or her welfare is cut off. In other words you have to accept one out of three proposed jobs or else. This extensive job search should be implemented in this country in order to facilitate everyone's working to the greatest extent possible. If no suitable private sector job can be found, then public sector jobs at minimum wage can be created. There's no end of trash that needs to be picked up along the streets and freeways. I'm sure productive jobs can be created ala FDR's Civilian Conservation Corps and Works Progress Administration.

3) Create millions of jobs by transitioning to 100% clean renewable energy by 2030, and investing in public transit, sustainable agriculture, and conservation.

Global warming is serious and needs to be addressed in a serious manner. Dr Stein's platform would do this although the date needs to be moved up to 2025.

4) Establish a foreign policy based on diplomacy, international law, and human rights. End the wars and drone attacks, cut military spending by at least 50% and close the 700+ foreign military bases that are turning our republic into a bankrupt empire. Stop U.S. support and arms sales to human rights abusers, and lead on global nuclear disarmament.

The US has to be weaned away from being the world's foremost militarist nation if there is ever to be peace on the planet. Peace making activities such as the Peace Corps need to be stepped up. The money saved by slashing the military budget and closing bases can be used to transition to renewable energy and provide other social benefits.

The US military bases in almost every country of the world give credence to the fact that the US is an occupying power that occupies the whole world. It's world domination pure and simple, something we fought against in WWII when the Axis powers tried to do it. A lot of these countries, for example the Phillipines, don't want our bases on their territory. Converting US military occupation to Peace Corps related activities would go a long way to creating world peace. We create enemies and then beef up the military budget to defend against them. Even Russia has been recreated as a new old enemy when friendship would have been and still is possible. Those in power miss the good old days of the Cold War; they want it back so bad.

5) Establish an improved “Medicare For All” single-payer public health insurance program to provide everyone with quality health care, at huge savings.

With Aetna pulling out of Obamacare, Obamacare's days are numbered. The big insurance companies are not interested in playing that game leaving the whole program in jeopardy. It was a jury rigged, Rube Goldberg jumble of incompatible compromises in the first place. Medicare-for-all is the only sane solution. Let's get on with it.

6) Abolish student debt to free a generation of Americans from debt servitude. Guarantee tuition-free, world-class public education from pre-school through university. End high stakes testing and public school privatization. 

5) and 6) agree with Bernie Sanders' proposals.

7) Set a $15/hour federal minimum wage. Break up “too-big-to-fail” banks and democratize the Federal Reserve. Reject gentrification as a model of economic development. Support development of worker and community cooperatives and small businesses. Make Wall Street, big corporations, and the rich pay their fair share of taxes. Create democratically run public banks and utilities. Replace corporate trade agreements with fair trade agreements.

The Federal Reserve created $17 trillion out of thin air via a few keystrokes on a computer in order to bail out the big banks, domestic and foreign, in the 2008 financial crisis. It's obvious they don't know what they're doing. They're in uncharted waters, and the only thing they know is to preserve the system as it already exists until the next financial crisis. That's the only time when things might change. Until then they are holding on to the current system such that it is for dear life.

The Rich Need to Pay Taxes Sufficient to Reduce Inequality

The rich need to pay their fair share which I define as sufficient to diminish income and wealth inequality. If the US is to remain a democratic country and not become a plutocracy, this needs to happen.

Reagan's and Alan Greenspan's tax breaks for the rich had a lot to do with the increasing economic divide between rich and poor. The balance needs to be regained by taxing the rich to support the poor until wealth and income is more evenly distributed.

There are other parts to Dr Jill Stein's plan, but the above are the main "planks" in my opinion. She mentions public banking which I have written about extensively in the San Diego Free Press. The champion of public banking is Ellen Brown who has run on the Green Party ticket previously for State Treasurer of California. Public banking is an important concept that would make it possible for the US and its citizens to get away from the debt based economy they now suffer under. It also is a non-violent way to diminish the power Wall Street has over the economy.

In Ellen's latest blog: Can Jill Carry Bernie’s Baton? A Look at the Green Candidate’s Radical Funding Solution she says:

Bernie Sanders supporters are flocking to Jill Stein, the presumptive Green Party presidential candidate, with donations to her campaign exploding nearly 1000% after he endorsed Hillary Clinton. Stein salutes Sanders for the progressive populist movement he began and says it is up to her to carry the baton. Can she do it? Critics say her radical policies will not hold up to scrutiny. But supporters say they are just the medicine the economy needs.

...

As with Sanders’ economic proposals, her plan has been challenged as unrealistic. Where will Congress find the money?

But Stein argues that the funds can be found. Going beyond Bernie, she calls for large cuts to the bloated military budget, which makes up 55% of federal discretionary spending; and progressive taxation, ensuring that the wealthy pay their fair share. Most controversial, however, is her plan to tap up the Federal Reserve. Pointing to the massive sums the Fed produced out of the blue to bail out Wall Street, she says the same resources used to save the perpetrators of the crisis could be made available to its Main Street victims, beginning with the students robbed of their futures by massive student debt.

If the Fed Can Create Money for Wall Street, They Can Create It for Main Street

The Fed came up with trillions of dollars to bail out Wall Street and they did it with a couple keystrokes on a computer. So why can't the same thing be done for Main Street? Dr Jill Stein and Ellen Brown say it can. Bernie Sanders demanded that the Government Accounting Office conduct an audit of the Fed which revealed that it had provided a whopping $17 trillion to bail out American and foreign banks during the economic crisis. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else,” said Sanders in a press release.

If the Fed can create money that it doesn't really have just by a few keystrokes on a computer and give it to the rich, it begs the question why can't the Treasury Department issue the money directly to the people? Right now they are forbidden by law from doing so, but there is a way around this since the Treasury can issue coins. It has been proposed that the Treasury could mint a trillion dollar coin and then go from there. Better yet change the law so that the Treasury Department, not the Wall Street controlled Fed, has control over the money supply. If it did this, it wouldn't have to borrow money and pay interest on its bonds which goes mainly to Wall Street. Taxpayers would save billions of dollars in interest charges. Ellen continues:

The alternative is to do what governments arguably should have been doing all along: issue the money directly to fund their budgets.

Central bankers have largely exhausted their tool kits, prompting some economists to  recommend some form of “helicopter money” – newly-issued money dropped directly into the real economy. Funds acquired from the central bank in exchange for government securities could be used to build infrastructure, issue a national dividend, or purchase and nullify federal debt. Nearly interest-free loans could also be made by the central bank to state and local governments, in the same way they were issued to rescue an insolvent banking system.

Just as the Fed bought federal and mortgage-backed securities with money created on its books, so it could buy student or other consumer debt bundled as “asset-backed securities.” But in order to stimulate economic activity, the central bank would have to announce that the debt would never be collected on. This is similar to the form of “helicopter money” recently suggested by former Fed Chairman Ben Bernanke to the Japanese, using debt instruments called “non-marketable perpetual bonds with no maturity date” – bonds that can’t be sold or cashed out by the central bank and that bear no interest.

The Bernanke proposal (which he says could also be used by the US Fed in an emergency) involves the government issuing bonds, which it sells to the central bank for dollars generated digitally by the bank. The government then spends the funds directly into the economy, bypassing the banks.

The US government need not borrow money for its expenditures thus driving up the national debt. It could issue the money directly essentially the way the Fed did. The Fed then bailed out the banks, but won't bail out Main Street. The Federal government could do just that: provide money interest free for rebuilding infrastructure, buying up student loan debt and other worthwhile activities. The result would be increased economic stimulus and full employment. This coupled with a financial transactions tax on Wall Street, eliminating the "carried interest" loophole for hedge funds, would decrease the economic divide between the 1% and the 99%.

Bernie Sanders had the right ideas; Jill Stein has the right ideas. But none of these ideas can be implemented with a corporate controlled Congress which likes things just the way they are. After all it serves their interests very well. They are getting rich off it, and they could care less about the middle class or the poverty stricken. The Repubs have their southern "tribe" locked up and fully imbued with the idea of voting against their own interests. They are busy ginning up anger against the less rugged. This seems to be sufficient for getting people to vote against their own interests. Corporate Democrats like their perks too like going to work as lobbyists after they quit their "public service."

Today’s Jobs Report and the Supreme Court’s “McCutcheon” Debacle

by Robert Reich

Friday, April 4, 2014                

What does the Supreme Court’s “McCutcheon” decision this week have to do with today’s jobs report, showing 192,000 new jobs for March?

Connect the dots. More than five years after Wall Street’s near meltdown the number of full-time workers is still less than it was in December 2007, yet the working-age population of the U.S. has increased by 13 million since then.

This explains why so many people are still getting nowhere. Unemployment among those 18 to 29 is 11.4 percent, nearly double the national rate.
Most companies continue to shed workers, cut wages, and horde their cash because they don’t have enough customers to warrant expansion. Why? The vast middle class and poor don’t have enough purchasing power, as 95 percent of the economy’s gains go to the top 1 percent.

That’s why we need to (1) cut taxes on average people (say, exempting the first $15,000 of income from Social Security taxes and making up the shortfall by taking the cap off income subject to it), (2) raise the minimum wage, (3) create jobs by repairing roads, bridges, ports, and much of the rest of our crumbling infrastructure, (4) add teachers and teacher’s aides to now over-crowded classrooms, and (5) create “green” jobs and a new WPA for the long-term unemployed.

And pay for much of this by raising taxes on the top, closing tax loopholes for the rich, and ending corporate welfare.

But none of this can be done because some wealthy people and big corporations have a strangle-hold on our politics. “McCutcheon” makes that strangle-hold even tighter.
Connect the dots and you see how the big-money takeover of our democracy has lead to an economy that’s barely functioning for most Americans.

The Real Job Killers

by Robert Reich

Friday, February 28, 2014

House Speaker John Boehner says raising the minimum wage is “bad policy” because it will cause job losses.  

The U.S. Chamber of Commerce says a minimum wage increase would be a job killer. Republicans and the Chamber also say unions are job killers, workplace safety regulations are job killers, environmental regulations are job killers, and the Affordable Care Act is a job killer. The California Chamber of Commerce even publishes an annual list of “job killers,” including almost any measures that lift wages or protect workers and the environment.

Most of this is bunk.

When in 1996 I recommended the minimum wage be raised, Republicans and the Chamber screamed it would “kill jobs.” In fact, in the four years after it was raised, the U.S. economy created more jobs than were ever created in any four-year period.

For one thing, a higher minimum wage doesn’t necessarily increase business costs. It draws more job applicants into the labor market, giving employers more choice of whom to hire. As a result, employers often get more reliable workers who remain longer – thereby saving employers at least as much money as they spend on higher wages.

A higher wage can also help build employee morale, resulting in better performance. Gap, America’s largest clothing retailer, recently announced it would boost its hourly wage to $10. Wall Street approved. “You treat people well, they’ll treat your customers well,” said Dorothy Lakner, a Wall Street analyst. “Gap had a strong year last year compared to a lot of their peers. That sends a pretty strong message to employees that, ‘we had a good year, but you’re going to be rewarded too.’”

Even when raising the minimum wage — or bargaining for higher wages and better working conditions, or requiring businesses to provide safer workplaces or a cleaner environment — increases  the cost of business, this doesn’t necessarily kill jobs.

Most companies today can easily absorb such costs without reducing payrolls. Corporate profits now account for the largest percentage of the economy on record.  Large companies are sitting on more than $1.5 trillion in cash they don’t even know what to do with. Many are using their cash to buy back their own shares of stock – artificially increasing share value by reducing the number of shares traded on the market.

Walmart spent $7.6 billion last year buying back shares of its own stock — a move that papered over its falling profits. Had it used that money on wages instead, it could have given its workers a raise from around $9 an hour to almost $15. Arguably, that would have been a better use of the money over the long-term – not only improving worker loyalty and morale but also giving workers enough to buy more goods from Walmart (reminiscent of Henry Ford’s pay strategy a century ago).

There’s also a deeper issue here.  Even assuming some of these measures might cause some job losses, does that mean we shouldn’t proceed with them?  

Americans need jobs, but we also need minimally decent jobs. The nation could create millions of jobs tomorrow if we eliminated the minimum wage altogether and allowed employers to pay workers $1 an hour or less. But do we really want to do that?

Likewise, America could create lots of jobs if all health and safety regulations were repealed, but that would subject millions of workers to severe illness and injury.

Lots of jobs could be added if all environmental rules were eliminated, but that would result in the kind of air and water pollution that many people in poor nations have to contend with daily.

If the Affordable Care Act were repealed, hundreds of thousands of Americans would have to go back to working at jobs they don’t want but feel compelled to do in order to get health insurance.

We’d create jobs, but not progress. Progress requires creating more jobs that pay well, are safe, sustain the environment, and provide a modicum of security. If seeking to achieve a minimum level of decency ends up “killing” some jobs, then maybe those aren’t the kind of jobs we ought to try to preserve in the first place.

Finally, it’s important to remember the real source of job creation. Businesses hire more workers only when they have more customers. When they have fewer customers, they lay off workers. So the real job creators are consumers with enough money to buy.

Even Walmart may be starting to understand this. The company is “looking at” whether to support a minimum wage increase. David Tovar, a Walmart spokesman, noted that such a move would increase the company’s payroll costs but would also put more money in the pockets of some of Walmart’s customers.  

In other words, forget what you’re hearing from the Republicans and the Chamber of Commerce. The real job killers in America are lousy jobs at lousy wages.   

Why the Lousy Jobs Report Boosted Wall Street

by Robert Reich

Saturday, February 8, 2014                

The stock market surged yesterday after the lousy jobs report. The Dow soared 160 points Friday, while the S&P 500, and Nasdaq also rose.

How can bad news on Main Street (only 113,000 jobs were created in January, on top of a meager 74,000 in December) cause good news on Wall Street?

Because investors assume:

(1) The Fed will now continue to keep interest rates low. Yes, it has announced its intention of tapering off its so-called “quantitative easing” by buying fewer long-term bonds in the months ahead. But it will likely slow down the tapering. Instead of going down to $55 billion a month of bond-buying by April, it will stay at around $60 billion to $70 billion.

(2) The slowdown in the Fed’s tapering will continue to make buying shares of stock a better deal than buying bonds – thereby pushing investors toward the stock market.

(3) Continued low interest rates will also continue to make it profitable for big investors (including corporations) to borrow money to buy back their own shares of stock, thereby pushing up their values. Apple and other companies that used to spend their spare cash and whatever they could borrow on new inventions are now focusing on short-term stock performance.

(4) With the job situation so poor, most workers will be so desperate to keep their jobs, or land one, that they will work for even less. This will keep profits high, make balance sheets look good, fuel higher stock prices.

But what’s bad for Main Street and good for Wall Street in the short term is bad for both in the long term. The American economy is at a crawl. Median household incomes are dropping. The American middle class doesn’t have the purchasing power to keep the economy going. And as companies focus ever more on short-term share prices at the expense of long-term growth, we’re in for years of sluggish performance.

When, if ever, will Wall Street learn?

College Graduates Beg for a Shrinking Pool of Jobs

by John Lawrence from the San Diego Free Press

PhDs Go Begging, Microsoft Lays Off High Tech Workers, Graduates Not Able to Cope with Student Loan Debt Getting Jobs as Baristas. 

That's the new reality for today's college graduates.

Have America's young people been sold a bill of goods? They thought that a college degree guaranteed them an entry to a good middle class life. Many are now finding out that that's not the case as they struggle to pay student loans and try to cope with an anemic jobs market. For profit colleges are advertising on TV in order to perpetuate the myth that a college education is a panacea. Even President Obama spouts that everyone should go to college and that's what will cure the nation's ills and prevent us from falling into the abyss of national mediocrity.

But don't count on it. Even PhDs are having trouble finding jobs. Dan Rather says in an episode entitled PhDon't!, "If you believe getting an advanced degree in science or math is a meal ticket for a career of the future, know there’s a glut of highly qualified PhD’s who will never get the jobs they spent over a decade training to do." Having stayed in school and gotten advanced degrees, they find themselves working in low paid positions as post docs well into their 30s. As a result, much scientific talent is going to waste. Even Shirley Tilghman, the President of Princeton University, herself a scientist, is now dissuading students from making a decision to pursue a scientific career.

It doesn't make any sense to spend years in college, acquiring student loan debt, to then not be able to find a job, or to have one's job outsourced after having found one. It makes more sense in my estimation to follow my three rules for job selection: 1) Don't train for a job that can be outsourced; 2) Don't train for a job from which you can be downsized; 3) Don't train for a job that requires one to go into debt.

Rather than training for a cutting edge career that requires you to be hired by a corporation, train for a job which has a well established market that you can access by being self-employed. Many college educated people have a trade as a sideline or which they can pursue on their own if their services are no longer required by a corporation.

The high school years provide an excellent opportunity for learning a trade. Everyone should do this irregardless of whether or not they intend to go on to college. The advantages are 1) no student loan debt need be taken on; 2) one can be self-employed and start a business as soon as a driver's license is obtained; 3) a business can be built while still living with parents to minimize expenses while getting established; 4) as long as you serve the local community your job can't be outsourced; 5) you can't be fired or laid off unless you fire or lay off yourself; 6) you get to set your own hours so that you can incorporate other activities into your work day. These are just some of the reasons why it makes sense not to rely on a college career just like the many successful people who have eschewed a college degree.

America's Job Losses Are India's Job Gains

"Silicon Valley high techs are all over India now hiring by the thousands" says Dan Rather in his report "Help Wanted! Not Here." The high wage, high tech jobs are moving off shore where they can be done, according to one Indian facilitator, "better, cheaper, faster." Outsourcing is part of an American strategy to keep companies lean and competitive. And they cannot ignore the billions of potential consumers in India, China and elsewhere who are just entering the middle class. While corporations are prospering in this global environment, American workers, even those with PhDs, are losing their jobs, and those jobs are not coming back.

Silicon Valley has been the bellwether in the quest for pushing boundaries in the high tech world. Google, Facebook, Intel, Hewlett Packard and others have led the world with their technical expertise and inventiveness. But today, on closer examination, the gleaming cities of high tech campus buildings look now more like gleaming ghost towns. Silicon Valley buildings sit vacant. Nearly 75,000 people have lost their jobs in Silicon Valley during the recent great downturn. Layoffs were massive. HP reduced its payroll by 17,000; IBM, over 10,000. Cisco systems laid off 6000. Across the valley there was a glut of empty office space that could fill more than 20 Empire State buildings.

Despite the imprecations of many highly educated role models, a college degree just sets you up for being hired by a corporation and then unhired as it suits their (not your) purposes. Unemployment in the high tech capitol of the US, Silicon Valley, is around 11%. So-called "mature workers" search futilely for jobs. Anyone over 50 is considered to be technologicaly obsolete, and his or her job is in jeopardy. Their jobs are being outsourced to younger and more energetic people in Bangalore, India among other places. People have lost their jobs, their homes, their health insurance and in some cases their marriages. While stock prices are up and corporate profits are soaring, workers in Silicon Valley despair of ever finding another job in the high tech industry.

But while workers despair in Silicon Valley, hopes are soaring in India. American companies are hiring there big time. It's a never ending job fair. Companies laying off in the US are in a hiring frenzy in India. India's high tech outsourcing industry hired 850,000 people in 2012 alone. All across India there is a new exuberance, a new confidence and new jobs. India's highly skilled laborers are working for $9000 a year, much less than a middle class, college educated worker in the US will work for. India's new middle class is already bigger than America's and there are jobs galore for everyone. India's colleges are churning out highly skilled graduates. India has dozens of high tech universities (India Institutes of Technology) churning out hundreds of thousands of engineers and computer scientists every year.

Today Bangalore is called the Silicon Valley of India and business is booming. In 2012 Dell Computers doubled its headcount in India. Accenture Consulting, which had only a few employees in 2003, today has more than 50,000. HP also has around 50,000 employees there. IBM is estimated to have more than 100,000 workers in India, more than in the US. Cisco Systems has a beautiful campus with four buildings and 6000 employees with thousands more on the way according to the company. Cisco prides itself on having more workers in the US than abroad, but is now doing about half of its core research and development in India. Cisco workers work in a "smart building" - the lights, the AC, the heating, even the doors are all controlled by the prescence or abscence of workers in the building. These innovations were all designed in India.

Outsourcing on Steroids

American companies operating in India have increased production seven fold in the past three years. And the Indian companies specializing in outsourcing are ready to take it to the next level. So far only the largest Fortune 400 companies have been involved, but outsourcing giant Quatro is prepared to facilitate outsourcing for mid-market companies as well. That means they will actively pursure smaller companies to outsource jobs to India, and that means more American workers will lose their jobs. In fact any job that American workers are now doing can be done in India at a price and at a quality that is better than what you could get in the US, and Indian outsourcing companies are busy cheerfully advertising that fact.

While Silicon Valley has a glut of empty office parks, gleaming architectural masterpieces are taking the place of shanty towns in India. Free trade or no free trade, the facts of globalization are that workers of all skill levels will be found to do the jobs Americans once held wherever their pay levels are the cheapest. Americans will be left to take classes on how to write a killer resume and how to present themselves in the best way to job interviewers as they compete with hundreds if not thousands of applicants for one lousy job.

Americans will not be hired to create products to ship to emerging markets as free trade theorists have promised. Instead the jobs themselves will be shipped to local markets in India and elsewhere where the local population will be employed to create and manufacture products that are sold locally. This makes sense as in the Henry Ford example where he paid workers $5 a day in order that they might make enough to buy the products they themselves were manufacturing. The same applies to India. By employing local Indian workers, they will then have the money to buy the products they are manufacturing. The result is the creation of a local middle class in India. American workers are superfluous.

As far as job creation in the US, US corporations are importing guest workers from abroad under the H1B Visa program. These workers are then trained in the US, and take US expertise and jobs with them when they return to their own countries while their trainers in the US lose the jobs they have just trained Indians to take from them.

Under current US tax law, US corporations do not have to pay taxes on foreign earned profits unless they want to repatriate those profits to the US. That makes it better to expand business operations in the countries where those profits were earned than to bring the money back home and invest here.

Ron Hira is a researcher with the Economic Policy Institute and a public policy professor at Rochester Institute of Technology. He wrote the book "Outsourcing America" which argues that lawmakers need to stop providing incentives to companies that send jobs overseas. He says, "There’s no other country in the world that actually encourages firms to expand overseas in lieu of expanding in [their home country] through their tax policies." Some companies like McKinsey Global Institute are making millions of dollars advising other US companies on how to outsource their jobs.

But what about the argument that what's good for the big corporations is, in the end, good for the US economy and good for Americans as a whole? Hira says, "I think this is another misconception. 'What's good for General Motors is good for America' and vice versa: I don't think that's true anymore. We're losing a lot more jobs than we're gaining in that relationship."

In a nutshell outsourcing is good for American corporations; that's why their profits are soaring. It's not good for American workers who have invested heavily in their college educations and need a job to pay off their student loan debt or to buy a house or to raise a family.

PhDs Begging for Jobs

And PhDs are finding themselves redundant even after years of college education and huge burdens of student loan debt. Despite being told by President Obama and other government and industry leaders that we need more scientists and engineers, newly minted PhDs are becoming realtors and going into other professions that don't require extensive training simply to make ends meet.

ShirleyTilghman, PhD and President of Princeton University, told Dan Rather on PhDon't!: "And they say, 'Do I really want to be 38, 39 years old, still in this training position? I'm going to medical school, thank you very much.' Or, 'I'm going off-- to Wall Street.'"

Take Brooke Flamming for example, a recent Harvard PhD: "I did a four-year bachelor's degree. I did a two years master's degree. I did a five-year PhD. I graduated my PhD in the 23rd grade -- you just count up from 12, plus four is 16, plus two...". But instead of reaching her life's goal of becoming a professor, Brooke is stuck in career purgatory, a never ending series of low paid post doctoral positions. Brooke says she works 60 to 80 hours a week at a job that took her 23 years of education to get all for a salary that averages $8 to $12 an hour.

Only about 14% of PhDs like Brooke will ever find a job like a professorship. The problem is that the system is turning out many more PhDs than can be absorbed by the job market. Educators know this, but they don't care because their job security rests on the fact that they can continue to turn them out despite the hardship they will face when they come face to face with reality.

Aaron Dossey, PhD, is not waiting for some lab to hire him. He conducts his research from the kitchen of his one bedroom apartment in Gainesville, Florida. He is working on experiments that he hopes will one day feed malnourished children around the world. He spent six years getting his PhD from the University of Florida, but he might just as well have skipped all of that and just started working out of his apartment in the first place. You don't need a PhD to do that. He'd have been better off learning a trade that he could do to make money and do his research in his spare time. As it is now, he's living off his savings and the money he got from a small grant which will soon be gone.

Dossey says: "I felt as if I could have started a lab and been a professor right after graduation. I was chomping at the bit, as they say, ready to get out there and start my own lab. At the time I didn’t-- I just had no idea. I just started applying, and after a year of no calls, no interviews, and then my thought was: It’s my first year, the economy was in a mess-- so I was patient, I thought well that’s the way it is."

So now he is an independent scholar, an unemployed researcher, all his noble goals of feeding the world seemingly of no value to anyone else. Despite the fact that Dossey has gotten two awards from two different journals, he is a non-entity as far as the professional world of his peers is concerned. He is losing employability with each passing day. After six years and three post-docs, Dossey has become less marketable. After almost giving up, Dossey finally received a $100,000. grant from the Bill and Melinda Gates Foundation. But this will only cover the expense for his lab equipment, not his living expenses.

Dossey says: "I don't have an income other than a few invoicing hours that I can do on the grant. I'm trying to find other ways to make money on the side. I made some T-shirts for my company. Trying to sell those. Basically, I'm living off my savings right now, running my company, trying to find income - working at Home Depot or something you know, ... , maybe a part-time hourly job or something."

If Dossey had followed my advice, he would have learned a trade in high school that he could pursue part time along with his research and that would have provided him with enough money to meet his living expenses. Currently, he eats his meals off the 99 cent menu at McDonald's. When his money runs out, he is not looking forward to having to move back in with his parents and give up his research altogether.

He says: "I'm 35 now. And I love research and I wanted to do research, and I have all kinds of, you know, research that I could do, and I think, contributions I could make. For me personally, I could bite the bullet and could be just a-- dream that didn't happen. A lot of people have dreams that didn't happen. But I think it's a little bit bigger deal, and I think there's more squandered than just my-- than just what's in it for me."

President Obama has called for "One million more American graduates in science, technology, engineering and math over the next ten years." But why would someone heed this siren call only to be disenchanted at the outcome? With hundreds of applicants for every position and corporations making more and more demands for the perfect candidate, even these highly trained PhDs with years of post doctoral training can't measure up. Corporations want the best, and they want it right now. They are unwilling to do on-the-job training.

Princeton President Tilghman says: "I think the pathology in the system right now is the length of training that it takes to get from a beginning graduate student to someone who has what we would think of as a real job in the real economy. And that number has been growing and growing and growing, and it's strictly market-determined. In other words, as it gets harder and harder to find one of those jobs, you stay in training positions longer and longer and longer."

Finally, Rather asks her, "If there are too many scientists and not enough jobs, is the big policy push to produce more scientists just bad policy?" and Tilghman replies, "Yes. I-- I think it is bad policy. And I think that it-- it will ultimately be harmful to the enterprise in the long run."

Aaron Dossey is thinking about filing for unemployment.

Why Walmart’s Response to my Petition Is Brutally Irrelevant

by Robert Reich

Friday, August 30, 2013                

Yesterday a Walmart spokesman criticized the petition I’ve been circulating that asks Walmart (and McDonalds) to pay their employees at least $15 an hour.

Walmart’s spokesman told the Huffington Post that my petition fails to mention that Walmart is a major job creator and that it promotes some of its employees.

The spokesman is correct. In fact, Walmart is America’s biggest employer. And I’d be shocked if some of its employees weren’t promoted.

But the brute fact is Walmart’s typical employee is still paid less than $9 an hour.

To offer lousy jobs on such an extraordinary scale is not something to brag about. Indeed, the point of the petition — as well as the national movement to raise the minimum wage to $15 an hour — is to recognize that most people who work for big-box retailers like Walmart, as well as those who work in the fast-food industry, are adults. They are responsible for bringing home a significant share of their family’s income. A decent society requires they be paid enough to lift them and their families out of poverty.

When Martin Luther King, Jr., led the March to Washington for Jobs and Justice, fifty years ago this week, one of the objectives of that March was to raise the minimum wage to $2 an hour. $2 an hour in 1963, adjusted for inflation, comes to over $15 an hour in today’s dollars. Walmart doesn’t come close to the American dream.

Why Republicans Want Jobs to Stay Anemic

by Robert Reich

Saturday, August 3, 2013                

Job-growth is sputtering. So why, exactly, do regressive Republicans continue to say “no" to every idea for boosting it — even last week’s almost absurdly modest proposal by President Obama to combine corporate tax cuts with increased spending on roads and other public works? 

It can’t be because Republicans don’t know what’s happening. The data are indisputable. July’s job growth of 162,000 jobs was the weakest in four months. The average workweek was the shortest in six months. The Bureau of Labor Statistics has also lowered its estimates of hiring during May and June. 

It can’t be Republicans really believe further spending cuts will help. They’ve seen the effects of austerity economics on Europe. They know the study they relied on by Carmen Reinhart and Kenneth Rogoff has been debunked. They’re no longer even trying to make the case for austerity.  

It could be they just want to continue opposing anything Obama proposes, but that’s beginning to seem like a stretch. Republican leaders and aspiring 2016 presidential candidates are warning against being the “party of ‘no.’" Public support for the GOP continues to plummet. 

The real answer, I think, is they and their patrons want unemployment to remain high and job-growth to sputter. Why? Three reasons:

First, high unemployment keeps wages down. Workers who are worried about losing their jobs settle for whatever they can get — which is why hourly earnings keep dropping. The median wage is now 4 percent lower than it was at the start of the recovery. Low wages help boost corporate profits, thereby keeping the regressives’ corporate sponsors happy. 

Second, high unemployment fuels the bull market on Wall Street. That’s because the Fed is committed to buying long-term bonds as long as unemployment remains high. This keeps bond yields low and pushes investors into equities — which helps boosts executive pay and Wall Street commissions, thereby keeping regressives’ financial sponsors happy. 

Third, high unemployment keeps most Americans economically fearful and financially insecure. This sets them up to believe regressive lies — that their biggest worry should be that “big government" will tax away the little they have and give it to “undeserving" minorities; that they should support low taxes on corporations and wealthy “job creators;" and that new immigrants threaten their jobs. 

It’s important for Obama and the Democrats to recognize this cynical strategy for what it is, and help the rest of America to see it. 

And to counter with three basic truths: 

First, the real job creators are consumers, and if average people don’t have jobs or good wages this economy can’t have a vigorous recovery.

Second, the rich would do better with a smaller share of a rapidly-growing economy than their current big share of an economy that’s hardly moving.

Third, therefore everyone would benefit from higher taxes on the wealthy to finance public investments in roads, bridges, public transit, better schools, affordable higher education, and healthcare — all of which will help the middle class and the poor, and generate more and better jobs. 

The US Has Not Created ONE Breadwinner Type Job in Over 10 Years

by John Lawrence from the San Diego Free Press

Only part time, temp and minimum wage jobs are being created

"Four years after the [Great Recession of 2008] median family income has fallen by 10 percent in real terms. ...[T]he number of full-time breadwinner jobs in the US economy is still down by 5 million; that is, it is more than 8 percent below its late 2007 level. In short, the Main Street economy has been failing for years, and now the massive debt deflation [the paying down of debt rather than consuming] under way will aggravate that condition enormously [since GDP is 70% consumption], leaving millions of citizens to depend on intermittent employment in low-paying part-time jobs or to fall back on family, friends, charity, or nothing at all." - David Stockman, The Great Deformation.

A breadwinner job is a job that is sufficient to support a family including rent or mortgage, car payment, adequate food and nutrition, health care, education and savings for retirement. That meant a job paying $50,000 a year in 2007 when the US economy peaked. At that time there were 71.8 million "breadwinner" jobs in construction, manufacturing, white-collar professions, government and the like. These jobs accounted for more than half of the nation's 138 million total payroll.

Breadwinner jobs are the foundation of the Main Street economy. But after losing 5.6 million of these jobs during the Great Recession, less than 4 percent of these jobs have been recovered. The 3 million jobs recovered since the recession ended in 2009 have been mainly in part-time work, temp jobs and in health, education and social services (the HES complex).

More than half of the recovery (1.6 million jobs) occurred in the part-time economy which presently includes 36.4 million jobs in retail, hotels, restaurants, shoe-shine stands, barrista kiosks and temporary help agencies where the average annualized compensation was only $19,000. The balance consisting of 1.1 million jobs was in the HES complex which consists of 30.7 million jobs in health, education and social services.  Average compensation in these jobs was about $35,000. annually. These jobs are almost entirely dependent on government spending and as such are subject to being eliminated at the whims of a deficit cutting Congress. That leaves only approximately 300,000 breadwinner jobs created since the Great Recession!

A family would need two of the HES type jobs to be the equivalent of one breadwinner job or three temp or part time jobs to be the equivalent. Simply put this is why both the husband and the wife need to be out in the workforce whereas a generation ago only one member of the household needed to be in the workforce with the other member (usually the wife) staying home raising the children and taking care of the house. This is what women's liberation has wrought! Two members of the household in the workforce and nobody taking care of the children.

According to a report in ProPublica, roughly 2.7 million temp workers are currently employed in the US — a sector that’s roaring back 10 times faster than private-sector employment as a whole. Many temp workers start work with the promise of a full time job after a 3 month or 6 month probationary period - only to find their times extended to the point where they can be at the same worksite for years, but as an employee of the temp agency with no benefits, vacation or raises. More and more companies are turning to temp labor to avoid the insurance costs and other obligations of a full-time staff. Even nurses, cooks and professors are being hired as temp workers.

Temp workers have few rights. Complaints to management are frequently referred to the temp agency itself and are not subject to being considered at the company where the temp worker has actually been working. They are not day laborers looking for an odd job from a passing contractor. They are regular employees of temp agencies working in the supply chain of many of America’s largest companies – Walmart, Macy’s, Nike, Frito-Lay. They make our frozen pizzas, sort the recycling from our trash, cut our vegetables and clean our imported fish. They unload clothing and toys made overseas and pack them to fill our store shelves. They are as important to the global economy as shipping containers and Asian garment workers. 

Many get by on minimum wage, renting rooms in rundown houses, eating dinners of beans and potatoes, and surviving on food banks and taxpayer-funded health care. They almost never get benefits and have little opportunity for advancement.

Across America, temporary work has become a mainstay of the economy, leading to the proliferation of what researchers have begun to call “temp towns.” They are often dense Latino neighborhoods teeming with temp agencies. Or they are cities where it has become nearly impossible even for whites and African-Americans with vocational training to find factory and warehouse work without first being directed to a temp firm.

In June, the Labor Department reported that the nation had more temp workers than ever before: 2.7 million. Overall, almost one-fifth of the total job growth since the recession ended in mid-2009 has been in the temp sector, federal data shows.  But according to the American Staffing Association, the temp industry’s trade group, the pool is even larger: Every year, a tenth of all U.S. workers finds a job at a temp agency.

A healthy Main Street economy depends upon growth in breadwinner type jobs, but there has been none. The Bureau of Labor statistics (BLS) reported 71.8 million breadwinner jobs in January 2000, but 7 years later in 2007,after the huge boom in the housing, real estate, household consumption and stock market sectors, there were still exactly only  71.8 million jobs of this type.

To be sure, the economy did grow during this period. Nominal GDP grew by 40% or about $4 trillion. However, outstanding debt grew by $20 trillion during this same period. So the economy was being pushed along by a torrent of debt far exceeding any real economic growth due to rising productivity and earned income.This debt tsunami which induced only modest GDP growth makes it clear that the Fed policy of increasing debt in order to "grow the economy" is a total failure. As people pay down their debt (debt deflation) instead of buying more stuff, GDP growth will suffer. GDP growth in the real economy is much more modest than reported GDP because 8% of GDP (in 2010) was contributed by financial services, primarily Wall Street speculation and hedge fund activities which often tear down the real economy for the benefit of speculators. Case in point: Twinkies are back on store shelves after being taken over by a hedge fund and unionized workers being laid off. See "Twinkies' Twisted Tale: Junk Food Devoured by Junk Bonds"

While the Federal Reserve has pumped cash into the big Wall Street banks and the upper one percent of wealthy investors, very little of this money has trickled down to Main Street. One of the Fed's missions is to increase employment. However, the American economy has been almost entirely bereft of job growth. For the entire 12 year period since early 2000, it has generated a net gain of only 18,000 jobs per month, a figure that is just one eighth of the labor force growth rate. The only thing happening on the "jobs creation" front in the last 10 years in addition to the massive creation of temp and part time jobs is a huge creation of the bedpan and diploma mill brigade which consists of employment in nursing homes, hospitals, home health agencies, and for-profit colleges.

The sunny job creation statistics cited by the Fed and by anxious politicians eager for good sounding economic news are a complete sham. The fact is that monetray policy in the US is all about fueling the speculative urges of Wall Street, not about the economic health of Main Street. This obfuscation is especially true with respect to the oft cited figure of the creation of 3 million jobs since the recession ended. What they don't tell you is that the majority of these jobs were part-time jobs in bars, restaurants, retail emporiums and temporary employment agencies which supply most of the factory and warehouse jobs for the likes of Microsoft, Amazon and Wal-Mart.

The recovery, such as it is, has been fueled by the massive creation of debt in the hopes that consumers will be persuaded to borrow and spend since 70 percent of US GDP is comprised of consumer spending. If instead consumers choose to pay down personal debt (debt deflation) which is the smart thing to do, the American economy will go into recession. The Federal Reserve is trying to levitate the economy by gigantic infusions of free money into the Wall Street casino in the hopes of creating another real estate bubble or a bubble of any sort really. Please give us a bubble, any bubble. The only economic activity that Fed chief Bernanke is producing with his helicopter free money drops is speculation on Wall Street. The inflation of speculative bubbles will only lead to another bubble pricking collapse since the smart fellows at the Fed and in the government did not learn anything from the economic collapse of 2008.

The American people should not stand for another too-big-to-fail government bail-out of Wall Street. The next time that happens there may be a revolution to go along with it. People are getting tired of the fondling of Wall Street while the people get gypped. In particular they have been gypped lately with the huge accumulation of student loan debt and the refusal to write down any homeowner mortgages while foreclosing mightily instead. What we need is not catering to the Wall Street speculative economy of the 1%, but consideration for the Main Street economy of the 99%. A recent San Diego Free Press Article about an unconditional basic income for the masses would be an antidote to the massive giveaways of free money to Wall Street.

What We Need Now: A National Economic Strategy For Better Jobs

by Robert Reich

Tuesday, June 11, 2013                

Jobs are returning with depressing slowness, and most of the new jobs pay less than the jobs that were lost in the Great Recession.

Economic determinists — fatalists, really — assume that globalization and technological change must now condemn a large portion of the American workforce to under-unemployment and stagnant wages, while rewarding those with the best eductions and connections with ever higher wages and wealth. And therefore that the only way to get good jobs back and avoid widening inequality is to withdraw from the global economy and become neo-Luddites, destroying the new labor-saving technologies.

That’s dead wrong. Economic isolationism and neo-Ludditism would reduce everyone’s living standards. Most importantly, there are many ways to create good jobs and reduce inequality.

Other nations are doing it. Germany was generating higher real median wages until recently, before it was dragged down by austerity it imposed the European Union. Singapore and South Korea continue to do so. Chinese workers have been on a rapidly-rising tide of higher real wages for several decades. These nations are implementing national economic strategies to build good jobs and widespread prosperity. The United States is not. 

Any why not? Both because we don’t have the political will to implement them, and we’re trapped in an ideological straightjacket that refuses to acknowledge the importance of such a strategy. The irony is we already have a national economic strategy but it’s been dictated largely by powerful global corporations and Wall Street. And, not surprisingly, rather than increase the jobs and wages of most Americans, that strategy has been increasing the global profits and stock prices of these giant corporations and Wall Street banks.  

If we had a strategy designed to increase jobs and wages, what would it look like? For starters, it would focus on raising the productivity of all Americans through better education — including early-childhood education and near-free higher education. That would require a revolution in how we finance public education. It’s insane that half of K-12 budgets still come from local property taxes, for example, especially given that we’re segregating geographically by income. And it makes no sense to pay for the higher education of young people from middle and lower-income families through student debt; that’s resulted in a mountain of debt that can’t or won’t be paid off, and it assumes that higher education is a private investment rather than a public good.

It would also require greater accountability by all schools and universities for better outcomes — but not just better test results. The only sure thing standardized tests measure is the ability to take standardized tests. Yet the new economy demands problem-solving and original thinking, not standardized answers. 

Better education would just be a start. We would also unionize low-wage service workers in order to give them bargaining power to get better wages. Such workers — mostly in big-box retailers, fast-food chains, hospitals, and hotel chains — aren’t exposed to global competition or endangered by labor-substituting technologies, yet their wages and working conditions are among the worst in the nation. And they represent among the fastest-growing of all job categories. 

We would raise the minimum wage to half the median wage and expand the Earned Income Tax Credit. We’d also eliminate payroll taxes on the first $15,000 of income, making up the shortfall in Social Security by raising the cap on income subject to the payroll tax. 

We’d also restructure the relationships between management and labor. We would require, for example, that companies give their workers shares of stock, and more voice in corporate decision making. And that companies spend at least 2% of their earnings upgrading the skills of their lower-wage workers.

We’d also condition government largesse to corporations on their agreement to help create more and better jobs. For example, we’d require that companies receiving government R&D funding do their R&D in the U.S.

We would prohibit companies from deducting the cost of executive compensation in excess of more than 100 times the median compensation of their employees or the employees of their contractors. And bar them from providing tax-free benefits to executives without providing such benefits to all their employees. 

And we would turn the financial system back into a means for investing the nation’s savings rather than a casino for placing huge and risky bets that, when they go wrong, impose huge costs on everyone else.

There’s no magic bullet for regaining good jobs and no precise contours to what such a national economic strategy might be, but at the very least we should be having a robust discussion about it. Instead, economic determinists seem to have joined up with the free-market ideologues in preventing such a conversation from even beginning.

Today's College Graduates: In Debt and Not Able to Find a Job

by John Lawrence

The American mythology that getting a good job requires a college degree is turning out to be a hollow promise, a mythology devoid of any connection to reality. Today's college graduates are being weighed down with tens of thousands of dollars in student loan debt, and many of them are either unemployed or working in jobs that don't require a college degree. A recent study has shown that half of recent college graduates can't find jobs. Those who graduated since 2009 are three times more likely to not have found a full-time job than those from the classes of 2006 through 2008. Of those who did find a job, the study indicates that 43 percent had jobs that didn't require a college degree. Sure the top 10% will get jobs right out of college, but for everyone else disappointment in the job search abounds. Even recent PhDs are facing stiff competition for fewer available jobs, and many of them end up driving taxis for a living.

At the same time that college graduates are not finding work, there are 3.7 million job openings, but these are the kinds of jobs college graduates aren't equipped to do. They require technical or vocational school training not the sitting in class and passing tests experience of most college graduates. As President Obama mentioned in his State of the Union speech, Germany prepares high school graduates with the training necessary to get an actual job instead of directing everyone to go to college. High school graduates in Germany have the equivalent of a techniocal degree from an American community college.

Despite the fact that Microsoft founder Bill Gates is a college dropout, Apple's founder Steve Jobs was a college dropout and Facebook's founder Mark Zuckerberg is a college dropout (all became billionaires by the way), Americans have been sold a bill of goods that a college degree is necessaary for the good life. This hasn't panned out for Serena Whitecotton however. Since graduating last May with a grade-point average of 3.5, experience working at her school newspaper and a degree in communications from California State University at Fullerton, Whitecotton said she has applied for more than 400 journalism and public relations jobs. For her efforts, she has been granted 10 interviews that haven't led to a single job offer. She still lives at home and has been unable to find work since her internship ended in November.

America has set up a class system whereby you are a second class citizen if you don't graduate from college. Increasingly though the reality is that there is not much of a connection between a college degree and finding a good job, and American high schools are not preparing high school graduates for entering the work force directly after high school. In a recent Dan Rather report about the German job machine, Rather interviewed young German workers and asked them if they had any regrets about not going to college. One young German girl said no, her job was so interestimg that she could not imagine going to university and sitting in a class all day. "It would be too boring for me." The fact of the matter is that the American educational system graduates students who have the capacity for sitting there and being bored without complaining for years on end. They are capable test takers, but in many cases the material is soon forgotten after the test is taken. They graduate with few if any practical skills and no practical experience. German youth on the other hand can work half time in industry earning money and getting real world practical experience. And it doesn't limit them if they want to go back to school later on and acquire more credentials and degrees.

The myth that with a college education you will be able to get a good paying job is being laid to rest. The social contract that, if you work hard, play by the rules and graduate college, there will be a job waiting for you is just a myth. Nowhere in the Constitution does it say anything about guaranteeing college graduates a job. That would be a social contract, and there ain't no social contract.

The Bureau of Labor Statistics projects that for the top ten fastest growing occupations for the years 2010 - 2020, only two will require a college degree. Four don't even require a high school diploma! Two require an Associate's Degree. Jeff Faux in his book, "The Servant Economy," explains why he believes politicians of both parties working for America’s elite are systematically destroying the economic aspirations and quality of life for America’s middle class.

Jeff Faux: "The future — you walk into an Apple store and you think you’re looking at the future, and you are, but it’s not in the technology. It’s in all of those smart college educated kids with the T-shirts on who are working as retail clerks at $12 an hour or so. Now if you talk to them, they will say, well, I’m just here temporarily." But they may still be there well into their 30s. That's what's happening. When you consider the BLS projections about the jobs of the future, you realize that many of these kids, these 20-something’s thinking that they’re going to be on a professional track, are going to be 30-something’s with dead end jobs well into the future. The BLS projections give the lie to the much repeated myth that with a college education you will make more over your lifetime than you will with just a high school diploma. Heck, where the jobs really are is for people without even a high school diploma. And the kids coming out of college that can't find jobs, that is the non-elite kids from non-elite colleges, they are loaded down with student loan debt. They wind up in a dead end job barely able to make their payments to Bank of America and Wells Fargo.

For profit colleges are advertising on TV trying to reinforce on impressionable minds that you aren't worth nothing without a college degree. And they will see to it that you are loaned as much money as you want with the consequence that whether or not you graduate with questionable skills, you will end up being indebted to Wall Street probably for the rest of your life, and that's even before you get a mortgage if indeed that were even possible with so much student loan debt. They are reinforcing the American meme that college graduates will make much more in their lifetime than those with only a high school diploma. Those dubious statistics may have been true in the past but recent statistics suggest otherwise.

Dr. Robert Schwartz, a professor in the Harvard graduate school of education, says that youth unemployment rates in Germany are half those in the US. The German system gets young people through high school with skills and credentials that allow them to get to work immediately. Schwartz doesn't believe the mythology that everyone needs to go to a four year college in order to have a fair shot at the American dream. Today's recent college graduates, instead of achieving the American Dream, are graduating into a hellish American dystopia of student loan debt, no job except one perhaps that didn't require a college degree and resentment at having been led down the garden path to nowhere.

Schwartz believes the educational system should be focused on helping young people make smarter choices about what they study and to make those choices with one eye on where the economy is going and whether or not the skills that they are acquiring actually have value in the labor market. 25% of 25 year old college graduates are working in jobs that don't even require a four year degree. They could have gotten those jobs without even going to college. They were sold a bill of goods, and they and their parents have been snookered by the educational system which has effectively lobbied the public to make people feel inferior if they don't have a college degree.

In San Diego wealthy La Jollans recently shot down a plan by the San Diego Unified School District to include more career and technical education in the curriculum. They thought it would detract from their college bound progeny.

"Take what happened this March in La Jolla, Calif. Parents rose in protest after the San Diego Unified School District  proposed new high school graduation requirements mandating two years of career and technical education courses—or two to four courses. The district would have been the first in the nation to have such a mandate, experts believe. Parents circulated an online protest petition and school officials spent hours in a meeting to assure hundreds of parents that courses like computerized accounting, child development and website design could be in the best interest of all students.

"But afterwards, when parent leaders asked the crowd who favored the requirement, every single parent at the meeting voted against it.

...

"The parents, though, argued that college-bound students wouldn't be helped by taking career and technical education classes. As one parent wrote on an online petition that garnered 1,326 signatures in 21 days: "If you force the children of … highly intelligent and very academic parents to take less-rigorous VoTech coursework, you will hurt their chances of admission to undergrad and grad school.""

Recent studies have shown that people with two year technical degrees are starting to outearn four year college graduates. In the Florida class of 2009 those with two year technical degrees are outearning the average BA holder by $10,000. Nationally, roughly a third of those with two year technical degrees are outearning the average four year degree holder. The US needs to create some alternatives for young people other then going to college. One person in four drops out of high school and the biggest reason they give is that it was boring sitting in classrooms all day and there was no connection with the real world.

The educational system should help young people get over the hump of high school and get launched into the world of work thus helping them go from adolescence to adulthood. There are some programs starting up, for example at Greenville Technical College, where young people can combine school with on the job work experience and a paycheck so that after two years they have a degree, work experience and have earned a living. They can step right into a full time job. Later on if they so desire they can go on to further their academic experience and earn more credentials and skills.

 

Why Democrats and Republicans Are Both Wrong About the Economy

by John Lawrence from the San Diego Free Press

The unemployment rate is 7.8%. Both parties agree that this is too high, but they propose totally different solutions to create more jobs. The Republican solution is to give more tax breaks and other advantages to the rich and to corporations because they are the job creators. Really? Then why haven't they created more jobs in the last 30 years. This historical experiment of "trickle down" economics has been tried since the time of Ronald Reagan and it has proven to be an abject failure. Yet Republicans are still pushing it as the solution to all our problems. 

Esteemed Nobel laureate and Princeton professor Paul Krugman wants to take the traditional Keynesian approach and do deficit spending to improve the economy. He says there's no reason to worry about the deficit since the US can borrow money at extremely low rates. Not to worry. He sides with Dick Cheney who famously said, "Deficits don't matter." He and Bush then went on to add trillions to the national debt by fighting two unpaid for wars, tax breaks for the rich and an unpaid for prescription drug benefit for seniors that was in reality a giveaway to the pharmaceutical companies. But now that a Democratic President is in office, Republicans are all worried about deficits. They should have been worried when George W Bush was doing the profligate spending.

However, I disagree with both Cheney and Krugman. Deficits do matter and here's why. Sure the government can borrow a lot of money, as much as it wants to, at extremely low rates. But the government has to pay interest on the national debt and that is a growing part of the budget. Interest on the debt is the fourth largest government expenditure after Defense, Medicare and Medicaid. In 2011 Federal, state and local  governments spent $454,393,280,417.03 on interest. It actually came down dramatically in 2012 to $359,796,008,919.49. That's still a lot of money. The Federal government alone spent around $220 billion in net interest on its debt in 2012, and is predicted to spend over a trillion dollars in interest by 2020. That's $1 trillion we can't spend to educate our kids or to replace our badly worn-out infrastructure.

And there's no guarantee that interest rates will continue to remain at historical lows. They are being held there right now by the Federal Reserve's policy of quantitative easing. The Fed is printing money at the rate of $85 billion a month. This money is being essentially given to the large Wall Street banks. Theoretically it's being loaned, but if someone loans you money at a zero interest rate, why would you ever pay it back? It's foolish to think that interest rates will always remain this low and that foreign nations and individuals will continue to loan us money ad infinitum.

The Fed's policy of printing money and then giving it to the big banks relies on the theory that low interest rates will get the economy moving again. The theory goes that people will be attracted to the low interest rates, borrow money and consume. It assumes that banks will actually loan out the money. Since consumption is 70% of the US economy, GDP will increase and that will create more jobs. In other words the Fed is exercising the same trickle down theory of economic growth made famous by Ronald Reagan and that has been tried for the last 30 years and failed. The Fed is essentially devaluing American currency in the hopes that this will create jobs. And it has been a big failure insofar as job creation is concerned but it has kept the US government's borrowing rates low.

So if both deficit reduction and job creation are important, how do you do both. Put simply the US government has to walk and chew gum at the same time. The Republican emphasis on cutting spending, especially spending on social programs, would lead to austerity and that would contract the economy even more. So that isn't the solution. To be fair President Obama has not been on the side of deficit spending as a way to get the economy out of the doldrums. He has been for a balanced approach of stimulating the economy and paying down the deficit. But Paul Krugman and many Democratic theorists like Robert Reich have.

The trick is to note that government spending does not have to be deficit spending. Government spending can increase without incurring greater deficits by increasing government revenues. And there are different varieties of government spending. Republicans favor just giving government money to private corporations and having them do the job. Their policy is to let the government just be a money conduit from taxpayers to corporations. Alternatively, government can spend money directly on jobs programs like rebuilding infrastructure. Instead of using the indirect approach which amounts to pushing on a string which is what the Fed is doing and which Republicans advocate, the government can actually create jobs directly in the public sector. If you want to create jobs, why not just create jobs directly instead of trying to get the private sector to create jobs. President Obama should just get up and say, "We've tried various policies to get the private sector to create jobs; they haven't worked so now the government, the public sector, is going to create jobs directly."

But here's where Democrats and President Obama have a problem. Instead of calling for more revenue by taxing the rich and corporations and government direct spending instead of spending to fund private corporations to rebuild infrastructure, Obama is reticent because he is afraid of being labeled a socialist. No worries, he's already been labeled a socialist despite his administration's being the most pro-business administration in years. And beware of the public/private partnership which is just another variation of the privatization of functions which the government can do more efficiently. We don't want to replace the military-industrial complex with an infrastructure-industrial complex replete with lobbyists, cost plus contracts and highly paid CEOs. There's no need for Wall Street to get involved.

Well, where is the money going to come from? Senator Bernie Sanders has an answer: End Offshore Tax Havens. One out of four profitable corporations pays nothing in taxes. Tax rates on profits are the lowest since 1972. Last year Facebook paid nothing despite having a billion dollars in profits. Government revenue as a percentage of GDP is lower than at any time in history. Corporate contributions to tax revenue are the lowest of any major country on earth. It is absurd for major corporations to stash huge amounts of money in countries like the Cayman Islands which have a zero tax rate. 

Bernie Sanders and Jan Schakowsky have introduced the Corporate Tax Fairness Act. The bill will raise $590 billion over the next decade. The bill will also stop giving tax breaks to corporations for shipping jobs overseas. Their bill would prevent oil companies from disguising royalty payments to foreign countries as taxes in order to reduce their taxes in the US among other things. And it has a snowball's chance in hell of passing. A financial transaction tax would bring in as much as $100 billion annually. We used to have one; Europe just recently enacted one. Let's end the "carried interest" loophole for hedge and private equity funds. Wall Street needs to start paying its fair share.

Corporations have been getting away with murder in not paying their fair share of taxes. This is from an article by Bernie Sanders:

"In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. That same year Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis."

The sad fact is that the private sector is not in the process of creating jobs but of destroying jobs through automation and robotics. Almost anything a human being might have done in a job is now being done by robots. Some say that this creates jobs for "knowledge workers." Sure if you're among the upper 1% in knowledge talent. Companies like Microsoft, Google, Apple and Facebook are not looking for the average college graduate. They're looking for the upper 1% of college graduates. Together they employ less than 200,000 people in the US. The top talent in every field are making good money. Everyone else is going downhill if they're employed at all. 50% of college graduates are either unemployed or underemployed in terms of their qualifications. In the 2009-2010 recovery, 93% of the gains in income went to the top 1%. 

Why should the private sector create jobs if they can get a robot to do the work 24 hours a day at a cost of less than $5.00 an hour? If the private sector will not create jobs, that leaves the government to create jobs directly.  Instead of pushing on a string with policies that are supposed to create jobs indirectly by encouraging the private sector to do so, government should get more involved. More government revenues plus direct job creation rebuilding infrastructure could result in growing the economy, providing good middle class jobs and paying down the debt.

Chrystia Freeman in her book Plutocracy explains this phenomenon which results in the divergence of jobs and income, creating a well to do upper 1% class and everybody else:

"This is what ecomomists call the "superstar" effect - the tendency of both technological change and globalization to create winner-take-all economic tournaments in many sectors and companies, where being the most successful in your field delivers huge rewards, but coming in second place, and certainly in fifth or tenth, has much less economic value."

We are seeing the effects of a meritocracy where the top 1% of talent merges with the top 1% in terms of income and wealth. This is great for the top 1% of graduates from elite colleges but not so much for the average graduates of average colleges with $100,000. in student loan debt and a job at Starbucks instead of a career type job in their field. In every field the chasm between the superstars and everyone else is getting bigger and bigger. Inequality increases with the acceleration of meritocracy. Meritocracy and plutocracy converge creating a democratic dystopia.

That's why the government has to step in to regulate this runaway dystopia. Taxes on corporations and the rich need to be increased in order to tamp down inequality. This revenue needs to be redistributed to the former middle class in terms of job programs. It could be redistributed in terms of welfare and unemployment insurance, but this creates a class of dependents. It would be much better to create a middle class of workers rebuilding infrastructure. And this is not a trivial job. The American Society of Civil Engineers estimates that there is $2 trillion worth of work that needs to be done just to bring roads, bridges and other basic infrastructure up to par. But there is more to infrastructure than just that. When you consider all that needs to be done to prevent and combat the changes due to global warming, there is enough potential work out there to fully employ US workers for generations. Utilities need to be hardened and undergrounded. Fossil fuel powered electric plants need to be converted to solar and wind. Buildings need to be made less energy consuming. High speed rail needs to be implemented. Housing needs to be moved back from the shorelines.

There is no lack of work that needs to be done, and this is work the private sector not only won't do but in many cases it is work that the private sector is lobbying against doing. They profit from using the atmosphere as a dump. It's crucial that the government prevent runaway wealth maldistribution, create jobs that the private sector has no incentive to create and save the planet from ecological disaster.

The Jobs Report, and Why the Recovery Has Stalled

by Robert  Reich

Friday, February 1, 2013

We are in the most anemic recovery in modern history, yet our political leaders in Washington aren’t doing squat about it.

In fact, apart from the Fed – which continues to hold interest rates down in the quixotic hope that banks will begin lending again to average people – the government is heading in exactly the wrong direction: raising taxes on the middle class, and cutting spending.

The Bureau of Labor Statistics reported Friday that American employers added only 157,000 jobs in January. That’s fewer than they added in December (196,000 jobs, as revised by the Bureau of Labor Statistics). The overall unemployment rate remains stuck at 7.9 percent, just about where it’s been since September.

The share of people of working age either who are working or looking for jobs also remains dismal – close to a 30-year low. (Yes, older boomers are retiring, but the major cause for this near-record low is simply the lack of jobs.)

And the long-term unemployed, about 40 percent of all jobless workers, remain trapped. Most have few if any job prospects, and their unemployment benefits have run out, or will run out shortly.

Close to 20 million Americans remain unemployed or underemployed.

It would be one thing if we didn’t know what to do about all this. But we do know. It’s not rocket science.

The only reason for employers to hire more workers is if they have more customers. But American employers have not had enough customers to justify much new hiring.

There are essentially two sources of customers: individual consumers, and the government. (Forget exports for now; Europe is contracting, Japan is a basket case, China is slowing, and the rest of the world is in economic limbo.)

American consumers – whose purchases constitute about 70 percent of all economic activity – still can’t buy much, and their purchasing power is declining. The median wage continues to drop, adjusted for inflation. Most can’t borrow because they don’t have a credit record sufficient to allow them to borrow much.

And now their Social Security taxes have increased, leaving the typical worker with about $1,000 less this year than last.

The Conference Board reported last Tuesday consumer confidence in January fell its lowest level in more than a year. The last time consumers were this glum was October 2011, when there was widespread talk of a double-dip recession.

The only people doing well are at the top – but they save a large part of what they earn instead of spending it.

Overall personal income soared by 8 percent in the final three months of 2012 compared to an increase of just over 2 percent in the third quarter, but this income didn’t go into the pockets of the middle class. It went into the pockets of people at the top.

Wages and salaries grew a measly six-tenths of one percent.

Most of the rise in personal income in the last quarter was from companies rushing to pay dividends before taxes were hiked in 2013, and from an upturn in personal interest income. Both these sources of income went mostly to the well-to-do.

This explains why consumer spending is dropping. The Commerce Department said Thursday consumers’ spending rose 0.2 percent last month. That’s slower than the 0.4 percent increase in November.

So if we can’t rely on consumers to stoke the economy, what about government? No chance. Government spending is dropping, too.

The major reason the economy contracted between the start of October and end of December 2012 was a major reduction in government spending in the fourth quarter.

Government spending has declined in nine of the last ten quarters, but it took a precipitous drop in the last quarter. This was mainly because military spending fell 22.2 percent. That’s the largest fall-off since 1972 (mainly due to reduced spending on the war in Afghanistan, and worries by military contractors about further pending cuts). State and local spending also continued to fall.

Personally, I’m glad we’re spending less on the military. It’s the most bloated part of the government. Major cuts are long overdue. But the military is America’s only major jobs program. Cutting the military without increasing spending on roads, bridges, schools, and everything else we need to do simply means fewer jobs.

What’s ahead? More of the same. So what possible reason do we have to suspect the recovery will pick up speed? None.

Don’t count on consumer spending. Wages and benefits continue to drop for most people, adjusted for inflation. States are hiking sales taxes, which will hit the middle class and the poor hardest. Deficit hawks in Washington are contemplating additional tax hikes on the middle class.

Housing prices are stabilizing, thankfully. But one out of five homeowners is still underwater, and the ranks of people renting rather than owning are rising. Health-care costs are also rising for most people in the form of higher co-payments, deductibles, and premiums.

Don’t count on government, either. Government spending continues to head downward. The White House has already agreed to major spending cuts, some to go into effect this year. Coming showdowns over the next fiscal cliff, appropriations to fund government operations, and the debt ceiling will likely result in more cuts.

More jobs and faster growth should be the most important objectives now. With them, everything else will be easier to achieve – protection against climate change, immigration reform, long-term budget reform. Without them, everything will be harder.

Yet we’re moving in the opposite direction — following Europe’s sorry example of failed austerity economics.

Upon Reflection: What I Believe

by John Lawrence from the San Diego Free Press

Well the New Year is upon us, and it's time to take stock and see if I can make any sense out of the goings on of the last year and the interaction of reality with my own mind. This is my crack at it.

1. I believe that gun ownership should be a privilege and not a right. The 2nd Amendment was constucted to be similar to the Swiss model in which citizens formed a militia for national defense. There was no standing army. That was the original intent of the framers of the Constitution for exactly the same reason: there was no standing army. Today that rationale is not relevant. Even Switzerland has moved the guns from homes to depots to prevent what little gun violence takes place there.

I don't believe background checks and a database of those with mental problems will solve much. In almost every mass murder, the perpetrators had no prior record of mental health problems although in retrospect everyone agrees that there were mental health problems. In almost every case, the guns were obtained legally. That tells you something which is that it is the proliferation of military type weapons with high capacity magazines that is the problem. These guns should not only be made illegal, but they should be taken off the streets, that is, confiscated or gotten rid of with buyback programs.

Terrorists have only been able to kill 17 people in the US since 9/11, but 88,000 Americans have died in gun violence from 2003 to 2010. Britain, which has very strict gun laws, had 41 gun murders in 2010 while the US had around 10,000. 6,626 Americans have died in the wars in Iraq and Afghanistan. About 3000 died in the tragedy of 9/11. The cost of the wars in Iraq and Afghanistan so far is around $4 trillion. At the same time zero dollars have been spent on the war on gun violence in the US in which about the same number of people die every year as died on 9/11 plus Iraq and Afghanistan (Americans, that is). Does this make any sense? As Pogo said, "We have met the enemy and the enemy is us."

2. I believe there should be a floor on poverty and a ceiling on wealth. For most of the last decade, the percentage of Americans living below the poverty line increased each year, from 12.3 percent in 2006 to 15.1 percent in 2010. In 2011 the official poverty rate was 15 percent, meaning that 46.2 million people live below the poverty line. The Walton family has more wealth than the lower 40% of the American population combined while workers at Wal-Mart subsist on wages so low that they need to supplement their incomes with food stamps and other social services driving up the cost of government.

Much of the wealth that  the upper 1% possesses is used to distrort the political system and was gained fraudulently by those in the financial sector. I wrote this in 2010 on Will Blog For Food:

"Hedge Fund manager John Paulson helped to design the Abacus fund for Goldman Sachs and filled it with a bunch of garbage. This fund was then peddled to unwary investors while Paulson shorted it. As a result, when the garbage in the fund went south, the investors lost $1 billion and Paulson's gamble netted him $3.7 billion. But that isn't even the worst of it. Taxpayers who bailed out the system actually paid Paulson the $3.7 billion - as if he needed it."

John Paulson hasn't been prosecuted for this fraudulent investment scheme and paid taxes on his income at the "carried interest" rate of 15% just like his fellow private equity fund manager, Mitt Romney. He has used some of his ill gotten gains to contribute to conservative causes as has billionaire Sheldon Adelson who has made his money off of seniors gambling away their social security checks.

I don't think anyone needs an income of more than $10 million a year, and a family of four needs an income of at least $40 thousand. These would be my recommended limits, for what they're worth, for the ceiling on wealth and the floor on poverty. Remember anyone earning an income of $10 million is going to store much of that as accumulated wealth which is going to provide a certain percentage return on investment (ROI in plutocrat speak) as unearned income each following year in addition to the $10 million earned (yeah, sure) income.

3. I believe that global warming is happening right now and is a result of human beings polluting the atmosphere with carbon emissions. As the saying goes "Don't shit where you eat" and we are shitting on Mother Earth. Future generations are going to have to eat and breathe here. Europeans and native Americans settled this continent without sending massive amounts of carbon into the atmosphere. We're going to have to relearn how to do the same, and there is not much time to waste without suffering the consequences that we're already starting to suffer.

As the number of billion dollar weather events starts to pile up, we will soon run out of money. We need to divert money from the bloated and wasteful military-industrial complex and spend it on infrastructure redevelopment in order to counteract and protect ourselves from the devastating aftermaths of extreme weather events like SuperStorm Sandy and SuperTyphoon Bopha. As I previously said, we have spent trillions to avenge the deaths of approximately 3000 people while spending hardly anything on gun control or infrastructure hardening. Both of the latter are bigger threats to American security than are the handful of self-proclaimed Al-Quaeda terrorists who have done a trivial amount of damage to the US since 9/11. Yet we spend trillions of dollars on them which mainly goes into the coffers of corrupt politicians and defense contractors. Not to mention the millions of civilians we have killed in Iraq and Afghanistan which guarantees a future generation of terrorists bent on avenging those deaths.

4. I don't believe that good middle class jobs are coming back as we recover from the Great Recession. They were disappearing long before the Great Recession hit. The combination of automating and computerizing manufacturing processes combined with the outsourcing of menial labor combined with the deunionization of the country means that we shouldn't sit around and hold our collective breaths expecting that everyone who has lost a good middle class job is going to get one back as we recover from recession and the unemployment rate gets down to 5%. The jobs that are being created are for the most part minimum wage service sector jobs. Even so-called full employment, if we achieve it, will consist in large part of those kinds of jobs. So what good is full employment as a measure of anything or a goal?

The so-called job creators are really job destroyers and they know that. They are just laughing up their sleeves as they automate and outsource thereby slashing the cost of production and increasing profits while at the same time calling for lower taxes on themselves on the grounds that they are job creators. This makes Wall Street very happy and top management is handsomely rewarded for doing this. As CEO pay soars, jobs are either outsourced or subcontracted to temp agencies who hire non-full time workers at minimal wages to do the heavy lifting. By this means the major corporations take no responsibility for low wages. It's somebody else, a sub-contractor, that's paying the low wages, not them. And a college education is no panacea. Middle aged college degreed folks are being let go, laid off and downsized never to be rehired again. A good job right out of college is no guarantee of continued employment as you become technologically obsolete in about 10 years.

What's the solution? I believe that self-employment is a big part of it. When you are employed by a corporation, you are vulnerable to being laid off for any reason at any time. When you're self employed, you can never be laid off. It may be too late for a lot of people, but young people coming up in school, even those college bound, should learn a trade while in high school that they can fall back on if need be. Most trades that serve the local community cannot and will not be outsourced and are amenable to self employment. The college educated crowd needs to think about what occupations and professions allow them to be self employed and which only allow them to be employees of some corporation. And most corporations don't want you if you've been laid off after the age of 50 when you are most vulnerable and desperately need a job.

I also believe that government has to be the employer of last resort. Corporations are in the business of outsourcing and creating temp jobs. Even startups usually only need employees until they really get rolling, go public and get obsessed with their stock price which means they need to reduce the cost of labor. At that point the job creators seek to creatively destroy American jobs and pocket increased profits.

Well, folks, there you have it in a nutshell. These are some of the topics I will be writing about in 2013. I also like to bring in the San Diego connection as what's happening in the wider world is also very definitely happening here as well. As far as our political system is concerned, my prediction is that Republicans in Congress will obstruct any meaningful legislation whatsoever and put a halt to any initiative President Obama wants to make. Better hope that 2014 brings a return to majorities in both the House and Senate for Democrats and that Obama can manage to get something constructive done for the good of the country in his last two years in office.

Happy New Year to All.

 

An Invented Crisis Threatens the Forgotten Millions

Published on Friday, December 7, 2012 by The New York Times

by Paul Krugman

Let’s get one thing straight: America is not facing a fiscal crisis. It is, however, still very much experiencing a job crisis.

It’s easy to get confused about the fiscal thing, since everyone’s talking about the “fiscal cliff.” Indeed, one recent poll suggests that a large plurality of the public believes that the budget deficit will go up if we go off that cliff.

In fact, of course, it’s just the opposite: The danger is that the deficit will come down too much, too fast. And the reasons that might happen are purely political; we may be about to slash spending and raise taxes not because markets demand it, but because Republicans have been using blackmail as a bargaining strategy, and the president seems ready to call their bluff.

Moreover, despite years of warnings from the usual suspects about the dangers of deficits and debt, our government can borrow at incredibly low interest rates — interest rates on inflation-protected U.S. bonds are actually negative, so investors are paying our government to make use of their money. And don’t tell me that markets may suddenly turn on us. Remember, the U.S. government can’t run out of cash (it prints the stuff), so the worst that could happen would be a fall in the dollar, which wouldn’t be a terrible thing and might actually help the economy.

Let’s get one thing straight: America is not facing a fiscal crisis.

Yet there is a whole industry built around the promotion of deficit panic. Lavishly funded corporate groups keep hyping the danger of government debt and the urgency of deficit reduction now now now — except that these same groups are suddenly warning against too much deficit reduction. No wonder the public is confused.

Meanwhile, there is almost no organized pressure to deal with the terrible thing that is actually happening right now — namely, mass unemployment. Yes, we’ve made progress over the past year. But long-term unemployment remains at levels not seen since the Great Depression: as of October, 4.9 million Americans had been unemployed for more than six months, and 3.6 million had been out of work for more than a year.

When you see numbers like those, bear in mind that we’re looking at millions of human tragedies: at individuals and families whose lives are falling apart because they can’t find work, at savings consumed, homes lost and dreams destroyed. And the longer this goes on, the bigger the tragedy.

There are also huge dollars-and-cents costs to our unmet jobs crisis. When willing workers endure forced idleness society as a whole suffers from the waste of their efforts and talents. The Congressional Budget Office estimates that what we are actually producing falls short of what we could and should be producing by around 6 percent of G.D.P., or $900 billion a year.

Worse yet, there are good reasons to believe that high unemployment is undermining our future growth as well, as the long-term unemployed come to be considered unemployable, as investment falters in the face of inadequate sales.

So what can be done? The panic over the fiscal cliff has been revelatory. It shows that even the deficit scolds are closet Keynesians. That is, they believe that right now spending cuts and tax hikes would destroy jobs; it’s impossible to make that claim while denying that temporary spending increases and tax cuts would create jobs. Yes, our still-depressed economy needs more fiscal stimulus.

And, to his credit, President Obama did include a modest amount of stimulus in his initial budget offer; the White House, at least, hasn’t completely forgotten about the unemployed. Unfortunately, almost nobody expects those stimulus plans to be included in whatever deal is eventually reached.

So why aren’t we helping the unemployed? It’s not because we can’t afford it. Given those ultralow borrowing costs, plus the damage unemployment is doing to our economy and hence to the tax base, you can make a pretty good case that spending more to create jobs now would actually improve our long-run fiscal position.

Nor, I think, is it really ideology. Even Republicans, when opposing cuts in defense spending, immediately start talking about how such cuts would destroy jobs — and I’m sorry, but weaponized Keynesianism, the assertion that government spending creates jobs, but only if it goes to the military, doesn’t make sense.

No, in the end it’s hard to avoid concluding that it’s about class. Influential people in Washington aren’t worried about losing their jobs; by and large they don’t even know anyone who’s unemployed. The plight of the unemployed simply doesn’t loom large in their minds — and, of course, the unemployed don’t hire lobbyists or make big campaign contributions.

So the unemployment crisis goes on and on, even though we have both the knowledge and the means to solve it. It’s a vast tragedy — and it’s also an outrage.

© 2012 The New York Times

Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, The Return of Depression Economics, and his most recent, End This Depression Now!.

Today’s Job Numbers Show Why Job-Creation Must Take Precedence Over Deficit Reduction

by Robert Reich

Friday, December 7, 2012

 

Today’s jobs report shows an economy that’s still moving in the right direction but way too slowly, which is why Washington’s continuing obsession with the federal budget deficit is insane. Jobs and growth must come first.

The cost of borrowing is so low — the yield on the ten-year Treasury is near historic lows — and the need for more jobs and better wages so high, and our infrastructure so neglected, that a reasonable government would borrow more to put more Americans to work rebuilding the nation.

Yes, unemployment is down slightly and 146,000 new jobs were created in November. That’s some progress. But don’t be overwhelmed by the hype coming out of Wall Street and the White House, both of which would like the public to believe things are going quite well.

The fact is some 350,000 more people stopped looking for jobs in November, and the percent of the working-age population currently employed continues to drop — now at 63.6%, almost the lowest in 30 years. Meanwhile, the average workweek is stuck at 34.4 hours.

The slowness of the jobs recovery isn’t because of Hurricane Sandy, which it turns out had very little impact on November’s job numbers (the hurricane’s negative effects were more than offset by a Thanksgiving earlier than normal, and an early start to the Christmas buying season). And it’s not because of any uncertainty over the looming “fiscal cliff.” Most consumers in November remained oblivious about any pending cliff.

The reason the economy is still under-performing is overall demand is inadequate. Businesses won’t create more jobs without enough customers. But consumers can’t and won’t spend because they don’t have the money. Unless or until the private sector — businesses and consumers — are able to boost the economy, government must be the spender of last resort.

But the nation has bought into the Republican frame of thinking that we have to “get our fiscal house in order” before the economy can get back on track. Although Barack Obama was reelected and Democrats gained seats in the House and Senate, that frame is still dominating debate.

And even though we’re near a fiscal cliff that illustrates how dangerous deficit reduction can be when so many people are still unemployed, the White House and the Democrats seem incapable of changing the frame of debate.

But remember: Jobs must come first. Job creation must be our first priority