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Tag: "new gilded age"

TrumpCare: Republican Class Warfare

[ 33 ] March 11, 2017 |

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Finally, someone is standing up for our wealthiest citizens and the lives of endless luxury they deserve.

Two of the biggest tax cuts in Republican proposals to repeal the Affordable Care Act would deliver roughly $157 billion over the coming decade to those with incomes of $1 million or more, according to a congressional analysis.

The assessment was made by the Joint Committee on Taxation, a nonpartisan panel that provides research on tax issues.

It is not unusual for tax cuts to benefit mostly the wealthiest, but still save some money for a majority of Americans. But the benefits of these reductions would be aimed squarely at the top.

The provisions would repeal two tax increases on high earners enacted in 2010 to help pay for the Affordable Care Act: an increase in capital gains taxes and other investment-related income, and a surcharge on Medicare taxes.

People making $200,000 to $999,999 a year would also get sizable tax cuts. In total, the two provisions would cut taxes by about $274 billion during the coming decade, virtually all of it for people making at least $200,000, according to a separate assessment by the committee.

“Repeal-and-replace is a gigantic transfer of wealth from the lowest-income Americans to the highest-income Americas,” said Edward D. Kleinbard, a professor at the University of Southern California law school and former chief of staff for the Joint Committee on Taxation.

And by deserve, the rich have the right, nay, the duty, to drink champagne and brush their teeth with luxury toothpaste while watching the poor suffer and die. What a good time it will be!

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Organizing Against the Plutocrats

[ 11 ] March 7, 2017 |

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Sarah Jaffe has an interview with labor activist and overall genius Stephen Lerner that explores some of the campaigns he’s been involved with recently to connect labor organizing with targeting the plutocrats that dominate the New Gilded Age economy. The whole thing is well worth your reading and consideration. A brief excerpt:

We are doing a lot of work on mapping the different Trump worlds. There are the people, like Mnuchin and the Goldman Sachs folks that are directly in the administration and we map all the benefits that their companies will reap from that. Then, there are the Steve Schwarzmans and the Carl Icahns and this other set of players that run committees for him. So, they can essentially create government policies that will further enrich their companies. Then, there is a third set of people like John Paulson, who made all his money in the housing crisis, who may not be directly working for Trump, but who supported him and is now going to reap the benefits. For example, he is heavily invested in Puerto Rico.

What we have been looking at is, how do you identify the corporate collaborators with Trump, and then look at ways to start putting pressure on them so that they pay a price for the fact that they are in bed with Trump?

One thing is that many of these folks who are in bed with Trump have significant investments from public employee pension plans and college endowments. We have been ongoing running the campaign saying that pension funds and endowments basically are getting lousy deals from these guys, meaning they pay a lot of money to invest in them and they get lousy returns. We are going to escalate that, but we are also going to look at some of the hedge funds that have really atrocious policies and raise the issue that colleges and pension plans shouldn’t invest in racist companies. For example, this guy Robert Mercer whose family owns part of Breitbart. They are Cambridge Analytica, the secret polling apparatus for Trump. I think it is the city of Providence in Rhode Island has invested in one of his funds.

We want to start raising the issue for a bunch of these people that we should cut off their capital. Basically, public dollars or the dollars of progressive institutions shouldn’t be invested in them. Another thing we are doing is we have been introducing legislation on a state-by-state basis to tax the carried interest exemption. This is a loophole that lets them take the regular income that most people pay 30-35 percent on and they get to take 15 percent. I won’t bore you with the details of how they do it, except it is an $18 billion a year tax loophole.

Taxing it on a state level, on the one hand in New York it would produce $3.7 billion in revenue, but the other thing it does is it cuts off their capital. One of the reasons they can give so much money politically is because they have a special tax loophole that gives them $18 billion in cash to play with. One of the ways we can hurt them is cutting off tax breaks and cutting off investment. I think there is a sweet irony of their greed in getting in bed with Trump may make them much more susceptible to cutting off their capital.

Important stuff and a lot of room for organizing against these people. The bank workers organizing with the Communication Workers of America with significant support from overseas bank worker unions is one area that could lead to real success.

Life Under Puzder

[ 196 ] February 8, 2017 |

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I won’t attack Andy Puzder for hiring an undocumented worker to clean his house, but I sure will attack for everything else, including how he treats his own workers.

In 1984, I was hired as a cashier at Hardee’s in Columbia, S.C., making $4.25 an hour. By 2005, 21 years later, my pay was only at $8 an hour. That’s a $3.75 raise for a lifetime of work. Adjusted for inflation, it’s only a 2-cent raise.

Andrew Puzder, the chief executive since 2000 of CKE — which owns Hardee’s, Carl’s Jr., and other fast-food companies — is now in line to become the country’s next labor secretary. The headlines ponder what this may mean for working people in America, but I already know.

I already know what Trump/Puzder economics look like because I’m living it every day. Despite giving everything I had to Puzder’s company for 21 years, I left without a penny of savings, with no health care and no pension. Now, while I live in poverty, Trump, who promised to fix the rigged economy, has chosen for labor secretary someone who wants to rig it up even more. He’s chosen the chief executive of a company who recently made more than $10 million in a year, while I’m scraping by on Supplemental Security payments.

When I began at Hardee’s, I was hopeful. I liked the work and received a promotion to shift manager after only a month. But the pay remained low, and even with my husband’s salary as the head cook at Fort Jackson, we relied on food stamps and Medicaid. We were two full-time-employed adults; we shouldn’t have had to turn to the government, but we had kids to raise, and so we were left with no other choice.

Low pay wasn’t the only reason my family struggled: It was the lack of benefits and respect, too. I remember once my manager came to my house on a day off and demanded I go into work. I remember trudging through Hurricane Katrina to get to the store. I remember being denied a raise multiple times.

In 2005, I was diagnosed with chronic obstructive pulmonary disease and had to stop working. After more than two decades at Hardee’s, I left without any savings, a 401(k), pension or health benefits. That’s Puzder’s America.

But hey, fast food workers are all 16 year old kids in their first job and we don’t need to worry about paying them a living wage, right? It doesn’t matter I guess since Puzder will lead us on our Great Leap Forward of Automation in the next four years. Massive unemployment and desperate poverty won’t just be the fate of fast food workers anymore! The New Gilded Age is a glorious time!

The State of the Unions

[ 12 ] January 27, 2017 |

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Predictably terrible! The Bureau of Labor Statistics has released its annual report on union density. And who knows, maybe for the last time as the Trump administration continues its war on information. Anyway, the Center for Economic Policy and Research put together a report summarizing it. And union density continues to decline, sometimes by up to 2 percent in some states. Obama’s labor record as far as within the Department of Labor was pretty solid, but all of that meant nearly nothing for actually organizing unions. But hey, Trump named a new NLRB chair and I’m sure that will help!

The Cabinet of Deplorables

[ 21 ] January 19, 2017 |
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While Rick Perry discovers just what the hell the department he is going to run actually does and while Ben Carson examines his own stool in wondrous awe, Betsy DeVos utterly embarrasses herself in a hearing that LAMAR! rigged for her. But it doesn’t matter because she bought her position, just like a good Gilded Age capitalist does.

In 1997, she brashly explained her opposition to campaign-finance-reform measures that were aimed at cleaning up so-called “soft money,” a predecessor to today’s unlimited “dark money” election spending. “My family is the biggest contributor of soft money to the Republican National Committee,” she wrote in the Capitol Hill newspaper Roll Call. “I have decided to stop taking offense,” she wrote, “at the suggestion that we are buying influence. Now I simply concede the point. They are right. We do expect something in return. We expect to foster a conservative governing philosophy consisting of limited government and respect for traditional American virtues. We expect a return on our investment.”

Owning the country should provide that. All they need to do know is reintroduce slavery. Which I assume will be on the Republican platform in 2020, assuming they haven’t started the years over at 1 to honor Emperor Tangerine, a la the French Revolution.

The Modern Day Yellow Dog

[ 26 ] January 17, 2017 |

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The yellow dog contract was common in early 20th century work. These entailed employers forcing workers to sign a contract that explicitly stated they could not join a union as a condition of employment. In the 1915 case of Coppage v. Kansas, the Gilded Age Supreme Court ruled this legal. Finally in 1932, the Norris-LaGuardia Act banned them.

The New Gilded Age Supreme Court has decided to take up the modern version of this, the binding arbitration contract.

The Supreme Court on Friday agreed to decide whether companies can use employment contracts to prohibit workers from banding together to take legal action over workplace issues.

The court accepted three cases on the subject. They follow a series of Supreme Court decisions endorsing similar provisions, generally in contracts with consumers. The question for the justices in the new cases is whether the same principles apply to employment contracts.

In both settings, the challenged contracts typically require two things: that disputes be raised through the informal mechanism of arbitration rather than in court and that claims be brought one by one. That makes it hard to pursue minor claims that affect many people, whether in class actions or in mass arbitrations.

I think we know where this is going and why Merrick Garland is not on the Supreme Court. Republicans saw a real threat to their plan to bring us back to the Gilded Age. And they were going to stop at nothing to kill that threat, ranging from unprecedented destruction of norms concerning confirming justices to approving of massive Russian interference in our election to allow Emperor Tangerine to take the throne despite his massive lawbreaking and impeachable offenses.

If the Roberts court, presumably up to 5 members thanks to Trump outsourcing his selections to Jim DeMint by the time oral arguments occur, there is almost no way it does not rule in favor of employers. To do so would take away one of the only tools workers have without unions to ensure some sort of rights on the job. Forcing mandatory arbitration returns the workplace to the Lochner era of the Gilded Age, where workers and employers were legally assumed to be equals in power on the job, inevitably resulting in the utter crushing of workers. Going back to this point is not the policy of Donald Trump. It’s the policy of the entire Republican Party.

The Philosophy of the New Gilded Age

[ 245 ] January 11, 2017 |

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That Ben Shapiro is a horrible human being is not up for debate. And hey, at least he is articulating the true Republican position on health care.

On Sunday, Senator Bernie Sanders took to Twitter to deliver one of his usual messages. “People go to the doctor because they’re sick, get a diagnosis from their doctor, but they can’t afford the treatment,” he wrote. “How crazy is that!” I responded snarkily, “I go to a fancy store to check out a piece of furniture, can’t afford it. That’s totally crazy!”

This prompted spasms of apoplexy on the left. How could I dare to compare medical care to furniture? Was I equating the value of the two? Was I suggesting that the necessity of furniture was somehow comparable to the necessity of medical care?

Yes, imagine the outrage from the left. Who can imagine why someone would be offended!?!

Morally, you have no right to demand medical care of me. I may recognize your necessity and offer charity; my friends and I may choose to band together and fund your medical care. But your necessity does not change the basic math: Medical care is a service and a good provided by a third party. No matter how much I need bread, I do not have a right to steal your wallet or hold up the local bakery to obtain it. Theft may end up being my least immoral choice under the circumstances, but that does not make it a moral choice, or suggest that I have not violated your rights in pursuing my own needs.

Welcome to the core ideology at the heart of the actual replacement of the ACA! Die poor person, die!

But the left believes that declaring necessities rights somehow overcomes the individual rights of others. If you are sick, you now have the right to demand that my wife, who is a doctor, care for you. Is there any limit to this right? Do you have the right to demand that the medical system provide life-saving care forever, to the tune of millions of dollars of other people’s taxpayer dollars or services? How, exactly, can there be such a right without the government’s rationing care, using compulsion to force individuals to provide it, and confiscating mass sums of wealth to pay for it?

Actually, yes, that’s precisely what I demand.

Let’s say your life depended on the following choice today: you must obtain either an affordable chair or an affordable X-ray. Which would you choose to obtain? Obviously, you’d choose the chair. That’s because there are many types of chair, produced by scores of different companies and widely distributed. You could buy a $15 folding chair or a $1,000 antique without the slightest difficulty. By contrast, to obtain an X-ray you’d have to work with your insurance company, wait for an appointment, and then haggle over price. Why? Because the medical market is far more regulated — thanks to the widespread perception that health care is a “right” — than the chair market.

This is almost amazingly stupid, even for Shapiro. Clearly, ending any government regulation of medicine will allow for cheap medical care for all! Cancer treatment is totally like chairs! Because, hey, repealing the Pure Food and Drug Act and replacing it with a return of patent medicines is some kind of health care!

Is Growing Inequality Inevitable?

[ 93 ] January 3, 2017 |

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Of course growing inequality is not inevitable. Robert Kuttner:

But can we ever get that back? Of course we can—the obstacles are political, not economic.

We could have much higher minimum wages. We could stop the union-bashing. We could restore a brand of globalization that promotes rather than undermines national social standards. We could invest massively in a green transition, modeled on the World War II mobilization that reduced unemployment from 14 percent to 2 percent in two years and produced tens of millions of good jobs.

As technology replaces human work, we could also give everyone a share of that new production, the way the Alaska Permanent Fund gives all Alaskans a share of that state’s oil revenues. Any advances created with the help of government—from subsidy of biomedical research to free-riding on the internet—could be subject to a share-the-wealth levy. Author Peter Barnes is the inspiration for this idea.

Is this broad vision crazy? It is far less crazy than the folly of supply-side economics that is back in fashion, which will only make America more needlessly unequal.

As Kuttner points out, this is a question of political power, not some sort of inevitable force in the economy. In the New Gilded Age, corporations have torn down most of the limitations to their wealth that were erected between the 1930s and 1970s to create a more equitable society. They are now seeking to eliminate the last of those barriers (and largely will in the next 4 years) and repeal much of the Progressive Era as well. These are grim times indeed. But they are not inevitable. The obstacles we have to overcome to turn this tide are certainly no greater than those of workers a century ago. But we have to commit to this fight to do it. A more robust Democratic Party leading an actual fight would help but we are a long ways from that. And the loss of class consciousness, even among the white working class toward other members of the white working class (racism has usually trumped class consciousness across races of course) certainly makes this harder. But it is not impossible. It will however probably be one of the critical struggles of our remaining lives.

CEO Tax

[ 43 ] December 27, 2016 |

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This is an interesting approach to grotesque CEO pay in the New Gilded Age.

In Portland, Oregon, lawmakers aren’t holding their collective breath. In a move that made international headlines, Portland’s City Council voted earlier in December to approve a first-of-its-kind tax on public companies that pay their chief executive officers more 100 times their median workers’ pay.

According to Portland Commissioner Steve Novick, the tax aims to address growing income inequality by targeting “the phenomenon of outrageous CEO pay.” Some economists, said Novick, argue that escalating CEO pay is more than just a symbol of income disparity in the U.S. but has actually contributed to the nagging problem. Novick sponsored the ordinance authorizing the new tax.

“If we can do something to roll back the explosion in CEO pay, then we can do something about the explosion of economic inequality in general,” he said.

Portland’s new tax, effective in 2017, applies to publicly traded companies that do business in the city. Firms that exceed the 100-to-1 CEO-to-median worker pay ratio will face a 10 percent surcharge on their city tax bill. (Portland already levies a 2.2 percent business tax on net income.) Companies that pay their CEOs more than 250 times the median employee pay will pay a 25 percent surcharge.

More than 500 publicly traded firms do business in Portland — including Wells Fargo (WFC), Walmart (WMT) and General Electric (GE), companies known for their “sky-high CEO pay,” said Novick.

To monitor CEO compensation, Portland will rely on data that public companies must file with the Securities and Exchange Commission beginning in 2017. Public companies will be required to report their CEO-to-employee pay ratios to the SEC, under a rule designed to shine on a light on extreme pay gaps and allow cross-company comparisons.

While income inequality is a national problem, Novick said it has contributed to Portland’s current housing-affordability crisis. The fast-growing Northwest city regularly leads the country in home-price appreciation, partly because of the strong demand for housing created by an influx of new residents in recent years.

This is actually a pretty small tax, expected only to raise a few million a year for the city. And it has infuriated the city’s business community. I don’t know enough about the legal side of this to have much of a clue as to how it would stand up in court. But if it was applied with high rates in more municipalities and states, since it obviously isn’t going to happen nationally, what sort of impact could this make on pay disparities and income inequality?

Declining Upward Mobility

[ 110 ] December 12, 2016 |

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The American Dream has long evoked the idea that the next generation will have a better life than the previous one. Today, many Americans feel that dream is in jeopardy.

While I have my objections to the entire idea of “The American Dream” because it has a priori assumptions that will and should be at the bottom of a society that values competitiveness and pulling yourself up by your bootstraps over lifting all boats, there’s no question that it’s a powerful myth. And at its core is that if people work hard, their children will have the opportunity to live a better life than they did. But in the New Gilded Age, that’s not happening anymore.

The widening gap between rich and poor Americans has pushed the chances of children earning more money than their parents down to around 50 percent, economic researchers say. That’s a sharp fall from 1940, when 90 percent of kids were destined to move up the income ladder.

Describing an American dream that for many has faded into a less plentiful reality, Stanford economics professor Raj Chetty said in a news release, “It’s basically a coin flip as to whether you’ll do better than your parents.”

The downward trend held true across the U.S. — and the steepest declines were seen among middle-class families, according to Chetty and his fellow researchers in the Equality of Opportunity Project.

The study detailed “absolute income mobility” from one generation to the next by comparing the household income of 30-year-olds to what their parents made at the same age. The Stanford study used data from both the U.S. Census and anonymized Internal Revenue Service records to compile stats for people born between 1940 and 1984.

Well, that is certainly not good and part of a much larger failure of policymakers to think through the implications of globalization and automation for average Americans. And where it is the worst?

Over that period, it became less likely that children born in every U.S. state would out-earn their parents, with the largest drops in upward mobility seen in Michigan, Illinois and other parts of the industrial Midwest.

And this is why I simply don’t get why people are so completely dismissal of the economic problems of this region turning voters toward Trump. While, once again, Trump’s victory is by no means entirely or even primarily because of the economic anxiety suffered by the white working class, there’s no question that in these states, it played a critical factor in swinging some voters over to him. They knew Hillary Clinton had no real answer for them (and lets face it, she didn’t. Neither did Obama) because the Democratic Party could never come up with a solution for the loss of good union jobs in these states. Trump just flat out lied to them. But economic mobility in these states is particularly horrible, in no small part because the government has not engaged in the type of regional economic planning necessary to guide these states out of deindustrialization. So it’s hardly surprising that voters there would find any possible alternative something to run with, especially when that alternative made them feel empowered with white supremacy.

Incidentally, here’s a really neat website that explores the history of places like the abandoned factory in Rockford, Illinois I used for the above image.

Donald Trump: Republican

[ 45 ] December 9, 2016 |

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Once again, it’s worth noting that while there are some things about Donald Trump that are uniquely horrible, most of his appointments are just bog-standard right-wing choices any Republican president would make. He just named Cathy McMorris Rodgers as Secretary of the Interior, a completely expected and utterly horrendous choice to administer the nation’s public lands. Government by Goldman Sachs is exactly what we would have seen with Mitt Romney as president. No real difference with Trump.

Never mind that these cabinet members should be negotiating for you and not with you. Trump was supposed to be an unorthodox Republican, a champion of the (white) working class. Instead his cabinet picks represent mainstays of the Republican elite: neoconservative hawks, Wall Street bankers, climate change deniers, a guy literally nicknamed the “foreclosure king.” His pick for Labor, Andrew Puzder, is even pro-immigration, a classic GOP elite position.

If voters were hoping to express their disgust at both Republicans and Democrats in electing Trump, too bad.

Erik Visits an American Grave, Part 59

[ 46 ] November 27, 2016 |

This is the grave of Leona Helmsley.

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Born Lena Rosenthal in Marbletown, New York in 1920, Leona Helmsley was always a rather strange individual, having changed her name over and over again for years before deciding upon Leona Roberts. She married an attorney and then a garment industry capitalist before she met real estate entrepreneur Harry Helmsley in 1968 while working in a real estate job. She was already a millionaire, in part due to his previous marriages and in part to her work in selling luxury New York apartments. She joined Helmsley’s firm as a vice-president. He then divorced his wife of 33 years and married her in 1972. Her real estate license was suspended soon after for forcing the tenets of one her apartment buildings to buy condos. She then turned to managing Helmsley’s hotel empire.

Leona Helmsley was not a nice person. When her only son died in 1982, she sent his wife an eviction notice within a few days of his funeral. She was known for force employees on their knees to beg for their jobs, refusing to pay bills for her projects, and for screaming at people. When their engineer, trying to protect himself, asked Helmsley to sign a document invoicing expenses, she screamed “You’re not my fucking partner! You’ll sign what I tell you to sign.” The employees of her hotels actually created an alarm system when she came to visit one of the properties so they could prepare for the horror to come.

Tax evasion was a particular specialty of the Helmsleys. Her most famous statement of course was “We don’t pay taxes. Only the little people pay taxes.” It got so bad that even the utter loathsome U.S. Attorney Rudolph Giuliani indicted her and her husband on tax fraud and extortion, by which time they owed over $4 million in back taxes. She was convicted and originally sentenced to 16 years in prison, although her lawyers got it reduced to 19 months.

When she died in 1997, Helmsley was worth around $5 billion. She famously left her dog a $12 million trust.

Donald Trump of course has claimed that she wanted to have sex with him.

As you can see, the Helmsleys were all class and subtlety. And thus they did something that the rich haven’t really done in a century–build themselves a gigantic Gilded Age-style mausoleum, of which you only see a small bit of in this picture I took. They wanted the dog interred with them, but New York state laws forbids that. Hopefully President Trump can Make New York Great Again and fix this tyranny.

Helmsley has been portrayed a couple of times on the screen. Suzanne Pleshette played her in the 1990 TV movie Leona Helmsley: The Queen of Mean. And Mary Manofsky played her in a 2007 episode of The Ointment, in which she evidently appears from the grave. That’s a horror story too scary for me.

Leona Helmsley is buried in Sleepy Hollow Cemetery, Sleepy Hollow, New York.

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