Welfare State? Not So Much

Paul Krugman shows a graph of government transfer payments to individuals, other than medicare and medicaid:  It shows that such payments shoot up during recessions, when people are out of work, then drop back down as the economy picks up.  Currently about 8% of GDP.  

This certainly only measures transfers to the poor, elderly, and working class.  Welfare for the rich wouldn’t be included.

Robber Barony Is Back

http://topincomes.g-mond.parisschoolofeconomics.eu/#Graphic:
select:
United States
1917-2009
Average Incomes
bottom 90% average income - including capital gains

Shows the submerged 90% of us earn the same (per family) in real terms as we did in the late 1960s. Yet the typical family now has more wage earners, working more hours.

Same site, select
Top Income Shares
top .01% - including capital gains

Shows the hunting animals eating the entire carcass except during 1942-1981, when we had effective antitrust law, labor law, and progressive taxation.

In only these forty years was the average family income of the top .01% "only" 165 times the average family income.  Before 1942 and after 1981, the rich took a much larger share.  In 2010 it was 462 times the average and increasing.  (If only the top .01% earned anything, their share would be 10,000 times the average.   That the one family in 10,000 now takes nearly 5% of all the income, is appalling.)

The rich get their income not for what they do, but for what they own.  They claim to be "job creators."  In truth, the only job creator is a customer, who buys something.  We have to get money back in the hands of those who spend it--the nonrich.  When the only people with money to spend have all the stuff they can use, the economy collapses.  These booms and busts happened regularly up through the Great Depression.  It was political action that transformed the working class into the middle class, avoiding the booms and busts.  Deregulation, detaxing the rich, eroding worker rights, free trade, since 1981 are bringing back the bad old days of many serfs, one lord.  Only political action can reverse the trend.  We have to restore antitrust laws, restore workers' rights, establish fair trade not free trade, tax the rich.

Norway has a much fairer balance of power between employees and employers, partly due to nationwide collective bargaining.  U.S. labor laws have been eroded since they were enacted in 1935, by anti-labor court decisions and anti-labor legislation.  Now, management can ignore labor agreements and labor law without serious consequences.

Only Money Has Free Speech

As it is now, advertisers make the decisions about the media, not the people, because the media exist for the purpose of making money. . . .

The fact that people with money can hire lobbyists to represent them in Washington limits equity in the political system. Poor people don’t have the money for this—if they spent everything they had, they couldn’t get enough money together to equal the lobbying power of the rich. After an election, people don’t have access to government, because lack of money prevents them from having equal access to the people in power. That’s an inequity that’s built into the system. That’s where money is more powerful than people.

People do have a right to vote. But whom do they have a right to vote for? They have a right to vote for whoever is chosen. That’s our dilemma right now. It starts with how much it costs to run for office—it now costs $3 million to run for governor in Tennessee. That rules out a lot of people. So the choice is between two people who are willing to spend $3 million, which is not a democratic choice. You can say that the people have a right to vote, but they only have the right to choose between two millionaires or people whom other people with money are willing to back.

—Myles Horton, The Long Haul, © 1990, pp. 169-170

ALEC Corporations: Boycott Them

Corporate members of the American Legislative Exchange Council write model legislation and pressure state legislatures to adopt it. These laws break unions, take away worker protections and environmental regulations, capture control of government for use of corporate interests at the expense of the public good. They include: AT&T, Kraft Foods, UPS, Walmart, Amazon.com, FedEx, Frito-Lay, HP, JC Penney, McDonalds, Microsoft, Miller Brewing Company, Outback Steakhouse, Sprint Nextel, Sony, Time Warner, United Airlines, Verizon, Visa, American Express, KFC/Taco Bell, Walgreens, and hundreds of others. Money you spend there will be used as weapons against democracy, against the middle class, against the environment, against civil liberties. Check the list before you buy. Shop at the smallest, most local places.

Urgent Call to Action: Save First-Class Mail

The management of the US Postal Service has proposed a drastic and irreversible reduction in first-class mail delivery standards. Currently 41.5 percent of first-class mail is delivered in one day, 26.6 percent in two days, and 31.6 percent in three days. The proposal would eliminate one-day delivery altogether. Two-day deliveries would increase to 50.6 percent and three-day to 49.1 percent. The proposed increase in delivery time would be devastating to the many individuals, small businesses, and entrepreneurs who rely on first-class mail.

The proposal, the stated goal of which is to “bring operating costs in line with revenues,” would enable the USPS to eliminate 60 percent of the USPS’s processing-and-distribution plants, purportedly to cut costs. But the presumed savings are actually quite small (only $3 billion, or 4 percent of the USPS’s annual budget). All the mail would still have to be delivered. It would just have to be hauled farther to be processed, thus increasing fuel costs and the commensurate harm to the environment.

The possibility of raising revenues by increasing prices and expanding services is never mentioned. Bowing to pressure from the Direct Marketing Association, the postal service recently withdrew a request for an “exigent rate increase.” The USPS charges direct mailers less than what it costs to deliver their advertising mail, so in essence the direct mailers are stealing from the USPS with each piece of mail they send. Regarding the withdrawal of the proposed rate increase, Postmaster General Patrick Donahoe exclaimed that the direct mailing industry is “way too fragile” to survive a price increase. Clearly, the health of that industry is more important to him than the health of the USPS.

In its projection of the effects of the proposed change in service standards, the USPS does not even mention the American people. It lists only the possible effects on “commercial mailers.” Noncommercial mailers—citizens, entrepreneurs, small businesses, and rural communities—are not given even the slightest consideration.

Because the reduction in service standards would enable the USPS to dismantle its extraordinary processing-and-distribution network, a return to the current service standards would be impossible, thus permanently undermining the USPS’s ability to serve the American people, further reducing mail volume and postal revenues, and further imperiling the US Postal Service itself. The vast majority of the American people won’t fully realize the effects of the proposed reduction in service until it’s too late.

The notice in the Federal Register invites comments from the public between now and October 21, 2011. Letters may be sent to Manager, Industry Engagement and Outreach, United States Postal Service, 475 L’Enfant Plaza, SW – Room 4617, Washington, DC 20260, or e-mailed to industryfeedback@usps.com.

In hopes of gathering more signatures, we have created a petition at Change.org calling for retention of the current first-class service standards. We have less than two weeks to gather as many signatures as possible. Please sign the petition and write your own letter, and ask others to do the same. Once USPS management’s proposal is accepted, there will be no turning back.

Privatized Postal Disservice

This article, “Privatised mail: a second-class delivery” in The Guardian sheds light on some of the chaos and hardship resulting from privatized postal service. Undelivered mail stacks up in the apartments of privatized carriers in Holland, who are paid piece rates amounting to far less than the minimum wage.

The longer version of the same article, “In the Sorting Office,” in the London Review of Books, includes some of the political history in the Reagan-Thatcher era that brought the privatization about.

The winners from Holland’s liberalization of the postal market were the big organizations who bulk mailed. The losers? Almost everybody else.

The author, James Meek, wrongly accepts that the Internet necessarily means less demand for postal service. The opposite is true. Customers e-mailing documents to USPS to be printed at and delivered from the destination post office could be the biggest boon to mail since paper.

USPS: Vultures Roosting in the Eagle's Nest

The vultures on the verge of destroying the US Postal Service are not merely circling. They've landed in the nest, ready to plunder and privatize, having fully captured USPS management and oversight. It's clear to many that the the Post Office has enemies in Congress, to wit Rep. Darrell Issa (R-CA), among others. But it's also apparent that there are those in management and oversight who are just as determined to destroy the Post Office, who are in the service not of the American people but of those who consider the USPS their competition and who are eager to devour the advantages it currently maintains.

The postmaster general plans to make drastic cuts that will do away with first-class service, give the pickings to FedEx and the like, and continue propping up bulk mailers (who currently pay less than what it costs the USPS to process and deliver their junk mail). Those cuts will devastate small towns and inner cities, reduce the USPS to a third-class bulk mailer, and replace its middle-class workforce with a workforce of the working poor. All this for what?

Abdicating 6-day delivery to private postal services would, by Government Accountability Office estimates, save costs of only 4 percent of the USPS budget. USPS management has admitted that it wiped one small-town post office off the map because it "'cost' the USPS $1,500 a year more than it made in sales of stamps and money orders." Never mind the mandate that the USPS serve all Americans. Never mind that the USPS is not meant to make a profit but rather to be a self-sustaining service to the American people. Never mind that closing a post office because it is not "profitable" is against the law.

The devastating cuts proposed by the postmaster general—the projected savings of which are absurdly small—will serve only to weaken the USPS, not strengthen it, not put it on firm financial footing. All of the aspects of USPS service that are on the chopping block—6-day delivery, half the distribution network, half the retail network, half the workforce—represent USPS's greatest assets. So why proceed when the financial savings are so small and the resulting loss so devastating? The only conceivable answer is that the intent is not to save money or alleviate the USPS's financial difficulties, but to serve the interests of the vultures ready to devour this national treasure.

The planned devastation of the USPS is based not on need but on greed. The claim of financial emergency is a pretext to break the USPS up and feed the choice bits to the private mailing industry.

The postmaster general says he expects to close 16,000 post offices in six years—that's half of the nation's post offices! And he plans to close or consolidate as many as 313 of the 487 processing plants by 2013—destroying first-class service while estimating the destruction would "save" costs equal to only 4 percent of USPS's budget. When this happens—and USPS management is proceeding fast, in violation of federal law—there will be no more 44-cent postage. Only FedEx rates. There will be no more service to rural, remote, and distressed areas. Newspaper and magazine delivery will be eliminated.

The Internet could be the biggest source of new business imaginable. Customers could e-mail documents to the USPS, which would then print and deliver them from the destination post office. This would be a hugely popular service: next-day delivery anywhere in the country, of anything you can send to a printer. Fast, cheap, and hard copy. All it would require is leadership interested in providing a service to the public.

But what we have now is leadership more interested in providing profit to private moneyed interests than in serving the American people. That is the end result of setting up a public service to function "more like a business," as was done in changing the U.S. Post Office Department to the US Postal Service in 1970-71.

The United States Postal Service is a national treasure that needs to be saved from the formidable forces arrayed against it. And those forces are not only in Congress, but in the USPS itself. Those who seek to save the USPS will not succeed unless they recognize the threat within, and they must do so very quickly or it will be too late.

~~~

John Nichols writes good Save the Post Office columns in The Nation and The Capital Times. And there's always a lot of good information at Save the Post Office, which Steve Hutkins puts together.

Class Warfare and Flying Pigs

Tom and I have turned off the television. I know. Crazy, isn't it? Veritably un-American. But hey, I'm happy to announce that it's entirely possible to live without watching the boob tube. Not only did we cancel the cable, but we quit watching the networks as well. Can't say we miss it much, especially because our friends share much of what's worthwhile online. (And how else do you think I'd have so much time to prowl the Internet to figure out what's actually going on in the world?) And given yesterday's post, in which I tallied up the class warfare battles taking place in Wisconsin, at Verizon, and at the United States Postal Service, count the following clips from the Daily Show as the next installment on the war on the poor and the middle class.

Although these clips have way more of Fox Noose than I can watch without gagging, it's revelatory to hear what the propaganda machine is churning out these days. Jon Stewart handily pillories the FN talking heads.

[If you're reading this on Facebook (which doesn't let the automatic blog importer import video), the links to the videos are here and here.] Sorry about the commercial at the beginning of each clip. Enjoy!

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
World of Class Warfare - Warren Buffett vs. Wealthy Conservatives
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
World of Class Warfare - The Poor's Free Ride Is Over
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

The part about not assuming that all rich people are billionaires made me giggle. I suppose we shouldn't assume that all billionaires are billionaires either. And I love the bit about Warren Buffet's billionaire cleaning lady.

One of the most galling comments is the one about "the moocher class" as opposed to the "productive class." That actually made me gasp out loud. I mean, really? The people who watch their portfolios are the "productive class"? And the people who actually work for a living (or want to) are the "moocher class"? Unbe-fricking-lievable! Do people actually believe this stuff? If they do, it's because they have deluded themselves into identifying with the billionaire class, even when they themselves are struggling economically and are watching their piece of the pie shrink to a pile of crumbs. After all, they might hit pay dirt someday and become billionaires themselves, right? Sure! When pigs fly.

Tom was carrying his "Tax the Rich" sign downtown one day during the Wisconsin Winter (as opposed to the Arab Spring), and a panhandler—a panhandler!—told him, "Don't say that! Don't you want to be rich?" Tom pointed out the unlikelihood of that eventuality. The panhandler just wasn't buying it. As a matter of fact, he wasn't buying much. . . . With that, I leave you for today with this lovely thought from John Steinbeck (who knew some things about class warfare). And many thanks again to the creative wits at Armchair Patriots!

The Price of Inequality

This article, adapted from The Price of Everything: Solving the Mystery of Why We Pay What We Do, by Eduardo Porter, explains that wider communications, bigger companies, and deregulation are creating a pay structure where fewer and fewer people are taking more and more of the money, leaving the vast majority with no hope of sharing the benefits. This is a natural process. Wealth concentrates until the only people who can buy anything don’t need to, and the economy collapses. Both that article and this one point out that, in Frank Rich's words, "America can’t move forward until we once again believe . . . that everyone can enter Frontierland if they try hard enough, and that no one will be denied a dream because a private party has rented out Tomorrowland." Bob Herbert points out that in the recession of 2008 to the present, many unemployed people have lost that hope. As Paul Krugman says in The Conscience of a Liberal 2007 (p. 18), “Middle-class societies don’t emerge automatically as an economy matures, they have to be created through political action.” The political actions we need are progressive taxation, regulation to prevent abuse of economic power, public education, and a social safety net. And we should focus not on Gross Domestic Product, which harmfully accrues disproportionately to the wealthy, but on the average income of the poorest half or poorest 35% of the people, as recommended by Muhammad Yunus, "banker to the poor" and Grameen Bank founder.

Too, corporate executive pay often is more plunder than compensation.