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The Thirty Years War continues

By George Waring (Butte News) 3-12-14

 

                As William Greider maintains in his latest “Nation” article, since the union crushing days of Paul Volker’s Federal Reserve policies in the late 1970s and for all of the Reagan-Bush 1980s, the middle class has been under attack. The Clinton and George W. Bush administrations simply followed the triumphant neoliberal policies of Milton Friedman, Alan Greenspan and Ben Bernanke. The federal government’s tax, trade and labor policies have been crafted in the interest of the nation’s wealthiest campaign contributors.

                In mid-February, the Economic Policy Institute created a web site showing the extent of the damage done in this successful class war conducted by government on behalf of the one per cent. It is the first web site I’ve found that provides a state by state display focused on the widening income gap between our rulers and us.

                The following is a brief summary of the data collected by EPI. Our memories and imagination may be able to fashion a kind of “body count” for this domestic civil war. If the data is too dry, read “Nickel and Dimed: On (Not) Getting By in America” (2001) by Butte’s Barbara Ehrenreich. It’s a bottom up report on folks who work full-time, year-round, for the poverty-level wages fostered by our oligarchy.

                On average, income across the board in the U.S. grew between 1979 and 2007 by 36.9 percent. The wealthiest one percent received a 54 percent of that income growth.

                Looked at from the perspective of income change, the top one percent saw its income double, a 200.5 percent increase. The bottom 99 percent’s income increase was almost 19 percent in those 28 years.

                What happened through our Great Recession? The one percent has recovered quite well, but the bottom 99 percent’s income declined during what the mainstream media has agreed to call “the recovery.”

                The top one per cent has been the big winner during the Obama years, with an increase in income of 11.5 percent. For the 99 percent the news has been a decline in income measuring a minus seven-tenths of a percent.

                If the entire period from 1979 to 2011 is considered, the 32 years give us the concluding statements: (1) The top one percent had an increase of 129 per cent in its income; (2) The bottom 99 percent saw its income grow by 2.3 per cent. The contrast between the income of the one percent and the income of the rest of us puts us right back in the society of Herbert Hoover in 1929.

                By 2011 the average income of the one per cent was over 24 times greater than the average income of the bottom 99 percent. For the top one percent the average income was $1,040,506. It was $42,694 for the bottom 99 percent.

                The New Deal of Franklin Roosevelt and the post-World War II of a growing unionized middle class has been wiped from memory. We now live in the atomized, dog-eat-dog society created by the atheistic libertarian Ayn Rand’s disciples. Congratulations on this stunning ruling class triumph go to its wizard economists, Milton Friedman, Paul Volcker, Alan Greenspan, and Ben Bernanke. And to Rand’s two most prominent protagonists enjoying power today, Paul Ryan and Rand Paul.

                On what’s left of “the other side,” what can we say about those so-called “Democrats,” the “neoliberal” or “New Democrats” who exercised power within the period from 1979 to 2011? Jimmy Carter and Fed Chairman, Paul Volcker; Bill Clinton with economic and financial advisers, Robert Rubin, Larry Summers, and Alan Greenspan. Finally, Barack Obama with Clinton retreads, Timothy Geithner and Larry Summers. Not to forget, through the entire period, our own Senator Max Baucus. Quite a legacy to leave.

                The EPI site gives income data by state. No surprise that Connecticut’s one percent  did better than others. That’s where Wall Street CEOs reside. It’s top one per cent had an income growth of 273 percent (1979-2011) It’s bottom 99 percent had income growth under 15 percent. The top one percent claimed over 70 per cent of the state’s income growth since Carter’s presidency.

                Finally, David Cay Johnston reports that between the official end of the Great Recession in mid-2009 and the end of 2012, the top ten percent saw a 15 percent increase in income. The income of the bottom 90 percent declined 15.7 percent, putting its average income back to the 1966 level. And that happened “after” the Great Recession.

                Greider’s article is on “The Nation” magazine website: http://www.thenation.com/article/178366/why-federal-reserve-needs-overhaul

Appreciating the Greenspan-Bernanke Legacy

By George Waring  02-19-14

 

                With Wall Street’s current praise for newly retired Federal Reserve Chairman Ben Bernanke, its appropriate to remember our very recent past, our past and present, actually. The unprecedented wealth redistribution upwards from middle class and poorer home owners to the wealthiest Americans is continuing. The great mortgage scam of this century still proceeds. At the very center of this scam have been the policies of the Federal Reserve.

                To celebrate Bernanke’s retirement, the PBS News Hour offered assessments by two economists, a Clinton Democrat and a Bush Republican. They praised Bernanke, crediting him with having stabilized Wall Street’s financial institutions. Thus, PBS trumpeted Wall Street’s view: Bernanke as a hero who helped Secretary of the Treasury, Hank Paulson, save the world during a financial panic and prevented the slide into another Great Depression.

                Bernanke was Alan Greenspan’s colleague and successor at the Fed. He supported Greenspan’s refusal to recognize that homeowners were heading for a huge black hole by relying on the rapid increase in home equity to fuel consumer spending. The bursting of the real estate speculative bubble in 2006-7 caused our Great Recession. By supporting deregulation, maintaining record low interest rates, ignoring Wall Street’s highly leveraged derivative activity and its role in predatory mortgage lending, the Greenspan-Bernanke Fed failed at its job.

                Several good books relate this story, ranging from Michael W. Hudson’s” The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America—and Spawned a Global Crisis” to Simon Johnson’s “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown.” However, my favorite is Matt Taibbi’s “Griftopia: Bubble Machines, Vampire Squids, and the Long Con That is Breaking America.” Chapter Two provides a truthful brief survey of Alan Greenspan’s sycophantic and disastrous career.

Read more: Appreciating the Greenspan-Bernanke Legacy

Comprehensive economic plans needed

This editorial is from the Butte Weekly's opinion pages. It stands as the "opinion of the paper."

2-12-14

                Recent business closures and layoffs have prompted the usual chicken-little, “Sky is falling” talk and the bromides that a big-box store or more franchise restaurants will be the panacea for all of Butte’s economic woes.

                These assertions are false; what is needed is a better big-picture viewpoint to address ways to improve Butte’s overall economy and concerted local efforts that focus on doable steps to help that process that address a broader range of businesses and industry and encourage growth throughout them all, from small manufacturers and mom-and-pop stores to larger enterprises.

                We’ve heard for years that Butte is dying and that any day, the streets will be rolled up and everyone will move to greener pastures elsewhere.  We heard it in the old days during every union strike against the mining companies, we heard it when the Berkeley Pit ceased operations and we’ve heard it every time a retailer or restaurant has closed its doors.  Somehow, reports of Butte’s death, like that of Mark Twain, have been greatly exaggerated. 

                The town has shifted in many ways with time.  Although Butte still depends heavily on the mining industry, mining is no longer the only game in town.  Our population has been steadily declining for many years, but new census figures show that it has stabilized and even increased a bit.  Many residents and businesses have moved off the hill and the town has spread to the south and east, but redevelopment and reuse of historic Uptown buildings continues.  In recent years, more historic properties have been redeveloped for residential use, prompted by renewed interest from those who want to live in the central business district. 

                Butte has always endured its ups and downs, but it continues to survive and there are many bright signs that point to diverse economic growth that should be stronger over the long-haul than our previous dependence on a single industry. 

                Efforts like that underway to locate a major manufacturing hub, one of 8 nationwide, to bring together educational institutions and industry in research and development, hold promise.  The start of a pilot “Economic Gardening” program to help local businesses grow, thus supporting economic growth from within, is a positive step.  Our Chief Executive’s participation in national conversations about urban planning and development of plans to improve the corridor between Montana Tech and the Uptown business district signal promise.  With the completion of its high-speed fiber optic network, Butte is poised to attract more high-tech businesses and industries.

                Efforts to woo a big-box retailer to the Mining City seem even more likely to fail than they did in the 1990s.  Nationally, big retailers are not building as many brick-and-mortar outlets, partly due to changes in American shopping habits, such as the dramatic rise in internet sales in the past few years.  Companies like Home Depot, Lowes and Target seem unlikely to build in Butte, especially since their stores in other communities 60 to 90 miles away already draw customers from Butte and is surrounding area. 

                Even if Butte could land a big-box store, study after study has shown that economically, it would hurt locally owned competitors in the market and shuttle more local dollars out of the community. 

                Rather than putting all our focus on attracting “one big thing,” we need to continue to work steadily in multiple areas to improve our economy.  We need to steer clear of the old “flat versus Uptown” thinking that divides the community instead of uniting us. 

                A realistic approach, based on solid knowledge about business and industrial trends nationwide and statewide, is key to crafting future plans for economic development.  Our leaders need to be as aware of Butte’s weaknesses as well as its strengths in order to move forward.  We need multiple strategies to provide more value in the community that will attract new businesses and industries.  Our eyes need to be open to all new possibilities and to all avenues for growth. 

                We have to realize that great victories come from fighting many battles on many fronts.  We need to move forward one step at a time and pick ourselves up from setbacks, not let them defeat us.  Change is difficult, but the truth is that Butte can and will survive and thrive if we can work together and not be tempted to fall for the false prophets of gloom and doom.  

George Waring dives into Davos

By George Waring 2-12-14

The best of times, the worst of times

                1789. “It was the best of times. It was the worst of times.” I thank my Jr. High English teacher for having us read Dickens’ Tale of Two Cities, and then for treating us to the Ronald Coleman movie version. Some sixty years ago lessons in social justice were presented by union teachers in public schools, right here in the U.S.

                This reminiscence introduces my subject: “the best of times” for the fortunate few. In the Swiss Alps in January, 2,500 global “aristocrats” gathered by day to solve our planet’s problems. They only partied through the nights. Christopher Dickey, formerly Newsweek’s Paris correspondent, wrote a column about the revelers last month entitled: “Income Inequality Was Quickly Forgotten at Davos.” He began his account with the following sentence: “’It kind of disappeared,’ said one woman at the end of the World Economic Forum when someone asked what happened to perhaps the greatest issue facing the world today.”

                Prior to the Forum our corporate media fed us nonsense about the serious attention that Davos would give to the growing global problem of accelerating poverty. The conference organizers commenced the forum by calling on attendees “to address the explosive imbalance between the world’s astronomical rich and those who live in grinding poverty.” Pope Francis sent the glitterati a “polite but blunt” plea: “I ask you to ensure that humanity is served by wealth and not ruled by it.”

                Coinciding with the Davos forum, Oxfam issued a working paper  on growing global poverty, “Working for the Few: Political capture and economic inequality.” Three points made the news: “Almost half of the world’s wealth is now owned by just one percent of the population. The wealth of the one percent richest people in the world amounts to $110 trillion, 65 times the total wealth of the bottom half of the world’s population. The bottom half of the world’s population owns the same as the richest 85 people in the world.”

                Dickey’s report concluded with this summation:

                “The consensus among the rich guys I talked to (most of whom had left in their chauffeur-driven Audis and private jets on Friday), was that Davos this year was just the way it should be: a place to make more deals face to face with more people much faster than they could anywhere else – then spend a few hours on the slopes or taking in the esoteric offerings on the conference agenda, like Goldie Hawn talking about meditation. “I like to improve my mind,” one influential American CEO told me.”

                Who knows? Maybe that influential American was Jamie Dimon, the celebrated JPMorganChase CEO. He had just received a bonus of $20 million from his Board of Directors. This windfall came after surviving a year in which his firm had been fined more than $20 billion by the U.S. Justice Department for violating criminal laws and banking regulations.

                Sam Pizzigati’s website TOO MUCH ranked Dimon ninth on its 2012 list of the ten greediest American CEOs. Since the housing bubble burst in 2008, Dimon’s earnings have totaled $90 million. His 74% pay raise in January forced a New York Times business editor to compose a long piece justifying Dimon’s record-setting Wall Street bonus. His bank’s salary committee was composed of former CEOs from Exxon Mobil, Johnson & Johnson, and NBC Universal. Who could question the judgment of those capitalist rulers of the universe? They must recognize value when they see it.

                Dimon earned the reputation of being the most outspoken Wall Street critic of the Dodd-Frank Act of 2009 that created new regulations for the financial industry. He was credited with masterminding the lobbying effort in Congress that defanged the hated re-regulatory effort. In other words, Dimon earned every penny of his big bonus by saving the financial industry’s “free market.” And “every penny,” of his bonus was tax deductible for JPMorganChase. That’s because the $20 million was awarded in “performance pay,” a gift to corporations from their friends on the tax writing committees in Congress. There is no limit on how much of a CEO’s “pay for performance” is tax deductible. It falls to the little people who actually pay taxes to make up the governmental cost of Mr. Dimon’s fortunate political friendships.

                If Dimon were a European banker, he would not have been so blessed. The European Union just enacted a new rule which bars bankers from receiving bonuses greater than twice their salary.

                Meanwhile, for “the worst of times” imagine a Congress that cuts food stamps and unemployment benefits during our continuing Great Recession.

George Will’s hope for American Democracy’s end

By George Waring (Courtesy of the Butte Weekly) 1-22-14

 

                A couple of weeks ago, George Will, the old speech writer for Senator Jesse Helms,  supporter of Grover Norquist’s anti-tax movement, and advocate for privatizing our Social Security, gave me cause for optimism. He actually stopped attacking “liberals,” and began aiming at “progressives.” In fact, he attempted to smear “progressives” by carelessly equating them with the Democratic Party in Washington, DC. I should have protested at this draining meaningful content from the label “progressive” However, I filed away that significant change of target by Will. It was important that such a loyal Rupert Murdoch employee had felt compelled to acknowledge the growth of the Progressive Movement within the Democratic Party. Maybe he harbored a fear about a coming political blowback caused by the plutocratic excesses on Wall Street.

                Last week, George Will’s latest column in the local corporate newspaper, strengthened my optimism. His column publicized a book by Cato Institute scholar, Ilya Somin. As Will explained the book’s argument, he found much to agree with. Public opinion polling reveals that average voters don’t know much about foreign policy or global geography. Therefore, such ignorant voters cannot be trusted with choosing the leaders of our federal government. After all, presidents and congress folk must be loyal to our natural national elite, our giants of industry and finance in charge of ensuring that the United States remains the commanding global international crony capitalist power. In sum, according to Will, American democracy has reached its limits. The federal government must be shrunk back to its 19th-century harmless scope. That is, a size allowing mobilization of military might, but powerless when it comes to interference with wealth and income disparities. Our federal government will flourish in the interests of our largest corporations and great financial institutions, undisturbed by the local concerns of an ignorant democratic rabble.

                In fact, Will really made the case for terminating all the economic and social measures undertaken by government at the national and state levels during the twentieth century. These were pro-democracy reforms supported by progressive grassroots movements dating all the way back to the Age of Teddy Roosevelt. These reforms actually transformed the United States into a pale version of a democratic society.

                Without naming them, the libertarian author cited by George Will, had in mind the constitutional amendments, Supreme Court decisions, and federal laws that curtailed the power of our natural plutocracy whose period of unlimited power came in the post-Civil War period. That sordid chapter of our national history, stretching from Ulysses S. Grant through William McKinley, is called “The Age of the Robber Barons.” The plutocratic excesses of the industrial and financial tycoons motivated their labor and farmer victims at the state level to demand an end to political corruption. Among the progressive reforms we inherit from those early 20th-century reformers were the initiative, the referendum and recall. In Montana, a populist-progressive coalition angered by the Anaconda Company’s tyranny managed to outlaw corporate spending in our state and local elections. That hundred-year-old blow against corporate rule was not terminated by the wealthy until the Bush-Reagan Supreme Court made its “United Citizens” decision a short time ago.

                Among the federal progressive measures which George Will recognizes as leading to national decline and tragedy are many things we take for granted, such as the expansion of the voting franchise to women in the 1920's, to Blacks in the south in the 1960's, and to 18- year-olds during the Vietnam War. Also, such important milestones as the right to join a union and bargain collectively with employers, the right to a clean and healthy environment, and the right to know what government is secretly doing through measures such as the Freedom of Information Act.

                If you belong to the ACLU or any one of hundreds of groups concerned with the rights of individuals, conservation of natural resources, protection of the public’s health and environment, etc., you can name dozens of other “rights” that Americans actually enjoy as a result of the triumph of progressive policies in the last century.

                George Will concluded his Op-Ed with his hope that the failed 20th century progressive experiment in creating an open and responsive democracy could now be quietly buried. Now that the misguided American experiment in democracy has run its course, according to Will, this society’s natural rulers should be free to enjoy the benefits of Social Darwinism. Will’s desire is to live long enough to see our misguided democratic experiment replaced by a new generation of libertarian-minded Americans who rely on decision-making by “markets and civil society.”

                “Reliance on markets,” that is the guiding mantra from within George Will’s elite circle of libertarian thinkers. It is as though the 73 year-old has achieved second childhood. He seems to wish us back to the halcyon days of his hero, Ronald Reagan. Back to that “Morning in America” administration whose blueprint for “reform” was the infamous Lewis Powell Memorandum to the US Chamber of Commerce in 1971.  Back to the business deregulation days of Milton Friedman and Alan Greenspan. Back to that religious faith in the infamous “Laffer Curve,” the economist’s napkin doodling that proved how getting rid of taxes for corporations and the ultra-wealthy would mean a huge increase in government revenues, an end to the federal debt, and the end of poverty in America.

                But didn’t George W. Bush’s Federal Reserve chief Alan Greenspan have to admit before Congress that his libertarian views on markets regulating themselves was a big bust? And didn’t he have to make that confession as recently as 2009? Didn’t Wall Street’s gambling in highly leveraged derivatives show us all what reliance on unregulated markets can accomplish? In fact, that stealing of $7-$8 trillion in housing wealth by Wall Street’s largest financial institutions still goes on.

                Didn’t we witness the absolute panic generated within the banking industry in 2008? And didn’t we all see the fear in the eyes of President George W. Bush in the fall of 2008 when he told us that capitalism would collapse into rubble before our eyes if the banksters were not saved immediately? And the immediate stampede of Congress led by Hank Paulson and Ben Bernanke into a give-away program that ended up guaranteeing the quaking banker/grifters some $20 trillion worth of public debt. Even unto 2014, each year since 2009, the Federal Reserve has seen fit to pump some $65-$80 billion into those New York City bastions of libertarian thought. Those wondrous apostles of the “free market.”

                My optimism is that George Will’s libertarian nostalgia for the Age of McKinley is the final testament from a journalist who began his long career working for multi-millionaires and is ending it in the pay of multi-billionaires. What a murky ending to that last Op Ed: “reliance on civil society and markets.”

                The local corporate newspaper should have signaled to its editorial page readers that George Will now has a comfortable stall in the Fox News stable, and has become a publicist for academic associates of the Cato Institute. That luxurious mansion is the Charles Koch-funded libertarian “think tank” that passes as a “charitable” tax-exempt educational benefit to the nation. In fact, the Cato Institute is nothing more than a billionaire’s factory churning out reasons why rich people and corporations should not be taxed.

                My optimism is that George Will and his libertarian Tea Partiers now know fear. Back in 1980, George Will was more than happy to sing the merits of democracy, back when Ronald Reagan was elected. However, today’s polls show that Progressive policies are becoming more popular. Two-thirds of Americans now see wealth and income inequality as targets for immediate federal government action. Even the President has awakened to the political possibilities of contrasting the spreading poverty in our society with the towering wealth of this country’s 460 billionaires.

                Today, Progressives are calling for a return to a progressive tax system that will cure this sick society of George Will favored policies-that produced our diseases of wealth and income inequality. This means restoring a progressive federal tax system in effect during the Eisenhower years. It means closing all the tax exemptions that our largest corporations have written into our tax codes. It means ending the careers of politicians who enacted give-aways to General Electric, Apple, Microsoft, Abbot Laboratories, etc. that paid their freight charges for shipping equipment, plant and jobs to China. It might even mean putting an end to crony capitalism’s imperialist adventures.

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