From the News Archive

Last fall, Illinois GOP candidate Bruce Rauner spent $63.9 million -- $27.3 million of his own money -- to buy the right to occupy the Illinois Governor's mansion.

Now that he's in office his first moves have confirmed that he is the poster boy for the War on the Middle Class.

Rauner is a hybrid of the worst traits of Mitt Romney and Wisconsin Governor Scott Walker. In fact, you could say he personally embodies the reason why -- even though our economy has grown 77% in the last 35 years -- the wages of ordinary Americans have been stagnant or actually declined.

The American people have spoken. But what did we really say about inequality?

At first glance, it seems that extreme inequality mattered little to the majority of voters who put pro-business candidates into office. After all, the Republicans, along with far too many Democrats, are certain to cater to their Wall Street/CEO donors. Do Americans really want an ever rising gap between the super-rich and the rest of us?

A important study ("How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay") by Sorapop Kiatpongsan and Michael I. Norton provides insight on why Americans aren't more upset about rising inequality: It shows we are clueless about how bad it really is. Their analysis of a 2009 international survey of 55,187 people from 40 countries, found that when it comes to understanding the severity of inequality, we're the most clueless of all.

My job depends on trade. I'm 100 percent in favor of trade.

By the same token, we can have good trade policies that raise living standards, or bad trade policies that deindustrialize our economy and distort social and political power relationships.

Figure 1. What people hear, when you say "trade deal."

Two cases in point: the "Trans-Pacific Partnership" (TPP) and the "Trans-Atlantic Trade and Investment Partnership" (TTIP). Both are variations on NAFTA, a vigorously oversold agreement with Canada and Mexico.

Figure 2. Twelve Pacific Rim countries currently negotiating in the Trans-Pacific Partnership

Journalist William Greider explains the origin and intent of one particularly troubling feature of the NAFTA model. NAFTA's legal process helps global companies enforce certain provisions in the agreement. In full jargon, it is called "investor-state dispute settlement," or ISDS.

We understand how the US Constitution establishes our legal framework. The Constitution and Bill of Rights were specifically written to protect individuals from tyranny, and balance public interests with private interests. Our courts settle legal disputes by applying Constitutional principles.

NAFTA, as a legal framework, creates a parallel structure at the global level. However, NAFTA and similar deals have a very different design goal. They prioritize corporate investor rights, while pushing public interests to the side.

As the cynical catchphrase goes, under NAFTA, governments can do "whatever they want," to protect the environment, labor rights, human rights, public health, prudent financial regulation, and internet freedom (for instance), as long as they pay corporations for any lost profit -- including potential profit for activities that have not even occurred, yet!

Greider sketches the history of this question in America. In 1905, a corporate-friendly Supreme Court held that employers' rights outweighed public interest. That Court struck down laws setting a 10-hour day(!) and workplace safety rules. In the 30's, the Supreme Court reversed this interpretation, and recognized the legitimate role of government regulation in the public interest.

During the '30s, corporate interests were pushed back in a political struggle. The widespread economic suffering of that time discredited the idea of unregulated capitalism. New policies brought in a system of controls and regulations for banking and workplace safety. We introduced unemployment insurance, bank deposit insurance, and other familiar policies to prevent the huge market failures of the Great Depression.

NAFTA was negotiated in the early 90's. With NAFTA, corporate interests could draft a new global legal system on a clean sheet of paper. Battles lost in the 30's could be won quietly at the global level in the 90's.

NAFTA set up rules favoring global corporations, and shadowy trade tribunals to enforce those rules.

In practice, these tribunals can compel outcomes favorable to global corporations, in spite of decisions made through our domestic legislative process, or courts -- including the Supreme Court.

Trade tribunals are not courts. They don't have judges. Trade lawyers render decisions. They are not accountable to any political body. The proceedings are secret. Complaints are brought by corporations; all defendants are countries. Decisions reflect global investor rights, as written into NAFTA-style trade deals. Since public interest and public good are subordinated in the trade deals, people and the planet take a distant second place in decisions rendered by the trade tribunals.

In this system, foreign corporations have greater rights than domestic corporations. Of course, in the global economy, any large company can create a token presence offshore, and use that entity to seek damages in a trade tribunal. Any corporation with money and nerve can challenge a national law or court. Over 500 such ISDS cases have been filed, and the number is growing rapidly.

Greider interviewed a lead NAFTA negotiator who explained that it was his clear intention to rewrite the history of investor rights.

As for anyone troubled by the intrusions on US sovereignty, he said, "My only advice is, get over it. " ... the architects of NAFTA knew exactly what they were creating. "The parties did not stumble into this," he said. "This was a carefully crafted definition [of investor rights]."

In Greider's article, Georgetown law professor Robert Stumberg sharpens this point.

NAFTA's investor protections "are based on a long-term strategy, carefully thought out by business, with many study groups and law firms involved in developing them. This is about limiting the authority of government -- that is its central importance."

NAFTA, TPP, TTIP and other NAFTA-style deals are not "trade agreements." They are moral, social, political and economic documents -- with governing authority similar to our Constitution. One difference, of course, is that the Constitution never mentions corporations -- not even once. In contrast, these bad trade deals establish legal and social standards heavily biased in favor of investors.

In the '90s, NAFTA advocates enjoyed a presumption of trust. We trusted that public interest and moral values were an effective counterweight to global corporate power. Skeptics of NAFTA had the burden of proof.

Twenty years after NAFTA, we can look back and measure decades of glowing promises against our lived experience. Public trust is shifting. Now, negotiators for TPP and TTIP have the burden of proof.

Consider this: The web of NAFTA-style trade deals is a system, specifically designed to shift power in favor of global corporations. This is a system designed to work for the 1% and to subordinate the interests of most of the people we know. These deals are purposefully designed to determine how life will be organized in 2050.

Nobel laureate economist Joseph Stiglitz calls this trade policy "global governance without global government."

This system is doing exactly what it was designed to do.

If TPP, TTIP and other bad trade deals go into effect, they will lock in global standards for generations, with no practical process to modify, amend or repeal them.

Investor-state dispute settlement is a really good reason to oppose TPP and TTIP. We should rethink the entire premise for ISDS.

The last thing we should do is ratify TPP and TTIP, elevating ISDS to a global norm for generations.

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This has been reposted from The Huffington Post.

Steelworkers convention delegates adopted a multi-point action platform for their union for coming years to battle what re-elected President Leo Gerard called “shrewd, greedy and powerful” forces out to destroy workers.

The plan was touchstone of the 4-day convention, in Las Vegas , August 11-15.

The platform calls for the union, which represents workers in steel, oil, rubber and plastics, chemicals and other industries, “to fight continually” for jobs with family-sustaining wages and to reduce income inequality.  Reducing inequality “is at the core of rebuilding our economies.” delegates said.  That means also changing the way USW organizes, they said.  

The 10 states with the highest percentage of uninsured adult residents all have one thing in common: They’re led by Republican governors or legislatures.

That data comes from the latest polling from Gallup, which confirms the widening gulf between red states and blue states when it comes to health coverage. This divide existed before health reform went into effect; however, it’s only gotten worse under Obamacare, which has helped the national uninsurance rate plunge to record lows but which has been implemented unevenly across the country.

Walgreen Co announced on Wednesday that it won’t go through with its acquisition of Switzerland-based Alliance Boots, a move called an “inversion” that would have shifted company headquarters overseas to avoid paying U.S. taxes.

While it will still go through with buying all of Alliance Boots’s shares, Walgreen will still be based in the Chicago area.

Extending unemployment insurance during the recession didn’t just give the unemployed some extra income, but actually prevented millions from being foreclosed on, according to a new study from Joanne W. Hsu, David A. Matsa, and Brian T. Melzer.

Given that different states have different amounts they’ll pay out in unemployment benefits — in 2011 it ranged from $6,000 in Mississippi to $28,000 in Massachusetts — the researchers looked at what impact more generous benefits had on mortgage delinquency. They found that for every $1,000 extra in maximum benefits, the likelihood that an unemployed worker’s mortgage would go into delinquency declines by 25 basis points. Getting benefits for a longer period has a similar effect, as each additional week decreases the chance of delinquency by 34 basis points. “Based on this variety of tests, we conclude that the estimated effect of UI generosity is causal,” they write, meaning that bigger checks reduce the chances of going into delinquency directly.

An Indiana Judge has ruled that the state’s “Right-to-Work” law is unconstitutional, the second such blow to the legislation since its passage in 2012.

Lake County Circuit Judge George Paras decided against the state in United Steelworkers vs. Zoeller on July 17th, ruling that the law was “null and void in its entirety” and the state is “permanently enjoined” from enforcing it.  The law is already before the state Supreme Court as a result of a challenge from the International Union of Operating Engineers (IUOE) Local 150.  Oral arguments in that case are set to be heard on September 4th. 

Within the next several weeks Illinois-based Walgreens drug store chain is set to decide if it will become what President Obama referred to last week as a "corporate deserter" by - in essence - tearing up its U.S. Citizenship in order to cut its corporate taxes.

Walgreens recently bought a 45 percent stake in the Swiss drug chain, Alliance-Boots. It is now considering whether to complete a merger with the Swiss firm, so it can move its official corporate headquarters to lower-tax Switzerland, while maintaining most of its operations in the United States.

Forty-seven American corporations have used this this tax trick - known as an "inversion" -- over the last decade and the maneuver is increasingly favored by corporations that apparently have no loyalty to the United States - and instead have pledged allegiance entirely to their own bottom lines.

America is the richest country on Earth. We have the most millionaires, the most billionaires, and our wealthiest citizens have garnered more of the planet's riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years!  

This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that's what free-market cheerleaders repeatedly promise us.

Unfortunately, it's a lie, one of the biggest ever perpetrated on the American people.

Ladies, ladies, ladies, what's it going to take for you to stop bashing yourself in the face with a meat mallet every Election Day? Does the twisted, sanctimonious GOP state senator you voted for have to propose legislation making it legal for you to be sold into white slavery because... well... just because? Does the whacko Tea Party congressman you supported have to craft a bill saying that you should be stoned in the street (no, not the good kind of stoned) for wearing a halter-top in public? Do the nutjobs you repeatedly, repeatedly vote for have to repeal the 19th Amendment (you know, the one that enfranchises women), before you finally decide to vote for a sane person? (Oops, sorry, too late, you won't be able to vote for a sane person. Or a crazy one either. Or anybody.)

Seriously, ladies, to what absurd level of fracking-depth lunacy do these bottom-feeding misogynists (is that redundant?) have to sink before you perceive, in your Limbaugh-inspired wisdom, that perhaps, just perhaps, your beloved Republican Party doesn't have your best interests in mind?

Many people touted the 288,000 new jobs the Labor Department reported for June, along with the drop in the unemployment rate to 6.1 percent, as good news. And they were right. For now it appears the economy is creating jobs at a decent pace. We still have a long way to go to get back to full employment, but at least we are now finally moving forward at a faster pace.

However there is another important part of the jobs picture that was largely overlooked. There was a big jump in the number of people who report voluntarily working part-time. This figure is now 830,000 (4.4 percent) above its year ago level.

It was good to hear President Obama say that reining in Wall Street's high-risk behavior is an "unfinished piece of business." It would be even better if this observation were quickly followed by action -- the kind of concrete action he can take immediately, with or without Congress's cooperation.

The president made his remarks in an interview with host Kai Ryssdal on public broadcasting's "Marketplace" program. Ryssdal was surprisingly (and effectively) confrontational at several points, as when he asked the president this question:

The Dow today sits plus or minus 17,000, right? Record highs. Banks' profits are up; the big banks are bigger than they were during the financial crisis; their appetite for risk is growing, as we've seen; and all of this is happening after Dodd-Frank -- the financial reform bill that we were told was going to prevent all these things from happening. It was going to rein in the banking system.

So how do you look at the American people and say, "You know what? 'Too big to fail' has been taken care of. What happened in 2008 is not going to happen to you again."

The ability for ordinary working people to organize and collectively bargain over their wages and working conditions is a fundamental human right. It is a right just as critical to a democratic society as the right to free speech and the right to vote.

Over the last 30 years many in corporate America and the big Wall Street banks have conducted a sustained attack on that human right. Unionization dropped from 20.1 percent of the workforce in 1983 to 11. 3 percent in 2013 -- and the results are there for everyone to see.

During that period productivity and Gross Domestic Product per capita both increased by roughly 80 percent in America. But the wages of ordinary Americans have remained stagnant. Virtually all of the fruits of that increased productivity have gone to the wealthiest 1 percent of Americans.

Many economists and policy-makers struggle to explain growing inequality and the erosion of the middle class.

Nobel laureate economist Paul Krugman has a simple explanation, “…corporations use their growing monopoly power to raise prices without passing the gains on to their employees.”

The top 1% take 93% of all new gains created in our economy.

They divide gains that way – because they can!

The Chamber is at it again.  As negotiations drag and support flags for the controversial Trans-Pacific Partnership (TPP), the U.S. Chamber of Commerce has come up with a new number to sell the controversial deal to a skeptical Congress and U.S. public: 700,000. 

That’s the number of U.S. jobs that the corporate alliance claims could be created by the sweeping pact opposed by a diverse array of members of Congress, small businesses, and labor organizations for its threats to, well, U.S. jobs. 

How did the Chamber get this number?  They don’t say.

As president of the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), Dave Regan is well aware that over the past several decades, the number of American workers who are part of a labor union has declined fairly steadily — and the scales of power have continued to tip from workers to corporations.

“For most Americans we’re looked at as, at best, a mystery,” he acknowledges, “and, at worst, a problem and completely irrelevant.” To change that, he is calling for a major shift in the labor movement.

A Hollywood boycott is threatening the Obama administration's TransPacific Partnership agreement (TPP).

The southeast Asian nation of Brunei, a would-be member of the TPP, is under fire from Hollywood and human right activists for adopting a brutal penal code based on Sharia law with punishments including flogging, dismemberment and death by stoning for crimes such as adultery and sodomy.

Bad enough that the empty calories of many a fast-food meal have all the nutritional value of a fingernail paring. Even worse, the vast profits this industry pulls in are lining the pockets of its CEOs while many of those who work in the kitchens and behind the counters are struggling to eke out a living and can’t afford a decent meal, much less a fast one.

Yes, you have heard this before. Over the last year or so, you’ve probably seen news coverage of the strikes and other job actions fast-food workers have taken against their employers. Maybe you’ve even read about the wage theft lawsuits that have been filed against McDonald’s and Taco Bell, or the recent settlements in New York State against McDonald’s, Pizza Hut and Domino’s Pizza that have led to payments to employees of more than $2 million.

As a result of the disastrous Citizens United Supreme Court decision, billionaires and large corporations can now spend an unlimited amount of money to influence the political process. The results of that decision are clear. In the coming months and years the Koch brothers and other extraordinarily wealthy families will spend billions of dollars to elect right-wing candidates to the Senate, the House, governors' mansions and the presidency of the United States. These billionaires already own much of our economy. That, apparently, is not enough. Now, they want to own the United States government as well.

The Charles Koch Foundation recently released a commercial that ranked a near-poverty-level $34,000 family among the Top 1% of poor people in the world. Bud Konheim, CEO and co-founder of fashion company Nicole Miller, concurred: "The guy that's making, oh my God, he's making $35,000 a year, why don't we try that out in India or some countries we can't even name. China, anyplace, the guy is wealthy."

Today, the Congressional Progressive Caucus released its annual budget proposal -- the "Better Off Budget" (link not yet available). Budgets are numbing, grist for geeks, not citizens. This budget is no exception, detailing row after row of numeric projections. Produced in conjunction with the Economic Policy Institute, it is a technician's document, based on a sound economic model.

The big talk in Washington today is the 50th anniversary of the war on poverty -- still being fought with only limited success as 15 percent of the population is stuck in poverty -- and the related issue of income inequality. Both of these subjects will likely be a big part of the upcoming State of the Union message by President Obama, due next Tuesday. But I would urge the president to also take up one other issue which has a lot of bearing on the first two: the current state of our international trade.

It is hard to see our trade policy as a place where we are having much success. We have an unceasing $700 billion trade deficit, and we have lost 5.2 million manufacturing jobs since the year 2000. These facts contribute both to poverty and income inequality. The traditional road up from poverty into the middle class -- a good long-term job in a factory -- has now been blocked. Those jobs do exist, but because of our trade policy they are not in the United States; they are in China, Vietnam and other low wage, long-hour sites.

I'm certain the president will talk about the TPP (Trans-Pacific Partnership) talks he hopes to finish this year, a very large free trade agreement encompassing countries from Japan to Peru. He will also praise the new TTIP (Transatlantic Trade and Investment Partnership with Europe), another President Obama initiative. But it is very hard to see that either of these initiatives will help in the war on poverty or on remedying income inequality. In fact, free trade agreements have traditionally increased trade deficits for the U.S. and moved more jobs off-shore.

Rep. Dave Camp (R- MI) and Sen. Max Baucus (D-MT) have introduced “Fast Track” legislation in Congress. It’s been 15 years since a U.S. president sought Fast Track authority, which strips Congress of its Constitutional authority to have a meaningful role in U.S. trade policy. If the Fast Track bill passes, the Trans-Pacific Partnership (TPP), a trade deal involving 11 Pacific Rim countries could be completed and signed before it is sent to Congress for a vote. Then the far-reaching trade deal will be railroaded through with no amendments and only 20 hours of debate.

The original Fast Track was cooked up by Nixon, served up again by Clinton to pass the NAFTA and WTO agreements, and stirred up again in 2000 to jam China free trade through Congress. That all worked out well, didn’t it? The United States lost 5.7 million manufacturing jobs in the NAFTA/WTO era, and our trade deficit with China is now one of the largest in history.

It was shown in a recent report that the richest Americans have made millions from their stock holdings since the recession.

It's getting worse. The facts are summarized here, and presented in greater detail at Us Against Greed. 1. Just 13 Americans Made More from Their Investments in 2013 than the Entire SNAP Budget

Some wealthy Americans like to refer to themselves as "makers," and food stamp recipients as "takers," even though most of the latter are children, the elderly, or low-wage workers. Many of the top 13 on the Forbes list did not make anything of significance in 2013. Yet by being heavily invested in the stock market they were able to take $80 billion among them, more than a year of food stamps for almost 50 million people. 2. The Richest 400 Took $300 Billion in 2013, Approximately the ENTIRE Safety Net

The total budget for SNAP, WIC (Women, Infants, children), Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing is less than the $300 billion 'earned' by the Forbes 400.

My New Year's celebrations this year were haunted by memories of January 1, 1994 -- the day that the North American Free Trade Agreement (NAFTA) went into effect. I remember crying that day, thinking about the proud men and women in union halls across America, the Mexican campesinos and the inspiring Canadian activists I had met during the fight against NAFTA, and hoping desperately that our dire predictions would be proved wrong.

They were not. In short order, the damage started. And, we started to document it.

For NAFTA's unhappy 20th anniversary, Public Citizen has published a report that details the wreckage. Not only did promises made by NAFTA's proponents not materialize, but many results are exactly the opposite.

The NAFTA model has failed.

When NAFTA (the North American Free Trade Agreement) took effect 20 years ago, we were promised mutual gain.

To be clear, everyone I know wants good trade policies that raise living standards at home and abroad. The question is not trade versus protectionism. It's good trade policy versus bad trade policy.

NAFTA and numerous subsequent trade deals perform very well for investors and global businesses, while leaving most workers and communities at a disadvantage.

Since NAFTA, our trade deficits totaled over $8 trillion. We've lost millions of good manufacturing jobs and de-industrialized our economy.

When Senator Elizabeth Warren announced that she would not be running for president, she disappointed many who see her as one of the nation's most vigorous defenders of America's middle class. From her fight to end the risky lending practices that cost millions of Americans their homes to her efforts to protect Social Security, the Senator's calls to action consistently confront the ways that the system seems rigged against ordinary citizens. Now as her decision not to seek the presidency refocuses attention on Warren's leadership in the Senate, she is taking aim at a new danger: the employment credit checks that exclude qualified workers from the very jobs that could help them get out of debt.

"Following the financial crisis five years ago, millions of people confronted job loss, shrinking home prices, and depreciated savings," warned Warren in a recent letter to her Senate colleagues. "For too many people, the fallout from the crisis also damaged their credit... It makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and can be riddled with inaccuracies." Warren's bill, the Equal Employment for All Act, would prohibit employers from using personal credit history to screen job applicants or employees for most positions. By stopping employment credit checks, the bill would reduce employment discrimination and protect job seekers' privacy.

During a healthcare "town hall" episode of Fox News Channel's Hannity, Christian Dorsey from the Economic Policy Institute blasted a gaping hole through Sean Hannity's anti-Obamacare bubble. Toward the end of a segment, Hannity repeated the same old whiny "Obama lied" meme about keeping your plan if you like it.

Dorsey interrupted Hannity and reminded him that many parts of the law are wildly popular, and began to name those parts: ban on discriminating against people with pre-existing conditions and so forth. Then Dorsey said, and accurately so, that the things Americans don't like as much were indeed Republican ideas which the Democrats incorporated into the law: the exchanges and high deductible plans. By the way, he didn't mention the individual mandate, which is also a Republican idea.

Hannity smiled and mocked, "Wildly popular?"

The following article first appeared in the American Prospect. 

The steady stream of Watergate revelations, President Richard Nixon’s twists and turns to fend off disclosures, the impeachment hearings, and finally an unprecedented resignation—all these riveted the nation’s attention in 1974. Hardly anyone paid attention to a story that seemed no more than a statistical oddity: That year, for the first time since the end of World War II, Americans’ wages declined.

Since 1947, Americans at all points on the economic spectrum had become a little better off with each passing year. The economy’s rising tide, as President John F. Kennedy had famously said, was lifting all boats. Productivity had risen by 97 percent in the preceding quarter-century, and median wages had risen by 95 percent. As economist John Kenneth Galbraith noted in The Affluent Society, this newly middle-class nation had become more egalitarian. The poorest fifth had seen their incomes increase by 42 percent since the end of the war, while the wealthiest fifth had seen their incomes rise by just 8 percent. Economists have dubbed the period the “Great Compression.”

This egalitarianism, of course, was severely circumscribed. African Americans had only recently won civil equality, and economic equality remained a distant dream. Women entered the workforce in record numbers during the early 1970s to find a profoundly discriminatory labor market. A new generation of workers rebelled at the regimentation of factory life, staging strikes across the Midwest to slow down and humanize the assembly line. But no one could deny that Americans in 1974 lived lives of greater comfort and security than they had a quarter-century earlier. During that time, median family income more than doubled.