"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Plutonomy’

World Of Work 2013 Report: U.S. Inequality Now Literally Off The Chart And Rising

In Uncategorized on June 9, 2013 at 7:30 pm

This new chart from the ILO's latest World of Work report doesn't have enough room to visually portray the full extent of inequality in the United States.

Oldspeak: “This new chart from the ILO’s latest World of Work report doesn’t have enough room to visually portray the full extent of inequality in the United States.”

Among the world’s major nations, documents the UN agency dedicated to labor matters, only one currently has a level of inequality both high and rising” -Salvatore Babones

The controllers seem to have done quite well for themselves in this alleged “recovery”. The People have fared significantly worse with less to come as the full effects of U.S. austerity measures are felt. The stealth depression will continue and it’s getting worse.. The People in Cyprus, Greece, Spain, Portugal, Italy, and The U.K. have made their displeasure with the current state of affairs know loudly, repeatedly and en masse, where inequality is far less severe than in the U.S. Yet there’s a far smaller and more disjointed protest movement here in the “Greatest Nation On Earth”. Why? Why in a nation founded by protestors and civil disobeyers, are there so few to be found today? Was COINTELPRO, that effective? Perhaps it never really stopped?

By Salvatore Babones @ Inequality.org:

It is well known that the level of income inequality stretches much higher in the United States than in the other developed countries of Europe and North America. Now a report from the International Labour Organization shows that U.S. inequality has literally gone off the chart.

Income inequality in the United States is soaring so high, in fact, that the authors of the ILO’s new 2013 World of Work report couldn’t even place the United States on the same graph with the other 25 developed countries their new study examines.

Income inequality reflects the sum total of all the differences between the incomes enjoyed by different households in a country. Differences between rich and poor households, rich and middle-income households, middle-income and poor households all enter into total income inequality.

Researchers usually measure income inequality using a statistic called the Gini coefficient. The Gini coefficient runs from a minimum of 0 (perfect equality in incomes across all households) to 100 (one rich household gets all the income for an entire country).

The ILO report places the US Gini coefficient at 47.7, or almost half way toward the extreme where one rich household gets everything and everyone else gets nothing.

By comparison, the levels of inequality in the other 25 developed countries studied all fall in a band between 20 and 35.

The share of U.S. adults living in middle-income households dropped from 61 to 51 percent between 1970 and 2010.

Even worse, in America inequality is not only high but rising. The Unites States is one of only three developed countries where income inequality rose during the recession of 2008-2009, then continued rising through the lackluster recovery of 2010-2011.

The other two: Denmark and France. Both these countries had much lower levels of inequality to start with. By 2011, Denmark’s inequality had risen into the high 20s and France’s inequality into the low 30s.

In the United States inequality sat at 46.3 before the recession, moved to 47.0 in 2010, and rose further to 47.7 in 2011.

Rising inequality has hit the American middle class particularly hard. But America’s middle class decline began well before the recession hit in 2008. Every year fewer and fewer Americans qualify as middle class, and those who do have lower and lower incomes.

The share of U.S. adults living in middle-income households, the new ILO report notes,  dropped from 61 to 51 percent between 1970 and 2010, and the median incomes of these  households fell 5 percent.

Where has the middle class held its own in recent decades? Well, in Denmark and France, among other countries. The country with the largest middle class according to the ILO’s calculations is Norway, where about 70 percent of the population rate as middle class.

In Norway, about 70 percent of the nation rates as middle class. In the United States, only 52 percent.

In the United States today only about 52 percent of the population can claim middle class status.

The World of Work report concludes that the middle class in the United States and around the world is suffering from “long-term unemployment, weakening job quality, and workers dropping out of the labour market altogether.” Things have been bad for a long time, but the recession has made them far worse.

The ILO, founded in 1946, now operates a specialist agency of the United Nations. The world’s employers and workers are equally represented on its governing board, alongside the representatives of 28 governments, including the United States government.

Different international organizations use different data sources for comparing inequality levels across countries. The ILO World of Work report uses raw data from the Census Bureau for the United States and from Eurostat for European countries.

All these sources agree that income inequality has widened more in the United States than in other developed countries. The ILO report finds a much larger difference than other organizations, such as the OECD. One reason for the difference: As a UN organization, the ILO is committed to using data from official sources like the U.S. Bureau of the Census and published, peer-reviewed scientific journal articles.

Other organizations like the OECD and private think tanks make their own estimates of national inequality levels using data that may not be publicly available and methodologies that may not be transparent or audited.

Rising inequality is not inevitable. The rich are not winning everywhere.

According to the official data compiled by the ILO and documented in the World of Work report, only South Africa and about a dozen Latin American countries have higher levels of inequality than the United States.

In nearly all of these countries inequality appears to be either stable or falling. Out of a total of 57 countries studied by the ILO, 31 developing and 26 developed, only one — the United States — has a level of income inequality both high and rising.

This simple fact — that only one nation has inequality both “high and rising” — shows that high and rising inequality is not inevitable. The rich are not winning everywhere, just as the rich have not always won in the United States.

We can have sensible policies that reduce inequality and bolster the middle class. The ILO suggests that we prioritize employment growth over budget cuts, increase public investment to make up for a lack of private investment, and raise taxes on unearned income from financial transactions.

The folks at the ILO are smart enough to understand that the reasons our governments don’t give us good, pro-people policies are not technical or economic, but political and ideological.

“Against mounting evidence,” the ILO concludes, “a fundamental belief persists in some quarters that less regulation and limited government will boost business confidence, improve access to international financial markets, and increase investment, although these results have not been evident.”

The empirical evidence says that we can reduce inequality and bolster the middle class by putting people back to work. But that will take government action. And government action is the one thing we don’t seem to have.

 

Salvatore Babones is a senior lecturer in sociology and social policy at the University of Sydney and an associate fellow at the Institute for Policy Studies.

 

Plutonomy & The Precariat: On The History Of The U.S. Economy In Decline

In Uncategorized on May 11, 2012 at 5:22 pm

Oldspeak:”We’re really regressing back to the dark ages. It’s not a joke.  And if that’s happening in the most powerful, richest country in history, then this catastrophe isn’t going to be averted — and in a generation or two, everything else we’re talking about won’t matter. Something has to be done about it very soon in a dedicated, sustained way.” -Dr. Noam Chomsky
Empires in decline follow the same general pattern. High debt, unsound economic policies, intransigent political corruption, perpetual war and increases in war funding to the detriment of all else , privatized military, environmental degradation, looting of resources from throughout the empire rather than producing  things, systems deplete their resource base beyond levels that are ultimately sustainable. All these conditions exist in the American Empire. Something has to be done about fundamentally changing these conditions before it’s too late.

By Tom Engelhardt & Noam Chomsky @ TomsDispatch:

By Tom Engelhardt:

If you had followed May Day protests in New York City in the mainstream media, you might hardly have noticed that they happened at all.  The stories were generally tucked away, minimalist, focused on a few arrests, and spoke of “hundreds” of protesters in the streets, or maybe, if a reporter was feeling especially generous, a vague “thousands.”  I did my own rough count on the largest of the Occupy protests that day. It left Union Square in the evening heading for the Wall Street area.  I walked through the march front to back, figuring a couple of thousand loosely packed protesters to a block, and came up with a conservative estimate of 15,000 people.  Maybe it wasn’t the biggest protest of all time, but sizeable enough given that Occupy, an organization without strong structures but once strongly located, had been (quite literally) pushed or even beaten out of its camps in Zuccotti Park and elsewhere across the country and toward oblivion.

It’s true that if you were checking out the Nation or Mother Jones, you would have gotten a more accurate sense of what was going on.  Still, didn’t the great protest movement of our American moment (on a planet still in upheaval) deserve better that day? And no matter what you read in the mainstream, here’s what you would have known nothing about: this country is increasingly an armed camp and those marchers, remarkably relaxed and peaceable, were heading out into a concentration of police that was staggering and should have been startling.

Cops on motor scooters patroled the edges of the march, which was hemmed in by the usual moveable metal barricades.  Police helicopters buzzed us at rooftop level.  The police managed to alter the actual path of the marchers partway along and the police turnout — I estimated up to 75 cops, three deep on some street corners doing nothing but collecting overtime — was little short of incomprehensible.

Though Occupy marchers used to chant, “Whose streets, our streets!” it was never so.  The streets belong to the police.  If this is the democracy and freedom to dissent that American officials constantly proclaim to the world as one of our core values, then pinch me.  If most of it is even legal, I’d be surprised.  But when it comes to legality, we’re past all that.  So any march on a sunny day is instantly imprisoned, and the protesters turned into a captive audience.  When young people break out of the barricades and the serried ranks of cops and head in unexpected directions, it has the unmistakable feel of a jailbreak.

The fact is that, in a country whose security forces are up-armored to the teeth from the Mexican border to Union Square, just behind any set of marchers, you can feel the unease of those in power, edging up to fear.  And no wonder.  We remain in a “recovery” that’s spinning on a dime.  Let the Eurozone falter and begin to fall, the Chinese housing bubble pop, or the Persian Gulf go up in flames, and hold onto your signs.  Like Bloomberg in the Big Apple, many mayors sent in their paramilitaries (with a helping hand from the Department of Homeland Security) to get rid of the “troublemakers.”  Only problem: their real problems run so much deeper and when the next “moment” comes, Occupy could look like a march in the park (which, in many inspirational ways, it largely was).  In the meantime, the streets increasingly belong to the weaponized.  Americans who protest blur into the “terrorists” who, since 9/11, have been the obsession of what passes for law enforcement.

If you want some sense of just what’s lurking under the surface of all the police drones and helicopters and tanks and even mini-drone submarines, what underpins our fragile, edgy moment, then check out this talk TomDispatch regular Noam Chomsky gave.  It’s excerpted from his new book Occupy, with special thanks to its publisher Zuccotti Park Press. Tom

By Noam Chomsky:

The Occupy movement has been an extremely exciting development. Unprecedented, in fact. There’s never been anything like it that I can think of.  If the bonds and associations it has established can be sustained through a long, dark period ahead — because victory won’t come quickly — it could prove a significant moment in American history.

The fact that the Occupy movement is unprecedented is quite appropriate. After all, it’s an unprecedented era and has been so since the 1970s, which marked a major turning point in American history. For centuries, since the country began, it had been a developing society, and not always in very pretty ways. That’s another story, but the general progress was toward wealth, industrialization, development, and hope. There was a pretty constant expectation that it was going to go on like this. That was true even in very dark times.

I’m just old enough to remember the Great Depression. After the first few years, by the mid-1930s — although the situation was objectively much harsher than it is today — nevertheless, the spirit was quite different. There was a sense that “we’re gonna get out of it,” even among unemployed people, including a lot of my relatives, a sense that “it will get better.”

There was militant labor union organizing going on, especially from the CIO (Congress of Industrial Organizations). It was getting to the point of sit-down strikes, which are frightening to the business world — you could see it in the business press at the time — because a sit-down strike is just a step before taking over the factory and running it yourself. The idea of worker takeovers is something which is, incidentally, very much on the agenda today, and we should keep it in mind. Also New Deal legislation was beginning to come in as a result of popular pressure. Despite the hard times, there was a sense that, somehow, “we’re gonna get out of it.”

It’s quite different now. For many people in the United States, there’s a pervasive sense of hopelessness, sometimes despair. I think it’s quite new in American history. And it has an objective basis.

On the Working Class

In the 1930s, unemployed working people could anticipate that their jobs would come back. If you’re a worker in manufacturing today — the current level of unemployment there is approximately like the Depression — and current tendencies persist, those jobs aren’t going to come back.

The change took place in the 1970s. There are a lot of reasons for it. One of the underlying factors, discussed mainly by economic historian Robert Brenner, was the falling rate of profit in manufacturing. There were other factors. It led to major changes in the economy — a reversal of several hundred years of progress towards industrialization and development that turned into a process of de-industrialization and de-development. Of course, manufacturing production continued overseas very profitably, but it’s no good for the work force.

Along with that came a significant shift of the economy from productive enterprise — producing things people need or could use — to financial manipulation. The financialization of the economy really took off at that time.

On Banks

Before the 1970s, banks were banks. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account, for example, and transferred them to some potentially useful purpose like helping a family buy a home or send a kid to college. That changed dramatically in the 1970s. Until then, there had been no financial crises since the Great Depression. The 1950s and 1960s had been a period of enormous growth, the highest in American history, maybe in economic history.

And it was egalitarian.  The lowest quintile did about as well as the highest quintile. Lots of people moved into reasonable lifestyles — what’s called the “middle class” here, the “working class” in other countries — but it was real.  And the 1960s accelerated it. The activism of those years, after a pretty dismal decade, really civilized the country in lots of ways that are permanent.

When the 1970s came along, there were sudden and sharp changes: de-industrialization, the off-shoring of production, and the shift to financial institutions, which grew enormously. I should say that, in the 1950s and 1960s, there was also the development of what several decades later became the high-tech economy: computers, the Internet, the IT Revolution developed substantially in the state sector.

The developments that took place during the 1970s set off a vicious cycle. It led to the concentration of wealth increasingly in the hands of the financial sector. This doesn’t benefit the economy — it probably harms it and society — but it did lead to a tremendous concentration of wealth.

On Politics and Money

Concentration of wealth yields concentration of political power. And concentration of political power gives rise to legislation that increases and accelerates the cycle. The legislation, essentially bipartisan, drives new fiscal policies and tax changes, as well as the rules of corporate governance and deregulation. Alongside this began a sharp rise in the costs of elections, which drove the political parties even deeper into the pockets of the corporate sector.

The parties dissolved in many ways. It used to be that if a person in Congress hoped for a position such as a committee chair, he or she got it mainly through seniority and service. Within a couple of years, they started having to put money into the party coffers in order to get ahead, a topic studied mainly by Tom Ferguson. That just drove the whole system even deeper into the pockets of the corporate sector (increasingly the financial sector).

This cycle resulted in a tremendous concentration of wealth, mainly in the top tenth of one percent of the population. Meanwhile, it opened a period of stagnation or even decline for the majority of the population. People got by, but by artificial means such as longer working hours, high rates of borrowing and debt, and reliance on asset inflation like the recent housing bubble. Pretty soon those working hours were much higher in the United States than in other industrial countries like Japan and various places in Europe. So there was a period of stagnation and decline for the majority alongside a period of sharp concentration of wealth. The political system began to dissolve.

There has always been a gap between public policy and public will, but it just grew astronomically. You can see it right now, in fact.  Take a look at the big topic in Washington that everyone concentrates on: the deficit. For the public, correctly, the deficit is not regarded as much of an issue. And it isn’t really much of an issue. The issue is joblessness. There’s a deficit commission but no joblessness commission. As far as the deficit is concerned, the public has opinions. Take a look at the polls. The public overwhelmingly supports higher taxes on the wealthy, which have declined sharply in this period of stagnation and decline, and the preservation of limited social benefits.

The outcome of the deficit commission is probably going to be the opposite. The Occupy movements could provide a mass base for trying to avert what amounts to a dagger pointed at the heart of the country.

Plutonomy and the Precariat

For the general population, the 99% in the imagery of the Occupy movement, it’s been pretty harsh — and it could get worse. This could be a period of irreversible decline. For the 1% and even less — the .1% — it’s just fine. They are richer than ever, more powerful than ever, controlling the political system, disregarding the public. And if it can continue, as far as they’re concerned, sure, why not?

Take, for example, Citigroup. For decades, Citigroup has been one of the most corrupt of the major investment banking corporations, repeatedly bailed out by the taxpayer, starting in the early Reagan years and now once again. I won’t run through the corruption, but it’s pretty astonishing.

In 2005, Citigroup came out with a brochure for investors called “Plutonomy: Buying Luxury, Explaining Global Imbalances.” It urged investors to put money into a “plutonomy index.” The brochure says, “The World is dividing into two blocs — the Plutonomy and the rest.”

Plutonomy refers to the rich, those who buy luxury goods and so on, and that’s where the action is. They claimed that their plutonomy index was way outperforming the stock market. As for the rest, we set them adrift. We don’t really care about them. We don’t really need them. They have to be around to provide a powerful state, which will protect us and bail us out when we get into trouble, but other than that they essentially have no function. These days they’re sometimes called the “precariat” — people who live a precarious existence at the periphery of society. Only it’s not the periphery anymore. It’s becoming a very substantial part of society in the United States and indeed elsewhere. And this is considered a good thing.

So, for example, Fed Chairman Alan Greenspan, at the time when he was still “Saint Alan” — hailed by the economics profession as one of the greatest economists of all time (this was before the crash for which he was substantially responsible) — was testifying to Congress in the Clinton years, and he explained the wonders of the great economy that he was supervising. He said a lot of its success was based substantially on what he called “growing worker insecurity.” If working people are insecure, if they’re part of the precariat, living precarious existences, they’re not going to make demands, they’re not going to try to get better wages, they won’t get improved benefits. We can kick ’em out, if we don’t need ’em. And that’s what’s called a “healthy” economy, technically speaking. And he was highly praised for this, greatly admired.

So the world is now indeed splitting into a plutonomy and a precariat — in the imagery of the Occupy movement, the 1% and the 99%. Not literal numbers, but the right picture. Now, the plutonomy is where the action is and it could continue like this.

If it does, the historic reversal that began in the 1970s could become irreversible. That’s where we’re heading. And the Occupy movement is the first real, major, popular reaction that could avert this. But it’s going to be necessary to face the fact that it’s a long, hard struggle. You don’t win victories tomorrow. You have to form the structures that will be sustained, that will go on through hard times and can win major victories. And there are a lot of things that can be done.

Toward Worker Takeover

I mentioned before that, in the 1930s, one of the most effective actions was the sit-down strike. And the reason is simple: that’s just a step before the takeover of an industry.

Through the 1970s, as the decline was setting in, there were some important events that took place.  In 1977, U.S. Steel decided to close one of its major facilities in Youngstown, Ohio. Instead of just walking away, the workforce and the community decided to get together and buy it from the company, hand it over to the work force, and turn it into a worker-run, worker-managed facility. They didn’t win. But with enough popular support, they could have won.  It’s a topic that Gar Alperovitz and Staughton Lynd, the lawyer for the workers and community, have discussed in detail.

It was a partial victory because, even though they lost, it set off other efforts. And now, throughout Ohio, and in other places, there’s a scattering of hundreds, maybe thousands, of sometimes not-so-small worker/community-owned industries that could become worker-managed. And that’s the basis for a real revolution. That’s how it takes place.

In one of the suburbs of Boston, about a year ago, something similar happened. A multinational decided to close down a profitable, functioning facility carrying out some high-tech manufacturing. Evidently, it just wasn’t profitable enough for them. The workforce and the union offered to buy it, take it over, and run it themselves. The multinational decided to close it down instead, probably for reasons of class-consciousness. I don’t think they want things like this to happen. If there had been enough popular support, if there had been something like the Occupy movement that could have gotten involved, they might have succeeded.

And there are other things going on like that. In fact, some of them are major. Not long ago, President Barack Obama took over the auto industry, which was basically owned by the public. And there were a number of things that could have been done. One was what was done: reconstitute it so that it could be handed back to the ownership, or very similar ownership, and continue on its traditional path.

The other possibility was to hand it over to the workforce — which owned it anyway — turn it into a worker-owned, worker-managed major industrial system that’s a big part of the economy, and have it produce things that people need. And there’s a lot that we need.

We all know or should know that the United States is extremely backward globally in high-speed transportation, and it’s very serious. It not only affects people’s lives, but the economy.  In that regard, here’s a personal story. I happened to be giving talks in France a couple of months ago and had to take a train from Avignon in southern France to Charles De Gaulle Airport in Paris, the same distance as from Washington, DC, to Boston. It took two hours.  I don’t know if you’ve ever taken the train from Washington to Boston, but it’s operating at about the same speed it was 60 years ago when my wife and I first took it. It’s a scandal.

It could be done here as it’s been done in Europe. They had the capacity to do it, the skilled work force. It would have taken a little popular support, but it could have made a major change in the economy.

Just to make it more surreal, while this option was being avoided, the Obama administration was sending its transportation secretary to Spain to get contracts for developing high-speed rail for the United States, which could have been done right in the rust belt, which is being closed down. There are no economic reasons why this can’t happen. These are class reasons, and reflect the lack of popular political mobilization. Things like this continue.

Climate Change and Nuclear Weapons

I’ve kept to domestic issues, but there are two dangerous developments in the international arena, which are a kind of shadow that hangs over everything we’ve discussed. There are, for the first time in human history, real threats to the decent survival of the species.

One has been hanging around since 1945. It’s kind of a miracle that we’ve escaped it. That’s the threat of nuclear war and nuclear weapons. Though it isn’t being much discussed, that threat is, in fact, being escalated by the policies of this administration and its allies. And something has to be done about that or we’re in real trouble.

The other, of course, is environmental catastrophe. Practically every country in the world is taking at least halting steps towards trying to do something about it. The United States is also taking steps, mainly to accelerate the threat.  It is the only major country that is not only not doing something constructive to protect the environment, it’s not even climbing on the train. In some ways, it’s pulling it backwards.

And this is connected to a huge propaganda system, proudly and openly declared by the business world, to try to convince people that climate change is just a liberal hoax. “Why pay attention to these scientists?”

We’re really regressing back to the dark ages. It’s not a joke.  And if that’s happening in the most powerful, richest country in history, then this catastrophe isn’t going to be averted — and in a generation or two, everything else we’re talking about won’t matter. Something has to be done about it very soon in a dedicated, sustained way.

It’s not going to be easy to proceed. There are going to be barriers, difficulties, hardships, failures.  It’s inevitable. But unless the spirit of the last year, here and elsewhere in the country and around the globe, continues to grow and becomes a major force in the social and political world, the chances for a decent future are not very high.

Noam Chomsky is Institute Professor Emeritus in the MIT Department of Linguistics and Philosophy.  A TomDispatch regular, he is the author of numerous best-selling political works, most recently, Hopes and Prospects, Making the Future, and Occupy, published by Zuccotti Park Press, from which this speech, given last October, is excerpted and adapted. His web site is www.chomsky.info.

Why Is the ACLU Helping The Richest Americans Buy Our Elections?

In Uncategorized on February 21, 2012 at 4:17 pm

Oldspeak: “Plutocrats come in Red and Blue. Elephantine and Asinine. You can bet your ass Newt Gingrich isn’t the only Presidential candidate with a Billionaire benefactor. Obama has them too, the difference is he’s not being called to account for it, he’s openly talked of raising ONE BILLION dollars to finance his reelection campaign. I ask you What’s democratic about that?  How does someone with the means to raise that sum of money represent the interests of all Americans? He doesn’t.  He represent the interests of his benefactors. As long as unlimited monetary donations from multinational corporations, foreign investors and god knows who else with millions to ‘contribute’ is allowed, plutocracy will be order of the day in the U.S. of A.  Need we any more evidence that the 2 party system has failed, and it hopelessly corrupted with money, greed, and cronyism? ‘The ACLU thrives on being attacked and sees itself as the last legal line of defense against state censorship. But an honest look in a mirror may reveal that its anti-censorship absolutism is helping the wealthy to eclipse and suppress—if not silence—political speech of millions of ordinary Americans.’ -Steven Rosenfeld

By Steven Rosenfeld @ Alter Net:

The American Civil Liberties Union has earned its reputation as the nation’s foremost legal opponent of government censorship and defender of First Amendment political speech. But increasingly, this national organization with 500,000 members and a $70 million annual budget has another legacy—helping the wealthiest Americans and institutions spend unlimited sums on elections.

This complex legacy follows a nearly four-decade history of filing briefs in the Supreme Court and lower federal courts, virtually all of them arguing that the door to censorship, via regulation of core political speech, must never be opened. But various forces in the courts, the political world, and inside the ACLU are converging that may prompt the ACLU’s national board to reexamine its hardened stance in a more nuanced light, just as it moderated its policy on public financing of elections soon after the Supreme Court’s controversial Citizens United ruling.

The pressure went up considerably on Friday, as two U.S. Supreme Court Justices said the Court should reopen Citizens United, as they suspended a Montana Supreme Court ruling that upheld the state’s century-old ban on corporate electioneering. Unlike the ACLU’s national office, which urged the Court to remove restrictions on independent—or non-candidate related—electioneering, the Montana ACLU argued this wasn’t about censorship at all, but preventing corruption and ensuring Montanans’ voices could be heard in elections.

“Montana’s experience, and experience elsewhere since this Court’s decision in Citizens United v. Federal Election Comm’n, make it exceedingly difficult to maintain that independent expenditures by corporations ‘do not give rise to corruption or the appearance of corruption,’” wrote Justice Ruth Bader Ginsburg, with Justice Stephen Breyer joining. A hearing “will give the Court an opportunity to consider whether, in light of the huge sums currently deployed to buy candidate’s allegiance, Citizens United should continue to hold sway.”

Two phrases in the justices’ statement may have particular resonance for the ACLU’s national board—the “experience elsewhere” and “corruption or the appearance of corruption,” which suggest constitutional issues apart from censorship. In Citizens United, the ACLU had argued that independent expenditures were the kind of “speech that lies at the heart of the First Amendment” and must not be censored.

According to Burt Neuborne, the ACLU’s former national legal director and now legal director at the Brennan Center for Justice, only one perspective matters to an organization that has weathered criticism for decades for defending unpopular people and causes: whether new facts from current events and recent changes in law demand a reevaluation of their position. As the two justices suggest, the 2012 presidential campaign, in combination with the Court majority’s recent aggressive deregulation of campaign financing, may be that spark.

The presidential campaign has seen what’s left of the nation’s campaign finance laws flouted in a striking way that cannot have gone unnoticed within the ACLU; it has revealed that critical rulings in Citizens United (and the D.C. Circuit Court in a ruling that followed, SpeechNow.org) were at best politically naïve constructions. This is because 2012’s electoral landscape is presenting free speech issues that are not about state censorship—but what American democracy should look like and how big money functions in it.

The ACLU was not responsible for the Supreme Court’s decision to expand Citizens United from a narrow case to one remaking big portions of campaign finance law. But like many times before, it urged deregulation of electioneering—which the Court’s majority did for independent expenditures. Just weeks later, an appeals court in SpeechNow.org drew on this ruling, allowing individuals and corporations to make unlimited contributions to political committees, so long as those groups only make independent expenditures and do not coordinate with candidates. That is how today’s super PACs emerged.

In Citizens United, the Supreme Court made a series of remarkable assertions. It declared that independent expenditures could not corrupt candidates, as they would be truly independent and operate apart from the candidates. But neither the Supreme Court nor the Speechnow.org court said how to avoid coordination, assuming the problem away. Everyone on the Court but Justice Clarence Thomas held that disclosure of spending was permissible, not recognizing that current disclosure rules allow donors to operate in the dark behind innocuous stage names. Like coordination, corruption was also dumbed down. Invoking the long-established doctrine that the only legitimate reason for regulating campaign funds is curbing quid pro quo corruption or the appearance of it, the majority watered this concept down saying a lot about what corruption was not, namely access, influence and ingratiation of candidates, but next to nothing about what quid pro quo corruption was, apart from buying votes. Against this backdrop, Justice Anthony Kennedy, writing for the majority, made the startling assertion that limitless independent expenditures in elections could not possibly cause the public to lose faith in our democracy.

Needless to say, his prediction has not been borne out by events. Recent nationwide polling has found 55 percent of Americans oppose the decision, and bigger numbers believe that their voices are diminished compared to big donors and lobbyists. It is not hard to see why the public is upset and discouraged. Presidential candidates’ former campaign staffers are managing the supposedly independent committees, mocking that supposed independence. By uniformly taking the low road, they complement the official campaign’s positive messaging showing further coordination. The top donors use the fiction of independence to ignore federal contribution limits and write million-dollar checks, including to political non-profits that do not disclose their names. To suggest that an individual or corporation writing six- or seven-figure checks to back candidates or parties does not expect payback is naïve, former political consultants say. Meanwhile, a voluminous record discussing independent expenditures, coordination and corruption was before the Court during its deliberations. Citing this record, Justice John Paul Stevens in his Citizens United dissent wondered how the majority could be so indifferent.

“On numerous occasions we have recognized Congress’ legitimate interest in preventing the money that is being spent from exerting an ‘undue influence on an officeholder’s judgment’ and from creating ‘the appearance of such influence,’” he wrote. “Corruption operates along a spectrum, and the majority’s apparent belief that quid pro quo arrangements can be neatly demarcated from other improper influences does not accord with the theory or reality of politics.”

These developments raise specific First Amendment issues that are not about state censorship of political speech, but about corruption and distortions of the democratic process. These issues have been noted not only on editorial pages and parodied on late-night TV, but from within the ACLU itself. The Montana ACLU affiliate weighed in before the recent Montana Supreme Court decision, taking the opposite view of the national ACLU office. And New Mexico’s ACLU chapter did not interfere this month as that state’s legislature passed a resolution calling for a constitutional amendment to overturn Citizens United.

Moreover, in recent weeks, a respected Second Circuit judge took issue with Citizens United in a concurring opinion in a case involving New York City’s public financing system. “All is not well with this law, and I believe it appropriate to state in a judicial opinion why I think this is so,” wrote Guido Calabresi, a U.S. Court of Appeals judge and former Yale Law School dean, in comments to late 2011 ruling. Calabresi’s remarks address the majority’s contention in Citizens United—which echoes the national ACLU’s view—that unfettered political speech regardless of the speaker is paramount. He began by quoting Luke 21:1-4.

As Jesus looked up, he saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in two very small copper coins. “Truly I tell you,” he said, “this poor widow has put in more than all the others. All these people gave their gifts out of wealth; but she out of her poverty put in all she had to live on.”

Like Luke, Calabresi noted that the wealthy will drown out the political speech of poorer people by virtue of spending more to send a message—having a larger megaphone. Additionally, he said that such domination of the airwaves also “obscures the depth of each speaker’s views,” as one cannot tell if the voice being eclipsed is whispering, crying or yelling—conveying the intensity of their opinions. “And that is a problem of profound First Amendment significance.”

“There is perhaps no greater a distortive influence on the intensity of expression than wealth differences,” he wrote. “The wider the economic disparities in a democratic society, the more difficult it becomes to convey, with financial donations, the intensity of an ordinary citizen’s political beliefs. People who care a little, if they are rich, still give a lot. People who care a lot must, if they are poor, give only a little. Jesus’ comment about the rich donors and the poor widow says it all.”

In other words, in 2012, when supposedly independent super PACs and political non-profits are raising millions from wealthy individuals and corporations whose actions are coordinated in all but name only with the candidates, and disclosure by those political entities is untimely or non-existent, the nation is facing serious First Amendment issues that do not neatly fit the ACLU’s anti-censorship line.

Convincing the ACLU

The ACLU is a nationwide organization with independent affiliates in every state and Washington, DC, and a headquarters and national legal department in New York. Its board of directors has representatives from every state and from its 500,000 members. As such, it is one of the most powerful legal advocacy organizations in the country.

For decades, people inside and outside the ACLU have tried to get its board to moderate its campaign finance views. Since 1970, it has taken up the issue two dozen times. The key question, according to Neuborne, its former national legal director, is whether today’s rising calls to restrict the wealthiest Americans and institutions from spending unlimited money ‘independent’ of campaigns is just today’s version of censoring society’s latest villain, as the federal government once tried to do with Communists, Nazis, gays, minorities and pornographers—or is something constitutionally different going on in today’s deregulated campaign finance environment?

One of the ACLU board’s long-held assumptions, which was affirmed in the Supreme Court’s 1976 Buckley v. Valeo ruling, is that candidates and independent groups who spend their own money in elections constitute a form of free speech that must not be regulated. In Buckley, the Court held that a new congressional law’s limits on campaign spending by office seekers and independent groups were unconstitutional. It ruled, however, that campaign contribution limits were constitutionally permissible in the interest of preventing corruption or its appearance with candidates, an interest that candidate and independent expenditures did not prevent. Buckley’s framework has led to today’s billionaires writing million-dollar checks to the supposedly independent super PACs and political non-profits, and in turn, voters in 2012’s early presidential contests hearing their views dominate the airwaves and debate.

The ACLU includes Buckley on its list of its most important 20th-century victories. Moreover, in the 36 years since that case, with few exceptions, the Court and the ACLU board both have treated spending money in elections as the purest form of protected constitutional speech there is—not conduct that can be regulated. That is a key legal distinction. Other areas of First Amendment law are not this clear-cut and all kinds of speech are regulated without seeing censorship issues. That raises the question of why should political speech in elections be so black and white, or can it be balanced with other democratic interests?

The ACLU’s assertion that political messaging is pure speech whose regulation amounts to censorship infuriates not just state and federal judges but many democracy advocates, particularly those who believe big money distorts the process and acts to suppress the speech of people of lesser means.

“It’s not speech itself and it never has been,” said John Bonifaz, co-founder and director of Free Speech for People. “It is conduct not speech, and any regulation of spending of campaign money in elections is the regulation of the manner of speech, to ensure that anyone who has a 1000-megawatt bullhorn is not able to drown out anybody else’s speech.”

A series of former top national ACLU officials have tried to get the national board to change its position. In fairness, the board did change its policy in April 2010 after Citizens Unitedsaying that spending limits were permissible for candidates that took public financing. And its board, noting this was unprecedented in ACLU history, agreed that “reasonable” contribution limits were acceptable, although that has been settled law since Buckley. But these changes re-enforced laws established decades earlier. And on the key holdings in Citizens United, the board did not budge.

“You can be furious at guys like that, especially when they win,” said Neuborne, who now believes the ACLU national policy is on the wrong side of history and the Constitution. He went before the board to make that case after Citizens United came out, debating Floyd Abrams, a famous First Amendment attorney whose legal career has spanned defending the New York Times to shielding major tobacco companies from federal health regulations.

“Their trumping legal argument is that you have to make an overwhelming showing of need before they will sit still for censorship. And they say your overwhelming showing of need is that rich people have too much power in the society, and they are distorting the democratic process. Their argument is, ‘Look, there are a lot of rich people and a lot of them disagree. So if the rich people cancel each other out, what’s the big deal? All they do is fund democracy. People get more speech and the rich folks pay for it.”

That’s not all the ACLU’s board says, said Neuborne. “Second thing they say [is that] if you think that rich folk’s speech is skewed, you have to show me facts to demonstrate that. You just can’t tell me it’s a problem. Show me which election it has happened in. Show me where one side blew out the other side to the point where the other side wasn’t able to make its case to the electorate. You know what, I can’t make that showing. The closest it happened interestingly was Florida, when Romney outspent Gingrich five to one. I think it demonstrably changed the outcome of the election. But you cannot argue that national elections are shifted that way, because in national elections that parties are relatively equally balanced in terms of money.”

Indeed, 2012 is turning into exactly that kind of political arms race. While most of the early independent spending has been in the Republican presidential race, the Democrats are quickly falling in line. The Obama re-election campaign has said it would refer donors to a super-PAC run by a top ex-Obama campaign staffer—another instance of admitting that these PACs were anything but “independent” of the campaigns, the concern that Justice Kennedy turned a blind eye to Citizens United. In liberal circles, Credo Mobile, a phone company that has raised millions for progressive causes, said it too would form a super-PAC for the 2012 election. So has ActBlue, which has a traditional PAC that can donate to candidates and an independent super-PAC.

Neuborne knows American elections do not benefit from this spiral—which only elevates the role of wealthier participants at the expense of Americans of more modest means. The question is how to convince the ACLU board. It may have debated its response to Citizens United too soon, he said, noting that Abrams argued the organization would look foolish after siding with the Court majority in the case and winning—only to reverse its position. That, however, was a political argument, not a constitutional one. Neuborne said 40 percent or more of the board believe it is time to take a more nuanced view.

“Where the ACLU goes off the rails is that it forgets at some point that spending massive amounts of money ceases to be analogous to just pure speech and becomes an exercise in power,” Neuborne said. “I think that the ACLU is forgetting that the First Amendment is democracy’s friend, not democracy’s enemy.  And when it demonstrably hurts democracy there has to be something wrong with a policy that just digs in and says, ‘Sorry, the First Amendment made us do it.’”

The ACLU’s national press office declined to comment or make any attorneys available for this article. Calls and emails to ACLU litigators, current and former, who litigated many of its political speech cases before the Court also were not returned.

However, Neuborne is hardly alone in his analysis of how First Amendment fundamentalism can fray the fabric of political speech and democracy. Supreme Court Justices, starting with Byron White’s dissent at the start of the Court’s modern deregulatory regime in Buckley, and John Paul Stevens, whose 2010 dissent in Citizens United, catalogued the dangers of unregulated big money in elections.

“While it is true that we have not always spoken about corruption in a clear or consistent voice, the approach taken by the majority cannot be right, in my judgment, “Stevens wrote. “It disregards our constitutional history and the fundamental demands of a democratic society.”

Unlike the 1976 Buckley decision, which slowly transformed America’s campaign finance landscape over many years, the impact from Citizen United has come in barely two years. The Court’s majority in Citizens United did not anticipate these consequences. It puts those who argued with the majority—such as the ACLU’s national office—in an awkward place, because as new facts have emerged, so have nuanced political speech issues that cannot be adequately answered by saying censorship is the most important First Amendment issue.

And Citizens United may be headed back to the Supreme Court. On Friday, the Court issued a stay in a suit challenging Montana’s 1912 ban on corporate campaigning. The Court could overrule Montana without a hearing—citing the supremacy of the nation’s highest court over state courts. Or it could hold a hearing to re-evaluate parts of it in light of new facts and public perceptions.

Should the Court hear the Montana case, the ACLU board may be pushed to re-evaluate its policy. Whether it will remains to be seen. The ACLU thrives on being attacked and sees itself as the last legal line of defense against state censorship. But an honest look in a mirror may reveal that its anti-censorship absolutism is helping the wealthy to eclipse and suppress—if not silence—political speech of millions of ordinary Americans.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008).

© 2012 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/154184/

As The Plutonomy Powers Ahead, The Realonomy Remains In Recession

In Uncategorized on February 3, 2012 at 4:55 pm

Oldspeak:‘In a Plutonomy “the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers.” In other words, official economic statistics no longer represent the experience of the economy as a whole. More and more, they represent only the experiences of the very rich...the Realonomy has been in recession since 1999. Even at the very top of the Realonomy, people have experienced flat or declining incomes over the past 12 years…The Realonomy won’t start growing again until America addresses its runaway inequality. We need fairer taxes, higher minimum wages, and more – not less – government spending…That may all sound counterintuitive in a recession, but that’s only because we’ve gotten so used to the politics of Plutonomy. Growth isn’t enough.’ -Salvatore Babones. Not only is Growth not enough, it’s unsustainable. Infinite growth in simply IMPOSSIBLE on a planet with finite resources. The current empire in decline, the U.S. of A. one of the biggest debtor nations on the planet has not come to terms with the fact that it is indeed an empire in decline, and is generating more debt than wealth, while drawing down assets faster than they can replenish them, thus accelerating the rate of decline. “The ‘culture of debt’ has become a global issue, and it is not just financial, but defines how every society and economy now interacts with respect to their fundamental economic, human and natural assets.” -Edward B. Barbier We can’t continue down this unsustainable path indefinitely. The music will stop and the party will end. Then what? That’s what we need to be asking ourselves. Then what?

By Salvatore Babones @ Truthout:

America’s longest recession since World War II officially ended in June 2009. Since then, the economy has expanded by almost 6 percent (adjusted for inflation). All of the losses of 2007-2009 have been erased.

American economic output is now at an all-time high. So why doesn’t it feel that way?

Back in October 2005, three Citigroup stock analysts heralded the arrival of a new kind of economic system in the United States. They called it the “Plutonomy,” the economy of the rich.

They explained that in a Plutonomy “the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers.” In other words, official economic statistics no longer represent the experience of the economy as a whole. More and more, they represent only the experiences of the very rich.

Official economic statistics show that US national income per capita grew a cumulative 10 percent between 1999 and 2011 (adjusted for inflation). In aggregate, we generate 10 percent more per person than we did 12 years ago. Where did that 10 percent growth go?

Up in the stratosphere of the American Plutonomy, the IRS reports that incomes among the top 400 American taxpayers increased 107 percent between 1999 and 2007 (adjusted for inflation). Top 400 incomes declined in 2008, but by most accounts they have now bounced back to pre-recession levels.

For people who just make it into the top 1 percent, the gains have been much more modest. Their real incomes have risen about 12 percent since 1999, depending how you count. By some estimates, the increase has been closer to 6 percent. In other words, people at the 99th percentile of the US income distribution – people making upwards of $360,000 per year – have just about kept pace with economic growth in the economy as a whole.

Since 1999, no group below the top 1 percent has even kept pace. They are the “other 99 percent.” They live in the “Realonomy.”

In the Realonomy, people make most of their money from wages, not investments. In the Realonomy, people have to worry about retirement planning and health insurance. In the Realonomy, people can’t afford to lose their jobs.

While the Plutonomy continues to grow by leaps and bounds, the Realonomy has been in recession since 1999. Even at the very top of the Realonomy, people have experienced flat or declining incomes over the past 12 years. For example, families at the 95th percentile of America’s income distribution have experienced, on average, a 1.2 percent decline in real income (income adjusted for inflation) since 1999.

Further down the ladder, the situation gets worse and worse. For families at the 80th percentile, incomes are down 1.3 percent; at the 60th percentile, down 4.4 percent; at the 40th percentile, down 7.1 percent; at the 20th percentile, down 10.5 percent.

Nor does education provide an insurance policy. Among college graduates with full-time, year-round jobs, real incomes are down 3.6 percent over the past 12 years.

On the other hand, those without college degrees or full-time jobs have fared even worse.

The simple fact is that the Realonomy has been stagnant or in recession since 1999. The Realonomy hit bottom in 2009-2010, but it still hasn’t bounced back. Only the Plutonomy is growing, not the Realonomy.

The Realonomy won’t start growing again until America addresses its runaway inequality. We need fairer taxes, higher minimum wages, and more – not less – government spending.

That may all sound counterintuitive in a recession, but that’s only because we’ve gotten so used to the politics of Plutonomy. Growth isn’t enough.

We have growth. The top of the top 1 percent is growing like crazy. It’s government’s job to redirect some of that growth to the other 99 percent.

 

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