A particularly good column, "The Charts That Show How Big Business Is Winning," by David Leonhardt, appeared in yesterday's paper. More people now are employed by large corporations than small companies:
In the late 1980s, small companies were still a lot bigger, combined, than big companies. In 1989, firms with fewer than 50 workers employed about one-third of American workers — accounting for millions more jobs than companies with at least 10,000 employees.
Since then, though, many small businesses have struggled to keep up with the new corporate giants and with foreign competition. You can probably see a version of the story in your community. The hardware store has given way to The Home Depot. The local hospital and bank are owned by a chain. The supermarket is Whole Foods, which is now owned by Amazon. The family-owned manufacturer may simply be out of business.
The share of Americans working for small companies fell to 27.4 percent in 2014, the most recent year for which data exists, down from 32.4 in 1989. And big companies have grown by almost an identical amount. Today, companies with at least 10,000 workers employ more people than companies with fewer than 50 workers.
Of course it's noticeable in my own neighborhood (see my account from five years ago), but it also struck me when I was down in the Bay Area several years ago to run the Bay To Breakers with my father. We parked his car in a Berkeley fee lot with the intention of taking BART to San Francisco. But it was so early that weekend morning that BART wasn't running. We ended up taking a bus through Oakland surface streets, hooking up with the Bay Bridge, before being disgorged at the Embarcadero.
I had gone to school in the Bay Area in the 1980s, moving to the East Coast in 1988. When I lived in the Bay Area, Oakland and San Francisco were chock full of little mom & pop shops, artisanal bakeries, taquerias, record stores, fabric emporiums, you name it. Corporate entities like McDonalds or Sears were outliers in the city.
What I saw from the bus window that May morning was nothing but storefronts of national chains: Qdoba, Starbucks, Verizon. It was shocking. From the small-business rainbow of the 1980s to a colorless, desiccated corporate wasteland in 2015.
"All politics is local" is a largely useless statement ascribed to Tip O'Neill, known in American history for being the liberal Democratic Speaker of the House during the Age of Reagan. The idea that the statement is supposed to convey is that politics boils down to basic interactions between a representative and his/her constituents. The "rubber" always meets the road in some sort of idealized speech act where the honest pol knocks on a door in his/her district and gets an earnest earful from a thoughtful, engaged citizen. Since most people have do not have any sort of basic interaction with public officials -- elected, appointed or otherwise -- it begs the question, doesn't it?
Politics in the West are elections where the "Haves" spend money, usually a lot, to elect the representative of their choice, someone who will continue the gravy train running on time, shuttling more and more wealth to the top of the income pyramid; meanwhile, the "Have Nots," assuming they bother to vote, and assuming they have a clue, struggle to find someone or something on the ballot that might steer the gravy train, even just a little bit, in their direction.
Politics is a question of "Which Side Are You On?" Are you with capital or labor? Our -- meaning basically everyone on the planet -- current impasse is based on the fact that politics increasingly forecloses a choice of sides. It is a choice between capital or capital. No labor option is allowed.
It is election day today. It is an off year. The big election year is next year, but there are high stakes on this ballot. Locally, in the Emerald City, socialist firebrand Kshama Sawant, an exceedingly rare politician who is fighting the good fight, is headed for reelection. It would be an enormous, mind-bending upset, completely off the charts, if her faux-multicultural challenger, a corporate shill, were to triumph. It is not going to happen. The Sawant campaign has been disciplined and well-funded (by individual donations as well as some labor union independent expenditures). Labor cannot lose the Sawant race, something it is well aware of. So no stone has been left unturned.
Locally the race to watch is in District 1. If Lisa Herbold can defeat Shannon Braddock, surmounting the largest independent expenditure campaign in the history of Seattle, we can pronounce with some certainty that there is blossoming old-school "Which Side Are You On?" class consciousness in one the West Coast tech hubs.
Two good articles appeared yesterday in the national edition of The New York Times providing insight into the politics of the tech-booming West Coast. "San Francisco Ballots Turn Up Anger Over the Technical Divide" by Conor Dougherty and "Battles in San Francisco, but Not in Mayoral Race" by Adam Nagourney describe a situation similar to the one in Seattle. New commercial construction spurred on by the tech industry is radically altering the cityscape and dislocating longtime residents.
Nagourney opening paragraphs pretty well sum up the situation prevalent in the metropolitan West Coast tech hubs:
SAN FRANCISCO — This city has been racked by battles over development, a homeless population that spills onto its stoops and sidewalks, rocketing housing costs and increases in violent crime. With its gleaming new buildings and influx of Silicon Valley wealth, San Francisco has the fastest-growing income inequality gap in the nation.
And on Tuesday, when voters here go to the polls for municipal elections, they will see a ballot that captures that turmoil and the deep divisions over the city’s future. There is an initiative to impose a moratorium on new construction in the Mission District and another to severely restrict short-term rentals, as well as a $310 million bond to create affordable housing.
A Board of Supervisors race in the northeast corner of the city, which includes Russian Hill and North Beach, has turned into a war over development between the two factions that rule politics here: moderate Democrats and the far left.
The factions would be more appropriately named the "corporate Democrats" and the "popular left."
We'll see what happens. But one thing is for sure: Those canyons of new commercial construction I walk through every morning on my way to work, the ones Amazon is building to house its new headquarters, those are not going away. They will change the city forever. San Francisco and Seattle are moving in a Manhattan direction. There will be a reaction. The question is how robust and how class conscious it is. District 1 Herbold vs. Braddock should provide us an indication.
Amy Chozick has worked the Clinton beat for two years now. Chozick acts as midwife for the public relations campaigns launched one after the next to reinvent the bloated power broker we have come to know as Hillary, but Chozick can also be a stealthy critic as well.
An example can be found in last Saturday's repackaging ("Hillary Clinton Embraces Her Mother’s Emotional Tale") of Hillary as a loving daughter to a mother with a hardscrabble, emotionally-harrowing working-class story. If Hillary had a privileged, stable Illinois upbringing, her mother did not. Here is how Chozick sums up the Hillary reboot in a tidy four paragraphs that open the story:
Dorothy Howell [Hillary's mother] was 8 years old when her parents sent her away. It was 1927. Her mother and father, who fought violently in the Chicago boardinghouse where the family lived, divorced. Neither was willing to take care of Dorothy or her little sister.
So they put the girls on a train to California to live with their grandparents. It did not go well. Her grandmother favored black Victorian dresses and punished the girls for inexplicable infractions, like playing in the yard. (Dorothy was not allowed to leave her room for a year, other than for school, after she went trick-or-treating one Halloween.)
Unable to bear it, Dorothy left her grandparents’ home at 14, and became a housekeeper for $3 a week, always hoping to return to Chicago and reconnect with her mother. But when she finally did, a few years later, her mother spurned her again.
It took a long time for Hillary Rodham Clinton to fully understand the story of her mother’s devastating childhood. But now, four years after her death, Dorothy’s story is forming the emotional foundation of her daughter’s campaign for president, and will be a central theme in her big kickoff speech on Saturday.
Chozick, a media reporter before taking on the Clinton beat, explains to her readers why this reboot is important:
A sympathetic tale of her mother’s struggles could help Mrs. Clinton convince a struggling middle class that she understands their problems, aides said. A CNN poll released on June 2 showed that 47 percent of voters thought that Mrs. Clinton “cares about people like you,” down from 53 percent last July. Mrs. Clinton’s campaign aides have publicly shrugged off such polls as evidence that voters distrust Washington and politics in general, but privately they are strategizing about how to reframe the conversation.
The task at hand for the Clinton campaign is enormous, almost akin to an alchemical squaring of the circle: How to convince people that Hillary is not what she is? -- a member of the "Davos elite," a powerful, jet-setting celebrity that accepts gargantuan checks from sheikhs and moguls and cares less for ordinary working people than an antebellum plantation owner would for one of his infirm slaves. Hence, we have Hillary piggybacking on her dead mother's backstory.
Hillary came out swinging last Saturday (Amy Chozick, "Hillary Clinton, in Roosevelt Island Speech, Pledges to Close Income Gap") on Roosevelt Island, the long spit in the East River between Manhattan and Queens, promising to fight for the truck drivers and nurses. Chozick couldn't help getting in the dig that
For as much as the content of the speech mattered, the theater of it was equally important. For a campaign criticized for lacking passion, the event gave Mrs. Clinton the ability to create a camera-ready tableau of excitement.
The Brooklyn Express Drumline revved up the crowd assembled on a narrow stretch at the southern tip of the island. And Marlon Marshall, the campaign’s director of political engagement, rattled off statistics about the number of volunteers who have signed up and house parties held in the early nominating states. A section with giant screens set up for an overflow crowd stood nearly empty.
But a crowd of supporters and volunteers from the staunchly Democratic New York area does not exactly represent the electorate writ large. The real test for Mrs. Clinton and how the speech was perceived will be in Iowa, where she was to travel on Saturday evening for several events. Iowa, the first nominating state, shunned her the last time she sought the presidency, in 2008.
The Clintons when they occupied the the White House in the 1990s were known for something called "triangulation," which was a way of running against your own party by cherry-picking policies from the opposition. Tony Blair made a career out of it in the UK as well.
As Obama's attempt at triangulation to get the Trans-Pacific Partnership through Congress has exploded in a ball of flames, it is interesting to note that at the core of Hillary's messaging is the triangulation of the Obama presidency. According to Chozick and Patrick Healy in today's story "Hillary Clinton’s Vows to ‘Fight’ Evoke a Populist Appeal and a Contrast With Obama":
In a roughly 45-minute speech on Saturday, Hillary Rodham Clinton made 14 references to herself as a fighter.
She said she would “fight” back against Republicans, “fight” climate change, “fight” to “strengthen America’s families” and “fight” to “harness all of America’s power.” She used the verb in many of the same ways at her first major rally in Des Moines on Sunday, adding that she would “fight” for Midwestern values.
The presidential campaign’s effort to define Mrs. Clinton as a fighter is, on the surface, a way to persuade middle-class voters that she is on their side. But it is also helping to convey a more subtle message: When it comes to political combat and perseverance, Mrs. Clinton is not President Obama.
The theme is emerging just as Mr. Obama has suffered a major setback on trade, one that many in Congress say reflects his weaknesses, namely his standoffishness and his inability to forge coalitions for an agenda.
It is a hall of mirrors. Obama is working with Republicans to surreptitiously reintroduce Fast Track while Hillary is positioning herself on the corpse of Democrats' hopes that Obama was a transformative politician.
This cannot end well. Hillary has not put Benghazi and the email issue behind her, let alone successfully relaunching herself as a working-class champion. I am still of the belief that absent the GOP nominating Ted Cruz Hillary cannot win.
Yesterday was another nationwide mobilization to demand a $15-an-hour minimum wage for low-wage workers. The fast-food industry has been the principal target. Service Employees International Union (SEIU) is the key labor organization spearheading the push. For instance, SEIU ran the successful 2013 initiative campaign for a $15/hr. minimum wage in SeaTac, the city that is home to Seattle's airport, at the same time it provided valuable support in socialist Kshama Sawant's victory over an entrenched corporate liberal Seattle City Council incumbent. Sawant's win paved the way for Seattle's breakthrough $15/hr. minimum wage, which was copied, in one form or another (usually a lower rate of pay), in other cities and states.
“America, period, is unequal,” said Chasten Florence, 26, a construction worker from Jamaica, Queens. “Once we accept that, we can change that."
McDonald’s said in a statement: “We respect people’s right to peacefully protest, and our restaurants remain open every day with the focus on providing an exceptional experience for our customers.”
The campaign, staffed in part by organizers from the Service Employees International Union, orchestrated the country’s first-ever fast-food industry strike in November 2012, when 200 New York City workers walked off their jobs. The periodic protests expanded to six other cities in the spring of 2013, 60 cities in August of that year, 150 cities in May 2014, and 190 last December.
The protests have coincided with an extraordinary shift in the political consensus on the minimum wage. In the last two years, Seattle has moved to gradually increase its minimum wage to $15 an hour, from $9.32. Oakland, Calif., established a new minimum wage of $12.25, while Chicago approved an increase to $13, from $8.25, over the next four years. Alaska and Arkansas passed minimum wage increases by referendum in 2014.
In 2013, President Obama endorsed raising the federal minimum wage to $9, from $7.25 an hour, then increased that to $10.10 by the fall of that year. Democrats in the Senate are now working on a proposal to raise the national minimum wage to $12 by 2020.
But there was not a peep about the event yesterday in my place of employment, and I work for a union. And that is the problem. There is a yearning on the part of the broad public for a change in working conditions, which Scheiber makes clear, but, besides SEIU, the other big international unions have shown no ability to capitalize on the unrest.
“The labor movement has been stuck,” said Janice R. Fine, an associate professor of Labor Studies at Rutgers University. “They deserve a lot of credit in deciding that, in a situation this bleak, you needed ‘climate change’ ”— that is, a change in how the public views low-wage work — “before you’d actually get an opportunity to organize again.”
Partly in response to the political shift as well as competitive pressure from tighter labor markets, several major employers of low-wage workers have moved to raised their base pay in recent months. Walmart, Target and McDonald’s have all announced plans to increase their minimum wage to or near $10, though for McDonald’s it would apply only to the roughly 10 percent of its workers employed directly by the company, not by its franchisees.
But business groups argue that a substantially higher increase would force employers to reduce hiring, accelerate automation and even threaten the basic economic model of some industries.
For Mary Kay Henry, the president of S.E.I.U., the investment in the Fight for $15 campaign was initially controversial among her colleagues, many of whom wondered why the union should spend millions of dollars on a campaign that did not immediately net it dues-paying members.
But it was the result of a calculation that the 20th-century model of organizing workers was rapidly becoming obsolete for those in a growing sector where employers considered it essentially costless to replace them.“We can no longer change our lives, and our kids’ lives, without the support of a broader movement of workers,” Ms. Henry said.
The origins of the Fight for $15 campaign date back to early 2012, when organizers from New York Communities for Change, which had built support for Occupy Wall Street activists among more established progressive activists and labor organizers, began canvassing low-income New Yorkers, many of them employed in the fast-food industry.
At the same time, public opinion was shifting. According to the General Social Survey, regarded by researchers as the gold standard in public opinion data, the share of Americans who agreed that“inequality continues to exist because it benefits the rich and powerful” spiked by more than 10 points from 2010 to 2012, to over 60 percent.
“People know Walmart and McDonald’s are doing pretty well, people at top,” said Leslie McCall, a professor of sociology at Northwestern University, who has closely analyzed the opinion data on inequality. “It was like: ‘Wait a minute. We’re into the recovery, the unemployment rate is going down. But most people aren’t doing well.’”
Even politically moderate voters appear to believe that it is the responsibility of corporations to mitigate the problem. In her own preliminary surveys, Professor McCall found that, when asked to choose who should be most responsible for reducing inequality — the poor, the rich, the government, major companies, or that it did not need to be reduced — a plurality of Republican respondents, about 37 percent, chose “major companies.”
The Fight for $15 campaign hopes to harness these sentiments in ways that Occupy Wall Street never quite succeeded in doing. In Seattle, Steve Gelb, who makes above minimum wage at a work force training outfit, said he supported the protests because “the disparity of wealth has reached alarming proportions and the salaries of business owners and executives are way out of proportion.”
There is some evidence that the big internationals headquartered in D.C. are beginning to get the message. But it is not about income inequality and economic justice and the need for a broad mobilization of low-wage workers. What the big, wealthy internationals are afraid of is the rapid spread of right-to-work laws, some of which are being passed at the local and county level. The right senses weakness and fear and it is lunging for the jugular. Right to work has become a new litmus test for Republican governors. Wisconsin's Scott Walker is the matinee idol of the movement. His chances of winning the GOP presidential nomination are as good as anyone's.
The math on right to work is unforgiving. Once passed it quickly leads to a loss of 20 percent in union dues-paying membership. So the message that is coming from on high is not "We need to mobilize our membership and develop a radical consciousness," it is, "We need to get our budgets in line with a possible 20-percent loss in operating revenue. We need to think about a dues increase."
Unions are gray at the top and completely captive to business-as-usual, conventional thinking. There is zero ability to transform into a radical organization capable of spearheading progressive social change. The guys at the top are all about dollars and cents and the size of their pension funds and the amount of bonus miles they have on their credit cards. They have their eyes on retirement. They'll willingly file aboard the Titanic of Hillary's presidential campaign and argue that it is a vessel for working people.
Even SEIU, a local of which I have worked for, is a conventional, top-down, tyrannical hierarchy that produces a culture of mendacity. Our problem is that it is the only game in town. There needs to be a new leftist political formation. At least SEIU has shown a willingness to work with a socialist like Kshama Sawant.
A devastating unsigned editorial in the Gray Lady today. Appearing right below a truly despicable attack on Vladimir Putin in wake of the Ukrainian ceasefire announced yesterday ("A Cease-Fire in Ukraine"), "Jobs Stall and So Does the Economy" tells you everything you need to know about the dire straights of the U.S. homeland six-years after the Lehman Brothers meltdown:
The latest data also underscore how incremental improvements in labor conditions have failed to undo the damage from the recession and the prolonged slow recovery. For example, the share of adults in the labor force is no longer declining, as it did in 2013, but it remains at levels last seen in 1978.
The recent unemployment rate, 6.1 percent, is down from the recession-era high of 10 percent in 2009, but it is still higher than at similar points in recoveries from other downturns going back to 1982.Worse, the unemployment rate today would be 9.6 percent if it included the estimated 5.9 million jobless people who would be working or looking for work if the job market were stronger.
The generally bleak monthly data are broadly in line with other data on income and wealth released this week by the Federal Reserve. From 2010 to 2013, the Fed found that average incomes dropped by 8 percent for the bottom 20 percent of families and rose by 10 percent for the most affluent 10 percent. For everyone in between, incomes fell or stagnated.
Wealth was also skewed. Overall it barely grew from 2010 to 2013. But it fell by 21 percent for the bottom 20 percent of families, to a mere $65,000 of net worth, and rose by 2 percent, to $3.3 million, for the top 10 percent.
It is increasingly obvious that inequality of income and wealth are weighing on economic growth — especially on job creation and pay raises — by concentrating income and assets in the hands of a few who already have more than they can spend.
The situation is not self-correcting. In fact, in the absence of government policies to foster balance, it is self-reinforcing. The Fed should continue to try to stimulate the economy with loose monetary policy. But only Congress can put in place the broad new policies on taxes, labor standards and immigration that will give all Americans a shot at a rising standard of living.
And we know, what with Democrats headed for almost-certain losses in both the House and Senate (not that they were any help anyway; they can't even get a vote on raising the minimum wage to the floor of the House), that there is no chance for any sort of stimulative, pro-growth legislation coming out of Congress anytime soon.
Things are going to get worse. We're all Ferguson now. Those armored personnel carriers and assault rifles likely will be used in your town before long as jobs continue to evaporate and misery spreads. The Haves are doing fine, and they'll be sure to protect it.
Sitting down last night to a modest repast of grocery-store sushi, the computer monitor offered up a surprise nosegay. The serpent-like Eric Cantor, Republican House Majority Leader and one of the architects of the 2010 Tea Party revolution, had been resoundingly defeated in Virginia's 7th Congressional District primary by a Tea-Party backed Randolph-Macon econ professor, Dave Brat.
Cantor, who spearheaded most of the high-drama budget-based brinkmanship of the 112th and 113th Congresses -- the fiscal cliff, the sequester, the debt ceiling, the government shutdown last October -- ended up being hoisted by his own petard.
There will be much discussion in the next few days of what caused Cantor's undoing. For a member of the House leadership to lose a primary, and to lose by a landslide -- 10%, is almost unheard of. Jonathan Martin's frontpage synopsis, "Eric Cantor Defeated by David Brat, Tea Party Challenger, in G.O.P. Primary Upset," points to the Majority Leader's insufficiently hostile stance on immigration as the possible cause of his undoing. But what is apparent to me is that Cantor lost because he is seen as a fat cat wheeler dealer who represents an establishment that has failed to deliver anything at all for the average citizen:
Republicans were so sure that Mr. Cantor would win that most party leaders had been watching for how broad his victory would be. His defeat will reverberate in the capital and could have major implications for any chance of an immigration overhaul.
Mr. Cantor, 51, who is in his seventh term, had sought to counter Mr. Brat’s accusations that he was too willing to compromise on immigration. The majority leader, who had raised $5.4 million for the campaign, blanketed Virginia’s Seventh Congressional District with fliers and television advertisements in which he emphasized that he opposed an “amnesty” policy.
Apparently, Brat went hat in hand looking for help from the big ultra-conservative groups (without knowing for sure, I would imagine he talked to Club for Growth and Americans for Prosperity) but got nowhere:
Mr. Brat had little help from national groups that have funded other Tea Party challengers. Instead, he relied mostly on state and local activists.
Larry Nordvig, executive director of the Richmond Tea Party, said the national groups were not aware of “how much activity was going on underneath the surface down here and how large the ABC — Anybody But Cantor — mentality was.”
Jonathan Weisman, per usual, is the reporter to turn to (writing here with Jennifer Steinhauer) for the straight dope, "Cantor’s Loss a Bad Omen for Moderates":
One measure of the extraordinary defeat could be seen in the candidate’s finances. Since the beginning of last year, Mr. Cantor’s campaign had spent about $168,637 at steakhouses compared with the $200,000 his challenger, David Brat, had spent on his entire campaign. With Mr. Cantor out, members from solidly Republican states will almost certainly be vying for one of the top jobs, if not Mr. Boehner’s gavel. The current Republican leadership slate is filled with members from swing states where the pressure to moderate views on topics such as immigration looms.
What is going on here is the same thing as the European Parliament elections a couple weeks back; it is the"Ballad of a Thin Man." Seismic change is rumbling right under foot and the mainstream -- the prestige press, the establishment pols -- is not registering it. As Nancy Pelosi parties into the Georgetown night celebrating the the unexpected bonanza of Cantor's demise, the system continues its collapse.
What is maddening is that it is all so obvious. Capitalism is not spreading the wealth, producing employment. People are fed up, want change. Once again, Thomas Edsall has an excellent op-ed, "The Downward Ramp," that pretty much sums it up:
With the bursting of the tech bubble at the start of the 21st century, two decades of growth at the high end of the job market — once the province of college graduates with strong cognitive abilities — came to an abrupt halt, according to detailed studies of employment and investment patterns by three Canadian economists. We are still feeling the ramifications.
But new evidence produced by Paul Beaudry and David A. Green of the University of British Columbia, and Ben Sand of York University, demonstrates that the collapse, between 1980 and 2000, of mid-level, mid-pay jobs — gutted by automation or foreign competition (and often both) — has now spread to the high-skill labor market.
The U-shaped pattern of job growth characteristic of recent decades – strong at the top and bottom, but weak throughout the middle — has now become “a bit more like a downward ramp,” according to David Autor, an economist at M.I.T. who documented the decline in mid-level jobs in the 1980s and 1990s.
Preliminary findings suggest that this trend is alarming in almost every respect. Just one example: the drying up of cognitively demanding jobs is having a cascade effect. College graduates are forced to take jobs beneath their level of educational training, moving into clerical and service positions instead of into finance and high tech.
This cascade eliminates opportunities for those without college degrees who would otherwise fill those service and clerical jobs. These displaced workers are then forced to take even less demanding, less well-paying jobs, in a process that pushes everyone down. At the bottom, the unskilled are pushed out of the job market altogether.
Edsall's columns, focused on the politics of inequality and race, provide a codekey of the neoliberal paradigm.
Larry Mishel, president of the Economic Policy Institute and a co-author of a major new study of employment patterns, wrote me that “Beaudry et al are finding exactly what we find.” The E.P.I. report, “Raising America’s Pay,” points out that “entry-level hourly wages fell on average for both female and male college graduates from 2000 to 2013 (8.1 percent among women and 6.7 percent among men).”
These trends are certain to reverberate into the political system.
The downward pressures means that the problem of declining opportunity will now be a fact of life across nearly all classes.
But the political system, captured as it is by the 1%, is unable to address the problem. So you have the fringe parties kicking ass in the European elections and now the Cantor bombshell. Expect more bombs to drop.
Hippies vs. Punks has been on hiatus. Since February Ukraine has absorbed most of my attention. I realize now that these Hippies vs. Punks posts, though of modest depth and limited insight, require a level of attention, effort and research that I have been unable to deliver of late.
The standard operating procedure for a Hippies vs. Punks post is to take a band, an album, a song, sometimes even a genre and immerse myself in selected recording(s) for a week or two, and then sit down and deliver. And what I want to deliver is some sort of understanding of what happened when the Hippies gave way to the Punks.
Why is this important? Because it is the period of time, when the Hippie dream gave way to the Punk nightmare, that marks the beginning of the age of neoliberalism in the West.
A story that appeared this week in the New York Times reminds us what many (Noam Chomsky, for instance) have been saying for decades -- that inequality, the re-ascension of capital, begins in the 1970s after a brief spurt of egalitarianism in the 1960s. Neil Irwin writes in "Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined?" that great gains in the fight on poverty were made between 1959 to 1973 -- what one could call the heyday of rock'n'roll -- but have completely stalled or fallen backwards in the last 30 years:
From 1959 to 1973, the nation’s economy per person grew 82 percent, and that was enough to drive the proportion of the poor population from 22 percent to 11 percent.
But over the last generation in the United States, that simply hasn’t happened. Growth has been pretty good, up 147 percent per capita. But rather than decline further, the poverty rate has bounced around in the 12 to 15 percent range — higher than it was even in the early 1970s. The mystery of why — and how to change that — is one of the most fundamental challenges in the nation’s fight against poverty.
The disconnect between growth and poverty reduction is a key finding of a sweeping new study of wages from the Economic Policy Institute. The liberal-leaning group’s policy prescriptions are open to debate, but this piece of data the researchers find is hard to dispute: From 1959 to 1973, a more robust United States economy and fewer people living below the poverty line went hand-in-hand. That relationship broke apart in the mid-1970s. If the old relationship between growth and poverty had held up, the E.P.I. researchers find, the poverty rate in the United States would have fallen to zero by 1986 and stayed there ever since.
“It used to be that as G.D.P. per capita grew, poverty declined in lock step,” said Heidi Shierholz, an economist at E.P.I. and an author of the study. “There was a very tight relationship between overall growth and fewer and fewer Americans living in poverty. Starting in the ′70s, that link broke.”
The idea behind Hippies vs. Punks has always been that if we could understand what was going on when the kids gave up on the Hippie dream -- go back to the land, reject technocratic corporate society, live in communion with nature, practice tolerance, etc. -- in favor of the nihilism and know-nothingness of the Punks we could understand where we went wrong the last time around. So that now, as the wheel turns and signs appear pointing towards the coming demise of neoliberalism, we will be prepared to avoid the mistakes the Hippies made.
Not all Punks were "No Future" nihilists like the Sex Pistols or Rock 'n' Roll High School know nothings. The foremost example of a politically engaged, socially conscious first-wave Punk band is The Clash.
It is hard to appreciate today how big The Clash were in the early 1980s. In fact, my freshman year at the university they were the band at the top. And what made them different is that they were, at least as the gestural level, clearly opposed to the cultural establishment that they were reigning over.
When The Clash signed to CBS Records and released their eponymous debut in April 1977, it marked the critical moment when the corporate mainstream recognized the new avant-garde.
As has been noted in numerous past Hippies vs. Punks posts, 1977 is the year that the Hippie finally gives up the ghost and disappears, becoming nothing more than a heavy metal headbanger. The Hippie, shorn not of his locks but of his Aquarian aspirations, had been trending in that direction for many years, certainly since 1971. By 1977 the shift is irrevocable.
Five-years later The Clash release their double platinum Combat Rock (1982); it is the year I graduate from high school and enter the university. My first few months on campus songs from Combat Rock were heard everywhere -- from the student union Bear's Lair, to transistor radios, and out of the mouths of collegiate gridiron heroes. I owned a cassette tape of the album, which I played repeatedly.
The Clash performed "Straight to Hell," a song about the gross injustice of living in a world ruled by war and greed, on Saturday Night Live, October 2, 1982. Watch the YouTube of the performance. It is wonderful. The band is flawless. From the animated guitar playing of Mick Jones and Paul Simonon to the precision of a mohawked Joe Strummer on lead vocals.
I remember that evening. It had been a beautiful, sunny day in the Bay Area. I had been out with a girl, and I got home late and turned on the TV to Saturday Night Live. Everyone watched Saturday Night Live in those days. It was obligatory. I remember thinking that Joe Strummer's conclusion to "Straight to Hell" -- when he holds two fingers (simulating a gun) up to his temple and rasps sharply into the microphone -- was a bit over the top. But watching it today, I have no such qualms.
Nineteen-eighty-two is the zenith for The Clash. Reaganism and Thatcherism rule the West. It is the end -- for the Hippies, for the Punks, for any dream of progressive transformation of society.
But on that one beautiful Indian summer dark night in October I was feeling good: a young man, a boy, living alone for the first time, in a clean apartment, on top of the world as it hurtled through space on its trip around the Sun.
While Yue Yuen agreed to reimburse pension contributions and increase a monthly living subsidy by $37, the outcome is something of a Pyrrhic victory for its workers. In order to claim the past benefits, employees must pay matching funds, which for many amounts to years of savings they do not have.
“Worker wages are barely enough to feed their families now,” said Wang Kongxia, 38, who has worked at Yue Yuen for 19 years. “A lot of people feel quite helpless.”
Despite those misgivings, workers say, Chinese authorities and Yue Yuen used subterfuge to force employees back to the assembly lines. According to Ms. Wang, factory management removed the time clocks for four days this week, requiring employees to sign in every two hours or be fired. Supervisors were also asked to photograph each employee. “We didn’t do it,” she said.
Yue Yuen did not respond to repeated phone calls requesting comment.
Zhen Fanfei, 35, has gone back to making Adidas midsoles, but he doubts the company will be more respectful of workers’ demands without a major change in the government’s attitude.
“Capitalists will always be capitalists,” he said.
Eduardo Porter had another good Business Page column this past Wednesday, "In the U.S., Punishment Comes Before the Crimes." The dawn of neoliberal age in the middle 1970s was also the beginning of the incarceration bonanza in the United States. Prior to this, the U.S. and other industrialized nations had similar rates of incarceration:
Scholars don’t have a great handle on why crime fighting in the United States veered so decidedly toward mass incarceration. But the pivotal moment seems to have occurred four decades ago.
“With few and isolated exceptions, the rehabilitative efforts that have been reported so far have had no appreciable effect on recidivism,” he wrote. Standard rehabilitation strategies, he suggested, “cannot overcome, or even appreciably reduce, the powerful tendency for offenders to continue in criminal behavior.”
Crime was rising in the 1960s and 1970s, alarming the public and increasing the risk to politicians of appearing “soft” on crime.
The decline in manufacturing employment, once the backbone of many urban economies, wasn’t helping. Later, in the 1980s and ’90s, crack cocaine became a scourge of the nation’s inner cities.
But as Steven Raphael of the University of California, Berkeley, and Michael A. Stoll of the University of California, Los Angeles, note in their book “Why Are So Many Americans in Prison?,” what drove up imprisonment rates was not crime but policy.
If rehabilitation was out of reach, the thinking went, all that was left was to remove criminals from society and, through harsh sentencing, deter future crime. From 1975 through 2002, all 50 states adopted mandatory sentencing laws, specifying minimum sentences. Many also adopted “three strikes” laws to punish recidivists. Judges lost the power to offer shorter sentences.
And the prison population surged. Four decades ago, the correctional population in the United States was not that dissimilar from the rest of the developed world. Less than 0.2 percent of the American population was in a correctional institution. By 2012, however, the share of Americans behind bars of one sort or another had more than tripled to 0.7 percent.
Bruce Western of Harvard suggests a specific American motivation, which sprang to some degree from the victories of the civil rights movement.
“The crime debate was racialized to an important degree,” Professor Western told me. “The anxieties white voters felt were not just about crime but about fundamental social changes going on in American society.”
Today, a little under half the state and federal prison population is black. The Bureau of Justice Statistics estimates that a black boy born in 2001 had a 32.2 percent chance of doing time behind bars.
Growing inequality, too, appears to have played a role. As Devah Pager of Harvard told me: “There is something to the idea that the more distant the rich become to the poor, the easier it is to impose policies that are more punitive than others.”
Professor Raphael is wary of linking incarceration with income dynamics. Still, he agrees the trends are suspiciously similar. “In the 1970s, something changes,” he told me. “The increasing concentration of income at the top follows the incarceration rate almost perfectly.”
And a final reference for your Sunday, be sure to check out Gregg Shotwell's absolutely essential "A Practical Solution to an Urgent Need," which appeared in last month's Monthly Review. American organized labor started buckling at the same time as the mass incarceration boom.
Chomsky has that line, "excess of democracy," from one of his books about a Trilateral Commission report on the social upheaval of the 1960s. The report's conclusion was that the world was suffering from an "excess of democracy."
Apropos Obama's State of the Union address last night where he vowed to tackle rising inequality, today the indispensable Thomas Edsall writes about Thomas Piketty's new book, Capital in the Twenty-First Century. Piketty, a professor at the Paris School of Economics, and his colleague from U.C. Berkeley, Emmanuel Saez, have been pumping out topnotch research the last several years that takes head on the idea that neoliberalism -- the central tenet of which is minimal market regulation -- produces abundant growth and shared prosperity. In a nutshell, Piketty and Saez have consistently argued that since the dawn of the neoliberal age in the 1970s the economy has worsened for working people.
In today's post, "Capitalism vs. Democracy," Edsall positions Piketty's new book as one that might well have historic impact. Capital in the Twenty-First Century argues that the high-growth, 60-year period beginning with World War I and ending in 1973 was an anomaly. The normal state of capitalism is one which produces ever greater inequality. Unless we address the problem through a global progressive wealth tax, increasing inequality is inevitable. Here is how Edsall summarizes it:
“If the rate of return on capital remains permanently above the rate of growth of the economy – this is Piketty’s key inequality relationship,” Milanovic writes in his review, this “generates a changing functional distribution of income in favor of capital and, if capital incomes are more concentrated than incomes from labor (a rather uncontroversial fact), personal income distribution will also get more unequal—which indeed is what we have witnessed in the past 30 years.”
The only way to halt this process, he argues, is to impose a global progressive tax on wealth – global in order to prevent (among other things) the transfer of assets to countries without such levies. A global tax, in this scheme, would restrict the concentration of wealth and limit the income flowing to capital.
Since a global wealth tax is an unlikely prospect in the current political environment (absent a revolutionary mass movement), we are likely headed for some sort of rupture or system failure. Yesterday I argued that this is already on view in Egypt, Thailand and Ukraine. Democracy is being scrapped and will continue to be scrapped in favor of either a formally representative but hallowed out government entirely captured by capital and saturated with surveillance (like in the West) or an overtly old-fashioned authoritarianism, also saturated with surveillance, and also ruling at the behest of neoliberal market fundamentalism (currently on display in Cairo). This is what is in store for us: rising inequality, receding democracy. Hopefully, people will come together and fight back.
But the super-rich will not yield a single dollar without a vicious struggle -- a fight they will pay a pittance to the growing global army of unemployed to wage for them. The future is shaping up to be very brutal.
New numbers from U.C. Berkeley economist Emmanuel Saez show that the income gains of the last four years have gone to the top 1%. According to yesterday's story from Annie Lowrey, who is a reporter to look for,
The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7 percent over the period. But there was a wide gap between the top 1 percent, whose earnings rose by 11.2 percent, and the other 99 percent, whose earnings declined by 0.4 percent.
Mr. Saez, a winner of the John Bates Clark Medal, an economic laurel considered second only to the Nobel, concluded that “the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s.”
I'm thinking as I'm reading Lowrey's story yesterday: Saez has been so strong on the issue of income inequality, when is that Acorn-sting clown O'Keefe or one of Karl Rove's 501(c)(4)s going to target him?
In his analysis, Mr. Saez said he saw no reason that the trend would reverse for 2012, which has not yet been analyzed. For that year, the “top 1 percent income will likely surge, due to booming stock prices, as well as retiming of income to avoid the higher 2013 top tax rates,” Mr. Saez wrote, referring to income tax increases for the wealthy that were passed by Congress in January. The incomes of the other “99 percent will likely grow much more modestly,” he said.
Excluding earnings from investment gains, the top 10 percent of earners took 46.5 percent of all income in 2011, the highest proportion since 1917, Mr. Saez said, citing a large body of work on earnings distribution over the last century that he has produced with the economist Thomas Piketty of the Paris School of Economics.
The data analyzed by Mr. Piketty and Mr. Saez shows that income inequality — as measured by the proportion of income taken by the top 1 percent of earners — reached a modern high just before the recession hit in 2009. The financial crisis and its aftermath hit wealthy families hard. But since then, their earnings have snapped back, if not to their 2007 peak.
That is not true for average working families. After accounting for inflation, median family income has declined over the last two years. In 2011, it stagnated for the poorest and dropped for those in the middle of the income distribution, census data show. Median household income, which was $50,054 in 2011, is about 9 percent lower than it was in 1999, after accounting for inflation.
The last two paragraphs let us know that the reign of the 1% -- despite reforms already in the pipeline like Dodd-Frank and Obamacare, as well as the recent increase of the top marginal tax rate -- is with us for the foreseeable future:
Mr. Saez has advocated much more aggressive policies aimed at income inequality. “Falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented,” Mr. Saez said in his analysis.
The recent policy changes, including tax increases and financial regulatory reform, he wrote, “are not negligible but they are modest relative to the policy changes that took place coming out of the Great Depression. Therefore, it seems unlikely that U.S. income concentration will fall much in the coming years.”
