Too Damn Big Fails Us

Last week a federal court approved the $85.4 billion merger of AT&T and Time Warner over the objection of the US Justice Department which, in President Trump’s words, opposed the deal “because it’s too much concentration of power in the hands of too few.”  (New York Times, 6/13/18).  District Court Justice Richard Leon dismissed the government’s case out of hand, arguing they failed to prove the consolidation would result in reduced choices or increased prices for consumers; he also warned that an appeal would be fruitless and recommended against it.  Immediately following the decision Comcast launched a $65 billion challenge to take over 21st Century Fox, topping Disney’s previous offer.  Analysts believe a wave of consolidations will surely follow, further entrenching power and profit at the top of the corporate pyramid.

Judge Leon’s consumer benefit theory of antitrust, originally hatched by conservative  scholar and failed Supreme Court nominee Robert Bork, is legally and morally suspect.  First, it’s hard to know what the effects on choice and price to the consumer will be before the deal is consummated, and probably not for many years to come.  Is anyone happy with their cable bill?  Second, many economists believe that corporate consolidation, excess profits and power are a key cause of stagnant wage growth and rising economic inequality in recent decades, as well as loss of political power of ordinary voters v. highly funded special interests.  Hence, even if consumer choices remain plentiful and prices reasonable (a big IF), workers are hurt by their loss of bargaining power and voters by their reduced influence at the ballot box.  This should be cause for concern among all of us.

A recent article in The Economist (no liberal rag) entitled “Profits Too High: America Needs a Giant Dose of Competition confirms these facts.  It reports American Airlines, nearly bankrupt a decade ago, earned $24 billion in profits last year – the same as Google! – following consolidation of the airline industry into four major players.  A similar pattern exists in other major industries.  US companies have engaged in $trillions of mergers over the past decade, with many more expected to follow, as they sit on over $800 billion in idle cash before the recent tax cut bonanza.

The article concludes that US company profits are too high, that most firms “are more adept at siphoning off cash than creating wealth, and that this deepens inequality by dampening wages and raising consumer prices above a competitive level.  Concentrated economic power also stifles innovation and retards the growth and formation of small businesses.  According to David Leonhardt of the New York Times (6/18/18) large companies now employ the majority of US workers, reversing historical trends.  As a result, over 2/3 of Americans, across the political spectrum, believe the economy is “rigged” (remember that word?) in favor of huge corporations and against them.  Similar or greater numbers doubtless exist for the U.S. political system, hence the dueling populisms and strange outcome of the 2016 election.

Americans are feeling an increasing sense of powerlessness and insecurity over their personal lives, which produces anxiety, anger and the search for a strongman to restore order and a lost, largely mythical “golden age.”  We have been through this before, in the Populist, Progressive and New Deal periods.  We have been able to increase democracy and dampen inequality through a combination of political and economic reforms that are still within our grasp, should we resolutely reach for them.  Higher progressive taxes, especially on huge individual fortunes and concentrated industries, jobs and training programs and income supports for lower paid workers are the obvious place to start.

Needless to say, it won’t be easy or quick.  The sheer bigness of business and their stranglehold on our politics (corporate spending on lobbying has doubled over the past decade, but only represents a tiny fraction of their profits) complicates but doesn’t negate the task.   Remember it took a century after the Civil War for African Americans, who helped win it, to gain legal equality.  Hopefully it won’t take as long for a just, sane, equitable, human economy to emerge from the ashes of late 20th and 21st century plutocratic capitalism.  With faith, determination, solidarity and persistence, perhaps we too shall overcome our current predicament.

 

 

 

Trump and Puerto Rico

Remember when Donald Trump visited Puerto Rico last fall, a week or two after the devastation of Hurricane Maria?  He threw paper towels to the crowd, boasted of the size (why is he always so obsessed about size?)  of the recovery effort and bragged that the island had “only” experienced 14 deaths, compared to the 2500 plus from Hurricane Katrina.  Later he criticized residents for not doing enough to help themselves and got into a Twitter spat with San Juan’s mayor – sad!

Well, the stats are in and once again our president is exposed for peddling falsehoods, whether intentional or not.  In an article in the New England Journal of Medicine, the Harvard School of Public Health and others updated the figures through December 31, 2017.  Using a survey of 3299 households (why not 3300?), they concluded the actual death toll was 4645, or 70 times the Puerto Rican government’s official total of 64.  Comparing figures with 2016, this represented a 62% increase in mortality on the island that year.

At least 1/3 of increased deaths were attributed to delayed/denied medical care.  It’s not clear, from reading the report, what the other 2/3 were caused by.  The average household went 84 days without electricity, 68 days without running water and 41 days without cell phone coverage.   The further you were from a major population center, the longer you waited.  Today, nine months later, over 30,000 residents still lack electricity.

I traveled to Puerto Rico between Christmas and New Years of last year, seeking warmth but also interested in assessing the damage.  I stayed in San Juan (most of the outlying hotels were still damaged) but spent three days driving around the countryside, sacrificing beach time and a killer tan!  Some observations: the island is small but densely populated, with 3.5 million souls spread throughout.  The map from my rental car agency showed many small towns and cities with large green areas in between.  I assumed these would be fields and forests – not so.  Instead, I drove up and down winding roads over endless mountains with houses perched, continuously and precariously, on the side.  Outside of a few parks, very little land was unsettled.

This would present a logistical challenge in the best of times, which this obviously wasn’t.  Power and water lines would need to be stretched foot by foot across the whole island.  Worse, the power grid was on the verge of collapse before the storm, as was the government, with over $85 billion in unpayable debts.  Bureaucratic snafus worsened the problem.  A FEMA contractor staying at my hotel said the main problem was the lack of supplies, particularly power lines.  Later they discovered many thousands of miles of power lines sitting unused in warehouses in Florida, waiting for authorization to ship.

The ocean, too, became a problem.  Puerto Rico is a large island 200+ miles off the mainland, not a compact geographical zone around Houston, Texas.  With these logistical challenges and less than half the per capita GDP as the mainland US, Puerto Ricans were at a distinct disadvantage in “helping themselves.”  Add political impotence to the equation.  The island is a “commonwealth,” or territory, not a state.  They have no Congressman or Senators and they don’t vote for President.  Nor do, I suspect, many residents contribute large sums of money to US campaigns to buy “access” to favored politicians.  They were, in a word, screwed.

I’m not sure exactly what should have been done but the answer, obviously, is much more.  Let’s start with something near and dear to Trump’s cold heart.  He signed and helped push through an increase in the Defense (a misnomer) budget to over $700 billion for a country with no natural enemies or fear of foreign invasion.  What’s it all for?  Why not take a small portion of that money and use it for civilian reconstruction, especially since the Army and its marvelous Corps of Engineers are the only federal agency with the organizational capacity, resources, knowledge and skill to handle such a mammoth task?

Hurricane season is upon us again.  Let’s hope and pray that Puerto Rico is spared any major storms in this and coming years.  It is a lovely island with warm, beautiful people whose major downfall is to have been made, in effect, a “colony” (not a state) of the USA in 1898.  Nevertheless, they are US citizens, hence our brothers and sisters (hermanos y hermanas).  Let’s treat them that way now and in any future hour of need.

Death by Uber

Last Sunday morning I opened my Philadelphia Inquirer to find a front page story titled “In Cabs or Ride-Sharing Vehicles, Drivers Struggle to Scrape By.”  It described the plight of one Bangladeshi immigrant taxi driver, Shah Golamkader, who has seen his income plunge by over one third since Uber and Lyft entered the Philadelphia market in 2014, even though he’s driving more hours than ever.  He switched to Uber for a time, then returned to the cab company after finding he made no more money and had to sacrifice his personal vehicle in the process.  Either way, he concluded, “If you’re driving a taxi cab or Uber, you have no money.”

On the way up to New York City with my daughter a few hours later, I heard that the body of a taxi driver, Burmese immigrant Yu Mein Chow, was found in the East River.  He was the fifth New York taxi driver to commit suicide in as many months.  Mr. Chow purchased a taxi medallion in 2011 for $700,00, a good deal at the time.  Today it is worth less than $100,000, but he still has to make payments on the existing loan, a task now impossible since his income was cut in half by Uber.  A day before his death he tried to make a loan payment but his credit card was rejected.  The next day he jumped off a bridge into the East River, leaving behind a daughter in college and wife battling cancer.

I confess a personal interest in this story, since I have been doing some Uber driving since January.  The money’s okay for a part time gig but you can’t live on it.  The fares are so low (and the company takes 20% for booking them) that you only make money at peak times during “surge” prices, when they raise rates to cover increased demand.  Unfortunately, but predictably, this leads drivers to “flood the zone,” resulting in less rides per driver. Since they pay no salary, benefits, gas or vehicle maintenance, Uber has every incentive to sign up as many drivers as possible to maximize coverage and customer satisfaction.  On the way home I heard a radio ad and saw a billboard touting the great benefits of Uber driving. I sadly shook my head and thought of P.T. Barnum’s phrase, “There’s a sucker born every minute.”

The bottom line is, in exchange for your cheap ride and my driver’s pittance, Uber (and to a lesser extent Lyft) have ruined the taxi business.  Rides and revenue in Philadelphia have declined nearly 50% since 2014, and similarly in New York and other cities.  This has crushed the livelihoods and spirits of tens of thousands of hard working people, many of them immigrants, who work 12-14 hour days, 6 days a week, and still can’t make a living.  They are precisely analogous to the millions of “forgotten” men and women who lost their good paying factory jobs and voted for Trump in 2016. They worked hard, played by the rules and got screwed through no fault of their own. They need and deserve our help.

State and local governments should immediately impose a tax of at least $1 per ride on Uber, Lyft and their ilk, to “level the field” in terms of fares.  They should use it to help taxi companies and public transportation adjust and retool their services, as well as to repair roads which increased congestion has damaged.  Uber and Lyft are predatory competitors who take advantage of their “independent contractors” to destroy family sustaining jobs.  The only ones who truly benefit are the “mafia” and their minions in Silicon Valley, who take a cut on every transaction.  As for you, do you really need to save those few bucks to get to the airport or go crosstown?  You might ask a friend to drive you or take public transportation if the fare actually represented the true cost, socially speaking.

“The drivers are the sorry losers in it,” says David King of Arizona State U, who has studied the industry.  “That’s kind of the larger narrative about deregulation and the technology enabled gig economy.”  Think about that the next time you click the Uber or Lyft apps.  Think it doesn’t apply to you?  Who knows what automation and artificial intelligence will do to your job in the near future?  If compassion and solidarity isn’t enough to move you, consider this: “Whatsoever you do (or don’t) to least of my children, that you do unto me.” (Matthew 25: 40)  The life you save may be your own.

Beyond Trump: A Federal Jobs Guarantee?

I recently received another video from my good buddy (at least he feels that way to me!), Robert Reich at inequality.org.   As an old New Deal Democrat, I was immediately drawn to the concept of guaranteed jobs at living wages.  I kept Trump’s name in the title in the hope it might draw a few extra readers to the blog!

In the video Reich highlights some obvious flaws in our labor markets.  Despite near record low unemployment rates, millions are not working because of “discouragement, discrimination and location.”  Others, like myself, are working two or more part time jobs without health or retirement benefits.  Nearly all workers, except for executives and those with high demand skills, have seen their wages stagnate in recent years as gains from economic growth increasingly go to the top 10, 5, 1 or .01% – take your pick.

Reich’s solution: guaranteed federal jobs in public service at an (undefined) “living wage.”  This would inject government competition into the labor market, raise the floor” on wages and benefits, increase worker’s bargaining power with private employers and provide an automatic economic stabilizer in periods of recession.  All these benefits and it will only cost $670 billion in the first year ($30 billion less than the Defense budget!), with future costs falling (when does that ever happen with government programs?) as incomes, consumer spending and tax revenue rise while welfare costs fall in a “virtuous cycle” of growth and redistribution – a “progressive utopia” indeed!

The idea holds appeal, but I think I’ll pass.  First, it’s too expensive.  Assuming we’re not going to drastically cut Defense, Social Security, Medicare & Medicaid, where will the money come from?  Massive tax increases on the wealthy?  This is certainly a post Trumpian notion, only possible if the modern Republican Party collapses as in the Great Depression/New Deal era.  At present, there are no signs of that happening.

Second, it’s too bureaucratic.  It’s doubtful the federal government could efficiently run such a massive program.  Who would identify or create the jobs, and by what criteria?  Who would supervise the workers, hire and fire, and by what criteria?  How would you prevent cronyism and corruption from creeping into the process?  If these jobs were truly better than their private sector equivalents, who wouldn’t want them?  Would they compete with or crowd out private employment?  Are these temporary or permanent positions?  Do we really want to double or triple the federal workforce?  Even FDR never contemplated that.

Third, it’s unnecessary.  We already have the tools in our policy box to increase incomes: higher progressive taxes on the wealthy; raising the minimum wage; subsidized training and apprenticeship programs; Pell grants and especially strong support of private labor unions with sufficient legal protection and collective bargaining power to force corporations to share their excess profits.  We could also expand the Earned Income Tax Credit (EITC) into a wage subsidy  for a broader range of earners, perhaps to the bottom 60-80% of the population, so that “work pays” and no one working full time lives below, at or near the poverty line (a position well over 90% of Americans consistently support in polls).

In the end, there are numerous ways to decrease inequality and increase opportunity, and no one has done more to bring the problem to popular attention and pose solutions than Robert Reich.  What is lacking, as he has pointed out, is the political will to pursue these policies and form a social movement for the common good (the title of his last book).  This is the prevailing challenge of our time – who’s ready to join and fight for justice?

 

 

 

A New Poor People’s Campaign?

You wouldn’t know it from watching the news or reading the papers (assuming you do), but there’s a new Poor People’s Campaign in the USA , launched on  the 50th anniversary of Dr. King’s assassination in Memphis.   It was the final campaign of King’s life, the hardest and most ambitious, challenging the “evil triplets” of poverty, racism and militarism.  He was stoned trying to integrate housing in Chicago in 1966, shunned by his allies and the media for denouncing the Vietnam War in 1967 and finally gunned down fighting for a 10 cents an hour raise for Memphis sanitation workers in 1968.  His later efforts proved far less popular with the elites and general public than ending racial segregation in the South in the early 1960s.

The new Campaign is led by Rev. William Barber, a North Carolina pastor and former head of that states’ NAACP, and Rev. Liz Theoharris, co-director of the Kairos Center for Religions, Rights and Social Justice in New York.  They are supported by a gaggle of over 60 religious, civil rights and social justice groups, from the American Friends Service Committee and Democratic Socialists of America to the National Welfare Rights Union and World Beyond War.  In other words, the same collection of left wing, “progressive” groups that launch internet petitions, show up for rallies, raise funds, agitate for broad social change and lose nearly every major election and policy debate.  Obviously, more needs to be done.

They have updated the “evil triplets” of poverty, racism and militarism and appropriately added a fourth, ecological devastation.  Their list of proposed “Demands” is too lengthy to detail here.  It unsurprisingly includes something from the wish lists of every supporting group, as most committee documents do.  One thing is conspicuously absent: the lack of a clear political strategy to get from here to there.  Is this a political platform or social movement?  What’s the difference?

In my view a political platform brings you into the realm of party politics, of running candidates to win elections by uniting a broad and diverse coalition of voters.  A social movement is a form mass protest, an outside pressure group that agitates for specific changes in public policy to benefit the aggrieved and advance the common good.  In my life time, three social movements have succeeded: African American, women’s and gay rights.  All followed the same formula: clearly defined injustices perpetrated on an identifiable group with internal solidarity; external allies in the media, academia and elite circles;  articulate leaders and committed followers with a clearly communicated vision of the future; and especially fortunate timing to tell a message people were ready, willing and able to hear.

Do poor people share any of these traits?  Unfortunately, no and not in the foreseeable future.   They do not make campaign contributions or vote in proportional numbers.  They have no identifiable poor spokesmen, in part because they’re a stigmatized group, and anyone with the requisite leadership, organizational and communications skills would quickly work their way out of poverty.  While the general public supports increasing the minimum wage and jobs programs, there is little taste for the significant redistributive taxation and social disruption required to make “myth of meritocracy” and “equal opportunity” more than just a mirage.

Beginning on Mother’s Day and continuing for the next six weeks, the Campaign will hold protests in 40 state capitals, including your own.  They’re asking people to get arrested, so maybe you’ll see a news blip.  It will culminate in a mass rally in Washington DC on June 23.  I will probably be there, “showing the flag” in support, and I hope you join us.  But it won’t be nearly enough; it never is.  Not until the bottom portion of the population is mobilized to vote their interest in sufficient numbers and the upper classes, especially the top 10%, are moved by compassion or necessity (probably the latter) to sacrifice a greater part of their good fortune for the common good.

As children ask on long car trips: ‘are we there yet; how much longer?”   The answer: just keep moving forward.

 

The Monopolization of America

Happy Mother’s Day to all the blessed women who bore & raised & nurtured us through adulthood.  If your mother is still alive, as mine thankfully is, show her your full love today.  If not, tell her story to your children & grandchildren & anyone who will listen & benefit.

As I mentioned in my last post, Robert Reich is one of my true heroes and sources of inspiration.  In a recent inequality media video, The Monopolization of America” he details the high cost concentrated business control exerts on our economic and political systems.  I had previously written about this in my April 3rd post, “Small is Beautiful,” but since only two people viewed it and none commented, perhaps it warrants a revisit.

Reich begins the video with Monsanto as an example.  This agribusiness giant controls 90% of the soybean seeds and 80% of corn in the US, allowing them to raise prices beyond a competitive market rate.  He goes on to detail “monopolies everywhere”: the 4 largest meatpacking companies control 75% of sales; the 10 largest food companies have 80% of branded products.  2 companies produce 80% of the toothpaste; 2 large companies, Nestle & Mars, produce 90% of the cat food; 4 large drug companies dominate the pharmaceutical market and inflate prices by billions per year.  A few large health insurers control most local markets.  4 behemoths dominate cable & internet services, often in a local monopoly.  He doesn’t even mention the nation’s largest banks, which are “too bigger to fail” than ever, but does cite tech giants Google, Amazon, Facebook and Apple, the latest manifestation of our “New Gilded Age.”

The first Gilded Age, 1870s – 1920s, was brought down by anti-monopoly legislation and the ravages of the Great Depression.  The Sherman Anti Trust Act of 1890, at first little enforced against the railroad, steel, oil and financial “trusts” that dominated state legislatures and Congress, was eventually given teeth by presidents Theodore Roosevelt, who broke the Northern Securities railroad trust, and William Howard Taft, who dismantled John D. Rockefeller’s Standard Oil Co.  Woodrow Wilson added the Clayton Act and the 17th Amendment, providing for direct election of Senators.  The power of the national government really can be wielded on behalf of economic justice, when politicians heed the will of the people and the common good, rather than the selfish machinations of concentrated wealth!

For the next 50 years, the federal government relied on a mixture of active regulation of concentrated business and breaking up “trusts” when necessary.  In 1950, the Alcoa Aluminum company was broken up for achieving an effective monopoly, even though they never sought one.  By 1960 overly big businesses were held in check and the the ratio of CEO pay to the average worker was 30:1.  Then came 1980 and Ronald Reagan.  If you’re a “progressive” (a label I shun) or pro worker & poor (which I enthusiastically embrace) Reagan’s election was the nadir of our our political economy, the “great divide” that ended 50 years of progress toward increasing equality and ushered in a government “of the rich, by the rich and for the rich” that endures to present.  Today, the average CEO earns 300 times their average worker and Jeff Bezos of Amazon sees space travel as the only way to spend down some of his $131 billion (and counting) fortune.

Since the 1980s successive administrations, both Democratic and Republican, have prostrated themselves at the altar of the rich for modest campaign contributions.  This is why none have made a dent in rising economic equality.  Case in point: The CEO of AT&T just apologized (because they got caught) for paying $1.2 million to Michael Cohen to influence the Trump Administration to approve an $85 billion proposed merger with Time-Warner, which the Justice Dept. thankfully opposes.  The same article noted that AT&T spent over $17 million on lobbying last year – chump change for a multi-billion corporation, but enough to buy a lot of political support on Capitol Hill.

Note also President Trump’s new prescription drug proposal, which includes no mechanism to limit drug prices or allow the government to negotiate better rates for the massive Medicare and Medicaid programs.  Also Trump’s empty threats to stand up to the National Rifle Association after Parkland, rescinded once Republican legislators reminded him of how much they rely on NRA cash to maintain their Congressional majority.  As the old Who song goes, “Meet the new boss, same as the old boss.”

The rich are too damn rich and have too damn much political power.  Just a little bit of their huge surplus is enough to turn politicians into lapdogs, doing their bidding and angling to join them in lobbying and law firms once their “public service” is done.  Currently I’m reading Democracy in America: What Went Wrong?  by Benjamin Page and Martin Gillens.  In Chapter 3 they find that, in examining 1800 discrete public policies, once you discount elite and interest group preferences, general public opinion has virtually NO impact on the outcome. “Well,” as Dana Carvey used to say as the Church Lady on Saturday Night Live, “isn’t that precious!”

We need effective anti-monopoly enforcement, campaign finance reform and publicly financed elections.  More to the point, we need a new social movement that puts the needs of the poor and working classes at the forefront of American politics, rather than in the dustbin of history, as Marx might say.  I’m talking about the type of Poor People’s Movement  that Dr. King gave his life for, in the toughest and least successful battle of his career.

Yet, while I write this, I’m listening to a “60 Minutes” interview about  a new film on Pope Francis, the headliner of my blog.  His opening remark: “Humanity is mostly deaf.”  Amen to that.  Jesus used to say “those who have ears to hear, let them hear.”  Is anyone really listening?  What would it take to bring forth a response?

 

What if Everybody Voted – Would it Make a Difference?

I am a huge fan of former Labor Secretary and current Berkeley professor Robert Reich.  In addition to his masterly feature film, Inequality for All,  which I highly recommend, check out the frequent short film clips from his inequality media project, which I you can sign up for or go directly to you tube and watch.

Recently one of these videos caught my eye.  “What if Everyone Voted?”, makes the point that the largest block of potential voters in the country are neither Republicans, Democrats or Independents but non voters who comprise the majority of Americans in every election, and even 40% in most presidential contests.  When I was a political science instructor I used to tell my students that there are only two form of political capital that politicians will respond to – money and votes.  Since most of us don’t have enough money to impact the process, our only option is to vote, in blocs that indicate preferred policies.

The mass of non voters are young, poor and people of color.  Surveys show they tend to support “progressive” policies that would benefit them, such as a higher minimum wage, guaranteed government jobs, universal health care, free college tuition etc.  By not participating they leave the door open for the donor class to drive elections toward more conservative candidates who cut taxes for the rich, reduce regulations that protect health and safety, and slash  social programs that benefit the poor and working class.  The theory is if everyone voted we’d have a more “progressive” country more friendly to the young, poor, minorities and working class.

I’m not so sure.  I believe and have observed that the main determinant of political ideology is temperment.  Some people are more liberal or “open ended” by nature, others more closure or “judging” oriented, according to the Myers Briggs personality types.   This is right and just.  A strong country requires strong liberal and conservative parties, able to coalesce their broad beliefs into a majority.  It further requires compromise  between these two visions in order to pursue shared goals in a positive and mutually acceptable manner.  It’s a shame that our current partisan warfare nullifies this goal.  Contrary to the dictum of legendary football coach Vince Lombardi, winning is NOT the only thing in politics or life.  When you crush and ignore your opponents you only sow the seeds of further conflict and discord, killing the relationships you depend on to survive.

At the end of the Constitutional Convention in 1787, a good Philadelphia woman asked Benjamin Franklin, “Well, Dr. Franklin, what kind of government have you made for us?”  Franklin replied, “A republic, madam, if you can keep it.”  How do you keep a republic?  By voting in elections and advocating for preferred policies in the interim.  How do you get people to vote?  According to the above video there are several ways, including: 1) automatic voter registration through the Division of Motor Vehicles, tax and other public records, which could immediately add 27 million new voters to the rolls; 2) same day voter registration; 3) voting by mail; 4) allowing early voting; 5) changing election day to a weekend.

Republicans oppose all of these initiatives.  Instead, they favor: 1) tough voter ID laws that overwhelmingly disenfranchise the poor and minorities; 2) limiting or eliminating early voting and same day registration; 3) purging voter rolls of anyone who hasn’t voted recently; 4) prohibiting ex felons who’ve served their time from ever voting again, primarily hurting minority communities.  Why are Republicans afraid to let all citizens vote?  Do they fear the potential progressive wave the video predicts?  The only way to find out is to open the system to everyone and let the chips fall where they may.