Opposing the Bully Mentality—Part II

Financial FAQs

How does one stop the bullies? Put simply, find a way to stand up to them. Economic bullies behave no differently than individuals when confronted by a person or organization willing to oppose them. But how are the 80 percent that are wage and salary earners to do that whose incomes has been whittled away since the 1970s by anti-union legislation and outright banning of collective bargaining in many of the right to work states?

Popular culture has enshrined the superhuman heroes who have tamed bullies; from Superman and Wonder Woman, to Batman, and now Captain America taming Nazi bullies. But taming economic bullies doesn’t have a popular precedent other than Robin Hood, it seems.

And Robin Hood was an English legend. America can only come up with its opposite, reverse Robin Hoodism, or taking from the poor and giving to the rich. That is how Nobelist Paul Krugman characterizes Republican attempts to cut taxes further and oppose raising the minimum wage.

“In the past, Republicans would justify tax cuts for the rich either by claiming that they would pay for themselves or by claiming that they could make up for lost revenue by cutting wasteful spending. But what we’re seeing now is open, explicit reverse Robin Hoodism: taking from ordinary families and giving to the rich. That is, even as Republicans look for a way to sound more sympathetic and less extreme, their actual policies are taking another sharp right turn.”

So the cards seem to be politically stacked against those who oppose the economic bullies. “(But) It wasn’t always this way,” says Marketwatch’s Rex Nutting. “In the 1950s, 1960s and into the 1970s, trade barriers, strong unions and discrimination gave workers (white male workers, that is) more bargaining power to get higher pay. It created the middle class.”

The result of such economic bullyism is that American wages haven’t grown since the 1970s, except for a brief period in the 1990s, when the Federal Reserve allowed the unemployment rate to fall to 4 percent, before beginning to raise interest rates. Thank you, President Clinton (and then Fed Chairman Greenspan during his easy money phase).

The share of national income that goes to labor (including the CEO’s salary and his stock options) has plunged from about 63 percent to 57 percent, says Nutting. The 6 percent of national income that’s going to profits instead of wages amounts to nearly $900 billion a year.

Graph: WSJMarketwatch

“For corporate businesses, after-tax profits are at record levels as a share of national income,” says Nutting. “Since the recession ended, profits are up 65 percent to $1.68 trillion last year. Small businesses aren’t doing quite so spectacularly, but their income is up 13 percent and their net worth is up 33 percent to $8.7 trillion since the recession ended. And the workers? Even after a big gain in the first quarter, median wages are down 3 percent since the recession ended.”

Many commentators and sociologists in particular assert 9/11 brought modern economic bullying to a high point. It’s rationale was the US put on a semi-permanent war footing, so that “Allegiance to the old public virtues—respect of the Bill of Rights, the Geneva Conventions and the rule of domestic and international law—was mocked and dismissed as quaint and soft by our new drill sergeants, according to a recent Canadian study. “From then on a state of emergency replaced the rule of law and set itself up as the norm.”

On a personal, workplace level, “If we are in a constant war-like mode societally, it sounds trivial, it sounds child-like, it sounds naively utopian to say, ‘Can’t we all get along?’” says Gary Namie of the Workplace Bullying Institute. “If you call for civility or a suspension of unmitigated, unfettered aggression, they call you a wimp. They think you are a wimp.”

There is another term for economic bullies, used by Professor Krugman, among others, in his most recent NYTimes column. They are sadomonetarists, or bankers and economists who want to tighten credit even during such tough economic times, as now: “At some level it has to reflect an instinctive identification with the interests of wealthy creditors as opposed to usually poorer debtors. But it’s also driven, I believe, by the desire of many monetary officials to pose as serious, tough-minded people — and to demonstrate how tough they are by inflicting pain.”

That, of course, is the most cogent definition of a bully. They want to demonstrate how tough they are, regardless of the consequences. For instance, the NAACP recently posted a report by Devin Burghart, Leonard Zeskind and the Institute for Research & Education on Human Rights called “Tea Party Nationalism,” exposing what it calls links between various Tea Party organizations and racist hate groups in the United States, such as white-supremacist groups, anti-immigrant organizations and militias, who have by definition, the bully mentality.

The bully mentality manifests in many forms, besides politically. The gun lobby via the NRA, ALEC, and other organizations have succeeded in blocking government study of the causes of gun violence, even though 31,000 gun-related death occur per year, the highest by a factor of 10 of any country in the world. Needless to say that inhibits development of policies and laws that might lower gun violence, whether in the schools or our inner cities.

So it turns out the bully mentality is part of human nature, really, and so part of our culture. It is then up to those employees who want to better themselves to find a way to oppose that culture and mentality. That means pushing back against the fear that such bullying engenders in all of us—against the ‘boss’ mentality, as well. Remember, such fear has to also be felt by those economists and politicians that allow it.

Harlan Green © 2014

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Labor’s Day Remembered

Popular Economics Weekly

As we celebrate another Labor Day, a national holiday, how do we remember it? I would like to remember it as some other developed countries celebrate it. France, for instance, has enshrined the one-hour lunch, whereas a 2012 survey of North American workers by Right Management found that only one in five reported taking a real break for lunch. Thirty-nine percent even reported they take lunch at their desks in the survey cited by columnist Robyn Blumner in the Tampa Bay Times.

The French don’t have to worry, for they work less and actually produce more per worker. A new survey touted by The Business Insider from UBS has shown that the French continue to work the least amount of hours per year in the world. Once again, the French have blown away the competition. Nationmaster ranks France as #18 in terms of GDP per capita, at $36,500 per person, yet France works much less than most developed nations.

France, for instance, with $36,500 GDP/Capita and works 1,453 hours per year, said the UBS study. This equates to a GDP/Capita/Hour of $25.10. Americans, on the other hand, have $44,150 GDP/Capita but work 1,792 hours per year. Thus Americans only achieve $24.60 of GDP/Capita/Hour.

And a recent visit to Amsterdam in The Netherlands, floored me. Stores can only stay open from 10-5pm, except for Thursday when they are allowed to be open to 9pm, and this in one of the commercial capitals of Europe!

Many economists and policy experts blame the loss of workers’ income on globalization, the exporting of jobs overseas to cheaper climes. But there is a much simpler explanation for the loss of workers’ incomes—record corporate profits that have enabled corporations to suppress their workers’ incomes, mostly via legislative and judicial means

As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966, according to the New York Times. In recent years, the shift has accelerated during the slow recovery that followed the financial crisis and ensuing recession of 2008 and 2009.

Graph: EPI

The legislative means are clear. Some 24 right-leaning Republican state legislatures have enacted right-to-work laws that actually prevent unions from either organizing, or requiring them to pay union dues, even though they receive all the benefits of unionization. This is not to mention the outright voter suppression tactics of ALEC, the American Legislative Exchange Council, a lobbying organization that has written many of those state laws

Judicially, we know that the Supreme Court’s decision in Citizens vs. United allowed corporations to contribute unlimited amounts to elections, and with their record profits they have not hesitated to back those right-to-work laws.

So who is the richest country in terms of human capital? Perhaps, France that has the best health care and pension systems in the world, or The Netherlands with 10 to 5 working hours, or the country that diverts most of its profits to corporations, their CEOs and investors?

Harlan Green © 2013

Follow Harlan Green on Twitter: www.twitter.com/HarlanGreen

Social Security Isn’t Dead

Popular Economics Weekly

Social Security isn’t dead, or even dying, in spite of the prediction by the Social Security Trustees that it will no longer be able to pay full benefits by 2033. That’s because the Trustees use what are called ‘intermediate’ assumptions of income and tax growth that have prevailed since the huge shift in wealth upward beginning in the 1970s, depressing incomes of the middle and lower income earning brackets.

The Trustees base their projection on growth rates of population, wages and employment that comprise the Gross Domestic Product, and not wanting to be overly optimistic, pick what they believe to be a medium GDP growth rate over the next 75 years in the mid-2 percent range, rather than the longer term historical rate of 3.5 percent over the past 75 years.

There are reasons for optimism, in other words, if employment and wage growth can be brought back to historical levels, instead of assuming more recent growth rates that are result of 5 recessions since 1980, which in turn were the result of experiments with so-called supply-side economics that emphasized lower tax rates for investors and and reduced government spending. This ‘experiment’ resulted in tremendous economic upheavals and $trillions in productive output lost.

Graph: US Social Security Admin

The Social Security Trustees own Alternative I, the “lower cost” estimate, would in fact never run out of funds. Hence the need to focus on what creates economic growth. It’s really a no-brainer.  More growth requires more jobs that pay a living wage for starters, which means more collective bargaining power and the strengthening of labor laws that have been weakened over the past 30 years.

There has been very little research, other than historical, on the ingredients of robust growth. But history does show that the continued transfer of wealth away from the consuming public to the wealthiest, while keeping corporate and high income tax rates as low as possible, hurts overall economic growth.

How? By the outright suppression of collective bargaining of wage and salary earners, either via such corporation backed groups as ALEC, the American Legislative Exchange Council, or Republican majorities in the right to work states that inhibit union organizing efforts, for starters. And those Republican majorities are due in part to blatant voter suppression laws in those states, again supported by the likes of ALEC.

Economists such as Thomas Piketty and Emmanuel Saez have shown that this has been going on for decades—since the 1970s, really, when high income tax brackets began to be lowered under the rationale that it would boost economic growth. But alas, the opposite has happened.

We need another New Deal to bring back the middle and lower class earning potential, real jobs paying wages real wages, in other words. Then we won’t have to worry about social security, worry less about Medicare, and stop the impoverishment of the majority of Americans who actually produce the wealth that should guarantee them a comfortable retirement.

Harlan Green © 2013

Follow Harlan Green on Twitter: www.twitter.com/HarlanGreen

Let’s Bring Back American Jobs

Popular Economics Weekly

It’s well-known that American job formation isn’t keeping up with economic growth, but not why. It’s mostly because corporations have been retaining more of their profits and sharing less with their employees, so that household incomes have fallen to historic lows as a share of national income. That has to be reversed, if we are to get back to full employment, and employees are again paid a living wage.

It makes sense economically, since households consume some 70 percent of what is produced, diminished incomes have reduced the public’s demand for the very goods and services that would create more jobs.

So the why is not something we see in everyday headlines. WSJ Marketwatch has said that if 175,000 jobs are added in Friday’s Labor Department unemployment report, then the 135 million jobs total will just bring it back to mid-2008 levels during the Great Recession.

Why have corporations been able to rack up such profits? The conventional wisdom is because of strong global demand, cheap global labor, and low interest rates, while American workers muddle along, their significance to these companies greatly diminished by a worldwide market for goods and people.

But it’s more than that. American workers have not been able to share in that prosperity. Economist John Kenneth Galbraith pointed out as early as the 1960s in The Affluent Society, among other writings, that labor was no longer an equal partner in the Big Business, Government, Labor triumvirate. Thanks to business-friendly legislation—such as the deregulation of whole industries and Wall Street finance, corporations began to grow beyond government’s power to control their behavior.

Most American workers today are paid a barely living wage, as household incomes have declined steadily since the 1970s, while labor productivity has soared. This is while labor friendly laws were weakened that gave corporations more power to hire and fire. And Right to Work laws enabled states to inhibit or even prohibit collective bargaining, which prevented workers from negotiating for their own wages.

U.S. companies today give wage and salary earners the least amount of vacation and, health care coverage, while working the longest hours, of any developed country. The American employee has lost the ability to control their own destiny, in other words.

The New York Times highlighted the divergence of record corporate profits from the meager jobs formation, and income gains. Corporate profits have risen 20 percent annually since the end of 2008, while disposable (after tax) incomes have risen just 1.4 percent. This trend has in fact been happening since the 1970s, but especially since 2000 and the concerted push of Republicans to increase corporate and investment tax breaks, which pushed more of the tax burden on ordinary households.

Graph: The Atlantic

“We went almost a century where the labor share was pretty stable and we shared prosperity,” says Lawrence Katz, a labor economist at Harvard. “What we’re seeing now is very disquieting.” For the great bulk of workers, labor’s shrinking share is even worse than the statistics show, when one considers that a sizable — and growing — chunk of overall wages goes to the top 1 percent: senior corporate executives, Wall Street professionals, Hollywood stars, pop singers and professional athletes.

Corporate power in America is now becoming egregious, as corporations continue to consolidate power over everyday life. Corporate lobbying groups such as ALEC now write states’ legislation that limits voters’ rights and environmental regulation, as well as pushing for even less gun regulations that now endanger children.

ALEC, the American Legislative Exchange Council is the corporate-funded organization that allows global corporations like Wal-Mart and ideological special interests like the National Rifle Association (NRA) to give state legislators changes to the laws they desire. ALEC "model bills" have served as the template for voter ID laws that swept the country in 2011, for the "voucher" programs that privatize education, for anti-environmental deregulatory bills, and for the wave of anti-union legislation in Wisconsin, Ohio, and most recently, Michigan.

So it turns out taking away the voice of American employees is really taking away democracy for the majority of Americans, something that cannot be tolerated if America is to remain a prosperous democracy.

Harlan Green © 2013

Follow Harlan Green on Twitter: www.twitter.com/HarlanGreen

Gun Violence Has Too Many Causes

Popular Economics Weekly

The tragic Newtown, Connecticut elementary school mass shooting is just the latest in a string of mass shootings that have contributed to more than 1 million dead by guns over the past 3 decades in the U.S.—an average of almost 32,000 per year.
This is when no other country in the developed world has had more than 400 documented gun killings in a year, outside of wartime. The problem in understanding the causes of such mass shootings may be that much gun violence has many causes that make it difficult if not impossible to understand in isolation.
But not if we look at the culture of violence that has made U.S. the most violent nation on earth. In fact, gun violence, as violence in general, has too many causes. Studies bear out that record income inequality, a poor social safety net and lax, almost nonexistent gun control laws all contribute to the U.S. record as the most gun violent culture in the world.
The Trayvon Martin killing illustrated this culture with the Stand Your Ground Laws being enacted in several states. And thereby we are beginning to see where the National Rifle Association, backed by some elements of Big Business, is leading this country—into a greater lawlessness, at the very least. For the Stand Your Ground Law enshrines the gangster code—shoot first and ask questions later.
As Paul Krugman said in a March New York Times Op-ed after the Trayvon Martin killing:

“Specifically, language virtually identical to Florida’s law is featured in a template supplied to legislators in other states by the American Legislative Exchange Council, a corporate-backed organization that has managed to keep a low profile even as it exerts vast influence (only recently, thanks to yeoman work by the Center for Media and Democracy, has a clear picture of ALEC’s activities emerged). And if there is any silver lining to Trayvon Martin’s killing, it is that it might finally place a spotlight on what ALEC is doing to our society — and our democracy.”

Krugman was exposing the links between corporations and the NRA that continues to push for guns to be worn by everyone everywhere, with or without background checks or even licenses.
Why the push by the NRA, and Big Business for more guns, as I said back in April? The reason most gun advocates and the NRA give, is that it is for the purpose of self-defense in an increasingly violent world. The NRA even asserts it decreases violence. But studies cited in an excellent book, Gun Violence: The Real Costs by Philip J. Cook and Jens Ludwig show that gun use tends to increase gun violence—i.e., there are almost 4 times more fatalities in gun-related robberies than other robberies with knives, clubs, etc.
And a study cited in the Justice Department’s National Crime Victimization Survey (NCVS) on home invasions found that just 3 percent were able to use guns against someone who broke in (or attempted to do so) while they were at home, when 40 percent of households have guns.
So it turns out guns are not very helpful in self-defense. Also overlooked is the fact that criminals are predators, and predators prey on the weakest and most vulnerable, not those who look like they can defend themselves. So really, does the agenda of the NRA to abolish all gun controls do more than reinforce the fear factor, the fear that your neighbor may be your assailant?

“But where does the encouragement of vigilante (in)justice fit into this picture?” asks Krugman. “In part it’s the same old story — the long-standing exploitation of public fears, especially those associated with racial tension, to promote a pro-corporate, pro-wealthy agenda. It’s neither an accident nor a surprise that the National Rifle Association and ALEC have been close allies all along.”

The culture of violence is not a pretty picture in our crowded cities in particular. Philadelphia averaged more than 30 gun-related deaths per month in 2011, when Europe as a whole had less than 300 per year. The last time U.S. gun violence was this high was during the Great Depression, when we had gangsters like Al Capone, John Dillinger, and Bonnie and Clyde.
English Sociologist Richard Wilkinson has brought this out in books and lectures, especially his TEDx lecture on the roots of violence and crime, in which he charts that countries with the most inequality in wealth are also the most violent countries. And surprise, the U.S. is now one of the most unequal countries—in terms of wealth and opportunities for wealth—in the world, as has been brought out by the CIA World Factbook. It is ranked 94th of the 136 countries ranked by the CIA for income inequality, next to Camaroon, Zimbabwe, which are some of Africa’s poorest countries.
There are many who will say that the deeds of a psychopath cannot be prevented. But is that the point when it is so ridiculously easy for an individual to purchase an arsenal without an alarm being set off? Why would anyone such as the Aurora, Colo. shooter need 6,000 rounds, for instance, said the New York Times?

“With a few keystrokes, the suspect, James E. Holmes, ordered 3,000 rounds of handgun ammunition, 3,000 rounds for an assault rifle and 350 shells for a 12-gauge shotgun — an amount of firepower that costs roughly $3,000 at the online sites — in the four months before the shooting, according to the police. It was pretty much as easy as ordering a book from Amazon.”

Do we need another reason to require reporting such weapon sales, other than for war?

Harlan Green © 2012

Michigan Republicans Repeat Economy Wrecking Doctrine

Financial FAQs

Michigan has become the latest Republican-led effort to wreck economic growth in passing a right-to-work laws that restrict unions. With all apologies to Naomi Klein’s Shock Doctrine, Repubs are no longer waiting for recessions to enrich their wealthiest supporters—such as passing GW Bush tax cuts during the 2001 recession and in 2003 that caused the largest budget deficit in history, precipitating the Great Recession.

Michigan is a text book example of how ALEC and Americans for Prosperity, the big business lobby and the Koch Brothers have worked to bust unions. Michigan is the 24^th state to enact Right-to-Work Laws that take away unions’ ability to organize and charge union dues to finance union benefits. But more insidiously it weakens the ability to bargain for their own wages and salaries. This is when corporate profits and CEO salaries are already the largest in history.

We know the result in the other 23 states. They are the poorest states, who require the most government assistance. So this exposes Republicans and conservatives agenda in general. Restricting union organizing and collective bargaining impoverishes the majority of wage and salary workers, which drives the poorest into government assistance at the slightest economic downturn. It therefore preserves the profits of the investors who live off of corporate profits, while passing on the costs of wrecking the incomes of the majority to government-financed programs—i.e., our tax monies.

Wisconsin’s direct restriction of collective bargaining rights for government employees was the most blatant example until now. By directly restricting their incomes and benefits, it puts a wrecking ball to economic growth in Wisconsin, putting it into the group of have-not states that have consistently lower standards of living.

Many studies have shown this, but the most convincing evidence is listing the have-not states. They include the most rural and red states in the South and Midwest dependent on government benefits to supplement the meager incomes and lower standard of living of their citizens.

The AFL-CIO has put out the latest statistics on union, vs. non-union incomes and benefits: Employees covered by union contracts receive 28 percent more in wages and benefits than workers without unions.  For women workers, the union advantage is 34 percent. For African American workers, the union advantage is 29 percent.  And for Hispanic workers, the union advantage is a whopping 50 percent.  When “right to work” laws weaken unions and drive down wages and benefits, workers have less to spend and the entire economy – particularly small business--suffers.

It should be blindingly obvious why Republicans are pushing their anti-union agenda. It increases their wealth and power at the expense of everyone else.

Harlan Green © 2012

Gun Violence Has Too Many Causes

Popular Economics Weekly

The shooting in Aurora’s Central Theatres is not something “impossible to understand” as was said by Denver’s Mayor just after the massacre, if we look at the culture of violence that has made U.S. the most violent nation on earth. In fact, gun violence, as violence in general, has too many causes. Studies bear out that record income inequality, a poor social safety net and lax, almost nonexistent gun control laws all contribute to the U.S. record as the most gun violent culture in the world.

The Trayvon Martin killing illustrated this culture with the Stand Your Ground Laws being enacted in several states. And thereby we are beginning to see where the National Rifle Association, backed by some elements of Big Business, is leading this country—into a greater lawlessness, at the very least. For the Stand Your Ground Law enshrines the gangster code—shoot first and ask questions later.

As Paul Krugman said in a March New York Times Op-ed after the Trayvon Martin killing:

“Specifically, language virtually identical to Florida’s law is featured in a template supplied to legislators in other states by the American Legislative Exchange Council, a corporate-backed organization that has managed to keep a low profile even as it exerts vast influence (only recently, thanks to yeoman work by the Center for Media and Democracy, has a clear picture of ALEC’s activities emerged). And if there is any silver lining to Trayvon Martin’s killing, it is that it might finally place a spotlight on what ALEC is doing to our society — and our democracy.”

Krugman was exposing the links between corporations and the NRA that continues to push for guns to be worn by everyone everywhere, with or without background checks or even licenses.

Why the push by the NRA, and Big Business for more guns, as I said back in April? The reason most gun advocates and the NRA give, is that it is for the purpose of self-defense in an increasingly violent world. The NRA even asserts it decreases violence. But studies cited in an excellent book, Gun Violence: The Real Costs by Philip J. Cook and Jens Ludwig show that gun use tends to increase gun violence—i.e., there are almost 4 times more fatalities in gun-related robberies than other robberies with knives, clubs, etc.

And a study cited in the Justice Department’s National Crime Victimization Survey (NCVS) on home invasions found that just 3 percent were able to use guns against someone who broke in (or attempted to do so) while they were at home, when 40 percent of households have guns.

So it turns out guns are not very helpful in self-defense. Also overlooked is the fact that criminals are predators, and predators prey on the weakest and most vulnerable, not those who look like they can defend themselves. So really, does the agenda of the NRA to abolish all gun controls do more than reinforce the fear factor, the fear that your neighbor may be your assailant?

“But where does the encouragement of vigilante (in)justice fit into this picture?” asks Krugman. “In part it’s the same old story — the long-standing exploitation of public fears, especially those associated with racial tension, to promote a pro-corporate, pro-wealthy agenda. It’s neither an accident nor a surprise that the National Rifle Association and ALEC have been close allies all along.”

The culture of violence is not a pretty picture in our crowded cities in particular. Philadelphia averaged more than 30 gun-related deaths per month in 2011, when Europe as a whole had less than 300 per year. The last time U.S. gun violence was this high was during the Great Depression, when we had gangsters like Al Capone, John Dillinger, and Bonnie and Clyde.

English Sociologist Richard Wilkinson has brought this out in books and lectures, especially his TEDx lecture on the roots of violence and crime, in which he charts that countries with the most inequality in wealth are also the most violent countries. And surprise, the U.S. is now one of the most unequal countries—in terms of wealth and opportunities for wealth—in the world, as has been brought out by the CIA World Factbook. It is ranked 94th of the 136 countries ranked by the for income inequality, close to Camaroon, Zimbabwe, some of Africa’s poorest countries.

There are many who will say that the deeds of a psychopath cannot be prevented. But is that the point when it is so ridiculously easy for an individual to purchase an arsenal without an alarm being set off? Why would anyone need 6,000 rounds, for instance, said the New York Times?

“With a few keystrokes, the suspect, James E. Holmes, ordered 3,000 rounds of handgun ammunition, 3,000 rounds for an assault rifle and 350 shells for a 12-gauge shotgun — an amount of firepower that costs roughly $3,000 at the online sites — in the four months before the shooting, according to the police. It was pretty much as easy as ordering a book from Amazon.”

Do we need another reason to demand laws that require the reporting of such weapon sales?

Harlan Green © 2012