Saturday, July 16, 2011

Deficit Reduction Versus Democracy

Deficit Reduction Versus Democracy

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Listening to Congress debate deficit deduction is like listening to a den of lions discuss the welfare of zebras. In both cases the debate is very one-sided. Democrats and Republicans sound disagreeable on TV, but their arguments differ by the tiniest of degrees (like lions fighting over how best to eat a zebra.)

The zebras in this case are U.S. working people, who are not seeing their interests represented by their so-called representatives. Instead of fixing the national deficit in the way that the vast majority of Americans would like, only the opinions of a tiny minority of very rich people are being considered. Both political parties are uniting to reduce the deficits on the backs of working people.

For example, Obama's chief of staff, William Daley, spoke recently about the budget deficit and the need for massive cuts to social programs, which include Social Security and Medicare:

“Everyone [Democrats and Republicans] agrees that a number around $4 trillion [in cuts] is the number that will make a serious dent in our deficit...He [Obama] didn’t come to this town to do little things. He came to do big things.” (July 10th, 2011).

In a recent presidential address Obama said: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

This is the language of the right wing, which is now the language of both the Democrat and Republican parties. In reality, the U.S. government could easily access trillions of dollars in revenue; it simply chooses not to. Both political parties refuse to discuss how raising taxes on the wealthy and corporations could easily fix the current deficit issue on both the federal and state levels. The ONLY mention of taxing the rich is in the context of the Bush tax cuts, which some Democrats would allow to expire in the coming year; but it’s very possible that Democrats will "compromise" on this issue yet again.

Even economist and liberal Obama-backer Paul Krugman put two and two together when he said:

"in fact, if all you did was listen to his [Obama's] speeches, you might conclude that he basically shares the GOP’s diagnosis of what ails our economy and what should be done to fix it." (July 8th, 2011).

The rich and corporations have always hated Social Security and Medicare; they'd rather not pay taxes towards these programs at all. It lowers their profits. And ONLY this perspective is being shared on the mainstream media and being discussed in the halls of Congress. If massive cuts are made to these federal programs at the expense of millions of working people -- without substantially raising taxes on the wealthy -- then the safety net in the U.S. will have been critically injured.

How would the vast majority of working people in this country like the deficit to be fixed? Poll after poll has indicated that cutting Social Security and Medicare is VERY unpopular, while raising taxes on the wealthy is extremely popular. A recent Washington Post/ABC News poll reported that 78 percent of Americans are opposed to cuts in Medicare, while 72 percent favor taxing the rich. (April 20th, 2011).

But polls are just one way of expressing popular opinion, i.e. democracy. Another alternative is massive street mobilizations. In Greece the majority of people have exposed the anti-democratic policies of their government, which is trying to impose massive cuts to social programs to fix Greece's budget problems. Sound familiar? If the Greek government doesn't change course it will have zero popular backing, i.e., it will be a dictatorship. Obama's silence on this situation in Greece is very telling.

In order to follow the Greek and Wisconsin examples of massive mobilizations, there must be an organizational push within working class organizations to make it happen. A resolution adopted unanimously by the Executive Committee of San Francisco Labor Council on July 5, 2011 expresses this vision:

"The big question now is what the labor movement will do to meet this challenge confronting working people and the great majority. The choice is clear: either confine labor's protest against cuts in the social programs to pronouncements opposing them, coupled with lobbying; or combine these efforts with an all-out mobilization of the rank-and-file and our allies to prevent the cuts from being enacted."

The San Francisco Labor Council resolution also encouraged all sectors of labor to organize "a campaign to mobilize support for "No Cuts or Concessions! Tax the Corporations and the Rich!" in the streets -- where it counts the most -- and in every corner of the nation."

Democracy is no longer expressed in the halls of Congress nor in the White House and must therefore be transferred to the streets.

Shamus Cooke
is a social service worker, trade unionist, and writer for Workers Action ( He can be reached at


Carlos Montes and the Security State: A Cautionary Tale

Carlos Montes and the Security State: A Cautionary Tale

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On May 17 at 5 in the morning the Chicano activist Carlos Montes got a wake-up call at his home in California from Barack Obama’s security state. The Los Angeles County sheriff’s SWAT team, armed with assault rifles and wearing bulletproof vests, as well as being accompanied by FBI agents, kicked down his door, burst into his house with their weapons drawn, handcuffed him in his pajamas and hauled him off to jail. Montes, one of tens of thousands of Americans who have experienced this terrifying form of military-style assault and arrest, was one of the organizers of the demonstrations outside the 2008 Republican National Convention in St. Paul, Minn., and he faces trial along with 23 other anti-war activists from Minnesota, as well as possible charges by a federal grand jury.

The widening use of militarized police units effectively nullifies the Posse Comitatus Act of 1878, which prohibits the use of the armed forces for civilian policing. City police forces have in the last few decades amassed small strike forces that employ high-powered assault rifles, armored personnel carriers, tanks, elaborate command and control centers and attack helicopters. Poor urban neighborhoods, which bear the brunt of the estimated 40,000 SWAT team assaults that take place every year, have already learned what is only dimly being understood by the rest of us—in the eyes of the state we are increasingly no longer citizens with constitutional rights but enemy combatants. And that is exactly how Montes was treated. There is little daylight now between raiding a home in the middle of the night in Iraq and raiding one in Alhambra, Calif.

Montes is a longtime activist. He helped lead the student high school walkouts in East Los Angeles and anti-war protests in the 1960s and later demonstrations against the wars in Iraq and Afghanistan. He was one of the founding members of the Brown Berets, a Chicano group that in the 1960s styled itself after the Black Panthers. In the 1970s he evaded authorities while he lived in Mexico and he went on to organize garment workers in El Paso, Texas. He and the subpoenaed activists are reminders that in Barack Obama’s America, being a dissident is a crime.

“It was an FBI action, as I recall,” Sgt. Jim Scully told reporters of the Pasadena Star-News. “We assisted them.”

Montes was arrested ostensibly because he bought a firearm although a felony conviction 42 years ago prohibited him from doing so. The 1969 felony conviction was for throwing a can of Coke at a police officer during a demonstration. The registered shotgun in his closet, bought last year at a sporting goods shop, became the excuse to ransack his home, charge him and schedule him for trial in August. It became the excuse to seize his computer, two cellphones and files and records of his activism on behalf of workers, immigrants, the Chicano community and opposition to wars. Prosecutors said Montes should have disclosed his four-decade-old felony charge when he bought the shotgun at Big 5 Sporting Goods. Because he neglected to do this he will face six felony charges. The case is to be tried in Los Angeles.

“The gun issue was clearly a pretext to investigate my political activities,” he said when I reached him at his Alhambra home. “It is about my anti-war activities and my links to the RNC demonstrations. It is also about my activism denouncing the U.S. policy of war in Iraq and Afghanistan, their support for Israel and the Colombian government. I have been to Colombia twice.”

“I thought someone is breaking in, somebody is trying to jack me up,” he said. “I was a victim of an armed robbery in December of 2009 in my home. I do have a gun in my bedroom for self-defense. I was startled. I jumped out of bed. I saw lights coming from the front-door area. They looked like flashlights. I saw men with helmets and rifles. I gravitated towards the front door. I didn’t take my gun. I could have done that. I have it there. It is a good thing I didn’t pick anything up and put it in my hand.”

“I yelled, ‘Who is it?’ ” he said. “They said, ‘The police. Carlos Montes, come out’ or ‘come forward,’ something like that. I approached the entryway. They rushed in. They grabbed my hands. They turned me around. There were two police officers on each arm. They brought me out holding my arms. I have a little patio. They handcuffed me and patted me down. I am on a little hill. I looked down the street and [it was] full of sheriff’s vehicles, patrol cars and two large green vans. They were bigger than vans. People could stand in there. They didn’t have any logos on them.… I thought it was an Army truck at first. Later on I found it was from the sheriff.”

“It was kind of misty,” he said. “The ground was wet. They put me in the back seat of the car. I was handcuffed. They closed the doors and the windows. I was sitting there looking around, in a state of shock, thinking is this a dream or the real thing? I tried to close my eyes for a little while to see if I could wake up from this nightmare. I always had it in the back of my mind, one day they will come and raid me. My name was on the anti-war committee FBI search warrant raid in Minnesota. People were saying ‘we all got raided and your name is there.’ The lawyers said, ‘Beware—it could happen to you sooner or later.’ They were raided on Sept. 24 last year.”

Those who were raided were all issued subpoenas to appear before a federal grand jury in Chicago. They have refused to testify. The March on the RNC organizing committee was infiltrated by an agent although the protest groups had obtained licenses to demonstrate at the Republican National Convention. The Justice Department’s inspector general later released a report that criticized the FBI for invoking anti-terrorist laws to justify its investigations and harassment of peace and solidarity groups, including Greenpeace, People for the Ethical Treatment of Animals, and the Catholic Worker.

While Montes was in the back of the police car a man in a windbreaker and a baseball cap approached the vehicle. The sheriff’s deputies rolled down the right rear window. The man in the baseball cap told Montes he was from the FBI and wanted to speak with him.

“I blurted out, ‘Do you have a card?’ ” Montes said. “He laughed and said, ‘I don’t have a card.’ He said, ‘I want to talk to you about Freedom Road Socialist Organization.’ I didn’t say anything. I kept quiet. And then he walked away.”

Montes has written articles for the newspaper Fight Back News about Chicano immigrants’ rights struggles in Los Angeles, the wars in Iraq and Afghanistan and the fight against the rise of charter schools. He said he was not a member of Freedom Road Socialist Organization. The organization, a Marxist group, is reportedly being investigated by the FBI because of connections with the Colombian rebel group the Revolutionary Armed Forces of Colombia (FARC) and the Palestinian group the Popular Front for the Liberation of Palestine, both of which have been labeled as terrorist organizations. The Sept. 24, 2010, search warrant for the anti-war committee offices in Minneapolis lists Montes’ name among the group’s affiliates.

Montes was taken to the Los Angeles County Jail, known as the Twin Towers, and held for 24 hours until he was able to post a $35,000 bail.

“They called my sister to secure [my] house,” he said. “She called the handyman and he put a piece of plywood over my door. I did not have my wallet with me. When I got out of the county jail I did not have any phone numbers or money or an ID. I was walking around in slippers—at least they gave me slippers—and my pajamas. I got back about 5:30 the next morning. I got the door off. There were files and papers on the floor along with photograph albums of the anti-war movement, Latinos Against the War, the ’92 Rebellion, my son’s wedding, my daughter’s birthday, scattered on my kitchen table and floor. It looked like they lined up a bunch of stuff on tables and went through it. It was the same thing with my living room table. They had a file out from 1994 when we did a campaign against police brutality when the sheriffs were going crazy killing people. In my closet I had Chicano archives going back to the 1960s and 1970s. Those were pulled out and on the floor. They went through all my political documents, including my work with the Southern California Immigration Coalition and the campaign to elect a school board member, which we won, to stop the privatization of the local high school and the charters coming in. They went through all those files. It took me a couple of weeks to clean things up. They took a bunch of stuff.”

“The government sees the Chicano people as a threat,” he said. “We were able to turn out millions of people in 2006. In 1994 we had hundreds of thousands. We are growing. There are millions in the Southwest. We are all over the country, but especially in Arizona, Texas, New Mexico and California. We are still unorganized, but if we get organized we could really demand changes. We had millions of people out in 2006 and then they came after us hard in 2007. There was a lot of police repression, especially in Los Angeles. They fear the Chicano people challenging the status quo.”

“Many of the activists that were raided by the police are anti-war and solidarity activists,” he went on. “And even though the anti-war movement is not massive right now, the potential is there because there is an economic crisis. There is mass disgust with this economic system. People are out of work. It is not yet like COINTELPRO [Counter Intelligence Program] started under Hoover and the FBI to carry out surveillance, infiltrate and disrupt domestic political organizations, but the situation is getting worse. That is why we have to have demonstrations to put a stop to it now.”

Greece a Dress Rehearsal for United States

Cuts to Social Security and Medicare and privatization at the state level mirror strategy imposed on Greece


The True Cost Of America's Wars

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During his speech on Afghanistan June 22, President Obama revealed that "Over the last decade, we have spent a trillion dollars on war." He knew this was a deceptive understatement, as did everyone who keeps close watch on the Bush-Obama wars all these years.

Few Americans , however, have closely followed Washington's 21st century wars of choice, so a trillion probably sounds right to them, but that amount in 10 years — when the annual cost of air conditioning alone for the U.S. in Afghanistan and Iraq amounts to $20.2 billion a year — is way off base.

(It's difficult to conceive of one trillion, so we'll repeat a method we've used before: Sixty seconds comprise a minute. One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years.)

The latest objective estimate for the wars in Iraq and Afghanistan, made public June 29, is between $3.7 trillion and $4.4 trillion (140,800 years), according to the research project "Costs of War" by Brown University's Watson Institute for International Studies.

The university assembled a team of economists, anthropologists, political scientists, legal experts, and a physician to do this analysis, which included future costs for veterans care and interest on war debts to be paid over the next few decades.

The medical costs are huge. "While we know how many U.S. soldiers have died in the wars (just over 6,000)," the report pointed out, "what is startling is what we don’t know about the levels of injury and illness in those who have returned from the wars. New disability claims continue to pour into the VA, with 550,000 just through last fall." This doesn't even include the thousands of deaths and injuries among quasi-military contractors. There are about as many contractors as troops in Iraq and Afghanistan.

It's impossible to precisely predict the interest costs on these wars. In 2010, $400 billion of our tax money went toward paying off past war debts as far back as the Korean War of the early 1950s. We'll pay war debts indefinitely because Washington is always borrowing to plan for or start new wars. So far, the U.S.-led NATO war for regime change in Libya is costing American taxpayers about a billion. The Pentagon has blueprints ready for many different kinds of future wars, from small counter-terrorism escapades, to cyberspace and outer space conflicts, to nuclear war, all the way up to World War III.

The Brown University figures may turn out to be underestimates. A few independent studies over the years have been somewhat higher but were brushed aside by the White House and the mass media. This may happen to the Brown calculations as well.

The respected Nobel Prize-winning economist Joseph Stiglitz and Harvard Professor Linda Bilmes wrote a book three years ago estimating the cost of the Iraq war only, based on data collected in 2006. It was titled "The Three Trillion Dollar War." They based their calculations on the "hidden" costs of the war that include enormous medical care expenses over the next 50 years for tens of thousands of badly wounded soldiers, other benefits, equipment replacement, and interest on war debts.

Stiglitz and Bilmes calculated in 2008 that the combined cost of the Iraq and Afghanistan wars would be between $5 and $7 trillion. They called these adventures the "credit card wars." Using a somewhat different methodology a few years ago, the Joint Economic Committee of Congress, estimated the Iraq war ultimately will cost $3.5 trillion. They didn't include the Afghan war.

Assuming Obama is reelected, the Bush-Obama wars — including Iraq, Afghanistan, Pakistan, Yemen (and Somalia, where the U.S. is now engaged in drone strikes), plus the wars in Obama's final years — will certainly top $5 trillion in real costs.

In this connection, we cannot forget that current Pentagon spending of around $700 billion a year represents a huge increase since 2001, when it totaled about $380 billion. (By comparison, during this same time period, military spending by Iran — portrayed by Washington, Tel-Aviv and Saudi Arabia as the greatest danger to peace in the Middle East — dropped from $9 billion in 2001 to $7 billion in 2010.)

But Defense Department expenses are only half the story. Double the Pentagon's $700 billion for a true estimate of the amount of money the U.S. spent on war-related issues last year. That's $1.4 trillion a year for the United States. How is this possible?

Instead of just discussing the Pentagon budget, it is essential to also consider Washington's various other "national security" budgets. That of course includes the costs of Washington's 16 different intelligence services, the percentage of the annual national debt to pay for past war expenses, Homeland Security, nuclear weapons, additional annual spending requests for Iraq and Afghan wars, military retiree pay and healthcare for vets, NASA, FBI (for its war-related military work), etc. When it's all included it comes to $1,398 trillion for fiscal 2010, according to the War Resisters League and other sources.

It's not enough just to take note of the money Washington spent on stalemated wars of imperial choice. It's fruitful to contemplate where our $5 trillion Bush-Obama war funding might have been invested instead. It could have paid for a fairly swift transition from fossil fuels to a solar-wind energy system for the entire U.S. — a prospect that will now take many decades longer, if at all, as the world gets warmer from greenhouse gases. And there probably would have been enough left to overhaul America's decaying and outdated civil infrastructure, among other projects.

But while the big corporations, Wall Street and the wealthy are thriving, global warming and infrastructure repair have been brushed aside. States are cutting back on schools and healthcare. Counties and towns are closing summer swimming pools and public facilities. Jobs and growth are stagnant. The federal government is sharply cutting the social service budget, and Medicare et al. are nearing the chopping block.

During his Afghan speech, President Obama also declared that "we take comfort in knowing that the tide of war is receding." Finally, some "real change we can believe in" — right? Meanwhile, as The White House and Congress slash the deficit, be assured despite a bit of fixing here and there, the military and national security budgets will remain essentially unchanged.

Jack A. Smith is editor of the Hudson Valley Activist Newsletter and is former editor of the (U.S.) Guardian Newsweekly. He may be reached at

— For the Brown Univ. study,
— For Stiglitz and Bilmes,

Tax Subsidies (or Loopholes) for Corporations Are the Middle American's Tax Burden

Tax Subsidies (or Loopholes) for Corporations Are the Middle American's Tax Burden

One American's tax subsidy (or loophole) is another American's tax burden.

Take the money out of the middle-class taxpayers' pockets and put it into the super wealthy hands of the oil companies or hedge fund managers, for example.

In essence, people of limited means who work by the hour are paying higher taxes in order to make wealthy people wealthier. Why? Because someone has to pay taxes for the services provided by the government.

ThinkProgress noted this in terms of the tax subsidy we all pay to hedge fund managers:

The top 25 hedge fund managers in the United States collectively earned $22 billion last year, and yet they have their own cushy set of tax rules. If they operated under the same rules that apply to other people - police officers, for example, or teachers - the country could cut its national deficit by as much as $44 billion in the next ten years.

So, you and I are taxed at a higher rate than hedge fund managers for their personal gain on behalf of customers. Middle-income earners are subsidizing billionaires.

Of course, taxpayers also subsidize oil companies that have been making record profits, including ExxonMobil, which recorded the highest corporate quarterly profit in history awhile back. As the Center for American Progress reports, the middle class is paying indirect taxes to the oil companies: "In effect, U.S. taxpayers wrote a collective $7 billion bonus check to the oil industry when they filed their taxes last month [for 2010]."

Mainstream media euphemistically calls these taxpayer-subsidized profits by hedge fund managers and oil companies "loopholes."

That's like a pickpocket saying that he didn't steal a wallet, it just jumped into his hand.

Obama proposal would impoverish 250,000

Obama proposal would impoverish 250,000

The Social Security Administration estimates that a proposal floated by the Obama administration would put 245,000 people into poverty, according to an analysis released by liberal senator Bernie Sanders (I-Vt.) on Saturday.

That level of impact would be felt by 2050 if a proposal to change the way inflation is measured is adopted, Sanders announced. The change to the way SSA would calculate the Consumer Price Index has been floated in debt ceiling talks between Congress and the White House. The White House has suggested revising CPI for both the tax code, in order to generate more revenue, and for benefits.

Social Security Administration’s Office of Retirement Policy estimated that by 2030, according to the report prepared for Sanders, there would be 173,400 more people living in poverty in the United States.

Benefits for those who are 80-89 would drop by $960 a year. Benefits for women would fall by 3.5 percent overall while men’s benefits would drop by 2.9 percent.

By 2050, seniors in the 80-89 age bracket would see benefits fall by $1,200 a year.

"I am especially disturbed that the president is considering cuts in Social Security after he campaigned against cuts in 2008," Sanders said. "The American people expect the president to keep his word."

This week Sanders demanded that Senate Majority Leader Harry Reid (D-Nev.) join House Minority Leader Nancy Pelosi (D-Calif.) in flatly ruling out any benefit cuts to Social Security as part of the debt deal.

Reid in the past has said Social Security does not need to be reformed for decades. While Social Security is expected to be unable to pay full benefits by 2036, it is not a major driver of the budget deficit. Republicans want the program reformed now because they fear otherwise that as 2036 approaches massive tax hikes that could stall the economy would be demanded by senior citizens.

America’s current jobless class is less visible than ever

Somehow, the Unemployed Became Invisible

GRIM number of the week: 14,087,000.

Fourteen million, in round numbers — that is how many Americans are now officially out of work.

Word came Friday from the Labor Department that, despite all the optimistic talk of an economic recovery, unemployment is going up, not down. The jobless rate rose to 9.2 percent in June.

What gives? And where, if anywhere, is the outrage?

The United States is in the grips of its gravest jobs crisis since Franklin D. Roosevelt was in the White House. Lose your job, and it will take roughly nine months to find a new one. That is off the charts. Many Americans have simply given up.

But unless you’re one of those unhappy 14 million, you might not even notice the problem. The budget deficit, not jobs, has been dominating the conversation in Washington. Unlike the hard-pressed in, say, Greece or Spain, the jobless in America seem, well, subdued. The old fire has gone out.

In some ways, this boils down to math, both economic and political. Yes, 9.2 percent of the American work force is unemployed — but 90.8 percent of it is working. To elected officials, the unemployed are a relatively small constituency. And with apologies to Karl Marx, the workers of the world, particularly the unemployed, are also no longer uniting.

Nor are they voting — or at least not as much as people with jobs. In 2010, some 46 percent of working Americans who were eligible to vote did so, compared with 35 percent of the unemployed, according to Michael McDonald, a political scientist at George Mason University. There was a similar turnout gap in the 2008 election.

No wonder policy makers don’t fear unemployed Americans. The jobless are, politically speaking, more or less invisible.

It wasn’t always so. During the Great Depression, riots erupted on the bread lines. Even in the 1980s and 1990s, angry workers descended on Washington by the busload.

“There used to be a sense that unemployment was rich soil for radicalization and revolt,” says Nelson Lichtenstein, a professor of labor history at the University of California, Santa Barbara. “That was a motif in American history for a long time, but we don’t seem to have that anymore.”

But why? It’s partly because of the greater dispersion of the unemployed, and partly because of the weakening of the institutions that previously mobilized them.

Unemployment doesn’t necessarily beget apathy, Mr. McDonald says. Rather, demographic groups that are more likely to be unemployed also happen to be the same groups that are less likely to vote to begin with, such as the poor and the low-skilled.

Even so, numerous studies have shown that unemployment leads to feelings of shame and a loss of self-worth. And that is not particularly conducive to political organizing. As Heather Boushey, an economist at the liberal Center for American Progress, puts it, rather bluntly: “Nobody wants to join the Lame Club.”

That’s not to say that disillusionment about the economy will just fade away. But unless something changes, the unemployed seem unlikely to gain real political potency soon.

“There’s an illusion that grass-roots activity just begins spontaneously, that people get mad and suddenly say, ‘I’m not going to take it anymore!’ ” says Michael Kazin, a historian at Georgetown University. “But that’s not how it happens.”

Intellectuals used to play a big role in organizing labor. In the 1930s, Communists and socialists were a major force. Later, labor unions stepped in.

But today’s unions are not set up to serve the unemployed; they generally organize around workplaces, after all.

Just ask Rick McHugh, who worked in Michigan as an employment lawyer for the United Automobile Workers from the 1980s through the 1990s. He represented workers who were appealing denials of unemployment insurance benefits. The union footed the bill for people he represented who were not, and had never been, U.A.W. members.

Today, however, many unions are fighting for their own survival. They no longer provide such support for nonmembers. “They just don’t have the staff and the resources to support these programs and the recipients like they used to,” says Mr. McHugh, now a staff attorney at the National Employment Law Project.

Workers have also become suburbanized. Back in the 1960s or even the 1980s, the unemployed organized around welfare or unemployment offices. It was a fertile environment: people were anxious and tired and waiting for hours in line.

“We stood outside of these offices, with their huge lines, and passed out leaflets that said things like: ‘If you’re upset about what’s happening to you, come to this meeting at this church basement in two weeks. We’ll get together and do something about this,’ ” recalls Barney Oursler, a longtime community organizer and co-founder of the Mon Valley Unemployed Committee in the early 1980s. “The response just made your heart get big. ‘Oh, my God,’ they’d say, ‘I thought I was alone.’ ”

The Mon Valley Unemployed Committee, which is based in Pittsburgh, helped organize workers in 26 cities across five states, simply by hanging around outside unemployment offices and harnessing the frustration.

Today, though, many unemployment offices have closed. Jobless benefits are often handled by phone or online rather than in person. An unemployment call center near Mr. Oursler, for instance, now sits behind two sets of locked doors and frosted windows.

In other countries, workers have mobilized online. Unions here, too, have reached out on the Web. They include groups like Working America (the community affiliate of the A.F.L.-C.I.O.) and UCubed (created by the International Association of Machinists and Aerospace Workers).

But many Web sites geared toward the unemployed aren’t about mobilizing workers. Many instead provide guidance about things like posting résumés online, or simply offer the comfort of an online community.

It’s not clear why this is the case, when social networks have been so essential to organizing economic protests in places like Britain and Greece, not to mention political movements in the Middle East.

“You have to remember that technology is not independent of social structures, motivations and politics,” Mr. Kazin says. “People can feel like they have their own community online, which is useful emotionally, but they also have to have the desire and demand to do something about their situation first before they start using that online presence to organize anything in person.”

To the extent that frustrations are being channeled at all, they are being channeled largely through the Tea Party. But the Tea Party is mostly against devoting government resources to helping the unemployed.

Tea Party activists, for example, are more likely to believe that providing benefits to poor people encourages them to stay poor, and to believe that economic stimulus has made the economy worse.

Why populist anger over the poor economy is leaning right, rather than left, this time around is a bit of a mystery. Perhaps it is because Democrats, traditional friends of labor, control the White House and the Senate.

Mr. Lichtenstein, the historian, notes that it took awhile for the poor to mobilize in the Great Depression. Many initially saw President Roosevelt as an ally and only later became disillusioned. As Langston Hughes wrote in a 1934 poem, “The Ballad of Roosevelt”:

The pot was empty,

The cupboard was bare.

I said, Papa,

What’s the matter here?

I’m waitin’ on Roosevelt, son,

Roosevelt, Roosevelt,

Waitin’ on Roosevelt, son.

For the moment, jobless Americans are waiting on President Obama. If unemployment stays as high as many expect, and millions exhaust their benefits, they may just find their voice in 2012.

Obama toes Wall Street line in debt talks

Obama toes Wall Street line in debt talks

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In a press conference Monday morning before a new round of bipartisan talks on raising the federal debt ceiling, President Barack Obama embraced the demand of the most powerful financial interests that domestic social spending be slashed dramatically, declaring the deficit, not mass unemployment, to be the central US economic problem.

As with all such events in official Washington, it is necessary to decode the language used at the press conference. Obama sought to posture as an advocate of “shared sacrifice,” criticizing congressional Republicans for their adamant opposition to any tax increases on the wealthy. He even attempted, albeit not very convincingly, to make a display of sympathy for working people struggling to make ends meet.

But the basic message he conveyed was an acceptance of the entire framework of the discussion on raising the debt ceiling laid down by Wall Street, which demands a fundamental restructuring of social relations in the United States through the gutting of what little remains of the social safety net—Medicare, Medicaid and Social Security.

Referring to all the Democrats and Republicans who were meeting around the table at the White House, he declared that “all of us agree that we should use this opportunity to do something meaningful on debt and deficits.” He praised the leader of the House Republicans, Speaker John Boehner, for “good-faith efforts” to slash the deficit, and repeatedly declared his willingness to work with the Republicans on the biggest possible deficit-reduction package.

Given the Republican opposition to any tax increases, and the Democratic counterproposal of only trivial impositions on the wealthy, the “biggest deal possible” means the biggest possible cuts in spending on the programs upon which tens of millions of working people rely for their survival.

Obama radically expanded the framework of the debt ceiling talks last week by proposing a $4 trillion package, rather than the $2.4 trillion plan previously discussed in bipartisan talks headed by Vice President Joseph Biden. He unilaterally added Social Security as one of the programs to be targeted for cuts and restructuring.

On Monday, he reiterated his offer of “meaningful changes to Medicare, Social Security and Medicaid.” Cynically and dishonestly, he claimed that these changes “would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation, but for the next generation.”

This is little more than plagiarism of the language employed by House Republicans, who now regularly describe their proposal to abolish Medicare and replace it with a voucher program as a plan to “save Medicare” from inevitable bankruptcy.

Obama offered an even more alarmist version of the same argument, declaring at one point that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.”

This is a lie, since a progressive tax on the vast wealth of the financial elite would generate trillions of dollars and easily wipe out the entire federal deficit. The purpose of this lie is to present major cuts in Medicare as an unavoidable mathematical necessity.

On Social Security, Obama first admitted that the old-age pension program was not contributing to the federal deficit. He nevertheless reiterated his willingness to include the program in the deficit-reduction talks. In response to a question about whether he was prepared to raise the age of eligibility or make other drastic changes, he said he was “not going to get into the details…of the negotiations,” but did not reject the suggestion.

Equally significant was Obama’s parroting of Republican claims that massive spending cuts were required to restore business “confidence” in order to generate economic growth, ignoring the well-established fact that slashing federal spending during a recession has a deflationary effect.

According to a report published by Moody’s Analytics, the expiration of extended federal unemployment benefits by itself will cut $37 billion from consumer spending by the end of this year.

At one point, a reporter asked him, “With unemployment now at 9.2 percent and a large chunk of those lost jobs coming from the private sector, is now a really good time to cut trillions of dollars in spending? How will we still create jobs?”

Obama at first seemed to disavow the Republican position, saying, “I am not somebody who believes that just because we solve the deficit and debt problems short-term, medium-term or long-term, that that automatically solves the unemployment problem.”

He then offered two specific job-creation policies, while admitting that neither would be much more than a drop in the bucket. New trade agreements with South Korea, Colombia and several smaller countries “could add tens of thousands of jobs,” he said. This compares to the 25 million people currently unemployed or underemployed.

Obama went on to tout the creation of an “infrastructure bank” to channel federal money to private contractors, but later conceded “the infrastructure bank that we’ve proposed is relatively small.”

He next observed that deficit reduction was “the primary solution that the Republicans have offered when it comes to jobs,” and concluded by agreeing: “So I say, okay, let’s go. Where are they? I mean, this is what they claim would be the single biggest boost to business certainty and confidence. So what’s the holdup?”

Obama reassured Wall Street that his support for tax increases is purely nominal. “Nobody has talked about increasing taxes next year,” he said. The increases he has proposed would be “starting in 2013,” i.e., after the next election, when he may no longer be president and the Democrats may no longer control either house of Congress.

In other words, any tax increases incorporated into a debt ceiling and budget deal this month could be rescinded long before they take effect. Obama has also proposed to offset the closing of loopholes for oil companies, hedge funds and corporate jets by lowering tax rates for corporations and the wealthy (in the name of “tax reform”), thus ensuring that big business as a whole comes out the winner.

Perhaps the most outrageous lie in the press conference was Obama’s declaration that “This recession has been hard on everybody.” It would be difficult to find an investment banker, hedge fund manager or corporate CEO to justify that claim, given that corporate profits, bank bonuses and CEO pay are all at record levels.

Such a lie has a definite social function: its purpose is to conceal the fundamental class division within American society. Behind the posturing of the big business politicians and the breathless media coverage about the supposedly vast gap between the two parties, the Democrats and Republicans both represent the ruling class.

The financial aristocracy precipitated the financial crash of 2008 through reckless speculation and swindling in the subprime mortgage market. This same class now seeks to profit from the ensuing economic slump by destroying the living standards and social benefits of working people—the vast majority of the population. In this effort, the Obama administration acts as the principal instrument of Wall Street, while the congressional Republicans contribute background noise and ultra-right atmospherics.

One of the few press commentaries to acknowledge this dirty secret of American politics appeared Monday in the New York Times. Authored by right-wing columnist Ross Douthat, it observed, “Barack Obama wants a right-leaning deficit strategy.”

Douthat noted that the White House deliberately left raising the debt ceiling out of the discussion on the extension of the Bush tax cuts last December, when there was a large Democratic majority that could have easily passed it. He wrote that Obama “pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground.”

“The not-so-secret secret is that the White House has given ground on purpose,” Douthat added cynically. “Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support.”

While Douthat attributes this to a Machiavellian reelection strategy on the part of the White House, there is a simpler explanation: the Obama administration is doing the bidding of Wall Street to attack the living standards and social benefits of the working class and make it pay for the crisis of American and world capitalism.

Charter schools in the US: Wall Street's education model

Charter schools in the US: Wall Street’s education model

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Last month a new for-profit investment fund was created, the first of its kind, to finance the construction of charter schools across the United States. Jointly managed by Canyon Capital Realty Advisors ($20 billion in assets) and Agassi Ventures, LLC, owned by Andre Agassi, it plans to buy up undervalued urban land and jumpstart the construction of 75 new charter schools.[1]

The Canyon-Agassi Charter School Fund announcement states, “The fund will provide investors with current income and capital appreciation by responding to the growing demand for quality charter school facilities in the nation’s burgeoning urban centers and by capturing the opportunities arising out of the current dislocation in the real estate market.”

In other words, it will buy inner-city land cheaply, develop it and then sell the facilities to charter operations. The firm expects to raise $300 million in equity and invest up to $750 million.

CharterNational Heritage Academies

This model appears to draw on the wildly successful playbook established by the Michigan-based National Heritage Academies. The for-profit chain is the nation’s second largest charter school management company, at 67 schools with 42,000 students, and profits largely on their usurious building and rent fees (see “Michigan charters are a runaway train”).

The Canyon-Agassi Fund initiative dovetails with the recent announcement by the Obama administration that hundreds of thousands of dollars of “education reform” grants will be made available for assisting the start-up of new charters schools. Those grants will be in addition to the $1.35 billion allocated for Race To The Top (RTTT), which includes funds for partnering with businesses (see “Obama’s 2012 budget deepens attack on public education“).

In a similar vein, recently Hour Detroit magazine flatteringly profiled developer Joel Landy, who purchased the Jefferson School from the Detroit Public Schools for $1,000 in 1991. He replaced 900 windows and held onto the property for nine years, eventually negotiating an eight-year agreement for $65,000-a-month rent from a charter.[2]

Real estate market manipulation is, nonetheless, just one aspect of the steady looting of public education tax dollars.

The eagerness of Wall Street to profit from education dollars was famously pointed to by Jonathan Kozol, the well-known education advocate. He cited a NationsBanc Montgomery Securities prospectus in his column published by Harpers, writing: “The education industry represents, in our opinion, the final frontier of a number of sectors once under public control that have either voluntarily opened” or “been forced” to open up to private enterprise.

The education industry, the bank concludes, represents the largest market opportunity since health care services were privatized during the 1970s. While college education can offer “attractive investment returns, the larger developing opportunity is in the K-12 EMO [Education Management Organization] market,” it observed. “The K-12 market is the Big Enchilada.”[3]

While virtually every state in the US is facing draconian cuts in public schools, charters have been a mechanism, a Trojan horse, through which large profit concerns have taken over substantial and growing segments of kindergarten through grade 12 education.

This offensive is now receiving hundreds of millions of dollars of direct underwriting by the Obama administration. Of a piece with the bailout of banks, Obama is providing what little “education” money the federal government is allocating to facilitate the privatization of education.

How have charters aided this process?

As public schools, charters are funded by public tax rolls. Yet they are exempted from many state and local rules and regulations, especially those that protect the work rules and rights of teachers. Most have “at will” employment, no unions and no pension programs for teachers. While they must open their doors to all applicants, they have the right to dismiss students who do not “fit” or have “disciplinary issues.” For this reason, charters typically have few students classified as special education, or for whom English is not their first language—and are therefore cheaper to operate.

Some of these schools are run by a group of individuals, but most are administered by companies known as Education Management Organizations (EMOs). This name was deliberately coined by Wall Street to reference Health Maintenance Organizations (HMOs). The name clearly implies health insurance’s successful business model of increasing profits by denying services. While a few EMOs are nonprofit, most are now for-profit.

Since they are public schools, charters cannot charge tuition. The regulations governing the charter vary by state and by the authorizing institution, to which they are ultimately responsible.

The nation’s first charter schools were legalized in 1991 in Minnesota in the aftermath of the relative failure of school vouchers to gain traction.

The 1990s was the roaring decade of deregulation, financialization, securitization and subprime mortgages. As Wall Street found new and more rapacious methods to loot the economy, a section of the bourgeoisie eyed the billions of dollars spent annually on K-12 education. Charters grew rapidly and a market was created.

In the late 1990s, the largest for-profit EMO was EdisonLearning (formerly Edison Schools), which grew from $12 million in revenues in 1995 to $217 million in 2000. Today it is eclipsed by Imagine Schools and National Heritage Academies.

As of 2010, there were nearly 5,000 charter schools in the US, educating about 1.5 million students. The for-profit segment of the charter market had also steadily grown. According to a Western Michigan University study, for-profits nationally have risen from 131 firms in the 1997-1998 school year to about 729 today.

Michigan has the most for-profit Education Management Companies in the nation with 40 firms running 185 schools, or about 80 percent of the state’s Public School Academies (PSAs). Florida (with 145 schools), Arizona (99), Ohio (92) and Pennsylvania (40) are also considered large concentrations of for-profits.

No national accounting

Because of the unregulated, local nature of charters, reporting to national studies is largely voluntary. The amount of central analysis is limited to that performed by universities or other nongovernmental bodies. “There’s an awful lot of diversity in these companies [EMOs],” points out Henry Levin, a professor of education at Columbia University. “And most of them are proprietary, so we really don’t know how they’re operating,” he concluded in a ProPublica investigative article.[4]

Western Michigan University has sponsored studies based on self-reporting. A 2010 report, “Equal or Fair? A Study of Revenues and Expenditures in American Charter Schools,” shows charters top heavy with administration at the expense of instruction.[5]

According to this study, charter schools spend 54.8 percent of their operating budgets on instruction compared with 60.3 percent at traditional public schools. For-profit schools spend even less on instruction. In Michigan, the average drops to 44.8 percent. A random search online, for example, brings up Crescent Academy in Southfield, Michigan, which leases all of its employees and spends only 42.67 percent on instruction.

National statistics in “Equal or Fair?” show student support services are even more unbalanced—at $858 per year for public schools and an average of $517 for charters, with for-profits even lower at $366 less per pupil than nonprofit charters. On the other end of the scale, the charters are spending considerably more on administration than their public school rivals.

The disproportionate share of charter school income spent on administration includes the consultant fees and high rents, and therefore the hidden profits, especially in the cases of chain enterprises.

Michigan charters, on average, participate only 28 percent in the state retirement system, meaning that most charter school teachers have no pension.

A Detroit News survey of charter schools published July 7 shows that of 25 high school charters in Metro Detroit surveyed, most did worse in math or science proficiency than Detroit Public Schools on the most recent Michigan Merit Exam. Even more charters did poorer in reading and writing. All Detroit-proper charters surveyed did worse than their public counterparts.

National research has also shown that EMO-operated schools have increased school segregation and created environments where students are more isolated by race, class, ability and language from public schools, while conferring no statistically relevant test score advantage.[6]

The State of Ohio is presently suing White Hat Management, which has collected about $230 million to run charters in that state since 2008. With Annual Yearly Progress at only 2 percent of students, the company—like National Heritage Academies—receives 96 percent of the state charter revenues, owns the property and handles all operations. White Hat operates 51 schools nationally. The company refuses to account publicly for the funds it has received.

Virtual charters and Michael Milken

As troubling as the brick-and-mortar charters are, they do substantially better than the latest charter model, the online or virtual charter—in which children get their instruction entirely at home on their computer.

The largest taxpayer-funded online charter, Agora Cyber Charter, is managed by K12, an EMO founded and substantially owned by Michael R. Milken, the junk-bond dealer and securities fraud felon, former US Secretary of Education William Bennett and former Goldman Sachs banker Ron Packard. The banker told Newsweek, “Mike [Milken] believes that education is a phenomenal investment opportunity.”

K12 was established as a publicly traded entity in 2007 with about $90 million from Milken. This operation now has 81,000 students in 27 states. Local schools are designated as non-profit, which then hire K12 as the for-profit management company. This, for example, enabled K12 to corner the Pennsylvania charter market, and receive 80 percent of the funding of traditional schools, approximately $8,000 per student, while supplying no building, books or teachers.

Milken’s firm expects to generate $500 million in revenue this year and earned $21.5 million in profits last year. Its stock valuation has doubled.[7] According to the Western Michigan study, three quarters of K12’s students fail to achieve Annual Yearly Progress goals. Last June, the State of Pennsylvania filed a complaint against K12 citing its failure in reading and math proficiency.


1. Canyon-Agassi Charter School Facilities Fund press release.

2. Hour Detroit, December 2010, “On Track.”

3. “The Big Enchilada,” by Jonathan Kozol

4. “Charter Schools Outsource Education to Management Firms, With Mixed Results,” by Sharona Coutts

5. “Equal or Fair? A Study of Revenues and Expenditures in American Charter Schools” by Gary Miron and Jessica L. Urschel. Western Michigan University. June 2010.

6. “Schools Without Diversity: Education Management Organization, Charter Schools, and the Demographic Stratification of the American School System” by Gary Miron, Jessica L. Urschel, William J. Mathis, and Elana Tornquest. Western Michigan University, February 2010.

7. “Education According to Mike Milken,” Bloomberg Businessweek, June 2, 2011.

Obama begins new push for social spending cuts

White House begins new push for social spending cuts

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President Barack Obama convened a new round of bipartisan talks on raising the federal debt ceiling and slashing domestic social programs with a meeting that began at the White House shortly after 6 p.m. on Sunday. Eight top congressional leaders, four each from the Republican and Democratic parties, joined Obama, Vice President Joseph Biden and White House aides for several hours of talks, then announced plans to reconvene on Monday.

The talks began in the wake of the emphatic rejection by House Republicans of any tax increases for the wealthy. Speaker John Boehner announced Saturday night that there was no support for the relatively minor tax increases proposed by Obama Thursday as part of a “grand bargain” that would have put major cuts in Social Security on the table, in addition to the huge cuts in Medicare and Medicaid already being discussed. The deal also included a pledge to carry out sweeping tax “reform” to lower rates for corporations and the wealthy.

Many House Democrats publicly criticized Obama for injecting Social Security into the discussion on deficit reduction, but it was the House Republicans, particularly those linked to the ultra-right Tea Party faction, who effectively vetoed the larger deal.

Whatever the immediate results of the current talks, Obama’s decision to put cuts in Social Security on the agenda has enormous political significance. For decades, the Democratic Party identified itself politically with the basic social programs established by Franklin Roosevelt and the New Deal of the 1930s. Now, for the first time, a Democratic president has taken the initiative to attack Social Security, going beyond even what the Republican right is prepared to undertake at this juncture.

Boehner indicated that there was no possibility of enacting a package of spending cuts and tax increases that would reduce projected deficits by $4 trillion over the next ten years. He said the talks should focus instead on a lower goal of $2.4 trillion in deficit reduction, along the lines of bipartisan talks headed by Biden that collapsed June 30.

While the wording of the statement was conciliatory, praising Obama for “good-faith efforts to find common ground,” Boehner effectively issued an ultimatum that any and all tax increases should be taken off the table. Less than 24 hours later, the talks resumed, with the White House issuing a perfunctory statement of its continued support for a “balanced approach”—that is, including a fig leaf of selected tax increases for the wealthy to disguise trillions of dollars in spending cuts targeting the elderly, the sick, working families and the poor.

The budget talks in Washington have been through many twists and turns over the past seven months, dating back to December 2010, but each new stage has involved a further shift to the right by the Obama administration in response to pressure from the congressional Republicans, the corporate-controlled media and big business as a whole.

In December 2010, Obama caved in to demands by the Republicans—even while the Democrats held wide majorities in both houses of the lame duck Congress—and agreed to the extension of the Bush tax cuts for the wealthy for another two years. In April and May of 2011, the expiration of funding authorization for the current fiscal year prompted a further capitulation, as the White House agreed to $62 billion in spending cuts in fiscal year 2011, including major cuts in college student aid and housing programs.

The new deadline is the August 2 date set by the Treasury Department, when its financial maneuvers to avoid breaching the congressional debt ceiling or defaulting on the US debt will come to an end. Either Congress raises the debt ceiling to allow the Treasury to borrow the funds required to finance federal government operations, or, among other things, the Social Security Administration will have to withhold the $49 billion in monthly checks to the elderly, scheduled to be issued August 3.

As the price of raising the debt ceiling, Boehner and the House Republicans demanded deficit reduction measures equal to the amount of the increase in the debt ceiling, about $2.4 trillion, proposed by the Obama administration. The White House accepted this ultimatum and negotiated on that basis, until Obama proposed last week that the negotiators try to reach an even higher total of deficit reduction, at least $4 trillion over ten years.

According to press reports of the deliberations Friday, House Republicans rejected every single one of the tax increases on the wealthy proposed by the White House: allowing the Bush tax cuts for the rich to expire at the end of 2012, limiting tax deductions for upper-income households, ending favorable tax treatment of the income of hedge fund managers, ending tax subsidies to the major oil companies, and ending tax subsidies for the purchase of corporate jets.

These measures were proposed by Obama not because he expected any of them to be adopted, but in order to posture demagogically as an advocate of “shared sacrifice” and “fairness” before he capitulates again to Republican demands for even more savage cuts in basic social programs for working class families (See “Obama’s hypocrisy on the corporate jet tax loophole”.)

Spokesmen for the House Republicans taunted the White House over the proposed tax increases, noting that the Democrats had never adopted such measures when they controlled the House and Senate by large margins. House Majority Whip Kevin McCarthy of California pointed out Sunday, referring to ending the Bush tax cuts for the wealthy, “Speaker Pelosi did not have the votes for it when they had the majority.”

In the Senate, the Democratic chairman of the Budget Committee, Kent Conrad of North Dakota, proposed a budget plan that explicitly abandons the longstanding claim that the Democrats want to end the Bush tax cuts for individuals making more than $200,000 a year and households making more than $250,000 a year.

The proposal would extend the Bush tax cuts permanently for individuals making up to $500,000 a year and households making up to $1 million a year, drastically reducing the additional revenue that would be generated from taxing higher incomes.

The Democratic plan called for a total of $4 trillion in deficit reduction, including $350 billion from discretionary domestic spending, but only $80 billion from Medicare, Medicaid and other health care programs, and nothing from Social Security.

It is a measure of the drastic swing to the right in both big business parties over the past three years that this plan, matching the Republicans dollar-for-dollar in deficit reduction and providing nothing in terms of jobs for the unemployed or relief for victims of the economic slump, is now described in the media as the “left” alternative to the proposals being worked out by Obama and the congressional Republicans.

The language of the media coverage has become increasingly disengaged from reality, as the television networks and newspapers seek to conceal from the American people the wrecking operation that is underway in Washington against bedrock social programs on which tens of millions of elderly, disabled and low-income people rely for their survival.

McClatchy News Service referred in one recent dispatch to the Republicans opposing “unpopular tax increases,” although all public opinion polls show widespread popular support for tax increases on the wealthy that go far beyond anything proposed or supported by the White House.

The truth is that tax increases on the wealthy are “unpopular” only in those circles inhabited by congressmen, senators, White House aides and media pundits—among the super-rich and particularly well-heeled sections of the upper-middle class.

US jobs report points to renewed downturn

US jobs report points to renewed downturn

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The unemployment rate rose for a third consecutive month in June, as the US economy added far fewer jobs than new workers, according to the latest jobs report released Friday by the Labor Department. The report confirms a new downturn in the labor market amid the Obama administration's campaign to cut government jobs and spending.

The US economy added 18,000 jobs, less than one-fifth of the 105,000 that economists predicted in a poll conducted by Bloomberg News. The unemployment rate hit 9.2 percent, up from 9.1 percent in May, and 8.8 percent in March. The number of unemployed people grew by over half a million over the past three months.

The White House responded to the report with a press statement calling for more spending cuts. "We’ve got to rein in our deficits and get the government to live within its means," said Obama. "The sooner that the markets know... that we have a serious plan to deal with our debt and deficit, the sooner that we give our businesses the certainty that they will need," he said.

It is precisely the deficit reduction policies of the Obama administration that bear much of the blame for the renewed economic downturn. The bad performance of the private sector, which created only 57,000 jobs this month, was compounded by 39,000 job losses in the public sector. The largest portion of these losses came from education workers, with 13,200 laid off in June. A total of 18,000 people were laid off by local governments last month, 7,000 by state governments, and 14,000 by the federal government.

Stocks fell sharply at the start of trading Friday, but improved slightly throughout the day, no doubt propped up by Obama's assurances that he would not allow the second month of abysmal jobs figures to stop his plan to cut corporate taxes and regulations while slashing government spending.

The latest report further revised downward the payroll figures for April and May, by 15,000 and 29,000 respectively. This means that the number of jobs created in May, already disastrous at the initial estimate of 54,000, was actually 25,000.

Other indicators of the economic situation were equally bad. The average duration of unemployment rose for the second consecutive month to 39.9 weeks, up from 34.8 weeks a year ago. The average duration of unemployment is now more than double its level during the five years before the crisis, when the average unemployment spell was 18 weeks.

chart 1

The average workweek fell 0.1 hour to 34.3 hours, a figure likely to indicate more layoffs in the future. Average hourly earnings fell by 0.1 percent, representing only the second fall in nominal wages since 2003. Average hourly earnings have grown 1.9 percent over the past year, compared with a 3.6 percent increase in consumer prices, meaning that real wages have fallen 1.7 percent over the past year.

chart 2The employment-population ratio, which shows the number of people employed as a portion of the total working age population, fell from 58.4 to 58.2 percent. This figure was over 63 percent in 2007, so it has plummeted five percentage points during the course of the downturn. The US needs to create between 100,000 and 200,000 jobs each month to keep up with population growth.

Every sector of the economy did poorly in June. Manufacturing created only 6,000 jobs, which were more than offset by construction, which lost 9,000 jobs. Finance lost 15,000 jobs as banks cut back on the number of employees on their payrolls.

The U-6 unemployment rate, which counts both the unemployed and underemployed, rose to 16.2 percent, up from 15.8 percent in May. The teen unemployment rate likewise rose to 24.5 percent, up from 24.2 the month before.

The White House and both big business parties responded to the disastrous figures with calls for more austerity. Throughout the political establishment, the framework of discussion revolves around budget-cutting, which, in an economic contraction, translates into a policy of high unemployment.

The second downturn in the labor market is in large part the result of the austerity policies of the US public sector, which has laid off two thirds of a million people over the past year on the federal, local, and state levels. These job cuts have rippled throughout the economy, causing even more layoffs in the private sector.

This downturn takes place amid the European credit crisis, an economic contraction in whole swaths of Europe, and a slowdown in Asia. Figures released last month show manufacturing at a two-year low in China, at its lowest in 21 months in Britain, and at the lowest level in 18 months in Europe as a whole.

Amid all this, corporate profits are expected to be higher than ever in the second quarter of 2011. After hitting a new record in the first quarter of this year, profits are expected to be up 13.6 percent over the second quarter of last year, according to an analysis by Brown Brothers Harriman reported earlier this month in the Wall Street Journal.

These consistently rising corporate profits in the midst of a renewed economic downturn are not a fluke or aberration, but rather the direct result and goal of the policies collaboratively pursued by Obama and the Republicans. Every measure proposed by the White House has as its aim the direct enrichment of the ruling class through lower corporate taxes, falling wages, and the elimination of restrictions on corporate abuses.

The rising unemployment level is the outcome of a political attack upon the working class conducted by both parties. There will be no improvement in the labor market until workers launch an independent struggle against austerity and unemployment. This requires a break with the Democratic and Republican parties, and the building of the a party as the representative of working people.

Rampant Unemployment = The Death Of The Middle Class - 40 Facts That Prove The Working Class Is Being Systematically Wiped Out

Rampant Unemployment = The Death Of The Middle Class - 40 Facts That Prove The Working Class Is Being Systematically Wiped Out

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Without an abundance of good jobs, the middle class in the United States is going to shrivel up and die. Right now, rampant unemployment is absolutely killing communities all over America. Hopelessness and poverty are exploding and many are now wondering if we are actually witnessing the slow death of the middle class. There simply are not nearly enough "good jobs" to go around anymore, and even many in the mainstream media are referring to this as a "long-term structural problem" with the economy. The only thing that most working class Americans have to offer in the marketplace is their labor. If nobody will hire them they do not have any other ways to provide for their families. Well, there is a problem. Today wealth has become incredibly centralized. The big corporations and the big banks dominate everything. Thanks to incredible advances in technology and thanks to the globalization of our economic system, the people with all the money don't have to hire as many ordinary Americans anymore. They can hire all the labor they want on the other side of the globe for a fraction of the cost. So the rich don't really have that much use for the working class in America anymore. The only thing of value that the working class had to offer has now been tremendously devalued. The wealthy don't have to pay a lot for physical labor anymore. Thousands of our factories and millions of our jobs have been shipped overseas and they aren't coming back. The big corporations are thriving while tens of millions of ordinary Americans are deeply suffering. Almost all of the wealth being produced by our economy is going to a very centralized group of people at the very top of the food chain. The rich are getting richer and the working class is being systematically wiped out.

So the fact that we are facing rampant unemployment that never seems to go away should not be a surprise to anyone. Today, the "official" unemployment rate went up to 9.2 percent even though a whopping 272,000 Americans "dropped out of the labor force" in June. The government unemployment figure that includes "discouraged workers" went up from 15.8% to 16.2%. The mainstream media is proclaiming that this was "a horrific report" because most economists were expecting much better news.

Well, guess what?

Things are going to get a whole lot worse.

More job cuts are coming. One recently released report found that the number of job cuts being planned by U.S. employers increased by 11.6% in June.

It is also being projected that state and local governments across the U.S. will slash nearly half a million more jobs by the end of next year.

Needless to say, things don't look good.

Most people that still have jobs are desperately trying to hold on to them.

Employers know that most workers are easily replaceable these days, so wages are not moving up even though the cost of living is.

We are right in the middle of the worst employment downturn since World War 2. Jay-Z recently summed up the situation this way....

"Numbers don't lie. Unemployment is pretty high."

Jay-Z certainly has a way with words, eh?

If something is not done about the rampant unemployment in this nation, the death of the middle class will accelerate.

Most Americans just assume that the United States will always have a large middle class, but there is no guarantee that is going to happen. In fact, there is a whole lot of evidence that the middle class in America is rapidly shrinking.

Take a few moments to read over the facts compiled below. Taken together, they provide compelling evidence that the working class is being systematically wiped out....

#1 Right now, the U.S. government says that 14.1 million Americans are unemployed.

#2 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million people to the population since then.

#3 The number of Americans that are "not in the labor force" is at an all-time high.

#4 The United States has never had an employment downturn this deep and this prolonged since World War 2 ended.

#5 There are officially 6.3 million Americans that have been unemployed for more than 6 months. That number has risen by more than 3.5 million in just the past two years.

#6 It now takes the average unemployed worker in America about 40 weeks to find a new job. Just check out this chart....

#7 There are now about 7.25 million fewer jobs in America than when the recession began back in 2007.

#8 Back in 2000, the employment to population ratio was over 64 percent. Today, it is sitting at just 58.2%.

#9 Only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in all of U.S. history.

#10 During this economic downturn, employee compensation in the United States has been the lowest that it has been relative to gross domestic product in over 50 years.

#11 The number of "low income jobs" in the U.S. has risen steadily over the past 30 years and they now account for 41 percent of all jobs in the United States.

#12 Half of all American workers now earn $505 or less per week.

#13 According to a report released in February from the National Employment Law Project, higher wage industries are accounting for 40 percent of the job losses in America but only 14 percent of the job growth. Lower wage industries are accounting for just 23 percent of the job losses but 49 percent of the job growth.

#14 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#15 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.

#16 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

#17 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe? Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion.

#18 In 2010, South Korea exported 12 times as many automobiles, trucks and parts to us as we exported to them.

#19 The United States now spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

#20 Since China entered the WTO in 2001, the U.S. trade deficit with China has grown by an average of 18% per year.

#21 The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.

#22 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

#23 In 2002, the United States had a trade deficit in "advanced technology products" of $16 billion with the rest of the world. In 2010, that number skyrocketed to $82 billion.

#24 Manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.

#25 Since 2001, over 42,000 manufacturing facilities in the United States have been closed.

#26 There were more manufacturing jobs in the United States in 1950 than there are today.

#27 Since the year 2000, we have lost approximately 10% of our middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs. Meanwhile, our population has gotten significantly larger.

#28 When you adjust wages for inflation, middle class workers in the United States make less money today than they did back in 1971.

#29 One recent survey found that 9 out of 10 U.S. workers do not expect their wages to keep up with soaring food prices and soaring gas prices over the next 12 months.

#30 Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

#31 One out of every six elderly Americans now lives below the federal poverty line.

#32 According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

#33 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid.

#34 As 2007 began, there were 26 million Americans on food stamps. Today, there are more than 44 million Americans on food stamps, which is an all-time record.

#35 Today, one out of every four American children is on food stamps.

#36 59 percent of all Americans now receive money from the federal government in one form or another.

#37 The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.

#38 In the United States today, the richest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

#39 According to Moody's Analytics, the wealthiest 5% of all households in the United States now account for approximately 37% of all consumer spending.

#40 The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

The cold, hard reality of the matter is that the United States is experiencing a long-term economic decline.

Every single day, more American families fall out of the middle class and into poverty. There are millions of American families out there tonight that are just barely hanging on by their fingernails.

More Americans than ever are constantly borrowing more money just to stay afloat. Even as rampant unemployment plagues this nation and even as wages remain stagnant, middle class Americans are increasing their use of credit.

A CNBC article noted the increase in consumer borrowing that we have seen recently....

The Federal Reserve says consumer borrowing rose $5.1 billion following a revised gain of $5.7 billion in April. Borrowing in the category that covers credit cards increased, as did borrowing in the category for auto and student loans.

It is very hard to live "the American Dream" without going into huge amounts of debt these days.

But for an increasing number of Americans, "the American Dream" is just a distant memory.

Tonight, there are large numbers of people living in the tunnels under the city of Las Vegas. As the wealthy live the high life in the casinos and hotels above them, an increasing number of desperate "tunnel people" are attempting to carve out an existence in the 200 mile long labyrinth of tunnels that stretches beneath Vegas. It is a nightmarish environment, but it is all those people have left.

Don't look down on them, because you never know who might be next.

If you lost your current job, how long would you be able to survive?

Unfortunately, as bad as things are now, the reality is that this is just the beginning.

You ain't seen nothin' yet.

Do what you can to make sure that you and your family are not totally wiped out by the next wave of the economic collapse.

Occupation 101 (Full_Documentary)

A thought-provoking and powerful documentary film on the current and historical root causes of the Israeli-Palestinian conflict.