Wednesday, November 28, 2012

Election Recess

Remember those days as a kid
When school was nothing but fun
As down the slide you slid
And life had just begun
Responsibility was off in the mist
As you checked out and read the books
On and off the reading list
And then remember the looks
When the bell for recess rang
And glee painted each face
While we cheerfully sang and sang
With joy for the human race

The 2012 election is over and it appears that sanity prevailed by about 3 million votes.  So now it is recess and we can sing and breathe a sigh of relief that we will not have to do this again for another 4 years.  Or, can we afford to take recess?  Aside from the threats of secession and more threats from Grover Norquist to scuttle the sequestration process, jobs are increasing and the economy is building, if not booming.  Is there a need for concern?  We may need a recess, if only to think.

Virginia, there really is no Santa Claus.  The fundamental mechanisms that were operating prior to the election have not abated. In fact, they have accelerated by those bent on changing our way of life to the image of a simpler two-class society.  “Smaller Government” is actually a euphemism for selected application of government.  The GOP has not historically produced a government smaller in numbers.  In fact, GW Bush grew the government astronomically.  It changed, however.  We put two major wars on our credit cards and we outsourced many of the functions to well-connected private firms who charged multiples of standing government rates for logistics and security operations in and out of combat zones.  Romney wanted to add ships that the DOD never asked for and he was only the GOP candidate.  A dozen other GOP leaders have made similar proposals before and since the election.  The rhetoric says “small,” but the reality says “big.”  Twenty-four states have GOP super-majorities.  Many of those states have refused the insurance exchanges for the Affordable Care Act (with the first 3 years being paid for by the federal government) and yet they have enacted legislation that cuts other funding for healthcare such as Planned Parenthood services that are mostly preventive care and 97% non-abortion services.  Worse, they have MANDATED intrusive ultrasound procedures that must be paid for by the women being forced to undergo them.  As they swell the government for women who swell, they also swell the government to enforce “carry your papers” laws in many of these states, especially Arizona.

All this points to rigid ideology that lost the national election, but stays rooted in the GOP platform, despite the majority presidential vote.  Curiously, GOP pundits have mainly supported the losing platform but have decried how the message was packaged.  “If we only changed how we talked with Latinos, they would have voted for us.”  “We would have won and been the majority.”  Wrong again.  Asians (70%) also voted for Obama despite not being singled out for slander as Latinos were…or ordered to present papers showing citizenship based mainly on their looks.  If we look into the private sector, wages have again become the focus for millions of Americans who are not able to earn a living wage.  The Papa John’s Pizza CEO announced elimination of full time work because of the Affordable Care Act saying it would increase the price for pizza by 14 CENTS (turns out to be only 4 cents).  Yet, he gave away 2 million pizzas even as he embellished the pizza price increase.  Major restaurant chains have eliminated full time work and have slashed wages to $2.13/hour and forced pooling of tips.  The Hostess Baking Company filed for bankruptcy rather than bake Twinkies and pay a living wage.  Once again, management wanted to force lower wages on employees for a company that was poorly run.  Those workers suffered a wage cut from $45,000 annually to $35,000 at the last restructuring in 2004.  As they announced lower wages this time, the employees went on strike, but the CEO had just tripled his salary and senior executives had just doubled theirs.  The unions even made concessions adding to $110 Million/year.  Hostess spent nothing on new equipment, products or processes.  So the union is to blame?  Of course.  I get it.  If we could only get happy slaves, we could have more rich executives.  This from the party of Lincoln?  All this has the odor of maximizing the value of executives no matter how incompetent and minimizing the value of labor, no matter how competent. 

Two Koch brothers were recently found to have funded the NO campaign on California Proposition 30 (a tax to support schools) and the YES campaign for Proposition 32 (union killing by demanding specific member permission to spend money on political campaigns).  While I can understand union killing and not agree with it, the money spent to kill education smacks of a desperate attempt to avoid the support of the middle class.  Are we witness to crass attempts to frustrate socio-economic mobility?  Since the start of the latest recession, 97% of the added wealth has gone to the top 2% of our American society.  The middle class has lost ground in the last decade.  People are working longer and harder at more and more minimum wage jobs and some companies have put that limbo bar even lower by going sub-minimum, like Olive Garden and Red Lobster, or moving to China like Sensata Technologies (a Bain Company in Freeport, IL).  Sensata has been wildly profitable with over a half $ Billion profit in each of the last 3 quarters, but their average wage while making that profit was $18/hour, while it will be $ 1/hour in China.  Worse, much as a sordid 19th Century novel, Bain-Sensata made the US employees train their Chinese counterparts before they moved the equipment to China.

At what point do the middle and lower classes collapse to subsistence levels of existence?  We are currently on a trajectory to widespread poverty.  Forgive me for invoking Charles Dickens again, but we are repeating the painful history of the 19th Century and the “Roaring 20s” of more recent times when the obscene and ostentatious living of the wealthy was coupled with deliberate abuse of workers and their families.  It led to unions that are not in vogue or power today when only 7% of manufacturing is represented by unions.  Most employees now sign mandatory arbitration clauses to have any protection at all.  They cannot complain.  They cannot sue and, more importantly, they cannot strike or their jobs will be outsourced to China.  Child labor has again become an issue for employers seeking progressively cheaper labor.  In 2008, some 389 undocumented immigrants were apprehended, working in a kosher meatpacking plant in Postville, Iowa.  Of these, some 57 were minors as young as 13. Meatpacking is notorious for safety violations.  Being both undocumented and underage, worker ability to protest is nil.  Exploitation?  Of course not.  That is merely prudent management to make a buck for shareholders after rewarding executives. Unfortunately, things have only become worse as highlighted by the 2012 practices of Apple in China (at Foxconn where 14 year olds were earning $.20 / hour during 60 hour work-weeks) despite the efforts of “Free the Children” as seen on 60 Minutes. Incidentally, Foxconn produces about 40% of all electronic products regardless of brand name, so Apple is not the only abuser of Chinese child labor.

Mussolini aptly called his brand of Fascism “corporatism.”  His early government moves were designed to eliminate unions.  At this moment, we have powerful corporations that have more rights than breathing people.  It was Mitt Romney who callously explained at a 2012 campaign rally: “Corporations are people, my friend.”   With a nod to the Supreme Court, perhaps we need government intervention again, but on the side of breathing people, this time.  There are yet hidden ironies about all this.  In the headlong movement to lower wages, saying that any job is better than none, two things happen; first, an offending company like Hostess stops looking for ways to improve business practices and it relies on the worker to assume the burden of achieving profit goals; secondly, at some point, workers have insufficient disposable income with which to purchase the goods and services of the offending company.  Even Henry Ford, who was an ultra-conservative even by today’s standards, knew that he had to pay workers enough to afford his automobiles.  That knowledge appears to have been lost on today’s business scions.  Wal-Mart (our nation’s largest employer) avoids worker benefits and counsels employees to apply for Medicaid and even food stamps so it can dodge that benefit expense.  It avoids full time employees so that contributions to pensions and Social Security are minimized or avoided.  An inherent irony with Wal-Mart is that the US and each state must support Wal-Mart because of our laws.  Yet, many of those who swear by Wal-Mart prices quickly forget that Wal-Mart requires government subsidies for its company through its workers, thus creating an image of self sufficiency that is a fraud by increasing both Wal-Mart profits and taxes by ordinary Americans.

Let me summarize the mechanisms at play here.  Yes, Obama won the election by a wide margin.  However, 24 states have governments that are in direct conflict with the concept of ”Commonwealth.”  They promote “right to work” rules that crush collective bargaining and result in lower wages that do not approach living wages.  The Supreme Court decision to permit unlimited political contributions has unleashed the hounds of hell upon collective bargaining and worker’s rights.  Education, that was the ladder out of poverty for generations, has been snuffed by high tuition and low investment.  Education is no longer the engine for technology and creating jobs.  Access to healthcare by lower and middle class families has declined, especially for women, due to states reducing Medicaid and even Planned Parenthood.  Corporations have continued to depend on worker concessions instead of innovation and sound management.  Increasingly generous inheritance rules have made it easier to sit on money rather than invest it at risk.  The middle class was decimated in the last recession.  Public workers were eliminated by the thousands with no hope of returning to work and no private economy opportunities paying living wages.  Austerity which has already sent much of Europe into a second recession is being praised by conservatives to solve a deficit condition before people get back to work at good jobs.  We Know that will guarantee economic failure and cause increased pain and personal suffering that will accompany a second recession so close to the last.  The fact that the House of Representatives passed only ideological bills bodes ill for the Republic because it lacks the possibility of compromise.  The House appears to focus on its prurient interests in private bedrooms rather than expansive boardrooms.  The rules of the Senate essentially ensure minority rule thus supporting gridlock.  Obama won a mandate that the losers are unwilling to acknowledge despite the overwhelming plurality in votes.

Many conservatives want government to be run as a business.  It is not a business and running our government that has a mission statement, not to make a profit, but to protect and help all its citizens grow and prosper, requires different goals and different means.  We need only to look at the history of failed businesses to demonstrate the folly of that proposal.  HP is suffering from a loss of more than $ 5 Billion from its decision to buy software that is useless for today’s products of smart-phones, etc.  GM created Saturn as a whole new company to avoid unions only to discover a couple decades later that the wholly new company sans unions was unable to make a dollar.  GM dysfunctional management followed GM to a right to work state.  GM nearly went out of business because of weak management.  When GM had to spin off Delco parts and it became Delphi, the stock price went to 77 cents and Mitt Romney made millions selling it at $ 22, none of which went to GM. Digital Equipment Company (DEC) was a formidable computer company that failed to keep pace with the trend in smaller computers.  Kodak failed to keep pace with digital photography.  Corn alcohol producers provide a product that requires more energy than it produces and it sponges off taxpayers by continuing its subsidy appetite. BP criminally cut corners on safety and environmental protection and caused a human global economic and environmental disaster.  Xerox became arrogant about its unique position in the photocopy industry but failed to keep up its engineering and even its customer relations.  Japanese technology easily outpaced Xerox with better equipment and service.  Run the nation as a business?  Really?  And we should do this by having people that openly hate government transform it into a business?

We are in the middle of a very short recess.  Don’t wait for the bell to ring.  Enjoy yourself, but be prepared to get with your friends to create some workable solutions.  Time is running out.  We need to get our government(s) to support our people…the ones that breathe. We cannot wait until the next election to fix problems or allay the pain.  Fix problems now, one at a time.  Build a middle class.

George Giacoppe
27 November 2012

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