New Deal Redoux?

The amazing mobility of labor
Gave us all something to savor
Lifting oneself by the bootstraps
And closing society’s gaps
Work hard and stay clean!
And soon you rise on the scene
But far more than our mobility
Has been our inherent nobility
And world-class productivity
Of our mid-class working humanity
They work and they play
Full taxes they pay
Unlike the high and the mighty
Who use loopholes daily and nightly

The drama being played out in Madison, Wisconsin is being compared to the uprisings in Egypt. Wrong place. Wrong time. It should remind us of the heritage of our working middle class that was earned through the blood, sweat and tears of unions in the 1920s and 1930s. Conservatives of that time writhed in agony to witness the decline of Darwinian social politics and the rise of basic equality of opportunity in these United States. In the early days of the labor movement, state and even federal government sided with corporations to the point of brutal suppression of workers through gunfire and police batons. And the executive branch of government was not alone. Child labor laws enacted in 1916 restricted child labor to a minimum extent, however the Supreme Court overturned the Keating-Owens Child Labor Act of 1916 by their Hammer vs. Dagenhart decision in 1918 that encouraged exploitation of children in the workplace and as a ploy to maintain low wages. That remained a law of the land until 1933 when Congress again enacted legislation to restrict child labor. Again the Supreme Court declared the law unconstitutional in 1935. Later, FDR signed into law, the Fair Labor Standards Act of 1938. It was actually 1941 when a new Supreme Court finally affirmed FLSA as the law of the land and stopped the abuse. Only after 1938 were wages allowed to rise without interference from the Supreme Court and only through the concerted action of unions. Those of you who hold an image of the Supreme Court as wise and prudent interpreters of our laws need only review the history to see your error. Activist Supreme Court judges have ruled the bench for decades if not centuries. They supported corporations, not humans, and surely not children.

Were it not for unions, we would not today have the 40 hour work week nor the 8 hour work day. Safety in the workplace would be only at the will of the employer as in the days of the Manhattan garment workers fire in 1911 when 146 young women perished in a fire because the doors were locked. to keep them from taking breaks or leaving their work stations during their 72 hour work week. Management locked the doors to stairwells and women jumped to their deaths or burned in place. The International Garment Worker’s Union grew largely due to that fire. This is a time to remind the reader that unions were not some spontaneous expression of antagonism to management and corporations; they were instead caused by corporate and management abuse of power. Unions were an answer to capricious and arbitrary decisions about wages and working conditions. This was true in industry, in mining, in railroads and in all sectors of economic activity. At their peak in 1954, unions represented nearly 36% of American workers and had an influence that reached all economic sectors. It was about that time that corporate management and state governments felt that wages and, therefore, pensions had grown too large. As a result, “right to work” laws were enacted in many southern states. Quickly, textile and shoe and manufacturing corporations fled south where they got tax breaks, free land and other incentives to relocate their businesses. Unions shrank. In some “right to work” states the remaining unions were required to represent workers who paid no dues based on new laws. This was a blow both to union financing and to membership. Today, only about 7% of the private sector is unionized. Note that wages continued to fall without union protection and the flood of companies that surged into Alabama, the Carolinas and even Georgia and Tennessee did not stop their lower wage migration. They soon left to manufacture in Asia; first in Japan and then Taiwan and then Mainland China and even Vietnam and Malaysia. Once the cascade for lower wages begins, it becomes an unstoppable torrent that falls ever further to find the most depressed economies.

During this period, unions made concessions, perhaps in the hope of maintaining some of the jobs that were available and unions were characterized by corporations as the source of our economic problems. As a single example, the auto industry, notably GM, moved to “right to work” states to avoid unions. GM established Saturn in 1985, and it went out of business completely in 2010 without ever earning a single dollar profit in all the years it existed in Tennessee. GM had blamed unions for its woes when unsatisfactory leadership by CEO Roger Smith, unsatisfactory quality, especially in the early years, and competition with its other GM brands caused Saturn to fail. Failure had nothing to do with unions. Quality competition from Europe and Asia, where wages eventually became higher than American wages actually depressed GM sales along with other US automakers. Blame the unions? Boeing strove to kill unions with its 787 “Dreamliner” by outsourcing major components overseas. Result? Boeing is 3 years past due on delivery and billions over budget by not using their experienced union labor.

With the decline of union membership in US corporations, there came a nearly simultaneous, although mostly unrelated, growth in public sector unions. Once again, unions were caused and not a simultaneous expression of hatred for management. The largest single factor for public sector union growth was the simple fact that government jobs had been used as political capital for patronage and that workers had no control over being fired arbitrarily as a new party was swept into power. At the national level, civil service rules assisted workers to some extent, but that was reversed under GW Bush who wanted more freedom to “reward and punish performance” as he put the issue. In fact, patronage jobs went far deeper under GW Bush than any prior president. States quickly followed suit, except that unions were a stabilizing force that kept most workers on their jobs despite the political winds of change. That was good for both the workers and for people expecting continuity of quality public service despite varying election outcomes. The Bush model increased worker turbulance.

Fast forward to late 2007 and the continuing burden of a war of choice in Iraq and growing war efforts in Afghanistan and the collapse of the housing and lending industry due to malfeasance of corporate management and fundamental greed and…Poof! We have an unmatched fiscal and job crisis unseen since FDR’s days. Obviously, somebody should be punished for the widespread fraud and failure of our lending and our investment institutions. Pension funds, both individual and institutional, were devastated. Jobs were slashed. Balanced budgets became distant memories. Who can we punish? The perpetrators? Well, no. They are too big to fail. Let us get concessions from those who lost money in the pension funds and layoffs. Somebody has to pay. And so it came to pass that public sector unions and the real people who pay taxes were called upon to make new concessions. They did. Now if you can afford the tax accountants and attorneys to protect your income, you can still send your bonus dollars to the Grand Caymans for safekeeping.

Return to Wisconsin and Governor Scott Walker (bankrolled by Koch Industries) and you see the drama played out to bust unions and finally undo what FDR and unions wrought after years of fighting for some justice in treatment of labor. If unions are eliminated by this well financed conservative push, then you need to remember that it was unions that bargained collectively for each of us. I have never been a union member, but my pay was influenced by what unions derived at the table. Even in the Army, my pay was increased by what the postal workers were able to get through collective bargaining. If that is eliminated, then kiss goodbye to social and economic mobility as well as safety and stability. Bye to safety nets like public education, Social Security and Medicare. Say hello to the new robber barons and their conservative supporters who will finally undo the New Deal and present the Raw Deal. Unions, weak as they are, may be our last best hope to preserve education, dignity and mobility in these United States. We are moving from the justice of the people to the “just us” of the Oligarchs. Please speak up before it is too late. Maybe it is also time to impeach a few of the “Supremes” for conflict of interest.

Peace,
George Giacoppe
20 February 2011

Social Security Scapegoat

It’s time for the American public to blow a big hole in the proposals now being seriously considered to “solve the budget crisis.” As noted in my last blog, the onus, as always, is meant to fall on the poorest among us. We have been hearing ad nauseam the mantra that the Social Security system is driving the nation into insolvency. Therefore, recent proposals to “solve” the debt crisis—brought on, it should be remembered, by two unpaid-for and unnecessary wars, the Reagan-Bush-Bush reductions in tax income on the wealthy, and of course the outright thievery of Wall Street financiers that produced the housing bubble, and crash—always target Social Security. ‘We’ll all have to make sacrifices,’ is the song line. Which means, you, you poor gullible assholes, will have to sacrifice as usual.

Unless, that is, everyone remembers some simple facts, the first of which is: Social Security is NOT responsible in any way for the current deficits. Indeed, Social Security right now runs surpluses—that is, the money paid in, by workers themselves—outstrips the money paid out. And remember, it’s your money you’ve been paying in for a lifetime. You may recall, in fact, the campaign promises of our presidential candidates a few years ago, who promised that Social Security funds would be “put in a lock box.” What that referred to is the fact that right now, according to the National Committee to Preserve Social Security and Medicare (www.ncpssm.org ), there is a “$2.6 trillion dollar trust fund built up by American workers over decades.” That’s $2.6 trillion folks. Except for the fact that the federal government, to disguise the deficits it runs each time we have a war, borrows from the SS trust fund, and is thereby obligated to pay it back, with interest. This raiding of the Trust Fund started in 1968 when Pres. Lyndon Johnson got legislation passed—he was building up American involvement in the Vietnam War, and of course wanted to tout “both guns and butter” (their guns, our butter)—started the game. The Trust Fund was allowed to be mixed with the General Fund, and off we went.

Bottom line: not only does Social Security run a surplus, the Federal Government owes the Social Security Trust Fund a ton of money, which it has to pay back with interest. It is in this sense only that Social Security could be said—by a blatant liar—to be contributing to the deficit. A more honest assessment would admit that, in fact, Social Security has contributed to the government’s solvency by supplying it with unused SS funds (the surplus) to disguise its deficits. Is the government grateful? Are the fiscal hawks grateful? Au contraire, mon ami. These bastards resent having to pay all that money back. It will break us! they whine. So let’s kill the goose that lays the golden eggs!

Sounds unbelievable, but that is the proposal coming out of such august bodies as the President’s Commission on Reducing the Deficit, and the Domenici/Rivlin plan referred to in a previous post. Let’s raise the retirement age, cut the COLAs (cost of living adjustments), force seniors to pay more for prescription drugs, and find other ways to cut benefits to the poorest among us. The key thing is to help business! Domenici/Rivlin, in fact, propose giving businesses a one-year Social Security tax “holiday” (we all love holidays, right?) that would reduce government income by $650 billion. It’s not enough that the money-grubbing swine who drove us into this ditch have all been bailed out—with government funds, some of which no doubt came from that SS Trust Fund. Now we have to give them another “holiday” while cutting the pathetic benefits given to the old folks. I tell you, if the American people fall for this one, they deserve to be rooting around in garbage bins to survive.

Fortunately, the National Committee to Preserve Social Security and Medicare has organized a day of protest. The Committee is calling on all interested parties (and if there’s someone who plans on not getting older, I’d like to hear from him/her) to take part in a day (Tuesday, Nov. 30) of calling Congress and making two demands: 1) NO cuts to Social Security for deficit reduction, and 2) a $250 payment this year to SS beneficiaries in lieu of no cost-of-living increases (COLAs) the past two years. Here’s the number of a hot line that will connect you to your Congressperson’s office: 800-998-0180. CALL, because you can be sure the other side will be shouting their ears off.

While you’re at it, you might want to cast a vote of support for Representative Jan Schakowsky’s plan for deficit reduction. Shakowsky is the only people’s representative on the Deficit Commission, and her plan amounts to getting some budget reductions by such unheard-of expedients as “$144.6 billion in tax increases, $110.7 billion in defense cuts and $17.2 billion in healthcare savings through a public option.” And definitely no cuts in Social Security. As the Huffington Post quoted Shakowsky re: the Bowles-Simpson proposal to cut SS benefits: Using Social Security to address the deficit “is like attacking Iraq to retaliate for the September 11 attacks.”

Of course there are legions of benighted souls in America who would respond: what’s wrong with that? But perhaps there are other legions who get the point. Let us hope so; because as it stands now, the greatest push seems to be coming from the yahoos, who clearly see the current series of shocks (remember the Shock Doctrine?) as their best opportunity to, once and for all, get rid of the most hated of Roosevelt’s “giveaways”: Social Security.

Lawrence DiStasi