All Cities Are Not Created Unequal

See on Scoop.itDidYouCheckFirst

Alan Berube examines the most recent Census data to understand where and why income inequality has become a pressing political issue in many big cities today.

Greg Russak‘s insight:

"Inequality may be the result of global economic forces, but it matters in a local sense. A city where the rich are very rich, and the poor very poor, is likely to face many difficulties. It may struggle to maintain mixed-income school environments that produce better outcomes for low-income kids. It may have too narrow a tax base from which to sustainably raise the revenues necessary for essential city services. And it may fail to produce housing and neighborhoods accessible to middle-class workers and families, so that those who move up or down the income ladder ultimately have no choice but to move out." – Alan Berube, senior fellow and deputy director at the Brookings Institution Metropolitan Policy Program

See on www.brookings.edu

It’s On #MiddleClass America to Save America

I can’t imagine anyone arguing that America does not need a healthier, more economically viable, active, and growing middle class. Sadly, I also can’t imagine much argument that the exact opposite is dramatically evident.

Source: http://www.businessinsider.com/decline-of-theus-middle-class-2013-10
Source: http://www.businessinsider.com/decline-of-theus-middle-class-2013-10

The question now is what are we in the middle class prepared and willing to do about it?

I ask that question because I am completely convinced that the decline of the American middle class is reversible. I’m also completely convinced that the responsibility rests almost entirely and exclusively with all of us in the middle class. We can and we must do more to stop and then to reverse our decline.

Facebook posts and yelling at the TV might feel cathartic, but they don’t accomplish much. Let’s resolve in 2014 to do more and to take real action to take our democracy back from the corrupting influence of money.

What Can Be Done

It’s my opinion that we in America’s middle class need to do two things:

1. Stop waiting around for someone else to do something about it for us

2. Stop digging the hole deeper by no longer voting against our own economic self-interests

Let’s Stop Digging

I’ve written a lot over the years about point number 2, most recently herehere, and here.

There’s no other way to say it. All of the responsibility for point number 2 rests with Americans outside the wealthiest 2% who insist on voting against the economic interests of the middle class by voting FOR Republicans and tea party candidates who want to turn over control of our government and our economy to the very people and industries who got us into this mess.

The mess we’re in started with Reagan and his Rand/Friedman/Greenspan-inspired lies of trickle-down economics and the canard that government is somehow the only source of our problems. So long as some of us keep voting for the people representing those lies, we’ll keep digging the American middle class into a deeper and deeper hole.

I’m not saying we should never vote for another Republican. I have voted for Republicans in the past. I’m just asking – pleading, really – that we please just stop voting for the extremists in the Republican party.

We know – or we should know – who’s on that list. We know – or we should know – that it includes people selling us the fairy tales of unfettered free markets coupled with the failed economic and governmental philosophies of Milton Friedman, a.k.a. Reaganomics, a.k.a voodoo economics (thanks, btw, to G.H.W. Bush for that one), a.k.a. trickle-down economics.

Today, this describes one party and only one party. Anyone wishing to offer evidence to the contrary is invited to do so.

The Dangers of Being Kept In The Dark

To some extent and in a world where people still watch, listen to, and believe the likes of Fox News, Rush Limbaugh, Glenn Beck, and a whole plethora of ideologues masquerading as news media and opinion “journalism” (a very liberal use of that term, btw), it’s kind of understandable how so many middle class Americans can be duped into believing the lie of trickle-down economics.

Traditional corporate news media is almost as guilty. (In case you’re wondering, the answer is, “No, outside of a weather report, I do not count anything broadcast by Fox to be unbiased news.”) Corporate media spends almost no time or energy informing us about how and why the middle class is in decline. What time is spent on the subject is spent mostly with people meant more to drive ratings than to inform us about what the decline of the middle class actually means to America and to our geopolitical power and influence in the world on a long-term basis.

The reason for their silence seems clear. It’s not in their corporate economic self-interest for us to understand it, nor is it in the interest of the wealthy and powerful who run those corporations. They are beholden to their investors. Collectively, they exercise control over our government more than ever by funding campaigns with little-to-no oversight thanks to Citizens United.

Even worse for the vast majority of Americans, these are people who already seem to demonstrate little-to-no appreciation for the ramifications of their actions and that of a declining middle class. They are either willfully ignoring or inexplicably discounting in a dangerous and short-sighted way what a declining American middle class means for our economy, our country, and for the world.

If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated. Other superpowers such as Britain or Rome did not have the idea of a perpetually improving condition of the middle class as a core value. The United States does. If it loses that, it loses one of the pillars of its geopolitical power.

(Read more: The Crisis of the Middle Class and American Power | Stratfor)

Winners… and Even Bigger Winners

Every society throughout history has its ‘winners’ and its ‘losers’ in whatever terms each society chooses to define those words. Of late, it’s perfectly clear who the winners and losers are in America.

Source: http://www.businessinsider.com/decline-of-theus-middle-class-2013-10
Source: http://www.businessinsider.com/decline-of-theus-middle-class-2013-10

When it comes to the American middle class, the facts are in. The data are undeniable. The American middle class is in decline while the wealthiest accumulate even greater wealth and prosperity. This imbalance spells only trouble for us as a people and as a country.

Badly Tipped Scales

Source: http://voices.washingtonpost.com/ezra-klein/2011/01/a_graph_im_trying_to_understan.html
Source: http://voices.washingtonpost.com/ezra-klein/2011/01/a_graph_im_trying_to_understan.html

The balance that once existed between the income gains and the relative prosperity of the middle class and the wealthy – and which ought to exist again between free market capitalism and representative government – have tipped in dangerous and disturbing ways.

The scale seems to have tipped not between middle class and rich or between “corporatists” and “statists”, but instead in a third direction; Big Money.

Big Money, Bums, and Parties

Take a close look at the following chart. Appreciate and understand that it represents the average wealth of ALL of our representatives in Congress.

Wealth of Congress
Source: http://www.opensecrets.org/pfds/averages.php

As of 2011, that’s an estimated average wealth of $11.7million for a Senator and $6.5million for a Representative.

What, exactly, are we supposed to have in common with these people?

What, exactly, do we think motivates them and what, exactly, should we expect from them when it comes to the resultant policy and law they make?

Isn’t it clear that all of the opportunity, privilege, and entitlements – yes, entitlements – now flow almost exclusively to the wealthy and, by extension, to their Big Money interests in both the private and public sectors?

How’s that possible? How does one come to such conclusions? Simple. Take another look at the chart above. We are governed today almost exclusively by the rich.

We need to stop deluding ourselves about whom they serve. Our elected representatives represent the interests of Big Money. That means they do not represent the vast majority of Americans.

And, yes, both parties are guilty but it must be stated emphatically that they are NOT both guilty in equal measure. I’ve also grown weary of false equivalencies like that, too. Again, anyone wishing to offer credible citations to the contrary are invited to do so.

That said, the evidence is clear.

If the average Senator’s wealth is nearly $12million and the average House Rep is worth a cool $6.5million, then it stands to reason that these elected representatives don’t come from and don’t represent the middle class or the lower middle class or the working poor or the impoverished.

They represent Big Money, and without Big Money they can’t fund their campaigns.

The average winner in a Senate race <in 2012> spent $10.2 million, compared to $8.3 million in 2010 and just $7.5 million in 2008. That’s an increase of 19 percent since 2010. Senate Democrats seemed to have to work particular hard to win their seats, spending an average of $11.9 million, compared to the average Republican winner who spent $7.1 million.

On the House side, there was a smaller but still quantifiable increase in the cost of winning. On average, a winner in the House spent $1.5 million, compared $1.4 million in 2010 and $1.3 million in 2008. In the House, it was Republicans who had to work a bit harder: The average winning House Republican had to spend $1.59 million to win a seat, a bit more than the $1.53 million spent by the average Democratic victor.
(Source: http://www.opensecrets.org/news/2013/06/2012-overview.html)

Once in office, they are well on their way to amassing serious wealth. It begins on Capitol Hill with legislation and regulation (or more accurately, deregulation) in favor of the very industries they are supposed to be watching over for our benefit and protection. That’s just the start. Much bigger paydays await.

Being elected to office or appointed to one of the myriad departments or agencies is merely the step necessary before twirling through the revolving door that opens onto K Street and the private sector where their real rewards await them.

That is the heart of it. Money that concerns itself only with more money and not with the concerns and well-being of ordinary citizens.

This closed circle of money between government and private enterprise is precisely why a “throw the bums out” or even the dream of more viable third, fourth, and fifth political parties will not work to change anything.

Let me repeat that.

Simply replacing the current crop of politicians with a new group of elected officials – either from the current 2-party system or from a whole host of additional political parties – will serve to change very little if the underlying and fundamental campaign finance process and electoral systems by which these people are elected and reelected does not change.

Where We Come In

If we’re going to make our voices and our concerns heard, if we’re going to have a democracy that works for us, then we’re going to have to take the actions that serve to get Big Money out of politics.

The wealthy, both in and out of government, are continuing to prove that, outside of people like Bernie Sanders and Elizabeth Warren, we have very, very few people in Congress actually representing us.

It’s not just national politics, either. We need to be examining and pressuring our local and state governments about whom they actually represent. Is it us or their Big Money backers?

What we can’t expect politicians to do on their own is to work very hard at tearing down and rebuilding the very systems that got them elected and which make them rich (or richer) in the process.

There are lots of groups and lots ways for you to get involved and to add your voice to growing chorus. The ones that I endorse and that I strongly encourage you to learn more about and to get behind are listed below. Together, we can make our voices heard and we can make a difference.

We can save America. We’re the only ones who can.

http://anticorruptionact.org/
http://anticorruptionact.org/

The American Anti-Corruption Act (http://unitedrepublic.actionkit.com/event/cosponsor/9815/)

https://represent.us/
https://represent.us/

Represent.us (https://represent.us/)

https://movetoamend.org/
https://movetoamend.org/

Move To Amend (https://movetoamend.org/)

http://www.coffeepartyusa.com/

Coffee Party USA no longer has my support or endorsement. Click here if you’re curious as to why that is, and please drop me a Comment if you see any links to them on this site I may have missed.

 

Sources:

The Crisis of the Middle Class and American Power,
http://www.stratfor.com/weekly/crisis-middle-class-and-american-power

Average Wealth of Members of Congress,
http://www.opensecrets.org/pfds/averages.php

The Decline Of The US Middle Class Is Getting Even Worse [CHARTS],
http://www.businessinsider.com/decline-of-theus-middle-class-2013-10

Some thoughts — and graphs — on inequality and income,
http://voices.washingtonpost.com/ezra-klein/2011/01/a_graph_im_trying_to_understan.html

Election 2012: The Big Picture Shows Record Cost of Winning a Seat in Congress,
http://www.opensecrets.org/news/2013/06/2012-overview.html

 

“Bankers Are Balking at a Proposed Rule on Capital” Gretchen Morgenson – The New York Times

See on Scoop.itDidYouCheckFirst

“Over the next two months, the regulators proposing this rule will no doubt encounter a lobbying buzz saw. Mr. Hoenig (vice chairman of the F.D.I.C.) said he and his colleagues were bracing for that. Bankers, after all, prefer things just the way they are. They can load up on leverage to take risks and reap the rewards. But when losses abound? Well, they’re the taxpayers’ problem.” – Gretchen Morgenson, assistant business and financial editor and a columnist at the New York Times.

Greg Russak‘s insight:

Letting banks regulate themselves with what is called ‘risk-weighting’ didn’t work out so well in the past.

“This so-called risk-weighting approach was an abject failure. For example, the assumptions characterized the sovereign debt of Greece as risk-free, requiring that banks set aside no capital against those holdings for possible losses. The risk-weight system also determined, incorrectly, that highly rated mortgage securities fell low on the risk scale.”

Why shouldn’t banks be regulated up to their eye-balls? How can we think bankers can be trusted now?

Either they are horrible at analyzing risk and need lots and lots of oversight or, more likely, they know that in an under-regulated environment they can privatize any gains and socialize all their losses back to us through future federal bailouts.

See http://www.nytimes.com/2013/07/14/business/bankers-are-balking-at-a-proposed-rule-on-capital.html?ref=gretchenmorgenson&_r=0

A ‘Nonviolent Army of Love’ Rises in North Carolina to Face Down Rightwing’s Assault on Progress

See on Scoop.itDidYouCheckFirst

Individuals are risking arrest to draw attention to the policies of GOP Governor Pat McCrory and the conservative-run General Assembly—including cuts to social programs, education reforms, a rejection of federal funding to expand Medicaid coverage, and changes to voting laws—which protesters call “an assault” on the state’s poor and unemployed.

Greg Russak‘s insight:

“We’re going to continue our acts of civil disobedience because the General Assembly has made a cruel attack on the most vulnerable people in this state,” declared Rev. William J. Barber II, president of the North Carolina chapter of the NAACP. – Lauren McCauley, staff writer, Common Dreams

See on www.commondreams.org

From related article on Moral Mondays (http://www.commondreams.org/headline/2013/05/14-3)

According to the group—in just the first 50 days of their work—this ‘super-majority’ has already voted and passed legislation on the following:

  • Deny federal funds for Medicaid to 500,000 poor North Carolinians.
  • Take unemployment benefits from 165,000 North Carolinians.
  • Raise taxes on 900,000 of North Carolina’s poor and working poor by ending the Earned Income Tax Credit to pay for tax cuts to 23 millionaires.
  • That took over a billion dollars last year from public education, made plans to implement a voucher plan to hand out public money to private schools, and reduce eligibility to preschool for poor children.
  • To re-start the death penalty and repeal the Racial Justice Act that has exposed the racially discriminatory application of the death penalty.
  • To codify anti-labor language in our state constitution.
  • To roll back Early Voting, ban Sunday Voting, end same-day registration and impose an unneeded poll tax disguised as Voter ID bill that will cost the state millions, deny student ids from private schools, increase disenfranchisement of formerly incarcerated, charge parents a $2500 tax (poll tax) if there college student votes at college and not at home, and leave us with voting laws more restrictive than Alabama and South Carolina.

 

The Economics and Patriotism of Infrastructure Jobs Programs

Infrastructure map courtesy of The Atlantic

The Economics and Patriotism of Infrastructure Jobs Programs

America’s crumbling infrastructure is both a safety hazard and a drag on our economy that is projected to only get worse. If we’re going to tackle the really big challenges of government budgets, deficits, debts, and the economy, then every citizen must understand the realities of what a deteriorating infrastructure means to this country. We then need to demand that our elected leaders stand strong against austerity and, instead, do whatever it takes – including raising taxes on corporations and the wealthy – to improve our infrastructure.

Properly-funded federal and state infrastructure improvement jobs programs would produce immediate and lasting benefits, including but not limited to:

1) Putting large numbers of Americans back to work in good paying middle class jobs which would immediately boost the economy from the bottom up (since trickledown economics has proven to, once again, be an unmitigated and disastrous failure)

2) Making all of us safer and less vulnerable to infrastructure inefficiencies, failures, or acts of terrorism

3) Demonstrating to American companies and to the world a sense of patriotism that includes spending public funds on the infrastructure that is so vital to our economic and commercial success

Putting patriotism and safety issues aside for the moment (although I don’t know why we should), the sheer impact to our economy and our own selfish financial interests are at stake. This is usually motivation enough for most Americans to demand action from our politicians.

I think it ought to be more than just self interest. Americans have become the experts at professing their patriotism at every opportunity. We’re known the world over for our self-proclaimed exceptionalism. It’s why I believe that we ought to be thinking about and talking about funding the repair and expansion of our infrastructure as one of the most truly patriotic things we can do for ourselves and our country.

First, the economics. Math, after all, doesn’t require an emotional investment or belief system. It just is.

The Economics of Infrastructure

In his blog post, “Crumbling Infrastructure Has Real and Enduring Costs,” William A. Galston of the Brookings Institution points out that a study by the American Society of Civil Engineers projects that, “…by 2020, if the mounting investment gap in infrastructure is not addressed, ‘the economy is expected to lose almost $1 trillion in business sales, resulting in a loss of 3.5 million jobs . . . the cumulative cost to the U.S. economy will be more than $3.1 trillion in GDP and $1.1 trillion in total trade.'”

He also tells us that the Building America’s Future Educational Fund report reveals that a lack of a national infrastructure plan puts a serious drag on our economy. The example he cites is “…in 2010, Americans spent a total of 4.8 billion hours stuck in traffic, wasting 1.9 billion gallons of fuel, at a total cost of $101 billion.”

Let these numbers sink in.

$1 trillion – that’s a ‘1’ followed by 12 zeros; $1,000,000,000,000 – in LOST BUSINESS SALES and 3.5 million lost jobs in just 7 years.

$101,000,000,000 wasted sitting in traffic in just one year.

So in addition to patriotism and public safety, do we as Americans really want to waste greater and greater amounts of time, energy, and money sitting in traffic or waiting for delayed flights and trains?

Do you want to waste even more of it in the future?

Do you want American businesses to forego realizing ONE TRILLION DOLLARS in sales between now and 2020?

If not, then ask yourself how or why we ought to buy into Paul Ryan’s thinking that what’s needed most right now is greater austerity.

His budget – which unless I’ve missed it still seems to be the GOP’s position, too – proposes we spend $78 billion, or 25% less, on infrastructure than the White House’s proposed budget of $104 billion per year over the next decade. According to Galston and some think tanks, the White House’s budget is already less than one-half of what’s needed to repair our infrastructure, and yet Ryan would have us believe we need to spend even less.

How does that solve the problem? I simply cannot believe there’s that much waste and, true to form, Ryan still is unwilling or unable to offer any substantive details.

So as far as the economics go, one would think that numbers like the lost sales, lost jobs, trade imbalances, and lost productivity would be enough to rally the public *and* the business community to demand that something be done immediately to repair, improve, and expand our infrastructure. It’s not like there aren’t precedents to follow with proven outcomes. We – meaning the government hiring both workers and outside companies as contractors – have done big infrastructure projects before.

It took courageous leadership in government to get those projects moving. The private sector was and still is the beneficiary of that leadership. Where is it now?

No, You Didn’t Build That

With all due respect and admiration for the courage and creativity of entrepreneurs and captains of industry everywhere, I remind you that, “NO, YOU DID NOT BUILD THAT!”

You just get to benefit from it. The nation’s infrastructure is, without question or doubt, part of the reason for any commercial success and, hence, at least part of the resulting wealth that’s made possible in America for those who want to start, run, and work in the private sector. Trust me; I’m your fan and one of your biggest cheerleaders. I just think it’s time that you and your followers put your copy of Atlas Shrugged down and join the rest of us in the real world.

Business people everywhere – from the titans running multinational corporations to the small business owner on Main Street struggling to compete with Walmart – owe it to themselves and their self respect to please stop this self-indulgent and self-serving love affair with the Randian mythology. It’s tedious and tiresome and, truthfully, a complete fantasy. Where would you be if your workers quit tomorrow, and when was the last time you built a bridge, an airport, or an electrical power station?

To the business people busying themselves complaining endlessly about the government, please stop your childish whining and please start acting like real leaders. You can start by acknowledging that if you’re going to continue to benefit from everything a democratic society has to offer – including infrastructure – then you are going to have to pay for it. That’s how capitalism works, right? Payment for goods and services rendered?

Yes, I know that means higher taxes than the historically low taxes you pay now. The only sympathy you’re going to get are from fellow wealthy individuals and the people you’ve duped into believing in another fantasy – trickle-down economics.

Look, if your business cannot survive an increase in taxes and the closing of loopholes, well then maybe you’re not such a successful business person after all. Don’t feel bad. Lots of people have tried and failed more than once, including yours truly. It’s what makes me your cheerleader. I know how hard it is. We both know that there are no guarantees, but I will say this; never once did tax obligations figure into my thinking or have any impact on my results.

Real entrepreneurs don’t let things like taxes get in their way; they don’t use them as a lame excuse for not trying, nor are they the cause for why one tries and fails. Only someone who has never started a business would believe such a thing.

It’s only in bad novels by Russians with absolutely no economic credentials where real entrepreneurs give up and disappear because they were somehow defeated by government or society.

To the average citizens who rises in Randian defense of all things private and corporate, including infrastructure, I’d like to ask you a few questions.

How well do you feel you understand the profit motive and the demands it places on the business managers to maximize revenues and minimize expenses?

Have you really thought through what it would be like living in a country where every other river crossing or highway exit extracts a toll from us that goes only to a corporation and their shareholders?

If you have thought about it and you do want to see infrastructure privatized, then I would like to hear how and why you believe that the corporation collecting your tolls will forego maximizing profits and, instead, do what’s best for the nation and for the local community once they’ve built their monopolies modeled on Matty Moroun and his Ambassador Bridge?

It all comes down to money, of course, and, like it or not, it takes money to fund a democracy.

So here we are. We’ve arrived at a point in our political and societal evolution where, hyperbole and ignorance of the facts notwithstanding, American corporations, wealthy individuals, and their toadies in the GOP continue to foist upon us their strategy of fear, uncertainty, and doubt – along with unhealthy doses of outright lies – to keep us at bay and living in fear that they’ll abandon our shores if they can’t keep – and even reduce further – their already historically low tax obligations when they do pay any taxes at all. (Yes, I’m looking at you Mitt Romney, GE, and the rest of you uber-rich individuals and corporations paying very little taxes or actually getting tax refunds.)

The message from Big Money America and the GOP is clear: they are completely and utterly devoid of care or concern for this country and its citizens outside the now well-known 2%.

Where’s The Patriotism?

Galston reminds us that we’ve pulled together as a nation under both Democratic and Republican administrations before to do big infrastructure projects. We’ve done what’s been needed before. We can do it again.

A federal (and state) infrastructure program now would put lots of people to work. In addition to safer and more efficient infrastructure, big and bold new projects – hell, even repair and rehabilitation projects – would mean lots of decent paying middle class jobs for Americans. That is exactly what is needed right now to get the economy growing faster and better. What we don’t need and can’t afford is more austerity and more of our fellow citizens left with little choice or opportunity outside of working in retail or the fast food industry.

We need a sense of patriotism.

Federal infrastructure projects are patriotic and need to be talked about as patriotic. They are physical and enduring evidence of the love and devotion we should have to our country and to each other. Our society simply cannot operate without infrastructure, so programs to repair and improve it is service to our country, isn’t it?

Since the days of the Erie Canal, infrastructure projects have proven to deliver huge economic and societal benefits both at the time they are undertaken and for generations to come. We Americans need to remember this every time we merge onto an interstate, get on a train, board an airplane, turn on our lights, or buy bananas in January. None of that is possible without infrastructure, and that infrastructure was built by Americans for Americans.

Our roads, airports, railways, and sea ports have become too small, too old, and crumbling too quickly after decades of use for us to stand by and let it happen. They’re more and more unsafe and, for all the true capitalists out there, it’s a drag on our economic vitality and growth that will only get worse unless we do something about it.

And when it comes to defining what it means to be an American, letting our infrastructure deteriorate turns us into a second-rate first-world nation. It’s an embarrassment and a shame on all of us. We’re always making lots of noise about being number 1. I don’t know about you, but I never hear any Americans proudly proclaiming, “We’re #33!”

It’s time to show some real patriotism outside of military excursions. It’s time for Americans to rally together to demand that our elected officials put us to work fixing and rebuilding America’s infrastructure.

It’s good for us citizens. It’s good for business. It’s good for America.

Sounds like patriotism to me.

Sources:

(1) Galston, W. (2013, January 23). Crumbling Infrastructure Has Real and Enduring Costs. http://www.brookings.edu/blogs/up-front/posts/2013/01/23-crumbling-infrastructure-galston?cid=em_alert012813

(2) Plumer, B. (2012, March 30). What Paul Ryan’s budget actually cuts – and by how much. http://www.washingtonpost.com/blogs/wonkblog/post/what-paul-ryans-budget-actually-cuts–and-by-how-much/2012/03/20/gIQAL43vPS_blog.html

(3) Berfield, S. (2012, May 3). Matty Mouron, Detroit’s Border Baron. http://www.businessweek.com/articles/2012-05-03/matty-moroun-detroits-border-baron