New Ground 139
November - December, 2011
Contents
New Ground
139.1 -- 12.01.2011
0. DSA News
We Won! by Michael Baker
GOPDSA Pickets Trader Joe's by Tom
Broderick
Occupy Food Service by Michael Baker
DSA National Convention
1. Politics
Healthcare Atrocity: Boycott Hyatt
Hotels
We Won, Part II
Social Security "Reform" Is Really Theft
Reviving Our Economy
2. Democratic Socialism
Socialism:
Past and Future by Michael
Baker
America Beyond Capitalism
3. Upcoming Events of Interest
New Ground
139.2 -- 12.17.2011
0. DSA News
DSA Convention on Video
Talkin' Socialism
YDS Winter Conference
1. Politics
Hundreds Picket Hyatt
We Won Part III: We Lost
Workers' Republic
2. Democratic Socialism
Redefining Markets in a Democracy
From Bolshevism to Stalinism: Ernst Thälmann & German
Communism during the Weimar Republic
3. Upcoming Events of Interest
A Living,
Not Slavery
by Bob Roman
Every now and again it's time for a
new coat of paint: your apartment, my face. Nothing lasts forever,
including Chicago's O'Hare and Midway airports. In common with
many other cities, Chicago's approach to this is to put the airport
concessions up for bid. Not only do the concession operators
(similar in function to the operators of shopping centers) offer
to pay more for the concession, they also offer to spend money
rehabbing the space.
Sounds like a great win-win idea, yes?
Except for the employees at the stores and restaurants therein,
who will lose their jobs with no guarantee of being rehired.
And for their union that went through a good deal of work to
help them organize and now will have to start the process, again,
from scratch. It
doesn't have to be this way. The workers can be a part of
a win-win-win deal, and to that end a "Stable Jobs, Stable
Airports" ordinance was introduced in the Chicago City Council
on October 5 by Alderman Jason Ervin (28). A coalition of unions
and community groups held a rally
/ press conference at City Hall prior to the council meeting,
where the proposed ordinance was referred to the Committee on
Workforce Development and Audit.
The proposed ordinance begins by retaining
the present airport workforce. The new concessionaires must hire
the current employees, by seniority, for a trial period of 90
workdays. Those not needed are to be placed on a preferential
rehire list. In principle, if the trial period doesn't work out,
a retained employee might be let go, but this would be subject
to the provisions of a collective bargaining agreement. This
is because, more controversially, the ordinance also has a "labor
peace" provision that requires concessionaires and other
contractors to be signatories to collective bargaining agreements
that forbid "picketing, work stoppages, boycotts or other
economic interference." Unfortunately, these "labor
peace" provisions are fairly standard in contracts these
days, so much so that employers who are asked to sign agreements
without one get a tad crankier than usual. The ordinance would
allow the city to terminate a contract if there were no collective
bargaining agreement, so there would be an incentive to bargain
in good faith.
The proposal also amends Chicago's
Living Wage ordinance by expanding its coverage to workers
at O'Hare and Midway airports. There are workers at the airports
being paid the Illinois minimum of $8.25 an hour. The Chicago
Living Wage is presently a bit over $11 an hour, so some workers
could expect a raise.
This should obviously be a win-win-win
proposal. But the ideologues lurking in the various chambers
of commerce and community economic development corporations have
a whole repertoire of arguments that "prove" any deal
that doesn't maximize the profits of the business class will
also screw everyone else. These are arguments as old as the hills,
and they've been proven wrong time after time, but they need
to be answered.
To that end, Virginia Parks and William
Sites of the University of Chicago, Jack Metzgar of Roosevelt
University, and Ron Baiman of the Chicago
Political Economy Group collaborated in an uncommissioned
study, a cost-benefit analysis of the proposed ordinance (see
http://insidechicagoairports.typepad.com/files/stable-jobs-stable-airports-study.pdf
). For most employees, the biggest immediate benefit would be
coverage under Chicago's Living Wage Ordinance. They estimate
some 1,600 workers would see an average pay increase to $22,000
from $18,000, representing a net annual increase in purchasing
power of $3 million to $8 million. Now, this is a number small
enough to be lost in the statistical noise of the Chicago economy,
but it should be plain that it nevertheless would make a really
big difference in the lives of the affected employees. These
are not high school kids but adults with adult responsibilities.
Typically, when employees are better paid, they also stay with
the job, resulting in higher productivity and lower training
costs. Employers could thus save at least $700,000, the study
estimates.
The study estimates the aggregate cost
to employers of coverage under the Living Wage ordinance to be
$6.9 million. If that were taken entirely out of profits, they
estimate a reduction of total profits of 14% to 16% at O'Hare
and 23% to 27% at Midway. This would still leave profit margins
above similar stores located outside airports because airport
concessions have a distinctly monopolistic tinge to them. And
you know what that means: The consumer pays. And what would that
amount to? 16 cents per trip at O'Hare and 21 cents per trip
at Midway.
If you're inclined to be skeptical of
studies like this, you're probably right to be so. For example,
the business side of employment policy, the lemon-mouthed and
green eye-shaded cynics of the "free" market, have
a model all ready for the chamber of commerce types to plug in
the numbers and thereby "prove" that a living wage
ordinance will cost a fortune, destroy business, and create a
wasteland where once was plenty. But Chicago is not unique. What
has been the actual experience of extending a Living Wage ordinance
to an airport?
For just that reason, Roosevelt University's
Mansfield Institute for Social Justice and Transformation and
the Chicago Committee for Working Class Studies sponsored a meeting
at Roosevelt University's Gage Gallery on the evening of November
1. The meeting reinforced the conclusions of the cost-benefit
analysis by presenting the experience of Los Angeles. Madeline
Janis, the Executive Director of Los
Angeles for a New Economy (www.laane.org ) was the featured
speaker.
Los Angeles began its campaign for a
Living Wage ordinance a few years before Chicago, and it began
at a time when LAX airport was undergoing a rebidding and renovation
process similar to what is beginning in Chicago today. People
were beginning to lose their jobs at the airport, and this had
the effect of including LAX in the coverage of the living wage
ordinance. There were the usual chamber of commerce arguments
against the living wage ordinance, but ultimately it was passed.
Today, LAX is going through another cycle of rebidding concessions
and renovation, and it's a feeding frenzy of businesses wanting
a piece of the airport. There's nary a complaint about the living
wage ordinance. This also demonstrates the win-win-win nature
of the Stable Jobs, Stable Airport ordinance.
Alderman Jason Ervin introduced the
ordinance, and he was among the speakers at the November 1 meeting.
He noted that while 31 sponsors constitute a majority in the
city council, that's also no guarantee that the ordinance will
pass. Mayor Emanuel has not taken an explicit position on the
ordinance, but his airport commissioner has trotted out all the
old free market arguments against it.
The ordinance has been referred to Committee
on Workforce Development and Audit. This is not exactly a left-wing
stronghold. Of the 18 committee members, 5 are co-sponsors and
another 3 non-sponsors had participated in the Grassroots
Collaborative's Peoples' City Council meeting and signed
the resolution (see http://www.chicagodsa.org/ngarchive/ng137.html#anchor297498
). While this is an optimistic beginning, the ordinance clearly
has a long ways to go.
Is
the Tide Turning?
by Michael Baker
An important Evanston City Council budget
meeting was held October 29 at 9 am. The Community
Labor Alliance for Public Services (CLAPS) wanted to ensure
the City Council heard the community's opposition to privatization.
As a result, CLAPS organized a rally at 8:30 am just outside
of the meeting's venue. The rally had a sizable and spirited
turnout and included some powerful speakers: Henry Bayer, Executive
Director of AFSCME Council 31; Kevin Johnson, President, AFSCME
8191; Florence Estes, Staff Rep, AFSCME Council 31; Judy Wittner,
Community Labor Alliance for Public Services; and Charles Hogan,
retired Evanston public service employee. After the rally, many
folks attended the City Council meeting, continuing to hold their
signs in support of public services and speaking during the public
comment portion of the meeting.
Clearly, some of the aldermen heard
CLAPS' message. In fact, Alderman Rainey (8th Ward) proposed
putting all the jobs back into the budget. Other aldermen expressed
their support for this proposal, some during the meeting and
some to CLAPS members personally. The proposal didn't come to
vote, but it shows the progress CLAPS has made in saving Evanston's
public services. When CLAPS began the campaign only four months
ago, all public services were "on the table" for potential
privatization. Now, CLAPS is on the verge of saving all public
services.
In spite of the exciting progress CLAPS
has made, CLAPS states it is now more critical than ever that
the Evanston community pressure their aldermen. As a result,
CLAPS is asking Evanston residents to continue phoning
or e-mailing their alderman to express their opposition to privatization
and layoffs. CLAPS suggests the following talking points when
folks contact their aldermen:
- Workers should not be paying
for the City's $700,000 mistake.
In 2010, the City Council voted
to outsource garbage and yard waste to Groot Industries. Within
4 months Groot came back asking for (and getting!) an additional
$700,000. Now, the City Manager wants to layoff dozens of workers
with a total savings of $721,000. He may deny that connection,
but it appears the City Manager is trying to plug that hole with
layoffs.
- The head of the Department of
Parks and Forestry, Doug Gaynor, stated in a memo to City Council
that the proposal to eliminate 6 positions in Parks and Forestry
and outsource their work to a private vendor would have "definite
drawbacks." These include loss of flexibility and loss
of a needed vehicle for snow removal. He states also that the
possible savings that may be realized through the outsourcing
would likely "be short-lived." The City's report also
lists 38 services currently done by in-house Parks and Forestry
staff, which would no longer be done if turned over to a private
vendor. Privatizing will result in a serious shrinking of services
and lead to a serious threat to property values, quality of life,
and the beauty of our lakefront, which is key to Evanston's character
and economic development.
- Parks and Forestry staff work
as snow command personnel. Eliminating 5 field staff would put
Evanston in serious jeopardy in the instance of weather or security
emergencies. In February of this year, a winter blizzard
left Evanston snowed-under. Field staff in several departments,
including Parks and Forestry, are cross-trained to do snow plowing
and were able to turn on a dime to clear the blizzard in record
time. They were even given special commendations by the Evanston
City Council. Contracting these positions to a for-profit vendor
would seriously reduce staff response time and quality of service
during City emergencies.
- Outsourcing of Parks and Forestry
would eliminate critical administrative functions. In addition
to field staff, the proposal calls for eliminating the Secretary
II position. This employee currently performs some 67 complex
tasks which would be pawned off to other staff who already have
their own full-time jobs to do. Other Parks and Forestry personnel
have testified that the administration of the program would be
devastated with the elimination of this position. Even the head
of the Department is against eliminating this and other positions.
- Citizen input throughout the
budget process shows opposition to privatization. 2,000 citizens signed a petition against the
outsourcing of public services which was presented to the City
Council. Privatizing services received a -7 (that's minus 7)
vote tally in the Engage Evanston online survey. The Top
Ten budget balancing ideas on Engage Evanston were related
to revenue generation, not cuts in services or job elimination.
(See "City Services and Service Change Ideas Evaluation:
FY 2012 Budget Process" at www.cityofevanston.org
.)
- Evanston residents support revenue
generation that, according to the City, could go a long way in
closing the projected deficit. Several
ideas for revenue generation supported by Evanston residents
include (just as examples): (1) Enforcement of all code ordinance
(revenue up to $350,000 projected); (2) Increased collections
of money owed to City (revenue up to $300,000 projected); (3)
Increase in parking fees (revenue up to $120,000). These revenue
generation ideas alone, if pursued to their fullest extent (generating
$770,000) could more than pay for the 11 positions the City would
eliminate (worth $721,000).
Editor's Note: Michael Baker is Co-Chair
of CLAPS. For Labor Beat
coverage of the October 29 rally, see http:/
/www.youtube.com/watch?v=FZu9ucd52V4.
Inequality:
The Curse, the Consequence and a Cure
by Bill Barclay
The US today faces three overriding
political economic problems: jobs, finance, and inequality. The
third of these, the huge and rapid increase of inequality over
the past 35 years, is the core problem we face. In what follows
I briefly outline each of the problems and then develop the dimensions
of the central problem -- the curse -- of inequality. I argue
that the extreme of inequality we find in the US today both destroys
the ties that should link us together as a society and was also
the primary cause of the financial crisis of 2008 and the subsequent
Great Recession. Finally, I argue that an attack on inequality
that is organized around taxing the financial sector may offer
the best approach to defining and developing a new political
economy.
The first problem is the deficit problem,
the deficit in jobs. The often celebrated US jobs machine
has failed to generate enough decent jobs -- and often simply
enough jobs -- to meet the needs of our people. I am not referring
merely to the recent job losses and unemployment levels of the
Great Recession, although it is certainly true that both the
personal misery and the foregone economic output resulting from
the spike in the numbers of un- and under-employed are significant.
However, the jobs deficit has been long in the making. In the
first 35 years after World War II, recessions in the US were
short, and employment levels, as measured by the number of people
working, bounced back quickly. The average length of time to
return to pre-recession employed numbers (as many or more employed
people as existed prior to the recession) was only 9 months,
and the longest time was 12 months. However, beginning in the
1980s, the bounce back time lengthened: to 23 months after the
1990-91 recession and to 37 months after the 2000-01 recession.
It has now been two years since the official end of the Great
Recession (12/07 - 6/09) and we are still more than 7 million
jobs below the number that existed in November 2007.
The second problem is one that has been
noticed only more recently and is still a matter of dispute:
nonetheless I believe it apparent that the US has a financial
sector that is both too big and too inefficient for the political
economy as a whole. It is important to keep in mind that
financial institutions and financial workers do not actually
create anything. Instead, it is the task of finance to facilitate
the functioning of the larger political economy by raising and
allocating capital, ensuring the low cost and timely flow of
investment funds between net saving sectors to net investing
sectors of the political economy. Or at least that used to be
the case. However, just as the jobs deficit was long in the making,
so the bloating of finance has taken time to occur. As one measure,
from the mid-1970s to the pre-Great Recession peak, financial
sector profits as a percent of total corporate profits more than
doubled, going from 15-18% to almost 45%. This increase represented
a major shift in profitability between non-financial and financial
businesses. Until the late 1970s, the rate of profit for financial
firms was lower than for non-financial business; however, following
the first wave of financial deregulation in the early 1980s,
financial profit rates soared, frequently doubling that of non-financial
firms. Two important results were, first, the increasing financialization
of non-financial firms and second, the outpacing of growth in
financial assets to actual economic output. On the first point,
firms such as GE, GM and Ford began to make more (sometimes even
all) of their profits from financial activity rather than from
traditional manufacturing. On the second point, while the ratio
of financial assets to US GDP was in the 4:1 to 5:1 range between
the 1950s and the 1970s, beginning in the 1980s it rose rapidly,
reaching a 9:1 ratio by the early 2000s. As I argue below, this
has been the result of financial allocation decisions by the
class of rentiers: those who derive most of their very high incomes
not from wages and salaries but from dividends, capital gains
and interest. These decisions led to the unproductive use the
large accumulation of capital in the hands of a small group of
people.
Thus the third and underlying problem:
the dramatic increase in income inequality that has occurred
in the past 35 years. This huge and rapid upwards redistribution
has almost tripled the income share of the top 1% of the population,1.25
million households. In the mid-1970s this group received about
8.5% of total US income. Today they receive 22-24% of total US
income. (Note: I am talking about income, not wealth. Wealth
is even more concentrated.) A very small group of households
command $2.6 - $3.0 trillion dollars of income each year. These
1.25 million households receive more income than the bottom half
of all US households, 62.5 million households.
The Problem of Inequality: The
Culture of Too Much
The problem of increased inequality
is the fundamental one. It drives the problems in the political
economy as a whole. It also gives us a way to think about what
needs to be changed and what kinds of policies could be implemented
to change it. Rather than start with numbers, many of which readers
are, I am sure, already familiar with, I will illustrate this
inequality through the culture of excess, what one on-line publication
calls the culture of Too Much (http://toomuchonline.org
).
Let's take a few examples. For him,
the culture of excess offers an $85,000 pool table. Now, you
may well ask, how could one spend $85,000 on a pool table? Well,
this one has an electrical system that lights up to track the
path of each of your shots as well as the path of the balls you
hit (or missed). For her, since she might be jealous of the money
spent on your pool table, there is luggage that runs $25,000
- 50,000 a piece. Why? Because each piece is covered with gems.
As the clerk selling the luggage put it, "many of our customers
buy luggage for their luggage."
Our couple will take their little get
away on their 350 foot yacht, longer than a football field. They
need a yacht to get to that island they picked up off the Mediterranean
Coast. On the way to their island they can relax under $25,000
shower heads -- that can be configured to spray champagne. After
their shower, they can grab their $410 corkscrew and enjoy a
glass.
Are these uses of resources and money
obscene? Of course they are. Do they contribute to the well being
of society as a whole? Of course not, even though producing the
pool table, the luggage and the yacht all "created jobs."
(The fact that almost any human activity can "create jobs"
does not mean that we should support any and all "job creation"
programs.) More importantly, might these examples illustrate
some trends that are bad for all of us?
The Curse of Inequality
There are lots of ways in which the
extreme level of inequality that we find in the US today could
be socially destructive. Those with less than enough to live
on may envy those with Too Much, may even be driven to despair
and perhaps individual acts of violence. At the other end, there
is considerable evidence that, when the distance between your
life and that of most people can only be measured by money, you
lose any sense of empathy with the situation of others. These
"others" (most of us) become merely symbols that can
be manipulated. Of course, from the purely instrumental perspective
of a corporate CEO, a hedge fund manager or an investment banker,
this loss of empathy is perhaps useful to their ends.
Before talking about the political economic
dynamics of asset price bubbles and debt creation that were driven
by this increase of inequality, I want to look at inequality
from anther angle. In what follows I am drawing heavily on a
book called The Spirit Level by Kate Pickett and Richard
Wilkinson. In their book, Pickett and Wilkinson examine the relationship
between a broad range of quality of life measures and the extent
of inequality in various societies. But they do this analysis
with a twist. Rather than looking at all the more than 200 countries
on the planet, they separate out the rich societies, those countries
with per capita income of more than $20,000 a year and focus
on them. This gives them a group of 23 countries to look at on
both an overall Index of Health and Social Problems and scores
on the individual variables that comprise the index. Their data
show, beyond that level of affluence, where a society has solved
the age old economic problem of enough for all to live on (shelter,
food, etc); there is no significant relationship between further
affluence (as measured by per capita income), and health, education,
happiness, etc. In sum, further economic growth does not, in
and of itself, improve a society's standing, or the experience
of individual members of that society, on these variables.
The first point to be clear on is that,
as I said earlier, there is no statistically significant relationship
between level of national income per capita and scores on either
the overall index or most of the individual measures of social
and political well being when these rich countries are compared.
There is no correlation between further increases in per capita
income and better scores on the index of social well being. However,
there are marked differences on both the index as well as individual
components between different countries in this group.
Pickett and Wilkinson ask what explains these differences in
health, education, happiness, etc. if increasing per capita income
does not. Their answer, which they document extensively, is that
these differences are correlated with the degree of inequality
within these countries. They use two measures of inequality,
the Gini Index and the ratio of income of the top quintile (20%
of families) to the bottom quintile. Mathematically the Gini
Index can range from 0.0, if everyone has an equal amount of
income, to 1.0 if one unit has all the income. The range among
these 23 countries is roughly .25 - .50 and on the quintile comparison,
about 3:1 to 9.5:1. On both measures, the US ranks near the top
in terms of inequality.
On the overall Index of Health and Social
Problems, the US is by far the worst, significantly exceeding
Portugal, a country with only slightly less economic inequality
than the US. The Index contains three broad categories of social
well being: health, including life expectancy, infant mortality
and obesity; public safety/security, including homicide and imprisonment
rates; and social well being, including drug and alcohol addiction,
children's educational performance, teenage births and social
mobility. They also look at scores on a trust measure that, I
believe, nicely brings together all the other findings.
Pickett and Wilkinson find statistically
significant relationships between levels of income inequality
and these variables. (They do not look at wealth, for which data
is less readily available.) More equal societies have lower rates
of infant mortality, longer life expectancy, less obesity, and
lower rates of homicide and imprisonment. They have higher levels
of children's educational achievement and intergenerational mobility.
Perhaps most tellingly, in responding to the question "I
think that most people can be trusted," people in more equal
societies are more likely to answer "yes". I believe
that the responses to this question say much about the tone of
day-to-day interactions between strangers in a society, concerns
about crime and the willingness to support policies that may
benefit others. It is also worth noting that US scores on this
question have shifted significantly toward the "no"
answer over the last 35 years of rapidly increasing inequality.
Pickett and Wilkinson strengthen their
analysis by looking at most of these same measures across different
states in the US, again ranking state by levels of income inequality.
And again the more equal states do better.
It should come as no surprise that the
US fares poorly on these measures when compared to other advanced
industrial economies. While not always the worst (sometimes that
dubious distinction falls to Singapore or Portugal), the US is
consistently in the bottom group, and at times, as on percent
of population in prisons, an extreme outlier. To make sense of
these results, it is important to recognize that, in terms of
inequality, the US is much closer to Mexico than to Sweden.
For socialists and progressives more
generally, there is another important point to note. With the
exception of Japan, the level of inequality of market outcomes
(pre-tax) is not much different between the US and most of the
other countries in the sample. The difference occurs when public
policy, the role of government, comes into play. The impact of
government on the level of inequality in the US is very limited
in contrast to that for almost all of the other countries in
the group. These other countries use, in a conscious manner,
the public sector to counter the destructive inegalitarian outcomes
of the private market. For example, in the mid 2000s decade,
the Gini Index for the US, pre-tax was .46, similar to Australia
(.46), Germany (.51), Netherlands (.42), and even Sweden at .43.
However, post tax, the Gini Index for the US was .38, while that
for Australia was .30, for Germany .30, the Netherlands .27 and
Sweden at .23. The public market in the US is weak, with little
redistributional impact compared to that for other rich countries.
The conscious nature of these policies in Western Europe and
elsewhere is caught in the paper submitted by the Nordic countries
to the 2011 Davos World Economic Forum which argued that:
"Individualism has its place. Participants
[in Nordic Societies] respect the work ethic and punctualityBut
investing in social trust quietly builds a strong sense of common,
inter-generational, and place based responsibility that yields
high dividends over time."
The Nordic countries have the highest
scores on the trust measure.
What Is to Be Done?
We need policies that address all three
of our problems: the rapid growth of inequality, the jobs deficit
and the oversized financial sector. There is certainly much to
be said for restructuring our income tax. In the past 35 years
of rapid growth of inequality, both federal and state income
tax rates have failed to recognize the increased concentration
of income and adjust accordingly. Of course, this failure was
not chance but the result of deliberate policy pursued by the
top 1% of households by income as well as business interest groups.
There are many varieties of "tax
reform". But I think the best place to begin attacking inequality,
the overgrown financial sector and the jobs deficit, is another
kind of tax: a financial transaction tax (FTT). The basics of
an FTT are:
(a) to tax transactions, the buying
and selling, of stocks, debt, and currencies;
(b) to extend the tax coverage to both
the actual financial assets as well as derivatives (e.g. options
and futures) based on these assets; and
(c) to make the amount small enough
that it is insignificant to long term investors in these markets
as well as businesses seeking to hedge the risk of an transaction
in the actual asset but large enough to impact the excessive
profits accruing to the financial sector from activity that contributes
little or nothing to the economy as a whole.
It is important to be clear on what
an FTT is actually taxing, since opponents have tried to muddy
the waters. The tax is not on the asset, nor is it equivalent
to a value added tax since assets changing hands do not add value.
Rather the tax falls only on the trading of the asset. No trades,
no tax.
How much money could an FTT extending
across all three financial asset classes and derivatives raise?
There are a broad range of estimates, extending from 1% or so
of GDP to as much as 5-6% of GDP (equivalent in the US case to
$140 - $840 billion per year). In part, the range reflects differing
rates for an FTT and, in part, assumptions about how much trading
activity would be reduced by such a tax. But at even the low
end of the range the tax would:
(a) raise a significant amount of money;
(b) for reasons explained below change
the role of the financial sector; and
(c) be an important step towards countering
the strong forces towards increased inequality.
One very useful way of understanding
the financial crisis of 2008 and the subsequent Great Recession
and jobless recovery is to divide the US population into income
groups and examine the income and consumption experience of these
different groups during the long lead up to the 2008 collapse.
In terms of income, in the 1970 - 2006
period, the real annual earnings of males in the top 10% of income
households increased by almost 80%; in contrast, males at the
median decile saw almost no change in their real income and males
in the bottom decile experienced a 60% decline in real terms.
I believe that this income dispersion would be concerning enough
even if there were significant mobility between the top decile
(or top 5%) and the rest of the population, but there has been
no increase and probably even a modest decrease in income mobility
over the past few decades. Immobility into or out of the top
5% of income receivers is particularly striking.
We might expect that the response to
lagging incomes would be a reduction in consumption by those
at the lower end of the income hierarchy. While this did occur,
the consumption gap between the top income households and the
bottom income households grew much less rapidly than the income
gap. Comparing households at the 90th percentile to those at
the 10th percentile, the income gap grew from roughly 4.3:1 in
1980 to over 6.6:1 in 2006. However, the consumption gap, as
measured by non-durable goods purchases, grew from only 3.5:1
to 4:1.
How is that possible? The answer, of
course is debt. Debt, after all is simply the other side of wealth.
If there is a lot of debt in a society (such as is the case in
the US today), there is also a lot of wealth. One person or entity's
debt is another person or entity's asset. Just as was the case
for income, we would expect to see different experiences in terms
of growth of debt when we divide the US into top and bottom income
groups -- and we do. In 1984 the debt: income ratio for the top
5% of households by wealth was 0.8 and that for the remaining
95% of households was about 0.7. By 2007, however, the ratio
for the top 5% was just under 0.7 -- and that for the bottom
95% was 1.4.
Borrowing by the bottom 95% of households
who faced stagnant (median deciles) or even declining (bottom
deciles) real income partially compensated for the pressure to
"keep up with the Jones," narrowing what would otherwise
have been a highly visible, and perhaps politically volatile,
consumption gap. A large and growing portion of the income that
flowed upwards was recycled via the financial sector as loans
to the bottom 95%. Much of this was in the form of mortgage debt
that was packaged into various investment products -- by the
financial sector. And this brings us back to finance.
But first it is important to stress
the implications of the use to which the top 5% -- especially
the top 1% -- of households put their rapidly growing income
and wealth. These concentrated investible assets could have been
used for at least three very different purposes.
One choice would have been to consume
these excess funds in ever more lavish life styles. And, as illustrated
above, some of that did occur.
Secondly, the top 1% (or 5%) could have
invested in productive enterprises that expanded output and employment,
whether in upgrading traditional manufacturing to maintain US
competitiveness or trying to leapfrog to the next generation
of manufacturing, perhaps in the emerging green industries. This
use of investible assets would have generated the kind of good
jobs we see created in countries such as Norway or Germany where
manufacturing exports remain competitive in the global market
and wages remain high. Almost none of that occurred in the US.
And this is a very important point. We are talking here about
the people right-wing economists and political pundits insist
on calling the "job creators." But they didn't invest
in creating jobs when they had both the opportunity and plenty
of funds to do so.
So, what did they do with their new
found riches? They invested in and traded financial assets. There
was, of course, some speculation in the physical assets of housing
but most of their housing related speculation occurred through
the products created by financial "engineers" and hawked
by financial marketing departments: MBS, CDOs, etc. The potential
market for these financial innovations was (and is) huge: according
to the 2010 Merrill Lynch/Capgemini study of the world's high
net worth population, a total of about 40,000 individuals in
the US have $6 trillion -- that's with a "tr" -- of
financial wealth. This number excludes things like primary residences,
cars, yachts, etc. Marketing to, allocating, managing, and tapping
into that wealth drove the US finance sector to a relative size
never before seen -- except in the late 1920s. Finance value
added share of GDP almost doubled between 1975 - 2006 although
employment grew very little. By the mid 2000s, finance contributed
18% of the top 0.1% of taxpayers in the US even though the sector
accounted for less than 5% of total employment.
Thus an FTT would be paid primarily
by the top 1% (or 5%) of income households and would also serve
as a break on the cancerous growth of finance. How much revenue
could an FTT raise? As noted above, the answer depends on the
assumptions about the impact of a tax on the propensity of very
high income households and large financial institutions to trade.
However, the positive impact for the
US political economy and the countering effect on inequality
would occur whether the tax raised revenues at high or low end
of the estimated range. If the tax raises large amounts of money,
in the $500 - $800 billion range (indicating a limited decline
in trading activity), there would be a significant redistribution
away from the high income households and large financial institutions
into the public economy. This money could be used to underwrite
a major direct jobs creation program at the federal level such
as has been developed by the Chicago Political Economy Group
or proposed by Rep.
John Conyers' HR 870 "Twenty-First Century Humphrey-Hawkins
Full Employment and Training Act."
Alternatively, if the money raised by
an FTT were at the low end of the range, there would still be
a significant amount raised (in the order of 1% of GDP) that
could strengthen the public sector. More importantly, a reduced
amount of revenue raised by an FTT would indicate a significant
decline in financial trading and speculation. This would have
two positive consequences. First, the primary avenue by which
the top income households had disposed of their surplus capital
would be effectively shut down and, second, the continued accumulation
of these funds would also be slowed since rent seeking activity
that has dominated among the so-called job creators would be
much more difficult to undertake. Further, this change would
affect not only the top 1 - 5% of households. It would significantly
reduce the revenues gained by financial institutions, both from
cutbacks in their own high speed trading and from the creation
and trading of new financial instruments. In addition, the financialization
of non-financial businesses would also be curtailed. Thus, either
way, an FTT could drive a very different use of the excess capital
accumulating in the hands of the rentier class, the functionless
investors described by Keynes and others.
Conclusion
I have argued that the large and rapidly
increasing inequality is both a curse for our every day lives
and at the roots of the three major political economic problems
facing the US. Extreme inequality such as that characterizing
the US destroys social bonds. Beginning in the late 1970s, the
rapid growth of inequality created a small rentier class of extremely
wealthy individuals, with a share of national income achieved
only once in the 20th century, during the years immediately prior
to the Great Depression. This rentier class chose to use their
new-found wealth not to create jobs or drive the economy forward
in the new globalized market but instead in lavish consumption
and primarily in financial speculation and trading. The result
was predictable (and was foreseen by political economists not
blinded by the rational agents assumptions of neoliberalism):
an asset bubble followed by a crash. Now we face the problem
of building a new economy.
There are several policies and proposals
as to how to build that new economy. I have argued that one policy
idea a financial transaction tax, must have a central role in
this effort. An FTT is, as they like to say in the finance business,
a win-win proposition. First, it is an essential tool in the
fight to stop and reverse the long-term trend towards greater
inequality in the US. Second, an FTT is also a potential source
of significant revenue for socially beneficial uses. How much
revenue depends upon the market's response to the tax. Financial
speculation -- trading -- that is rendered uneconomic by the
tax will cease and that which only becomes somewhat less profitable
will likely continue.
The underlying rationale for an FTT
then is to assist in reshaping and rebalancing the US political
economy as well as the experience of living in that political
economy. From the reality of access to good jobs to the daily
sense of trust and social well being, an FTT offers us the opportunity
to move away from rent seeking activities carried out by a small
segment of the population, ably abetted by financial and political
elites. An FTT would help move us towards a political economy
where social needs -- and social and political mechanisms to
meet these needs -- are the subject of politics and the substance
of a social economy that allows all of us to live wisely, agreeably
and well.
Editor's Note: Bill Barclay worked
in the financial services industry for 22 years. Since retiring,
he's been active with the Chicago Political Economy Group, the
Oak Park Coalition for Truth and Justice, and the Democratic
Socialists of America. For an example of how a financial services
tax could create 40,000 productive jobs in Chicago alone, see
www.cpegonline.org/documents/ChicagoCommunityJobsPlan.pdf
.
Class
Warfare In America
by Tom Suhrbur
When progressives called for tax increases
on the top income earners in the U.S., conservative Republicans
scream "class warfare." Class war is a reality in America
but not in the way that conservative claimed. Over the last 30
years, the conservative tax, trade and labor policies of the
federal government have resulted in a huge upward redistribution
of wealth to the wealthiest Americans. In 2007, the New York
Times reported that "the top 300,000 Americans collectively
enjoyed almost as much income as the bottom 150 million Americans.
Per person, the top group received 440 times as much as the average
person in the bottom half earned, nearly doubling the gap from
1980."
I recently came across one particularly
shocking example of how the American corporations are waging
class war against the working class -- for profit of course.
On a recent flight, I came across a half-page advertisement in
the airline's magazine promoting capital investment in low wage
labor in China. The company that took out the ad was ITI Manufacturing,
a Houston -based corporation. In the ad entitled "Overseas
Manufacturing Isn't As Scary As You Think", ITI claims that
it:
"has been helping customers manufacture
goods in China for over 30 years - boosting profits and
reducing costs. . . . ITI handles all the logistics such as finding
the right factory, negotiating prices, overseeing the tooling
and factory production, quality inspections, production financing,
insurance, shipping, custom clearance and delivery. . . .With
full time ITI employees working in nine established offices in
China, ITI will help you to take advantage of low overseas labor
cost - without sacrificing the quality or reliable supply
of your product."
Notice the words "Low overseas
labor costs." Class war is being waged in America by the
transnational corporations. The war is nothing new but it was
greatly intensified with the election of Ronald Reagan in 1980.
His program of limited government, deregulation, privatization
and "free trade" has dominated the public discourse
over the last 30 years. Economist Timothy Smeeding summed up
the current trend of rising inequality in the Social Science
Quarterly:
"Americans have the highest income
inequality in the rich world and over the past 2030 years
Americans have also experienced the greatest increase in income
inequality among rich nations. The more detailed the data we
can use to observe this change, the more skewed the change appears
to be... the majority of large gains are indeed at the top of
the distribution."
The choices that we are facing today
are very clear. Either we raise taxes on those who can most afford
it or we take another step in driving down the standard of living
for the working people by cutting social programs and public
education. Either way, it is class war.
Editor's Note: Tom Suhrbur recently
retired after 26 years as a union organizer for the Illinois
Education Association. He is currently the Vice-President of
the Illinois Labor History Society.
|
New
Ground #139.1
12.01.2011
Contents
0. DSA News
We Won! by Michael Baker
GOPDSA Pickets Trader Joe's by Tom
Broderick
Occupy Food Service by Michael Baker
DSA National Convention
1. Politics
Healthcare Atrocity: Boycott Hyatt
Hotels
We Won, Part II
Social Security "Reform" Is Really Theft
Reviving Our Economy
2. Democratic Socialism
Socialism:
Past and Future by Michael
Baker
America Beyond Capitalism
3. Upcoming Events of Interest
DSA News
We
Won!
by Michael Baker
As many readers of New Ground are aware, Chicago DSA for
the past few months has been involved in a community-labor campaign
to save public services in Evanston, Illinois from privatization.
I am happy to report that the campaign was highly successful.
In the current political environment
in the United States, which is driven by the stagnating domestic
economic growth characteristic of mature capitalist economies,
private companies have been seeking growth and profits through
expansion globally and by targeting the private sector domestically.
All too often, they have done so successfully. As result, the
victory against privatization in Evanston offers progressives
a rare opportunity for a paean and for a study of a successful
campaign against privatization.
The Cultural & Political Context
Many New Ground readers
will be quite familiar with the City of Evanston, but as New
Ground has many readers outside the Chicago area, some contextual
information about might be useful. The following is not a tour
d'horizon of the cultural and political factors relating
to Evanston but an summary of some of the more important ones.
The City of Evanston. The City of Evanston, population of over 73,000,
boarders Chicago on the south and Lake Michigan on the east.
Due to its location, Evanston is the first community on Chicago's
"North Shore." For historical reasons, Evanston is
not a suburb but a city in its own right and, unlike other North
Shore communities, is quite diverse both racially/ethnically
and economically. Evanston is the home of Northwestern University,
and the denizens tend to be quite liberal, even when of higher
income. The community is represented by Jan Schakowsky, who is
extremely popular and indicative of the city's political milieu.
Evanston has a council-manager system of government. The city
is divided into nine wards, each of which is represented by an
alderman, or member of the Evanston City Council. The city mayor
presides over the city council meetings but generally does not
vote, except in the case of a tie or other exceptional circumstances.
The Local Union. The local union representing public employees
is the American Federation of State County and Municipal Employees
(AFSCME) Council 31/Local 1891. The local is of historical and
symbolic importance due to Evanston's diverse population, approximately
22.5% of which are African American, as the local was formed
in 1969 in direct response to the Memphis Sanitation Workers'
Strike. To date, many workers in the union are African American,
and half of those who live in Evanston are African American.
The Groot Fiasco. In November 2010, the City of Evanston entered
into a contract with Groot Industries to pick up garbage and
yard waste, work that was previously done by the city's Streets
and Sanitation Department. (The Streets and Sanitation Department
retained the work picking up recycling.) By February 2011, Groot
had raised its price by $700,000 for the remainder of a 5-year
contract. Such practices are common and well-documented among
private contractors in municipalities-they bid low, force the
city into a long contract, and then increase the price. In addition
to these explicit costs, Evanston has incurred costs for the
bidding process and for auditing and monitoring Groot. With regard
to the latter, many municipalities have discovered that if they
do not spend money on proper oversight, contractors can get away
with shoddy or incomplete work and massive cost escalation. In
spite of the city's attempts to monitor Groot, many Evanston
residents have found the quality of Groot's work poor and have
been doubly offended when they contact the city to complain and
are told that they must contact Groot, who is unresponsive and
the source of the problem.
The Blizzard of 2011. In February of 2011, Evanston experienced a
blizzard that shut down the city. Fortunately, City of Evanston
employees are cross-trained to do many different jobs, and employees
from several different departments, working as a team, stepped
up to run the snow plows and clear the streets. Some workers
did not go home for days in order to get the job done, only taking
care of their own families' needs after the cities' streets were
clear. After the blizzard, the city employees received special
commendations from the City Council for their work. Then, astonishingly,
during the 2012 budgeting process, the City Manager, in spite
of the fiasco with Groot and the feted dedication of the city
employees, proposed more privatization, including the
positions of some of these employees in spite of the fact that
a private contractor would not offer the cross-trained flexibility
of the city workers because the contractor's services are strictly
defined by the terms of the contract. Furthermore, a private
contractor would not have the knowledge and expertise the city
employees, who have decades of experience among them and know
every twist and turn of the city's roads and alleys.
The City's Attack on Workers Begins
Like many cities in early 2011,
the City of Evanston was struggling with how to balance its 2012
budget. However, the notion of struggle is relative. Unlike
many cities around the country, which are facing eminent financial
disaster, Evanston is far from even the remotest possibility
bankruptcy and, in fact, holds a triple-A rating from both Moody's
and Fitch. Nevertheless, the city did have an obligation to balance
its budget and was reluctant to raise taxes (at least very much)
on its residents, some of whom were under financial stresses.
As a result, cuts and privatization were on the agenda.
In early August of 2011, under the direction
of City Manager Wally Bobkiewicz, the city administration recommended
the privatization of a wide range of public services. The recommended
outsourcing would have resulted in the elimination of dozens
of city jobs about 45% of which were held by Evanston residents.
Approximately half of these employees lived in the historically
African-American neighborhoods of the 2nd and 5th Wards.
The recommendations for outsourcing
were compiled by the city's "Budget Team" which was
instructed to "review and make recommendations" regarding
39 areas of public services. Unfortunately, the methodology used
by the Budget Team in its study was fundamentally flawed and
reflected the agenda of "Priority-Based Budgeting,"
advocated by conservative, anti-public sector groups like American
Legislative Exchange Council (ALEC). A notable example is the
value matrix used to assign numerical values to different public
services, values that were illogical, inconsistent, and seemingly
arbitrary.
The Budget Team's study, titled "City
Services and Service Change Ideas Evaluation, FY 2012 Budget
Process," was unveiled by Mr. Bobkiewicz at a City Council
meeting on August 8, 2011. The report listed the services under
consideration for subcontracting to private vendors and the number
of jobs supporting each service. The following extrapolation
shows which services were being considered and the highest potential
number of non-supervisory jobs that could be cut if the services
were privatized:
- Alley Maintenance (17)
- City Vehicle Fleet Program (9)
- Crossing Guards (49)
- Forestry Services (17)
- Parks Maintenance (18)
- Recycling (10)
- Street Light Service (4)
- Street Maintenance/Street Sweeping
(9)
In addition, the report recommended
the elimination of Community Health Initiatives but was unclear
about the fate of the Children's Dental Clinic, which had a patient
list of 2,000. There was growing demand for services at the clinic,
formed in 1967, to provide free or low cost dental care for children.
According to the report, the local private providers that accept
Medicaid would be "unable to handle the volume in the absence
of the dental clinic."
After the unveiling, the city's budgeting
process consisted of continued discussions at City Council meetings
and two ancillary meetings organized by the City Manager ostensibly
to invite community input on the budget. The latter were rather
proforma and consisted of little more than those in attendance
prioritizing lists of services to be cut and city fees, taxes,
and other revenue streams to be increased. Interestingly, many
residents who attended these meetings noted that the city ironically
hired a professional facilitator (rumor has it at $14,000) to
facilitate the two meetings.
In addition, the City Manager created
a public survey called Engage Evanston that was made available
both in print and on-line so as to solicit community input on
the budget. Probably to the City Manager's chagrin, privatizing
public services received a -7 (minus 7) in the survey, and the
top ten budget balancing ideas on were related to revenue generation,
not cuts in services or job eliminations.
Organized Labor and the Community Strike
Back
Even before the Budget Team's
study and recommendations, Evanston public workers sensed that
more attempts at privatization and job eliminations were coming.
As a result, the union representing Evanston public workers,
AFSCME 31/Local 1891, started fighting privation and job eliminations
early in the budgeting process. The union conducted public outreach
at events like the local farmers' market to make the case for
public services. At the same time, the union understood they
needed to do more than just educate the public if they were to
be successful. They needed to recruit citizens to fight on their
side, so as a result, the union began organizing a coalition
with concerned citizens. The community and labor coalition that
resulted was named the Community Labor Alliance for Public Services
(CLAPS). The group was co-chaired by AFSCME Representative Flo
Estes and Chicago Democratic Socialists of America's (Chicago
DSA) Michael Baker. The groups' mission was to raise awareness
about the consequences of privatization and to defeat all privatization
and job elimination efforts.
At a CLAPS meeting held after the release
of the Budget Team's study, the coalition agreed upon a tripartite
strategy to defeat the City Manager's proposals for privatization
and job eliminations:
- Mobilize residents to pressure the
aldermen to oppose privatization and job eliminations;
- Drive a wedge between the City Manager
and the City Council over the issue of privatization and job
eliminations;
- Discredit the City Manager's privatization
and job elimination schemes and the concept of privatization
in the minds of the public.
CLAPS' first action toward implementing
its strategy was a petition drive. The petition drive was focused
on Evanston residents exclusively since, obviously, they are
the voters about which the aldermen would be concerned. In order
to make the issue easy for potential signatories to digest, the
petition stated,
We, the undersigned residents of Evanston,
petition the City Council to keep city services in-house. Public
services are for the good of the community and should not be
run at a profit. City of Evanston public servants are experienced,
accountable, flexible and make a positive contribution to our
quality of life. Keep our community under the control of Evanston
citizens, by keeping public services in the public's hands!
The petition drive served four critical
functions for CLAPS: It made the public aware of the issue; it
educated the public about CLAPS and served as a recruiting tool;
it gave CLAPS a tool with which to pressure the aldermen and
to drive a wedge between the City Manager and the aldermen; and
it collected the contact information (addresses, phone numbers,
e-mail addresses) of folks CLAPS could contact regarding future
mobilizations.
The petition was made available both
on-line on the CLAPS' website and in print. Within two months,
CLAPS was able to collect 1600 signatures, which made a strong
impression on the aldermen when CLAPS presented the petitions
at a city council meeting. Over the life of the campaign, CLAPS
managed to collect a little over 2,000 signatures. The decline
in the rate of signature collection is due to the fact that the
petition drive became less of a priority as the campaign evolved.
Nevertheless, the petition drive played an important role in
impressing the City Council early in the campaign and enabled
CLAPS to develop contacts which proved invaluable throughout
the campaign.
Subsequent to kicking off the petition
drive, CLAPS began mobilizing its contacts to reach out to their
aldermen on an ongoing basis by phone or e-mail to express their
opposition to privatization. CLAPS' contacts consisted of CLAPS'
members, residents who had signed the petition, and Chicago DSA
contacts in Evanston. To reach all of these contacts, e-mail,
phone, postal mail, and social media were utilized. To facilitate
the discussions with aldermen, CLAPS prepared a set of talking
points, which were made available on the CLAPS' website and were
reiterated in CLAPS' outreach to its contacts. These talking
points were periodically revised throughout the campaign to reflect
new developments and to emphasize the most exigent issues. Some
of the talking points CLAPS used were as follows.
Cost Overruns.
In November 2010, Evanston entered into a contract with Groot
Industries to pick up garbage and yard waste. By February 2011,
the company had raised its price by $700,000 for the remainder
of the 5-year contract. Who knows what further increases are
in store up through 2015. A well-documented practice among private
contractors in municipalities is to bid low, force the city into
a long contract, and then increase costs.
Costs of Monitoring. Beyond actual contract costs, the city incurs
costs associated with bidding, auditing and monitoring private
contractors. Without spending money on proper oversight, other
municipalities have discovered that contractors can get away
with shoddy or incomplete work and massive price escalations.
This cost is often hidden in the budget to give the impression
outsourcing the service is saving money.
Loss of Flexibility and Safety. City of Evanston employees, who were recently
commended by the City Council for their dedicated work during
the blizzard of 2011, are cross-trained to do many different
jobs. Employees from several different departments, working as
a team, stepped up to run the snow plows and clear the streets.
That's how they managed to keep the city going by going
the extra mile. Services performed by a private company are strictly
defined by the precise terms of the vendor's contract. They cannot
go an extra inch without charging extra dollars. During a weather
or security emergency, we need the flexibility to coordinate
services in-house.
Loss of Institutional Knowledge. Current City of Evanston employees have decades
of experience among them. They know every twist and turn of the
city's roads, alleys, sewers, parks and traffic lights. They
know the neighborhoods. They know what works and what doesn't
work. Loss of expertise to an outside private contractor is a
steep cost that may not show up on a balance sheet.
Costs of Layoffs. The city must pay unemployment benefits to the
employees it lays off, and these workers may also qualify for
public welfare programs. Any laid off workers will lose income
and health insurance, and Evanston businesses will lose customers.
Workers should not be paying for
the City's $700,000 mistake.
In 2010, the City Council voted to outsource garbage and
yard waste to Groot Industries. Within 4 months, Groot came back
asking for (and receiving) an additional $700,000. Now, the City
Manager wants to layoff dozens of workers with a total savings
of $721,000. He may deny that connection, but it appears the
City Manager is trying to plug that hole with layoffs.
The head of the Department of Parks
and Forestry, Doug Gaynor, stated in a memo to City Council that
the proposal to eliminate 6 positions in Parks and Forestry and
outsource their work to a private vendor would have "definite
drawbacks." These include
loss of flexibility and loss of a needed vehicle for snow removal.
He states also that the possible savings that may be realized
through the outsourcing would likely "be short-lived."
The City's report also lists 38 services currently done by in-house
Parks and Forestry staff, which would no longer be done if turned
over to a private vendor. Privatizing will result in a serious
shrinking of services and lead to a serious threat to property
values, quality of life, and the beauty of our lakefront, which
is key to Evanston's character and economic development.
Parks and Forestry staff work as
snow command personnel. Eliminating 5 field staff would put Evanston
in serious jeopardy in the instance of weather or security emergencies. In February of this year, a winter blizzard
left Evanston snowed-under. Field staff in several departments,
including Parks and Forestry, are cross-trained to do snow plowing
and were able to turn on a dime to clear the blizzard in record
time. They were even given special commendations by the Evanston
City Council. Contracting these positions to a for-profit vendor
would seriously reduce staff response time and quality of service
during City emergencies.
Outsourcing of Parks and Forestry
would eliminate critical administrative functions. In addition to field staff, the proposal calls
for eliminating the Secretary II position. This employee currently
performs some 67 complex tasks which would be pawned off to other
staff who already have their own full-time jobs to do. Other
Parks and Forestry personnel have testified that the administration
of the program would be devastated with the elimination of this
position. Even the head of the Department is against eliminating
this and other positions.
Citizen input throughout the budget
process shows opposition to privatization. 2,000
citizens signed a petition against the outsourcing of public
services which was presented to the City Council. Privatizing
services received a -7 (that's minus 7) vote tally in the Engage
Evanston on-line survey. The Top Ten budget balancing ideas on
Engage Evanston were related to revenue generation, not cuts
in services or job elimination.
Evanston residents support revenue
generation that, according to the City, could go a long way in
closing the projected deficit. Several
ideas for revenue generation supported by Evanston residents
include (just as examples): (1) Enforcement of all code ordinance
(revenue up to $350,000 projected); (2) Increased collections
of money owed to City (revenue up to $300,000 projected); (3)
Increase in parking fees (revenue up to $120,000). These revenue
generation ideas alone, if pursued to their fullest extent (generating
$770,000) could more than pay for the 11 positions the City would
eliminate (worth $721,000).
When sympathizers received responses
from their aldermen, they were encouraged to report back to CLAPS,
so CLAPS could monitor how aldermen were leaning on the issue.
Since CLAPS only knew if people contacted their aldermen or received
a response if they shared that information, CLAPS did not have
a reliable measure of the effectiveness of the mobilization.
But based on the piecemeal information CLAPS did receive, the
mobilization seems to have had impact.
In addition to encouraging sympathizers
to contact their aldermen, CLAPS attempted to mobilize people
to attend all City Council meetings, whether the 2012 budget
was on the agenda or not, between August and November, the time
frame for the budget discussion and approval process, and to
attend all the ancillary community meetings specially organized
by the City Manager ostensibly for community input on the budget.
In addition to having a physical presence at the meetings, CLAPS
also wanted supporters to speak on behalf of public services
and against privatization. Most of the city council meetings
had a public comment portion at the beginning of the meeting
in which residents were allowed to speak for around 3 minutes
on any given topic. Attendance from sympathizers and union members
was stronger at some meetings than others, and not all supporters
were comfortable with public speaking. In addition, residents
who supported public workers but were not mobilized by CLAPS
occasionally attended City Council meetings and spoke on behalf
of public workers. CLAPS, of course, took the opportunity to
connect with these supporters. Even though the level of attendance
was not consistently high, having supporters at these meetings
made an impact on the aldermen. CLAPS did note that the Evanston
City Council engages in some scheduling behavior that possibly
violates the Open Meetings Act. For example, in some cases, meeting
times or locations were changed or not announced with sufficient
notice. Also some meetings did not have definite times posted;
the time was given only as the City Council Meeting will begin
after the XYZ meeting. CLAPS believes these practices merit investigation.
In another attempt to increase public
pressure, CLAPS utilized yard signs. Some CLAPS members were
adamant about yard signs; others were skeptical about the potential
impact versus the cost and time commitment and whether CLAPS
could get enough yard signs in prominent locations to be effective.
After some discussion, the organization agreed to move forward
with yard signs. Several ideas about what text should appear
on the signs were considered, some of which were cheeky and humorous.
Ultimately, the group decided on the relatively tame, yet clever
and to the point, "Public Not Private Works."
Based on the number of comments CLAPS received from residents
who saw the signs, the signs seemed to have an impact.
To raise the profile of the campaign
and to increase pressure, CLAPS made extensive attempts at media
outreach. Throughout the campaign, and particularly after any
major development or event, either CLAPS or the union would send
out press releases. CLAPS used Chicago DSA's media contact list,
and the union used its own list. While the media response was
not overwhelming, CLAPS did receive local newspaper coverage,
video coverage by Labor Beat, and offers to appear on
local progressive radio talk shows. In addition, CLAPS members
wrote articles for local newspapers, and the union ran an advertising
campaign in the same. Even though the media coverage was minimal
and, for the most part local, CLAPS believes it was effective
as, after articles written by CLAPS would appear, CLAPS would
discover city officials repeating CLAPS' own words in subsequent
articles. Imitation, after all, is the best form of flattery.
In a more formal attempt to discredit
privatization through public education, CLAPS organized a public
forum on privatization. The event was held at the Main Library
of the Evanston Public Library and consisted of a featured speaker,
followed by a public discussion. The featured speaker was Emily
E. LaBarbera Twarog, Assistant Professor at the University of
Illinois at Urbana-Champaign. Professor Twarog used a historical
approach to belie the myth that privatization is a silver bullet
to solve municipalities' budget woes and to explain why municipalities
have services owned by the public. CLAPS had inauspicious weather
on the evening on the event, but nevertheless, the forum was
well attended with not an empty seat in the house. The audience
clearly enjoyed the speaker, and a spirited discussion followed,
which caused the meeting to run over time.
The climax of CLAPS' campaign was a
rally assembled outside the Lorraine H. Morton Civic Center,
the building in which the City Council meetings are held, immediately
before a pivotal meeting on the 2012 budget. The rally was originally
envisioned as a march in downtown Evanston that would proceed
to the Lorraine H. Morton Civic Center. Primarily for logistical
reasons, the march concept was scraped in favor of a rally. CLAPS
was prepared to hold the rally with our without a permit but
explored the permitting process with the city, principally because
CLAPS wanted the city to know about the rally to increase public
pressure. The rally had a sizable and spirited turnout and included
some powerful speakers: Henry Bayer, Executive Director of AFSCME
Council 31; Kevin Johnson, President, AFSCME 8191; Florence Estes,
Staff Rep, AFSCME Council 31/CLAPS Co-Chair; Judy Wittner, Community
Labor Alliance for Public Services; and Charles Hogan, retired
Evanston public service employee. After the rally, many attendees
marched to attend the City Council meeting, continuing to hold
their signs in support of public services and speaking during
the public comment portion of the meeting.
The Outcome
CLAPS learned a great deal from
the anti-privatization campaign. Most notably, CLAPS learned
that the struggle against privatization can be won and
that we needed to keep our minds open and to be prepared to expect
the unexpected. With regard to the latter, CLAPS originally thought
that the Streets and Sanitation Department would be the most
heavily targeted for privatization since it had been the target
of the previous privatization with Groot. However, as the budget
process unfolded, it became clear that the Parks and Forestry
Department would be the most heavily targeted. Perhaps, this
was due to the previous privatization fiasco with Groot
or the fact that Parks and Forestry had not been affected by
privatization and layoffs in the past, so it was "their
turn." In addition, some of the aldermen who we expected
to be our biggest allies turned out not to be. And in the end,
some aldermen who we thought would not be on our side turned
out to be our biggest advocates.
When CLAPS began the campaign, all public
services were "on the table" for potential privatization.
Over the life the campaign, as the city went through its budgeting
process and CLAPS applied its tripartite strategy, everything
is "one the table" devolved into eliminating 5 Parks
and Forestry field workers through privatization, privatizing
all crossing guards, and eliminating a secretary position in
Parks and Forestry. In the end, through the dogged strategy outlined
above, CLAPS managed to save all but the Parks and Forestry secretary.
The incumbent, fortunately, due to the union contract, will be
reallocated to a position in another department. While CLAPS'
victory was not perfect, one elimination is a far cry from where
the campaign started. Unfortunately for the city, the secretary
position is a crucial one to keeping the Parks and Forestry Department
running, so CLAPS believes this is a decision the city will soon
regret.
The credit for this victory goes to
all who helped get petitions signed, called their aldermen, expressed
their views at ward and City Council meetings, delivered yard
signs, helped with mailings, and got the message out to their
neighbors. Together, the residents of Evanston sent a clear message
to their elected officials that privatization is not an acceptable
way to balance a budget and that, if the city officials ever
try this again, they're going to have a fight on their hands.
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McDonald's was initially reluctant to
sign the agreement, which includes third party verification of
the terms of the agreement. The CIW launched a national campaign,
centered in the Chicago area (McDonald's Corporation is located
here). Oak Park was a hub in the Western Suburbs. Chicago proper
saw lots of activity. Informational picketing at individual restaurants
was one of the tools of the campaign. Chicago DSA and the Greater
Oak Park chapter of DSA worked in both locations.
Given Trader Joe's refusal to meet with
representatives of the CIW, the CIW has called for informational
picketing at Trader Joe's across the country. Chicago Fair Food,
which was formed around the McDonald's campaign, responded with
two pickets in Chicago.
Oak Park area residents came together
on Sunday, November 20th for the first informational picket at
a Chicago area suburban Trader Joe's ~ the one in Oak Park. Many
of those who took part were involved in the McDonald's victory.
There was a one hour walking picket followed by a short meeting
with the manager. We presented more than 200 signed letters asking
Trader Joe's to meet with the representatives of the CIW and
sign the agreement. We asked that the manager to forward them
to the corporate office, which he agreed to do. We also assured
him that we are aware that he is in no position to make policy
and it is policy we want to affect.
People from Ascension Parish, the Green
Party, Third Unitarian Church, Chicago Fair Food, Unity Temple,
Teamsters Local 705, First United Church of Oak Park, District
7 MoveOn, Sisters of Blessed Virgin Mary, Oak Park Coalition
for Truth & Justice and Chicago/Greater Oak Park Democratic
Socialists of America made our presence felt.
During the picket, Trader Joe's positioned
the window blinds to keep people inside the store from seeing
us or our signs. Management also sent a representative out to
provide us with a letter of misinformation from the corporate
office. The letter is part of the public relations campaign declaring
all is well ~ trust us. Sorry TJ, no can do. Expect more pickets
in the Chicago area as well as nationally.
If you are interested in helping put
together an informational picket either in the city or in the
suburbs, contact the DSA office at 773 384 0327. Let us know
where you want to target a Trader Joe's in your neighborhood.
Occupy
Food Service
by Michael Baker
On Saturday, November 26, Chicago DSA members braved the Chicago
wintery drizzle to bring food and comradery to the stalwart Chicago
occupiers at the Chicago Board of Trade. We offered meat and
vegetarian entrees, breads, and desserts, all home-made, and
bottled water to the approximately 15 occupiers, many of whom
expressed their appreciation for the fare. Chicago DSAers enjoyed
conversing with the occupiers and hearing their perspectives
on the occupation movement and answering questions about DSA.
A few of us were interviewed on camera
by an out-of-town 8th-grade teacher about their participation
in the occupation and about DSA. So look for these videos on
YouTube someday.
After 45 minutes or so, our work was
done, and the group began packing up the remaining food and supplies
to head home. At this time, a Chicago police officer, who had
been sitting in his car across the street the entire time, came
over to tell the group it was time to "pack it up."
His heart was clearly not in his task.
DSA National Convention
Thank you to the members and
friends who tossed money in the hat to subsidize low-income or
unemployed delegates to this year's DSA National Convention.
Chicago sent 5 delegates to the convention. Three of them were
new members. We raised enough for the Chicago delegation and
were able to contribute to the national office's subsidy fund
with the rest.
A brief convention report, the text
of the resolutions passed, and the minutes of the convention
are posted on the national DSA site. The Priorities resolution
is the most substantive as it indicates what the DSA national
office (and many of the DSA locals) intends to be engaged in.
The minutes include the names of the new National Political Committee
membership. It's all available HERE.
Politics
Healthcare Atrocity: Boycott
Hyatt Hotels
After more than two years of
contract negotiations, crisis looms as Hyatt threatens to strip
health insurance from 1500 Chicago workers and their families
unless they give up their fight and abandon their boycotts. In
so doing, Hyatt is forcing workers to choose between their families'
immediate medical needs and a fight for their long-term survival.
In negotiations, Hyatt has refused to
budge on crucial demands to curb subcontracting and ease working
conditions for housekeepers-demands met by Hilton and other hotel
employers citywide. In response, Hyatt workers have stood up
and made tough sacrifices by striking and calling for hotel boycotts.
Please join us in sending a message
to Hyatt's CEO Mark Hoplamazian to maintain health insurance
until Hyatt workers win a just settlement! CLICK
HERE.
Also: save the date: Thursday, December 15, 3 PM. Join thousands of UNITE HERE members and friends
in front of Hyatt's International HQ, 71 S. Wacker in Chicago.
We will not be moved!
For more information about the boycott
of Hyatt hotels, CLICK
HERE.
We Won, Part II
The Illinois General Assembly
was held hostage by the Chicago Mercantile Exchange and other
large corporations, but House resisted the demand for $300 million
in tax breaks by voting down the measure, 8 to 99. That it passed
the Senate by a somewhat narrower margin suggests this may have
been more theater than deliberation, but you can read more about
it HERE.
Social Security "Reform"
Is Really Theft
At the Fox Valley Labor Tribune,
Tom Suhrbur points out that while Social Security "provides
benefits to retirees, it was never intended as a government pension
plan. S.S. is social insurance a safety net for the least
fortunate. S.S. is an effective anti-poverty program. It's a
highly efficient system that puts money in the pockets of the
most needy." MORE.
Reviving Our Economy
From the Chicago Political Economy
Group: Over the last three decades the U.S. economy has gotten
fundamentally out of balance and increasingly dependent on private
or public sector deficits to maintain demand. Since the start
of the Great Recession in 2008 we have replaced (by bailing out
-- mostly financial) private deficits with public deficits. Cutting
the public deficit (without fundamental restructuring) without
restoring another unsustainable private deficit (as in the late
90's) will simply cause the economy to further decline.
In fact, without fundamental economic
restructuring, federal deficit cutting will hurt both in the
short-run and the long run. Instead, this new CPEG policy brief
focuses on how we restructure and revitalize our economy away
from an increasingly unsustainable and debilitating "rentier"
structure, to a more viable and sustainable advanced "unequal
exchange" economy. CLICK
HERE.
Democratic Socialism
Socialism:
Past and Future
by Michael Baker
Socialism: Past and Future by Michael Harrington, Arcade: New
York 2011, $16.95, paperback, 336 pp
I was recently at Princeton University
visiting my spouse, who is on a fellowship there. Whenever I
am in Princeton, I enjoy browsing Labyrinth Books, which always
has a good supply of lefty books, both new and used. Much to
my surprise, on my recent visit, I came across a copy of Michael
Harrington's book Socialism: Past and Future -- a new
copy.
I was excited that a publisher had invested
in re-publishing this book and what the implications of that
investment were -- notably the perceived existence of a market
for it.
I learned from a correspondence with
the publisher, Skyhorse Publishing, that the book was very recently
published, November 2011. Arcade Publishing, the original publisher
of the book, filed for bankruptcy in 2009, and Skyhorse Publishing,
Inc., purchased Arcade's assets with the goal of putting all
Arcade's books back into print. (Arcade is now an imprint of
Skyhorse Publishing.) An Associate Publisher informed me that
Socialism: Past and Future was a book Skyhorse rushed
to make available again "because of its history of and importance."
Unfortunately, Skyhorse does not have the rights to any of Harrington's
other works.
For those who do not know the history
of Socialism: Past and Future, the book was originally
published in 1989. Harrington began writing the book the day
he learned his cancer was inoperable and that he had a limited
time to live. He asked his doctor to keep him alive long enough
"to complete a summary statement on themes I had thought
of throughout an activist life." As the Editor's Note to
the new edition states, "Socialism: Past and Future
was Michael Harrington's last book ... [the] text was literally
Harrington's last word on the subject -- a cause he had dedicated
his life to understanding."
In some ways, the book is a compendium
of Harrington's thought, as he revisits many ideas found in his
earlier books, but he refines and updates these ideas in revisiting
them. The central theme of the book is that if humanity is to
enjoy freedom, solidarity, and justice in our century socialist
transformation is the only hope. As Harrington states elsewhere,
he notes that the future is collectivist. The choice we face
is whether the future will be a top-down collectivism or a democratic,
id est, socialist, collectivism. He writes, "Under
capitalism, there is a trend toward a growing centralization
and planning that is eventually global, but it takes place from
the top down; under socialism, that process is subjected
to democratic control from below by the people and their communities"
(9). In making his case, Harrington surveys and critiques socialist
history and discusses how socialist theory can be applied to
contemporary economic and political situations. The last chapter
of the book appraises the concept of "visionary gradualism"
as a method for achieving substantive socialist transformation.
The Editor's Note to the new edition
states, "[W]e believe his vision for socialism as 'the hope
for human freedom and justice' is as relevant and informative
today as it was upon its first publication." I would go
even further and state that Harrington's vision is now needed
more urgently than ever if we are to preserve and increase freedom
and achieve democracy. Many trends about which Harrington expresses
concern, such as the increasing centralization and globalization
of capitalism, have accelerated astronomically since his writing.
And many of the forces in which he expresses hope, such as the
labor movement and social democratic parties, are weaker and,
with regard to the latter, have drifted to the right. At the
same time, there are exciting and inspiring trends around us
which need socialist influence if they are to move us toward
democracy. The "Occupy" movement is one such trend
on many people's radar, but exciting activity is occurring in
other areas as well such as in food politics and in the labor
movement. As a result, the time is a propitious one for the re-publication
of this Harrington classic and for us to discover for the first
time or revisit the wisdom it holds.
America Beyond Capitalism
At Dollars & Sense,
Gar Alperovitz tells us how "thousands of co-ops, worker-owned
businesses, land trusts, and municipal enterprises are quietly
beginning to democratize the deep substructure of the American
economic system." MORE.
Upcoming Events of Interest
Events listed here are not necessarily
endorsed by Chicago DSA but should be of interest to DSA members,
friends and other lefties. For other events, go to http://www.chicagodsa.org/page9.html.
Saturday, December 3, 10 AM
Teach-In on School Closures
King College Prep High School, 4445 S. Drexel, Chicago
How to save endangered neighborhood schools from closure or privatization.
MORE
INFORMATION.
Monday, December 5, 6 PM to 8 PM
Journal of Ordinary Thought
Winter Issue
St. Leonard's House, 2100 W. Warren Blvd, Chicago
Readings from the JOT Winter 2011 issue. MORE
INFORMATION.
Tuesday, December 6, Noon
Part-Time Faculty Association
Demonstration
Columbia College, 600 S. Michigan Ave, Chicago
To draw public attention to college practices that are anti-labor
and harmful to college faculty, staff, and students.
Saturday, December 10, 12:30 PM
Executive Committee Meeting
Chicago DSA office, 1608 N. Milwaukee, Room 403, Chicago
All DSA members are welcome.
Saturday, December 10, 3 PM to 4 PM
Health Disparities in Chicago
Columbia College, 600 S. Michigan Ave, Chicago (room will be
posted)
Presentation by Steve Whitman on disparities in health care among
Chicago communities followed by open discussion. MORE
INFORMATION.
Saturday, December 10, 3 PM to 6 PM
The Occupy Movement: What
Does Democracy Look Like?
Jane Addams Hull House Museum, 800 S. Halsted, Chicago
Panel discussion and poetry. MORE
INFORMATION.
Thursday, December 15, 3 PM
Protest Hyatt's Threat to
Health Care
Hyatt International HQ, 71 S. Wacker Dr, Chicago
Join UNITE HERE Local 1 and friends in protesting Hyatt's threat
to discontinue health benefits. MORE
INFORMATION.
Thursday, December 15, 7:30 PM to 9:30
PM
Crisis of the Left
Harper Memorial Library, 1116 E. 59th
St, Room 130, Chicago
One of the Platypus Affiliated Society panel discussions, this
one featuring Mike Ely, Roberta Garner, and Alex Hanna. MORE
INFORMATION.
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