Economy – Page 28

January 28, 2012

Been there, done that

I suppose the aspect of conservative thought that most…puzzles? annoys? makes me laugh?…let’s say ‘puzzles’ me is the sense they seem to have that their ideas are somehow bold, and daring, and novel.

In fact, conservative ideas–low taxes, no regulation, no government–have all been tried. In fact, these ideas describe how government operated throughout most of human history. And they certainly describe the government of the US for most of its history.

Newsflash: these ideas didn’t work. We tried them, they didn’t work.

Let’s take the whole free market thing. *

One caveat: I am not an economist; I have no training as an economist. I do spend a lot of time reading economics blogs. I have five or six that I read regularly, another dozen that I read once a week or so. Definitions presented will generally be from Wikipedia, so they will be easy to verify.

Generally speaking, a free market is, more or less, unregulated. The idea is that all of the players–buyers and sellers–jockey back and forth in a rough-and-tumble so that prices come to reflect the best value as determined by the ‘market’, and resources are allocated efficiently and optimally.

For a free market to work, one aspect that must happen is that there must be robust competition among both buyers and sellers. Without robust competition, sometimes a buyer, more often a seller will gain a competitive advantage. The theory is that the competition will grind this advantage away, by underselling, a better product, or some such mechanism.

Competition will do this, but only under certain conditions. Competition is effective whenever the barriers to entry into a market are reasonably low. For example, a lemonade stand. My kid can put one up in a few minutes, undersell the kid who’s charging a buck a cup, and take away the price gouger’s market share in a heartbeat.

But what happens when barriers to entry are high? What about a mine? Or an oil refinery? Or a steel mill? Or meat packing?

Enterprises like these require huge capital outlays over a sustained period before they can enter the market. When they are able to do so, they are usually at a competitive disadvantage on price, since their operation may not have the efficiencies of scale that the established concerns do. In situations where barriers to entry are high, the tendency is for the operator with the most money will eventually win.

This was the Walgreens strategy: put up a chain store to compete with the local pharmacy, undersell the local, drive it out of business, then raise prices. Walgreens could afford to lose money on a lot of items because it was financed by a corporate treasury. Now we are in a situation in which there are virtually no local/mom-and-pop pharmacies. We have our choice of CVS (yes, it’s local, but hardly mom-and-pop), Rite-Aid, and Walgreens. Competition, but not overly robust. I suspect that Walgreens will disappear within a decade.

Even more to the point. In downtown Providence, we used to have the corporate HQ for several banks. Now, we have a satellite office for a single bank, a huge national conglomerate, that may, apparently, be pulling out of Providence.

These results are not surprising. This is what happens in a free market. It’s exactly what happened the first time we had unregulated, free markets.

This occurred in the aftermath of the Civil War. The war provided a huge market for a lot of industrial products, so a lot of entrepreneurs took advantage and went into business to supply this market. Within fifteen years (give or take), most of these small businesses had vanished, having been swallowed up, or driven out of business by huge, vertically-integrated corporations, known at the time as trusts.

Not all trusts were monopolies, but many of them were. They bought, crushed, or drowned their competitors in a bath tub. This was considered a good thing; Rockefeller trumpeted his intention to ‘end wasteful competition.’ Even if they never quite attained a true monopoly–and it wasn’t for lack of trying– they dominated their markets.

Given the direction in which we are going, it is very important to remember what has happened. Given the death of Brooks Pharmacy, and Fleet Bank, and Hospital Trust, we need to recognize the path we’re on.

An unregulated, free market will generally end up in a monopoly in any situation in which barriers to entry are high. And they are high in most industries, in finance, even in a lot of retail operations.

And, just so there’s no doubt, below is evidence, demonstrating that our first experience with free markets ended up with most markets controlled by de facto monopolies. I don’t want it said that I make claims without offering proof.

I’m outsourcing this to a history book. The first edition came out in 1973; I’m quoting the second, from 1989. Either way, this stuff was written before the poisoned partisanship brought out by Newt Gingrich, when there was only one set of facts for everyone. Nowadays, there’s the actual set, and then there’s the set claimed by conservatives, in which tax cuts pay for themselves and stimulate economic growth, the economy has gotten worse under Obama, and we can drill our way to energy independence. More on some of those at a later date.

The Shaping of Modern America: 1877-1920 2nd Edition

by Vincent DeSantis Harlan Davidson, Wheeling IL, 1973 & 1989

Page 12…Just as Rockefeller had cornered the refining market, so Andrew Carnegie captured much of the steel market…

…From then on, led the field in the steel industry. He took bought out and took into his business Henry Clay Frick, who in the [1870s] had gained control of most of the coke ovens around Pittsburgh. Together they created a great vertical combine of coal fields, coke ovens, limestone deposits, iron mined, ore ships, and railroads….

Page 13…After Standard Oil Company set the trust pattern in 1879 other business enterprises of this form soon appeared. Before long most Americans were referring to all large corporations as trusts, a word that soon became loosely synonymous in the public mind with monopoly. Many important industries ceased to be competitive and in addition to steel, oil, and railroads similar combinations were built by equally forceful and ambitious entrepreneurs in other fields. [The list of such megalithic companies included t]he McCormick Harvester Company…American Tobacco Company…American Sugar Refining Company…while Philip D Armour and Gustavus Swift dominated the meat-packing business…

Page 14….As the American people watched the proliferating of trusts and millionaires, many became convinced that something had to be done to restore effective competition. There arose a popular outcry against monopolies….William W. Cook, an eminent corporation lawyer in New York, made a very sharp attack on monopolies in a volume on Trusts (1888) when he wrote:

(quoting Cook:)….. It is currently reported and believed that the “Trust” monopolies have drawn within their grasp not only kerosene oil and cotton-seed oil, but sugar, oatmeal, starch, white corn meal, straw, paper,… whiskey. rubber, steel,….wrought iron, pipes, iron nuts, stoves, lead, copper, envelopes, paper bags, paving pitch, cordage, coke, reaping and binding and mowing machines, plows, glass, and water works. And the list is growing day by day…

[ End cite ]

I hope everyone finds this both informative and convincing.

*Note: in comments on another thread, I posited that a free market and an unregulated market are not the same thing. The problem with comments is that they rarely reflect a considered opinion, since they often get dashed off in the heat of the moment. I regret that I made that distinction.

January 26, 2012January 26, 2012

Imagination, Collective Struggle, and the Inclusion of Artists and Ordinary People: Angela Davis Speaks at RISD in Providence

PROVIDENCE, RI – Click on the image above to hear a short podcast with Dr. Angela Davis. It is from a brief interview I conducted with her after a keynote address she gave on Monday, June 23, 2012 at Rhode Island School of Design. More information about her talk is below; in the podcast/interview, I ask Davis more about the history of race relations within the labor movement. She replied with an abbreviated timeline of when and why Blacks were excluded, but went on to discuss the benefits of integration in the Labor movement, citing one group in particular – the International Longshore and Warehouse Union (the ILWU). A labor union that primarily represents workers on the West Coast, the ILWU accepted Black workers as members as early as the 1930′s.

Later in the century, explained Davis, Black workers within the ILWU helped introduce new “radical” ideas into the labor union movement, including during the global campaign to dismantle Apartheid South Africa.

The podcast is produced by me Reza Clifton (Reza Rites / Venus Sings / DJ Reza Wreckage). Music by (and played with permission from) The Blest Energy Band ft. Tem Blessed & The Empress. The song, “The Struggle,” comes from their album ”Re-Energized,” which was released January 20, 2012. The podcast and article written below are also available on www.IsisStorm.com.

***

(PROVIDENCE, RI) – Imagination, collective struggle, and the inclusion of ordinary and disenfranchised people. These were among the themes and lessons shared on Monday, January 23, 2012, when famed scholar, activist, and former prisoner (acquitted of charges including murder, kidnapping, and conspiracy), Dr. Angela Davis, spoke at RI School of Design. Part of a week of service dedicated to Reverend Dr. Martin Luther King, Jr., Davis’ keynote address covered the topic of “Building Communities of Activism.”

Her talk included a discussion of King’s belief in collective action despite the memorializing of him as the face of the Civil Rights Movement; an examination of the New Deal from the perspective of the protests and direct actions that prompted the policies that emerged after the 1930′s era Depression; and an analysis of the “prison abolition movement” as an important part of the worldwide struggle for social justice, workers rights, and economic equality.

Davis also talked about and periodically referenced the Occupy (Wall Street) Movement throughout her talk, including the site here in Providence. At times, she was thoughtfully critical about what many have documented as the movement’s absence or sparsity of space for discussions about race, class, and the “intersectionality” of these and other issues in the Occupy encampments, as well as concerns associating the US occupy movements with traditional American occupation narratives of Native lands, Puerto Rico, Iraq, and other sites associated with the rise (and ills) of “global capitalism.” Davis displayed this same kind of caring admonition in reference to the exclusion of prison labor union issues in spaces created by the “free union movement,” expressing pride in the advancements but honesty in the historical tendency to leave certain groups out (ie. women, people of color, and prisoners).

Overall, though, Davis expressed an unbridled show of support and enthusiasm for Occupy activities (and the labor movement), citing Occupy as the main reason why a climate exists again in this country for discussions on economic inequalities and the failures of capitalism. Notably, she also inserted occupy in her speech, reframing the syntax and lexicons usually used in historical texts about Civil Rights and Worker movements, where terms and phrases like “sit-ins” and “street demonstrations” became sites or examples of people who “occupied” spaces.

Conscious of her audience and the origins of the invitation – RISD, an art school – and in response to a question from a student, Davis encouraged artists to continue making their art. Harkening back to the ordinary people who joined because of their collective abilities to imagine a world without segregation, racism, jails, etc. Davis says that artists are in the practice of imagining the impossible, and that alone is a gift to the world – and contribution to the movement.

January 23, 2012January 28, 2012

Apple: The Company No American Should Be Proud Of

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When most Americans think of Apple, they think of the hip commercials, the latest must have gadgets, and the industry leading innovation. What most do not realize is the untold story of how Apple has perfected stealing the seeds of American ingenuity and harvesting them under a complex system of third world slave labor. Throughout this article, keep in mind that Apple made a profit of $400,000 dollars per employee last year.

Apple made headlines this week when a New York Times article detailed Apples explanation for the companies lack of US manufacturing. Apple said that the issue goes much deeper than cheap labor and that American manufactures lacked the, “flexibility, diligence and industrial skills of foreign workers.”

The true meaning of Apples statement only became evident when they cited a specific example clarifying what they meant. Last year, Apple ran into a last minute problem with the screen on one of its devices that caused the company to make a last minute adjustment in the manufacturing procedure.

Apple proudly admitted that 8000 employees at a Chinese manufacturing plant were quickly roused from their on-site plant dormitories, given a biscuit and cup of tea, and forced to go right into a 12 hours shift retrofitting the new screens.

If Apple wants to define “flexibility” as keeping workers in military like dormitories in which they are forced awake in the middle of the night to work a 12 hour shift on minimal food rations, than perhaps America cannot compete with that.

If one wishes to measure how Chinese workers truly feel about the working conditions they should look no further than the Foxconn plants in China. Apple uses the Chinese company Foxconn to manufacture a large portion of the Apple items bought in the US. In 2010, there were 14 successful suicide attempts at Foxconn when workers began jumping off the manufacturing building.

These suicides led 20 Chinese universities to launch an investigation and compile a report on the working conditions at Foxconn. The universities findings classified the conditions at the plants as comparable to a “labor camp.”

The idea of suicide being preferable to work became so widespread throughout the company that special netting was put around the roof of the building to keep workers from jumping to their deaths. In addition, workers were asked to take a anti-suicide pledge. Unfortunately Apple is not alone here. A few weeks ago, 300 employees that manufacture the Microsoft Xbox 360 threatened to commit mass suicide over working conditions.

Although Apple’s manufacturing practices are closer to the norm, rather than the exception when it comes to tech corporations, they deserve special scrutiny. Apple is quickly monopolizing the market of tablet and phone accessories. Most third party magazines, catalogues, and retailers that sell electronic accessories seem to be marketing accessories almost solely for Apple products today. Consequently, Apples business practices will likely be the practices emulated by the industry for market competitiveness.

Most disturbing though may be the uniquely deceptive way in which Apple products are marketed. Apple has successfully marketed its products as the must have items for generation Y. Sadly, when the young American unpacks his or her new I-Pad, they are unaware of the story behind how it actually was made.

January 22, 2012January 22, 2012

Hard Talk About an Ugly Economy

After several months of more-or-less positive jobs numbers in RI, the last two months have been anything but. And the December numbers were, frankly, horrific. While it is certainly true that a wonk could parse [spin] the recent down-turn toward neutral, the same could be done with the previous up-cycle.

As the wonk that could do either, let me tell you this: the jobs scene in RI is bad. Damn bad. Later, I’ll parse these numbers to show how bad things really are.

Unlike my usual polemics, I’m not going to rant as if there were some obvious course of action on which pols are unwilling to act [even though that’s been true for decades]. At this point, I don’t have a lot of answers, just one brutal, ugly question: where do we go from here?

So, enough with the introductory niceties; let’s have at.

RI’s Jobs Numbers Since the Economic Collapse

Before we can talk about our numbers since the collapse, we need to appreciate that the mid-00’s were the best economic times RI had seen in decades. Of the main jobs indicators, all of them – labor force, employment and unemployment – topped out in 2006/2007. Being the Biggest Little, we need to accept that we largely rise and fall on the national trend. Or at least, we rise on it.

The lead graphic shows how most industrial sectors were basically flat 2001 to 2008 with these notable exceptions: education and health care exploded while manufacturing continued its decades-long collapse. [Source: BLS]

Ed/Health has held its gains since the collapse while professional services and hospitality, which showed solid gains to 2008, have only modest declines since. Construction, not surprisingly, along with government employment, financial services and trades, transportation and utilities (TTU) have sloped off badly.

It’s important to note that I haven’t parsed the contribution of construction in RI relative to other states, but given the collapse of manufacturing, it is at best a secondary impediment.

Long story short: our problems today are the same as our problems 20 years ago – manufacturing is dying, and we have not yet found a way to replace those jobs.

The Recent Horrors

For most of this year, we followed or even amplified the national trend downward until October, when we hit some kind of top and turned counter-trend. In the fourth quarter of 2011, we diverged almost a full percentage point from the national average.

That, my friends, is some ugly shit.

Granted, I could spin these declines toward neutral, but just as easily could I spin the gains toward neutral. The gains were mostly declines in the labor force – that is, people who say they’re looking for jobs – while the declines were gains in the same.

Long story short: we’re not creating jobs, we’re treading water. People dropped out and then dropped in again.

I probably should have mentioned that we need to create 40,000 jobs to get back to “full employment”. 40,000 jobs on a basis of just over 500,000 employed means 1 new job for every 12.5 that currently exist. It’s a giant number.

But wait…it gets worse.

The Current Situation

Look at this jobs board. Plenty jobs listed, for a certain kind of worker. These are all full-time jobs, and they are recent listings. Even ones from months ago may still be unfilled. This state lacks highly educated workers. In fact, we lack moderately educated workers – we import welders. Not Ruby on Rails developers – welders!

That’s the situation. RI’s historic under-investment in education has yielded a work force ill-prepared to face the current economy, much less the emerging one. [See above under collapse of manufacturing sector.]

To be sure, if you drive an automobile on an elevated highway, it’s important that welders that construct the steel-on-steel joints that support the reinforced concrete substrates that hold the gloriously smooth asphalt on which you drive understand the operational parameters of joint strength relative to weld length and depth as that applies to steel grade and thickness.

“Welder” does not equal “ignoramus”. If it did, you’d be dead. [If welder had ever equaled ignoramus, he or she would be dead. Welding is, you know, dangerous. Go pick up a torch some time…]

So we need a range of workers, and we import some of them from India or Slovakia or Colombia. Meanwhile, we export highly educated workers to such remote locations as Massachusetts.

But none of that does Jack Squat for our unemployment numbers. Why? Sadly, that answer is all too simple.

Our Prospects

Long ago on a blog far, far away, I wrote a post called “Our Prospects for Economic Growth”. And that post was just as cheery as this one. The cold, hard fact is that the RI’s unemployed are poorly suited to those scant jobs our economy is creating.

This state’s historic disinvestment in education has created a self-reinforcing feedback loop in which jobs exist for imports, and local don’t get jobs. I call this phenomenon “government at war with its population”. If you don’t have an advanced degree, they want you to go away…to some other place where people like you live. While the cities of Pawtucket and Woonsocket (and the ex-government of Central Falls) exemplify this trend, the RI state government proves it out, as well.

To the long-term denizens of the State House, “welder” – challenging as that job might be – is not good enough for them. They want you to have an advanced degree in micro-biology, computer science or (choir of angels) business management before they’ll say you’re RI material. [Note: Financial Services is among the employment sectors that collapsed, much to Smithfield’s chagrin regarding the enormously expensive and now only partially occupied Fidelity campus.]

Except this: RI has an unemployment rate of 10.8% as of this writing, and those people lack substantial education. What’s to do?

Non-Snarky, Future-Oriented Discussion

This state needs to recognize the fact that we’ve got a serious problem, and it’s not going to fix itself. It requires action – immediate, meaningful action. Here are some things I think we can look to create some jobs at the lower end of the wage/education scale.

Get our heads around the “1099 economy” – Having been self-employed for about a decade, I know that it doesn’t really matter if you have “a job” so long as you have “work”. But the deck is stacked badly against the 1099-ers. From health insurance to FICA, you pay a serious penalty when you try to strike out on your own. The Powers that Be have only recently become aware that there is such a thing as the 1099 economy, so they’re still getting up to speed on what it means and how they can help move it forward. Recent changes to the RI EDC Board of Directors certainly help, but they need to be far more aggressive about making this happen.

Fulfill our “Arts and Entertainment” Promise with a Downcity Casino – Like it or not, Providence is known as a party town, and we should build that out for all it’s worth. Despite all it’s challenges and downsides, I think it’s possible for us to “do a casino right” so that we get maximum benefits. And we should go the whole hog, including the postage. We should take a serious look at developing looser rules around the vice trades in which government oversight and monitoring keeps the criminal element at bay. In simple terms, we take a more Cuban or Dutch approach to the sex trades where pimps are replaced by health services.

Sell “War-on-Joblessness” Bonds that Fund Infrastructure – The same way the US sold War Bonds in the 2oth century, we sell bonds to fund the infrastructure critical to a thriving economy. Because we’re not auctioning bonds on the market but selling them directly, we can set the interest rate where ever we want it. The payoff for investors is more moral than financial. Crazy-talk, I know, but it could happen.

Take Another Look at “Dirty” Industries – The new metals recycling operation on Allens Ave is the kind of “working waterfront” thing we would do well to expand on. Garbage is big business, and it’s the kind of unglamorous industry that nobody goes after. Like the casino, it’s disastrous if done wrong, but brilliant if done right. I’m actually a connoisseur of dumps, so I’ve visited or read about some very advanced operations.

What else? My ideas aren’t the only possibilities. But whatever we talk about doing, it has to focus right down on the kind of jobs we need, not the kind of jobs we want.

January 11, 2012January 11, 2012

Fighting for Our Future

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This is bound to be an exciting year for our state, and I know I speak for many when I say that the return of RI Future to the Ocean State’s blogosphere is a welcome one.

From Netroots Nation coming to Providence – something Mayor Taveras and I worked particularly hard to ensure – to our continued efforts to get Rhode Island’s economy moving again and put people back to work, there will be no shortage of Rhode Island events for us to discuss here on RI Future.

But as we look forward to the year ahead, we have to take a hard look at where we are now. When one month of unemployment, one missed mortgage payment, or a single medical bill can push a Rhode Island family over the brink, we know it’s more important than ever to re-commit ourselves to protecting the programs that formed the foundation of our nation’s middle class: Social Security, Medicare, and Pell Grants.

These three programs are the pillars of American prosperity and economic security. Unfortunately, last year alone, Congressional Republicans attempted to undercut each of these programs. The House Republican Budget would have slashed Pell Grants for more than 1.3 million students and ended Medicare as we know it. And legislation has been introduced in the House to allow private accounts to replace Social Security.

This is wrong, outrageous, and as long as I’m in the Senate, you can count on me to fight against attacks like these on the pillars that sustain the middle class.

That’s why I stood with Senator Sanders from Vermont to advocate for legislation to keep Social Security solvent for the next 75 years.

That’s why I called on President Obama to make sure he keeps Medicare benefits off the chopping block in deficit negotiations.

That’s why I’ve cosponsored legislation to allow Medicare to negotiate drug prices to lower costs, without reducing the benefits.

And that’s why I’ve been reaching out to the students who depend on Pell Grants and bringing their stories to Washington.

I’m glad to say that we beat back the House attempts to slash Pell grants and Medicare benefits in the Senate, but we need to stay active to defend our progressive principles. Please take a moment to sign the petition to defend Social Security and Medicare benefits or share your Pell Grant story with me.

The more voices we have the stronger we will be.

*****

Sheldon Whitehouse is the junior U.S. Senator from Rhode Island. To keep up with Sheldon online, please visit him on Facebook and Twitter.

January 11, 2012January 11, 2012

Republican Presidential Candidates’ Tax Policy Would Destroy the Economy (Even More)

There’s nothing quite like a political campaign to demonstrate just how extreme the national Republican Party and its primary voters are. The Center for Tax Justice has an analysis of the GOP Presidential Candidates’ Tax Plans which shows just how much they favor the wealthiest 1% of Americans. Some high(low)lights:

Former House Speaker Newt Gingrich’s $18.1 trillion tax plan would give the richest one percent of Americans an average tax cut of $391,330.
Texas Governor Rick Perry’s $10.5 trillion tax plan would give the richest one percent of Americans an average tax cut of $272,730.
Former Senator Rick Santorum’s $9.4 trillion tax plan would give the richest one percent of Americans an average tax cut of $217,500.
Former Massachusetts Governor Mitt Romney’s $6.6 trillion tax plan would give the richest one percent of Americans an average tax cut of $126,450.

To put these numbers into better perspective, let’s compare them to the 2010 median wgae of $26,363, as reported by the Social Security Administration (note: median wage means that 50% of workers earned less and 50% or workers earned more. This is a much better calculation to use since “average” income skews higher because of the outrageous sums of wealth that some people generate).

Under Newt Gingrich’s plan, the median worker would need to work almost 15 years to earn as much as the average tax cut received by the richest 1%.
Under Rick Perry’s plan, the median worker would need to work about 10 years and 4 months to earn as much as the average tax cut received by the richest 1%.
Under Rick Santorum’s plan, the median worker would need to work about 8 years and 3 months to earn as much as the average tax cut received by the richest 1%.
Under Rick Perry’s plan, the median worker would need to work about 4 years and 8 months to earn as much as the average tax cut received by the richest 1%.

And these calculations don’t include the millions of people who are either “officially” unemployed, or have stopped looking for work, just those that are fortunate enough to find jobs. Why these proposals are even being seriously considered is beyond me.

It’s important to remember that not all taxes (or tax cuts) are equal. For instance, a payroll tax is more regressive than an income tax, a sales tax is more regressive than a payroll tax, and a capital gains tax is the most progressive of all since the wealthy benefit the most from capital gains (hence why capital gains taxes were sharply cut under George W. Bush). It’s also important to remember that the US tax burden is at its lowest level since 1958 and also federal income taxes are at historically low levels. The LAST thing this country needs right now are additional transfers of wealth to the already rich.

Each of the GOP candidates’ tax plans would further starve the federal government of much needed revenue, increase borrowing to provide for all the important things the federal government does for us, further increase the national debt and the interest we pay on that debt, and exacerbate the growth of income inequality, albeit in varying degrees. What they wouldn’t do is deal with the real economic problem facing the country: not enough money is going into the hands of people who will spend it.

Since the 1970s, U.S. wages have largely remained stagnant. At the same time, the vast majority of all the wealth created in the country over the last 30 years has been flowing upward.

Because the super wealthy don’t actually work to generate their income, wages as a share of national income has been declining for just as long. What that means is less and less money is being earned by workers, and that’s bad for the economy because workers spending money is what fuels economic growth. Consumers earning more money means that they can buy more goods and services, increasing the effective demand in an economy. Seems pretty simple, right? Well, yes, it is.

January 10, 2012January 10, 2012

MyRI: A Journey to Expose Creative, Cool People in the Ocean State

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As RIFuture.org was preparing to re-launch, I was approached to write for this politically oriented blog. Understandably, I was a bit hesitant. What I care about seems less to do with politics and more about creativity despite one’s own political environment.

When mulling this decision over, I considered a column that was less about marking a line in the sand one way or the other politically speaking, but dedicated more to uncovering the people with whom I come in contact with every day; who have chosen to make Rhode Island their home (long-term or at the very least, for the time being) and are at the core of why I (and others) have chosen to call this place our home, too. That’s what MyRI is all about.

“In political practice, cities are often sites of collective self-determination, but contemporary thinkers fail to theorize in ways designed to provide informed judgments about what’s good and what’s bad about urban pride, the idea that residents of a city are proud of their way of life and struggle to promote its particular identity. Patriotism today refers to national pride, but what about feeling proud of being a member of the (Jerusalem, Beijing, Montreal, etc.) community? We nominate the word civicism to express the sentiment of urban pride.”

–Excerpt from The Spirit of Cities by Daniel A. Bell and Avner de-Shalit

This column is as much about civicism than anything else; a word, which looks and sounds a lot like its nemesis, cynicism (the scourge which inhibits our creative actions, evolutionary change, and ultimately our own economic and cultural sustainability). So let’s hear it for our civicism!

JERRY THE BEAR & THE LAWS OF ATTRACTION

I first met Aaron Horowitz in 2010. He and I were both attending Providence’s acclaimed A Better World by Design conference (now in its fifth year) created by students at Brown University and the Rhode Island School of Design. I subsequently connected with Aaron again at the 2011 edition of that same conference, and most recently at Brown University this past summer during the Dell Social Innovation Fellows program coordinated by the Swearer Center for Public Service in partnership with the University of Texas-Austin.

Aaron struck me as a creative young man with a great head on his shoulders, who had seemingly unlimited potential. Even though he was living in Chicago, he kept finding excuses to come back here. That’s why when he told me that he was planning to move to Providence from Chicago to launch his new venture, Jerry the Bear, during his final semester at Northwestern University, and he is bringing fellow student and business partner, Hannah Chung, with him I was ecstatic. This is the kind of talent a place (any place) would be happy to have. So why did they choose Providence?

Horowitz explained their reason to relocate here from the Windy City this way:

“A young entrepreneur who spends any sort of time here will see the magic of this place. You have an incredible asset in having a highly networked web of established professional and academic mentors who play an extraordinary role in assisting ventures like ours. The amount of support we receive from this community will undoubtedly lead to an expedited path for our venture, and that is extremely important to any entrepreneur. If you are a young entrepreneur, in particular, looking to build the foundational skills needed to succeed, then this is the place to be.”

Last Saturday alone, Horowitz and Chung also experienced the hustle and bustle of the winter’s farmer’s market held at Hope Artiste Village in Pawtucket, then took in the coastal sights in Narragansett later that same (unusually warm winter’s) day. Reminding us all that you are never very far away from unique attractions and destinations here; showcasing the QOL (i.e., quality of life) attributes that Rhode Islanders cherish so dearly, which didn’t go unnoticed by these new immigrants.

They recently applied to be accepted into the next Betaspring (the mentor-driven startup accelerator based in Providence) class beginning in early February. [Please note: Their next phase of work will involve interviewing youngsters under the age of 10 who have Type I diabetes to further refine their prototype of Jerry. So, if you know any families that may want to participate in these discussions please don’t hesitate to reach out Aaron and Hannah at info@JerrytheBear.com.]

The lesson to be learned from this entrepreneurial equation is that if given the ability to share with the world’s pipeline of talent, we can compete on a regional, national and even global stage to attract and retain such talent. The more activity coming out of here will lead to more success stories and even more talent coming (and possibly) staying here. Our global competitive advantages are our colleges/universities, and the faculty and students occupying those hallowed halls, our burgeoning entrepreneurial community, our critically acclaimed arts and cultural scene here (which serves a significant role in keeping people interested, entertained and inspired), but above all our growing reputation as the premier mentorship destination; something money cannot buy.

Providence (and Rhode Island) civicism should not only be taken seriously, but should be the foundational core of any real talent retention and attraction efforts moving forward. It is our “secret sauce,” not to mention a global differentiator, which allows us to stand out as a true leader rather than a place that is continually looking for its own identity into the 21^st Century. Thanks to Aaron and Hannah for reminding us what this place is really about!

And don’t forget, if you see them around town, please introduce yourselves to them and ask about their latest adventures here; and of course, show your civicism by seeing what it is you can do to help this dynamic duo out. You may just be helping retain and attract top talent here.

January 9, 2012January 10, 2012

Retail Stock Data Proves The Middle Class Is Imploding

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A close analysis of stock market data is an excellent bellwether for determining the financial health of the middle class. Despite the meteoric rise of the market since its bottom in 2008, there are very negative omens for the middle class if one examines the market data more in depth. An analysis of stock prices and company performance in the retail sector shows a middle class that is rapidly losing purchasing power. In contrast, the data also shows that the high end or wealthy consumer is doing quite well.

An investment strategy that has proved consistently successful in the retail space has been betting against the prosperity of the middle class consumer. Investors have successfully gambled that the middle class consumer will continue to be pushed down to retailers that have traditionally catered to the lower income American consumer. Some examples of these companies are Dollar Tree, Dollar General, TJ Max, and Wal-Mart.

Retailers that traditionally catered to middle class shoppers, such as J.C. Penny and Kohls, have been losing market share to the “bargain retailers.” This trend is a reflection of the change in the shopping habits of the middle class. Middle class shoppers are feeling less confident with their financial stability and consequently are trading down to cheaper brands.

In contrast, the higher end retail shoppers appeared to be quite confident with their finances in 2011. Luxury retailers such as Neiman Marcus, Nordstrom, Saks, Tiffany, and Lululemon saw a healthy demand from their higher end customers.

The data for retail sales in 2011 clearly shows that the purchasing power between the middle class and the rich is widening very quickly. This trend should be carefully noted by all Americans both rich and poor. One only needs to read a bit of history to see that a disappearance of the middle class is one of the final markers before the implosion of an empire.

November 18, 2011January 11, 2012

No More Caving: A Message To Super Committee Democrats

As the super committee nears its deadline (Nov. 23), it seems increasingly likely that the Democrats will cave on the issue of raising taxes on the wealthiest Americans. This is not the first time we have seen them punt on this issue, and I’m getting pretty tired of it. I hope that you will join me in emailing this message to Senator Patty Murray, the Democratic co-chair of the super committee.

You can email her here. For the topic pull down thing, select the first option “Joint Committee on Deficit Reduction.” For subject I put “No More Caving.”

Here is the message I’m sending:

Senator Murray,

As you may already be aware, many young progressives are once again becoming disillusioned with our political system. In 2008, many of us were idealistic about the potential of the shift in leadership. However, time and time again we have watched as Democrats in Congress capitulated to the obstinate Republicans. Each time, Democrats blamed the Republicans’ complete refusal to compromise. While this problem is real, it must not be used as an excuse. Instead, Democrats must be equally resolute in defending and advocating for their own principles. Just as the Republicans have their “no tax pledge,” Democrats ought to have their own pledge. This pledge should demonstrate that they are committed to a balanced approach to deficit reduction, including both spending cuts and tax increases on the wealthiest Americans.

Not only is this good policy, but it is also good politics. Every poll demonstrates that the American people support this kind of approach. The polls showed the same results during last summer’s debt ceiling debate, but unfortunately the Democrats squandered the opportunity. Polls are not the only indicator of popular support for tax increases on the wealthiest Americans. The Occupy Wall Street movement, dedicated in large part to protesting income inequality, is committed to making the wealthiest Americans pay their fair share. How is it that the Republicans are able to go to the wall for principles that are relatively unpopular while Democrats consistently cave on their principles, despite having the wind of popular support at their backs? When you read headlines about young progressives becoming disillusioned, remember that your refusal to stand firmly behind progressive principles and tendency to capitulate are major contributing factors.

Our country is in an economic crisis. The Republicans have suggested that we can solve the crisis by simply cutting regulations and spending. When President Obama and the Democrats in Congress suggest a more balanced approach including increased taxes on the wealthiest Americans, Republicans criticize them for waging class warfare and attacking the “job creators.” The Democrats have allowed the Republicans to shape the public discourse in such a way that makes tax increases on the wealthiest Americans seem un-American. This is not the case. Crises call for shared sacrifice. The notion that all Americans have the duty to help their country out of crises is inherently American. Some Americans can afford to sacrifice more than others and they should be called on to do so.

We want leaders who will act as passionate advocates for progressive ideals. As the super committee approaches its deadline, we urge you to stand up for what you believe in. Young progressives cannot stomach another Democratic capitulation.

November 7, 2011January 6, 2012

“Centrist” Economic Pap

Friend of the blog, Tom Sgouros expresses the following concern about protestors and supporters of Occupy Providence:I’ve enjoyed walking through Burnside Park on my way to and from work lately, and I find the activity and energy invigorating. One point that worries me, though, is represented in some conversations I’ve joined or overheard as I passed through, and it has to do with our political parties and the differences between them… Not being represented by either party isn’t the same thing as saying there is no difference between them. It takes a fool to deny the differences between our two parties.Notably Sgouros doesn’t offer the details of those conversations or list those differences he finds so significant, so we’re left to wonder what exactly he means. But it appears to be a common strawman argument, usually intended to marginalize those critics as unreasonable, to be set up and knocked down as if it actually represents the views of these “foolish” unnamed Occupiers.

The actual position is much harder to dismiss. With neither party addressing the great moral issues of our time, who cares if one supports minor policy changes of some sort or another while the other doesn’t? That’s an example of the illusion of choice, not proof of it. Here’s Gore Vidal some forty years ago:

There is only one party in the United States, the Property Party…and it has two right wings: Republican and Democrat. Republicans are a bit stupider, more rigid, more doctrinaire in their laissez-faire capitalism than the Democrats, who are cuter, prettier, a bit more corrupt—until recently… and more willing than the Republicans to make small adjustments when the poor, the black, the anti-imperialists get out of hand. But, essentially, there is no difference between the two parties.

Which part of that is foolish, Tom? I’d say that’s even truer now, than when Vidal wrote it. In fairness Sgouros goes on to conclude:…it also takes a fool to claim that what the bulk of the current Democratic party offers is economic populism or anything other than centrist economic pap. Which is a problem because centrist economic pap — bromides about growth, fealty to the “job creators” who walk among us, and lack of respect for the great mass of workers who made our country great — has not served us well.Yeah, sure, I normally vote Democratic, but count me with Vidal among the “foolish” on this one.

November 3, 2011January 6, 2012

Mayor Taveras Signs Order ending Tax Breaks for Big Banks

This is refreshing policy-making for the 99%:

Join
Mayor Angel Taveras,
Local Elected Officials,
&
Affordable Housing Activists
for a Press Conference

=================

Mayor Taveras to Sign Executive OrderClosing Corporate Tax Loopholefor Foreclosing Banks

=================

WHO: Mayor Angel Taveras, local elected officials and leading housing advocates.

WHAT: Mayor Taveras will sign an executive order (1) closing the corporate tax loophole which allows foreclosing banks to keep the owner occupied homestead exemption and (2) incentivizing new homeowners of foreclosed properties by allowing them to immediately receive their owner occupied homestead exemption.

WHEN: Thursday, November 3rd at 2:00PM.

WHERE: 48 Ardoene Street in Providence – house foreclosed in 2011 by Deutsche Bank.

October 26, 2011January 6, 2012

The State’s New Economy Wrong Way Run

Disturbing hints this week from EDC director, Keith W. Stokes, that the state plans to continue it’s new economy wrong way run, even possibly eliminating financing of the Slater Technology Fund, this on the heels of the positive news of a $9 million federal grant.

“The hope would be that we can continue to maintain state support consistent with past practice or, better still, increased levels of investment,” [Slater managing director Richard] Horan said. “Given the cost-effectiveness of the program … there is certainly a case to be made.”

But Keith W. Stokes, executive director of the R.I. Economic Development Corporation, says the $9 million from the U.S. Department of Treasury’s State Small Business Credit Initiative should be a major step toward Slater becoming self-sustaining. “That money [now provided annually by the state to Slater] has to go to more economic development.”

Slater currently receives $2 million dollars from the state, money well spent and an amount itself reflective of the steep funding cuts doled out by the state in 2009.

Yes, there certainly is a case to me made for the cost-effectiveness of the program. In recent years Rhode Island moved from a middling 29th to as high as 11th in 2008 in national rankings, a needed bright spot in the state’s business outlook. When we look back in a few years at where we are, will we wonder why we let Tea Party type, anti-tax gone haywire conservatism trump sound business sense?

October 14, 2011January 6, 2012

Polluting Waterfront Poster Child Cashes Out

The poster child for the industry led effort to kill the $400 million redevelopment of the hospital adjacent area of Allens Avenue just cashed out, selling the firm to Sims Metal Management.

Ship repair company Promet Marine Services Corporation Ltd., located at Allens Avenue in Providence, was acquired by a metal recycling company.

Promet’s deep sea facility, with nine acres of land, a rail serviced 600-foot pier and two deep water berths will be the main export terminal for the newly formed New England subsidiary of Sims Metal Management Ltd.

So long, Providence! But look at the bright side, now you have yet another, even larger polluter to take Promet’s place and a lovely waterfront junkyard!

Among the recipients [of a S.F. Green Business Program award] was the local subsidiary of Sims Metal Management, a global company that shreds automobiles and appliances for recycling. The corporation also happens to be a big generator and dumper of hazardous waste.

As reported in this space previously, earlier this year the automobile shredding industry successfully lobbied to block rules that would have halted the dumping of treated waste from automobile recycling plants into municipal landfills.

While recycling may seem like an environmentally friendly idea, grinding up cars and separating only recyclable metal actually leaves behind hundreds of tons of toxin-containing residue in the form of ground-up cushions, wiring, and other material. Scientists say the stuff is unsafe, even when treated with silica-based coating, unless buried in specially sealed hazardous waste landfills.

Regulators with the California Department of Toxic Substances Control hoped to require just that. But the industry backs a pending bill to stop a rule that would have officially designated its byproducts as hazardous waste. Sims Metal can now plausibly claim in its financial filings that the million metric tons of waste per year it dumps in North America is “nonhazardous.” The attempt at changing this designation was a big deal. In a worst-case scenario, the material could leach lead, PCBs, mercury, and other toxins into groundwater.

Notwithstanding, attending the Veterans Building party to pick up a plaque last month was a vice president for Sims Metal Management. State records show that last year, 41,300 tons of waste went to landfills from Sims’ auto shredder facility in Redwood City.

City employees apparently were too occupied sniffing out nonbiodegradable window cleaners to conduct a Web search that might have revealed SF Weekly’s report noting Sims’ status as a major dumper of toxic garbage.

One has to wonder if this is what Mayor Taveras meant by bringing “green” jobs to Providence. Ever feel you’ve been cheated?

October 8, 2011January 3, 2012

Liberals Love Profit Too

Lynn Neary of NPR recently interviewed Bill Frezza, a venture capitalist, about the business community’s responsibility for tackling unemployment. He bluntly said they didn’t have such a responsibility.

Listen to the podcast here: http://gregmatos.com/blog/2011/10/liberals-love-profit-too

October 5, 2011January 2, 2012

The Mythology of Radical Capitalism

One reason that radical capitalism has won the hearts of so many is that it is highly plausible; it sounds great. A world of abstract morality where the anonymous ‘market’ expertly and without pity, favoritism or error decides the ultimate value of goods and services and delivers those goods and services with maximum efficiency, the highest good. A world where shared ownership shifts corporate responsibility to a plebiscite to which the corporation answers; the interests of the shareholders will echo the interests of humanity. A world where capital flows continuously from the corporate class back to the entrepreneurial class, endlessly cycling value into new innovations that serve humanity. Continue reading “The Mythology of Radical Capitalism”

September 13, 2011January 2, 2012

Make Serious Investments to Create Good Paying Jobs for Rhode Islanders

Dear Mr. President:
Over recent weeks I have visited Main Street small businesses and toured manufacturing facilities throughout Rhode Island’s First Congressional District. I have met with jewelry makers, boat builders, and creators of cutting edge medical devices and aeronautical components, and heard from restaurant owners, small textile retailers, and information technology start-ups. Across this diverse array of interests I hear one common and constant concern – in order to survive, prosper, and grow, entrepreneurs and seasoned small business owners alike need consumers, and those consumers need jobs.

Since becoming a member of Congress, I have hosted Town Hall and Tele-town Hall Meetings in communities across my District in an effort to hear directly from constituents. With unemployment in my state and across the country at unacceptably high levels, we must heed concerns from Main Street and the families we serve. In light of recent Congressional Budget Office projections that forecast slow economic and job growth, and in advance of your announcement outlining recommendations to spur job creation, I would like to take this opportunity to share the views of constituents in Rhode Island’s First Congressional District and some of my thoughts on this critical matter.

Rhode Island was the first state in the northeast to enter the recession three years ago, and at 10.8%, our unemployment rate continues to be among the nation’s highest. As you have consistently expressed, our government must set priorities, cut what does not work or is not needed, and make the investments that will create jobs, sustain our economy today and into the future, and ensure our ability to compete in the world.

Nationally, the manufacturing sector has been a bright spot even during these trying economic times. If this vital economic engine is to be sustained, we must continue our investments in programs that help manufacturers compete in a global economy, retool to be more efficient and effective businesses, and retrain the workforce so that skill sets utilized in declining sectors can be transferred to those that are expanding. This is the driving force behind my Make It In America Block Grant legislation and a number of common sense, job- creating bills that have been introduced in the 112th Congress to strengthen and modernize our nation’s manufacturing industry. I strongly encourage your Administration to carefully consider these proposals that will help bolster research and development, expand advanced manufacturing capabilities, and level the playing field with our foreign competitors.

If we are going to strengthen our manufacturing capabilities and make new products here at home, then we must have the ability to execute the timely and effective transport of goods, people, and ideas. This work will require significant investments, both public and private, in our nation’s infrastructure. A critically important first step in this effort is the passage of a robust surface transportation reauthorization.

Building and repairing our nation’s highways, roads, and bridges now is not only a surefire job-creating strategy, this important infrastructure work also helps advance the broader economy, enhances the safety of our citizens, and is a far more cost-effective investment today than it will be in the years ahead. Without a doubt, we must work collectively to rein in our nation’s debt. However, numerous studies, such as the Infrastructure Report Card from the American Society of Civil Engineers, clearly demonstrate that we cannot be responsible stewards of our nation’s finances if we continue to allow the price-tag for infrastructure improvements to escalate with each passing year.

This vital work also extends beyond roads and bridges, and includes our nation’s water systems, ports, schools, public parks and facilities, power grids, and telecommunications. The nearly 14 million unemployed Americans, more than 61,000 of which reside in Rhode Island, demand bold action from their government. When our nation endured the economic strains of the Great Depression, it was bold action in the form of the Works Progress Administration, the Civilian Conservation Corps, and the Public Works Administration that helped put Americans back to work, building and repairing our nation’s infrastructure.

While labor and financial market conditions in the 1930s may have been vastly different than today, what remains the same is the underlying notion that a robust investment in rebuilding our nation’s roads, bridges, and schools will generate job growth and enhance our ability to compete in the global economy. Investing today in building and restoring our nation’s infrastructure is not only smart job-creating policy, it is also smart fiscal policy – as continued deferred maintenance drives the future costs of repairs higher and higher. I strongly urge that your recommendations for job creation include a range of options that encourages both public and private investment in this important work – including the creation of an infrastructure bank and enhanced, innovative, and effective funding opportunities for states, cities, and towns that will put people back to work on priority infrastructure projects.

At the same time, we must recognize that a comprehensive proposal to create and sustain jobs in America must include initiatives that support workforce training and small businesses. Job growth today and into the future, especially for our nation’s manufacturing and construction sectors, requires enhanced support for effective on-the-job training programs, and greater collaboration between our elementary and secondary schools, higher education institutions, and employers in developing multiple career pathways for young adults and improving the skills of unemployed and underemployed Americans. Furthermore, as a member of the Committee on Small Business, I strongly encourage your continued efforts to expand small business access to capital, the lifeblood of small start-ups and longstanding businesses alike. The more than 95,000 small businesses in Rhode Island make up 96% of the state’s employers. They have endured the brunt of our nation’s economic downturn, and our country’s full and sustained economic recovery requires that small businesses have access to the resources that will allow them to form, grow, and prosper.

As the debt ceiling debate underscored, there is strong disagreement about the best approaches and the appropriate role for government in creating jobs. There is no shortage of ideas on how to put people back to work and spur economic growth in the near-term. But, the time for bold action is now. On behalf of my constituents in Rhode Island’s First Congressional District, I thank you for this opportunity to give voice to the small businesses, manufacturers, builders, and unemployed as you prepare your proposals. I look forward to hearing your recommendations, and working to find common ground across the aisle and between levels of government to help put Americans back to work.

Sincerely,

David N. Cicilline

Member of Congress

September 4, 2011January 6, 2012

The End of the American Dream?

July 22, 2011January 22, 2012

Stand Strong for Rhode Islanders in the Debt Ceiling Fight!

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The debt ceiling negotiations have heated up to match the mercury outside and Republicans and Democrats are proposing dranconian cuts to Social Security, Medicaid and Medicare while preserving tax breaks for the super wealthy and corporate tax subsidies.

Join us to ask the RI delegation to stand their ground for Rhode Islanders by defending these principles:

Defending the Well Being of Our Communities – Program cuts that eliminate benefits, reduce eligibility, demand participants pay more or force state governments to make cuts are not acceptable.
Responsible Reductions in Defense Spending – National security is essential, but our defense spending wastes billions. We can responsibly reduce outlays for defense while maintaining a strong, secure nation.
Fixing the Corporate Tax System is Imperative – We cannot afford a tax code that rewards corporations for hiding money offshore and permits them to benefit from accounting gimmicks and loopholes. As good paying jobs become harder to find and corporate profits continue to skyrocket, we need to strike the right balance of corporate citizenship and economic growth.
Restoring Fairness to the Income Tax – While the income tax structure is progressive, it does not make up for the regressive nature of the many other forms of taxation in our nation – property taxes, the sales tax and so on. We allow far too many people to hide wealth, or claim income as something else that is taxed differently – or not at all. We must ask the wealthiest – from hedge fund managers to the inheritors of fortunes – to be good patriots and contribute more to the commonweal.
Responsible Social Spending Reform – The only acceptable changes to programs like Medicare, Social Security and Medicaid are those that make the programs more efficient and successful. Any changes that result in the loss of income security or access to health care are unacceptable.

Add your name to the petition today and ask our Congressional delegation to HOLD THEIR GROUND!

It is with the utmost concern that we are following the negotiations between Congress and the President over the national debt ceiling. Many of the proposals, including those from Democrats as well as from Republicans, offer devastating reductions to programs including Social Security, Medicare and Medicaid that are necessary to keep scores of millions of Americans healthy, educated, financially secure and free from desperate need.

During this difficult time, many of your constituents in Rhode Island have watched, with great pride, as you have been a voice of reason, calling on Congress to approach the issue of our nation’s long-term debt with compassion, fairness and moral principle.

We write to say thank you. On behalf of the people of Rhode Island, our working families and struggling unemployed, our cities and small towns, our schools, our health centers and our senior centers, we say “Thank you.” Thank you for understanding that harming the well-being of children, seniors, the poor and the disabled is not a solution of any kind. Thank you for taking action – through letters to the President, votes on the floor, interviews in the media, and messages to your constituents – on behalf of those for whom government programs provide support and hope during these hard times. Thank you for being the truly progressive leader that Rhode Island and America need today.

Thank you for recognizing that fundamental economic principles demonstrate that cuts during periods of high unemployment are counter-productive. Thank you for demanding that the long-term deficit be addressed not only by cuts, but also through fair, common sense revenue measures. You have articulated, cogently and forcefully, for the inclusion of these measures – including ideas like closing corporate tax loopholes, eliminating tax breaks for the wealthy, repealing the Bush-era tax cuts and asking the top brackets to chip-in as good patriots should. Thank you for being a voice that demands we ask as much of the fortunate few as we do of everyone else.

We also write to ask you to stay strong. As the negotiations continue, there will be pressure from within your party, from the press, and from powerful interests in our society to do the wrong thing. Those privileged few will call on Congress to cut programs instead of cutting corporate welfare. They will ask that you vote to devastate working families instead of asking the wealthiest to contribute a little more to the common good in return for the opportunities our nation has given them. They will ask that we base decisions on a faulty concept – that government is not an answer to our society’s ills, but rather the cause.

As representatives of communities and organizations that see, every day, how programs like Medicare, Social Security and Medicaid change people’s lives for the better, we know this view is wrong. We believe you share our belief that as a society, we have a moral duty to ensure that everyone has a chance to live a full, productive and economically secure life. That is the American Dream.

We ask that you support a resolution to this crisis based on the following principles:

Defending the Well Being of Our Communities. Program cuts that eliminate benefits, reduce eligibility, demand participants pay more or force state governments to make cuts are not acceptable.

Responsible Reductions in Defense Spending. National security is essential, but our defense spending wastes billions. We can responsibly reduce outlays for defense while maintaining a strong, secure nation.

Fixing the Corporate Tax System is Imperative. We cannot afford a tax code that rewards corporations for hiding money offshore and permits them to benefit from accounting gimmicks and loopholes. As good paying jobs become harder to find and corporate profits continue to skyrocket, we need to strike the right balance of corporate citizenship and economic growth.

Restoring Fairness to the Income Tax. While the income tax structure is progressive, it does not make up for the regressive nature of the many other forms of taxation in our nation – property taxes, the sales tax and so on. We allow far too many people to hide wealth, or claim income as something else that is taxed differently – or not at all. We must ask the wealthiest – from hedge fund managers to the inheritors of fortunes – to be good patriots and contribute more to the commonweal.

Responsible Social Spending Reform. The only acceptable changes to programs like Medicare, Social Security and Medicaid are those that make the programs more efficient and successful. Any changes that result in the loss of income security or access to health care are unacceptable.

These are principles reflected in the Congressional Progressive Caucus’ Peoples Budget (introduced as an amendment to Rep. Ryan’s budget proposal and voted on in the House on April 14). That document can and should serve as a guide towards a responsible resolution of our national budget challenges.We respectfully request that you join the other members of the Rhode Island Congressional Delegation in transmitting to the President the sense of the people of Rhode Island as embodied in the principles above. As August 2nd approaches and America faces the real possibility of not being able to meet its debt and other payments, the people of Rhode Island need to know that any resolution will not occur at the expense of the common good.

Thank you for being the champion we need in these trying times. We support your good work and stand ready to help in any way we can.

SIGN THE PETITION HERE!

July 9, 2010January 25, 2012

How to Further Destroy the Economy in Two Easy Steps – A Tutorial Brought to You by Obama and the Democrats

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Step One: Form a “Fiscal Commission” tasked with developing a plan (with the end result of implementing the plan) to reduce the budget deficit during the worst economic crisis since the Great Depression. This will be done by slashing spending on social services, MediCare, Social Security, education, etc. (all the things that working folks depend on), but not the military budget, bailouts for banks, corporate subsidies to businesses sending jobs overseas, etc. Check!

Step Two: Ignore the growth of income inequality in the U.S. over the past 30+ years, which is actually at the root of the economic problems the country faces. Don’t even mention it, and especially don’t do anything about it. Check!

I have watched in shocked horror over the past couple weeks, as conservative deficit hawks enabled by the Democratic Party, have marched toward a fiscal austerity program that will take the depressed and down economy and pummel it to a bloody pulp. This is all being done in order to alleviate some mythical inflationary pressure that wealthy bankers are terrified of (remember, inflation is the biggest enemy of accumulated wealth).

Of course none of this really matters to the tens of millions of people who are looking for work, have had their hours cuts, have been forced into part-time work, or are in fear of losing their jobs (55% of all adults in the labor force have been affected by this recession in some way).

The real problem is that people aren’t spending money because of the recession, and that is directly related to the growth in income inequality, albeit in complicated ways. Since the 1970s, U.S. wages have largely remained stagnant. At the same time, the vast majority of all the wealth created in the country over the last 30 years has been flowing upward.

Because the super wealthy don’t actually work to generate their income, wages as a share of national income has been declining for just as long. What that means is less and less money is being earned by workers, and that’s bad for the economy because workers spending money is what fuels economic growth. Consumers earning more money means that they can buy more goods and services, increasing the effective demand in an economy. Seems pretty simple, right? Well, yes, it is.

But Brian, if wages have been stagnant for 30 years, then why has the economy been growing that whole time? I’m glad you asked. The economy didn’t tank sooner because people have been supplementing their stagnant or declining wage income with credit and debt. As a society, America took out more and more, and larger and larger, loans either through credit cards, home equity loans, mortgages, payday loans, and all the other delightful financial products offered by financial institutions intent on making money off of your debt. Notably, as fake housing wealth grew, people used their homes as ATMs – we’re currently seeing how good of an idea that was (and once the housing bubble burst, the $1 trillion of increased demand that was based on it vanished).

As a result of all this borrowing, middle class Americans tripled their debt over the last 30 years. As we all know, when debt rises, service on the debt rises. That is yet another mechanism that sucks dollars from a local economy and puts it in the bank account of CEOs, exacerbating the income inequality problem (always remember that when millions of people have been losing their jobs since 2007, Wall Street managed to find $145 billion to pay in bonuses in 2009 alone).

Yes, there’s more to the story, there always is. But here we are, discussing the budget deficit and the national debt when the real problem is that average workers are getting screwed, they haven’t been making enough money to keep pace with the increases in the cost of living, virtually all the wealth accumulates into the hands of the few, and Democrats and Republicans continue to let it happen.

We need to put more money in the hands of people who will spend it in the economy – that’s the only way jobs will come back. Why the federal government isn’t spending every waking moment developing a strategy for making this happen is beyond me. Instead we get bank bailouts and financial reform legislation that makes Wall Street happy.

We expect Republicans to screw workers – that’s what they do. But Democrats have, time and again, been complicit in the weakening of the middle class. And it’s no different now.

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