‘Les Mis’: Jean Valjean Is a Friend of Mine

Most reviews of Les Miserables discuss the singing, editing, and acting, disregarding the original text of Victor Hugo.  I write the simple reflections of a former prisoner who read this ex-con tale while sitting in a cell, with only a feint hope of ever being an ex-con at all.

The movie, by the way, is a masterpiece.

To me, the story was always about politics and philosophy, as Hugo wrote this classic in 1862, in the same era as Fyodor Dostoevsky’s Crime and Punishment, where each tale uses individual conflicts to symbolize larger themes for people living under oppressive regimes of inequality.  In Les Miserables, the unlikely hero is Jean Valjean, representing the downtrodden people whose station in life is based on the law of man, not of God, fabricated by the elites in order to maintain their economic superiority.  Inspector Javert represents the government system, lacking in love and unrelenting in his determination to crush Valjean.  The story, I believe, is truly about the journey of Inspector Javert (and the system he represents), even though it is through the eyes of Valjean we view his existence.

When I read this tale, there were many people around me who were imprisoned on something petty, often sentenced to the gills, and occasionally were clearly innocent; similar to Jean Valjean, who served 19 years for stealing a loaf of bread.  It was easier to see America’s systemic issues in an honest light because I wasn’t biased by my own dilemma: I had actually committed a terrible crime and had accepted my sentence.  Furthermore, it wasn’t as though the thousands of prisoners I was forced to eat, play, speak, and live with were chosen by me (there were plenty of wronged people who don’t make it easy to stick up for them).  Anyone who has ever read or seen Jean Paul Sartre’s play, No Exit, recognizes that “hell is other people.”  Yet in my fellow convicts’ eyes I saw all the Jean Valjeans, the desperate and desolate, trapped in a system of control that does not end at the prison gates.  And I experienced the Inspector Javert, up close and personal.

Prisoners, perhaps more than anyone, will confront their own morals and courage in the face of perceived injustice.  There is typically nowhere to turn when confronted by the Javert, the governmental force that imposes its authority.  Like the rebellious youth of Hugo’s novel yearning for freedom, the question becomes how much poverty and pain can the people take?  What is the straw that breaks the camel’s back, and under what banner will resistance come?  Victor Hugo reinforced Valjean’s spine with the loving righteousness of a God that considers all mankind to be equal and worthy of fairness.  Valjean’s resistance to Javert’s tyranny is rooted in a belief that there is a higher power than the laws of man (and France).  At the battlements (the front lines of French civil uprisings), Hugo infused his rebels with the spirit of Communism, a political belief that all citizens are equal members, and all should shoulder the burdens collectively and reap the rewards together.

Unlike the varied choices of free people, there is no retreat for a prisoner choosing to confront injustice and champion Constitutional principles that relate to Search and Seizure, Effective Counsel, Confrontation of Witnesses, Suppression of Evidence, and Cruel & Unusual Punishment.  This is why in the history of American prisons there have typically been only hunger strikes, work strikes, or riots.  When one considers that even a work strike (such as the recent one throughout the prisons of Georgia) can result in a violent backlash from the uncompromising Javert: all of these tools of prisoner resistance bring forth violence and possible death.  Like anyone else who ever sat in a cell observing this Javert, desiring a fair Justice System rather than a blunt instrument of vengeance, I wondered how I could respond in a way that was true to the highest laws.

Prisoners will challenge each other about what they will do when the “shit hits the fan,” and the Goon Squad comes in full riot gear.  We know their work from the dead of night: hearing a cell door get popped open, and the distinct sounds of eight armed men trying to enter a 5’ x 8’ cage to pounce upon one man who had previously transgressed Javert’s law (whether the written or the implied law).  Some of us will risk further retaliation by bringing a complaint in Javert’s court, and try to win a battle of words and concepts.  Others condemn this practice as useless; and if there will be violent repercussions anyway, they argue that one might as well simply utilize violence in the first place.  Even assisting another in their attempts to call out injustice will bring repercussions, which places an additional moral burden upon those of us with added resources.  For some it might be their muscle, community, or education.

I felt knowledge is power, and built on it accordingly.  For different reasons than Valjean, my Buddhist path reinforced my determination to use peaceful means to resist the Javert.  I never was fully convinced, however, that it is the most effective, nor if there was hope of success.  Any student of history knows that violence is the most common tactic of the winners.  For this reason, it is all too hypocritical when the Javerts denounce violence with the use of violence, and rationalize it with an “Ends Justify the Means” philosophy.  I’ve come to believe, like Victor Hugo’s young men at the battlements, that “Success” is not always defined by immediate victory.  Whether historically in Harper’s Ferry, Johannesburg, Tiananmen Square, or this year in Cairo: people are propelled by a sense of duty that, win or lose, life or death, we simply do what is right.

Victor Hugo anticipated Mahatma Gandhi’s principle that the Javert, when forced to confront his own injustice, would turn from the path.  Dr. King and the 1960’s Civil Rights Movement echoed this practice, to lay bare just how brutal, unreasonable, and unrelenting are the tactics of the oppressor.  There, the ends justifying the means was Racism.  And not enough people continued to agree with it to support that form of inequality; at least not as a state-sponsored body of laws.  For Gandhi, it was Colonialism, as the exploitative foreign ruler lacked justification to rule.  For Victor Hugo, it was the Capitalist elite; a wealthy class that supplanted the aristocracy through the blood of the French Revolution.

It is interesting that Hugo’s 19th Century inequality is the one that resonates most clearly today across America.  Despite the growing recognition of the racist ripples that have always pushed the tide of our criminal justice system, most people are versed enough in the current dilemmas of our economic structure (even where they can’t correctly identify all the moving parts).  We are backed into a corner of rich getting richer, outsourcing jobs to where labor is cheapest (and done by businessmen waving the flag while holding political office).  Technology has put people out of work faster than jobs can be created.  Millionaires of the 1% sit in Congress and uphold inequality through such extremes as the Big Bank Bailout, where a trillion dollars flowed to subsidize the criminal and reckless activity of Wall Streeters who simultaneously protest against all government regulation of their activities.  And then there is the Javert.

Inspector Javert tells Jean Valjean he is from the same rabble, the same common stock, born inside a prison himself, “but he is no thief.”  Both characters represent “France,” born of the Revolution and praying to the same God for guidance and support in their actions.  Javert is the law of Man, maintained and executed by men.  Javert today is the prison guard, police officer, prosecutor, judge, and politician.  In America today, Javert often refuses to investigate the elites for criminal activity while devoting all attention, and resources, to the commoner.  Javert, perhaps, does not even see the hypocrisy; conditioned by all the elements of a self-reinforcing system that prays to a God (that “says” whatever any self-appointed interpreter declares), and is educated by the most elite institutions that are funded by this self-replicating system.  But the outsiders, the Valjeans (regardless of formal educations or material success), see truth with increasing clarity.

Javert’s oppression, which he sees as “Justice” for the longest time, poses the problem to those who seek fairness: Reform or Revolution?  When Javert finally sees his own injustice, he then lacks the tools to truly transform into what the People genuinely need.  He becomes a malfunctioning machine that cannot fulfill its mission.

SPOILER ALERT (skip the next sentence if the plot of Les Miserables concerns you):

Javert self-destructs and kills himself in Les Miserables.  Again, as Gandhi taught, the oppressor simply cannot continue.  Nelson Mandela sought to rewrite the tactic by encouraging (some would say “allowing” via Truth and Reconciliation Commissions) the Javert to reform and merge back into a wider society that reaffirms equality and justice.  After nearly two decades of debate, in the front lines of American struggle, I am not firmly in either camp of (a) reforming our economic and/or criminal justice systems (the two have closer links than most believe), or (b) wholesale replacements.  My goals are to unite reformers and revolutionaries in common cause, rather than haggle over the ideal end game, and see what best can come of it.  (Side Note: some see the term “revolution” as requiring violence, but it does not.  It simply means a massive overhaul in the status quo.  Many within the political system have openly discussed a massive overhaul of our criminal justice, economic, electoral, or other systems.  Like the Internet’s impact on global commerce, such changes could be “revolutionary.”)

With age and experience, any story will take on more layers of meaning.  Les Miserables becomes another tale for a former prisoner, and for a father, both perspectives I currently hold.  Having now studied millions, seen thousands, and personally known hundreds of people re-entering society after time spent in prison, I see the Javert can be just as ruthless in modern America than 19th Century France.  Now, however, Jean Valjean would not have had the opportunity to break free of Javert.  With cameras, computers, and databases, people bearing the mark of a conviction are forever branded.  They may succeed as business owners, like Valjean did, or even become elected mayor (if a jurisdiction’s law allows people to truly elect any citizen of their choice) as Valjean was… but it will generally be done only where the person’s criminal past is constantly placed at the forefront.

Javert is adamant that “once a thief, always a thief.”  We hear that philosophy regarding all manner of criminalized behavior, including addiction.  The hypocrisy is most evident when members of the wealthy lawmaking class of citizens do not say the same about their kin.  Some supporters of the Javert will exempt their own, saying they “have a problem” and “need help.”  They do not get them help by calling the police and pushing for prison.  None of them argue that the rehabilitative qualities of a cage are the best option for their own.  High-priced thieves are considered to have had a “moral lapse.”  Yet as these contradictions come to light, more supporters of Javert begin to recognize the path of 19thcentury class-based systems of judgment are illegitimate where lacking the principle of “All Men Are Created Equal” by a higher power than a body of laws.

People who push back against “Once a thief, always a thief” have drafted and advocated for simple laws that allow those millions of Americans to apply for work based on their ability rather than their former problem or moral lapse.  “Ban the Box” is not a specific law, but rather the concept of eliminating the question “Have you ever been convicted of a felony?”  Javert cannot ignore the fact that he deploys police forces where people’s skin tones are darkest, even into the schools, regardless of where the crime actually occurs.  Javert also knows that decisions made by prosecutors, judges, and parole boards are also skewed by race… further magnified along a prisoner’s personal path of being formerly incarcerated.  The evidence of racism in the criminal justice system is overwhelmingly accepted by those who believe it is either too challenging to change, or that the inequality is proper.

Like Jean Valjean, some will overcome Inspector Javert no matter how intense the repression.  Exceptionalism, however, does not make for good social policy that affects so many families and, by extension, communities.  “By hook or by crook” is street slang for Ends justifying the Means.  Many Americans today are faced with violating the law in order to go Straight and Narrow.  Most Americans have no idea about the laws and codes to be obeyed, and yet some will still pass judgment like an Armchair Quarterback who does not know the rules of football.  Many convicted people lie about their past to get an education, an apartment, or a job, just like Jean Valjean.  They violate probations and paroles just to go where the jobs are, or to live where they are accepted.  When “doing the right thing” becomes a crime, it is time to sit down and discuss just what Javert is doing, because there is a good chance that even Inspector Javert does not know.  The very principles of America are at stake.

Labor vs. Management


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Full disclosure: I grew up in a time and an environment that accepted an adversarial relationship between labor and management.

I still agree with that belief. Everything I have experienced in the last 30 years has convinced me, over and over again that this is the fundamental relationship between the workers and the bosses.

More, the side most actively pursuing this agenda is management.

I have worked as union labor in a closed manufacturing plant. I have stood on the lower rungs of corporate management. I have, therefore, seen this from both sides. What this two-sided, balanced experience has demonstrated is that there are people in the upper levels of corporations who wake up every morning thinking about new ways to screw labor.

Take away pensions. Cut benefits. Cut wages. Collude with other companies to set wages at “market norms”. Outsource departments. Offshore jobs. Pay management ever and ever larger salaries. Take away holidays. These have all been all-to common management practices of the past 30 years. Anyone denying this is either grossly ignorant or lying.

Now Hostess has gone down. Now Hostess is blaming it on the greedy unions.  Here’s a contrary view.

Hostess went through bankruptcy twice in the last 8 years, the latest time in January of this year. As of January of 2012, management had not implemented even some of the most basic strategies for streamlining operations and cutting costs. The would include, but not be limited to, closing inefficient plants, merging warehouse operations, and closing unprofitable retail operations.

For this this gross negligence of management responsibilities, the CEO of Hostess saw his pay tripled; other high-level executives had their pay doubled. They got these raises while demanding additional union give-backs and lower wages.

One favorite bete noir of the anti-union hooligans is the US car companies. There, the unions have strangled and nearly ruined these titans of manufacturing. This is just plain wrong. 1977 was a banner year for GM. Its plants were cranking out mountains of 302 cubic inch V8 engines; this, after we ‘learned our lesson’ from the oil shocks that happened in the early 1970s, when Richard Nixon and Gerald Ford were in the White House.  How did GM cope with the threat of higher oil prices? By creating the Vega. Remember them? Millions of these cars were sold between 1970 and 1977. And yet, by 1980, there were virtually none left on the road.

IOW, it was a terrible design, and a terrible car. Who designed this car? Who approved this car? Labor? No.

Ford came up with the Pinto and the Maverick. Remember the Maverick? With the gas tank situation so that it got hit in rear-end collisions, with a sickening tendency to explode? Who designed this car? Who approved this car? Labor?

Of course not. Only management can make these decisions. What was the result? The American car brands were damaged irreparably; the Big 3 are still fighting to overcome the negative perceptions created by these cars.  And these are glaring examples of terrible management decisions. Oh, and the follow-up were the K- and X-cars. Another engineering masterpiece.

These horrible management decisions led to generations that assume that Japanese cars are superior to American cars. And now that Toyota has grabbed the mantle of the largest car manufacturer in the world? Quality has plummeted. We’re on the third or fourth massive recall of the last five year.  Why? Because management decided to sacrifice quality for price, and over-expanded beyond what they could effectively control.

As for labor costs, the German manufacturers have some of the highest labor costs in the world. Hasn’t really dented their ability to export. In fact, they see America as a low-wage country. You know, on par with Mexico.

So you’ve seen decades of bad management decisions in any number of industries. How many airline companies have come and gone? I had a couple Sunbeam appliances that were very well made. When they finally died, I had to replace them with other brands, none of them of the level of quality.

America is engaged is a vicious bout of class warfare. As soon as management saw its opening, it took the opportunity to exploit its advantages to the hilt. The result has been a period of stagnant to falling wages for labor, a shrinking percentage of corporate profits going to management, and a level of income inequality not seen since the days of the Robber Barons. Oh, and we have an MSM that screams that labor is waging class warfare for merely pointing out these facts; largely because the MSM is a wholly-owned subsidiary of some corporation.

The employees of Wal-Mart have started fighting back. This is huge. This is the piece missing from our economic recovery. It’s called “demand”. Supply shocks causing recessions is ridiculous, on par with claiming the world is flat. How many well-supplied stores have you seen fail because of lack of demand? Answer: all of ’em.

Because, somehow, today’s Titans of Industries (read: bureaucrats who clawed their way to the top by political infighting) have forgotten what Henry Ford figured out 90 years ago: that ‘workers = consumers.’ And if you pay your workers more, they buy more, which is the whole point of the exercise, isn’t it?

So when management finds ever-more-creative, ever-more-blatant ways of squeezing labor harder, the irony is that, ultimately, they’re cutting their own throats because they’re simultaneously destroying the ability of their customers to purchase their goods and services.

Yet one more really, really stupid, short-sighted, greedy decision made by management. One more reason to fire the bums, before they given themselves another raise–at the expense of labor–and ruin even more companies.

Want an Efficient Historic Tax Credit? Raise Taxes


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State House Dome from North Main Street
State House Dome from North Main Street
The State House dome from North Main Street. (Photo by Bob Plain)

As the maneuvering in advance of the next legislative session gets into gear, we keep hearing that the state’s historic structures tax credit is to be revived.

To recap: for several years, Rhode Island had a tax credit available for developers who restored historic buildings.  It was essentially a subsidy for 30% of the cost of the project.  In a variety of ways it was a decent program, with low overhead to administer, and the subsidies went to a variety of worthwhile projects, mostly in the cities that need it.  Some of the projects were a bit too gentrifying, and I regret that the credits didn’t come with strings to insure better wages for the people who work on them, but it was, for several years, the most effective affordable housing program in the state.

The downside, though, was big.  Because the program was available to any qualifying project, it was impossible for the state to budget for it.  The credit was much more popular than budget-writers anticipated, and this made not only a big hole in the budget, but an unpredictable one.  When the program was closed in 2008, there were around $300 million of credits outstanding, waiting to be cashed in for lower tax bills.

It made sense at the time to float a bond to make the redemption of the credits a bit more predictable, so the state borrowed to create a trust fund to make payments to the people who held the credits.

However, there is another down side to our tax credits.  When the state gives a $5 million tax credit to some project, the project only receives around $4 million or less.  The rest is shared between some tax credit broker (Michael Corso has become a famous one for his involvement with 38 Studios) and a business or rich person who wants to lower their tax bill.  That is, less than 80% of the face value of the tax credit goes to the public purpose to which the credits are supposed to be devoted, and the other 20% is for a benefit that goes directly to the richest citizens of our state.  Being a perfect example of government overpaying (by a lot) for a service, one might think this the very definition of “government waste,” but somehow the label never seems to be applied there by the fiscal watchdogs.

Contrast this to federal tax credits, where it is usually more than 95% of the credit that goes to the stated purpose.  Federal taxes are higher than Rhode Island taxes, so credits against those tax bills are worth more than credits against a state tax bill.  So one way to increase the efficiency of state tax credits would just be to raise the state business and personal income taxes on the top end by a lot.  Yes, I know, that’s just my little joke, but with the recent “reforms” of the tax rates, prices for state tax credits are going to be even lower than they were in 2008, when they were 80 cents on the dollar or less.

Here’s the bottom line: credits against state taxes are a great way to waste a ton of money and create unpredictable budget costs.  The projects that the tax credit funds are worthwhile, but if they are to be subsidized they should be funded by grants, with a set annual budget and rules to demand that projects pay at least a living wage to their contractors.  As they were constituted, they did useful work, but also served as a giveaway to wealthy insiders who don’t need your tax dollars to live a life of ease.

Why Stock Buybacks Benefit Corporate Greed


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Image courtesy of Hodart Report.

One of my last posts touched on how corporations are spending their money, what they are doing and not doing with the piles of record profits they’ve been making in the past few years while median wages have stagnated or fallen.

Here’s some additional information. First, the cites:

http://online.wsj.com/article/SB10000872396390444657804578052472320753336.html

http://www.thereformedbroker.com/2012/10/12/the-buyback-epidemic/

If you piece the two of them together, you will glean that dividend payments to shareholders are near an all-time low. Something like 34% of earnings are being paid out in dividends today. OTOH, stock buybacks by the S&P 500 hit $112 billion just for the second quarter of 2012. You will also learn that, in contrast, companies paid out about 60% of their earnings in dividends in 1960. This is despite a top tax rate of 91%. No, that’s not a typo. 91%.

Why the preference for stock buybacks over dividend payments? Again, apply the principle of ‘cui bono’: to whose benefit?

Dividends generally benefit the average holder, the smaller holders. In fact, as I’ve said before, prior to about 1990, one bought stocks in order to collect the dividend paid, not with the idea of the price of the stock going up. In fact, stocks like utilities were considered ‘widows and orphans’ stocks because of the generous dividends they generally paid.

Buybacks, OTOH, generally benefit the corporate executives because the bulk of their compensation is in company stock. One component in the price per share of stocks is the number of shares outstanding. In fact, it’s the denominator in the equation. Since corporate compensation comes from huge issues of common stock, the denominator grows, which drops the average price, which means that the shares executives increase in value. Shares that are bought back are retired, decreasing the number of shares outstanding, which has the impact of pushing the price up, other things being equal.

Yes, the average holder gains from this too, but the benefit is much more limited. Let’s say I own 1,000 shares, which is a big holding for most middle-class folks. If the price goes up a dollar, I’ve made $1,000. Not bad. But if I own 100,000, or 500,000 shares, the gain is much higher. And grants of hundreds of thousands of shares are not unusual. An executive holding a million share is not unusual.

Plus, this gain is completely tax-free, until the stock is sold. This benefits the executive who can then borrow against the shares and perform feats of legerdemain with the money. The small holder, OTOH, will generally never see the benefit f the capital appreciation because s/he is less likely to sell shares.

Yes, they may, and then turn around and buy others. However, this sort of trading mentality is very dangerous for the small investor. 80% of professional investors do not ‘beat the market’ through frequent trading. If these professionals can’t, then what chance does the small investor have? A small one, and then usually only for a short time before regression to the mean sets in. The safest strategy for the small investor is to buy stocks that pay a decent dividend and hold them for the income. Now, that few companies do this any longer is certainly a problem. Once again, the market is tilted in favor of the larger investor who can make a lot of money on fairly small increases in price, or who can hedge, or who has access to resources and information that the small investor does not have.

Cui bono? The corporate executive.

In the WSJ (yes, Wall St Journal), note the following quote:

        …More than seven decades ago, in his classic book “Security Analysis”, the great investor Benjamin  Graham made a call so radical that it still sounds shocking today. Complaining of the “despotic powers wielded over dividend policy by corporate executives and directors, Graham argued that companies should no longer be allowed to direct surplus cash away from paying dividends–even for reinvesting in the business–without first obtaining formal “consideration and appraisal” from their investors, most likely through a vote at the annual meeting.

 

        Capitalist to his core, Graham was dead serious with this Bolshevik-sounding suggestion.  He wanted shareholders–who, after all, own the company–to force management to provide at least a general justification for using cash for any purpose other than paying a dividend.

 

      With the percentage of profits paid out as dividends today near all-time lows, at 34%,  Graham’s drastic proposal is just what we need to cattle-prod companies out of being such skinflints.

One “argument” that tax-cutters like to use is that it’s our money, not Washington’s. Fair enough. But those corporate profits belong to the shareholders, not to the CEO. So why should the CEO decide?

(Yes, he is a shareholder, but he & his board almost never control a majority of shares. Plus, Graham’s point was to make them explain why they were not issuing larger dividends. You know, make them accountable? Radical notion, I realize. Only people on the bottom are accountable for anything. Those on top can do whatever they damn well please.)

(Point 2: the fact that dividends are ‘double taxed’ is completely irrelevant to the argument. But let’s put it this way: they are double taxed. So what? What difference does that make?)

Here’s how the other article describes the buyback/dividend issue:

…One other thing — executives use buybacks to offset compensation, they issue themselves shares or options, and then get the board to approve a stock buyback to counter the effect of dilution. If you’re asking yourself “wait, so buybacks can be used as a tool to transfer shareholder money to executives?”  then you’ve got it figured out, that’s exactly what they can be used for. And they often are.

As I said, cui bono? The corporate executive. He does not own the company. He–in theory, anyway–works for the shareholders, and yet he’s following policies that enrich himself (and it’s pretty much always a ‘he’) at the expense of those he works for. Somehow, I suspect that if he found an underling at the company doing something similar, the underling would be fired, if not prosecuted.

As an aside, the comments section of the WSJ article is hilarious. Note the utter horror–The horror! The horror!–with which they regard a tax rate of 39% on dividends. Somehow, the returns to capital should be privileged above actual work. And note how they throw out retirees who will be hurt by paying an hypothetical 39% in taxes on their dividend income, after the confiscatory Obama plan of letting the Bush tax cuts expire. But, 39% is the top tax rate. Only people making the highest incomes would pay at that rate. For the rest of us, we would pay at the rate we pay on the rest of our income. The only retirees who would be hit by the top tax rate are those who are earning in the top level of income.

One final word. A while back I wrote a post about how the purpose of allowing capital to accumulate was so that business could expand and benefit more people through hiring. IOW, there’s an implicit deal: we allow capital formation so you can increase the number of people you hire, which benefits everyone. However, the capital side of deal has not kept up its end of the bargain. For pointing this out, I was excoriated as a…whatever. You can fill in the blank. But this is exactly what is happening: the profits are not being reinvested in the US, those receiving the benefits of the profits are not paying taxes to support our society, even though they benefit disproportionately from the peace and security provided by the US government. They’ve breached the contract.

Finally finally, here’s something about the effects of income polarization.

    “If a man is not an oligarch, something is not right with him.”

http://blogs.reuters.com/great-debate/2012/10/15/the-billionaires-next-door/

OK, feel free to excoriate mindlessly by calling me all sorts of names, and saying I’m wrong without ever quite showing how I’m wrong.

Income Inequality and Entry Level Wages


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Evidence shows that real wages for college grads fell in 2011. More: real wages for college grads are down from 2000, and real wages for college grads are down from 2004, the trough of the Bush recession. These wages did go up–sharply–in 2005, and then began a long, not-so-slow slide from which they have not begun to recover.

And yes, the link is to the Progressive Policy Institute, but the data is drawn from the Census Bureau’s annual Income, Poverty, and Health Care report for 2012 that was published recently. So this is standard gov’t data.  As the article makes clear, this is very significant information. It seriously cripples the argument that people can lift themselves up by getting a college degree. Or that income inequality is simply the premium paid for education.

So the graduate enters the real world to find that a) jobs are very hard to find; b) that those lucky enough to get a job are making less than they expected; and c) they have a mountain of debt to pay off. This latter was exacerbated by policy changes in the Bush era, which have been, thankfully, addressed by Obama.

But, no problem. This is all part of the Grand Plan to make sure that a) levels of income inequality continue to rise; and b) that these differences become stratified into place, resulting into a permanent caste system. Yes, this is the goal. Let the rich get richer, and let everyone else go to hell in a handbasket. That is what the corporate overlords want. Is this bordering on tinfoil-hat paranoia? Perhaps, at first glance, but let’s look at the evidence.

Income inequality shrank significantly between 1948 & 1973. Why? Because of deliberate government actions that fostered the downward redistribution of wealth. Unions were institutionalized, providing labor with a powerful voice to protect workers’ rights. The steady, significant, upward trend of real middle-class wages was the result of deliberate policy.

Another deliberate policy that fostered income redistribution was very high tax rates. Even after Reagan’s 1981 tax cuts, the top tax rate ‘fell’ to 50%. Prior, it was in the 70s, and it only ‘fell’ to 77% after being cut in 1964. I say we do what the GOP wants and emulate Reagan. Let’s put that 50% tax rate back in place. If it was good enough to St Ronnie, then it’s good enough for me, right?

And let’s make one thing clear: today’s “corporate titans” are not the steely-eyed heroes of a bad Ayn Rand novel. These are not entrepreneurs. They are bureaucrats. The guys sitting in the chairs at Citibank or GM or 3M or Exxon did not build their company from scratch. Yes, you have (or had) your occasional Steve Jobs and Bill Gates, companies like FedEx that grew into market behemoths, but they are, far and away, the exception and not the rule. The family-owned, family run corporate giants like Standard Oil or Dagny Talbert’s (Atlas Shrugged; yes, I read it) railroad barely exists today.

The point is, when a public corporation makes money, it can choose what to do with it. The corporation can return it to the owners–the shareholders–in the form of dividends. This was the traditional thing to do. Until sometime in the 1990s, buying stock in the expectation of the price going up so you could sell it was the definition of ‘speculation.’ Rather, one bought stock to hold it, so you could collect the 5% annual dividend. In some ways, IMO, the worst thing about the dot-com boom was the idea that dividends were ‘quaint’, and something only old-fogey companies did. Now, dividends of 2% are considered generous, and perhaps foolish. Apple, with all its money, has never paid a dividend.

Or, if a corporation chooses not to give the money to the real owners, another choice is to re-invest the money in the company by building another plant, or buying new, improved machinery. This is not happening. Business investment in this country is at its lowest level in decades. Yes, some companies are spending the money in other countries by outsourcing, but that doesn’t do a college grad in this country much good, does it?

So the corp is not returning the money to its real owners, the shareholders; nor is it re-investing the money in the company. How about higher wages?

Despite enormous productivity gains, wages–which is where we came in–are stagnant at best, falling at worst. In the period 1948-1973, there was a rough equivalency between productivity increases and wage increases. If an improved process makes the product cheaper, the profit margin increases. In the time to 1973, this extra profit was shared more or less equally by everyone in the company, workers and management alike. But, starting somewhere around 1980, this trend stopped. Oh, productivity has increased, dramatically at times, but wages have remained stagnant.

IOW, it’s gotten cheaper to do things, but that money is not being distributed to those who actually do the work. It’s being kept by management.

We are living in a time when corporate profits are at record high levels, and the percent of profits going to labor is at record lows for the post-Depression period. Coincidence? No.

Why is this happening? Here’s where my tinfoil-hat conspiracy theory comes in: because this is the plan. Those fortunate enough to climb into the executive level of a corporation they did not build, have decided that they’re going to keep the extra money themselves. So, the wages for college grads falls, because it can. Why has the GOP fought so relentlessly to stymie every pro-jobs proposal brought before it? To maintain the 8-10% unemployment rate. Why do they want to maintain this high rate? Because high unemployment puts downward pressure on wages. When someone asks for a raise, the corporate response is “you’re lucky to have a job.” Yes, it’s true, and that’s exactly my point.

I get a lot of flack claiming that I’m anti-business, or a pro-union shill, or an alarmist, or lots of other things. And yet, somehow, the actual evidence seems to be on my side. Oh, sure, you can nitpick a few of these points where I’ve overgeneralized and then shout “FAIL” (it’s happened), but I have yet to see a convincing, fact-based contrary argument.

Of course, one prime target is my conspiracy theory, that there is a plan to build in legal support for income inequality. Look, corporate management is a cohesive group. These guys–and it’s 90% men–sit on the boards of each others’ companies. They hang out together in the Hamptons on weekends. They ski in Aspen. The cabal is not nearly as incestuous as the power circle here in RI, but it’s on course for that. The first thing that happens when you get power is you try to make sure you keep power. It’s damn hard to get to the top of the pyramid, so, when you do, you bloody well try to stay there.

Now, if you’re Mitt Romney, and you can borrow untold amounts from your parents, and you’ve been sent to the best schools where you met the Next Generation of Leaders, getting there is a whole lot easier. He claims he got nothing, but that’s just flipping ridiculous. I saw a post showing a copy of a magazine article from like 1967 that listed him among the 25 most eligible bachelors in the nation. Yeah, he had to work really hard. He and GW Bush could call up daddy’s friends and ask for help, for investment money, etc. Real hard. And did you see how Mitt’s original contract at Bain Capital guaranteed him a place in the parent company should the venture fail? A real risk-taker.

Even Adam Smith recognized the collusion of management: “We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject.” Wealth of Nations, Part I, Ch VIII

So, yes, the people in power have a vested interest in maintaining their power. And they have the ability to shape circumstances–to some degree–to help them maintain their power. So, conspiracy? That might be a stretch. A plan, perhaps not fully articulated as such? Absolutely.

New Ideas? No Thank You


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Earlier this month, the Rhode Island Foundation held a big conference that said it was intended to generate ideas for moving the state’s economy forward. Yesterday, I received a note about the “New Leaders,” a group purportedly about bringing new ideas to the management of our state.  (This is apparently a different group from the “New Leaders Council” though it’s hard to tell from the rhetoric.) The Rhode Island Public Expenditure Council put out a report last week about its new ideas for reforming the state’s economic development apparatus. All these new ideas!  Sounds great, no?  Well, in a word, no.

Wht’s the problem with new ideas, you might ask?  Isn’t our poor state in dire need of some?

Well, yes and no. There are a million ways to change the way government does business, and hundreds of thousands of them would make our state a better and more prosperous society. But of those million ideas, there are only a paltry few that won’t gore someone’s ox when transformed into actual policy changes.

Now I think there are plenty of oxen out there that we would do well to gore, repeatedly. For example, I happen to think that the state and all its cities and towns pay too much for the financial services they need and that there are plenty of more economical ways to get those services that would benefit our state’s economy, too. But there are bond counsels, investment advisers, bankers, and tax credit brokers out there who would likely disagree with me, some strenuously.

Or we could stand to tax the wealthy of our state a little bit more. These “job creators” have created precious few jobs in exchange for the hundreds of millions of dollars of tax breaks we’ve awarded them over the past 15 years. Or perhaps we could look into ways to discourage the kinds of suburban development that cost so much to service, or at least make the developers pay the true costs to our communities. Or how about just guaranteeing that children in our poor cities have the same opportunities in their public schools as the children in the rich suburbs? That’s not a new idea, but it’s a good one.

There are plenty more ideas like this, but rather a lot of them have the disadvantage of inconveniencing some folks at the top of the heap: bankers, lawyers, real estate developers, rich people.

Many of those same people have their own list of ideas, many entries in which are different from mine. They routinely present them in anodyne language, calling them “tools” for example, or “innovations,” or “new ideas.”  Unfortunately, they are often the same old oppression and exploitation, with a different label.

For example, you routinely hear that cities and towns need “tools” to control their costs. Well, yes, in a world where those cities and towns aren’t getting the state support they need to pay for state-required services, they obviously need to be relieved of the requirements or given more money. The Assembly’s refusal to face that choice honestly has already led to one bankrupt city and will likely lead to more before long. But the “tools” in this case are not as morally neutral as the word would suggest. Most of the components — cutting pay, cutting pensions, cutting jobs — are just ways to turn decent jobs into poor ones, and to lower the level of services we get. But calling the proposals “taking away pay and benefits from workers especially those in the poor cities” or “paying teachers less” doesn’t sell as well as “tools.” Admitting that these “tools” will exacerbate the difference of opportunity in our schools, putting the kids in the poor districts even farther behind the kids in the wealthy districts just isn’t as pleasant as looking at the nice effect the tools would have on budget numbers.

The sad truth is that the best ideas are likely to provoke conflict. Many good ideas already have. Rhode Island is not stuck in economic neutral because of a dearth of ideas. We are awash in good ideas, but people with power find many of them too threatening to consider seriously. Good ideas are not only worth fighting for, they usually require fighting for.

The title above is a bit of a joke; new ideas should always be welcome. We learn and improve our world by seriously considering them. But though it’s important to foster a climate where good new ideas are developed and can get a hearing, they are absolutely not the way forward for our economy.

What is?  The first step to overcome our economic malaise is not to come up with new ideas, but to insist that the old ones be evaluated honestly. Did tax cuts actually create new jobs?  Did developing all our open space make us more prosperous?  Did cutting education really help our economy?  Did ending welfare relieve pressures on the state budget?  Did cutting state aid to cities and towns actually cut overall taxes?

Straight and honest answers to these policy questions will be worth a million new ideas. Unfortunately for all of us, House leaders seem to be committed to never considering the merits of their tax policies, and Senate leaders seem committed to never considering the merits of their policies about local funding and property taxes. Few suburban town councils in the state seem willing to push back against developers seeking to build on whatever open space is left. Fear of admitting error drives our leaders harder than intellectual honesty.

Until we have leaders willing honestly to confront questions raised by policy — especially policies they championed — and consider their implications with an open mind, all the new ideas in the world won’t help us one bit.

Bank of America Protest: First PVD, Then NC


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A recent DARE rally in front of the Bank of America in downtown Providence. (Photo courtesy of DARE)

After a protest in front of the downtown Bank of America building this afternoon at 5pm, about 15 Rhode Islanders are heading off to Charlotte North Carolina to join thousands of others from across the United States to protest at the bank’s annual shareholder’s meeting.

Today’s action in downtown Providence in front of the Superman building, said Christopher Rotondo, of DARE or Direct Action for Rights and Equality, “is so Bank of America knows there is a local group here in Rhode Island taking up these demands.”

The demands, according to a DARE press release:

  • Principal reduction for all homeowner and full restitution for all those who lost homes. Bank of America has promised principal reduction to current value for 200,000 households. That (verbally) goes much further than any other bank in the recent Attorney General’s settlement. We therefore demand a principal reduction plan byall banks.
  • Banks should hand over all their unoccupied, foreclosed housing to community and non-profit ownership that is not  subject to foreclosure or speculation
  • Reparations to communities of color targeted for predatory lending, including below-market loans to all communities of color
  • We Want an end to evictions and for banks to commit to protecting the right of tenants to stay in their homes by healthy and habitable properties

Members of DARE and the Environmental Justice League of RI will then be taking a new-to-the road bio-diesel bus to Boston before making another 16 hour bus trip to Charlotte starting at 11 p.m. tonight.

DARE has been leading or lending to support to direct action against Bank of America id downtown Providence since October.

Here’s more from release from DARE and the Environmental Justice League of RI:

The rally is part of a massive nationwide effort called 99% Power which Will be protesting outside shareholder meetings across the country to hold corporate America accountable. “Because of big banks like Bank of America, many families don’t have basic rights in  this country. Because of banks like Bank of America, the gap between the rich and the poor is getting Wider. The rich are getting  richer and the poor are getting poorer. We the people bailed out the banks and they don’t feel justified or righteous enough to help  provide jobs or help people in foreclosure,” explains Theresa, Board Glaixperson of DARE. “That’s why DARE and our alliance  called Right to the Gty are going to North Carolina to protest Bank of America, RrtC Wants the people in the city to take back  the city and to build cities that are just, democratic, and sustainable. The banks should not have us, we should have the banks.”

“The E] League understands that foreclosure and eviction are environmental justice issues. Bank of America evícts families and  decimates whole blocks, attracting litter and rats, which impacts the environment and health of the entire neighborhood. Three of  our  Youth members are going to Charlotte to tell Bank of America to stop evicting families and stop bank-rolling fossil fuels  and climate change,” explains Rodriguez-Drix, organizer with the Environmental Justice League.

The Right to the City Alliance will be converging in Charlotte, North Carolina as part of 99% Power to shed light on the divisions  between the 1% and the 99%. Alliance members in attendance include: City Life/ Vida Urbana, Boston., MA, Mothers on the Move  and Community Voices Heard, NY, Miami Workers C/enter and Power U, Florida, Direct Action for Rights and Equality, Providence, RI, Springfield No @ne Leaves, Springfield, MA and the Environmental Justice League of Rhode Island.

Child Health Deficiencies Explain RI Education Gap


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It’s often said that Rhode Island doesn’t get good value for its education dollar. The Rhode Island Public Expenditure Council says so every year, and the claim is dutifully repeated on the radio and I’ve heard it at the State House, too.

But is it true?

A while back I was looking at education funding and comparisons between states, and I noticed how thoroughly Rhode Island is outperformed by Massachusetts. Massachusetts, of course, is less urban than our little state, but even when you leave out Cape Cod and the Berkshires, or only look at urban areas, or high-poverty schools, students in Massachusetts schools tend to score higher on the national NAEP tests of academic prowess. (Check it out.)

As far as costs, Massachusetts is slightly below Rhode Island, though not by far. Both states are pretty much in the middle of the pack. Rhode Island has the 24th highest education expenditures per capita (counting public schools, colleges, and libraries) and Massachusetts is 27th, according to RIPEC’s annual compendium of census data. But it is lower and, according to their respective education departments, Massachusetts spent $13,047 per pupil in 2010, and RI spent $15,024.  (These are elementary and secondary education costs, leaving us 8th in the nation and MA 13th.)

So what’s with that? Our higher costs can’t be attributed to unions, since Massachusetts is as unionized as we are, and besides they pay their teachers more, according to the NEA salary survey. So I looked in the results and found… well I found that it’s pretty hard to compare the numbers, since they’re all reported in different categories. I couldn’t help notice that the Massachusetts numbers do not include things like debt service, construction costs, and transportation for non-public students, maybe a quarter or a fifth of the differences in costs.

Fidgeting around with the numbers for a while, you quickly come to a couple of conclusions. First, the differences are more or less along the lines that Massachusetts has fewer teachers per student, but they get more in the way of support services than here, and they appear to spend quite a bit less on administration. Benefit costs might also have something to do with it, but it’s hard to say. Second, it will take an army of accountants to sort the differences out more precisely than that because the categories just do not line up in a way that makes it easy to compare our state with theirs.

The real reason I was even bothering with this is something else entirely. The Kids Count data book came out in April, and I’ve been meaning to write about it since. Let me say before I go on that I will likely be the last writer in America frantically waving the flag of liberal education as the grim waves of business needs wash over my vessel and draw me down to the darkling deep. To me, there is an inestimable value to teaching our children to appreciate the glories of human civilization. After all, that’s how we pass it on, isn’t it?

But stick with me for a moment, and let’s pretend to look at our schools as little factories to manufacture workers while we consider the, ah, raw materials — and how we care for them. And here’s the funny thing. On pretty much every variable of childhood health and well-being, Massachusetts children have a better time of it than ours do.

Lack of health insurance coverage? 3% vs. 6%. Children in poverty? 14% vs. 19%. Infant mortality? 5.1% vs. 5.9%. Immunized two-year-olds? 80.4% vs. 76.7% This is not just a story about our poverty rate or unemployment rate being higher than theirs. Eligible kids who get food stamps? 68% vs. 75%. Children under the poverty line without health insurance? 6% vs. 11%.

Overall, Kids Count calls Massachusetts the third healthiest state to be a kid in, and Rhode Island lags at 17th. Is it conceivable that this has no bearing on the collective school performance of our children?

Of course, what has our actual record been?  Over the last few years, we’ve tightened eligibility rules and raised co-pays for Medicaid, reduced rental subsidies, ended or severely curtailed child care for poor families, and more.  We prioritize the health of rich taxpayers over the health of poor children, and then complain when the poor children don’t do well on standardized tests.  Go figure.

I’m not counseling only doom and gloom here. In fact, our standing in the Kids Count comparisons has made some desultory progress in the last couple of years.  Despite the funding setbacks, some measures are still improving over where we were a couple of decades ago, just much more slowly and unevenly than we could.  When we’re talking about relative performance of one educational system to another, it’s worth considering the factors outside of the classroom.  Spending a bit more time worrying about the health of our children might be as productive as complaining about the cost of our schools.

Update: I edited to make the distinction between education costs clear.

VIDEO: Three Perspectives on Income Tax Equity Bill


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At a hearing last night, many spoke in favor of Rep. Maria Cimini’s legislation that would raise income taxes on Rhode Island’s richest residents as a way to raise revenue and encourage job creators to lower the state’s unemployment rate, and I chose three to feature because they represent a wide variety of reasons why it makes sense for Rhode Island to take proactive steps to better fund government.

The bill would raise the income tax on those who earn more than $250,000 from 5.99 to 9.99 and that rate would decrease by one percentage point for each percentage point that the state’s unemployment rate drops. It would raise some $132 million in additional revenue.

Budgeting for Disaster: Taxing History


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Is it really too soon to modify our tax code?

In the discussions of taxes at the State House, one line you hear a lot this year is that our state’s new income tax code is new and we should give it time to see how it works out.  That’s what House Speaker Gordon Fox has said, and I’m hearing that it’s the line of the day on Smith Hill, available from any of the House or Senate leadership.

This is, of course, a silly point to make.  The tax changes made last year basically just baked in the low taxes on rich people offered by the “flat tax” alternative.  It used to be that a rich person could choose whether to pay tax under the tax code everyone else uses or using the flat tax limit, and now the flat tax limit is part of the code everyone else uses.  This part may be new, but the overall “strategy” at issue — lower taxes on rich people, expect economy to get better — has been the order of the day in Rhode Island for a long time.  To illustrate what’s really been going on in Rhode Island tax policy, I put together the following graph.

The blue line is the effective RI income tax rate on a fairly typical taxpayer in the top 1% over the last 16 years, with the various cuts that taxpayer has received indicated.  These cuts don’t count tax credits like the film production or historic structures credits, which are typically only available to high-income individuals and which make the effective rate even lower.  The black line indicates the effective tax rate on the median taxpayer (the 50th percentile).  You can see a slight decline in the 1997-2002 period, but the other changes didn’t do much of anything for them.

The unemployment rate, of course, has nothing to do with the tax rate, except as a rhetorical club used to beat people about the head and neck.  There is no evidence that it has any causal relationship with the state tax rate (in either direction), but the relationship between taxes and “job creators” is commonly invoked to persuade lawmakers to support lower taxes.   I’ve included the unemployment rate on the graph as a service, so you can see how little is has to do with the movement of taxes.

One more thing you should know about this graph.  There is some evidence available that the 2012 tax changes raised taxes substantially on the middle percentiles of taxpayers.  Unfortunately, it’s premature to say more than that, since the data won’t be available until later this year, at the earliest.

The House Finance Committee is holding a hearing on several bills designed to raise taxes on the top 1% Tuesday afternoon at 4:30pm in State House room 35.  Rep. Maria Cimini (D-Providence) is the prime sponsor (with 36 co-sponsors) of a bill to raise the taxes on people earning more than $250,000 per year by four percentage points, with that top rate coming down as the unemployment rate also goes down.  Think of it as a “pay for performance” clause for rich people.  There are also bills by Rep. Larry Valencia (D-Charlestown, Exeter, Richmond) and Scott Guthrie (D-Coventry) that will have more or less the same effect, though the income limits and tax changes are slightly different (neither of those bills have the unemployment clause).

Occupy PVD To Hold ‘Robin Hood’ Rally at State House


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Occupy Providence returns to the State House Tuesday, this time to show solidarity for the Miller-Cimini income tax equity bill that is being heard by the powerful House Finance Committee at around 5 p.m. The rally will begin at 4:45.

The bill would raise income taxes on the richest Rhode Islanders, those who earn more than $250,000, back to 9.9 percent, the rate paid by those who made more than $100,000 when former Gov. Don Carcieri and the General Assembly lowered them to 5.9 percent. The bill would drop the rate one percentage point for every percentage point the unemployment rate drops.

This Tuesday, April 24, Occupy Providence (OP) will hold a “Tax the Rich” march at the State House. Occupy Providence’s “Robin Hood” Merry Band of Protesters will march to the King’s court (the RI State House) to oppose the policy of giving income tax breaks to the rich and soaking the poor and middle class with regressive taxes like real estate and sales tax.

WHO: Occupy Providence in Robin Hood costumes, along with other groups supporting the same cause.

WHAT: “Robin Hood” March – OP’s Merry People demand tax justice

WHEN: 4:45pm April 24, this Tuesday

WHERE: The start of the march is at the State House lawn, corner of Gaspee and Francis St.  The march will end inside the State House. Also, some Occupy Providence members will be participating vigorously in the House Finance Committee hearing on taxing the rich, in Room 35 of the State House.

WHY: To demand higher taxes on the rich. The march is timed to coincide with a House Finance Committee hearing Tuesday that considers bills to raise taxes on the wealthiest. Some Occupy Providence members will participate vigorously in that hearing. Occupy Providence expects that the House Committee will vote to kill these bills by “holding them for further study”.  The march will show how Rhode Islanders are fed up with politicians damaging our economy by giving tax breaks to the rich.

VISUALS include Occupy Providence members – some dressed in Robin Hood costumes – marching with signs around, and then into, the State House.

RI CEO Paywatch


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The AFL-CIO released its annual Executive Paywatch website for 2011 yesterday and it shows that the average CEO in American makes 380 times what the average worker earns. In 1980, the ratio was a much more reasonable 42 times as much. Similarly, it also shows that in 2009 – 2010, the average income of the richest 1 percent pay increased 11.6 percent while the 99 percent pay increased by only .2 percent.

The site also lists some CEO salaries by state. Here’s their list for Rhode Island:

  • Brian Goldner, Hasbro: $23,153,471 (2010)
  • Larry J. Merlo, CVS: $14,074,790 (2011)
  • Scott C. Donnelly, Textron: $11,519,177 (2011)
  • Vincent L. Sadusky, Lin TV: $5,490,264 (2010)
  • David G. Whalen, A.T. Cross: $2,613,365 (2010)
  • Merrill W. Sherman, BankRI: $1,580,849 (2010)
  • Martin A. Kits Van Heyningen, KVH Industries: $1,373,559 (2010)
  • Joseph J. MarcAurele, Washington Trust: $1,098,788 (2011)

Goldner, of Hasbro, is the only Rhode Island CEO to make the list of top 100 CEO earners. He’s number 52 on the list, just ahead of the CEO’s of Verizon, American Express and Boeing.

VP Candidate Talks Politics, Race, Music at RIC Friday


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Party for Socialism and LiberationThere is room at every election for new voices – including the ideas of former communists and those of modern-day socialists.  That’s my premise and I’m sticking to it. Well actually, I’m doing more than that this Friday at a panel discussion I’m facilitating at RI College called “Race, Politics and Music: A Look at Rhode 2 Africa and Election Year 2012,” which includes Yari Osorio, the Candidate of Party for Socialism and Liberation.

The panel is part of “Diversity is a Way of L.I.F.E,” which is a statewide conference that happens annually at RIC “to bring together educators, students, artists and community-based activists.”  My session will run on Friday at 4:00 PM in Alger Hall, and Osorio will speak alongside Jim Vincent, President, NAACP Providence Branch and television host of the Jim Vincent Show; Erik Andrade, a spoken word artist and community/youth activist from New Bedford, MA; Talia Whyte, a Boston-based freelance journalist with over ten years experience reporting on social justice, media and technology; and Marco McWilliams, a RI-based educator, activist, lecturer, and published writer (including here on RIFuture.org) who covers the African Diaspora.

The entire conference kicks off at 11:00 AM, and directly following the conference there will be dinner, a poetry open mic, and performances that are part of Bilingual Poetry Festival I organizing at sites across the state.

Below is more information about the panel; updates will also be posted on www.Rhode2Africa.wordpress.com and on Twitter (follow me @rezaclif). Learn more about the conference here on Facebook or register by clicking here.

***

Rhode 2 Africa: Elect the Arts 2012 (R2A 2012), is a documentary and multimedia project being produced with the primary aim of motivating diverse constituencies to vote in November and engage in political conversations at the local, national, and global level.  The project does this through conversations with emerging and established Black musicians, community members and leaders, political experts and scholars, and media professionals – including those involved in or knowledgeable about alternative parties and platforms and underrepresented issues. The exploration of these topics is based on a very simple principle: there is room at every election to hear and examine new voices and ideas, and this year is no different.

Furthermore, as protesters part of Occupy Wall Street, and break-off movements like Women Occupy and Occupy The Hood have demonstrated, citizens across this country have grown tired of never hearing from the variety of voices making up the “99%.” Still, if you pay attention to major news outlets, you would think that the only people engaged and to be targeted for the November elections are the (now) all-white Republican candidates and their party followers. However, one place in which you can hear alternative voices and views on politics is within the music community. Besides being heads of households, tax-payers, insurance-holders, and voters, there are many performers who play at political events, directly and indirectly endorsing candidates; hip hop artists who “rap” about reform and rebellion; and emerging and established artists who’ve performed at The Whitehouse.  R2A Elect the Arts is about sharing the voices of Black and multicultural musicians engaged in this type of work and providing election 2012 coverage and awareness through conversations on race, politics and music.R2A 2012 is currently in-production, but on Friday, April 13 at 4:00 PM, R2A Creator/Producer, Reza Clifton facilitates a panel discussion called “Race, Politics and Music: A Look at Rhode 2 Africa and Election Year 2012.”  In addition to opening the conversation up to the Diversity is a Way of L.I.F.E. statewide conference at Rhode Island College, Clifton will bring in tech/staff to film the discussion and question and answers for inclusion on the documentary.  Attendees who attend and stay for the session are automatically consenting to be recorded and included in the final project.Facilitator:
Reza Clifton, Award-winning writer, multimedia producer and cultural navigator, Creator/Producer of Rhode 2 AfricaConfirmed Panelists:

  • Yari Osorio, Vice Presidential Candidate of the Party for Socialism and Liberation
  • Jim Vincent, President, NAACP Providence Branch and television host
  • Erik Andrade, spoken word artist and community activist from New Bedford, MA
  • Talia Whyte, Boston-based freelance journalist with over ten years experience reporting on social justice, media and technology
  • Marco McWilliams, RI-based educator, activist, lecturer, and published writer who covers the African Diaspora

***

MORE BIOS:

Reza Corinne Clifton is an award-winning writer, producer, digital storyteller and cultural navigator whose work blends and examines music, identity and global consciousness.  She was acknowledged in 2007 and 2009 with Diversity in the Media awards for multimedia projects that she published or launched on her flagship blog, RezaRitesRi.com – including the first Rhode 2 Africa project, which was a four-part interview series and concert series held in Providence. Clifton has also been recognized for written work and direction as health editor a regional women’s magazine and for leadership as a young professional and community organizer in Providence, RI. In 2011 alone, she was named “Most Musical,” a “Trender,” and “Most Soothing Voice” due to her work sharing music and art in the community and on radio – through WRIU and BSR. She remains an active blogger on VenusSings.com, RI Future.org, Rhode2Africa.wordpress.com and on RightHer (a blog from Women’s Fund of Rhode Island) and she sits on the board of Girls Rock! RI, an organization that uses music to empower girls and women in RI.

Yari Osorio is the 2012 vice-presidential candidate of the Party for Socialism and Liberation; he has been a member of the New York City branch of the PSL since 2006.  Born in Cali, Colombia, Osorio immigrated to the United States at age three with his mother and older brother. He is now a U.S. citizen, but grew up undocumented. The harsh anti-immigrant policies in the United States propelled Osorio to become an ardent advocate for social and economic justice, and for equality. Osorio received a BA degree from John Jay CUNY in Forensic Psychology and later became a New York State certified Emergency Medical Technician.  He is an active anti-war and social justice organizer in New York City, and is a volunteer organizer in the anti-war ANSWER Coalition (Act Now to Stop War and End Racism).

Jim Vincent is the President of the the NAACP-Providence, a position he was elected to in December 2010.  Prior to taking on the role of president, Vincent had spent many years serving the organization as Second Vice President, and serving the community in general through his work doing housing and community development in Rhode Island and Massachusetts. In particular, he has worked since March 1998 as the Manager of Constituent Advocacy for Rhode Island Housing, where he provides outreach and technical assistance to underserved communities among other duties.  Vincent has also served on many boards throughout RI that serve the state’s African American, Cape Verdean, and Hispanic communities, and is a former President of the Urban League of Rhode Island.  He may be best known for his role as the Producer and Host of the award winning, Jim Vincent Show .

Erik Andrade is a spoken word artist and community activist from New Bedford, MA who is featured in Rhode 2 Africa: Elect the Arts 2012.  He works with New Bedford youth through People Acting in Community Endeavor (PACE) YouthBuild New Bedford and as co-facilitator of the organization’s Sustainability, Leadership Development and Social Justice Workshops. Andrade is also a founding member of La Soul Renaissance, a local spoken word and hip hop venue which focuses on social justice issues and spirituality, and of the Overflowing Cup Project – an artist circle that works to encourage, recover and inspire creativity through a collective process. Andrade recently ran for the New Bedford School Committee, hoping to bring the voice of at-risk youth to the committee and to issue a call for systematic reform.

Talia Whyte is a freelance journalist who has reported on issues related to social justice, media and technology for over 10 years.  Her work can be found in the Houston Chronicle, The Progressive, theGrio.com, The Boston Globe, MSNBC, PBS, and Al Jazeera, among many other publications and sites.  She is also a leader within Global Wire Associates, a new media consulting firm that promotes innovative communication for advancing social justice.  Whyte is co-author of “Digital Activism Decoded: The New Mechanics of Change.”

Marco McWilliams is a Pan-Africanist intellectual, published writer, and lecturer whose ideas can currently be read at Voxuion.com and RIfuture.org. McWilliams is also an adult literacy instructor for Amos House and English for Action, two organizations based in Providence, RI. As founder of the Providence Africana Reading Collective, McWilliams is known for his rigorous scholarship on social justice and for creating a “progressive learning community dedicated to the interruption of normative narratives of oppression through a critical examination of the emancipatory thought chronicled in the canons of Africana literature.” He will pursue a Ph.D. beginning in 2013.

Obama tax plan clamps down on private equity

Reviewing reports of last week, I see that buried in the details of President Obama’s corporate tax reform proposal is a rare gem. To be clear, the overall package — basically a reduction of the nominal tax rate in exchange for giving up some of the more egregious loopholes — seems an ok deal. But there is a piece of idiocy in the corporate tax code that hasn’t been addressed seriously since Jimmy Carter failed to get it fixed in 1977. This is the tax advantage of debt over equity.

This sounds dull, but it has a story behind it that is far more revealing about “private equity” than any of the blather you’ve already read about Mitt Romney and Bain Capital.

Imagine, for a moment, Company A with a million dollars in profit and a hundred thousand investors, each of whom paid a hundred dollars for a share. The company takes that million, pays taxes on it, and distributes the remainder to the investors. Say they pay 10% of their profits in taxes (what’s left of the 35% rate, after all the loopholes, and not an unusual number). If the company distributes all its profit as dividends, each shareholder gets $9, a 9% annual return on their investment, which isn’t bad at all.

Now imagine a Company B that also earned a million dollars more than they spent. This one has a hundred thousand bondholders, each of whom loaned the company $100 at 10% annual interest. The company sends $10 to each bondholder, and so reports zero profit, thus zero taxes. The shareholders in B?  Who cares about them?

The structure of these two is pretty much the same: both companies sell their products, pay their expenses, and then distribute the money left over. But one calls those distribution payments “dividends” and the other calls them “debt service” and so the first company pays taxes, and the second does not.

What happens if the economy declines?  Company A will simply send out less money in dividends. Company B will go bankrupt if it can’t meet its debt payments.

Clear enough?  Now imagine some private equity vultures, I mean investors, notice that Company A has built up cash reserves of $10 million. They borrow $50 million to purchase Company A, which is now on the hook for $2.5 million per year. Since they’re only earning a million a year, they have to pay part of that debt service from their reserves, but they can do that for a few years. Also, they get to book a loss, which means they can ask the IRS to refund the taxes they paid for the previous two years. And since they can’t get enough back to make a profit, it’s very unlikely they will pay any taxes at all for a long time to come. They used to pay $100,000 in taxes every year, so over the life of the losses they’ll incur, taxpayers will subsidize the deal to the tune of over $2 million.

This is the point that lots of people don’t understand, or refuse to understand, about “private equity.”  They way those outfits make money is usually by using the tax rules to their advantage, not by increasing corporate efficiency or streamlining processes. A company with exploitable assets could be one with an underutilized factory or intellectual property, but it’s more likely just to be one that has cash in reserve or that paid a big tax bill in the last couple of years. “Assets” like these are much more easily quantified than property and you can estimate them via public documents, something you can’t do with factory outputs or licensing fees.

In other words, that wave of leveraged buyouts that began in the 1980s and ended — well it hasn’t really ended — was largely subsidized by you and me. When RJR Nabisco was bought in 1989 for $21 billion, taxpayers ultimately paid more than $5 billion to the purchasers. This was not the free market at work, it was the tax code encouraging buccaneers like the folks at KKR, Michael Milken, and Ivan Boesky, along with Mitt Romney and Bain Capital. Without the tax advantage of debt over equity, very few of those leveraged buyouts could ever have happened.

Jimmy Carter’s economic team recognized the risk to American manufacturing represented by the tax preference for debt over equity, and addressing it was a central piece of his proposed 1977 overhaul of the tax code. But the change was opposed by business, and he dropped it. Ronald Reagan’s administration made a half-hearted attempt to fix it in 1984, but it went nowhere. Dan Rostenkowski, the longtime head of the House Ways and Means Committee, worked on a proposal in 1987, but it also died. George Bush, Sr., airily said, “I have no agenda on that. I’m always a little wary about the government trying to solve problems when, historically, the marketplace has been able to solve them,” and declined to do anything about the issue. Bill Clinton’s 1995 tax proposals contained a provision addressing the issue, but these were presented during the government shut down episode and did not make it into the final bill resolving that debacle.

So far as I know, that’s the last time there was a proposal on the congressional table to address what has been one of the most destructive tax policies on record. Over the past 30 years, our leaders, with only a few exceptions, have stood by as big finance has devastated our manufacturing sector, laid off hundreds of thousands of people, and done away with their well-paid jobs — and you and I paid for it. I know President Obama’s corporate tax proposal isn’t going to become law in this Congress, but fixing the tax code to eliminate the subsidy for leveraged corporate takeovers is important, and I’m glad someone has put it forward — again.

 

Rhode Islanders for Tax Equity Meets Today


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There’s a broad-based coalition building around a bill that would raise income taxes on the wealthiest Rhode Islanders. The coalition includes legislators, labor leaders, small business owners, parents, college students and a at least one mayor.

Pawtucket Mayor Don Grebian will join the other members of this coalition, called Rhode Islanders for Tax Equity, today at 3:30 at the State House for a press conference to answer questions about the new tax proposal that would raise income taxes on those who make more than $250,000 a year.

“RITE is advocating for a tax policy that will take the burden off of the middle class and ensure the most privileged Rhode Islanders are paying their fair share,” said the group in a press release.

The group estimates the bill could yield $118 million in revenue for the state budget.

Rep. Maria Cimini, a Providence Democrat who sponsored the bill in the House, previously told RI Future: “We’ve really called on low and middle income Rhode Islanders to feel the pain of this recession. I don’t feel that we’ve called on upper income Rhode Islanders to feel that pain or share that sacrifice.”

Cimini will be at the event today, as will the bill’s sponsor in the Senate, Josh Miller, D- Cranston.

Cimini said the bill is different from other tax the rich proposals because the increase would drop commiserate with the state’s unemployment rate. In that way, it will serve as an incentive for the job creator class to actually create jobs.

Payday Reform and Policy Change: A Recent Conversation on Sonic Watermelons on BSR


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PROVIDENCE, RI – Are Rhode Islanders paying fees for loans that are higher than what residents in other states are paying? The answer in some cases is yes – 260% versus 36%. Learn more about the type of loans that charge these rates, the impact of these loans on RI families, and what you can do to stop the practice in this excerpt from my interview with Margaux Morriseau and Nick Figueroa of the RI Coalition for Payday Reform.

It’s from the February 8, 2012 edition of Sonic Watermelons on BSR (Brown Student and Community Radio) – a show I produce as part of my work on VenusSings.com and with Isis Storm, a collective of artists, writers, and educators who empower women and underserved communities through performances, workshops, and media projects.

For more information on the topic, click here to listen to the full interview or click on the handouts provided below by the RI Coalition for Payday Reform.

FYI:  Hear Sonic Watermelons live every Wednesday, from 6:00-8:00 PM…

Presented by Venus Sings and Isis Storm
Because the World is a Big Place
With Big Ideas and Lots and Lots of Music

Live or archived: bsrlive.com
Studio phonelines: 401-863-9277
Contact: IsisStorm.com, VenusSings.com

Surprising Occupy Surprises Even Cynical Me

From the very beginning, the Occupy movement has been one surprise after another. The scale of the turnout in lower Manhattan is said to have stunned the AdBusters crew. The scale of peripheral support that came to the major protests surprised the activist core. The scale of the police response surprised the major media that wanted to ignore the story. And the speed with which the movement swept across the country surprised everyone.

But more than anything, the biggest surprise has been the movement’s staying power. Despite virtually all the US encampments being raided or voluntarily abandoned, the movement continues to offer up – you guessed it – surprises.

Occupy the SEC

Last weeks’ 325-page letter to the SEC et al from an Occupy Wall Street working group that supports the Volcker Rule portion of Dodd-Frank, came as a shock to the financial community. This was no rambling left wing polemic (such as you might be reading now), but a carefully considered expression of the broad ranging benefits of controls on the largest institutions. It was the kind of thing that could only be constructed by people who come from inside those large financial institutions.

To decode, this was Wall Street occupying Wall Street. Well and truly the 5th Column.

Surely, it is dawning on even the most strident radical capitalist that it is in their own self-interest to come to grips with the basics of this movement. It’s one thing when left wing radicals are talking about income inequality. It’s something else altogether different when it’s a major topic at the World Economic Forum in Davos!

This doesn’t need to make sense; only fiction needs to make sense. It is what it is, and I am very pleasantly surprised.

Reestablishing Solidarity

As the winter weather kept many people indoors and away from Occupy actions, I’ve become a bit concerned that the potentially fractious nature of hardcore activist collaborations would create an atmosphere that might discourage or alienate the large mass of peripheral supporters like me. While it’s true that I haven’t seen much evidence of this, I also haven’t seen much evidence of the opposite.

For this reason, I’ve suggested to every Occupier I know that it would be helpful to us on the periphery if Occupy created a series of regular, low-risk protests scheduled at such a time and constructed in such a way that so-called “regular people” could feel safe in coming out and showing solidarity with the core of the movement. The model that I keep pointing to is the regular Monday night protests held in 1989 in Berlin on both sides of the Berlin Wall.

Don’t Screw This Up

I’ve heard from many in and around the core of the movement their concern about some issues and ideas taking precedent over others. If that line of thinking becomes  prevalent, this movement will fail.

To be sure, it is crucial that the movement remain open to and aware of ALL the various viewpoints, issues, communities, etc. that make up this remarkable collection. But it is equally crucial that ALL these communities recognize that is the solidarity among themselves that attracts the large mass of peripheral supporters. And it is that large mass on the periphery that will force the change – NOT the hardcore at the center. The relationship is symbiotic; the periphery needs the center and vice versa.

To succeed – that means radically altering the dialog, awakening the apathetic and driving for real change – this movement can’t let itself get ripped apart. Everything needs to be focused on maintaining solidarity and attracting supporters.

Solidarity is the Goal

I’ve spent the last 30 years wondering what the hell was wrong with people in the US. Didn’t they see where this country was heading? Didn’t they understand that we couldn’t just keep growing on leverage without it eventually biting us in the ass? Didn’t they see that we were becoming an empire with our military spread far and wide? Didn’t they see that this nation was rapidly driving itself deep into the “bad guys of history” category?

Surprisingly, Occupy has shown that many more people than I had thought do seem to understand.

So don’t let us down, Occupy. We don’t want to go down on the wrong side of history. You are our last, best chance to pull the US back from the brink of catastrophe.

If we blow it now, we won’t get another opportunity like this in our lifetime.

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.

Understanding The Intersection of Race, Music and Politics

(RHODE ISLAND, MASSACHUSETTS) – If I were to describe some of the events I have coming up as political, I’m sure someone would ask me, “hey Reza, what is political about an event featuring spoken word poetry and world rhythms?”  This is the type of question I love to answer, though, sadly, few seem to find the courage to ask it.  Still, I think I want to spend a little time breaking it down for you.

Now, I hate to make this sound clichéd or ultra familiar in terms of the African-American experience, but, really, it’s not clichéd; the transatlantic slave trade and American chattel slavery is where it begins.  Remember, this was (is?) a system and a series of policies that made reading and using native languages illegal; made breaking up families, forced breeding, and forced sterilization standard during different periods; and made identity and self-determination a muddled concept at best.  Family stories, national heroes, indigenous recipes – banned, marginalized, or high-jacked.  From these conditions, a people fought onward and moved forward, often in the form of Negro spirituals, blues music, and later hip hop.  In essence, if personhood, pride, and goal-setting could not be achieved through homeownership, the right to vote, or access to living wages, then it was through music, oral storytelling, and creating new (creole) sounds within which people of African-descent found courage and voice.

Today, we see challenges and struggles such as low high school graduation rates, exorbitant prison/probation rates, and disparities in healthcare access, treatment, and mortality rates – again, caused or condoned by this country and state’s systems and leaders.  Therefore it is in the tradition of our ancestors, activists, and cultural rebels before us that “The Rhythm Heard Round the World” event happening tonight is, in fact, a political gathering.  There will be new spaces, new sounds, and new ways to communicate our stories and build community – strategies we are forced to return to again and again; a recipe that calls for a dash of politics and a sprinkle of art.

That is one of the reasons I’m so excited about another event I have coming up: Soul Rebels Unite: An Empower Communities Event and Reggae Bashment.  Don’t tell me that a genre of music known for a song called “Legalize It” is not a place to discuss or engage in political conversations.  As I’ve explained to some: it is one thing to perform about smoking weed; it is another thing to write and sing a song asking people to mobilize, advocate and change laws.  This song, for instance, alongside others about unifying as a people to fight illegitimate governance are the subjects that make up the content of the reggae songs that launched the international appeal the genre has today.

So as I get ready to go out to do this musical-political work that I’m regularly engaged in, I ask those working on political and social change to take a peek at the events I have listed, and reconsider your stance about who and where you will or will not engage audiences.  Try analyzing things similarly to how I did above – tracing the historical perspective to trends we see today.  For the event on Saturday with Girls Rock! RI and Sojourner House, remember how long before women were granted the right to vote, observe the lack of women holding office today, and investigate the dismal number of women making decisions within the entertainment and communications fields.  Then tell me that there is no room for art in politics or no reason to mix the two topics.

If you still feel that same way – well, as Mr. T used to say, I pity the fool.  If you’re open, or just want to debate me, I hope you’ll join me over the next few days.

***

1) “The Rhythm Heard Round the World”
A Night Of Spoken Word Poetry, World Rhythms & An Open Mic

Thursday, January 19, 2012
7:30 – 10:00 PM
Roots Cultural Center
276 Westminster Street
Providence, RI

Price: $5.00

Presented by VenusSings.com, Isis Storm & Funda Fest 14, the event features Singer-Songwriter and Recording Artist, The Dubber; Pecussionist Kera Washington and Bassist Joanna Maria of the band, Zili Misik and performers from the women’s art collective, Isis Storm. The event also includes talent from the RI Black Storytellers’ Funda Fest.

To sign up ahead of time for the open mic, email singsvenus@gmail.com or leave a comment here.

FB EVENT / MORE INFO: https://www.facebook.com/events/243212192414449/

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2) VenusSings.com, rhymeCulture, Isis Storm & La Soul Renaissance Present

Soul Rebels Unite:
An Empower Communities Event and Reggae Bashment

Friday, January 20, 2012
Black Watch Pub
266 Dartmouth Street
New Bedford, MA

Confirmed Artists:
Tem Blessed & Blest Energy ft. the Empress, aka Cita-Light ~ Isis Storm ~ The Dubber ~ King-I ~ Erik Andrade ~ The AS220 Criss Cross Orchestra ~ DJ Blade Mon ~ Rebel International ~ and more.

12-2 PM:
Empower Communities Youth Workshop with YouthBuild New Bedford

7-9PM:
“People of Culture Mixer and Marketplace” with local, regional and national activists, entrepreneurs, poets and musicians

9PM-2AM:
Hip Hop and Reggae Performances, DJ’s, and Sound Systems. PLUS album release party for “Re-Energized” by Tem Blessed & Blest Energy ft. the Empress, aka Cita-Light.

FB EVENT / MORE INFO: https://www.facebook.com/events/224041467674515/
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3) GIRLS ROCK THE SOJOURNER HOUSE: A JOINT BENEFIT FOR:
Girls Rock Camp Alliance & Sojourner House
And A Gathering for Empowerment

Saturday, January 21, 2012
7:00 PM – 1:00 AM
Roots Cultural Center
276 Westminster Street
Providence, RI

FEATURING:
-> Me Jane
-> Simple Etiquette
-> The Bookmarks
-> 5th Elament (CO-FOUNDER OF ISIS STORM)
-> ROUTE .44
-> JERI AND THE JEEPSTERS

FB EVENT / MORE INFO:
https://www.facebook.com/events/226863584050679/

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.


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