Public Pension Raiders Slip Up

One way to scuttle unions is to go after their pensions.  The premise is that these public employee pensions are responsible for huge deficits in state budgets.  Conveniently built-in to that premise is the implication that public sector unions and those rich retirees are bleeding the taxpayers dry.  This diversion reinforces the argument of anyone who wants to cut taxes and cut the unions off at the knees. It looks like this strategy is running into some difficulties;  the main one is that it doesn’t square with contract law.

On April 30, the Oregon Supreme Court shut down a recent raid on the public employee pension system that had been engineered by the Governor and public sector haters in 2013.  The vocabulary framing the discussion achieved notoriety among the targets of the raid.  The fix became known as the “Grand Bargain” and it was going to achieve “savings” by reducing COLA and other formulations promised to the Public Employee Retirement System (PERS) members.  

The Supreme Court said, among other things, that the state could not go back on a promise: that promise being the benefits already defined for current state workers and retirees.  The workers are made whole by the decision.  The tragedy is that the mine-field of finding a solution to a state funding crisis that had been kicked down the road by the Grand Bargain is once again laid bare by the decision.  And the same old bogeymen and ragged targets are once again on parade: Goddamn retirees. Blood-sucking unions.

Must be a trend or something: On May 8 the Illinois Supreme Court ruled (unanimously) that the pension overhaul that reined in benefits to fix the “consistently underfunded” system was unconstitutional.  The can that had been kicked down the road in Illinois  ($111B) makes the almost-billion dollar gap in Oregon look like nickels and dimes lost in the couch.  The Wall Street Journal reports that “Illinois joins Oregon and Arizona as recent examples of high courts peeling back pension overhauls. Other states, including Colorado and Florida, have upheld laws cutting benefits.”

At best, this turnaround is a very mixed bag.  Deferred justice is always welcome but we are just waiting for the other shoe to drop.  State budgets are still bleeding more than ever. State governments, are in thrall to the likes of ALEC and the Koch brothers. These predators will be on the prowl for new victims.  State governments, owned by the money, have no stomach for going after the obvious and rightful sources of “new revenue” (another catch-phrase from the Grand Bargain). The people need to shut down the raiders who have stolen their voice.  And the states need to close corporate tax loopholes and tax their wealthiest citizens fairly.  

The Civil Rights Connection

So I’ve got this blog  - see?  A central premise was that I would focus on wealth inequality and the nature of the US plutocracy:  a pretty wide ballpark even at that so I tried to narrow my focus.  For example, there are huge issues of civil rights and oppression that I ignored for the sake of that premise.  Clearly, that is not tenable or even consistent with my intention.  It’s blinders for the hell of it and it makes the discussion kind of parochial.

I’m here to say, as if you didn’t know, that there is a very big connection between civil rights and wealth inequality.  Please consider this somewhat wider premise and let me know what you think.

First, about racism:  Racism can be personal bigotry, learned and acculturated.  But there has been well over 200 years of scholarship and activism that prove - to me, anyway - that racism is encouraged institutionally. By whom?  Who could benefit?  Well, certainly the very wealthy could benefit.  Napoleon used divide-and-conquer. Of course, Marx talked about class warfare.  And John Sayles summed it all up in his film, Matewan.  There is much to be gained by cementing ideas of them versus us.  If you can justify closing opportunities for upward mobility or aid to families, you can keep more for yourself.  All those social services and federal scholarships are expensive; just an invitation for higher taxes on the 1%.  But it’s not only simple greed - you’ve got to protect the top rung.  

Starving social services is easy to justify if you demonize the poor or marginalize minority populations.  It keeps taxes low.  And it keeps a potential population of irate voters stupid and powerless.  

Prisons can be useful as well as lucrative.  School-to-prison pipeline, racial profiling, mandatory sentencing - all play their role in filling the prisons and vindicating racism and class prejudice.  The Koch brothers are heavily invested in prisons.  For-profit prisons are suing states for not keeping the prisons full.

Militarizing the police deepens the impression even more that “we” have to be protected from “them”.  (Who is “we”?  Who is “them”?)  Militarizing the police implicitly indoctrinates the police. Militarizing the police makes them the firm ally that the oligarchs will need if push comes to shove.   Militarizing the police is the 180-degree opposite of community policing.

Racism is no doubt deeply satisfying to racists.  It is also profoundly useful to the oligarchy.   Racism is real and it’s a crucial diversion.

The only political rights are those protected by law.  The anchor of law in this country is the Constitution - the same one that (originally) protected slavery.  That’s why, as long as you live in the United States, you love the Constitution.  For what it’s worth, discrimination is against the law (thank you, 14th amendment).  For what it’s worth, any interventions that limit your free speech, your blogging, your peaceably marching and protesting, your demands for an accounting from your government,  Etcetera! … are against the law (thank you, 1st Amendment).  For what it’s worth, any activity that restricts your participation in voting is against the law (14th, 15th Amendment, Voting Rights Act and more than one named Civil Rights Act - thank you very much).  

Feeling oppressed?  Don’t be fooled.  Don’t be distracted.  Use the tools available, imperfect though they may be.

Other diversions and distortions threaten these civil rights.  Religious claims justify bigotry on the basis of the 1st Amendment.  Corporations now have civil rights which is very troubling because of their power to buy public opinion and the state legislatures.

Corporations and big, big money can stifle free inquiry and dissent. They can privatize the public schools.  They can co-opt or buy higher education.  They can bust unions. They can dismantle institutions of government that protect you.

There is work to be done.  To paraphrase Pope Paul VI, if you want freedom, work for justice.

Blogalink: Kochs fail in Montana

Wow. Timing is everything.  I posted my plaintive, hopeful prayer about bottling up the Kochs last night and found this brilliant flash of light this morning.

Please read this inspirational tale of epic failure of Koch money and power among the resourceful and committed citizens of Montana:

Kochs defeated in Montana: 6 lessons the country can learn from this rural Western state

Fighting Big Money

It is very difficult to find good news about the Koch brothers these days.  Their depredations - you would think - are well-known.  But apparently they are not well known enough; Huffington Post reports that half the country doesn’t know who they are. A possible bright spot is that the half that does know the Koch brothers doesn’t like them.

It’s hard to fight the ability of millions and millions of dollars (a billion by the Koch brothers at last count): to buy candidates, to buy elections, to stifle free speech and employee rights, to compromise academic free inquiry, to undermine science, to undermine public schools, or to profit from pollution and a burgeoning prison population.  The best news is mostly those glimmers of protest that are not snuffed out by the machine.

Amy Dean reaches some useful conclusions in her thoughtful and focused March 25 article.  (She appears on the Al-Jazeerah America website, if such a disclaimer is necessary.)  Money can be extremely difficult to counter unless you have more money.  Unions don’t have enough but they do have organized people power which is demonstrably and consistently effective:  “This kind of in-person voter outreach has been shown to be far more effective than the TV ads most big money political campaigns churn out.”  Small wonder that union busting is a burning focus of the Koch brothers. Amy provides a number of encouraging examples where this is borne out.

Citizens United vs FEC, a Supreme Court case,  since 2010 is the constitutional basis for granting personal first amendment rights to corporations, including off course non-profit super PACs, but also for-profit corporations and labor unions.  Freedom of speech was primarily cited by corporate entities but recent  claims based on the freedom of religion are starting to appear.  The debut of the Super PACs and their ability to sway elections relative to the size of their pile of cash, arguably, comprise a grave and insidious threat to a democratic, civil society.  Access to political debate and policymaking is now comparable to the status quo of any banana republic, entrenched plutocracy or corrupt dictatorship that we or anyone has ever had the pleasure of propping up. Welcome to Havana before July of 1953.

Off course - in a democracy - anyone can have a super PAC.  All it takes is money.  There are liberal Super PACs, too.   A comparison of who has the biggest pile might be useful except for the problem of Dark Money:

Dark money is a term for funds given to politically active nonprofits that can receive unlimited donations from corporations, individuals, and unions but are not required to disclose their donors.[1][2] Funds can be spent on behalf of a candidate running in an election, or to influence voting on a ballot question. Following the 2014 elections, CBS News reported on the rise of the phenomenon.[3] The New York Times editorial board opined that the 2014 federal mid-term elections were influenced by "greatest wave of secret, special-interest money ever raised in a congressional election."[4]

Dark Money is big, possibly dwarfing the amounts that must be reported by super PACs.  In sum, we really don’t know how much money is being spent to swing elections.

Gosh.  What to do?  Well, what about those wealthy progressives?  Tom Steyer is one and he has a Super PAC.  One disadvantage of fighting a Super PAC with a Super PAC is the difficulty of laying claim to the moral high-road.  For example,  Senate Majority Leader Harry Reid said

“[W]hat is un-American is when shadowy billionaires pour unlimited money into our democracy to rig the system to benefit themselves and the wealthiest 1 percent”

In response, Republicans have pounced on Steyer for relying on the same laws and court rulings that allow the Kochs to use their wealth to have a massive influence on elections. And they gleefully note that Reid and other Democrats attended a recent fundraiser at Steyer’s San Francisco home.

Another liberal Super Pac is American Bridge:

(David) Brock announced in 2010 that he was forming a super-PAC, American Bridge, to help elect liberal Democrats, starting with the 2012 election cycle. In describing Brock's intentions for the super-PAC, The New York Times referred to Brock as a "prominent Democratic political operative" (mirrored by The Washington Post's characterization of him as a "former journalist-turned-political operative") and New York Magazine referred to Brock's "hyperpartisanship."

In a 2011 interview with Politico, Brock vowed to wage "guerrilla warfare and sabotage" against Fox News.

For most of us, throwing money is not an option - at least not as an individual.  But loyally paying your union dues and sending in $50 to your favorite cause does definitely matter - possibly decisively;  as does that “kind of in-person voter outreach” that unions do.  That is also - potentially - decisively important.  

The money wouldn’t matter at all if we could rely on ourselves to think critically and act in our informed self-interest.  But that’s a platitude or at the very least, it's unhelpful.  Everybody that can, has to be a teacher.  And one-on-one is still the best counter there is to propaganda hosed at the masses.

Blogalink: On the power of 47

I found this link posted on LinkedIn:

The number 47 is out to destroy the Republican Party... read all about it... extra, extra!

I wish it were that easy.  Hope you enjoy it.

Selling Minimum Wage

No, wait:  Don’t click away - just a second.  Remember those relentless, obscure, dry as dirt Supply and Demand curves from high school economics?  Look, there’re two of them right now!  When the market for some commodity - like labor - is stable, there is exactly as much labor available (supply) as is needed (demand) at some particular price.   According to the cruel, inexorable laws of Supply and Demand,  you can mess things up if you artificially impose a price - say you pass a law to raise the minimum wage.  Even though neither Supply nor Demand have increased or decreased (the S and D “curves” have not changed position), the market is out of equilibrium.  Now there is a labor surplus - there is more labor available (supply) than is needed (demand) at that artificially imposed price.  People get laid off because they are too expensive.

That’s what they say - if you go messing with the markets you’ll get distortions like surpluses and shortages.  The President just raised the minimum wage with an executive action of limited scope.  But it sounds like raising the minimum wage is foolish or bad or counterproductive - like pissing into the wind?  Is that inappropriate?  For that matter, is it true?

The data do not always support the theory, straightforward though it may be.  Changes may be mandated nationally but they’ll take place locally and in a wider social context than is suggested by the small number of considerations in the graphs.  In other words, it’s complicated.  Oh, that whole discussion about raising the minimum wage, social justice, impact on families, impact on communities:  Maybe it’s bad for the brand if  a company dumps hundreds of workers in the face of a national crusade to help families of the working poor.  

Also, at a fundamental level, a lot of those low-skilled, low-wage jobs can not be automated away - yet.  People are still more flexible than most machines at that interface where the customer meets the product or service, e.g. counter workers, cashiers, store floor walkers.  So, apparently, people are not simply commodities that can be placed neatly on the graph.

Walmart has conveniently taken center stage to provide a case in point.  Walmart, the largest private employer in the country, will raise wages at least to $9/hour by April and perhaps to $10 by February.  Paul Krugman, without painting himself into any corners, suggests a number of possible reasons for this significant action - it will affect half a million employees.  

Walmart is under political pressure over wages so low that a substantial number of employees are on food stamps and Medicaid. …

Paying workers better will lead to reduced turnover, better morale and higher productivity.

Also in the mix is:

… workers are gaining clout thanks to an improving labor market, reflected in increasing willingness to quit bad jobs.

This third reason is the strongest.  It describes just plain-old, every-day, garden-variety supply and demand.  There is a greater demand for labor at any price - a shift in the demand curve.  There are no shortages or surpluses of labor, no distortions in the market,  just a new equilibrium point at a higher price.  In an improving economy with more jobs and better jobs, Walmart has to pay more for labor.  This explanation has the benefit of simplicity and does not rely on Walmart to act out of fairness nor on the basis of such employee-centric considerations as reducing turnover or improving morale.  So this change in Walmart policy is probably not the twinkle of a new dawn to a brighter day of employer enlightenment.

But many cities and states have also raised their minimum wages since Obama’s action in January of 2014.  

• the minimum wage in Oakland, California, will rise to $12.25 per hour and will rise accordingly with standard of living increases over the next several years.
• Since January 1st, 2015, San Francisco employers must pay their employees $11.05 per hour, and that rate will steadily increase to $15 per hour over the next four years.
• Alaska, current minimum wage has been kicked up to $8.75 per hour, and it will increase to $9.75 per hour on January 1st of next year
• Arkansas, whose minimum wage has been raised to $7.50 per hour, will raise to $8.00 per hour next year and $8.50 in 2017
• Washington's new, higher minimum wage took effect Jan. 1, 2015, a 15-cent increase to $9.47

And finally, to the hysterical alarm of the business community, there is the example of Seattle:    

Seattle, Washington, one of the strongest remaining bastions of liberal philosophy left in the country, passed a phased-in $15 minimum wage law earlier this year. The highest minimum wage in the country. The vote was unanimous and the throng outside cheered, but for many this is a loss from which they will never recover. It is a blow to the profitability of businesses that they just can’t take.

Cities and states are not Walmarts and these initiatives are not old-brain knee-jerk responses to the forces of supply and demand.  This is the “political pressure” that Krugman optimistically alluded to.

Perhaps announcing a “national crusade to help families of the working poor” is an exaggeration.  But President Obama certainly broke something loose when he took executive action in early 2014 and raised the minimum wage to be paid to federal contractors to $10.10/hour.  Without the passage of a law - (good luck with that) - that’s the most he could do.  The legal range of that action is so limited that it would seem to be only symbolic.  And so it is - powerfully symbolic.

Yay! Free tuition!

By 1944 Americans could at least visualize a time of no war, still almost a year away.  Some could also remember the short, sharp recession at the end of World War I - many veterans returned to America to face unemployment and homelessness.  This memory, the national unity born of patriotism and sacrifice, and perhaps the momentum of the New Deal made this time an especially fertile chance for passing the Serviceman’s Readjustment Act of 1944, known famously forever after as the GI Bill.

The Free Dictionary by Farlex highlights the important aspects of the GI Bill:

The original GI Bill offered veterans up to $500 a year for college tuition and other educational costs—ample funding at the time. An unmarried veteran also received a $50-a-month allowance for each month spent in uniform; a married veteran received slightly more. Other benefits included mortgage subsidies, enabling veterans to purchase homes with relative ease.

...having spent a large part of their youth engaged in battle, World War II veterans were highly motivated. GIs in their late twenties and early thirties returned to the United States in droves, anxious to catch up with their nonmilitary peers, marry, settle down, and support a family. The benefits provided by the GI Bill facilitated these goals.

Veterans were not the only beneficiaries of the GI Bill. Colleges, with increased enrollments, received years of financial security following its enactment. Veterans demanded more practical college course work, and this need led to a changed concept of higher education, with more emphasis on degree programs like business and engineering.

The lines of race, class, and religion blurred as higher education became attainable for all veterans. No longer was a college degree—and the higher paying jobs that normally follow it—limited to members of the upper class. Federal income increased as the average income of taxpayers in the United States increased, and as the veterans graduated from colleges, women and members of minorities enrolled to fill the gaps they left.

The GI Bill's mortgage subsidies led to an escalated demand for housing and the development of suburbs.  One-fifth of all the single family homes built in the 20 years following World War II were financed with help from the GI Bill's loan guarantee program, symbolizing the emergence of a new middle class.

Time marches on and now our landscape is considerably less fertile for sustaining such rich opportunities on such a broad front.  Still a refuge from unemployment, millions of students are going to school.  Most of them are financing school with loans. Millions will be hobbled, well into their working years, by net income lost to debt service, default, bad credit, home foreclosure, bankruptcy - the full range of personal financial threats and catastrophes. There are, however, noticeable bright spots. Maybe these will blossom into greater opportunities for everyone if the mighty pendulum starts swinging the other way.

The military services offer impressive college support through a broad array of programs that may include 100% subsidized tuition, generous loan repayment plans, living and supply stipends, or tech support (free laptops!). The tradeoff is and has always been in exchange for a commitment to a time of military service - a potentially lethal risk.  It’s not for everyone.  It’s an incredible boon for those whose limited choices leave military service as one of their best options.

In 2014, there were 23 colleges or universities in the United States with endowments of $4 billion dollars or more:  including Harvard with $35.9 billion down to Vanderbilt University with $4.09 billion.  Unsurprisingly, this list corresponds very closely with lists by Forbes or US News and World Report of the very best colleges.  Sitting on that kind of money, colleges can - and some do - simply offer free tuition to excellent students from families of limited means.  At least 11 prestigious colleges offer such programs.  There are at least nine colleges - all reportedly excellent - who traditionally offer free tuition to all enrolled students.  They are Deep Springs College, Cooper Union, Curtis Institute of Music, College of the Ozarks, Berea College, Webb Institute, Macaulay Honors College at City University of New York (CUNY), Alice Lloyd College and Barclay College.

At his State of the Union address given by President Obama on January 20, he proposed a federal program to guarantee free attendance at a community college.

...  the plan would provide tuition-free classes for students going to school at least half time who maintain a GPA of 2.5 or higher and are making steady progress toward a degree or transferring to a four-year institution.

“Forty percent of our college students choose community college,” Mr. Obama said. “Some are young and starting out. Some are older and looking for a better job. Some are veterans and single parents trying to transition back into the job market. Whoever you are, this plan is your chance to graduate ready for the new economy, without a load of debt.”

The plan is modelled after an existing program in Tennessee.

Like Obama’s executive action raising the minimum wage to $10.10 for federal contractors, it matters that initiative comes from the President.  The idea becomes a focus or a goal that puts tremendous pressure on state and national legislators to match it or explain why not.  With that cat officially out of the bag, numerous high profile politicians have started their next campaign early and are crafting similar or expanded plans to the one proposed by Obama.  Since January 20, Alaska Pacific University has announced  a program to reduce tuition costs practically to $0.

Proposals have been floated at many other schools since the State of the Union Address.  There are a handful of such programs already being developed in states like Tennessee, Indiana and Hawaii.

We have endured at least 20 years of ferocious disinvestment in public schools under relentless assaults by corporatists and charter school advocates. The sudden interest in institutionalizing universal access to higher ed has to be a signal of a change in political will or public attitudes about support for public education, kindergarten through college. Don’tcha think?  No - that’s wishful thinking. There are no imperatives in any of this. We are presented with an opportunity - a spark - that needs to be protected and fanned.

Good News and Bad News

This just in: The Oregon economy is doing great.  We are roaring back from the Great Recession.  The Oregon economy is doing so great that Oregon will exceed its projections for tax revenues and this will animate the notorious “Kicker”.  Oregon will refund these “extra” taxes back to the taxpayers as a paltry pro-rated, per capita check - maybe enough to pay your Comcast bill for one month.

Of course if this “extra” money just stayed in the treasury - or was pigeonholed into an interest-bearing “rainy day” account- we could build a reserve. We'd be able to weather the storm and not have to strangle the schools during the inevitable hunger games phase of our feast-or-famine economy.

The Kicker is very popular in Oregon.  Only piecemeal reform has been successful to plug this drain on the treasury.  The corporate kicker was repealed by a ballot initiative in 2012.  Corporate income tax rebates no longer gush to huge out-of-state corporations when times are flush here in Oregon.  

So when your kicker check comes, you’ll be able to take your friends out for pizza and beer - once, maybe twice.  When we run out of money to fund the schools, we’ll worry about that next time.

Senator Haas' email (cited above)

This is the full text of an email notice from Oregon State Senator Mark Haas.  I wanted to provide a link to it in the article posted above but I did not find it on his website.

Dear Friends,

Oregon’s economy is booming.  That’s the story from the economists who presented to the Senate Revenue Committee today.

Their quarterly forecast indicated that Oregon is recovering from the Great Recession, with more people going back to work and with wages increasing.  In fact, the economy is growing so fast it is projected to kick Oregon’s unique “kicker” law. Here are the highlights:

•  2013-15 Revenue: The overall revenue forecast for the 2013-15 biennium increased $100.7 million from the December 2014 forecast ($87.6 million more in projected General Fund resources, $13.1 million increase in Lottery Funds).
• Economic Outlook: Oregon’s economic recovery continues to be stable and growing in the short term, with job growth expected to continue at its current pace for another two years.
• Personal Kicker: A $349.3 million kicker is projected in 2015, largely due to very strong projected April 2015 tax filings from investment income and 2013 Special Session revenue increases. The revenue lost to the projected personal income tax kicker is felt mostly in the 2015-17 biennium.  Calculations to determine if a kicker is triggered do not occur until July 2015.
• Corporate Kicker: A $55.7 million corporate kicker is projected to direct $55.7 million to K-12 funding (Measure 85, 2012).
• 2015-17 Revenue: Strong General Fund and Lottery Fund growth projections offset much of the revenue lost to the kicker, so the forecast for the 2015-17 biennium is only $21 million less than projected in the December 2014 forecast.

The kicker law is something Oregonians love to talk about.  I agree with many of you that it should probably be replaced with something that is more in tune with Oregon’s economy. Like many inventions, haircuts and dance moves from the 1970’s, it’s probably time for an update.  You can check out the full revenue forecast here.

We are also working hard in the Senate Education Committee.  The Debt-Free Education Bill (SB 81) is scheduled for a public hearing next Tuesday, February 24th. This bill  represents the greatest expansion of college accessibility and affordability to date. SB 81 would give Oregon high school graduates the opportunity to attend two years of community college or trade school at no cost to the student.  I urge you to follow and support this bill. Debt-free higher education is the key to building more Oregon careers that provide livable family wages.

Sincerely,

Senator Mark Hass

Senate District 14

email: Sen.MarkHass@state.or.us I phone: 503-986-1714