164-1 Politics

The New American Economy by Tom Suhrbur

From the earliest days of the Industrial Revolution, manufacturing drove the U.S. economy. Steel, railroad, textiles, automobiles and countless other enterprises made the U.S. the leading industrial power of the world in the 20th Century. Industry also gave rise to labor unions. Following WWII, a third of the workforce mostly in the private sector was unionized. Strong labor unions shifted income from capital to labor. The U.S. working class enjoyed the highest standard of living in the world in the 1960s.

Today, a growing portion of American business profits is derived from financial transactions instead of manufacturing. In 1947, the U.S. financial services industry comprised only 10% of total non-farm business profits. Today more than half of all profits are derived from investment, trading, rent, student loans, mortgages, brokerage, credit cards and other financial transactions.


Citizen Action Endorsements

Chicago DSA is a member of Citizen Action/Illinois, and our representative, Ron Baiman, participated in their endorsement meeting on January 16. Endorsement requires a super-majority of 60%, and a move to endorse Bernie Sanders failed by two votes. Citizen Action/Illinois is making no endorsement for the Presidential nomination. You can find the rest of their endorsements HERE.

Citizen Action/Illinois has also released its Illinois legislative scorecard, available HERE.

Bernie Sanders

Rickey Hendon and Elaine Shaw have filed objections to the nominating petitions for Bernie Sanders. These objections are apparently directed at the petitions placing Sanders’ name on the ballot, not toward his delegates.

Early voting begins February 4.

Time to End the Illinois Hostage Stand-Off

At The Shriver Brief, John Bouman writes:

Like most hostage-takers, Governor Rauner knew that if his demands were not met, at some point the hostages would have to begin to die, literally or figuratively. And, sure enough, the dying is underway.


#Black Workers Matter

Last September, the Institute for Policy Studies held a two-day convening on race and organizing at the historic Pullen Memorial Baptist Church in Raleigh, North Carolina, which has a decades-long tradition of progressive stands on social issues.  The Black Workers Matter: Organize the South convening focused on fresh, new strategies for supporting organizing as a means of lifting up black workers in this region, known for its high levels of poverty, low wages, and low unionization rates. Read the highlights and conclusions from the conference HERE. (PDF)

Save Jobs at the Chicago Nabisco Plant

From the Chicago Federation of Labor:

Mondelez, the maker of Nabisco brands products, intends to eliminate more than 600 good paying jobs on the Southside of Chicago and send these jobs to Salinas, Mexico. For more than 60 years, the South Kedzie Street Bakery made cookies and crackers enjoyed by families in our area and across the country.

By making the decision to send production to Salinas, Mexico, Nabisco is eliminating hundreds of middle class jobs in this heavily African-American and Hispanic community in southwestern Chicago.

Mondelez plans to send these jobs to Mexico and then to bring the products produced there back to the U.S. for sale in the very communities where the laid-off American workers reside.

To learn more and to join the fight, visit fightforamericanjobs.org.

To listen to their new radio ad:

The New American Economy

by Tom Suhrbur

Deindustrialization! Globalization! Post-industrial economy! Service economy! These are just a few phases used to describe the radical transformation of the U.S. economy over the last 35 years.

From the earliest days of the Industrial Revolution, manufacturing drove the U.S. economy. Steel, railroad, textiles, automobiles and countless other enterprises made the U.S. the leading industrial power of the world in the 20th Century. Industry also gave rise to labor unions. Following WWII, a third of the workforce mostly in the private sector was unionized. Strong labor unions shifted income from capital to labor. The U.S. working class enjoyed the highest standard of living in the world in the 1960s.

Today, a growing portion of American business profits is derived from financial transactions instead of manufacturing. In 1947, the U.S. financial services industry comprised only 10% of total non-farm business profits. Today more than half of all profits are derived from investment, trading, rent, student loans, mortgages, brokerage, credit cards and other financial transactions.

In 1975, the total value of stock trading in the US was $171 billion – less than 5% of the Gross Domestic Product (GDP); in 2014, it increased to almost $27 trillion (about 1.5 times or GDP). Besides stock market trading, there is a largely unregulated market in over the counter trading (OTC) in equity-based derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations. In 2010, the value of the derivative market was estimated at $21 trillion. Speculation, in effect gambling, guides much of this trading activity. Day traders, hedge fund managers and high frequency traders have turn Wall Street into the biggest casino on earth. Managers of private equity firms and hedge funds become mega-millionaires and billionaires almost overnight. Lord Turner, UK’s senior financial regulator, dubbed this speculation as “socially useless.” So powerful is the financial services sector that, when the economy crashed in 2008 as a result of the reckless behavior, no one was prosecuted. Instead, the federal government bailed them out.*

This new economy has winner and losers. The biggest winners, by far, are those who earn much of their income from financial assets. The biggest losers are bottom 80% — the working class as well as many college-educated lower middle class who are deep in debt and stuck in low paying jobs. The bottom 80% relies almost exclusively on earnings from wages and salaries. They own just less than 9% of all stocks. Less than 1% of their income is derived from capital gains and dividends.

A large portion of the income for top earners, on the other hand, comes from investments. The top 10% wealthiest possess 80% of all financial assets. The top 1% own over 35% of all stock. Those in the top 0.1% receive most of their income from their financial assets. Given this situation, it is not surprising that those who own the most financial assets are reaping the greatest benefits in the growing financial services economy. According to a 2014 Organization for Economic Co-operation report, 80% of total income growth went to the top 10% from 1975 to 2007.

The shift in wealth and income to the top earners is intentional. It was guided by conservative economic policies. Tax cuts during the Reagan and Bush II administrations were designed enrich the rich. Sold as “supply side economics,” Reagan cut the top income tax bracket from 70% to 39%. Bush I, and Clinton cut capital gains. Bush II not only cut capital gains but also the income tax and the estate tax. According to a report by the Congressional Research Service, capital gains tax cuts were the single most important contributor to the growing income inequality since 1996.**

Free trade agreements have globalized the labor markets without any meaningful labor or environmental standards. As a result, millions of manufacturing jobs has been transferred overseas. American workers cannot compete with desperately poor and oppressed workers in South America and Asia. Clothing, electronics, appliances and many other consumer products are no longer made in the U.S. Small American flags handed out at 4th of July Parades are made in China.

While cheap foreign labor has enriched the investor class, it has devastated working class wages and unions. Millions of good paying manufacturing jobs have outsourced to low wage nations. Wages in the U.S. have stagnated. Many workers have been forced to work two or more jobs, typically in the service economy, to pay their bills. College education is no longer a guarantee of the good life. Many educated lower middle class students are strapped with huge college loans debts but end up working low paid jobs. The standard of living has fallen for many.

In the private sector, outsourcing jobs to low wage countries has given employers a powerful tool to fight union organizing and to force concessions in bargaining. According to the U.S. Bureau of Labor Statistics, labor unions represent just 6.6% of the workforce. Total union membership has dropped from 17.7 million in 1983 to 14.6 million in 2013. Most of the successful organizing has been in the public sector employment. Unions represent over 35.7% of public employees. Not surprising, the public sector unions are now the chief target of conservatives and the business community.

For the bottom 80%, the further down you go on the income ladder the worse off it gets. The income gap between rich and poor in the U.S. is greater than in any other developed country. According to U.S. Census, half of the U.S. population lives in poverty or are low-income with no real savings and barely able to pay their bills. According to a survey by the Associated Press, four out of five U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives. In 2013, child poverty reached record highs, with 16.7 million children living in food insecure households, about 35% more than 2007 levels.

The election of President Reagan in 1980 signaled the triumph of conservative, free market economics. The so-called Reagan Revolution did not end when he left office. Every presidential administration that followed enacted free market policies that created the new economy. Despite opposition from Labor Democrats, many so-called “New Democrats” joined Republicans in support of free (but not fair) trade agreements, banking deregulation and tax cutting. Conservative Republicans carried free market policies much further attacking labor union rights, environment regulations, the social safety net and other public policies that infringe upon their free market ideology and corporate prerogatives. The 2016 election could be a watershed in American politics. Will the Republican Party win the White House controlling all three branches of federal power? Will the slide into plutocracy accelerated with a conservative election victory? Will unionism survive? Will the Democratic Party coalesce around a working class agenda?

*See the movie “The Big Short.” It does a good job covering some of the issues raised in this article.

**Supply side is a cute way of saying trickle down economics. It claims that, by supplying them with money through large tax breaks, the rich will create jobs through investments and personal spending thereby creating prosperity for others. Of course, they may use the money to speculate in securities and land, purchase a yacht on the Mediterranean, or buy a chalet in the s Swiss Alps. They may invest the money overseas manufacturing. Nothing guarantees that they will create jobs for Americans. But the lost revenue will restrict governmental investments in research, education, infrastructure and other socially beneficial spending in the home economy.

A Note on Taxing the Wealthy

The ACA Proves It Can Be Done

by Bill Barclay

The news item that has excited many economists –- you can be excused for missing it –- was the release by the IRS of the data on income and taxes for the 400 highest income filers in 2013. Of course it was interesting to learn that the income needed to be admitted into this select group dropped to a mere $105 million (AGI), down from $135 million in 2012, undoubtedly letting in a lot of riff-raff.

But, the big number was the effective tax rate: 22.9%. Now, you may be thinking, “What? … Why was it so low?” But in 2012 it was only 16.7%. The revenue difference? More than $6.5 billion or about $16.5 million for each of the 400 filers.

Did the 400 simply decide to come clean and pay up? Hardly. The increase came about for two reasons: first, the expiration of the Bush tax cuts on the highest income groups and, second, the Affordable Care Act (ACA, aka Obamacare).

I see the perplexed look on your face –- Obamacare? Yes, because the ACA contained two little-noticed, by many, very progressive tax regulations designed to finance Medicare. The first is a 2.35% tax on wage income above the usual cut-off for Social Security and Medicare, $118,500 in 2016. This tax raised only a modest amount from our 400 because most of their income is not in the form of wages and salaries. But a second Medicare tax of 3.8% that covers both investment and wage income did raise a lot of money from this group. And all of us should welcome a tax that doesn’t privilege unearned income over wage income because it reverses the trend in tax policy that goes back to the Reagan days.

And you wonder why they want to repeal the ACA.

Petitioning for Sanders

by Tom Broderick

Petitions to put Presidential candidate Senator Bernie Sanders on the Illinois Primary Ballot won’t be submitted until January 6, which is just after the deadline for this article. The same holds true for delegates that we will elect to join him at the Democratic Party National Convention in Philadelphia in July later this year.

We hope to have one Chicago DSA member on the ballot as a Sanders delegate from the 6th Congressional District (CD): Alexander Franklin. The 6th CD is represented by Republican Peter Roskam, so we are very excited that Alex may go to Philadelphia and represent the views of Democratic Socialism from such a right wing stronghold.

Illinois will send 156 of 182 delegates to the Democratic National Convention (DNC) pledged to vote for particular ­Presidential candidate based on the results of the vote tally from the March 15 Illinois Primary. Not only is it critical to vote for Bernie Sanders for President, you must look for the delegates pledged to vote for Bernie. Look for the Sanders’ delegates on your primary ballot and be sure to vote for them.

The remaining 26 delegates to the DNC will be officially designated as “Unpledged.” These are “Political Leaders and Elected Officials” (PLEOs) and will be made up from 14 Democratic National Committee members, 11 Members of Congress (1 Senator and 10 Representatives) and one Distinguished Party Leader (President Barack Obama). One reason to send the maximum number of electable Bernie delegates to Philadelphia is to influence these few “Unpledged” Super Delegates.

Working independent of the official Bernie Sanders’ Presidential Campaign, Chicago DSA had comrades and friends circulating delegate petitions in the following Congressional Districts: 1 (Bobby Rush); 4 (Luis V. Gutierrez); 5 (Mike Quigley); 6 (Peter Roskam); 7 (Danny K. Davis); 8 (Tammy Duckworth); 9 (Jan Schakowsky); 11 (Bill Foster); 14 (Randy Hultgren) and 16 (Adam Kinzinger).

Elected Bernie delegates can influence the DNC. 102 delegates are to be pledged to presidential contenders based on the primary results in each CD. The more Bernie delegates sent to Philadelphia the greater their/our influence at the DNC. Rep. Jan Schakowsky will be a PLEO. She came out early for Hillary, but there are many voters in the 9th CD who mistrust Hillary’s deep ties to the world of trans-national investment and banking. Sending all of the elected Bernie Delegates to Philadelphia will deliver to Rep. Schakowsky a strong message in support of democracy.

Bernie delegates from districts that are heavily Republican can also sway events at the DNC. Sending a slew of Bernie delegates to the DNC from these districts will strengthen the voice of democratic values regardless of the upchuck delivered at the Republican National Convention. Voting for Bernie and his pledged delegates will only sow seeds for the future.

My appreciation to all the friends and comrades who freely gave time and energy in response to Chicago DSA’s outreach to get Bernie’s delegates on the Illinois Primary ballot: Giudi Weiss, Alec Hudson, Tom Ladendorf, Norm Groetzinger, Alexander Franklin, Sydney Baiman, Bill Barclay, Pat Dooley, Judith Gardiner, Paul Sakol, Hilda Schlatter, Diane Scott, Peg Strobel, Tom Suhrbur, Holly Graff, Tom Simonds, George Kazda, Gary Hagen and Dave Rathke. Hopefully I haven’t missed anyone that I knew helped, but if so, mea culpa.

The number of valid signatures to get Bernie on the Illinois Democratic Primary ballot was 5,500. Nearly 10,000 signatures were collected. Delegates for the ballot required 500 valid signatures from their respective Congressional Districts. In the CDs where Chicago DSA had petition circulators the unofficial counts are: more than 850 in the 1st, almost 800 in the 4th, more than 1,100 in the 5th, more than 1,300 in the 6th, more than 1,100 in the 7th, more than 700 in the 8th, more than 1,500 in the 9th, more than 1,000 in the 11th, nearly 1,000 in the 14th and almost 700 in the 16th.

Any who read this and worked for Bernie’s campaign know that elections are but one step in the process of bringing forth democratic socialism. DSA is part of that process. Bread and Roses together breathe democratic socialism. There will be more work to do whether or not Bernie Sanders is elected President of the United States.

Editor’s Note: Paid for by Chicago DSA and not authorized by any candidate or candidate’s committee. Dig it?


For more information on the delegate selection process, CLICK HERE.

163-2 Politics

Robin Hood Tax in Europe
At Democratic Left, Bill Barclay writes:

On December 8, ten nations announced an agreement on “core issues.”  Two in particular are important because, while they may seem technical in nature, they are key to an effective FTT.

First, the proposed FTT will apply on a “gross” rather than a “net” basis. That is to say, it will apply to all trades that occur, not just to those still in effect at the end of the trading day. This is a major defeat for the HFT constituency.

Second, in order to counter various tax avoidance tactics, the FTT will apply if at least one of the parties to the trade is a resident in one of the ten participating countries and/or if the asset traded is issued in one of these countries.

In addition, it looks as if the proposed FTT will apply to both the assets themselves as well as to derivatives based on the assets. This is very important, since it eliminates another way of avoiding the tax.


What Contract Do Police Deserve?
At The Chicago Reporter, Adeshina Emmanuel begins:

In the fallout from the release of the Laquan McDonald video, Chicago’s top cop lost his job. But the police officer who shot the teenager 16 times is still employed.

Officer Jason Van Dyke, who is captured on police dash cam video shooting McDonald, can thank the police union.

The Fraternal Order of Police contract with the city shapes how Chicago handles police misconduct allegations, disciplines rank-and-file officers, as well as when the city pays legal costs for police officers accused of wrongdoing. While activists have long called for changes to the contract, many people in local government have not been eager to take on that fight — until now.

With cries of reform ringing louder than before and a federal investigation of the police department, aldermen are demanding changes to a union contract that breezed through the City Council in 2014.


Praying for Godzilla
At Mayoral Tutorial, Don Washington writes:

So here you are listening to radio ads and watching media coverage where Bruce Rauner… of all people is painting Mike Madigan as Satan… which could be true. But then you think: hold up, isn’t Bruce Rauner Satan? Then it dawns on you that all the answers to this epistemological conundrum are bad and you cry out to a suddenly absent God: “In the name of all that is holy are we to understand that the only thing standing between Illinois becoming Wisconsin, Ohio, New Jersey or Kansas is Mike Madigan?” You know that moment in every good Godzilla film where you have to switch gears from can the heroes stop Godzilla to can Godzilla stop the aliens and their pet monster from destroying Tokyo? You know, the place in the film where everyone is hoping that after kicking a lot of furry or scaly ass Godzilla will lose interest and just wander back into the ocean? That’s where we are now… That would mean that Mike Madigan is Godzilla… I swear to God following politics is going to make me take to the drink.


Attention Should Be Paid
At In These Times, Joe Burns argues that the strike in Wisconsin at the Kohler faucet plant deserves more than cursory attention:

Two thousand workers at the Kohler faucet plant in Wisconsin have been walking the picket since November 16. Such a strike would have been commonplace decades ago. Nowadays it is a rarity. Major strikes of over 1,000 workers are few and far between. Even rarer are open-ended strikes at an industrial plant.

Today’s battered labor movement no longer thinks of watershed strikes; we are so beaten down and used to defeat that no particular loss is seen as critical. And sadly, it’s not as if labor must win this particular battle to survive. The truth is labor has learned to live with defeat. But a more fundamental point is at stake: Labor must redevelop the ability to win this type of strike if we are to have any chance of survival.


At Jacobin, Joel Feingold provides an account of the history of heroic struggles for labor rights at Kohler HERE.

Blue to Red, Red to Blue
At FiveThirtyEight, Aaron Bycoffe and David Wasserman present a clever online tool wherein the user can play with the demographics of the 2016 election. Devout marxists might not like the assumptions implicit in the demographic categories, but check it out HERE.


Another Rotten Cover-Up

At The Chicago Reporter, Curtis Black outlines what is known about the Chicago Police Department attempt to conceal the execution of Laquan McDonald. Black quotes Jamie Kalven of The Invisible Institute:

“The real issue here is, this terrible thing happened, how did our governmental institutions respond?” Kalven said.  “And from everything we’ve learned, compulsively at every level, from the cops on the scene to the highest levels of government, they responded by circling the wagons and by fabricating a narrative that they knew was completely false.”  To him this response is “part of a systemic problem” and preserves “the underlying conditions that allow abuse and shield abuse.”


Trans Pacific Partnership

Public Citizen has published an initial analysis of the key chapters of the proposed “free trade” agreement. It’s worse than we thought. Read about it HERE. (PDF)

Violence Against Women’s Rights

At Mother Jones, Nina Liss-Schultz writes:

Since the release of the Center for Medical Progress’ videos that purport to show Planned Parenthood selling fetal issue, harassment, threats, and attacks against abortion providers, their staff, and facilities have surged dramatically across the country, according to new numbers from the National Abortion Federation.


Mergers and Alliance

National People’s Action, Alliance for a Just Society, and USAction are merging to form a new umbrella organization for consumer, community, and worker center organizations: People’s Action. Your editor doesn’t have any special insight as to the timing or the rationale for the union; the news was included in an email invitation to a reception, a form of bait perhaps. The three organizations already have some overlap in membership. Here in Illinois, Chicago DSA is a member of Citizen Action/Illinois, which is affiliated with USAction. Chicago DSA has a long history with Citizen Action/Illinois, back to when it was called the Illinois Public Action Council. They’re good people, even if we sometimes disagree.

Also in the works is an alliance between eight Chicago-area worker centers, the Raise the Floor Alliance:

Both a shared capacity builder and space for collective action, RTF represents the next step in the worker center movement. Founding members include Arise Chicago, Centro de Trabajadores Unidos, Chicago Community & Workers Rights, Chicago Workers Collaborative, Latino Union of Chicago, Restaurant Opportunities Center, Warehouse Workers for Justice and Workers’ Center for Racial Justice.

They’re celebrating the launching of this project on December 9 at the National Mexican Museum of Art. You can get the details HERE.

Chicago Afire?

by Bob Roman

Dry tinder, high wind, and a persistent spark is all you need for one hell of a fire. Ask any Chicagoan, where the Great Fire seems to have epigenetically impressed itself on the heredity of the natives. And in 2015 we have Bruce Rauner, a fanatically right-wing plutocrat Governor plus the huffing and puffing of a mostly cynical Democratic legislative leadership, and the dry tinder of a state in fiscal paralysis. With distress rising from the downtrodden into the business class, all it would take tonight is a pissed off cow. Two demonstrations this month suggest fire and smoke.

On November 2, Moral Monday Illinois held the latest and possibly the largest of its Moral Monday protests. Well over 500 people gathered at the Thompson Center in the Loop and marched to the Chicago Board of Trade. They shut it down. Several dozen people were arrested. Some went with the police cooperatively. Others were carried. This was not the scripted kabuki performance typical of many labor demonstrations of late. Those arrested do face charges, not a ticket, and Moral Monday Illinois was collecting for a bail fund.

The militancy was impressive and calculated to get the attention of the business class, media, and politicians, but the primary demand was more important: It was for a “LaSalle Street Tax”. Also known as a Robin Hood Tax or a Tobin Tax, it amounts to a small sales tax on trades done on the exchanges. It is something that Chicago DSA and our friends at the Chicago Political Economy Group have been promoting for years, and it’s an example of how this idea is making its way into political discussion, even legislation. Representative Flowers has a bill before the Illinois House and plans are afoot for a Senate bill in next session.

On November 10, Fight for 15 called a nationwide strike of fast food workers and others for a $15 an hour minimum wage and, for many, a union. I have no idea how many such workers walked out on Tuesday, but that is a close second in significance to the noise and visibility generated by demonstrations in 270 cities across the nation.

In Chicago, we had several actions. Two in the morning on the south and west sides were directed at workplaces. The grand finale was a very large, media oriented demonstration at the Thompson Center. It filled the plaza. These demonstrations are akin to high school pep rallies, but they do have a cumulative affect. It was not so long ago that a demand for a $10 an hour minimum was considered the radical edge of the possible. And by repetition, working conditions and collective bargaining may soon be placed on the agenda, too.

Fight for 15 on Nov 10 2015
Peg Strobel, Alec Hudson, and Bill Barclay were among the many DSA members at the November 10 demonstration

Arise Chicago organized a bus to the demonstration from Oak Park that Greater Oak Park DSA, several west suburban congregations, and fast food workers helped fill. Chicago DSA mailed a few hundred postcards that promoted the bus and the demonstration to the usual suspects in the greater Oak Park area. We also did a similar mailing to people and organizations in downtown Chicago. And we promoted the event using the web, including Facebook, and with emails.

Where does that leave us? In mid-air with a dozen plates in play. This is a work in progress, and we invite your incendiary participation.