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All across the country, states are facing budget crises and are looking to fix the situation. However, the focus of many of the “fixes” is to attack public sector unions and erode labor rights in general. The justification is that public sector workers supposedly have inflated benefit packages, and they must finally “pay their fair share.”  In reality, this is hogwash. It is nothing more than an excuse to bust unions, rollback social safety nets, all while giving tax cuts to the rich. On the Rachel Maddow Show, Naomi Klein brilliantly describes what is really going on. The recent massive demonstrations in Wisconsin, and the threat of a general strike by some labor leaders, show that this time workers aren’t necessarily going to sit back and take the beating.

Most of the ant-union bills are happening under Republican governors. But working people are under attack, under the pretext of addressing a fiscal crisis, even under the reign Democratic local governments. In Providence, RI, for example, a labor-backed mayor recently handed all of the public school teachers pink slips. This was to prepare for firings and school closings that are said to be imminent and necessary to address the deficit. I just wrote something on the situation.

I propose one “fix” that would both help solve some of these economic woes and be fair. It focuses on going after those who bask in great wealth even during the economic crisis that they caused. We need to raise taxes on corporations and the rich. We need to collect the taxes that they owe and close the loopholes that allow them to shield money from taxes. The reality is that many corporations pay little to no taxes, and the rich pay taxes almost a third lower than they did in the 1950s—a time of great economic growth.

Yes, taxes need to be cut. We need to extend the tax cuts for the bottom 80% of the population–I would even settle for extending them for the bottom 95%. However, the top percentiles’ taxes need to be increased, so here are a few reasons why we should raise (and collect!) taxes on the rich, not cut them.

First, history shows that they can handle it. In the golden age of capitalism–a time where GDP growth rates vastly outpaced those of the last 30 years–the top tax brackets paid taxes as high as 94% of their income. High rates lasted up until as late as the early 1970s, with them paying 70%.

Second, it is good for the economy and the budget. It provides government income that can be used to provided vital services to the working class–like unemployment benefits, subsidized housing and healthcare, increasing the minimum wage, etc.–as well as be a source of funding for infrastructure spending–which we need badly, especially in addressing the ecological crisis. Both of these things stimulate the economy and provide jobs. Providing the social services reducing inequality and decreases the chances of economic meltdown. It also puts more dispensable income in the hands of people who will spend it, increasing demand and stimulating the economy. Infrastructure spending will directly create jobs–that’s an easy one.

Third, tax cuts for the wealthy do not create jobs at the level we need, if any at all. Wealthy people do not put their money into the economy the same way that working class and middle income people do. They are more likely to save it or sit on it to wait for more profitable times in the market. For example, reports came out recently stating that non-financial companies are sitting on over a TRILLION DOLLARS. Yet, they are not hiring people. This is because they don’t have confidence in the market. They don’t think they’ll make the profits the want. Here’s the link to the article.

What we need is a high road, wage-led growth, not low road, profit-led growth. The latter is what we’ve had since the 70s–the neoliberal era. This can be done in the short term by providing adequate fiscal stimulus–much, much, larger than has already been provided–and taxing the wealthy and cutting wasteful spending can pay for it (a few wars come to mind). Also, the government needs to have a more active role in creating jobs through infrastructure spending, etc. Trickle-down economics just doesn’t work.

But here’s the catch. It is going to be difficult to for anything to happen on the federal level in the next two years. We couldn’t get meaningful economic legislation passed under a Democratic majority, never mind under a Republican controlled house. We need to consolidate our forces on the ground and build so we can pressure for change from below now, as well as get some people elected in 2012. This does not, however, suggest extending tax cuts for the wealthy and cutting spending on social programs becomes the only option. That will only exacerbate the crisis even more. We need to buckle down and make sure that they DON”T get extended, that labor rights are not taken away, that teachers don’t get fired, and defend all of the other programs that are good–like social security. Also, there is room for us to wage battles on the state level. If we show our power in the streets, as they have done in Wisconsin, we can make them listen to us. A state-wide or nation-wide general strike certainly would shift some power to our hands.

The first step is to break away from the narrative that says solving the economic crisis “will require shared sacrifice across our community,” to quote Providence, RI’s Mayor Taveras. Working people are always sacrificing. It’s time for those who caused the current crisis—and for those who benefit from the perpetual crisis working people face laboring under an oppressive system like capitalism—to pay. Let’s draw a line in the sand and pick sides. Which side will you choose?

John Cronan Jr is a restaurant worker, organizer, and a masters student at the Murphy Institute for Worker Education and Labor Studies.  Currently, he is a volunteer organizer for the Restaurant Opportunities Center of New York (ROC-NY). John is also an avid Boston sports fan.

A few weeks ago, in a supposed attempt to put a dent in the federal deficit, Obama announced that he would be freezing wages for federal employees—over 2 million workers.  Obama said, “The hard truth is that getting this deficit under control is going to require some broad sacrifice…And that sacrifice must be shared by the employees of the federal government.” This is just pure nonsense. Freezing wages for working class people in bad economic times will at best only contribute to a sluggish recovery, and at worst contribute to a double-dip into a recession.  Furthermore, why do ordinary Americans—most federal employees are not analysts making 6 figures—have to share the sacrifice alone? What about the rich?  Maybe they will just share their sacrifice in taxes….

Try again.  Yesterday, the Senate pretty much sured up the passage a controversial tax bill, as it cleared a procedural hurdle with overwhelming support.  The upside is that the bill extends unemployment benefits for 13 months. The downside is, well, everything else. Worst of all, it will extend Bush-era tax cuts, including the ones for the rich—going against one of his biggest campaign promises not to do so.  This part of the bill was forcefully pushed by Republicans but Obama easily caved in, per usual these days.  Yes, you heard me right. The bankers on Wall St. and the other super rich get “socialism for the rich” through bailouts, and they also get rewarded with tax breaks.

Firstly, this is, and should be, a huge insult to every working person in the United States.  It shows that bankers and corporations matter most, and they will be rewarded no matter how much they ruin our economy and people’s lives in the process.  Secondly, the fact that unemployment benefits were held hostage and tagged onto a bill that will hurt working people should also be an insult. Thirdly, it will add to the federal deficit by taking away billions of dollars in federal revenue.  Confused? Weren’t they trying to reduce that? Fourthly, it shows that the elites really don’t care about the deficit.  It is merely used as an excuse to attack social spending on programs and services that benefit working people, and at the same time ensure that the rich get richer.  Now it makes sense, no?

As I argued in a previous post, on the whole the Democrats are not able to put forth truly progressive economy policy because they are beholden to moneyed interests.  However, this seems to be the beginning of austerity programs that are not only regressive, but represent an escalation of the thirty years or so attack that has been taking place against working America.  Sadly, they will only worse under the coming Republican controlled House and weakened Democratic Senate. And, yes, this should be cause for great concern.

I could continue to explain the ills of the measures, but I think they speak for themselves.  The real question is what to do.  I think these recent events change the game plan a bit.  More than ever I am convinced that there is very little hope of getting any progressive measure passed in the next two years on a national level, and the chances of regressive measures has increased. Therefore, I believe we must focus more than ever on building grassroots opposition to any and all policies and forces that siege oppressed communities.  We need to start now if we are to have any influence in the years to come.

I think for the labor movement this means a few things.   It means that it is time for it to take its place as a leading actor and advocate for working and oppressed people everywhere. In a great article in the New Labor Forum, Stephen Lerner of SEIU says:

This is the time to offer a moral voice for those devastated by the economic crisis, and to have the courage and passion to liberate ourselves from the straitjacket of limited expectations. Unions, and their members, must join with communities long mired in poverty—and the tens of millions of people being forced out of the middle class—to imagine and articulate a vision of a better world, and to help lead the battle to win it. We have the opportunity to work with a growing group of potential allies to develop a plan and strategy to achieve that vision—but, to do so, we have to question and challenge long held assumptions and ideas.

One of those “long held assumptions” is that what is good for free market capitalism is good for us.  We need to ditch that in the gutter.  So, yes, we are in tough political climate, but we should use such hectic times to provide a true voice of hope and vision; and a vehicle to exercise collective will to reach it.  Let’s get started. It’s getting cold.

John Cronan Jr is a restaurant worker, organizer, and a masters student at the Murphy Institute for Worker Education and Labor Studies.  Currently, he is a volunteer organizer for the Restaurant Opportunities Center of New York (ROC-NY). John is also an avid Boston sports fan.

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” –Warren Buffet

Almost four years to the day after billionaire Warren Buffet candidly spoke those words, a bailout package was agreed upon by the European Union and IMF to give to Ireland[i], at the tune of $89. 4 billion (euro67.5 billion) in loans.  It is meant to help the country with its massive banking crisis that has sent the Celtic Tiger crawling back to its cage.  The money, however, comes with some conditions.

First, Ireland will have to repay the money at an average 5.8% interest rate, which is higher than the 5.2% Greece agreed to pay out. In other words, it is an astronomically high and unfair rate to enforce.  Even with reasonable growth, it would be unaffordable.  Speaking of growth, what are the other conditions?

Second, the EU and the IMF will require that Ireland engage in fiscal austerity.  With the pretext of reducing the deficit, the government will have to basically cut social spending. This is going to have horrendous effects on the Irish economy, especially affecting the working class.  Economist Robin Hahnel said, “This is going to do nothing but aggravate the recessionary pressures within those economies and … increase their rates of unemployment. Production is going to drop further, income will drop and that means tax revenues are going to drop.”  But, hey, what really is important is that the private investors and the richer nations, like Germany and the United States, get their money back. Also part of this austerity program involves raising the sales, or value-added, tax to 23 percent, while the government pledges not to raise the already low corporate tax from 12 percent. Political economist Leo Panitch describes this situation of inequality, and how the United States corporations play a role:

And I might point out that the American corporations that have been the largest investors in Ireland in terms of manufacturing investment and exports from Ireland are threatening they’ll pull out unless this 12 percent corporate tax is maintained. So you see the enormous class inequity that’s built into this, the enormous demonstrations that have taken place in Ireland. And they’re not new.

This is where Buffet’s brutally honest words come in.  The conditions of this bailout, and the circumstances that created the need for a bailout, amount to nothing less than class warfare; and unless popular forces can resist it, the capitalists and their states who are waging it are going to come out on top, at the expense of the great majority of the population.

It is here that the Irish people have a chance to shine, and they have already been getting the ball rolling.  On November 3rd, tens of thousands of students from all over Ireland flooded the streets of Dublin to protest the proposed increase of registration fees, even resulting in an occupation of the Department of Finance. On November 27th, over a 100,000 people came out on the streets of Dublin to protest the austerity measures.  It was organized by the mainstream, moderate trade union leaders, but they did so knowing that they had to—the people were angry.  Moreover, leftwing forces showed a strong showing, pointing out that more radical action is required if the Irish people are to weather the storm.  Furthermore, the Irish people can shine if they are able to mobilize even greater numbers of people, and create a situation where their voices are not only heard but action in their favor is taken.

To do this, they need a plan of action and an alternative.  Given the likely effects on the economy due to austerity, described above, Ireland’s best bet, according to economist Dean Baker, is to learn from Argentina and default on its debt and break from the euro.  He says,

Ireland should study the lessons of Argentina.  Breaking from the euro would have consequences, but it is getting increasingly likely that the pain from the break is less than the pain of staying in…What the people of Ireland and every country must realize is that if they agree to play by the bankers’ rules, they will lose.

Then, Ireland should nationalize its banking system and turn it into a public utility under the democratic control of the populace.  This does not mean merely putting public money into banks while demanding no executive powers. Panitch, discussing such a proposal for all countries, says, “I mean taking the banks properly into public ownership and changing the function of the banks, as Mitterrand did not do in France in the 1980s, so that the criteria on which they invest are redefined as social purposes, to be democratically determined.”

The people of Ireland are at a crossroads. They can accept austerity and watch their economic situation deteriorate; or they can take bold action and do what is necessary to limit the long-term suffering of the majority, as well as protect against further crises. They have the opportunity to set an example for the countries that are next on the austerity hit list—notably Spain and Portugal—and for the people in the richer countries, like the United States, as well. They can show us that when Warren Buffet’s class, the rich, capitalist class, wages war on the working class, there will be resistance, and we do have an alternative.[ii] Will they be able to exclaim with confidence, “We won’t pay! We will win!”?

[i] For the sake of this blog, I will use the term “Ireland” to describe the 26 counties that compromise the south of Ireland but are referred to as the “Republic of Ireland.”  The true Republic of Ireland also consists of the 6 counties of Northern Ireland that are still under colonial British rule.  Many of the progressive forces fighting austerity also seek a united 32 County Ireland, myself included.

[ii] This is a link to an article I wrote on an alternative economic system to capitalism, called participatory economics.

John Cronan Jr is a restaurant worker, organizer, and a masters student at the Murphy Institute for Worker Education and Labor Studies.  Currently, he is a volunteer organizer for the Restaurant Opportunities Center of New York (ROC-NY). John is also an avid Boston sports fan.

Recently, I got into a Facebook comment exchange with a longtime friend of mine from back home in Providence, RI.­  He identifies as a conservative.  I had posted an article that argued that a portion of the reason for the Republican Party gaining so many seats in Congress was that youth of color did not come out to vote in the same numbers as they did in 2008.  This, I argued, was another factor supporting the argument that the election results did not signify a conservative shift in the American populace; rather, it reflected the disillusionment and anger of voters who felt that President Obama and the Democrats did not deliver on the progressive change they had voted for.

This topic warrants its own post, and I probably will dedicate one to it. We’ll see.

What I want to discuss here is a comment that he made about taxes and the size of the government.  He decried the size of the government, and how they are becoming ever more invasive into our freedoms, mentioning as one example an excise and sales tax on alcohol.  I don’t know much about the size or extent of the tax he was talking about; however, it made me think about all of the recent hoopla over whether or not we need to cut taxes, and about the larger role of the government in all of it.

My friend ain’t no millionaire (Sorry, that’s how we see it back home!).  He comes from a working class family, and from 6th grade to 12th grade he went to the same public schools I did.  The point is, he is not benefiting from corporate tax breaks and cutting income taxes for the rich.   Leaving the rest of his political beliefs aside, some of that concern is valid—it’s not merely right wing blabber.  We are in an economic crisis, and we are being hit hard.  For the latter, I don’t include everyone in society. That “we” is regular working class people. Higher taxes on things that affect our everyday life are going to unfairly burden us with the brunt of paying for state and federal deficits.

Now, let’s take a look at two of the recommendations of the National Commission on Fiscal Responsibility and Reform—a “bipartisan” panel appointed by the President and charged with the task of coming up with solutions to the nation’s long-run fiscal problems.  They proposed eliminating the deductibility of health benefits and mortgage interest.  These are tax breaks that Nobel Prize-winning economist, Paul Krugman, says, “whatever you think of them, matter a lot to middle-class Americans.” Krugman goes onto point out that the gained revenue will not be used to reduce the deficit, “but to allow sharp reductions in both the marginal tax rate and in the corporate tax rate.”

I take issue with the use of that term, “middle-class,” which most often just refers to “middle-income” working class people; however, the picture is clear. Here, Krugman is spot on again:

It will take time to crunch the numbers here, but this proposal clearly represents a major transfer of income upward, from the middle class to a small minority of wealthy Americans. And what does any of this have to do with deficit reduction?

What we have is yet another example where working Americans has to bear the brunt of the economic crisis, while the wealthy consolidate their wealth.  It is measures like these that give can validate the calls for “smaller government” and fuel anti-tax hysteria.  It also, if implemented, will probably contribute to a weakening of the economy and an increase in the budget deficit because: 1) working class people will have less money to spend, thereby lowering demand; 2) the rich people are less-likely to put that newfound money into the economy; and 3) tax flows from the wealthy will diminish leading to a decrease in government revenue and probably increase long-term deficits.

The problem is that measures like these are pursued because the Democrats are not willing to do what is necessary—due to them being controlled by financial and corporate interests—and after the midterm elections, they do not have the ability to even if they wanted.   Absent of increased taxes on the wealthiest 1-5% and a massive fiscal stimulus, the tab has to be picked up by us.  Republicans are able take advantage of this fact—though once they also fail, or even make things worse, it could be a different story.

This is what people like my friend do not get. It is not a matter of “small government” or “big government”—do those preaching small government speak out against the massively funded military industrial complex or militarized borders?  It is a matter of whose interests the government is serving; it is about political power. And the reality is that our economic system of capitalism relies on a strong government to rescue the elite that run it when they overplay their hand.

Until we can mount a counter-force to corporate interests controlling government by building a social and political movement, and eventually think beyond the limits of our current economic arrangement to imagine a system based on equitable cooperation and true freedom, working people will always be the hand that holds the silver spoon.

John Cronan Jr is a restaurant worker, organizer, and a masters student at the Murphy Institute for Worker Education and Labor Studies.  Currently, he is a volunteer organizer for the Restaurant Opportunities Center of New York (ROC-NY). John is also an avid Boston sports fan.

Today is Election Day, and we could quite possibly see many changes in Congress and in governships. It’s just not the kind of change that President Obama and his supporters were hoping for. See, the Democrats are on track to lose seats in both the House and the Senate, with a very good chance of losing control of one or both of them.   The writing has been on the wall for months, as unemployment continues to remain high and foreclosures hit record numbers.  This has made people angry, very angry, and they are targeting their anger at the party in power—the Democrats.

The most visible, and I stress visible, example of citizen outrage has been the Tea Party.  Some have argued that their size and strength are not as massive as the media has made it out to be.  Regardless, their message has received immense media coverage. Tea Party supporters not only call for a reduction in government spending and tower taxes but also accuse the President of being a socialist. The latter, and of course the former, are most vocally expressed by Fox News personalities like Bill O’Reilly and Glen Beck.

The first casualty of voter backlash happened in January, in Massachusetts, when Republican Scott Brown, in a special election, won the vacant U.S. Senate seat formerly held by Ted Kennedy—a hero among liberal Democrats.  Brown campaigned on a platform that railed against the healthcare bill and decried the woes of government spending.  Now enter organized labor.

The very next day, the president of the AFL-CIO, Rich Trumka, released a video discussing the results in Massachusetts.  He rightfully pointed out that pundits in the corporate media were going to attribute the outcome to voters punishing the Democrats for overreaching in policy-making, when the opposite is true.  For example, on issues like healthcare, many Americans feel that the bill did not go far enough!  Trumka stressed that working people feel like Wall Street and the bankers are being taken care of but working people are not.  He said that Scott Brown’s victory should be a wake-up call to both Democrats and Labor.  It signaled that people want action and not excuses.  It was an excellent address.   However, what kind of action would Labor take as part of their wake-up call?

Well, even before the Brown victory, Trumka threatened to cut support for Democrats who didn’t push for a more comprehensive healthcare bill and who didn’t back the Employee Free Choice Act (EFCA).  Specifically concerning healthcare, Trumka issued a threat:

Well, we need to send them a special message: it’s that you may have forgotten what the labor movement did to get you elected; but, by God, we never will! And if you stab us in the back on health care this year don’t you dare ask us for our support next year!

Fast forward to the present. What has happened? Healthcare passed without a public option, EFCA is not even being talked about, and the government is not taking adequate measures to spur job creation—like something along the lines of a public works project of some sort.  Then, don’t forget that we have two wars going on and something called climate change. Oh, boy! Watch out! Labor must be planning to run more progressive candidates against Democratic incumbents who did not follow through, right? Wrong.

Instead, all of the blame is being put only on Republicans and Fox News.  Labor is scrambling, at the tune of millions of dollars, to get the very same Democrats who should be on the chopping block re-elected.  Is it just me, or is there something wrong with this situation?  Didn’t these people betray us?

I am in no way advocating that Labor throw their support behind the Republicans as a way to smite the Democrats. I am saying that if Labor truly wants to fight on behalf of working-class people, it needs to be able to flex its muscle and make good on its promises (and threats).  Otherwise, our elected officials have no reason to listen to us.  As Trumka, himself, noted, Americans truly want change in a progressive direction.  The labor movement should be at the forefront of providing a vehicle for that change, and to get on that path, the unions out there might want to question their relationship to the Democratic Party.

I would also like to make a suggestion to labor leaders and rank-and-file workers, alike.  We should always work to get the most pro-labor candidates in office, but time after time, we see politicians fall very short on their promises. There is a way, however, to increase the chances that our voices are heard and our demands met. And that way is to mobilize the power we have as workers outside of the ballot box.  Sometimes we need to vote with our feet in the streets.  We could definitely learn from our fellow workers in France about that.

John Cronan Jr is a restaurant worker, organizer, and a masters student at the Murphy Institute for Worker Education and Labor Studies.  Currently, he is a volunteer organizer for the Restaurant Opportunities Center of New York (ROC-NY). John is also an avid Boston sports fan.