the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Sep 28, 2009
Tell It to the Unemployed!
In February, Obama’s Council of Economic Advisers calculated that unemployment could get no worse than 8.9% this year. Unemployment blew past that figure in May, and has been getting worse ever since.
And that’s not the worst of it. A good number of serious economists today foresee unemployment hitting 15% before it tops out–and even the most “optimistic” predict that unemployment is going to keep getting worse far into next year, if not into the year after that.
Yet Ben Bernanke, chairman of the Federal Reserve, proclaimed, “the recession is very likely over.” And Treasury Secretary Timothy Geithner bragged, “we have stepped back from the brink.”
How could we step back from the brink? We’d already fallen over the edge, and we’re stuck in a swamp of ever worsening unemployment. 14.5 million people out there looking for jobs today, and only 2.4 million job openings. And most of us who are still working are at risk of losing our jobs.
This capitalist economy is a disaster, with unemployment touching in one way or another every working family in the country.
Why?
This country has urgent, unmet needs–roads filled with potholes, bridges falling down, subway trains that crash, railroad tracks in such a bad state of disrepair that trains go slower than cars do. Many cities have a public transit system on the verge of collapse, with so few buses and trains that no one can depend on them to get to work. Water mains burst. Sewage backs up. Garbage litters city streets and country roads. Weeds poke through abandoned buildings. Almost every city is closing down recreation facilities and parks, or letting them go to weeds. School boards are stuffing more kids into fewer classrooms.
There is such a backlog of unmet needs that tens of millions of people could be put to work, and being put to work, take home a paycheck, use it to buy things, pay taxes, and generally contribute to the common good, making the economy hum.
There could be nothing more obvious. People need work. There is work that needs to be done.
All it requires is money and the will to use that money in ways beneficial to the population. But neither the capitalists nor their government have any intention of using the money they control for the common good.
The Treasury handed trillions of dollars over to the big banks. That money is now gushing through the circuits of speculation, forcing up the prices on stock markets around the world, on oil and other commodities. Money loaned by the Federal Reserve ends up fueling speculation in the international currency markets.
Money that could be put to useful purposes is not only going to waste, it’s being put to destructive purposes, into new rounds of speculation. And guess who’s speculating? The same few big banks, the big players who blew up the speculative bubbles of 2003-2007–only to bring the whole economy crashing down with them.
Waiting on the bankers, or on their government, or on either of the two big parties, won’t get us out of the swamp.
The working class, employed and unemployed, has the forces to make these financial criminals step back. The working class has the power to put the productive forces of society in motion to meet the population’s needs. The point is to use those forces, to use that power ourselves, for ourselves.
Sep 28, 2009
If it’s such a great economy, why did 42 states lose jobs last month, up from 29 in July?
Politicians and CEO’s live on another planet!
Sep 28, 2009
The inspector general of DPS (Detroit Public Schools) announced that the school district overspent millions of dollars in real estate deals 15 years ago.
The people of Detroit certainly can be excused for feeling a bit cynical about the current state-appointed administration of DPS unearthing corruption during a previous state takeover of DPS!
The figures are revealing nonetheless. In 1994 DPS bought five properties, assessed by the city at $640,700, for nearly 4.9 million dollars.
Who pocketed this generous gift of more than 4.2 million dollars?
Among others, a certain Farbman Group is mentioned by investigators. In one particular deal, a property assessed at $57,800 was bought by Detroit Property Acquisition, a Farbman subsidiary, for $550,000. Interior Systems Inc., a company hired by DPS, bought it from DPA for $701,500, and sold it to DPS for $743,590 the same day!
The same pattern of transaction was seen in all purchases under investigation.
DPS has long served as a cash cow for every well-connected speculator in the city. There is no reason to think that, 15 or 20 years from now, another district investigation will not reveal some corrupt deal that’s being made under today’s state-run DPS administration.
Sep 28, 2009
Some of the biggest pharmaceutical companies have been competing to produce the swine flu vaccine.
Did these different companies pull all their resources together? Did they share information in order to create the vaccine as soon as possible?
No–just the opposite.
Each company works in secrecy. Each one wants to be the first to cash in on all the profits to be made. And if people get sick and die first, so be it.
That’s what it means to allow companies to make a profit on “health care.”
Sep 28, 2009
By the time the fire season was barely a month old, the state of California had already burnt through most of its entire annual fire budget–even though Governor Schwarzenegger had made a big deal about doubling the budget over the previous year.
This wasn’t just because of the number and severity of the fires. Over the years, the cost of fighting the fires has skyrocketed, as more and more of the work has been farmed out to private contractors. Roughly 60% of government wildfire expenditures go to private contractors–including firefighting, training and fuel reduction projects. Private contractors large and small provide a wide range of equipment and services on wildfires, including aircraft, ambulances, earthmovers, water trucks, even portable air-traffic-control towers and their operators. California ranchland is rented to stage heavy equipment.
Big fires have become big business and big profits.
Some of the biggest contractors are the companies that supply big aerial tankers, like converted DC-10s and C-140s. During the Station Fire one DC-10 was contracted out for a period of 90 straight days at an average of $45,000 per day. For the other, the state paid $66,000 per day for a minimum of five days.
The appearance of these big planes dropping water and retardant is very dramatic. However, these big planes are not well-suited to operate in California’s steep canyons and mountains or at low altitudes required for effective delivery of water and retardant. Much of the drops miss their marks and are wasted. No wonder firefighters call the use of the big planes “CNN drops,” because they make good television for the politicians... and profits for the contractors.
Fires are a very profitable “cash crop,” indeed.
Sep 28, 2009
While top government officials and political leaders pretend they want to regulate finance capital, all sorts of speculators are searching for a new target for their deals.
With the collapse of “subprime” and other mortgages securitized in financial products, speculators have to find other outlets. According to the press, one of them could be speculation on life insurance policies.
When people with life insurance policies come up against a serious problem–illness or the loss of a job, for example–many have to terminate their policy, asking for their accumulated premiums to be paid out. The life insurance companies are big winners in these cases, because they return a lot less money than what was paid in.
Hence the idea that banks or “investors” could buy up a big number of contracts, speculating on the fact that many holders will not get a full pay-out.
Just as with subprime mortgages, they create new financial products, based on these packets of life insurance policies; then issue securities, and, based on these securities, issue still other financial products. Who knows what they are worth?
Two things about the whole scheme are sure: purchasers of life insurance will lose a big part of their savings, and shrewd financiers will make a mint by speculating on their distress.
Sep 28, 2009
Thousands of people turned out at the Michigan State Fairgrounds when DTE Energy held a Customer’s Assistance Day, trying to avoid having their power shut off.
So many people responded that the company closed the gates four hours early to handle those who had already gotten in. The lines wrapped around the 160-acre State Fairgrounds. And those were only the people who happened to have heard about the event in advance.
By the company’s own figures, 400,000 out of its 3.2 million customers are unable to keep up their energy payments. DTE ordered over 257,000 utility shutoffs from January 2008 to July 2009, and the pace is increasing.
No wonder so many people cannot afford to pay their bills with the number of surcharges being tacked on to the price of the energy consumed. In some cases, “Delivery charges” like “Distribution” fees, “Energy Optimization” charges, and “Nuclear Decommissioning” surcharges add up to more than half the bill!
The company offers people a “payment” plan under the pretext that this will allow them to pay off their bills, but as soon as they miss one payment, it shuts off the power. In the meantime, they’ve collected money they might not otherwise have gotten. That money will help DTE pay out almost 350 million dollars to its shareholders this year.
This is a picture of what capitalism is doing to people. With the winter months soon approaching, how many people like those who attended “Assistance Day” will be left out in the cold?
Sep 28, 2009
California Governor Arnold Schwarzenegger, President Obama and Education Secretary Arne Duncan are pressuring the state legislation to pass a virtual wish list of “education reform,” including the introduction of merit pay for teachers, that is, tying teacher pay to student test scores, and lowering standards for teachers. The Obama administration, in strong support of Schwarzenneger, is even threatening not to allow the state of California to apply for its share of the 4.35 billion dollar federal “Race to the Top” education fund, unless the legislature goes along with this supposed “reform.”
These same politicians, who pretend to be so concerned about improving the public schools, are literally starving the entire system of money and resources. In one year, politicians cut California education spending by 8.6 billion dollars, or 17%. That amounts to a cut of $1,500 less spent on each student’s education. School boards across the state laid off 18,000 teachers. They cut several days from the academic year. They cancelled summer school. And the state government announced that it will not budget any state money to buy new text books until ... 2015!
When the schools began the new school year this fall, they were literally jammed to the rafters. An article in the Los Angeles Times described the situation: “Some L.A. Unified class rooms are crammed with over 50 students, leaving pupils to sit on desks or the floor and their teachers to grade hundreds of papers ....”
One Los Angeles sophomore described some of the problems. “It’s more difficult to focus on the work. The teachers–you can’t hear them clearly. If you need help, the teacher can’t help you as well because they have so many students.”
In the midst of this criminal destruction of the schools, Schwarzenegger, Duncan and Obama propose to cut teachers’ salaries! That’s what so-called “merit-pay” is all about: cutting the pay of most teachers while raising the pay of a very few. And that’s what lowered standards means–lower salaries.
Of course, because–as already shown–they want to spend as little money as possible educating children of the working class.
Sep 28, 2009
The New York Times reports that the Senate Finance Committee has added a secretive section to the health care bill. Four cancer institutes, one each in Michigan, Ohio, New Jersey and Nevada, would be exempted from some Medicare payment limits. The incomes of the favored institutes will go up, paid by taxpayers.
The four institutes are not mentioned by name in the bill! Their secret is kept by special wording about dates and designations. The reporter had to dig behind the curtain to find their identities: the Karmanos Cancer Institute in Michigan, the Nevada Cancer Institute (still under construction!), the University Hospitals in Cleveland, and the Cancer Institute of New Jersey.
This sort of special treatment in secret is so common, the legislators have a special term for it. A spokesperson for Michigan Senator Debbie Stabenow called this deal for Karmanos “a typical rifle shot.”
This reveals something of how Congress spends its days: rifle shots echoing across the chambers, hunting down ever newer ways to bag taxpayer money and deliver it to private interests.
Sep 28, 2009
This article is based on a report in the September 18 issue of Lutte Ouvri re [Workers Struggle], the paper of the revolutionary workers’ group of that name active in France.
Dairy farmers in France must sell their milk to the large processors, businesses like Dannon. Earlier this year, the processors slashed payments to the farmers by 30%. The farmers can’t meet expenses on this new rate–much less live!
In desperation, the farmers are taking their case public with dramatic steps: they dump milk on the ground in public demonstrations. On September 18, more than 2.5 million gallons were poured out all over France. Along the borders with Belgium and Germany, farmers who face the same problem, joined in.
The dairymen are well aware that dumping good milk on the ground is very shocking. They themselves don’t want to waste what they have produced! But they have been driven to the wall. They feel they have little choice but to use the most dramatic means possible to make others aware. They have also picketed the processors’ factories, and organized free milk distributions.
No matter what actions the farmers choose, it’s necessary to be in solidarity with them. They did not start this! They did not invent the system of pushing everyone for more and more production–then lowering the prices paid, pushing many out of business–then pushing the rest for more production again.
This system destroys more and more productive capacity, by strangling thousands of farms. In France, milk producers numbered 427,000 in 1984; today, only 90,000. In Europe as a whole, 300,000 have gone under in only the past three years.
It’s a revolting aspect of the capitalist mode of production. On one end of the planet, under the pressure of agro-business, prices are collapsing so much that producers can’t survive. On the other end, the same business interests condemn millions of people to famine by speculating and driving up prices on basic items like rice, corn, or milk. For the millions who cannot pay, there will be no food–there is no “demand,” says the capitalist!
Waste on one hand and famine on the other. It’s an absurd, chaotic, inhuman system. Let us save the milk–and dump capitalism off the face of the earth, instead.
Sep 28, 2009
On September 8, the German Parliament–just before the coming elections–repealed sentences handed out to so-called “war criminals,” sentences given by the Nazi regime! Sixty four years after the end of World War II and the collapse of the national-socialist regime, its last victims have been rehabilitated.
In 2002, various categories of Germans were rehabilitated. Their so-called crimes included deserting from the German army, taking a conscientious objector stance, and cowardice in the face of the enemy. And those Germans waited 62 years for their exoneration. But seven years ago, the “war criminals” were excluded from the decision. According to some right wing politicians, soldiers who had “harmed” their comrades should not be rehabilitated. The left-wing government at that time, including Social Democrats and Greens, gave in to the right.
Historians estimate that Nazi military courts pronounced at least 30,000 death sentences, after which some 20,000 were executed between 1934 and 1945. A number of those not executed were sent to concentration camps where they died from what they suffered there. For similar reasons, tens of thousands more were sent to the camps by the Nazis. In most cases, the victims were Germans who had aided Jews, or who had criticized Hitler’s regime, or who gave information to the Allies, or soldiers who had not been harsh enough to prisoners of war. Their courageous attitude shows that the German people didn’t unanimously support Hitler and his policies. Many Germans were also victims of the ferocious Nazi dictatorship.
The survivors of these military courts were abandoned and sometimes slandered after the war. At the same time, when the German bourgeoisie was reconstructing its state apparatus after 1945, it used numerous people who had served the Nazi regime. The German state did organize spectacular trials–like Nuremberg–against high Nazi officials and numerous underlings. But other former Nazi officials–like judges, prosecutors, mayors and police commissioners–were used in the German administration starting with the Cold War, in 1946-1947. In 1955, when the German Federal Republic set up a new army, the Bundeswehr, it brought back a number of old officers of the Wehrmacht to staff it.
The decision announced this September to rehabilitate some of the so-called “war criminals” came so late that a majority of those concerned had already died. But the decision does at least prove the extent to which the so-called democratic postwar Germany was built on a pile of manure.
Sep 28, 2009
President Barack Obama, at a press conference at the G-20 summit in Pittsburgh, accused Iran of trying to build nuclear weapons. Obama said that “Iran is on notice,” and that Iran should not “continue down a path that is going to lead to confrontation”–an open threat.
Iran says it has no nuclear weapons, and no one has shown that it does. But Obama, like George Bush before him, says that Iran can’t be trusted.
That’s putting the issue upside down and backward. Iran has every reason to distrust–seriously distrust–the United States.
A brief look at history shows why. In 1953, Iran’s military, backed by the U.S. and British secret services, overthrew the country’s democratically elected government headed by Mohammad Mossadegh. It was obvious that the two imperialist powers had organized the military coup in order to stop Mossadegh’s efforts to gain more control of the oil extracted from Iranian soil.
The Shah, brought to power by this coup, was backed by the U.S. from day one. The Shah’s military dictatorship enjoyed generous U.S. aid, while Iran’s U.S.-trained secret police jailed, tortured and assassinated thousands of oppositionists, including almost all the local leaders of the trade unions.
Iranian people rightfully resented this brutal regime, and the U.S. government for supporting it. The Iranian Revolution of 1979 overthrew the Shah–only to be replaced by another dictatorship, this time controlled by Iran’s top religious clerics. When Iranian students occupied the U.S. embassy, the relationship between the U.S. and Iran soured.
In 1980, Iran was invaded by Saddam Hussein’s regime in neighboring Iraq. In this war, the U.S. initially backed and encouraged Iraq. But then the U.S. secretly started to support Iran also–a fact brought into daylight in the late 1980s by the “Iran-Contra Affair.” It’s obvious that the U.S., while supplying weapons to both regimes, didn’t want either one to be strengthened by being the clear winner. The price of this cynical U.S. policy–paid by the populations of both Iraq and Iran–was eight years of war and one million deaths.
Now the U.S. military has invaded Afghanistan to the east of Iran, Iraq to the west of Iran, and has a big naval presence near Iran’s southern shores. That is, the U.S. has Iran practically under siege.
The Iranian people have every reason to distrust, and feel threatened by, the U.S. government. And American workers have every reason to distrust this war-making U.S. government, because it is American workers who are expected to fight the wars this country’s rulers start all over the world.
Sep 28, 2009
The following article was translated from an editorial in the September 25th issue of Lutte Ouvri re (Workers Struggle), the paper of the revolutionary workers group active in France. What is happening to the post office in France will sound very familiar to postal workers and customers in the U.S.
The Parliament is prepared to ratify a change in status of the Postal Service. This bill, which the postal workers struck against at the beginning of the week, concerns every worker, and, in fact, all the laboring people.
It’s not only that the 7,700 jobs eliminated in the Postal Service this year alone, with more threatened, makes unemployment worse. But also, the attacks on public services affect every worker’s living conditions. Turning public services over to private capital makes them more expensive and access to them more difficult. It means demolishing these services.
In this capitalist society where money is king, the postal services, education, health, public transit, telecommunications, the provision of water and energy, and waste removal all need to remain or become once again public services. They mustn’t be organized to yield private profits, nor be submitted to the stupid inhumane laws of the market. These services must satisfy community needs.
When the postal service was somewhat sheltered from competition and the race for profit, it served everyone, even the most remote villages, criss-crossing the country with a dense network of post offices. The rates were affordable.
But over the past several administrations, those of the right but also those with socialist and communist ministers, the pursuit of profit was introduced into the postal service. Postal services were opened to competition. These government maneuvers have already led to the disappearance of one post office out of every three, the cutting of hours in some post offices in the neighborhoods and the lengthening of lines. With a third of the post offices gone, thousands of towns are deprived of postal services, forcing people to go to a larger town–a hardship for older and disabled people. And the closing of post offices and getting rid of postal carriers also affects the life of the community.
All the measures taken for the sake of profitability are reactionary measures. The evolution toward privatization is a step backward in society.
At one time, the postal service, by law, guaranteed a certain stability of employment. That guarantee is completely gone for the postal workers not already permanent government functionaries; temporary workers make up half the postal work force.
The administration swears that the postal service will remain 100% public. That’s ridiculous! When public enterprises like EDF (electricity), GDF (gas) or France Télécom (phone company) were privatized, the administration used the same lies! It’s not hard to figure out that private capital will lay hands on profitable activities. And, to make money off the backs of consumers and those working in this sector, the private companies will increase prices and drastically reduce the work force, imposing “flexibility” and job insecurity. Services will be properly provided only to those who can pay. Too bad for all others!
We say NO to a two-tier postal service, and to private profit at the expense of the users. Stop turning over the postal service to private contractors!
Only a determined movement of all the workers can stop the offensive of the bosses and the administration. Such a movement can’t be produced on demand, but it can be prepared and, in any case, it’s the only way to prevent the capitalists from making the exploited pay for the crisis of their economy!
Sep 28, 2009
On September 13, a methane explosion killed a dozen miners in a mine in Wujek-Slask, in the south of Poland. Of the 43 wounded who were brought up, two later died in the hospital and five were in very serious condition.
Miners questioned by Polish television said they had to go deeper and deeper to find coal, increasing the risk of falling into methane pockets. Of course, the miners were given gas detectors, but some of the detectors had been tampered with. Miners said that when they brought their own detectors, they indicated a methane level higher than the official data.
The Polish government ordered two days of national mourning. It promised an inquiry would be made about the accident. This is exactly what it said three years ago, after an explosion killed 26 miners in the Halemba mine, in the same region of Silesia. At that time, the company sent miners to the bottom of an unused mine to bring back equipment. The inquiry is still going on ...
While 100,000 Polish miners go down deeper and deeper into the earth, the owners of the coal-burning power plants, the main customers of the mines, convert cheap coal into electricity and profit from it.
Sep 28, 2009
Ninety-eight housekeepers at Hyatt hotels in Boston were laid off without warning. Some had worked there more than 20 years. Their jobs were filled by a low-wage company called Hospitality Staffing Solutions. It pays only half what housekeepers had been earning.
Hyatt is one of the largest hotel chains in the world, owned in its majority by the family of founder Jay Pritzker, one of the biggest capitalists in the world.
Members of the Pritzker family have 11 spaces on the Forbes list of the 400 richest Americans. Their money and connections helped put Obama in the White House.
This filthy rich family tried to push housekeepers out the door simply because they thought they could get away with it! The Pritzkers, however, had to think again. They and their hotels got bad publicity when workers laid down in the streets of Chicago and Boston, in demonstrations organized by the union Unite Here.
Hyatt tried to counter the bad press on September 26 by offering the housekeepers new jobs at three different employment agencies. Management claimed the housekeepers would be able to keep their benefits and same hourly wages–until “some time” next year.
The next step is up to the workers.
Sep 28, 2009
On September 18, a big water main pipe ruptured in a suburb of Baltimore flooding parts of several neighborhoods. Hundreds of people had to be evacuated. Residents suffered millions of dollars in damages to their houses, appliances and other belongings, some of which will not be covered by their insurance policies–if they have one. A section of a major commuter road was also undermined and will remain closed for repairs for several weeks.
The type of water pipe that failed has not been installed for over 25 years, after it became all too clear it was likely to fail. But many thousands of miles of it were already in use in water systems all over the country.
These defective pipes would have been quickly replaced, if decisions about public services were made in the interests of the public. Instead, the pipes were left in place with the number of disastrous failures growing year after year.
In the meantime, companies that made those pipes raked in big bucks–until they were sued in New Jersey courts, after which, having taken the money and run, they shut down the business.
Now, as a spokesman for the Baltimore Department of Public Works said, “We really do have an infrastructure crisis.”
If so, it’s because we have a crisis caused by the search after more profit by every means imaginable.
Sep 28, 2009
On September 24, the U.S. Chemical Safety Board released its report on the 2008 explosion at the Imperial Sugar refinery in Georgia. Fourteen workers were killed. Thirty-six more were injured, one so seriously that his medical bills have reached more than eight million dollars, according to a lawyer representing some of the victims.
The Chemical Board report noted inadequate equipment design, poor maintenance and ineffective housekeeping as the causes of the Georgia disaster. Said its chairman, “This was a tragic accident that should not have happened.”
Of course it should not have happened. And it was no “accident.” The sugar industry has known since 1925 that dust from its operations can burst into flame. Imperial Sugar itself had a management memo on the dangers of sugar dust dating back to 1967.
After the 14 deaths last year, the Occupational Safety and Health Administration fined Imperial Sugar close to nine million dollars. Imperial Sugar is going to court to fight the fine. But for the sake of all workers endangered by the way the bosses run their factories, OSHA should have inspected and fined Imperial nine million dollars BEFORE the deaths occurred.
If we had killed 14 people, we would be tried for murder. But for the bosses, when their actions kill people it’s not murder–it’s just called an accident that should not have happened!
Sep 28, 2009
Crystal Lee Sutton, the North Carolina textile worker who inspired the film Norma Rae, has died of brain cancer.
The movie, in fact, was based on an earlier book by Hank Lieferman entitled simply Crystal Lee. It is an interesting book that gives a feeling of life for workers, and women in particular, in a Southern mill town, Roanoke Rapids, in the 1960s and ’70s. Sutton came from a family of generations of mill workers. By age 17, she too went to work in the cotton mills. Within eight years, she had three children to feed. She went to work for J.P. Stevens, a notoriously anti-union company, in 1972.
The Textile Workers Union of America had attempted to organize workers at Stevens for 10 years before they won a court case in 1973 requiring the company to back off on some of its intimidation tactics. Sutton soon threw herself into organizing the union. On what became her last day on the job, Sutton copied down a letter the company had posted aimed at pitting white workers against black, suggesting that black workers were planning to take control of the growing union. In a scene that would be made famous in both the book and the movie, Sutton stood on a work station holding a handwritten sign saying “UNION,” before she was taken out of the plant and arrested by the police. She later went door-to-door organizing for the union. Her efforts helped the J.P. Stevens workers win a union a year later.
Sutton continued to speak out in the last months of her life against blood-sucking insurance companies. Despite a clear diagnosis of serious cancer, her insurance company denied her treatment for two months. “How in the world can it take so long to find out (whether they would cover the medicine or not) when it could be a matter of life and death,” she said.
In fact, it was a matter of life and death–in this case the death of Crystal Lee.
Sep 28, 2009
At a recent protest rally, over 1000 city workers, bus riders and supporters circled the Coleman Young Municipal Building in Detroit. A retired city worker observed: “Isn’t it peculiar. All these government agencies–the city, the county, the state, and schools–all say they have a deficit. They say workers have to give up because of the deficit. It’s like they got together and planned this thing.”
They didn’t need to plan it. This was just business as usual in this capitalist economy. Wealth is exploited from workers and transferred to the wealthiest one% every day. And the state budget is always used to take tax money from us and give to the corporations.
What is different today is the worldwide economic crisis, which exacerbates capitalism’s drive for profit. Today public services are cut to the bone and beyond, education is cut, social services are cut–all under the pretext of a budget deficit.
It’s true there are massive “deficits.” But workers and people who need public services did not create these massive deficits. Government policies of tax breaks and hand-outs to corporations DID.
According to the federal Government Accounting Office, from 1998 to 2005–a time of high profits–roughly two thirds of all U.S. corporations paid ZERO income taxes. What big corporations didn’t pay created the deficit–and the deficit was used to justify cuts in social programs and public services.
Even when corporations DO pay taxes, on average they pay less than 5% of their net income in taxes. The equivalent would be a worker making $30,000 a year and getting to keep $28,500 of that income. Not bad.
Corporate tax breaks go primarily to the biggest corporations and are doled out from several levels of government.
In Michigan alone, the amount of tax breaks at the level of the state government is over 35 billion dollars a year. This is bigger than the ENTIRE state budget. By the estimates of some politicians, just eliminating 4% of the tax breaks would balance the state budget. (Not all of this is tax breaks to corporations, but a good chunk of it is).
Look at the case of retail giant Meijer. It is building a new store in Detroit. In 2007, the State of Michigan gave “tax breaks and incentives” to develop what was then described as “an unused parcel at the corner” of the State Fairgrounds. Detroit City Council passed tax breaks for that same “parcel”. It turns out that Meijer will be the anchor store on that “unused parcel at the corner,” and the recipient of those big tax breaks.
During 2007, when Michigan state offices were shut as a way to scare people about the “budget deficit,” the Traverse City Record-Eagle reported:
State lawmakers gave Meijer Inc. an $8.5 million [yearly] tax break.... Meijer wasn’t the only special interest to receive a targeted tax break. New car dealers, professional sports stadiums, Michigan International Speedway, banks and the insurance industry all received special credits.”
For another look at corporate tax breaks, just glance at General Motors. Hidden in the federal bail-out package were enormous give-aways. According to the Associated Press (May 2009):
“The government bailout of General Motors includes a … tax break that could save GM and its future investors more than 12 BILLION dollars” when it becomes profitable again.
There’s more!
In June 2009, GM got 100 million dollars from Orion Township and 779 million dollars from the State of Michigan for its Orion Township plant.
And while details are undecided, GM has been offered 12 to 15 years TAX FREE at its Renaissance Center headquarters by Detroit and Wayne County.
In a bidding war, the city of Warren offered GM 30 years TAX FREE if they would move the GM headquarters from Detroit to the city of Warren.
Don’t be surprised if GM moves a few departments around between Detroit and Warren and manages to claim some version of BOTH tax breaks!
None of this is new. And it doesn’t happen just in Detroit or just in Warren or just in Michigan. Under Republicans AND Democrats, tax breaks given to big business and the wealthy keep growing.
For the past 14 years, Michigan has given away 3.3 billion dollars in tax credits through its Michigan Economic Development Corporation. On top of THAT, Michigan spent 1.6 billion dollars in grants. Of course, the state always claimed jobs were to be created.
That’s a lot of bull–even according to The Wall Street Journal. The Journal showed that for every 100 of the jobs that were promised to be created or maintained, only 29 arrived by the end of 14 years. Of all new jobs, only ¼ of one% of jobs created in 10 years time were the direct result of these incentives.
All of these give-aways add up. Back in 1990, the share of state and local tax revenue coming from corporate income taxes was 16%. Today it is 8%. Were ordinary people’s taxes cut in half over that same period? No. We made up that difference in additional fees and taxes we pay–and in the destruction of public services.
If it weren’t for the funneling of public money to private corporations, we could have better roads, better schools, better public transportation and better water systems.
So when state and city governments say that they have no choice, that their budget deficit requires public workers to sacrifice and give up concessions, tell them where to shove it! More sacrifices by workers will only be used to give out more corporate tax breaks.
That’s why the small signs of resistance we have seen from teachers, city and state workers and Ford workers in recent months are important. There can be CHANGE–IF this resistance can spread.