Bust Goes the Boom

The following is excerpted from ASR 88 (https://syndicalist.us):
Newspaper columnists and Federal Reserve bankers are panicked about an overheated economy suffering from too many jobs and too high wages, while Democratic politicians boast about how “Bidenomics” has brought prosperity to the entire country. And yet, an August Quinnipiac Poll found that 71 percent of respondents described the U.S. economy as not so good or poor, while just 3 percent said it was excellent. The pundits note a “contradiction” in the results – most of those asked to describe their own financial situation say it’s good or excellent, while “only” 38 percent said not so good or poor. Evidently, we’re supposed to ignore the nearly 40 percent of the population struggling to survive.
Median inflation-adjusted pay is now back to or slightly above 2019 levels – median wages in 2019 were essentially the same as in 1973 – though of course, that means half did worse. Many much worse. And a few did very much better, as witnessed by the hundreds of companies paying top managers more than a million dollars a year.
The economy is much worse for some people. Federal child care subsidies ended in November, causing some facilities to close and prices to skyrocket. Prices for necessities like food, gas and housing remain high (even if prices are rising more slowly than a year ago). Many workers are now required to resume paying off their student loans – payments some have been making for decades, and which have followed some into retirement. In the Times/Siena poll of six swing states, 93 percent of those from the ages of 18 through 29 rated the economy “only fair” or “poor” (fully 59 percent answered “poor”). While the politicians assure us that we never had it so good, our lived experience tells a very different story.
Before the pandemic, most workers’ savings could cover only a month or so of expenses and huge numbers said they would not be able to manage a $500 emergency. As prices rose, savings have dwindled and credit card debt is rising. And the number of people raiding their retirement accounts to meet living expenses is also growing. Fidelity Investments reports that in July through September 2023, 2.3% of people holding retirement accounts there made a “hardship withdrawal,” a rate that has been slowly increasing. The most common reasons cited for these withdrawals were avoiding eviction or foreclosure and paying medical expenses. Few of these workers will be able to replenish the funds in 2023, and so will have to pay tax penalties on the withdrawals (and of course will have even fewer funds available when they retire – perhaps the only bright side of the recent declines in life expectancy is that we are more likely to die from work-related illnesses and “deaths of despair” than from starvation).
But the bankers think the job market is too hot, and wages are too high. They’re determined to drive up the unemployment numbers in order to discipline us unruly hordes.

Whacked by prosperity

All that prosperity swinging around is likely to you a concussion.

The stock market has been falling for the last week — according to the pundits, because too many people have jobs, and those jobs pay too well. (Never mind that millions of people who lost work at the outset of the pandemic are still looking for work, that wages are falling relative to inflation, that millions are set to lose their health care coverage in the coming months, that evictions are skyrocketing as landlords boost rents into the stratosphere…)

That’s their story, and they’re sticking to it.

They believe that we’re drowning in prosperity because the rich — and the pundits are mostly from the top 10% or so — are swimming in money. Corporate profits reached record levels during the pandemic, even as many people struggled to survive (and a great many of us didn’t make it — about a million are known to have died from Covid, and many others were forced onto the streets). Gas companies are raking in monopoly profits. CEO pay is up. The wealth of the wealthy just keeps on growing.

So there’s plenty of prosperity, but you’ve got to be careful as it goes around because those wielding it are likely to knock you in the head, and stomp on you once you’re down.

Is Your Pay Too High?

Economists and Federal Reserve officials were blathering today about the need to cool down the overheated job market, lest it touch off a wage-price spiral. We all know that prices have been going up, but wages not so much. And employers continue slashing away at health and retirement benefits like they were weeds threatening to engulf the bosses and their ill-gotten pandemic profits.

A very few workers at the bottom of the pay scale have been able to get pay hikes that outstrip the official inflation rate – though of course that official rate undercounts housing and food prices, at least for lower-income households. (Richer folks typically own their homes, and so if they’re not buying a fifth mansion at the moment the costs are relatively stable. Their food budgets are much larger than ours, but make up a much smaller proportion of their income.) Most are losing ground as the price gougers rake in record profits, raise prices as fast as their monopoly power allows, and hold the line on wages. And of course millions of workers continue to be frozen out of jobs altogether…

15 million to lose health care

Some 15 million Americans will be dropped from expanded Medicaid coverage once the Covid-19 health emergency is declared over — something the federal government says could happen any day now, though the polytricksters promise they will give 60 days notice before actually cutting off people’s health coverage. The state of emergency bars states from kicking people off Medicaid while the pandemic raged, but its funding has expired and the Senate has blocked proposals to extend coverage. So we are reverting to current law, which requires states to regularly conduct reviews to make sure those ineligible for the government-funded health care scheme are kicked off. Some states, of course, are far more aggressive in looking for excuses to cut off health care.

Some people will have become ineligible because their income has risen above the cut-off point, even though they still don’t make enough to afford health care. Some moved without letting the bureaucrats know. And many – perhaps most – haven’t returned the complicated paperwork to demonstrate their continued eligibility. Many, many people have long gone without coverage because they were unable to navigate the bureaucracy.

This is the inevitable result of a health care system organized around profits. In such a system, the services available to poor people will always be inferior and harder to access – the more difficult the better. And even for those who have health coverage, the system is organized around erecting as many barriers as possible between workers and the health care we need.

The Booming Economy That Isn’t

Americans’ net worth plummeted by $3.73 trillion in the fourth quarter of 2018, according to the Federal Reserve, the most dramatic decline since the Great Recession began in 2008.  Workers’ pay and benefits have been falling as a percentage of gross domestic income for years, down to 52 percent. It was 59% in 1970 and 57% in 2001; the difference has largely gone to corporate profits.

The incomes of the very rich have grown faster than the economy since 1980, skyrocketing by more than 400 percent for the top .01 percent. The top 1 percent aren’t hurting either, raking in about 180 percent more over the same period. The top 10 percent have held their own, with income gains that closely mirror GDP growth. (New York Times columnist David Leonhardt calls this – those making $120,000 to $425,000 a year after taxes – the “upper middle class.” Presumably, under this conception, the middle class includes everyone except the richest and poorest 1 percent.) And the bottom 90 percent are steadily losing ground.

A few weeks later another Times columnist, Neil Irwin, noted a string of economic problems: “economic growth has been slower than it used to be… Productivity growth has been weak. Inequality has risen. And the corporate world is more and more dominated by a handful of ‘superstar’ firms.” Others call this monopolization.

“What,” he asks, “if those megatrends are all the same problem?” Not capitalism, of course, but the effects of surging economic inequality, holding down economic growth because most people can’t afford to buy stuff, and holding down wages because the remaining companies face little competition for workers. Perhaps “we’ve been thinking about the world’s economic woes all wrong. It’s not a series of single strands, but a spider web of them.”

Leonhardt was back a few days later, conceding that economic pundits have been “exaggerating the strength of the economic expansion, because it makes for a good story. Here’s the truth: There is no boom. The economy has been mired in an extended funk since the financial crisis ended in 2010.” Indeed, he offered a chart showing that year after year, the economy has consistently underperformed the experts’ predictions. “And for most families, real-life experience has been more disappointing than the G.D.P. numbers, because much of the bounty of the economy’s growth has flowed to the affluent.”

Leonhardt blames this long stagnation on too much money sloshing around in the pockets of the rich (they long ago reached the point where there’s nothing more for them to buy, and so stash the wealth we create in bank accounts and stocks and such), and an investment slump resulting from the fact that most companies “have grown so large and monopoly-like that they don’t need to invest in new projects to make profits. Think about your internet provider: It may have terrible customer service, but you don’t have a lot of alternatives. The company doesn’t need to invest in new technology or employees to keep you as a customer.”

He suggests we stop funneling money to the rich, and instead put it into repairing infrastructure, improving the social safety net, and speeding the transition to an environmentally sustainable economy.

ASR 74

The new Anarcho-Syndicalist Review is on the way to the printer.

ASR 74 (Summer 2018) Contents:

Wobbles: Grand Theft Paycheck, Right to Work, Fare-Free Transit, World Bank Attacks Labor Rights …

International Labor News Compiled by Mike Hargis

Stephen Hawking (1940-2018) And Us  by Frank Mintz, translated by Maria Gil

Immokalee Workers Protest Wendy’s  by John Kalwaic

Israelis Protest for African Refugees by Raymond S. Solomon

ARTICLES: Teachers Rise Up  by Jon Bekken

Notes on Anarchist Economics by Iain McKay

Liberal Illusions & Delusions  by Wayne Price

‘It’s Like A Rainbow’: Australian Political Watermelons by Tony Sheather

Wobblies of the World  Review essay by Jon Bekken

Yours for Industrial Freedom Review by Jon Bekken

The Dead End of Electoralism by Wayne Price

Some libertarian insights on fascism  by Sarthak Tomar

REVIEWS: Overcoming the Politics of Division & Fear Review essay by Wayne Price

Anarchists Never Surrender Review by Iain McKay

The Anvil of War Review by Jeff Stein

Anarchists in the Bavarian Revolution Review by Thomas Klikauer

Bookchin’s Revolution Review by Iain McKay

Left of the Far Left Review by Raymond Solomon

Anarchism in Galicia  Review by Jeff Stein

The Limerick Brigadistas Film review by John Kalwaic

LETTERS: Fighting on Every Front

Happy Days Are Here Again, but for who?

Friday’s New York Times bears the ominous headline, “Fed Officials Worry Economy Is Too Good. Workers Still Feel Left Behind.” (4/27/18, B2)

Federal Reserve officials are beginning to worry about a possibility that seems remote to workers…. the danger of the economy’s running too hot, destabilizing financial markets and setting off a rapid escalation in wages…

“Destabilizing financial markets” is presumably the concern, as this “rapid escalation in wages” is nowhere to be seen. Wages have been rising very slightly of late, but only those at the very top and very bottom of the wage spread are seeing gains. Most of us are still losing ground, even before rising health care costs and other lost benefits are taken into account.

As a result the government is looking to push up interest rates, in order to make sure our wages don’t get too high. (You don’t seem them taking action around the multi-million paychecks the corporate fat cats are pulling in, but of course there aren’t any working stiffs on the Federal Reserve board.)

Deep in the story, the Times notes than 62 percent of respondents say prices are rising faster than their wages. But apparently we’re not losing ground fast enough, and so policymakers are on a crusade to hold wages down, working hours up, and the death rate rising (in order to hold down the cost of pensions and Social Security).

Open letter to Sen. Toomey

Pat Toomey

U.S. Senator “for” Pennsylvania

https://www.toomey.senate.gov/?p=contact

I realize that, as a Philadelphian paid (substantially) less than $100,000 a year, I am not one of those you normally think of as your constituents. Nonetheless, I must implore you to consider the plight of the great majority of Pennsylvanians as you consider the proposal currently pending in the Senate to increase our taxes so that the government can redistribute our money to those your colleagues consider truly deserving: the corporations and the rich.

The proposal passed by the Finance Committee would leave my base tax rate the same (although people paid far more than I would see significant savings, as their tax brackets are eliminated and their rates fall), while eliminating the dependent deduction for my daughter, eliminating or significantly limiting my deductions for local and state income and real estate taxes, further limiting my ability to deduct thousands of dollars in work-related expenses, and eliminating the childcare tax credit. So under this legislation my taxes would increase significantly next year, and apparently might go up even more in  few years’ time when provisions sunset.

It would be one thing to raise my taxes in order to fund some worthy goal, such as universal health care or accelerating the conversion to a green economy and so averting the worst consequences of global warming. But to raise my taxes (and those of the vast majority, who must work for a living) in order to hand the money over to the wealthiest among us strikes me as quite outrageous. The United States already suffers economic inequality unparalleled since the eve of the Great Depression. I would hope that the prospect of exacerbating this problem through regressive changes to the tax code would disturb even someone such as yourself, who has built his entire political career around advocating for the interests of the rich and powerful.

ASR 71/2, Workers Against Fascism

ASR 71-72 is on the press. This is a double issue, with special sections on labor’s fight against fascism and labor-community struggles in South Africa, as well as articles on the history of the term Libertarian (and of anarchist opposition to sexism), Anarchism and Play, and Eco-Anarchism.

Contents:
2. ASR & the Challenges Facing the Syndicalist Movement
3. Wobbles: Loyalty to the Bosses, Refusing Deportations, Booting La Migra, Golden Age for Workers? …
5. International Labor News Compiled by Mike Hargis
6. Wildcat in Vietnam… Labor Shorts by John Kalwaic
8. ARTICLES: Fascist Attack in Charlottesville
8. Unions Against Fascism by Shane Burley
10. Flying Squads & Self Defense Now by Jeff Shantz
12. Anarchists Against Hitler from the Kate Sharpley Library
13. Fighting Fascism: Lessons from Italy by Iain McKay
16. 160 Years of Libertarian by Iain McKay
24. On the Male & Female Human-Being by Joseph Déjacque
28. SPECIAL SECTION: People’s Power, Workers’ Control & Grassroots Politics in South Africa: Rethinking Practices of Self-Organization & Anti-Apartheid Resistance in the 1980s
28. S African ‘Workerism’ in the 1980s by Lucien van der Walt
32. Lessons from the 1984-85 Vaal Uprising by Jonathan Payn
37. Self-Organization in South Africa by Daria Zelenova
41. The Playful Anarchist by Brian Martin
45. REVIEWS: Eco-Socialism, Eco-Anarchism & the Anthropocene Review essay by Wayne Price
47. Debt: Anarchist Economics Review by Chad Anderson
50. Graeber on bureaucracy Review by Jeff Stein
51. Fighting the Spanish Revolution Review by Jeff Stein
52. Kropotkin’s Activist Anarchism Review by Iain McKay
53. This Fight is Our Fight? Saving America’s Middle Class Review by Wayne Price
56. Transnational Anarchism Review by Martin Comack
57. Economics of Labor Repression Review by Jon Bekken
58. Radical Press Review Review by Mike Hargis
59. LETTERS: Fighting CEO Pay, Reviving the Cold War…

Class Struggle (hidden) in the New York Times

A golden age for workers?

The front page of the Sept. 20 New York Times Business Day section has headlines suggesting workers are doing well, but when you read the stories things look quite different.

Eduardo Porter’s column headline trumpets “Labor Shortage Gives Workers an Edge.” It takes him until the fourth graf to tell us that average hourly pay for production and nonsupervisory workers has almost reached 1973 levels (after adjusting for inflation). Less, of course, after 44 years of speed-up, but close. Of course, that doesn’t take account of lost benefits. We’re paying a lot more out of pocket for our health care. Time off is harder to get. Pension plans are but a distant memory. And right next door, “Cost of Employer-Based Plans Remains Stable, a Study Finds.”

Good news, right? Well, it’s good news for the bosses. Average premiums for family coverage are up 3 percent, to $18,764 a year. The cost is rising faster than wages, and far fewer small employers are offering health benefits at all. Out-of-pocket costs are higher, as employers switch to insurance companies that restrict access to doctors and hospitals. But “deductibles rose only slightly this year.” Why? “Companies are recognizing that they have reached the limits of what they can ask their workers to pay, said Michael Thompson, the chief executive of the National alliance of Healthcare Purchaser Coalitions, which represents employers. ‘We’re running out of runway to keep cosh-shifting to employees,’ he said.”

But at least we’re seeing the promise of new jobs? Same page’s “A Manufacturing Model Tough to Export” notes that FoxConn, which is promising 13,000 new jobs in Wisconsin, has a history of breaking such promises once it gets its government hand-outs.

In Brazil, FoxConn promised nearly 100,000 jobs in exchange for billions in subsidies. Six years later, the plant site sits empty – only 2,800 jobs ever materialized. In Pennsylvania, FoxConn promised to hire 500 workers in a $30 million plant it has yet to break ground on.

Wisconsin officials have promised $3 billion in tax breaks and other subsidies. If FoxConn hires all the workers it promises, it would take until 2042 before the state could hope to recoup its money. (Of course, the deal would have run out by then, and so FoxConn would have long since demanded more payments.)

Back to the looming labor shortage. Employers profess to be worried that they’re going to run out of workers (though there are tens of millions of folks frozen out of the labor market – far more than the jobs employers say they can’t fill). The Times quote “experts” who suggest slashing disability benefits, expanding government assistance for workers paid so little they can’t afford childcare or rent, and holding down the minimum wage because higher wages “could price some workers out of jobs” even in the face of the “looming labor shortage” the column is fretting about.

Over in Arts, the same issue reviews a book, Nomadland, about tens of thousands of older workers forced to trade in their homes for vans and old school buses, traveling from part-time job to part-time job – sometimes working for little more than a place to park their vehicles. Their ranks include “retired” teachers and aged-out software engineers. Amazon hires lots of these desperate workers, getting federal tax credits for 25 to 40 percent of the paltry wages it pays them for working in dangerous sweatshops where the company distributes free painkills to keep them working as long, and as fast, as possible.