Legislation that Sen. Bernie Sanders unveiled 13 years ago to help boost workplace democracy and curb worsening inequality in the United States was included in the $1.7 trillion omnibus package approved by the Senate on Thursday.
Modeled on the success of employee ownership centers in Ohio and Vermont, Sanders’ (I-Vt.) Worker Ownership, Readiness, and Knowledge (WORK) Act authorizes a $50 million grant program to help create and expand employee ownership centers around the country.
These centers provide workers with the tools they need to own their own businesses through employee stock ownership plans (ESOPs) or eligible worker-owned cooperatives. This act will authorize the [U.S.] Department of Labor to provide education and outreach, training, and technical support for local and state programs dedicated to the promotion of employee ownership and participation. Sanders helped establish the Vermont Employee Ownership Center in 2001 and first introduced the WORK Act in 2009. Sanders also secured $158,000 for the Vermont Employee Ownership Center as part of the Consolidated Appropriations Act of 2022 earlier this year.
“Workers deserve an ownership stake in the companies they work for, a say in the decisions that impact their lives, and a fair share of the profits that their work makes possible,” Sanders said Thursday in a statement.
“This modest but effective legislation will go a long way to ensuring workers have the tools they need to have a seat at the table they worked to build,” he continued. “By making sure workers have their seat and their voices are heard, we can start to create an economy that works for all of us, not just the wealthy few.”
“Workers deserve an ownership stake in the companies they work for, a say in the decisions that impact their lives, and a fair share of the profits that their work makes possible.”
Research has shown that worker ownership leads to higher wages, better benefits, a more secure retirement, and reduced gender and racial wealth disparities. In addition, employee-owned enterprises see lower turnover and increased output. Sanders’ office attributes these positive effects to improved “employee morale, dedication, creativity, and productivity, as workers share in profits and have more control over their own work lives.”
Other studies have shown that worker-owned companies in the U.S. are less likely to outsource jobs and more likely to experience stronger profits and shareholder returns. According to one recent analysis, scaling up employee ownership could quadruple the share of wealth held by the bottom 50% of U.S. households.
In 2019, roughly 25 million workers in the U.S. already owned some stock in the company where they were employed, according to Sanders’ office. More than 10,000 enterprises currently use some type of employee ownership model, improving material circumstances for millions of working people nationwide.
“On behalf of the more than 10 million American households that already benefit from an ESOP, we are deeply grateful to Sen. Sanders for his dedication to include the WORK Act in the omnibus,” Jim Bonham, president and CEO of the ESOP Association, said Thursday.
“Starting years ago with the Vermont Employee Ownership Center that he helped create, we have learned that increased education, awareness, and feasibility grants directly results in more employee-owned businesses and now those lessons can be applied across the nation,” said Bonham. “More employee-owned businesses mean more stable local jobs, higher incomes, increased retirement savings, better work environments, and more productivity for our economy.”
The omnibus package, which funds the federal government through 2023, also includes the first budget increase for the National Labor Relations Board in nearly a decade, as Sanders’ office noted.
The massive, 4,100-plus-page bill now heads to the House. It must be approved by lawmakers in the lower chamber and signed into law by President Joe Biden by Friday to avoid a painful government shutdown.
This post was originally published on Common Dreams.
Today, the top 0.01% of the wealthiest people in America hold more of the country’s total wealth than that same group did during the Gilded Age, a time of unrestrained financial speculation—but also of grinding poverty, corruption, and racial strife. That extreme concentration of wealth is in large part attributable to the dominance of Wall Street over American life, and bankers and investors’ willingness to manufacture and exploit crises, when the spoils are greatest. The centrality of finance in the United States and across the globe arose through successive waves of neoliberal reform over the last half century involving the privatization of profits and externalization of risk.
The 2007 financial crisis led to widespread distrust of banks and government, but rather than creating a fairer economic system, it gave rise to new trends in finance that expanded speculators’ influence in the global economy and continued to facilitate massive accumulations of wealth. Since the crisis, the financial sector has witnessed the rise of private equity (PE) as a major-league wealth maker, such that founders of the largest PE firms have become multi-billionaires.
This infrastructural power and concentration of ownership, largely unknown to the public, allows BlackRock and these other “big three” firms enormous influence over nearly every industry in the world.
In 2021, 25 members of the Forbes billionaire list made their money in PE, notably Kohlberg, Kravis, and Roberts (KKR) founder Henry Kravis (net worth $7.4 billion) and Stephen Schwarzman (around $30 billion net worth), the cofounder of the PE giant Blackstone, which manages about $1 trillion, a mammoth sum.
PE is a rebranded form of the leveraged buyouts (LBOs) of the Reagan era, memorialized in Oliver Stone’s Oscar-winning film Wall Street—a fictionalized account of how real-life banker-predators like Ivan Boesky speculated on corporate takeovers in the go-go 1980s using illegal insider information, justified with survival-of-the-fittest ideologies and slogans like “greed is good.” In that dog-eat-dog world of risk arbitrage, insider information was both money and power. The racket involved buying stock in “target” companies, pushing up bids beyond their actual value, and forcing takeovers.
In the 1980s, LBOs and mergers and acquisitions (M&As) were among Wall Street’s hottest techniques for making massive amounts of money. LBOs took public companies private by borrowing against their assets to pay off shareholders (usually at inflated stock prices), with financing from banks and junk bonds. They tended to involve incredibly high debt levels, which were used to justify shop-floor cost cuts at a time when unions were far too weak to prevent them. After pieces of target companies were sold and their workforces “streamlined,” the “re-engineered” companies would go public again with new and improved stock prices. LBO players claimed to be purchasing undervalued assets to unlock corporations’ value and “rescue” them, but the buyouts were not for innovation and product development—they were for getting rich quickly.
For target companies, LBOs were rarely profitable, but they were big money makers for the bankers and cadres of lawyers and specialists who collected fees on the massively inflated buyout prices. Today, billion-dollar buyout and merger deals total in the trillions and PE has become a powerful engine of financialization, profoundly deepening the reach of wealthy investors in all parts of the economy. As of 2019, assets under PE management totaled more than $6.5 trillion, and in 2020, PE accounted for 6.5% of GDP, directly employing nearly 12 million workers and its suppliers employing an additional 7.5 million. By the middle of 2018, PE owned more companies than the number of businesses listed on all of the U.S. stock exchanges combined.
How PE operates
In broad strokes, a PE fund is an unregulated pool of money operating outside of public markets that elite investors buy into. Given the size of the initial outlay, those investors tend to be classified as “high net worth” or are institutional investors, such as universities, insurance companies or pension funds. Enabled by low interest rates and a politically friendly climate, the pooled funds are used to invest in or buy a target company—toy stores, newspapers, hospitals, pretty much anything under the sun—and then load it up with debt (as much as 90% of the sticker price) to finance the purchase. The borrowed money is, theoretically, used as working capital to restructure the company and “unlock” its value, while paying large dividends and funneling profits back to investors. Then, the idea is, they sell the company at a profit.
PE is so lucrative in part because of its generous “2 and 20” fee structure—2% in annual fees, plus a 20% cut of the profits above a certain level. Under the current tax code, that 20% is considered “carried interest” and is thus classified as capital gains, which saves PE firms tens of millions each year in taxes.
PE advertises itself as a benevolent force, as just a group of well-intended entrepreneurs investing in underperforming companies and restructuring them so they become more productive and efficient, and thus good for the economy. Some are. But most of the companies taken over by PE start off healthy and only become distressed after being raided for their value. The purpose is not to make companies productive citizens—it is to maximize the fund’s profits and increase a company’s appeal to buyers by cutting its operating costs, while shifting the risks associated with their investment onto shell companies and workers.
Companies acquired through leveraged buyouts are more likely to lower wages, cut retirement plans, and have higher rates of bankruptcy. Instead of reinvesting profits, as someone trying to build a company would, PE strips them of workers and assets and saddles them with untenable debt repayment schedules to “discipline managers.” Such was the case with the dozens of large retailers that PE firms drove into the ground—including the otherwise profitable Toys-R-Us—wiping out millions of jobs and shorting workers of their severance pay.
The volatility that PE has introduced into the workforce is matched by high-risk lending to companies with poor credit and already high debt loads. PE’s incentive structure is such that the more debt one raises against a target company, the less cash that is needed to pay for it, and the higher the returns once the company is sold. PE has also introduced dangerous levels of corporate concentration and monopoly by driving target companies out of business or merging them with other firms in the same industry.
After the 2007 financial crisis, for example, Blackstone bought up chunks of “troubled” real estate assets and used them to found a large single-family home rental company, Invitation Homes Inc. After “streamlining” its operations, Invitation Homes went public, then merged with another PE-backed business to create the United States’ largest single-family rental company—all on the backs of millions of people forced out of their homes due to a crisis that the banks created. As of 2022, giant PE firms continue to buy up real estate—fostering an epic housing bubble and major affordability crisis, especially for renters—and create increasingly high-risk, shadowy, complex investment vehicles and shell companies to profit off overvalued or worthless assets.
Profiting off sickness
PE’s raiding of the U.S. healthcare system—one of the country’s most essential industries, accounting for a fifth of GDP—has proven disastrous. As a decentralized and fragmented industry composed of small operators, healthcare was ripe for investors looking to churn profits of mergers and by controlling markets. In 2020, large PE firms invested more than $340 billion to buy healthcare-related operations around the world, including rural hospitals, nursing homes, ambulance companies, and healthcare billing and debt collection systems.
This concentration has led to price gouging, hospital closings, predatory billing, cuts in hospital infrastructure and workforces, and declining quality of care. According to a study of PE-owned nursing homes, researchers found “robust evidence of declines in patient health and compliance with care standards” after PE firms took over the facilities. Moreover, despite receiving at least $1.5 billion in interest-free loans from Covid-relief funding streams, PE-backed healthcare providers cut workers’ pay and benefits to make up for lost profits due to the emergency suspension of elective surgeries. They also contributed to shortages of ventilators, masks, and other equipment because their managers did not want to lose potential profits by keeping such equipment on the shelves in their hospitals.
PE managers have been caught grossly overcharging for medical treatment. In 2020, NBC News reported that while the median cost for treating a broken arm in an emergency room was about $665, Blackstone’s TeamHealth charged almost $3,000. In a typical emergency room, NBC found, a physician group might charge three to four times the Medicare rate, but TeamHealth charged six times the rate. There is also the problem of “surprise billing”—when a patient’s hospital is in their insurance network, but not the doctors who are treating them. PE firms found that, especially in emergency rooms, they could squeeze out profits by moving doctors out of network and then extracting higher prices from patients unaware that they are being treated by out-of-network providers.
Naturally, when Congress tried to thwart this criminal behavior, PE lobby groups spent a fortune protecting their interests, including a benevolent-sounding organization called Doctor-Patient Unity, which spent more than $28 million on ads funded by PE-backed companies. The bill did not pass, and to the Biden administration’s credit, its Health and Human Services Administration passed a rule in July 2021 banning this egregious practice.
The other big three
The years since the financial crisis also witnessed the rise of just a handful of asset management firms as a dominant force in the world economy. Asset managers are companies that run investment funds for a variety of retail, institutional and private investors. While traditionally, ownership of corporate shares has tended to be dispersed across many diverse investors and owners of assets, this vast pool of corporate equity has become increasingly controlled and owned by a small, concentrated group of intermediary financial institutions.
Today, a “big three” of asset management firms—BlackRock, Vanguard, and State Street Global Advisors—together are the largest shareholder in almost 90% of the companies in the S&P 500 index, including Apple, Microsoft, ExxonMobil and GE. As of 2020, they were also the largest shareholder in 40% of all publicly listed U.S. companies, employing 23.5 million people, and with combined assets of over $15 trillion—an amount equivalent to more than three-quarters of GDP. The largest of these firms, BlackRock, not only controls shares in all of these companies but also has been hired by leading governments and central banks to advise them, in some cases making decisions about institutions in which BlackRock is a shareholder.
This infrastructural power and concentration of ownership, largely unknown to the public, allows BlackRock and these other “big three” firms enormous influence over nearly every industry in the world. Among fossil fuel companies alone, in 2020 BlackRock managed more than $87 billion worth of shares, giving it a major hand in decision making over how to combat the climate crisis, or not combat it at all.
Political economist Benjamin Braun termed this concentration of ownership “asset manager capitalism” to indicate the systemic effects of this acute consolidation and the novel corporate and financial architecture it has fostered. With a small group of financial companies controlling this architecture and an already large and still growing amount of wealth, they are on course to one day hold voting control of every major corporation and wield an immense, systemic level of power over governments and the global economy.
This post was originally published on Common Dreams.
Progressive advocacy groups and economic analysts on Tuesday denounced retirement savings-related tax changes embedded in Congress’ end-of-year $1.7 trillion spending package, characterizing the pending reforms taken directly from the SECURE 2.0 Act as a “giveaway to the rich.” According to Patriotic Millionaires, a group of wealthy tax fairness champions, the must-pass omnibus bill includes “some…
“You don’t think about the future.… There’s no future to think about. Future is arriving home to sleep,” Nemir said. “It’s stressful. Sometimes you feel like you won’t get anywhere. You can’t plan anything. You feel defeated.” Nemir (who requested his last name not be used due to fear of reprisal), worked for years delivering food via apps like Rappi, and now cleans and delivers 20-liter bottles…
A shop in West Sussex has used its Christmas window display to take aim at the Tory government over the ongoing cost of living crisis.
Eco2Home: the circular economy
Lee Barnett owns Eco2Home, a shop in Burgess Hill, West Sussex. The outlet describes itself as a ‘circular economy’ shop. This means it sells items usually destined for landfill. As the website Circular wrote:
The circular economy is based on a fundamentally different concept to the linear model of economic activity with which we are all familiar.
The circular economy is, essentially, a production and consumption system that relies on recycling, reuse, repair, remanufacturing and sharing of products – so, by definition, it demands a change in consumption patterns, new business models, and circular systems of production and resource allocation.
As a result, our usual ways of judging national economic performance in a linear system – with indicators such as gross domestic product, productivity and inflation rates – are not sufficient or adequate for measuring circular activity.
At the moment, estimates suggest that only 8.6 per cent of the world’s economy is circular.
Open two days a week, the shop has several values, and states that it will:
plant 45 trees for every 1 ton of waste we are unable to recycle or reuse.
Eco2Home won Burgess Hill’s best Christmas window competition in 2020 for a genuinely festive display. However, this year Barnett has chosen to make a political point – and it’s a massive departure from what Eco2Home usually does.
Taking aim at the Tories
Barnett used his shop window frontage to create ‘The reality of Christmas in 2022’. One window features Rishi Sunak, Boris Johnson and Mims Davies (MP for Mid Sussex) in a decadent living room setting:
A second window has a child wrapped in blankets, sitting at a table with a pot noodle and a letter to Santa describing the bleak reality of the cost of living crisis. An electric fire has a ‘do not turn on’ note on it:
There’s a note from a child asking Santa:
could my mum be home for Christmas, she always has to be at work.
Eco2Home has made pertinent points about the current cost of living crisis: how the Tories are sitting pretty, while the rest of us suffer to varying degrees. Barnett should be applauded for this, and in a just world would win the best shop window display again – though perhaps for different reasons this year.
PHILADELPHIA — In the second year of J. Jondhi Harrell’s 20-year sentence, he began to contemplate what would alter a person’s life for good. Financial literacy, employment, mentorship and community support were essential, he recalled thinking.
“If you can’t feed yourself, if you can’t manage your money, you can’t build a solid foundation for the future,” Harrell said in the lobby of the First African Baptist Church, 13 years after completing his sentence.
That morning in late November, his organization, TCRC Community Healing Center, gave away dried fruit, nuts, 170 turkeys and 100 chickens to more than 370 families on the church’s sidewalk. Many of the visitors that day were impacted by the prison system in some way — either because they or their loved ones had been incarcerated.
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As the organization’s founder and executive director, Harrell sees how safe and thriving communities can help build a strong foundation upon reentry.
Each year, the more than 600,000 people released from state and federal prisons nationwide face a range of financial barriers. Difficulty accessing banking, a lack of credit, court fines and fees and dismal employment opportunities are common challenges. Together they can have devastating consequences for individuals and families, researchers say.
Tony Lowden, former executive director of the Federal Interagency Council on Crime Prevention and Improving Reentry, recalls seeing his neighbors in North Philadelphia return from prison as a youth. They couldn’t get a job or even an interview due to their criminal record. Predatory lenders took advantage, knowing formerly incarcerated people had difficulty accessing traditional banking services, he said.
“With all these barriers that a person has coming back into the community, rolling up in the inner city communities or rural communities where there’s no financial literacy in those areas, they end up becoming justice-involved: desperate people doing desperate things,” he said.
Lowden vowed to do everything he could to ensure that formerly incarcerated people could earn a living wage and create financial stability in areas like his childhood neighborhood, where the odds were stacked against them.
Tony Lowden, Vice President of Reintegration and Community Engagement at ViaPath Technologies. (Courtesy of ViaPath Technologies.)
Now as the vice president of reintegration and community engagement at ViaPath Technologies, Lowden works to provide free educational courses and training on topics including job skills, math and language arts, personal growth and finance on tablets for people in prison and upon their reentry. The company’s services are in 64 of the largest correctional facilities in the nation, where Lowden said they serve around 1.2 million incarcerated people.
Just as Lowden witnessed as a youth, formerly incarcerated people still face discrimination and stigma in the labor market. Some states even preclude people with criminal records from obtaining occupational licenses, such as for nurses or veterinary technicians.
A 2021 Bureau of Justice Statistics study looked at the employment of 51,500 people released from federal prison in 2010. A third found no jobs in the four years post-release.
For those in the study who did find employment, it took them an average of more than six months, according to the report. People of color fared the worst, with Native Americans spending over eight months to find work, compared to white people at around five months.
Job prospects are particularly important upon reentry, since people are less likely to return to prison when they have full-time employment.
Terry-Ann Craigie, associate professor of economics at Smith College and an economic fellow at Brennan Center for Justice, where she focuses on the intersection of race, labor and mass incarceration, said the economic impact is massive. Over a lifetime, people who were imprisoned earn half a million dollars less on average than people who were not.
But Craigie believes the current job market offers some good news for job seekers who were previously imprisoned.
“Because of the economic climate we’re in, we’re seeing that unemployment is really … low,” said Craigie. When it’s harder for employers to fill openings, “you would expect that people with criminal records or formerly incarcerated people probably stand a better chance of getting hired.”
Another barrier: financial obligations in the form of fines, supervision fees, court costs, property forfeitures and restitution to victims. A 2017 Harvard Kennedy School report found that financial obligations can “have long-term effects that significantly harm the efforts of formerly incarcerated people to rehabilitate and reintegrate, thus compromising key principles of fairness in the administration of justice in a democratic society and engendering deep distrust of the criminal justice system among those overburdened by them.”
“Tough on crime” policies, including mandatory minimum sentencing and harsher punishments for defendants with repeat convictions, fueled mass incarceration in the 1980s and ’90s. With that came rising costs to sustain the system. Fines and fees increased.
The justice system’s operational costs rose nationally from $84 billion in 1982 to $265 billion in 2012, adjusted to account for inflation, according to The Illinois Criminal Justice Information Authority. The number of incarcerated people facing fines tripled to 37% between 1986 and 2004.
Hakeem Rudd, pantry manager for TCRC Community Healing Center, met Harrell in the Atlanta Penitentiary in the mid-2000s. Rudd said that he’s seen people return to criminal activity to pay for their fines and fees upon release. A 2015 survey by community researchers across 14 states found that formerly incarcerated people have an average debt of $13,607 in fines and fees.
“You served your time,” Rudd said. “You’re putting people back in the line of fire because you’re sending them home with a bill.”
Hakeem Rudd, pantry manager for TCRC Community Healing Center at the First African Baptist Church in Philadelphia, PA on Nov. 21, 2022. (Melissa Hellmann / Center for Public Integrity.)
It can also lead to disenfranchisement. A Florida law denies voting rights to an estimated 934,500 formerly incarcerated people due to outstanding fines and fees, according to The Sentencing Project.
Some states and jurisdictions allow fines and fees to be waived or community service ordered in lieu of payment when people can’t pay.
Across the nation, states are lifting restrictions related to unpaid fines and fees and removing other financial barriers for formerly incarcerated people. Colorado, Delaware and Nevada are among several states in recent years to prohibit the suspension of driver’s licenses for nonpayment of criminal debt. The federal Driving for Opportunity Act wending through Congress would incentivize other states to follow suit.
A recently passed law in Washington, D.C., ensures that outstanding criminal debt does not prevent a sentence from being completed, while an Illinois act bans courts from denying requests to expunge or seal a record due to nonpayment of fines and fees.
On the job front, 37 states — and some cities, including Philadelphia — have adopted “ban the box” laws by disallowing criminal history questions on job applications. A federal law that took effect last year prohibits federal contractors from inquiring about an applicant’s criminal record prior to a job offer. Additionally, reforms to occupational licensing laws in 39 states and D.C. since 2015 have made it easier for people with criminal records to work in fields that require licenses.
Back in Philadelphia, Harrell stood in the bright sun as he distributed food in between a steady stream of cell phone calls about the pantry operations. His organization has focused on food security since the brick-and-mortar center closed due to the pandemic in 2020.
This fall, TCRC Community Healing Center began leasing a building from a church. Along with the food pantry, the center helps returning citizens reintegrate into society by referring them to organizations that provide guidance on rebuilding their credit, opening bank accounts and finding free professional attire.
More than anything, Harrell said he takes pride in offering a space where cheerleading and “encouraging people to see the positive aspects of their reentry” is the norm.
Tory MP, failed leadership candidate, and current leader of the House of Commons Penny Mordaunt has caused uproar on social media. She tweeted a video of herself promoting a new initiative in her constituency city of Portsmouth: Mordaunt is opening a handful of foodbanks. However, the MP has decided to call them something else, in a bid to make her move slightly less awful than it actually is.
Mordaunt’s food ‘pantries’, not ‘foodbanks’
As the News reported, Mordaunt is paying for three food “pantries” (not ‘foodbanks’ – ‘pantries’) to open in Portsmouth. She’s funding it from the royalties of a book she wrote. The News said that these pantries are where:
people facing financial difficulties can buy heavily-discounted groceries.
Yes, we know. That’s a foodbank – right? Well, not if you’re Mordaunt. The News continued, implying that unlike foodbanks:
No referral is needed to access them.
Never mind the fact that people don’t need a referral from places like Citizens Advice to access many independent foodbanks, anyway. So, what is the difference between Mordaunt’s pantries and a foodbank? The News revealed that:
a typical weekly shop bought through them would cost as little as £4.
Right – so you have to pay for the food. Now it’s making sense. Essentially, Mordaunt admits people are too poor to afford food, so has set up a load of discount shops under the guise of helping her community – which are foodbanks in all but name (and the fact people have to pay). Her party’s governments have caused poverty to skyrocket. Yet Mordaunt is so proud of her pantries that she filmed a video telling us all about them.
“They’re NOT foodbanks”
Mordaunt said that:
Food pantries are a great scheme that can help families reduce their food bills by about £800 a year. They’re not foodbanks where you need to be referred in. They’re open to everyone, and for a few pounds a week you can get a decent shop.
Naturally, people on Twitter weren’t having Mordaunt’s nonsense. TV host professor Alice Roberts noted the foodbank overtones of Mordaunt’s pantries, while also highlighting her cynicism:
This is not just any food bank, it’s a Make-Britain-Great-Again food bank. Sorry, pantry. And a great vehicle for advertising a book, too! https://t.co/nGo244NcO5
In 2010, 60,000 food bank packages were handed out in Britain. Last year, it was 2.5 million. This is the result of political choices – and the cost of living crisis will see millions more fall into food poverty.
The Tories have been in power all that time. So, Mordaunt would never admit that foodbanks were a scourge of successive governments – that would implicate her in the horror. Instead, this ghoul chooses to gaslight everyone who has to use them – by rebranding them and making our she has a charitable nature in the process. Mordaunt is supposed to be the palatable face of the Tories – yet here she is, running around trying to appeal to the ‘squeezed middle’ with this ‘food pantry’ dross. Beyond rancid.
The specter of inflation is haunting the world’s economies. Surging prices since 2020, especially in food and energy, have eroded global living standards, though inflation varies considerably across countries. However, inflation is hitting the working class and lower-income people harder than wealthier households, triggering protests around the world, especially in countries with strong trade unions and left-wing political parties. In Europe, governments fearful of social unrest have spent hundreds of billions of euros in an attempt to cushion the impact of inflation. The conservative government in Greece has even sought to restrain the increase in prices in more than 50 basic goods with a “household basket” plan. Meanwhile, in the United States — the richest country in the world — government policies to assist those suffering disproportionately from the surge in prices do not even exist.
Why are prices rising, and why do experts think that high inflation isn’t going away anytime soon? Moreover, what type of policies would we expect from a truly progressive government in an effort to curb inflation and bring wages in line with inflation?
Two leading leftist economists from the University of Massachusetts at Amherst, Gerald Epstein and Robert Pollin, shed light on these questions in this exclusive interview for Truthout. Epstein and Pollin are also co-directors of the Political Economy Research Institute (PERI) at UMass-Amherst, which on December 2-3 will host an international conference to explore the causes of inflation and what can be done about it.
C.J. Polychroniou: Bob, the war on Ukraine has not only set back global recovery from the COVID-19 pandemic but also seems to have caused inflationary expectations to soar. Indeed, inflation is haunting most economies around the world, and there seems to be no end in sight for high prices. Why is inflation rising, and what are the main forces behind the creation of large price increases in food, the energy sector and even in housing?
Robert Pollin: Sharply rising inflation rates emerged throughout the world coming out of the 2020-2021 COVID lockdown. According to the International Monetary Fund, the average inflation rate for the overall global economy rose from 3.8 percent in 2019, the year prior to the COVID pandemic onset, to 6.4 percent in 2021, as lockdown conditions from COVID started loosening, and 9.1 percent as of October 2022. For the large high-income economies (G-7 economies), inflation rose from 1.6 percent in 2019 to 5.6 percent in 2021 and to 6.8 percent as of October 2022. The comparable figures for the U.S. economy specifically are 2.1 percent in 2019, 7.4 percent in 2021 and 6.4 percent as of October 2022.
Clearly, the first driver of inflation globally has been the unique economic conditions globally coming out of the COVID lockdown. In particular, the global economy emerged out of the lockdown with supply shortages for a wide range of goods, including oil, food and computer chips, since production of goods had been cut back sharply during the lockdown. On top of that, the shipping industry itself contracted during the lockdown, and has not been able to bounce back quickly. Within the U.S., a major drag has been that there has been, very simply, a shortage of truck drivers to deliver supplies. This has resulted because truck drivers are badly paid. Under COVID conditions, the job also became less safe. One easy solution here would be to raise the pay and improve the safety precautions for the drivers. More people would then want to show up and take these jobs. That still hasn’t happened. Russia’s invasion of Ukraine led to further global supply shortages, in particular for energy and food. This in turn created still more inflationary pressures.
Right-wing commentators like to claim that large government spending levels caused inflation. This position is not entirely wrong, though it is misleading in the way that the right-wing pundits present it. In fact, government spending levels to counteract the COVID lockdown were historically unprecedented throughout the world, amounting to between 15 percent and 30 percent of all economic activity in all major economies. These were government spending levels equal to, if not greater than, World War II. They succeeded in creating a global floor on overall demand — that is, people did still have money in their pockets and bank accounts even while unemployment was spiking with the economic lockdown.
In other words, overall demand did not fall as much as overall supply. This created a version of the classic mantra on inflation, as resulting from “too much money chasing too few goods.” But consider this problem relative to the alternative that would have resulted under the COVID lockdown in the absence of these government spending injections — i.e., “too little money and too many goods.” That would have produced a major deflation — i.e., falling prices, wages and incomes, along with huge increases in mass unemployment, bankruptcies and a global depression. I have lots of criticisms of the specific ways in which these COVID bailouts were executed. But we are far better off as a result of this government spending, even recognizing how inflation has followed, then to have allowed a global deflation and depression to result.
Under these circumstances of COVID-lockdown and war-related supply shortages, corporations in turn seized the opportunity to mark up their prices and pad their profits margins. Focusing on the U.S. economy, the Financial Timesreported on November 28 that, “Margins of retailers and wholesalers have exploded in the past two years. The basic story here is that a combination of broken supply chains, rising input costs, and high demand created pricing power for producers, who raised mark-ups. Those mark-ups … are fueling inflation.” The economist Josh Bivens at the Economic Policy Institute has confirmed this pattern for the U.S., calculating that 54 percent of the price increases for corporations has been due to rising profit margins.
Polychroniou: Can inflation in today’s world be controlled by the actions of national governments? If so, what might a progressive government in the United States be able to do to make prices go down, or otherwise, to increase benefits and wages in line with inflation?
Pollin: The first issue to consider here is how much we should need or want prices to come down. In a paper that I will be presenting at the PERI conference, my coauthor Hanae Bouazza and I show that, considering 130 countries over the 61-year period from 1960-2021, economies have consistently grown at faster rates when inflation ranges between 5 percent and 15 percent as opposed to between 0 percent and 2.5 percent. Generally, this is because when an economy is operating at a high level of activity — with low unemployment rates and strong public sector support — inflation will tend to be somewhat faster. This is not a serious problem as long as workers’ wages and living standards are at least keeping pace with inflation. And as I noted above, this is a far less serious problem than when unemployment is high and wages and living standards are eroding, even while inflation may be at 2 percent or less.
In fact, since the mid-1990s, all high-income countries have been operating under what is termed an “inflation targeting” policy framework. These economies have all set their “inflation targets” at 2 percent inflation. The premise here is that economies perform better when inflation is negligible to nonexistent. But in fact, we have seen in the U.S. that, along with low-to-zero inflation between the early 1990s until the COVID reopening, the buying power of workers’ wages remained stagnant, while the pay for corporate CEOs rose exorbitantly, from being 33 times higher than the average worker in 1978 to 366 times higher in 2019. This is a more than tenfold increase in relative pay for corporate CEOs. So, the 2 percent inflation target has primarily been a means of keeping workers’ bargaining power weak and enabling profits and CEO pay to explode.
Within this context, it is not surprising that the primary response of policy makers to the global inflationary spike has been to try forcing their economies’ inflation rate down to the 2 percent target rate. Specifically, this has entailed central banks raising the short-term interest rates that they control for the purpose of weakening overall demand in the economy and raising mass unemployment. With mass unemployment rising, worker bargaining power — and along with it, the labor costs faced by businesses — would be expected to decline. Federal Reserve Chair Jerome Powell acknowledged these policy aims clearly, if demurely, in a major speech last August. Powell predicted then that there would “very likely be some softening of labor market conditions” resulting from the Fed raising interest rates.
Despite this singular focus by the Fed and other central banks on raising interest rates and unemployment, this is by no means the only policy tool available that could effectively manage inflation. The Biden administration itself has proposed enacting windfall profit taxes and stricter enforcement of regulations already in place to control corporations monopolistic pricing power. These would counter the excessive mark ups over costs that corporations have been able to impose over the past two years. Additional policy tools could include direct controls in the short term of some key prices, such as oil, along with tighter enforcement of speculation trading on futures markets for oil and food. Still more, increasing infrastructure investments can serve to loosen supply-chain bottlenecks in the short run while raising productivity over the longer term. Advancing a green energy transition — including investments in both energy efficiency and renewable energy — will reduce dependency on volatile fossil fuel markets while also driving down CO2 emissions.
It is possible that these other measures do not operate as forcefully as raising interest rates and unemployment for bringing inflation down to the 2 percent target rate. But the evidence shows that it is not typically necessary to force down inflation to such low levels. Moreover, all of these alternatives offer the critical advantage that they can reduce inflationary pressures without forcing up unemployment rates. It is also critical to note that inflation has been coming down since July. In the U.S., the average rate for the past four months has been 2.7 percent (expressed on an annual basis). At the least, this pattern demonstrates that there is no further need for the Fed to continue trying to force up unemployment in the name of inflation control. Rather, the combination of less stringent inflation-control policies should be more than sufficient now to continue bringing inflation down to an acceptable level.
Polychroniou: Jerry, there are some economists who argue that monetary policy has been the neglected factor behind the recent surge in inflation. Is this a valid argument, especially with regard to inflation in the United States? Moreover, how do central banks control inflation, and how do you assess the role, so far, that central banks and the Fed in particular have played in combatting inflation? It appears that working-class people, globally, are getting the short end of the stick with the policies pursued by central banks in the fight against inflation.
Gerald Epstein: The Federal Reserve has two broad areas of responsibility: one is with regard to monetary policy and the second involves financial regulatory policy, which includes both the monitoring and enforcement of financial regulations. When it fails to implement or enforce its regulations sufficiently, then it bails out the financial institutions and markets that have engaged in reckless behavior and are teetering on the edge. Here it is playing its role as “lender of last resort” or more accurately, as the “bailor-in-chief.” To bail out these banks and markets, the Fed tries to keep interest rates very low so they can borrow money cheaply. This also gives banks and wealthy financiers the opportunity to borrow money cheaply and buy and trade financial assets, leading to the massive increases in financial wealth we have observed until recently in the period following the great financial crisis of 2007-2009. Up until the time when Russia invaded Ukraine, the Federal Reserve’s mixture of monetary policy, regulatory (non-) policy and bail-outs led to a gigantic “asset inflation,” but not much of an inflation in the cost of goods and services. The one exception to this may have been in the case of housing and real estate, whose increase in prices were probably partly driven by these low interest rates.
But when supply chain problems from the pandemic hit and Russia’s invasion took hold, then commodity inflation took off. Now the Fed saw that its game of inflating the wealth of the wealthy with low interest rates and bailouts would no longer suffice. The problem: The accelerating inflation was harming the real value of wealth held by the top 1 percent and richer strata. The Fed responded by significantly raising interest rates to slow inflation and to try to protect the wealth of the wealthy. But as Bob Pollin explained, this came at the expense of slower employment growth and even higher unemployment for workers.
As Bob explained, the standard of living of workers and the poor have been significantly hurt by increases in the cost of living associated with the war and supply problems, but higher interest rates, designed to help the wealthy, will only hurt the workers more. Home mortgage costs, interest rates on credit cards and slower wage growth will be the result.
Polychroniou: Assuming you were in a position to affect policymaking in the fight against inflation, what measures would you recommend as an economist of the left?
Epstein: Since Bob discussed this in general, I will focus here on what the Federal Reserve could do. It is often said that the Fed has only one tool — interest rates — and so that is what it is using to fight this inflation. But this is not correct. As the Fed amply showed during the great financial crisis and the onslaught of the COVID pandemic — as well as in previous periods such as during World War II — the Fed has a number of tools in addition to interest rates: these include subsidized lending, asset buying, direct lending for productive purposes, and other more technical tools like asset-based reserve requirements designed to subsidize some lending and penalize other types. If the Fed had the notion (and the political will to pull it off in the face of a potentially hostile Congress), it could lend subsidized credit or buy assets from specialized nonprofit banks devoted to providing low-cost housing; it could provide working capital or buy longer term assets from organizations in communities providing subsidized solar energy and insulation for residences and community buildings; it could provide subsidized credit for farmers and rural communities that are producing healthy food and developing distribution networks that bypass the mega-middle men — buyers, grocery stores etc. that are using their market power to rise food prices. These are just a few examples.
The point is that the Federal Reserve has a huge amount of creative lending and investment strategies during the recent crises mostly to help banks and other financial institutions, but also municipal governments, small businesses and the like, and they could do this again to do two things: Help subsidize key commodities for the working class and poor, and also help increase the supply of key commodities — green energy, healthy food, etc. — that will improve the standard of living of workers in the medium to longer term.
Punishing increases in interest rates are not the only tool the Fed can use, but it is the tool it is choosing.
Like most public school teachers, Jeffrey M.R. Duncan-Andrade knows that educators are first responders: They are often the first non-family members to see children when they are unwell, angry, depressed or agitated. But unlike many of his peers, he sees his role, first and foremost, as promoting “wellness” of body, emotions, mind and spirit. His latest book, Equality or Equity: Toward a Model of Community-Responsive Education, offers a prescriptive message for local schools and school districts and shifts the focus from rote learning and standardized testing to instead promote relationships that lead to flourishing communities and engaged individuals. It’s an exciting, empowering vision.
It’s also bold, and poses a direct challenge to an educational system Duncan-Andrade says “was built to be unequal and segregated.” As he writes in Equality or Equity, “the idea of an equal education system presumes a social, economic, and political reality that has never existed in these United States. It completely ignores centuries of radicalized inequality wrought by white supremacy, male supremacy, hetero supremacy and xenophobia.”
Upending these systems is Duncan-Andrade’s mission. In this interview, Duncan-Andrade discusses how his ideas around education took shape, and how his personal experiences as a student, parent and teacher factor into his evolving ideas. He also offers his thoughts about how to combat school funding inequities and nurture a love of learning among students.
Eleanor J. Bader: Let’s start with your background. How have your experiences influenced your ideas about education?
Jeffrey M.R. Duncan-Andrade: I was born in Los Angeles, but my family did a lot of migration because of different challenges we faced. I am the youngest of seven children, and growing up, I did not feel like my teachers had a deep interest in me or my family.
When I started high school, we were living in a rural county of southern Oregon, in one of the poorest areas of the country. The school was large and a lot of the students were steeped in intergenerational poverty. But even though I was poor, I was a good athlete. I could jump high and run fast, which meant I was somewhat privileged within the school. One of my sisters had gone to this school and had dropped out, and I remember one of my teachers telling me that I was not like her. This teacher told me that I could use school to get out of southern Oregon, out of poverty. At that time, I was running the streets, doing things I should not have been doing, but because I could play the school game and was an athlete, I was seen as redeemable. My siblings were not. This teacher did not understand that I was not interested in escaping my community. I did not see my neighbors, my abuelita, my family, as a problem. I never wanted to escape them or even escape poverty. Instead, I wanted school to help me end poverty. That would have been an education to value, an education that taught transformation.
Later, I was recruited by a few colleges and I ended up at the University of California-Berkeley. I initially struggled a lot. I was rooming with people whose fathers ran U.S. corporations. It was shocking. After a serious athletic injury, I started asking myself what I was doing there. I stopped going to classes and was put on academic probation. I knew I could do the work, but the ether I breathed, the privilege that surrounded me, was so alien. Eventually, another athlete suggested I talk to Professor Harry Edwards, a Black sociologist who taught at the school. I did, and his impact on me was profound.
Edwards basically told me that I had a responsibility to my community and suggested I use the opportunity I’d been given for more than myself. I was 18 when I met Edwards and I literally wept the whole way back to my dorm after our first conversation. What he said set me on the sacred path the Creator intended for me.
I began studying the way I trained as an athlete. It was at that point that I started to think of myself as a scholar.
You are now a professor of Latina/o Studies and Race and Resistance Studies at San Francisco State University, but you were also involved in creating a charter school in Oakland called Roses in Concrete Community School. Tell me about the school.
We took the name from a poem by Tupac Shakur, “The Rose That Grew from Concrete.” The idea was very much aligned with Harry Edwards’s message to me. Many teachers see the Black and Brown students in their classes as “damaged petals,” and fail to see the tenacity, strength and resilience it takes for a flower to flourish in an inhospitable environment. We — teachers, community members, parents and students — founded Roses in Concrete in 2013 as a community program, built a curriculum and hired staff that reflected who we wanted our students to emulate. We used the term “warrior-scholar,” which was taken from 15th-century Japan. At that time, Japan afforded its highest reverence to warrior-scholars. We stressed that if you do not study, you become a soldier, someone who follows orders. Warriors, on the other hand, think for themselves. They learn math, science, history so they can be assets to the community. We taught the students that everything has to be done with intention. Why are you writing? Is it to make money and escape the community? We want our students to know, first, that they have value. We want them to know their ancestors and the richness of the heritage they come from. We followed this course until 2020.
Four years after opening Roses in Concrete, the political climate in the school district changed. Suddenly, there was tremendous focus on our test scores. We were up front when we opened that we would never focus on standardized testing. In fact, this orientation had gotten us a lot of attention both locally and nationally, including major investment from philanthropy; it also won us several awards.
After a lot of discussion in our school community and with the district, we made the decision to merge with the last predominantly Black elementary school in East Oakland. We morphed into a K-5 school called the Oakland Academy of Knowledge, OAK. OAK continues our focus on community engagement and acts as the district’s lab school for building ethnic studies in an elementary school.
School funding inequities are rampant. How does this impact public education in California? How can we change funding streams to be more equitable?
California has one of the largest economies in the world. But thanks to something called Proposition 13, which was passed by voters in 1978, state funding for public education has been decimated. Of course, the impact has not been as severe for middle- and upper-class communities. These wealthier communities use private fundraising and local bond measures to ensure that their schools are well-resourced. Meanwhile, schools in less affluent communities ended up cutting sports, counseling, arts and music while wealthier schools simply launch annual fundraising campaigns. This enables them to keep their counselors, nurses, coaches, and music and art teachers. We’ve ended up with privately subsidized public education.
Just this morning, OAK, which is my sons’ school — I have twins in 4th grade — asked if I could donate so they could pay for a bus to take the kids on a class trip. I can, but at the same time, neighboring Piedmont recently raised millions to build an athletic facility while in Oakland we need to collect nickels and dimes to rent a bus.
So yes, funding is a huge issue. As it stands now, those who have the most get the most and those who have the least get the least. It needs to be inverted. Schools that serve children living in poverty, kids whose families have been locked out or whose communities have experienced genocide, need more than kids who are well-resourced. Leveling needs to privilege those who have never been prioritized. This is the only way we will ever become a society of equals.
A lot of folks, including teachers’ unions, advocate a community schools model, where the school works in tandem with health providers, social services, employers, and others. Is this worth pursuing?
A lot of people, including unions, are looking for a playbook, a panacea. It does not exist. What we need is a more dynamic model of community responsiveness. The community school model has the potential to do this, but to be truly responsive to the community, you can’t have an educational workforce that is 80 percent white.
Equity is often used as a buzzword. Bryan Stevenson, founder of the Equal Justice Initiative, says that you need proximity to pain if you are going to eradicate it. Many teachers do not understand what this means. Teachers’ unions and their members need to do a lot of self-reflection so that the most wounded children, the kids who have been the most harmed by poverty and educational apartheid, are better served. We as a country are overdue for a conversation that asks why we take children from their families for 13 years, seven hours a day. The assumption is that public schools are a public good, but I see many public schools as toxic.
In order to do effective educational work, you need truth-telling, even when the truth is noxious. We need to grapple with the fact that the project of education has reified race, class and gender apartheid. The U.S. has the world’s biggest wealth gap, but instead of dealing with this, we’ve repeatedly moved deck chairs around on the Titanic. We need to make sure that every child in the U.S. has access to an education that teaches them that inequality is unacceptable.
We need curricula that focus on teaching the truth.
Kids have so many answers. Kids are so creative, so oriented toward problem solving. You see it on the playground. Kids have a profound sense of justice. If we educate students to be well, to guarantee that when they leave home for school, they will return mentally healthy, they will be able to come up with cures for many of the social ills we’re facing.
So many kids hate schools. How can we encourage this creativity?
Kids need to love themselves first. If children do not love themselves, they will never thrive.
Teachers should be evaluated on their relationships with the children in their classes. These relationships are the leading indicator of student engagement, and if a teacher does not have strong, trusting relationships with students, the curriculum will not matter.
How do we ensure this?
If we want to change the end game, one strategy is to plan backwards. You start by keeping the end you want in mind and then scaffolding the ideas needed to get there. This is what we need to do as a nation. But it goes without saying that this has to be locally driven and account for the specificity of a particular student population. It can’t be cookie cutter.
Teachers also have to deal with a lot of trauma. How can they be better prepared to deal with the emotional and psychological issues so many students face?
You can’t ask teachers to be trauma-responsive unless you train them in how trauma impacts the body and mind and what can be done about it. Training people to deal with trauma — sometimes referred to as ACEs, Adverse Childhood Experiences — has become a cottage industry. Unfortunately, the model often fails to support either young people or their teachers.
Schools typically see children as broken and try to fix them. But children are not broken. It’s our schools, our society, that is broken and children are responding to the conditions they experience. Schools need to train teachers to build a culture of healing. Kids experience hunger, violence, houselessness, and need extended multi-year relationships with skilled adults. At the same time, we need to be honest about what’s happening and why. I truly believe that if we talked openly about racism, classism, sexism, homophobia and transphobia, the kids would come up with policies and practices to move us off the cliff of public health crises. But to do this, we have to stare the truth in the face — and address it.
The dramatic collapse of the cryptocurrency exchange FTX sent shockwaves around the world last week, especially after it emerged that company managers allegedly stole at least $1 billion in customer funds to finance risky gambles that never paid off. About 1 million people have money frozen in the bankrupt exchange, in a collapse that also looks set to hurt poor and working class people worldwide who never owned so-called “digital assets.”
In Canada, pensions managers had to reassure public school teachers that their exposure to FTX was limited after it emerged that the Ontario Teachers’ Pension Plan invested $75 million in the company. The investment might end up being worthless, but it represented less than 0.05 percent of the pension plan’s assets, fund managers said.
Meanwhile, in El Salvador, market turmoil caused by the FTX downfall sent one of the poorest countries in the Western Hemisphere one step closer to an economic crisis. The administration of right-wing president Nayib Bukele has banked on cryptocurrency’s growth by passing laws favorable to the industry and by using public money to bet on the price of Bitcoin. Although Bukele said that El Salvador had no money tied up in FTX, his plans to woo the crypto industry and to speculate on Bitcoin seem increasingly doomed in the wake of the company’s crash with mounting doubts about the long-term economic viability of cryptocurrency, which had already been plagued by criticism and questions about its usefulness before FTX went under.
Though Bukele remains widely popular in El Salvador, his government’s embrace of cryptocurrency has been widely unpopular. In September 2021, protests greeted the enactment of a law that made Bitcoin legal tender. Commercial developments designed to attract cryptocurrency investors have also been met with howls of dissent after displacing poor Salvadorans.
Overall public approval of the Salvadoran government could change drastically in January, when the country faces $667 million in debt repayments that it’s increasingly struggling to finance. This week, in an apparent attempt to pressure creditors into accepting new terms, Salvadoran Vice President Felix Ulloa claimed that the Chinese government was interested in buying the country’s debt. The Chinese Foreign Ministry responded by saying it was not aware of any such plan. Analysts have estimated that Salvadoran public is currently down $70 million on the government’s Bitcoin purchases.
Meanwhile, retail investors with direct exposure to FTX appear to include many people around the world with little room to fall. Studies have shown that the cryptocurrency industry — similarly to subprime mortgages and payday loans — has attracted people in the U.S. who are priced out of conventional financial services. The market has flourished over the past few years under false promises of instant wealth with the blessing of lawmakers and regulators who have failed to enforce consumer protections, ignoring centuries of lessons learned about speculative frenzies dating back to the Dutch Tulip Mania of the 1630s.
Many policy makers and regulators who have encouraged the hands-off approach that allowed crypto to mushroom were particularly enamored by FTX. In recent years, the company’s founder and its former co-CEO Sam Bankman-Fried was routinely invited to appear before Congress to testify on the industry’s behalf, and made $40 million in campaign donations this election cycle, mostly to Democrats. Ryan Salame, FTX’s other co-CEO, also gave generously to Republicans, granting them $24 million in campaign donations this cycle.
The full amount of retail losses isn’t clear yet. More will be known in the coming weeks, as court administrators tally up claims made against the company, which filed for Chapter 11 bankruptcy on November 11. But working- and middle-class retail investors from around the world have already told reporters about being unable to access money they held on FTX — from thousands each held by a tech worker in Alabama and a musician in Thailand, to an entire “life savings” that a man in Morocco said is trapped on the platform.
To add insult to injury, and creating more doubt for those who are worried about recovering their money, an apparent hack of the digital wallets that remain on FTX drained hundreds of millions of dollars from users with frozen funds. The Securities and Exchange Commission, the Commodity Futures Trading Commission and the Department of Justice have all said they are investigating alleged misdeeds related to the collapse of the exchange. The House Financial Services Committee announced on November 16 that it will soon be holding a hearing on the matter, and the Senate Banking Committee will follow suit, a spokesperson for the latter told Truthout.
“The SEC, DOJ and CFTC have announced inquiries into FTX’s bankruptcy and Sam Bankman-Fried’s misconduct,” the Senate Banking Committee spokesperson said. “The Banking and Housing Committee’s role is to understand the cryptocurrency industry’s structure, as well as look into the broader issue of how cryptocurrencies impact consumers, our markets and the economy.” The spokesperson noted that the committee “is working to schedule a hearing and details are forthcoming.”
The FTX crash was so sudden, unexpected and characterized by accusations of misdeeds that analysts and investors have questioned the long-term viability of the entire cryptocurrency industry in its aftermath. Yahoo Finance editor Brian Sozzi said the industry “now faces a major trust deficiency” because of the bankruptcy. And as the Wall Street Journal noted on November 17, it is “becoming harder to trust that crypto’s future looks anything close to its thriving past, with interest rates higher, crypto prices hovering around multiyear lows and FTX customers wondering whether they will ever get their money back.” The price of Bitcoin has dropped 25 percent after FTX folded, the paper pointed out.
Another regulatory agency, the Consumer Financial Protection Bureau (CFPB), gave a preview of the pain that will likely emerge as bankruptcy proceedings advance. On November 10, the agency published a report on the uptick in complaints with CFPB officials about cryptocurrency, which has accompanied the industry’s growth in recent years. The study noted that a clear plurality of the complaints allege fraudulent activity, and highlighted grievances from customers of two crypto finance companies that went bankrupt earlier this year, Celsius and Voyager, the latter of which falsely represented its accounts as being protected by the Federal Deposit Insurance Corporation.
In a footnote, the bureau also cited letters sent to bankruptcy judges by those who lost money in the companies. The testimonies detail anxiety, despair, unpaid bills and thoughts of self-harm. In a separate footnote, officials also flagged how in August, the FDIC sent a cease-and-desist letter to FTX saying the company had similarly been falsely representing its accounts as being insured by the federal government.
Stories about the FTX downfall are also likely to surface soon on the CFPB’s public complaint database, which publishes filings 15 days after giving the subject of the complaint an opportunity to respond. If the company doesn’t respond, the agency doesn’t publish the complaints, but it does pass them onto the Federal Trade Commission, which investigates deceptive commercial practices. The agency also makes the complaints “available to federal and state agencies via the CFPB’s secure Government Portal,” a spokesperson told Truthout.
Tragically, the situation is something that satirists warned about months ago. In April, for example, before the global cryptocurrency market took a sharp nosedive, The Onion ran a piece with the headline: “Man Who Lost Everything In Crypto Just Wishes Several Thousand More People Had Warned Him.”
But, unfortunately for those with money stuck in FTX, the safety and soundness of the financial system isn’t the responsibility of The Onion’s editors. Nor is it the responsibility of the individuals looking for a return on their meager savings in a world currently marred by a cost-of-living crisis. It’s the duty of regulators and lawmakers, both Democrats and Republicans, who have chosen, once again, to sacrifice working-class people on the altar of capital accumulation.
The staggering $2.04 billion lottery jackpot sold in Los Angeles County made headlines this week, with the ticket holder now holding the title of first lottery billionaire. 11.2 million additional ticket holders across the country also won cash prizes of various amounts. The seller of the winning ticket, 75-year-old Joseph Chahayed, told media that he would split the money among 11 grandkids. The New York Times reports that California public schools will receive $156 million in funds as a result of this big lottery win.
While we don’t know personal details about the $2 billion jackpot winner, most media coverage of the Powerball comes across as a feel-good story that encourages regular people to dream of joining the billionaires like Elon Musk and Mark Zuckerberg who dominate our news cycle (and our political system).
However, the recent media frenzy over the Powerball has done little to expose the predatory quality of lottery companies or the ways in which lotteries effectively function as regressive taxes.
In a political era in which taxes are seen as antithetical to freedom, and billionaires such as the Musks and Bezos of the world often pay little to no taxes, the funding of socially beneficial public goods already falls disproportionately on the middle and working classes. We know that as a percentage of income, working Americans pay a far greater percentage of their income to state, local and federal taxes compared to the wealthiest Americans. However, the purchase of lottery tickets is overrepresented in lower-income Americans, and those Americans who feel economically insecure. While the majority of lottery tickets are purchased by middle-income American, the lowest income quintile of Americans tend to have the highest rate of lottery ticket purchases, and with a greater number of days played.
This is no accident, but rather the conscious marketing decisions of predatory lottery companies, who purposely market aggressively in lower-income communities and communities of color. The impressive potential payout of the lottery, coupled with the relatively low cost of buying a single ticket, can lead to addictive behaviors that can be extremely destructive to already distressed individuals.
In addition, as lottery revenue goes toward education funding, oftentimes the benefits are unequally distributed. For example, in some states, lottery funds go to wealthier school districts and higher education institutions, which tend not to benefit the most frequent lottery players. In addition, some states have merely cut their state allocations to funding education, replacing it with lottery revenues, such as in North Carolina. But most of the time, lottery taxes merely go into a state’s general fund, with little oversight on how these funds get used. Thus, states engage in austerity, allowing lower-income lottery players to fund public services that should be funded from a progressive tax.
A recent Bloomberg article declared that the ballooning of the lottery industry represented a failure of state governments. State governments largely own the major lottery organizations, and thus benefit from retreating from the difficult politics of funding the needs of their people. Lotteries serve as a convenient escape from government’s problem of taxation with representation at a time when political leaders refuse to take on the capitalist class.
While the state lottery associations do not necessarily have independent political affects, private businesses that sell lottery tickets do benefit from their sales and have thus played an outsized role in protecting the lottery industry.
According to Dr. Jonathan Cohen, author of For a Dollar and a Dream: State Lotteries in Modern America, 7-Eleven, the convenience store chain, funded the passage of the 1980 Virginia Lottery Act. Retailers, through industry organizations, continues to push for greater share of lottery commissions. The New York Association of Convenience Stores has recently pushed for larger commissions, citing increased costs of operations. Cohen also notes that “The $2 billion jackpot of course makes headlines, but isn’t the real problem when it comes to state lotteries and their effect on the poor.” He notes that the larger, regular sale of scratch of and smaller jackpot type games disproportionately affect “lower income, nonwhite, and less educated” Americans, and this rarely gets the attention it deserves.
The third reason that we should be concerned about the rise and influence of the mega lottery companies is the broader political effect that lotteries play on our political psychology. The promise of a relatively easy payout creates a mirage of future economic stability and prosperity. While most lottery players know that they will not reasonably win a big payout, the lottery and its perpetuation as a means to reach the American dream contributes to the anti-social idea that indignities and lack of social protections under capitalism can best be addressed by accumulating riches. According to polling, 6 out 10 Americans plan to be “very wealthy” someday, even though they dislike billionaires and income inequality.
According to a recent poll, more people would rather have extreme wealth than the old “American Dream” of a white picket fence. More than half of Millennials think they will be millionaires someday, even though the data suggest otherwise. In fact, most young people face a reduced chance of economic prosperity than their parents’ generation enjoyed.
Scholars know that economic inequality is a social negative that affects many components of our increasingly fragile democracy. According to various studies, economic inequality creates or maintains greater political polarization, anxiety about status and lower levels of trust — all factors that worsen democracy. Economic inequality leads to clear political and social problems that can have negative effects on individual level perceptions and beliefs about the government and democracy. Lotteries, which are an individualistic solution to the social problems of inequality and precarity, shift the focus from the political responsibility of governance to the luck of the ticket buyer.
SAN DIEGO — William Keith has experienced homelessness on and off here for the last 20 years.
His latest struggle came at the start of the pandemic. Keith had a federal housing voucher that guaranteed his rent to landlords. But as a Black man, the 66-year-old veteran said, it felt much harder to find housing than for white veterans he knew using the same program.
“Property managers immediately showed me a lot of racial animosity,” Keith said. “They didn’t even want to show me the apartments.”
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A concerted national effort has helped reduce the number of veterans experiencing homelessness, said Jack Tsai, research director for the VA’s National Center on Homelessness Among Veterans. That number has been halved since 2010, according to the federal homeless census.
Federal programs reducing veteran homelessness fall short in addressing some of the factors that increase housing instability for Black veterans and those from other marginalized communities, such as Native Americans. Black veterans often faced racial discrimination and bias during service, then experience disparities in receiving VA benefits and other social services afterward.
On top of that, Black people who join the military are more likely to arrive at a financial disadvantage, said Shawn Deadwiler, founder of Mission Uplift, an organization to help Black homeless veterans.
Veteran Shawn Deadwiler has been advocating for Congressional support to help veterans of color who experience housing instability. (Photo courtesy of Shawn Deadwiler)
“Let’s take me, for example,” said Deadwiler, who grew up in Arizona. “All I saw growing up was violence. I had to fight to get to school every day, to get food every day, to get home from school every day. My deck was stacked against me from day one. I joined the military because I didn’t want to live in the poverty that I was living in.”
Keith, meanwhile, joined the Army in 1974, during a time when he could serve in the military to avoid incarceration. He was honorably discharged.
Non-white service members are also disproportionately disciplined. A 2019 Government Accountability Office report found Black and Latino service members across the armed forces are more likely than white service members to be investigated, receive nonjudicial punishments or be court-martialed. Veterans with dishonorable discharges don’t have access to the same VA benefits.
Upon leaving the military, Black veterans face many of the same issues that make all veterans more at risk for homelessness. But housing affordability issues affect them more acutely because of the country’s long history of housing discrimination, said Stephen Metraux, a homelessness researcher at the University of Delaware.
In an expensive market, like San Diego, people with housing vouchers often struggle to get landlords to rent to them. That challenge is even greater when the voucher holders have a criminal record, are unemployed or face racial discrimination.
Metraux said leaving an institution like the military also is a substantial adjustment that most people get through with the support of family. But veterans without a network able to help them and knowledge about resources may face greater struggles that could increase their risk of homelessness.
Kathryn Monet, the CEO of the National Coalition for Veteran Homelessness, said Black veterans may be more likely to have family and friends who aren’t in a financial position to support them when they fall on hard times.
The Department of Veteran Affairs offers many resources to veterans, effectively social welfare programs that can help increase their access to health care, education and housing. And indeed, they do make a difference. Black veterans have higher levels of income than Black civilians. They are less likely to be incarcerated.
But they’re still more impoverished than white veterans and more likely to end up homeless.
The benefits provided by the VA may not be enough to combat generations of racism faced by many Black veterans. There are also disparities in accessing certain VA benefits: Black veterans are more likely to have their disability claims denied than any other racial or ethnic group.
“Even when you put these social welfare benefits in place, at the end of the day you still see disparities,” said Richard Brookshire, co-founder of the Black Veterans Project, a group trying to address racial inequities among veterans.
Tsai, Metraux and Deadwiler said more work is needed to ensure veterans can access their benefits.
During the annual homeless census counts, Deadwiler said, those capturing the data should also ask what benefits and programs homeless veterans are using. That could help them connect with resources they are eligible for but may not be accessing.
Deadwiler and Monet said that more could be done during off-boarding from the military to ensure that veterans have a place to live upon leaving.
“Nobody is really out there asking every service member as they transition, ‘Hey, do you have somewhere to go?’” Monet said.
Brookshire and Monet also said that there could be more targeted solutions for Black veterans’ unique needs. For example, Monet pointed to recent efforts to help homeless veterans who live on reservations, where previously housing vouchers couldn’t be used. Now the VA and HUD are working with tribal governments to build housing for veterans or to help veterans find places to live in already-built units.
Monet said there are also efforts underway to get VA programs expanded beyond veterans who had honorable or general discharge.
Deadwiler said he has been urging members of Congress to push some of these solutions for Black veterans forward, but he hasn’t seen movement toward a solution yet.
“There needs to be more cultural competency in helping Black veterans,” Brookshire said. “There’s wide room for bias and exploitation, and the victims of that are often Black.”
Keith was eventually able to find housing in May 2021 after more than a year of searching with his voucher. He’s been writing to his local congressman and filing complaints with the VA about his experience.
“We’re not just talking about housing,” he said. “We’re talking about disabilities. About education. The institutionalized, systemic racism runs deep.”
Viewed soberly, the results have been catastrophic: After 26 UN climate conferences, greenhouse gas emissions have not only not fallen, but have risen by almost 60 percent, while the climate crisis continues to escalate virtually unchecked.
With COP27 (“Conference of the Parties”) underway in Egypt, no one seriously expects a sudden turnaround from the international climate meeting, even though such an outcome would be crucial for the survival of the human species.
Many climate advocates and activists are not even attending the meeting, partly because the Egyptian regime leaves little room for civil society involvement and protests on the ground, which have been the main strategy for pressuring states to take meaningful action. Greta Thunberg has also announced that she will not travel to the conference venue Sharm el-Sheikh in protest against the Egyptian government’s human rights violations and repression.
A fundamental question arises, one that climate activists have been debating for some time: Are UN climate conferences a waste of time and resources — a diversion from more effective battlegrounds?
Given the abysmal record, the answer at first seems straightforward. But it’s worth understanding why climate diplomacy and global climate action have not progressed for decades. After all, it’s not negotiation in itself that’s the problem, but the power play behind the scenes.
The Outcomes of Past COPs
It is hard to argue that UN climate conferences had a significant effect on emissions. A 2010 study from the World Bank shows that even the often romantically hailed Kyoto Protocol of 1997, with its binding commitments, did not change the global output of emissions. It wasn’t even able to slow the increase of greenhouse gases, according to the World Bank. This is not because the developed countries didn’t deliver on their promises to cut emissions. (On the contrary, they exceeded them.)
The reason for this failure has to do with the unambitious targets. They were way too low (minus 5.2 percent until the period of 2008-2012) for most of the wealthy states, and loopholes and offsets made them even less effective. In addition, there were no targets at all for the developing countries because the industrialized countries were unwilling to fund the transition process. Global emissions went up, unchecked, while wealthy countries congratulated themselves.
At the Copenhagen 2009 conference, a bloc of rich countries led by the U.S. then tried to bully the developing countries into a deal with no binding targets for the former and an unfair distribution of the remaining carbon budget for keeping the world under 2°C. The South Centre, an intergovernmental policy research and analysis institution of developing countries, reported that under the COP15’s plan (the so-called Danish text that was leaked during the summit), the industrialized countries would be allocated around 30 to 35 percent of the remaining carbon dioxide budget, even though they account for only 16 percent of the world’s population (and had already exceeded their budget in the past). At the same time, the agreement would implicitly cancel the climate debt owed by industrialized countries for their past emissions, while the Global South would be forced to close the gap through tough emission cuts — without funding from the north.
A year after the Copenhagen summit, embassy cables published by Wikileaks showed how the U.S. in particular used espionage, threats and financial aid pledges (virtual bribes) to try to force political support from individual developing countries for an agreement in Copenhagen. The EU played along. For example, then-European Commissioner for Climate Change Connie Hedegaard met with her counterpart Jonathan Pershing, U.S. deputy envoy for climate change, in Brussels on February 11, 2009. According to the cables, Hedegaard reportedly told Pershing, “The Aosis [Alliance of 39 Small Island States] countries [including Haiti, Guinea-Bissau, Maldives and the Marshall Islands] could be ‘our best allies’ given their need for funding.”
But the U.S. and EU’s scheme met fierce resistance. Representatives of poorer countries were infuriated. Bolivia’s then-President Evo Morales, in a speech to delegates, demanded that rich countries repay their climate debt and called for a 1°C temperature limit. Morales also proposed that an international court of climate law be established. The disparity in emissions between the U.S. and the EU on the one hand and the Global South on the other was repeatedly raised on the podium.
The negotiations crashed. Only a political declaration of intent was adopted (the Copenhagen Accord), which did not have to be formally approved, and it contained no reduction targets. But for the first time, an upper temperature limit was discussed: 2°C. After Copenhagen, the emissions kept on increasing. In Germany, a country that has long called itself a “climate pioneer,” emissions went up a little and then stagnated for eight years from 2009 until 2017.
In Paris, six years after Copenhagen, an agreement was finally reached. The corporate media and many mainstream environmental groups in the West were euphoric, calling COP21 an historic moment and a breakthrough in climate negotiations. However, many climate scientists and civil society activists strongly disagreed. Studies showed that the promises made by states at the summit could lead to 3°C of heating. Pablo Solón, a former Bolivian ambassador to the United Nations, called it “a death sentence for many people.”
The conventional view is that “Copenhagen was a disaster and Paris a triumph” — a strange view, notes Dan Bodansky, the co-director of the Center for Law and Global Affairs at Arizona State University, and a longtime observer of climate diplomacy. Bodansky argues the Paris Agreement only formalized the “bottom-up paradigm” of the Copenhagen conference in which emissions goals are reached through the principle of voluntary commitments. The essential elements — such as the 2°C limit, the non-binding national contributions, the announcement to mobilize public and private funds for climate financing and the tendency to put industrialized and developing countries on an equal footing — had already been included in Copenhagen. Bodansky therefore speaks of Copenparis: “In essence, what the Paris Agreement does is tie a treaty ribbon around these key elements of the Copenhagen Accord.”
Looked at more closely, the path from Copenhagen to Paris via Cancún (COP16) and Durban (COP17) is in fact a process of eroding the foundations of climate diplomacy since the 1990s. The 1992 United Nations Framework Convention on Climate Change’s (UNFCCC) principle of “common but differentiated” responsibility for the climate crisis was finally abandoned in Paris and replaced by “universal responsibility.” In other words, all countries would be considered equally responsible, and all have to deliver, without consideration of their state capacities, resources or historical culpability.
But why did the developing countries agree to the paradigm shift in Paris, which they had largely refused to accept in Copenhagen? The main reason was that the countries of Africa, Latin America and Asia realized that they would not get any other deal from the industrialized countries, especially the U.S. and EU.
Long before the Paris summit, the U.S. together with the EU made sure that the Copenhagen debacle would not be repeated. Shortly after, they held a series of high-level diplomatic meetings with China, culminating in the Joint Climate Change Statement in 2015. It was the usual “carrot and stick” method: The U.S. and EU offered China financing and technology in combating smog in their cities to quell the demand by China and the G77 alliance of developing states that the industrialized countries should pay 1.5 percent of their GDP — $500 billion per year — to developing countries as climate finance.
In his detailed analysis of climate diplomacy, political scientist Fuzuo Wu concludes that China and India made several concessions in Paris since they were dependent on technology transfers from the U.S. and EU to implement the energy transition and adapt to the impacts of a heating planet.
Solón in an interview at the COP21 in Paris offered an example of how resistance in the Global South can be broken by the industrialized countries. At the 2010 climate conference in Cancún, he said, many countries, especially in Africa, had affirmed in a joint press conference that they would not sign the agreement — just a few hours before the vote. But then they suddenly agreed to it, with Bolivia alone standing firm. Solón asked his colleagues what happened. One of the negotiators answered him that the EU had called his government and threatened it financially. “This kind of blackmail is part of the negotiations,” Solón said.
Activists Outside the Official Meetings Keep Hope Alive
But what about the COP26 climate summit in Glasgow last year? Didn’t the gathering keep hope alive? That depends on which gathering one considers, because actually two climate summits took place in Glasgow — which is also true for Paris and Copenhagen. There was the COP26, where the state delegates met at a convention center, accompanied by lobbying groups like from the fossil fuel industry. In fact, the fossil fuel industry had a bigger delegation than any state present, with over 500 lobbyists.
Parallel to the official conference, there was a “People’s Summit for Climate Justice” organized by the COP26 Coalition, a civil society and movement-based alliance, which at its core aimed to address citizens of the Global South and Indigenous communities’ needs and demands. Hundreds of events and huge demonstrations took place in Glasgow. 150,000 people from all around the world protested for a Green New Deal and climate justice. This meeting was far bigger than the official one.
At the official meeting, major powers decided to keep the world on a course that eventually is going to burn the planet. Even if all promises governments have given in Glasgow were kept, we would reach 3°C or even more in this century, catastrophically changing life on earth especially for the human species, according climate experts like Kevin Anderson from the Tyndall Center for Climate Change Research.
In her speech, the prime minister of Barbados called the lack of commitments in emission cuts and climate finance by the developed countries “reckless,” “dangerous,” “immoral” and “injust.” Greta Thunberg spoke the famous phrase “blah, blah, blah” for what was happening in Glasgow and is still happening to this day: greenwashing.
At the second summit, activists, ordinary people and climate experts demanded climate justice and a truly Green New Deal in accordance with best science, as they have done for decades. They tried again to pressure the wealthy countries to take responsibility, cut their emissions back to zero until 2030 or 2035 respectively and pay reparations to the poor countries in form of climate finance. This finance must amount to hundreds of billions of dollars each year at least, so that developing countries are able to make the fast energy and infrastructure transition needed to adapt to already ongoing global heating and its effects.
But the people’s summit, with all its voices, insights and demands, was almost blacked out by the major media in the West. Only the huge demonstration drew some attention in the news. Asad Rehman, one of the organizers of the coalition and the people’s summit, said: “Unfortunately a lot of media are just taking sound bites from the UK government and reproduce them…. What we’re seeing is a really a very lazy journalism.”
The overarching narrative in most of the media outlets was that the COP was a step in the right direction. Of course, if you lower the expectation to near zero, everything can be labeled as an improvement while leaving out the fact that for a long time there has been no room left for minor steps.
At the same time the public was inundated in Glasgow with net-zero promises (attention: net zero is not zero) and isolated green initiatives. Brazil even committed to a deforestation initiative, as it had done in the past, while continuing to destroy the Amazon without pause.
Promises are recycled. Emissions keep rising.
So, to return to the initial question: Are climate conferences useless? Are they even detrimental — as German politician and the architect of the internationally influential Renewable Energy Act (EEG) Hermann Scheer once said — since UN climate diplomacy is consensus-driven and eventually waters down national ambition?
Certainly, the criticism of the existing climate diplomacy and some of the faulty designs within the negotiation system are justified. But it is not the UN climate system that is responsible for the inaction. After all, the Paris Agreement kept multilateralism alive — that is, the principle of an internationally agreed on and fair solution without which no possibility of global climate action.
Climate diplomacy and the UNFCCC framework also contain meaningful elements such as responsibility sharing, financing, setting a temperature ceiling, managing national reduction targets, review mechanisms, orientation towards science and equity principles.
Climate conferences also generate publicity and mobilization. Without the 1.5 to 2°C threshold at the Paris conference, protest movements would not been able to nail the industrialized countries on this and win victories in courts. In this way, governments and parliaments can be put on the defensive before their own electorates.
But negotiations and climate conferences can’t bring change on their own if major powers continue to block them. Climate diplomacy is effectively a power struggle between poor and rich countries, high and low emitters, the Global South versus the Global North. And in this struggle the developed countries have major advantages and the underdeveloped ones have no real leverage. Thus, necessary change will not come without mass political opposition within and against the powerful states like the U.S. or European countries, pushed through by civil society.
In Egypt at the current climate conference, an alliance of civil society groups and climate movements — called the COP27 Coalition, led by African and Arab organizations — is mobilizing to put pressure on the negotiators and create publicity. The COP27 Coalition is calling for rapid emissions reductions to zero (not net zero) from rich countries, repayment of climate debt to developing countries and no more “false solutions” like carbon markets. On Saturday, they will hold a Global Day of Action to lift up these demands.
COPs are not condemned to fail. But they will if we let them.
Martin Lewis has effectively become one of the few in the public eye people seem to trust and rely on. But even he can’t hide his frustration sometimes. This boiled over on Tuesday 8 November, as he gave an emotional diatribe on one aspect of the cost of living crisis: warm spaces.
Lewis: not holding back
As Lewis angrily said:
I hate the fact I’m doing this. But I’m doing it anyway. If you are really struggling, and you know someone who is really struggling, we in Britain this winter… [pause] have warm spaces.
Lewis was talking about warm “hubs” or “banks“. This supposedly new phenomenon is not really new. Ask plenty of poor people and they’ll tell you libraries or charity shops were always a go-to in winter. Warm spaces have a fairly obvious idea behind them. If people cannot afford to heat their homes, they can go to a warm space to stop themselves being cold. As the organisation Warm Spaces wrote on its website:
Every space can offer something different. Some may offer free food; pay-it-forward schemes, advice, somewhere to charge your phone or maybe just somewhere to be comfortable & warm with no judgement.
Warm spaces everywhere
Warm Spaces’ interactive map shows people where spaces are – and there’s already a lot:
Anyone can use them. And as Lewis explained, it’s important that everyone knows about them, because:
libraries or local councils are saying everyone is welcome to spend time and stay warm. There’s a website, warmwelcome.uk, where you can find one near you. If you know perhaps elderly relatives or people who live near you who can’t turn their heating on and they’re worried, why not find where your nearest warm space is for them?
However, Lewis was also right to point out that:
We shouldn’t be doing [this]. But it’s important people know, and the nice bit is I’m glad there are people out there who care enough to set these things up.
The reason for the sudden appearance of official warm spaces is the cost of living crisis. However, dangerously cold homes in the UK are hardly new – and they’re an issue of ethnicity and class. This is because it’s often the poorest and Black and brown people who are hardest hit.
In all types of housing, the damp figure rises to 13% for some dual heritage households, and 10% for some Black and Bangladeshi ones. It is likely that much of this percentage is, again, social housing – given these ethnic groups make up some of the largest proportions of residents. Recently, a coroner said two-year-old Awaab Ishak died because of the mould in his house – which the council hadn’t bothered to deal with.
Around 12,000 people die every year in the UK due to cold homes. However, this was in years without the huge energy price increases and sky-rocketing inflation we’ve seen this year. So the death toll from cold homes is likely to be even higher. This is why Lewis got so angry – and why he urged people to spread the word. Lewis is working with CILIP, and has created a guide for setting up warm spaces:
Meanwhile, social housing landlords allow people to live in dangerously low-quality, cold homes while the government cuts their benefits. Little wonder that Lewis is angry. The creation of official warm banks would have been completely avoidable, if there was the will from the government and social housing landlords. Sadly, there isn’t. So Lewis is once again left picking up the pieces.
Meanwhile, as communities, we must stick together and support each other.
The fat cats running London’s biggest listed companies increased their pay by more than double the rate of UK inflation. A lot of the increase was on boss’s bonuses – as workers struggle to make ends meet.
Fat cat pay: up
Accountancy firm Pricewaterhouse Coopers (PwC) has completed its annual survey on fat cat pay. As Agence France-Presse (AFP) reported, it found that total compensation for CEOs at FTSE 100 firms jumped by nearly 22%. It averaged £3.9m in 2021/22 compared with the previous 12-month period. A spokesperson for PwC said:
The increase in executive pay and bonuses highlights that FTSE 100 companies were boosted by businesses opening up and demand returning after the pandemic. However, looking forward… higher pay outcomes are likely to be met with greater investor scrutiny, particularly in the context of rising inflation and pay increases across the workforce.
The coronavirus (Covid-19) pandemic meant that some companies’ values fell – British Airways, for example. But for others – such as Tesco – profits soared. Some companies froze CEO pay. However PwC said that the proportion of CEOs with salary freezes this year fell to 15% from 43%.
However, while bosses rake it in, their workers and others are struggling.
Workers’ pay: down
UK annual inflation is at a four-decade high, standing at above 10%, while a majority of the country’s workers are receiving pay increases far below this level. Workers across various sectors have gone on strike across Britain this year in a bid to secure pay rises matching inflation. The National Union of Rail, Maritime and Transport Workers (RMT) and its members were striking over dire pay. Meanwhile, the Royal College of Nurses (RCN) are also going on strike – and the National Education Union (NEU) is currently balloting its members.
But it’s the Communication Workers’ Union (CWU) which best sums up the situation with fat cat pay. Its workers at Royal Mail are striking over a below-inflation pay cop-out. However, at the same time, the company’s CEO Simon Thompson took over £750,000 in salary and bonuses. It is exactly this kind of disparity which the PwC report shows.
Disgrace
Campaign group the High Pay Centre told AFP:
Over the past decade or so, investors have started to take a tougher line on executive pay,
However, the group also said that pay awards of £3-4m for most CEOs amount:
to pay over 100 times that of the typical UK worker, historically very high in the context of the past half century. The effect of investor scrutiny has been to contain pay gaps rather than significantly reduce them.
Bosses earning far more than workers is hardly new. But the latest PwC report comes in the middle of a cost of living crisis – and while the Tory government is still planning on scrapping the bankers’ bonuses cap. Unless bosses have the moral backbone to pay workers well before feathering their own nests, then strikes will continue to happen – and rightly so.
Rough sleeping in one city in Devon has doubled in the space of a year, according to a local charity. However, the news may represent the wider picture across the UK. St Petrock’s is a charity in Exeter which has reported the increase. Its boss said the current cost of living crisis is probably causing the spiralling number of rough sleepers.
Rough sleeping numbers had been going down steadily in the last couple of years and the pandemic helped as the government brought everyone in off the street and not everyone went back to the streets again. But sadly it seems to be going the other way again.
Stephenson wouldn’t commit to a definite cause of an increase in Exeter’s rough sleeper population. But he did tell Devon Live that:
I think it’s to do with the cost of living crisis. One thing we have never had at St Petrock’s before, but have been for the last three months, is members of the public calling us saying they have tried everyone else to get help and are worried about losing their home and can’t pay for food and rent.
However, the situation in Exeter may be a microcosm of the national picture.
the number of people sleeping rough has grown steadily since 2010 and despite four consecutive years of falling numbers there, the current figures are 38 per cent higher in 2022 than they were 12 years ago.
And the official rough sleeping figures are often thought to be a considerable underestimate as they rely on single-night counts and estimates by local authorities.
Tory government: unconcerned and unprepared
In reality, there are at least 8,239 rough sleepers a year in London alone – and again this figure may be an underestimate. Mayor Sadiq Khan has already warned the cost of living crisis may make things worse. This is already being seen in the quarterly rough sleeper figures, with a 10% increase between January-March and April-June this year.
With the cost of living crisis set to get worse, the picture in Exeter and London is likely to be replicated nationally. And so far, the government is probably both unprepared and unconcerned.
A protester captured a devastating photo at the People’s Assembly demo on Saturday 5 November. It’s one that should haunt the Tories. This is because it shows a disabled homeless person – as thousands marched against the government.
Another fantastic photo from today’s National Demonstration! The People’s Assembly is a coalition of unions and campaigns. Join Us and become a member today: https://t.co/iqmL9cJM3w Through organised collective action we make a difference Photo: Jess Hurd Photography pic.twitter.com/ED2KuPWpPS
Thousands of people take to the streets for a national demonstration. The Peoples Assembly are #protesting against the government's lack of action in dealing with the #CostOfLivingCrisis and is calling for a general election. #London, UK November 05th 2022 pic.twitter.com/MgchHAzh9b
Former Labour leader Jeremy Corbyn had hit the headlines during the week after he said he lived “rent free” in prime minister Rishi Sunak’s head. Corbyn also spoke at the People’s Assembly rally. He said that the Tories were sacrificing the UK:
All on the altar of profits to distant hedge funds. That is the reality of what modern Britain is about.
Disabled homeless people: the reality under the Tories
Disabled People Against Cuts (DPAC) member and activist Paula Peters also spoke at the People’s Assembly rally. And she took photos along the way. One of them was of a homeless person’s tent with a wheelchair next to it:
Not far from where the @pplsassembly March began a disabled homeless person is on the street. This is the impact of cuts, of government policy. 21st Century Britain @RishiSunak you need to stop the cuts and disabled people, no human being should be on street pic.twitter.com/kvYJNo2Kku
A study by Crisis of 14,922 individuals, 70% of whom were homeless while the others were either at risk of homelessness or had a history of homelessness, found that 39% reported having a disability. Another study… found that 12% of a group of people experiencing homelessness showed strong signs of autism. The prevalence of autism in the general population is approximately 1%.
the number of people with physical ill health or disability whose local council have been unable to help prevent or relieve their homelessness under the Homelessness Reduction Act (HRA) and now are classed as priority need for housing
DPAC formed in 2010. Now, after 12 years of brutal coalition and Tory austerity, things have got progressively worse for disabled people. Successive governments have cut social security, Housing Benefit and the Local Housing Allowance; they’ve introduced the bedroom tax and chaotic Universal Credit; they’ve overseen rising inflation, energy and food prices, and presided over cuts to social care. Many disabled people are in energy and social care debt – chased by bailiffs for money they haven’t got.
The travesty of this [is] disabled people are in a precarious position of barely surviving – or dying. If they can’t afford to live, they end up on the street. This shouldn’t be happening. More disabled people will end up this way. With the Tories’ budget in a few weeks, that’s sadly going to be the case.
However, it’s not just the Tories causing disabled people’s precarity which Peters thinks is a problem. She noted that during the People’s Assembly march:
What struck me was the sheer number of activists walking past this homeless, disabled person to get to the start of the demo. People didn’t see the sheer poverty literally beside them. They were too intent on getting to where they needed to go. It was like the entire march went through the homeless disabled persons space: people marching to resist this government against precarious situations such as this. It is so important to show the horrific situation disabled people are ending up in. I think some of the protesters on the People’s Assembly march chose not to see the homeless, disabled person – because deep down there is a stab of fear it could be them.
It could be you, next
It goes without saying that we all need to be fighting back against the Tories and the system. However, we particularly need to be allies for chronically ill, disabled and homeless people. As Peters said:
DPAC are still campaigning and fighting the government. But disabled people’s campaigns need all the support we can get, to pile the pressure on the government to stop the attacks on us. We need to resist this government with everything we have but we need support to do this.
As Peters summed up:
No-one is immune from disability or losing their job. Circumstances change – and you can end up like this.
In the leadup to the midterm elections, abortion rights and the economy have consistently polled as two of the top issues among voters. In the latest Gallup poll, they finished first and second: Forty-nine percent of registered voters said that the economy was “extremely important” to them, while 42 percent said the same of abortion.
After Kansas voters resoundingly rejected an anti-abortion ballot measure in August, many Democrats hoped that energy might carry them to a victory — or at least help them stave off a total defeat — in the midterms. However, according to a recent poll from NPR/PBSNewsHour/Marist, Republican voters are more enthusiastic about the midterms than Democrats. Could it be that the post-Dobbs momentum to treat the midterms as a referendum on abortion has faded, and that the economy has eclipsed abortion as a motivating issue for voters? Media coverage certainly suggests so, and if that’s the case, Democrats are in trouble: Another poll from ABC News and Ipsos found that 36 percent of Americans trust Republicans to better handle their economic concerns, compared to just 24 percent who trust Democrats.
“We’ve really seen what I would say is a pundit-driven or even polling-driven narrative emerging that’s pitting abortion access against the economy,” Morgan Hopkins, president of All* Above All, told Truthout. All* Above All is a women-of-color-led organization that has worked for nearly a decade to frame access to abortion as a racial and economic justice issue, rather than simply a legal right. It began in 2013 as a campaign to end the Hyde Amendment, a policy that bars federal funds from being used for abortion, primarily affecting low-income people who rely on programs like Medicaid. “To a certain extent, that’s just how a lot of polls work,” Hopkins said. “People are asked to pick their top issue out of, say, five. But that is not an accurate representation of the way that we experience our daily lives. The decision about whether or not to become a parent absolutely is an economic decision for families.”
In other words, abortion and the economy aren’t separate issues; they’re deeply intertwined. Democrats have an opportunity to make the case for their party as the one that can help ensure Americans’ bodily autonomy, and by extension, their economic futures. Why aren’t they taking it?
Polls do suggest that abortion rights remain a motivating factor among key constituencies for Democrats. In the Gallup poll, 51 percent of Democrats said abortion was the single most important issue to them. A previous poll from the Kaiser Family Foundation found that 59 percent of women under 50 and 62 percent of Black voters said the Supreme Court decision made them more likely to vote. Despite a swing toward the Republican Party in recent years, a poll commissioned by Voto Latino found that more than two-thirds of Latinos believe abortion should be legal in all or most cases, and 64 percent said they were much more motivated to vote because of the Supreme Court decision.
Across nearly all of these polls, independent voters fall somewhere between Democrats and Republicans: They are motivated to vote because of the economy, but not as much as Republicans are, and motivated to vote because of abortion rights, but not as much as Democrats are. Of course, few independents are truly independent; voters tend to lean toward one party or another. This is one of the reasons why midterm contests hinge on turnout. It’s not very likely one party can win over a significant number of voters more inclined toward the other, so the results come down to who can get more people to cast ballots.
Meanwhile, both parties are well aware that midterm elections often punish the ruling party. Just such an upset in 2010 saw Democrats lose control of the House of Representatives along with six governorships. Republicans also flipped over a dozen state legislative chambers in that election, leading to a devastating cascade of state-level abortion restrictions that plunged much of the South and Midwest into a post-Roe reality long before Republicans successfully appointed a conservative majority to the Supreme Court.
In October, Sen. Bernie Sanders (technically an independent himself) wrote in an op-ed for The Guardian that it would be a mistake for Democrats to focus only on abortion in the midterms. The piece was met with frustration from many reproductive rights and justice organizers, in part because Sanders’s statements about reproductive health have often been clumsy despite his progressive politics. However, Sanders was right to suggest that if Democrats want to win, they have to persuade voters that they are better suited than Republicans to fix the economy. Given that the economy has historically fared better under Democratic presidents, it would seem this shouldn’t be such a heavy lift. But perhaps Democrats are afraid to dig too deep into discussions of the economy because doing so would necessarily involve admitting to their party’s own failures, including the stagnant federal minimum wage, corporate tax increases that fell short of President Biden’s original proposal and the Federal Reserve’s controversial rate hikes, which have so far failed to curb inflation.
As Sanders has long argued, Democrats need to take up the issues of class and income inequality in a serious way if they want to appeal to struggling middle- and low-income Americans. But in addition to admitting to past and current failures, that would require standing up to corporate interests, to which powerful Democrats are just as beholden as Republicans.
However, even Sanders fails to make a connection between abortion access and economic security. The most commonly cited reason for needing an abortion in the U.S. is economic distress, but Sanders doesn’t mention this once in his discussion of low wages and lack of affordable health care, housing, paid family leave and child care.
One Democrat who has made the connection is Stacey Abrams. “You can’t divorce being forced to carry an unwanted pregnancy from the economic realities of having a child … women — half the population — especially those of childbearing age, they understand that having a child is absolutely an economic issue. It is only politicians who see it as simply another cultural conversation,” she said on Morning Joe.Republicans responded by calling her “despicable” and “demonic,” but didn’t refute her point. In Michigan, where abortion is on the ballot, Democrats Gretchen Whitmer and Elissa Slotkin have also tied abortion to the economy, albeit in an entirely different way: They’ve argued that banning abortion is bad for business and could lead employers to leave the state.
Why aren’t more Democrats on the campaign trail trying to connect these two top issues? It could be because, when it comes to abortion and the economy, “It’s complicated,” Caitlin Myers, John G. McCullough professor of economics at Middlebury College, told Truthout. “When people say ‘the economy,’ often what they’re thinking of is the macroeconomy, like GDP or unemployment rates,” she said. There’s no doubt that the decision of whether to have children, and when, is “the single most economically consequential decision most women make in their lives,” said Myers. But abortion bans aren’t yet widespread enough that Americans are seeing their potential macroeconomic effect.
“If we had a federal ban on all abortions, it would be a macroeconomic shock. It would dramatically affect the U.S. economy, and gender inequality in the U.S. economy,” Myers said, noting that the result of the U.S.’s current patchwork of state bans is that most people seeking abortions in the ban states still find a way to get out. “Now, that doesn’t mean it’s easy. A lot of them are suffering a great deal, but they are finding a way. What ends up happening is that a fraction, a minority of them don’t find a way. They get trapped. And the people who get trapped, it’s not random. They are disproportionately the poorest and the most vulnerable of an already poor and vulnerable population. And so, the economic story here right now is an inequality story. It’s a poverty story,” she said.
This was true even when Roe was the law. Consider the Turnaway Study, a five-year longitudinal study that compared people who received wanted abortions to those who were turned away because they were beyond the gestational limit of a particular facility. Among the most notable results of the study were its findings on the economic outcomes of being denied an abortion. Those in the “turnaway” group were more likely to receive food assistance, four times more likely to live below the federal poverty level and more likely to be raising their children alone five years on. A subsequent paper linked credit report data to the Turnaway Study, finding that people denied abortions saw a consequent increase in financial distress that was sustained for years.
When the Supreme Court was considering Dobbs v. Jackson Women’s Health Organization, Myers organized a group of 154 economists to sign onto an amicus brief laying out just how devastating the effects of overturning Supreme Court precedent on abortion would be, citing these and dozens of other publications.
However, even if abortion becomes banned in about half the country — the worst-case scenario forecast for state-based bans — Myers said it likely wouldn’t be enough to generate a noticeable macroeconomic effect. It would still be a story of inequality, driving already disadvantaged people further into poverty. But that, said Hopkins, is precisely what Democrats should be saying to voters.
“Abortion bans are a direct threat to economic security. Having to pay out of pocket for abortion care — especially at a time when gas is expensive, food is expensive — the consequences of that on someone’s financial well-being can last for a long time,” she said. “We have to talk about more than just restoring the legal right to abortion. We have known for decades that the legal right was never enough. I think more candidates, and pundits as well, need to start understanding abortion access as, yes, a fundamental freedom, but one that also is about having agency over our lives and our economic security.”
the reduction of food costs in canteens, children of staff eating for £1 in hospital restaurants, free facilities to wash and dry clothes on site, and free staff travel on hospital buses.
Leicester is not the only city to see hospitals running foodbanks for staff. The Times reports that across England, 27% of hospitals have staff foodbanks.
Bosses at UHL seemed sympathetic, if sitting on the fence somewhat. UHL’s chief people officer Clare Teeney told BBC News:
As NHS leaders, I think we have a moral responsibility to support our colleagues through this challenging period. At UHL, we are offering support around the costs of food, transport, energy for people who need it and considering how else we can support colleagues on the lowest pay.
However, trade unions and campaign groups have blasted the situation.
“Shocking sign of the times”
UNISON East Midlands says UHL’s installation of foodbanks showed “the present problems within the NHS in respect of the level of pay”. Campaign group NHS Workers Say No went further, telling the Canary:
It’s not a surprise to see yet another foodbank for hardworking staff opening in a hospital. The Tories have dealt NHS staff year after year of real terms pay cuts. This has left many of them working 40+ hours a week and selling back their annual leave just to survive. The Tories refusal to raise workers’ pay in line with inflation has left us with the situation that the NHS is no longer a living wage employer. This is why unions are conducting industrial action ballots across every corner of the NHS. We have no hope of recruiting or retaining staff unless this crisis is addressed – and that has repercussions for us all.
struggling to cope as demand for our support outstrips our food and financial donations
With inflation set to rocket further and no additional pay rise in sight, NHS workers are already under immense strain. Factor in another looming, Tory-created winter crisis, rising coronavirus (Covid-19) deaths and increasing flu cases, and staff will soon be well-past breaking point. The Tories’ shocking treatment of some of the country’s most vital workers is disgusting. But when a government encourages claps over decent pay – this is the end result.
It’s not a question of simple semantics. Words exercise power and consequences.
In the governmental jargon that can turn rhetoric into reality, two words — “disadvantaged” and “underserved” — help to explain why one act of Congress failed to provide long sought financial assistance to Black farmers, but another may succeed.
The American Rescue Plan Act, a bipartisan measure signed into law last year by President Joe Biden, set aside $4 billion for farmers considered socially disadvantaged.
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“A socially disadvantaged group,” according to U.S. Department of Agriculture policy guidelines, “is a group whose members have been subject to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.” They include African Americans, American Indians, Alaskan Natives, Asians, Hispanics, Native Hawaiians and Pacific Islanders.
Within weeks, white farmers argued that it was unconstitutional for the $1.9 trillion rescue plan to authorize appropriations that excluded farmers based on their race or ethnicity. A federal judge in Florida later agreed and blocked implementation of the aid to farmers of color on grounds that it discriminated against white farmers.
The U.S. has long been caught in a tug of war over whether race can be used as a remedy for racial discrimination. The U.S. Supreme Court, which has historically interpreted the Constitution to prohibit many race-specific measures, will hear oral arguments this fall in cases against Harvard University and the University of North Carolina at Chapel Hill on whether colleges and universities can consider students’ race and ethnicity in admissions.
On his first day in office, Biden issued an executive order to advance racial equity across the federal government. The USDA program to cancel certain loan debts held by socially disadvantaged farmers was considered an important early step toward fulfilling that promise. But legal challenges prevented the program from taking effect.
Then the $738 billion Inflation Reduction Act, passed on a sharply partisan vote and signed into law in August, presented a solution. It amends a section of the previous bill from benefiting “socially disadvantaged farmers” to “underserved farmers,” a broader category that can include veterans, beginning farmers and those in high poverty areas. Included in that section is $2.2 billion for farmers who can prove they experienced discrimination from the USDA.
It separately appropriates another $3.1 billion for all borrowers who are behind on loan payments or face other financial risks. This week, USDA announced that it has distributed nearly $800 million under the program to more than 13,000 distressed borrowers, with plans to provide up to $500 million more to as many as 23,000 additional borrowers.
And it repeals the debt cancellation program in the American Rescue Plan Act.
"We need to be clear about this. The Inflation Reduction Act, and the work that Congress did, charts a new pathway and a new set of tools for USDA to have,” USDA Secretary Tom Vilsack said on a call with reporters this week. “These tools are available to USDA borrowers regardless of race or gender or geography or size of operation or type of operation.”
But the new measure has prompted legal challenge – this time, from Black farmers and other farmers of color.
A class-action lawsuit filed this month alleges that the U.S. government broke its contract with the farmers when it agreed to cancel their loan debts, while in return the farmers accepted the government’s calculation of their debt and waived their right to appeal. The farmers were harmed because they made purchases and other investments in anticipation of the financial relief, according to the suit brought by civil rights attorney Ben Crump and others.
Some Black farmers and their advocates have been skeptical, disappointed and frustrated because the Inflation Reduction Act does not directly address what they consider race-based difficulties, such as lower rates of loan approval and higher rates of delinquency.
Others, however, are hopeful that the overall assistance to farmers of color will be equal to or perhaps even greater than it would have been under the previous bill.
As it turned out, far fewer Black farmers were eligible to have their loans canceled under the American Rescue Plan provision than Black farmer advocates had initially estimated. About 3,100 Black farmers would have qualified, and their combined debt from those loans was less than $300 million, U.S. Rep. Alma Adams, D-N.C., vice chair of the House Agriculture Committee, noted in a July letter to Secretary Vilsack.
That meant most Black farmers would have been left out. Overlooked is that “USDA is not providing loans to Blacks,” said Lloyd Wright, a former director of the USDA’s Office of Civil Rights., Wright is among those hopeful that far more Black farmers will receive financial assistance from the two provisions in the Inflation Reduction Act than they would have through the previous bill, although he worries about whether implementation will bear this out.
In a broader context, though, the situation illustrates the difficult dilemma for efforts to address racial disparities. How can you ameliorate racial discrimination without spelling out its causes and effects?
“It's like saying you want to address gender issues, but you can't do anything that specifically focuses on women,” Ralph Richard Banks, faculty director of the Stanford Center for Racial Justice at Stanford Law School, said in a recent interview.
“In our society,” he said, “the legal norms are kind of opposed to focusing on race, per se. We want to have racial equality, equity and justice, and all this, but we don't want to single race out or treat people differently on account of race, and that does make it difficult to address race-based inequities if we don't take race into account directly.”
A system that discriminates
Cash flow is critical in the business of farming, where short- and long-term income and essential operating revenues can be determined more by the whims of Mother Nature than the desires of customers and abilities of farmers. The financial difficulties of one year can easily pass into the next, and this generation’s hardships can become those of the next generation as well.
That makes loans essential to commercial farmers, and timely repayment of those loans more vulnerable to major disruptions in the economy, such as those related to the COVID-19 pandemic and the historic increases in the rate of inflation.
Black farmers and their advocates contend that over the years they have received less than their fair share of assistance through the USDA program that provides low-interest direct loans for activities such as purchasing land, crops, livestock and equipment.
That imbalance is ongoing, they say.
“We are in a system that’s systematically biased and racist against those farmers,” said Kara Boyd, president of the Association of American Indian Farmers and a member of the National Black Farmers Association, led by her husband, John. The Boyds and two other Virginia farmers are the named plaintiffs in the class-action lawsuit.
Advocates say that the current economic hardships help explain the racial differences in loan delinquency the Center for Public Integrity found in 2022 USDA data.
“Unfortunately, some of the farmers who were struggling before, now, they’re struggling even more because of the repeal of the act,” Boyd said.
But on the call with reporters Tuesday, Secretary Vilsack pointed to the $2.2 billion provision for farmers who feel that they have been unfairly treated in the past by the USDA. The department is currently seeking input on how to design and structure the program, which will be administered by one or more third parties.
The case for (and against) colorblindness
The debate over “colorblind” remedies for racial discrimination has a history of more than 120 years in U.S. constitutional law.
Justice John Marshall Harlan, the lone dissenter in the Supreme Court’s 1896 Plessy v. Ferguson decision that upheld “separate but equal” policies, said the Constitution prescribed color blindness in theory, but white supremacist policies were imposed in actuality.
“The white race deems itself to be the dominant race in this country. And so it is in prestige, in achievements, in education and in power,” he wrote in his opposition to the 7-1 decision.
“But in view of the Constitution, in the eye of the law, there is in this country no superior, dominant, ruling class of citizens. There is no caste here. Our Constitution is color-blind, and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law.”
In 1978, the Supreme Court upheld affirmative action plans in the case of Regents of the University of California v. Bakke. In support of that decision, Justice Harry Blackmun agreed with fellow Justice Thurgood Marshall’s assertion that race must be considered.
“In order to get beyond racism, we must first take account of race. There is no other way,” Blackmun wrote. “And in order to treat some persons equally, we must treat them differently. We cannot—we dare not—let the Equal Protection Clause [of the 14th Amendment] perpetuate racial superiority.”
But others argue that colorblindness aligns with the country’s founding principles. Peter C. Myers, a professor emeritus of political science at the University of Wisconsin-Eau Claire, said Blackmun was “sorely mistaken when he declared in defense of modern race preferences.”
Color-blindness requires that “distinctions of race or color play no proper part in the distributions of burdens and benefits in public law or policy” and “the recovery and secure establishment of the color-blindness principle in America’s public life are urgent moral and civic imperatives,” Myers wrote in a 2019 article for the Heritage Foundation.
Adia Harvey Wingfield, a sociology professor at Washington University in St. Louis, said some past efforts to remedy race-based problems in colorblind ways have widened or exacerbated racial inequality.
Minimum wage and Social Security laws, for example, did not adequately address the situation of the disproportionately large number of Black Americans in low-pay domestic jobs.
The G.I. Bill, which offered World War II veterans a range of financial benefits, including assistance for education and job training, was administered by states when segregation was the law in the South. Many state officials there steered Black veterans away from job training programs that could lead to higher-paying jobs, and to college degrees at Black schools that were underfunded rather than predominantly white institutions.
And while legal school segregation was technically eliminated by the Supreme Court in 1954 and by subsequent civil rights legislation, it was effectively replaced by de facto segregation in schools drawing students from neighborhoods that still show the impacts of white supremacist efforts to keep people separated by race.
“One of the things that’s so useful about historical research from that time period is that it shows multiple examples of race-blind public policy that still made sure racial inequality stayed in place,” Wingfield said in a recent interview.
“Trying to solve racial inequality by not talking about racial inequality doesn’t reduce racial inequality,” she said. “It leaves it there to continue to be perpetuated in existing forms.”
When the Biden administration announced its debt relief plan in late August, the timing was fitting. According to the Hebrew calendar, this last year, which ended on September 25, was the Shemitah year, a year where debts are forgiven. In the Bible, canceling debt is just one among a set of jubilee laws, which includes freeing the enslaved, feeding the poor, paying fair wages, and conserving and protecting overworked land. As a biblical scholar and pastor, I am often struck by the moral logic that undergirds these laws. Indeed, many ancient societies understood jubilee to be not only a compassionate response to unequal economic conditions, but a necessary step to keep themselves from buckling under the weight of inequality. In their eyes, debt and wider injustice was the cause of two forms of death: the economic and spiritual death of a society, and individual, avoidable death among their people.
In the U.S. debt has reached new heights, including $1.6 trillion in student debt, up 100 percent since 2010. Nearly half of these student debt borrowers owe less than $20,000, so the White House’s announcement that to cancel $10,000 for people earning less than $125,000 (up to $250,000 for a household) and $20,000 for Pell Grant recipients is significant. It amounts to the cancellation of up to 20 million loans. But responses to the new measure have been divided — many have celebrated it and called for more, while others have raised alarm about whether we can afford it as a nation and challenged it.
In fact, since the time of the announcement, six Republican-led states are in the process of suing the administration, claiming that President Biden overstepped executive powers with the debt relief program. In response, the Biden administration has scaled back eligibility requirements, eliminating borrowers whose federal loans were owned by private banks and subject to the lawsuits. NPRdescribes the impact of such a reversal: “People who took out Perkins loans and Federal Family Education Loans, the mainstay of the federal student loan program until 2010, may no longer be eligible for forgiveness.”
The justification to gut the loan forgiveness program follows the same tired arguments about who “deserves” to have their debt canceled, pitting struggling people against each other. A particularly divisive statement on this came from Arkansas Attorney General Leslie Rutledge, who claimed, “It’s patently unfair to saddle hard-working Americans with the loan debt of those who chose to go to college.”
In reality, the debate between the “deserving” and “undeserving” is a sleight of hand that is useful for the rich and powerful. It obscures the structural nature of debt and its role in hyper-charging inequality. Today, nearly 40 percent of the country lives in poverty or is one $400 emergency away from economic ruin, and personal debt that now totals nearly $16 trillion is in no small part to blame. After all, canceling debt and putting more money into the pockets of everyday people who will spend it on things like food and household items is both moral policy making and good economics. So, when narratives about scarcity, affordability and deservingness are invoked to thwart the cancellation of debt, we should approach them with a healthy dose of skepticism.
Over the last few weeks, politicians have been clamoring about scarcity, complaining that we can’t afford to cancel even a modest amount of debt and spending time and resources undoing the progress the administration made. But how can that be the case when the Pentagon has received increases in funding every year over the last decade (to a record $782 billion for 2022 — more than it even requested) and the Federal Reserve bailed out Wall Street in the early days of the pandemic for nearly as much as it would cost to cancel all student debt?
Moreover, Biden’s student loan plan is small compared to other debt that has been canceled in the last five years with very little opposition, including $659 billion in Paycheck Protection Program loans that mostly went to wealthy business owners during the pandemic and $1.7 trillion in taxes owed by wealthy corporations under the 2017 Trump tax cuts. Scarcity itself is a myth, seeming only to exist as an insurmountable problem when the needs of the poor are under consideration.
Rather, it is not debt cancellation that the nation can’t afford — it is widening inequality that is too costly. The Bible is a good reference on this. Deuteronomy 15 talks about canceling loans obtained for survival for the sake of a healthy society, and we need only look at the median income of people with college degrees versus those without to see that student loans are indeed about survival. The biblical tradition of debt relief is the centerpiece of God’s call to abolish poverty, and debt cancellation is understood as necessary when poverty proliferates amid plenty and survival becomes a question of wide concern.
Our elected officials would do well to take heed of the lessons of the book they so often like to reference. Rather than attacking debt relief, they could build on the advances made on student debt to enact a fuller slate of jubilee policies that uplift everyone near the bottom. When it comes to education, this could include wider debt cancellation, but also other structural changes like free, quality and diverse education from pre-K through university. There is no reason to pit loan cancellation against reforms that make education truly available to everyone. After all, if we value young people today and the nation’s future, we need both.
But instead of pursuing the divine mandate of jubilee, we are witnessing a society overcome with debt and death. The most recent numbers are dire to the extreme: Alongside growing debt, U.S. life expectancy has stagnated for two decades and in 2015, it actually began to drop in a way unseen in modern history. The country’s disastrous response to the COVID-19 pandemic only accelerated this trend and revealed systemic failure in our health care system — by comparison, our peer countries experienced only one-third as much of a decline in life expectancy and then saw an increase as they adopted more effective COVID-19 responses.
According to a 2022 report produced by the Poor People’s Campaign (which I co-chair alongside Rev. Dr. William Barber), poor and low-income U.S. counties experienced death rates that were twice as high as richer ones, and at different phases of the pandemic, their death rates were up to five times higher. This occurred in part because of the lack of health care for tens of millions across the country. In the worst public health crisis in a century, Congress did not expand Medicaid, leaving millions of people in the states that suffered the steepest decline in health outcomes without access to affordable health care. In fact, at the same time that overall health and life expectancy was on the decline, health care company profits were on the rise.
Connected to the issue of our lowered life expectancy is the growing crisis of what some call “deaths of despair” — from suicide, drug overdose and alcoholism. Traveling around the country, I have met with the families of small farmers whose suicide rates are rising because they are up to their ears in commercial debt. I have also met the friends and spouses of some of the 20 veterans who commit suicide every day, more than those killed as active duty servicepeople on the front lines of our most recent wars. But the framework of “deaths of despair” is often misleading. Even in the case of suicides and overdoses, a large part of what is driving these deaths is outright and egregious neglect and injustice.
Aaron Scott, co-founder of Chaplains on the Harbor, an organization committed to serving poor people on the rural coast of Washington State, has buried dozens of poor and homeless members who died from overdose and suicide. He also had to bury his grandpa after he took his own life. Scott recently explained to me, “When I think of my grandpa’s suicide, as much as he was personally experiencing despair, the reason he died is because he couldn’t access the mental health care my grandma was trying to get him connected to. I’ve seen a number of blatant medical neglect deaths that conservative county coroners refuse to label as medical neglect because of the poverty and IV drug use history of the deceased — so these get recorded as drug-related deaths even though the hospital simply refused care.”
In New York City, where I live, and where life expectancy dropped by three years in 2020, there is a mass grave of poor people on Hart Island, in the middle of the Long Island Sound. There are countless other “potter’s fields” (also known as “pauper’s graves”) across the country, and yet few know the true brutality of these graveyards for the poor. More than 1 million people have been buried on Hart Island since the Civil War, including thousands of victims of epidemics like the flu of 1918, AIDS and COVID-19. These people are buried in unidentified graves, with 150 adults or 1,000 infants in a plot. And although some may have been called home when it was their time, so many continue to prematurely die because they live in a society that neglects even their most basic needs. Now, dignity is denied to them not only in life, but in death itself.
Indeed, the United States has become far too comfortable with poverty and death, and the consequence, unfortunately, is more of both. But if the news of our declining life expectancy is a wake-up call of the most elemental nature, recent action on student debt (if it isn’t completely undone) is a small glimpse into what it could look like for everyone to have the right to live. That is what jubilee has always been about — preserving life and creating a more just and balanced society. Nothing less is required of us if we want the same today.
In the late summer of 2021, mortgage rates fell to near-all-time lows, even as the rate of inflation picked up. A borrower with good credit could borrow hundreds of thousands of dollars for 30 years at under 2.9 percent, despite the fact that the rate of inflation had already ticked up to above 5 percent.
Fourteen months later, that same 30-year mortgage is going for not far shy of 6.5 percent, with analysts predicting it could hit 7 percent within weeks. The average mortgage in the U.S. is just over $400,000. Thus, a hike in mortgage rates of 4 percent in the span of 15 months means that the average family with a new house will have to come up with $16,000 more in interest payments in late 2023 than they would have, had they locked in place a mortgage a year earlier.
And, because where the Federal Reserve goes, the rest of the world follows, interest rates are also soaring globally. Many international observers are worried. Indeed, in a report released earlier this week, the United Nations Conference on Trade and Development (UNCTAD) warned that rapidly tightening monetary conditions could impose a worse cost on the global economy than did either the 2008 crash or the COVID pandemic. Not surprisingly, it suggested that low-income families would bear the brunt of this downturn. UNCTAD called on the Fed to hit the pause button on interest rate hikes.
Inflation creates a climate uncertain for businesses, and when combined with the low unemployment levels currently seen in the U.S., it leads to wage increases that eventually have the potential to recalibrate the economy in organized workers’ favor. Since the Fed is determined to re-establish certainty for businesses and to rein in inflation at all costs, it is unlikely to heed UNCTAD’s warnings, and is likely to plow ahead with its regimen of rate increases.
In the U.S. — and, by extension, much of the rest of the world — two things are happening to the housing market in response to these hikes: the number of homes being bought and sold (and consequently the number of mortgages being taken out) is falling, and housing prices are starting to decline as purchasers feel more pinched by the cost of borrowing. Both will disproportionately hit lower-income families and new homeowners looking to move up the housing ladder.
For seven consecutive months now the number of home sales has declined. This means fewer people are currently able to enter the world of homeownership. It also means that it’s becoming harder for those who already own homes to sell in order to move either to a different city or into better or bigger accommodations in the cities they already live in.
And, while average home prices were still rising modestly into the early summer, in many high-cost cities, a fall-off in prices has now begun. Indeed, some studies have shown that in more than three-quarters of cities, home prices over the past month have retreated from their COVID-era highs. In Seattle, San Diego, Sacramento, San Jose and Las Vegas, Redfin data suggest double-digit drops in what homes are selling for as the Fed’s interest rate hikes ricochet through the broader economy.
Moody’s Analytics now predicts that over the next two years, housing prices will fall in just over half of the 414 major markets that it surveys. In the majority of these markets, especially in cities in the Sunbelt and in the West, it finds that home prices are overvalued by at least 25 percent, meaning that homeowners who bought in the last few years when interest rates were at rock-bottom levels and home prices were soaring are facing huge risks in getting stuck underwater as their real estate investments go south just at the same time as mortgage rates soar.
What makes this more infuriating is that this was an avoidable tragedy. Homeowners don’t make decisions in a vacuum; they buy and sell at least in part because of a financial environment determined by the monetary decisions of the Federal Reserve and the policy decisions of the U.S. government. The housing market was overheated in the last few years by a conscious effort to make money as cheap as possible for as long as possible; now, that housing bubble is being rapidly punctured by a panicked response to inflation by central bankers applying the lessons of the past several inflationary cycles to a pandemic- and war-impacted environment that looks nothing like the recent past. The interest rate hikes embraced by central banks essentially punish home buyers for the failure of expert economists to correctly game out inflationary pressures in the era of COVID and of Russian expansionist military adventures. Whether that punishment will even work, by the Fed’s own terms, and reduce inflation is very much an open question.
The Federal Reserve has gone on an interest-rate-raising spree in recent months as it belatedly attempts to put the inflation genie back in the bottle. There is, in this, an irony. The talking heads and maestros of finance — the experts whose every word markets hang on — spent months trying to calm rattled markets and investors by promising that inflation was transitory, that the fundamentals of the global economy were fine, and that once COVID-related supply chain glitches got sorted out, the world’s major economies would rapidly revert back to inflation in the desired 2 percent range.
They were, of course, hideously wrong. In hindsight, they ought to have gently raised interest rates and tapped the breaks on the housing market before the inflationary spiral took hold, instead of waiting until it was a crisis of such urgency that the massive and rapid interest rate hikes came to be seen as the only tool left in the Fed’s anti-inflation toolkit. But, of course, hindsight is everything. In the moment, their analysis of inflation in 2021 and early 2022 was ultimately as misguided as analyses made 15 years ago by those who waved off the increasingly urgent signs that the housing market was about to crash and pull down key pillars that propped up the global financial system.
In 2006 through 2008, as the housing market grew increasingly volatile, policy makers and those controlling monetary policy ignored the problem until it was too late to make only mild interventions and modest tweaks. When vast numbers of people started to default on their mortgages, and lenders began to suffer a liquidity crisis, it took trillions of dollars of coordinated international interventions to keep the world’s financial system from entirely seizing up and to stop the major industrial economies from sliding into a depression.
Now, in 2022, a similarly inept response by experts who should have known better threatens to crash the housing market in which tens of millions of American families have invested their life savings, following the encouragement of policy makers who kept interest rates artificially low for more than a decade.
The political repercussions from the crash of 2008 are still playing out today; it’s hard to imagine Trump’s ascendancy absent the aftereffects of the crash: the collapse in confidence in government agencies and elected officials, the distrust of self-proclaimed experts, the immiseration of millions of families, and the rage triggered by banks being bailed out while homeowners and ordinary workers were largely left to fend for themselves.
Today, the Fed is stampeding toward a regimen of ever-escalating rates. It is essentially declaring that large increases in unemployment are acceptable — possibly even desirable so as to curb worker power — as a way to rein in an economy it let overheat for years. As a result, the potential exists for a 2008-style sudden and calamitous failure of the housing market, a contraction in employment, and an unleashing of vast political furies in the wake of this.
Sometimes, as UNCTAD seems to have concluded, the medicine is worse than the ailment. In putting both the stability of the U.S. housing market and the employment of large numbers of Americans at risk with a rigid anti-inflation regimen that doesn’t take into account the very particular reasons for rising prices in 2022, the Fed risks fueling growing immiseration, and, in consequence, increased levels of societal upheaval. For months now, the Federal Reserve has talked up its ability to create a “soft landing” for the overheated economy. Now, in dramatically raising the costs of borrowing over the past few months, it has essentially accepted the necessity of a “hard landing” that triggers misery for millions of existing homeowners and puts the ability to purchase a home further out of reach for growing numbers of would-be first-time home buyers. That’s not sound economic policy making; rather, it’s decision-making via panic.
Yes, the Fed’s interest rate-raising frenzy of 2022 may ultimately curb inflation, but the collateral damage this time around, in terms of housing access and unemployment, could rival that of 2008. It could, if things really head south, be as unpleasant as the early 1980s, when monetary policy makers in Reagan’s U.S. and Thatcher’s U.K. sent interest rates and unemployment skyrocketing, in their efforts both to break the power of organized workers and also to tamp down inflation. That’s hardly the mark of a well-thought-out and humane monetary policy.
As President Biden meets with Florida Governor Ron DeSantis and survivors of Hurricane Ian, the deadliest storm to hit the state in decades, we get an update from Florida state Representative Michele Rayner on relief efforts underway and the housing crisis exacerbated by the storm. Republicans like Governor DeSantis are “more concerned about sticking it to Joe Biden than actually making sure that they can take care of their people,” says Rayner. She also discusses the treatment of asylum seekers in Florida and the anti-LGBT“Don’t Say Gay” bill.
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
AMYGOODMAN:President Biden is visiting survivors of Hurricane Ian in Florida today, surveying damage from the Category 4 storm that devastated part of Florida’s Gulf Coast. The hurricane’s death toll has topped 109, with 105 of those deaths in Florida, making it the state’s deadliest hurricane in decades. Search and rescue crews are warning they’re likely to uncover more bodies in the coming days. At least 55 of the deaths were in Florida’s Lee County. Republican Governor Ron DeSantis dismissed questions during a news conference Monday about why officials there didn’t mandate evacuations until the day before the storm hit.
GOV.RONDESANTIS:Go ahead, ma’am. Go ahead, ma’am. OK, OK, OK. Stop. Stop. Stop. OK? It’s been — this has been dealt with. The Lee County has explained what they did. They went through that. … Well, of course you’re going to review everything we do in these storms. I mean, that’s the way it works.
AMYGOODMAN:DeSantis meets with President Biden today as many residents face a long recovery amidst a housing crisis that could leave many unhoused, especially those on low or fixed incomes.
For more, we go to St. Petersburg, Florida, to speak with Democratic state Representative Michele Rayner. She’s been on the ground helping with relief efforts in the hardest-hit neighborhoods in Fort Myers, which is in Lee County, including Harlem Heights and Dunbar.
Welcome toDemocracy Now!It’s great to have you with us, Representative Michele Rayner. If you can talk about this whole story, you know, the attack on the officials for not calling for evacuation earlier, but the whole issue of who gets hit hardest? Who is it hardest — who is it hardest to evacuate? For example, the poor, people who don’t have access to vehicles, etc. And then, what happens after the storm? Who is affected most? Give us a lay of the land.
REP.MICHELERAYNER:Well, Amy and Juan, it’s so good to be with you. This is, low key, a dream come true. So, I loveDemocracy Now!and the work that you do.
But to the question at hand, so I have been Black in America, Black in Florida for 41 years — a young 41, but for 41 years. So, I have family in Fort Myers in the Dunbar area and in Harlem Heights. So, one, when we’re thinking about evacuating, there is a privilege in being able to evacuate. Not everyone has the means or the ability to be able to evacuate. And so, that’s number one, so we’re putting that there. Also, you know, as we are kind of gauging and looking at the response of Lee County, we knew that there was a hurricane coming, but initially they thought it was going to hit my home, my district, and it turned. So, once again, telling folks to evacuate, especially in Harlem Heights and in Dunbar, there is a privilege that’s there.
But secondly, after we are in this post-hurricane response, the concerning matter is: Who is getting what type of relief? And I think that, you know, as I’ve been making calls about this, there has to be an intentional focus on our working families, on our farmworkers. There’s a large population of farmworkers down in Southwest Florida. Also, parts of these communities, you know, quarter of Dunbar lives under the federal poverty line, and so — but we knew that there was going to be a disparity or an inequitable response because of what’s been going on pre-Hurricane Ian.
JUANGONZÁLEZ:And, Representative, could you talk about the housing crunch that exists in Florida already, before the hurricane, in terms of affordable housing, reports of huge skyrocketing of rent in many parts of Florida? How do you see the numbers of people that are now homeless, how the state is going to be able to marshal — and the federal government — resources to be able to assist those who have no homes?
REP.MICHELERAYNER:I mean, Juan, you know, quite frankly, Floridians can’t afford Florida. And so, we have a housing crisis, as you stated. There are ways to fix this housing crisis, but a Republican-led leadership in the Governor’s Mansion and in the Legislature have chosen not to. We attempted to address a property insurance crisis that we have. That was not addressed. It was actually — you know, helped and aided the insurance companies.
So, when you’re thinking about folks who are working families and folks who are trying to make sure they can rebuild their lives, number one, is their housing going to be the same or better as what they lost? Number two, are they going to be able to afford said housing? Number three, are the insurance companies — are they actually going to be ethical in their dealings with the people on the ground?
So, we already see that we have a crisis in our housing market, we have a crisis in our rental market, we have a crisis in our property insurance market, and this storm has now exacerbated the crisis that we’re at. And we’re at catastrophic levels. My hope is, is thatFEMAwill come in, it will immediately start working with the most marginalized communities and have an intentional focus on making sure that they can recover.
JUANGONZÁLEZ:And I wanted to ask you about your governor and his stance on issues such as climate change. If I’m not mistaken, back during — in the aftermath of Superstorm Sandy, he opposed federal aid to New Jersey and New York by the federal government after that catastrophe. Now he’s being forced to basically ask Washington for assistance, isn’t he?
REP.MICHELERAYNER:Yeah. And so, you know, the governor, he and other members of his party speak out of both sides of their mouth. You know, we saw members of the Republican delegation of congressional delegation of Florida vote against their own interests and their own constituents just this week about supplying aid to Florida. So, you know, they’re more concerned about sticking it to Joe Biden than actually making sure that they can take care of their people. And right now, you know, DeSantis finds himself in that position. You know, he’s trying to figure out a way to keep sticking it to Joe Biden by simultaneously having his hand out. And both can’t be true; you can’t do both of them. And once again, this is why I’ve been saying, you know, we are public servants. When we are elected, we are public servants. But there are some folks who are more concerned about being public than they are concerned about being a servant.
AMYGOODMAN:Let me ask you, still on Governor DeSantis but another issue, and that’s the issue of migrants. We all know about what he did, spending government money to fly Venezuelan asylum seekers from Texas to Florida, up to Martha’s Vineyard. Now there are number of immigrants in — migrants, asylum seekers in New York who have been shown flyers that there’s paid work in Florida. They’re headed back down. TheNew York Postis reporting this. What do you say to them, Representative Michele Rayner? They’re being told they’ll get money if they go to Florida.
REP.MICHELERAYNER:I don’t know what to say, Amy. One, it’s heartbreaking that, basically, our governor kidnapped them — I mean, like, let’s just level set and call this thing what it is — and under false pretenses. You know, I’m a criminal defense attorney. And by any other standard, you know, he would be facing prosecution for what he did. So that’s number one.
Number two, you know, while I understand that folks need to work — they are trying to make sure they can stay here in the United States because the conditions from where they are from are so dangerous. I don’t — I guess we’re here now. I don’t know if Florida is the best place for them, because we have a governor that has proven to be dangerous to people who do not look like him, to people who do not love like him, to people who are not of the same party and to people who don’t have the same wealth income that he has. And so, you know, while I, as anyone, would welcome folks and say, “Please come. Please work. Please help us and also be able to have money to send back to your families,” Florida is — tends to be a little bit dangerous for folks who don’t align with Ron DeSantis.
AMYGOODMAN:Let me ask you quickly, Representative Michele Rayner. You’re the first Black openlyLGBTQwoman in the Florida Legislature. Next — October 11th, next week, is National Coming Out Day. You’re planning to lead a town hall meeting in the aftermath of the passage H.B. 1557, “Don’t Say Gay” bill. Can you talk about the impact it’s had? And are people continuing their activism around this in the midst of this storm?
REP.MICHELERAYNER:You know, Amy, it has had significant impact. It has had significant impact on teachers. There have been teachers who have quit the education profession. We have had folks who are nervous of what they can say to parents. One school district right above my county, they had teachers take off the “safe space” stickers. You have parents who are concerned about their children’s safety. You have students who are reporting an uptick in bullying due to them being a member of theLGBTQcommunity.
And people are most certainly continuing their advocacy around this work, because here’s what we know to be true. If this Legislature stays the same makeup, if Ron DeSantis wins a second term in the Governor’s Mansion, that these type of bills aren’t going to just stop at “Don’t Say Gay.” We’re going to see bills that we have seen in Texas, you know, criminalizing parents for trying to allow their children to have gender-affirming care, and pushing the limit of what can be done. So, we know that right now with “Don’t Say Gay,” we have to continue sounding the alarm, knowing that this is a slippery slope as to what can happen, not only towardLGBTQyouth but also Black and Brown folks, working people and working families.
AMYGOODMAN:Well, Representative Michele Rayner, thank you so much for being with us, Democratic Florida state representative. After Hurricane Ian, Representative Rayner has been on the ground in the hardest-hit neighborhoods in Fort Myers, including Harlem Heights, Dunbar, helping with relief efforts. And a shoutout to the community radio stationWMNF, who we turned to as the storm was hitting, serving the community in Tampa and St. Petersburg.
David Barsamian: What we are facing is often described as unprecedented — a pandemic, climate catastrophe and, always lurking off center stage, nuclear annihilation. Three of the four horsemen of the apocalypse.
Noam Chomsky: I can add a fourth: the impending destruction of what remains of American democracy and the shift of the United States toward a deeply authoritarian, also proto-fascist, state, when the Republicans come back into office, which looks likely. So, that’s four horses.
And remember that the Republicans are the denialist party, committed to racing to climate destruction with abandon in the hands of the chief wrecker they now worship like a demigod. It’s bad news for the United States and for the world, given the power of this country.
The International Institute for Democracy and Electoral Assistance just issued the Global State of Democracy Report 2021. It says that the United States is a country where democracy is “backsliding.”
Very severely. The Republican Party is openly dedicated — it’s not even concealed — to undermining what remains of American democracy. They’re working very hard on it. Since the days of Richard Nixon, the Republicans have long understood that they’re fundamentally a minority party and not going to get votes by advertising their increasingly open commitment to the welfare of the ultrarich and the corporate sector. So, they’ve been long diverting attention to so-called cultural issues.
It began with Nixon’s Southern strategy. He realized that Democratic Party support for civil rights legislation, however limited, would lose them the southern Democrats, who were openly and overtly extreme racists. The Nixon administration capitalized on that with their Southern strategy, hinting, not so subtly, that the Republicans would become the party of white supremacy.
In subsequent years, they picked up other issues. It’s now the virtual definition of the party: so, let’s run on attacking Critical Race Theory — whatever that means! It’s a cover term, as their leading spokesmen have explained, for everything they can rally the public on: white supremacy, racism, misogyny, Christianity, anti-abortion rights.
Meanwhile, the leadership, with the aid of the right-wing Federalist Society, has been developing legal means — if you want to call it that — for the Republicans to ensure that, even as a minority party, they will be able to control the voting apparatus and the outcome of elections. They are exploiting radically undemocratic features built into the constitutional system and the structural advantages Republicans have as a party representing more scattered rural populations and the traditionally Christian, white nationalist population. Using such advantages, even with a minority of the vote, they should be able to maintain something like near-permanent power.
Actually, that permanence might not last long if Donald Trump, or a Trump clone, takes the presidency in 2024. It’s not likely then that the United States, not to speak of the world, will be able to escape the impact of the climate and environmental destruction they’re committed to accelerating.
We all saw what happened in Washington on January 6th. Do you see the possibility of civil unrest spreading? There are multiple militias across the country. Representative Paul Gosar of the great state of Arizona and Representative Lauren Boebert, of the great state of Colorado, among others, have made threatening statements inciting violence and hatred. The Internet is rife with conspiracy theories. What must we do?
It is very serious. In fact, maybe a third or so of Republicans think it may be necessary to use force to “save our country,” as they put it. “Save our country” has a clear meaning. If anyone didn’t understand it, Trump issued a call to people to mobilize to prevent the Democrats from swamping this country with criminals being let out of jails in other lands, lest they “replace” white Americans and carry out the destruction of America. The “great replacement” theory — that’s what “take away our country” means and it’s being used effectively by proto-fascist elements, Trump being the most extreme and most successful.
What can we do about it? The only tools available, like it or not, are education and organization. There’s no other way. It means trying to revive an authentic labor movement of the kind that, in the past, was in the forefront of moves toward social justice. It also means organizing other popular movements, carrying out educational efforts to combat the murderous anti-vaccine campaigns now going on, making sure that there are serious efforts to deal with the climate crisis, mobilizing against the bipartisan commitment to increase dangerous military spending and provocative actions against China, which could lead to a conflict nobody wants and end up in a terminal war.
You just have to keep working on this. There is no other way.
In the background is extreme inequality, which is off the charts. Why is the United States so unequal?
A lot of this has happened in the last 40 years as part of the neoliberal assault on America in which the Democrats, too, have participated, though not to the extent of the Republicans.
There is a fairly careful estimate of what’s called the transfer of wealth from the lower 90% of the population to the top 1% (actually, a fraction of them) during the four decades of this assault. A RAND Corporation study estimated it as close to $50 trillion. That’s not pennies — and it’s ongoing.
During the pandemic, the measures that were taken to save the economy from collapse led to the further enrichment of the very few. They also sort of maintained life for so many others, but the Republicans are busy trying to dismantle that part of the deal, leaving only the part that enriches the very few. That’s what they’re dedicated to.
Take ALEC, the American Legislative Exchange Council. This goes back years. It’s an organization funded by almost the entire corporate sector, dedicated to hitting at the weak point in the constitutional system, the states. It’s very easy. It doesn’t take much to buy or impel legislative representatives at the state level, so ALEC has worked there to impose legislation that will foster the long-term efforts of those seeking to destroy democracy, increase radical inequality, and destroy the environment.
And one of the most important of those efforts is to get the states to legislate that they can’t even investigate — and certainly not punish — wage theft, which steals billions of dollars from workers every year by refusing to pay overtime as well as through other devices. There have been efforts to investigate it, but the business sector wants to stop them.
An analog at the national level is the attempt to ensure that the IRS not go after wealthy corporate tax cheats. At every level you can think of, this class war on the part of the masters, the corporate sector, the super-rich is raging with intensity. And they’re going to use every means they can to ensure that it goes on until they’ve succeeded in destroying not only American democracy, but the very possibility of survival as an organized society.
Corporate power seems unstoppable. The uber class of gazillionaires — Jeff Bezos, Richard Branson, and Elon Musk — are now flying into outer space. But I’m reminded of something that the novelist Ursula K. Le Guin said some years ago: “We live in capitalism, its power seems inescapable.” And then she added, “So did the divine right of kings.”
So did slavery. So did the principle that women are property, which lasted in the United States until the 1970s. So did laws against miscegenation so extreme that even the Nazis wouldn’t accept them, which lasted in the United States until the 1960s.
All kinds of horrors have existed. Over time, their power has been eroded but never completely eliminated. Slavery was abolished, but its remnants remain in new and vicious forms. It’s not slavery, but it’s horrifying enough. The idea that women are not persons has not only been formally overcome, but to a substantial extent in practice, too. Still, there’s plenty to do. The constitutional system was a step forward in the eighteenth century. Even the phrase “We the people” terrified the autocratic rulers of Europe, deeply concerned that the evils of democracy (what was then called republicanism) could spread and undermine civilized life. Well, it did spread — and civilized life continued, even improved.
So, yes, there are periods of regression and of progress, but the class war never ends, the masters never relent. They’re always looking for every opportunity and, if they’re the only participants in class struggle, we will indeed have regression. But they don’t have to be, any more than in the past.
In your Masters of Mankind book, you have an essay, “Can Civilization Survive Really Existing Capitalism?” You write, “Really existing capitalist democracy — RECD for short (pronounced ‘wrecked’)” is “radically incompatible” with democracy and add that “it seems to me unlikely that civilization can survive really existing capitalism and the sharply attenuated democracy that goes along with it. Could functioning democracy make a difference? Consideration of nonexistent systems can only be speculative, but I think there’s some reason to think so.” Tell me your reasons.
First of all, we live in this world, not in some world we would like to imagine. And in this world, if you simply think about the timescale for dealing with environmental destruction, it’s far shorter than the time that would be necessary to carry out the significant reshaping of our basic institutions. That doesn’t mean you have to abandon the attempt to do so. You should be doing that all the time — working on ways to raise consciousness, raise understanding, and build the rudiments of future institutions in the present society.
At the same time, the measures to save us from self-destruction will have to take place within the basic framework of existing institutions — some modification of them without fundamental change. And it can be done. We know how it can be done.
Meanwhile, work should continue on overcoming the problem of RECD, really existing capitalist democracy, which in its basic nature is a death sentence and also deeply inhuman in its fundamental properties. So, let’s work on that, and at the same time, ensure that we save the possibility of achieving it by overcoming the immediate and urgent crisis we face.
What else is going to counter it? They are the ones holding up the hope that we’ll be able to find ways to counter these highly harmful, destructive developments we’re discussing.
The core method is, of course, education. People have to come to understand what’s happening in the world. That requires the means to disseminate information and analysis, opening up opportunities for discussion, which you’re not going to find, for the most part, in the mainstream. Maybe occasionally at the margins. A lot of what we’ve been talking about is not discussed at all, or only marginally within the major media. So, these conversations have to be brought to the public through such channels. There is no other way.
Actually, there is another way: organization. It is possible and, in fact, easy to conduct educational and cultural programs inside organizations. That was one of the major contributions of the labor movement when it was a vibrant, lively institution, and one of the main reasons why President Ronald Reagan and British Prime Minister Margaret Thatcher were so determined to destroy labor, as they both did. Their first moves were attacks on the labor movement.
There were educational and cultural programs that brought people together to think about the world, to understand it, and develop ideas. It takes organization to do that. Doing that alone, as an isolated person, is extremely difficult.
Despite the corporate effort to beat back the unions, there was a lively, independent labor press in the United States as late as the 1950s, reaching lots of people, condemning the “bought priesthood,” as they called it, of the mainstream press. It took a long time to destroy that.
There’s a history in the United States of a vibrant, progressive labor press that goes back to the nineteenth century, when it was a major phenomenon. That can and should be revived as part of the revival of a militant, functioning labor movement at the forefront of progress toward social justice. It happened before and it can happen again. And independent media are a critical element of this.
When I was a kid in the 1930s and early 1940s, I could read Izzy Stone in the Philadelphia Record. It wasn’t the major journal in Philadelphia, but it was there. In the late 1940s, I could read him in the New York newspaper PM, which was an independent journal. It made a huge difference.
Later, the only way to read Stone was to subscribe to his newsletter. That was the independent media in the 1950s. In the 1960s, it began to pick up a little bit with the magazine Ramparts, radio programs like Danny Schechter’s on WBCN in Boston, and others like it.
And today, this continues around the country. The ones you mentioned are forces for independence, for thinking.
There are multiple mentions of Antonio Gramsci in two of your most recent books, Consequences of Capitalismand Climate Crisis and the Global Green New Deal — specifically, of his comment, “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” Right now, though, the quote of his I’d like you to address is: “Pessimism of the intellect, optimism of the will.” Talk about his relevance today and the meaning of that quote.
Chomsky: Gramsci was a leading left labor activist in Italy around the late teens, early 1920s. He was very active in organizing left worker collectives. In Italy, the fascist government took over in the early 1920s. One of its first acts was to send Gramsci to prison. During his trial, the prosecutor stated: we have to silence this voice. (This gets us back to the importance of independent media, of course.) So, he was sent to prison.
While there, he wrote his Prison Notebooks. He wasn’t silenced, though the public couldn’t read him. He continued the work he had begun and in that writing were the quotes you cited.
In the early 1930s, he wrote that the old world was collapsing, while the new world had not yet risen and that, in the interim, they were facing morbid symptoms. Mussolini was one, Hitler another. Nazi Germany almost conquered large parts of the world. We came very close to that. The Russians defeated Hitler. Otherwise, half the world would probably have been run by Nazi Germany. But it was very close. Morbid symptoms were visible everywhere.
The adage you quoted, “Pessimism of the intellect, optimism of the will,” which became famous, came from the period when he was still able to publish. In his spirit, we must look at the world reasonably, without illusions, understand it, decide how to act, and recognize that there are grim portents. There are very dangerous things happening. That’s pessimism of the intellect. At the same time, we need to recognize that there are ways out, real opportunities. So, we have optimism of the will, meaning, we dedicate ourselves to using all the opportunities available — and they do exist — while working to overcome the morbid symptoms and move toward a more just and decent world.
In these dark times, it’s difficult for many to feel that there’s a bright future ahead. You’re always asked, what gives you hope? And I have to ask you the same question.
One thing that gives me hope is that people are struggling hard under very severe circumstances, much more severe than we can imagine, all over the world to achieve rights and justice. They don’t give up hope, so we certainly can’t.
The other is that there’s simply no option. The alternative is to say, okay, I’ll help the worst to happen. That’s one choice. The other is to say, I’ll try to do the best I can, what the farmers in India are doing, what poor and miserable peasants in Honduras are doing, and many others like them around the world. I’ll do that as best I can. And maybe we can get to a decent world in which people can feel that they can live without shame. A better world.
That’s not much of a choice, so we should be able to easily make it.
This article is part of a series about the workers’ revolution which led to the Canary becoming the Canary Workers’ Co-op. You can read all the articles in the series here.
This week, we are relaunching the Canary as a worker-owned cooperative.
This means that all decisions will be made by the workers from now on. There will be no bosses, and everyone will get paid the same for a day’s work. We aim to be an example of radical democracy in action.
The Canary has adopted a ‘sociocracy’ structure. Click here to read more about sociocracy.
It should have been like this from the beginning
Of course, this is the way it should have been from the beginning. It’s shocking that a media organisation set up to do “courageous”, “campaigning journalism” on the side of the oppressed was set up with a rigid hierarchy and inequality in pay and conditions between the workers and the bosses.
We are releasing severalarticles and statements explaining the extent of the Canary leadership’s oppressive, unequal, and entitled behaviour. You might ask, why did we stay on?
The reason we’re still here is because we all believe in the need for a radical media that isn’t afraid to speak truth to power, amplify the voices of the oppressed, and envision a world beyond capitalism and the state. However, radical media needs to be a microcosm of the world in which we want to live. It needs to be worker-run and truly democratic.
Embodying the change we want to see
Over the last six months we have been organising hard for control of our workplace. It wasn’t easy to achieve. In fact, it’s taken a workers’ revolution, but now we can honestly say that we are striving to embody the change we want to see.
If we want to see revolutionary change in society, we first need to take back control of our lives, our livelihoods, and our workplaces to create an infrastructure that can be a resource for movements struggling for change. We hope the Canary can play an important role in providing a platform for a radical politics that seeks to transform society in a holistic way, not just to elect a social democratic leader while leaving the rotten state system in place.
Here’s how the way we work is going to mirror our vision for change.
The Canary Workers Co-op (CWC) has been set up to create a co-operative media platform which will be run by its members in a radically democratic way.
That means that all of our decisions will be made by the workers themselves. UK law requires us to have directors, but our directors don’t have any more say in decision-making than the rest of us.
Because we’re registered as a cooperative within UK law, our primary rules need to be written in a certain way, and meet certain criteria. However, we want the way we operate in practice to mirror a deeper radicalism and militancy. As such, the way that the Canary operates as a co-op – and a sociocracy – will be an unfolding process defined by the decisions we make day to day as a collective. We will work hard to ensure that what we create is an empowering expression of our collective vision.
The decisions we make – and which actually govern the way we work together – will form our secondary rules.
We are owned and controlled by and for our members. Everyone who works at the Canary is a member of the co-op.
We’re democratic, and all our members have an equal say in how we’re run and how we spend our money.
We’re committed to providing education and training to our members. We believe in helping our members develop for the good of the co-op, and for the good of the movements for change that we are a part of.
We’ll work with other co-ops, and with wider communities, to achieve our aims.
A commitment to struggle against hierarchy
Under the old regime, the Canary‘s bosses got paid significantly more than the workers (in fact, the difference was a lot more than we were led to believe. When we began to take control, this was one of the very first things that we changed. Now everybody – from writers to editors, copy-editors, designers and video-journalists – gets exactly the same hourly rate, which is currently set at £12 an hour (a rate that we dearly hope we can increase in the future).
Decisions were previously made at the Canary in a deeply hierarchical manner. Important choices about finances and strategy were made between a few bosses, and decisions about our content and direction were passed down from the ‘leadership team’ in a unilateral manner, with only the occasional half-hearted nod to a collective process. This has already begun to change: since we wrested control from the bosses, we have made decisions collectively through discussions in general meetings. Problems are solved through discussion and agreement, not by majority rule.
We know that we have only just embarked on the path towards creating a radically democratic decision-making process. We’re the first to admit that we have a long way to go on that journey, but we have already established that decisions are taken by everyone, and that everyone’s voice should be included.
Sociocracy
Over the last six months, we have been discussing how we can implement a sociocracy system in the Canary. As of today, this is the system that we will use to run our organisation.
According to the Sociocracy for All website, sociocracy is:
a decentralized system of authority and intentional processes to improve our decisions and processes over time into a governance system that supports effective and efficient process while increasing connection, listening and co-creation among members.
This means that a lot of the decision-making power in the Canary will be devolved to working groups – known as ‘circles‘ – which have a remit to decide certain things. Each circle has a delegate, tasked with communicating with the rest of the organisation.
This kind of decentralised structure is nothing new in anti-authoritarian organising. Things like it have been used by militant and revolutionary movements for many generations, but the clear structure set out by Sociocracy for All is really useful for our purposes. Creating decentralised power within the Canary means we can take into account everyone’s views and work towards a shared aim without the potentially cumbersome process of making every decision as a group of fifteen workers.
Within our sociocracy structure, all major decisions will be made by consent. If a decision does not gain consent, then it won’t go ahead. Instead, we will try to understand each other’s objections, and work out a new proposal.
The start of a journey
We understand that this process is unlikely to be a smooth one. And there will be a real need to work out how to make sure we listen to everyone and take into account everyone’s needs during times of disagreement. But we’re proud to be adopting a structure which has collective decision-making and non-hierarchy at its core.
The Canary Workers’ Co-op doesn’t only want to exist for the good of its members. We want to be part of building power from the bottom up and outgrowing our current unequal and unjust system. We want to collaborate with other co-ops – particularly radical media cooperatives – and social movements to further this aim.
We’re proud to launch the Canary Workers’ Co-op today: we feel we can finally begin to live up to the values that we write about on this site. We hope this can be the start of a new journey, and that our co-op will be a vital part of the radical media ecology in the UK. We intend to amplify the voices of the oppressed, and be a platform that demands and enables change.
This article is part of a series about the workers’ revolution which led to the Canary becoming the Canary Workers’ Co-op. You can read all the articles in the series here.
Up until this summer, the Canary had been run like a corporate capitalist organisation. But from June onwards, as a group of workers, we’ve been running the outlet as a co-operative. We’ve spent the last few months addressing workplace inequalities and overhauling the organisation in order to run it more fairly and efficiently.
To put it mildly, we’ve all been put through the wringer mentally and emotionally. It’s important to us, as a team, to set out the historic inequalities and what we’ve done to address them. Finally, it’s time for the values and ethos of the Canary to match the politics and ideals of the people who work here.
We’re all family here…
Many people will be familiar with how companies claim that “we’re all family here” – and use that to foster a culture of overworking. There’s a version of this which is becoming increasingly common in workplaces which seem progressive. It was only once the directors began leaving the company that it became clear how big the gulf was between directors and workers.
When I joined the Canary a couple of years ago, I was surprised at how open the directors seemed to be. We had the odd team meetings where one director would lay out the finances of the company, discuss profits, and circulate a spreadsheet which showed how much everybody was paid. Sounds positive enough – except that spreadsheet was a lie.
Directors were supposed to be paid £13 an hour, editors £12 an hour, and writers £11 an hour. In theory, fine. In practice, it was a very different story. As the article from Emily Apple and Steve Topple shows, directors were paying themselves significantly more money than anybody else via dividends and director’s loans. On top of this, Canary Media Ltd was paying directors’ full pensions contributions of 8% – while the workers’ only got 3%, having to pay 5% themselves. The pay structure we were told about was even more of a joke than we realised.
Over the years, the three directors’ duties involved the management of administration and finance for the company, speaking engagements, and, occasionally, journalism. What actually happened is that directors often wouldn’t work the days they were supposed to work, and a number of business-critical tasks were completed late, if at all. Directors would let important work fall by the wayside and regularly leave workers in the lurch. There was no mechanism through which the rest of the team could hold them accountable. We were only a family if we’re defining ‘family’ as a dysfunctional, chaotic, toxic nightmare.
Culture of gaslighting
Directors would often give workers vague platitudes about mental health. They would regularly explain their own mental states in great detail to the whole team. Unfortunately, they did not possess the skills of self-awareness and empathy that were necessary for safe mental health disclosures in a hierarchical organisation. Added to this, workers were at times on 65% sick pay, and at others on statutory sick pay, while directors received 100% sick pay. In practice, this meant that when directors needed to take time off for their physical or mental health, they could do so comfortably without losing any money. The rest of us, however, were effectively financially punished for our sickness.
There was a similar pattern for holiday allowances. Directors were able to (and often did) take large chunks of time off without notice or cover. Editors, meanwhile, have had to juggle cover and severely restrict the time we were able to take off. Given that our editorial team is made up of three chronically ill people, this was yet another slap in the face. Editors and writers had a limited amount of holiday allowance. And, because of the lower rate of sick pay, they would often use their annual leave as sick days.
It’s undeniable that there was a clear hierarchy in the old structure of the Canary. Directors would pretend that everything was equal, and that the external values of the company were the same as what was going on behind the scenes. This was absolutely not the case.
So, what did we do about it?
Parity
Everyone is now paid £12 an hour, regardless of role. Everybody who works at the Canary has 100% sick pay and equal holiday allowance. We have a system in place for people to take paid mental health leave. All of our contracts reflect this. We’re also in the process of moving away from short-term, piecemeal contracts that force people to work multiple jobs whilst on Universal Credit.
But here’s the thing: these concrete examples of parity don’t begin to make a dent in the culture the former directors created. Everyone would be expected to overwork themselves, and our outwardly-projected socialist politics would work to hide this. Directors often spoke to people in small groups or individually. They would repeatedly claim that if people were truly ‘passionate’ they’d do anything required of them.
Moreover, directors often lied to or concealed business decisions from workers. We were all lied to about the actual state of the finances, and the health of the company. This understandably caused concern about people potentially losing their jobs.
The directors created a culture of gaslighting and toxic, unsafe behaviour. Even during the last few months, when conversations around working conditions were happening openly amongst the team, outgoing directors obstructed this process.
The editorial team have long been forced to do the jobs of the directors, whilst also doing our actual jobs. Several people at the Canary had to put a life-altering amount of work and mental energy into making sure the company didn’t go down the shitter. Naturally, this has caused a huge amount of strain, and the last few months have been draining and chaotic for all of us. We’re not rich or powerful people with connections that will help us fall upwards. We’re not legacy journalists or corporate hacks.
An outlet we can finally be proud of
We’re all committed to doing this work because we believe in each other as a team, and more importantly, because we believe in the work that we do. There is no separation between our workers and our work – we live the realities of the communities we write about.
Nobody who works here is only a journalist. We’re all activists, community organisers, and people with lived experience of the things we report. Now that we’re not constrained by dodgy bosses and toxic directors, we can finally get on with the work we all believe in.
This article is part of a series about the workers’ revolution which led to the Canary becoming the Canary Workers’ Co-op. You can read all the articles in the series here.
This October also marks the Canary‘s seventh birthday. So to accompany the multitude of revelations you can find elsewhere on our new, improved website, here’s a potted history of the Canary‘s journey so far.
The early days of the Canary
The Canary took flight in October 2015. Within a few weeks of its existence, mainstream media outlets started freaking out. They had good reason to do so because the Canary was calling them out on their shit.
For years, there’s been growing dissatisfaction among the public with the overwhelmingly right-wing establishment media. This was one of the reasons why the Canary came into being. The hunger for an alternative was clearly reflected in our readership, with the publication reaching millions monthly from quite early on.
2015 was also the year that Jeremy Corbyn became leader of the Labour Party. He championed ideas that promised to upend the status quo. Naturally, the establishment’s media (not a typo) instinctively tried to sabotage him at every turn. So, as part of a growing independent media landscape at the time, the Canary dedicated a significant amount of time in our early years to giving people some idea of what their electoral choices actually were – including making sure people knew which parties were electoral cheats.
The upshot of the UK’s electoral choices became very clear with the arrival of coronavirus (Covid-19). The government dragged its heels on reacting to the emergency. As one of our staffers astutely pointed out, the government’s early response echoed a proclamation by a character from Shrek, who said: “some of you may die, but it’s a sacrifice I am willing to make.”
Seven years is a short amount of time in the grand scheme of things. But looking back at the breadth of the Canary‘s coverage, its seven short years feel like a lifetime. From the arms industry to the welfare state, via police brutality and the sixth mass extinction, we’ve cast a wide net in terms of reporting. What’s been behind all of our reporting choices, however, is a revulsion of injustice and a compulsion to stand with those facing it.
The Canary has also attempted to confront the injustice within the media landscape itself. It’s a closed shop industry that generally greets people who don’t have a private education with a sign that reads: ‘your name’s not double-barrelled, so you can’t come in’. But through our Amplify project, we’ve provided free training, mentoring and paid publication to magnify marginalised people’s voices.
Changing with the times
However, we live under the boot of a system that cannot exist without injustice. So as an entity that rails against injustice, the Canary has faced challenges. This has impacted how we operate as an organisation through the years.
We began, for example, as an organisation that largely derived income from advertising revenue. But moves by social media giants to limit the reach of independent media, bogus attacks on us, and other factors ultimately propelled us towards the adoption of a different model. This is a membership-based model, where most of our income comes from the generous people who financially support us.
We are immensely grateful to our supporters for financing our work – and we feel a deep sense of responsibility to them. That is, in no small part, why we have spent a considerable amount of time this year looking inwards rather than outwards. As we explain in detail elsewhere, we uncovered a ton of unequal practices that are the antithesis of what we stand for.
So we got rid of the bosses and started laying down the foundations for our transformation to the Canary Workers’ Co-op.
As we set out on this ambitious and necessary newest course, one thing is for certain. We will need members – old and new – to help our bird soar.
Financial and logistical barriers to monkeypox care can disproportionately affect patients of color. In New York City, appointments for monkeypox treatment and vaccination, distributed on a first-come, first-serve basis, have disproportionately gone to wealthy, white individuals who have better access to the health care system. The first vaccines were doled out in Chelsea, a mostly white neighborhood, during the middle of the workday on Thursday. Even when vaccines began to be distributed in Harlem (a neighborhood that is 82 percent non-white), appointments appeared to go largely to white residents from outside the community, leaving community members frustrated.
Such disparities mirror larger trends in society. Across specialties, physicians disproportionately spend their time seeing white patients, despite patients of color, on average, having higher medical needs. Due to the legacy of slavery, Indigenous genocide, xenophobic immigration regulations and centuries of racist economic policies, patients of color are more likely to be under- or uninsured, and in general, have lower incomes. Patients of color are also more likely to experience difficulties accessing transportation, or taking paid time off work to access appointments. The latter is particularly important for individuals with monkeypox, which requires prolonged isolation, and whose painful lesions can inhibit the ability to work.
We need explicitly anti-racist policies to repair these harms. Medicare for All would eliminate financial barriers to health care, and in doing so, help address the racial inequities highlighted by the monkeypox pandemic.
Medicare for All would establish a “single-payer” system, in which all U.S. residents would receive health insurance. All U.S. residents would have access to medications, doctor appointments and hospitalizations with low or no copayments. Undocumented individuals could be covered under the current House bill, as to be determined by the U.S. Secretary of Health and Human Services.
Studies show that Medicare for All would have saved 340,000 lives so far during the COVID pandemic, primarily by eliminating financial barriers to care, while saving billions of dollars annually. It’s a rare “free lunch” in economic policy, because savings under a single-payer system far outstrip the costs of expanding coverage. The U.S. spends nearly a third of all health care dollars on administration, approximately $800 billion annually, primarily coming in the form of private health insurance company overhead and profits. Medicare’s fee-for-service plan, in contrast, has 2.4 percent overhead.
Medicare for All could address racial disparities in monkeypox access by making all services free of charge, disproportionately benefiting racial and ethnic minorities. Most Americans would see their incomes rise, not only because premiums and copayments would fall to near zero, but because for the majority of Americans with employer-sponsored insurance, the potential salary that is currently tied up in insurance subsidies would be freed up.
When diseases like monkeypox disproportionately affect communities of color, the financial impact on hospital systems is not equal, reproducing structural racism. In general, hospitals primarily serving patients of color earn fewer profits, since these patients are disproportionately uninsured or covered by public insurance, which reimburses less than private insurance. This codifies a perverse financial system in which white lives are more valued than the lives of people of color.
Over the past few decades, this has also led to an arms race among health care systems, which invest in lucrative projects to attract privately insured (disproportionately white) patients, driving up the cost of care for all in the process. Meanwhile, clinics that serve people of color remain underfunded.
It doesn’t have to be this way. Medicare for All would establish a financing system called “global budgeting” that could allocate resources based on need, similar to how we currently finance fire departments. It’s a common-sense approach that aligns dollars with need. Safety net and rural hospitals, which are currently closing at record rates, would see boosts in revenue, and unnecessary or wasteful spending would be curtailed. This would be a boon for clinics which focus on lower reimbursing areas, like primary care, mental health, and yes, infectious diseases.
The early days of the monkeypox pandemic have been plagued by supply chain and logistical challenges. Vaccines remain scarce and maldistributed. Contact tracing and testing have been challenging. Medicare for All wouldn’t, in and of itself, fix all of these problems, but it would enable a national electronic medical record, mitigating logistical hurdles that result from our byzantine, multi-payer health system.
For example, in 2020, Taiwan’s lauded initial response to COVID would not have been possible without its single-payer system and national health insurance database, which streamlined contact tracing and communication.
There will be more pandemics after monkeypox and COVID-19. Narrow, disease-specific measures, such as those passed in 2020 making COVID hospitalizations free, expire with time, serving only as Band-Aids. Other incremental reforms are politically attractive, but mathematically infeasible, as they do not come with the administrative savings of a single-payer system.
There is a saying in medicine that the United States does not have a “health care system,” we have a “sick care” system. Among wealthy nations, the U.S. stands out for its uniquely reactive, profit-driven system which is disinterested in prevention. The monkeypox pandemic makes this all the more clear, and also sheds a light on structural racism in our health care system. By advocating for Medicare for All, we can build a better system, fundamentally reoriented to justice and public health, one that prioritizes people over profits and takes a necessary step toward confronting racial inequities in our society.
Delivering the final maiden speech of the Forty-Seventh Parliament, former Accenture managing director and Kevin Rudd economic adviser Dr Andrew Charlton said the government must support the uptake of new technologies to create a new generation of Australian prosperity. He compared the opportunity for creating prosperity “by managing the transition to the digital economy” to…
For the past several months, the Federal Reserve has used a traditional toolkit to attempt to rein in the high inflation that was unleashed by the pandemic and worsened by Russia’s attack on Ukraine.
This traditional model for responding to inflation, hewed to by economists for decades, posits that inflation is triggered by excess demand, and that the way to rein in demand (and thus to put the brakes on inflation) is to raise the cost of borrowing. Hence the rush upward in the interest rate set by the Federal Reserve, and, by extension, the increased cost of borrowing for companies looking to finance new investments and for consumers looking to get mortgages from banks. In the summer of 2021, for a buyer with good credit, a 30-year mortgage could be approved at a 2.75 percent interest rate. Last week, those mortgages headed north of 6 percent. For a family with, say, a $400,000 mortgage, that’s a difference of roughly $14,000 per year. Not surprisingly, millions of people are deferring home purchases. Between the moment when mortgage rates hit their lows last summer and now, the demand for mortgages has declined by nearly a third.
The idea is pretty straightforward: If it costs more — perhaps a lot more — to borrow, people will defer purchases. Fewer new cars, fewer house purchases and fewer big-spending items put on credit cards lead to companies needing fewer employees, which in turn recalibrates the labor market away from worker-power, making it harder for employees, in a soft labor market, to bargain up their wages. That particular circle will, the idea goes, rapidly put the squeeze on inflation.
The theory, which is epitomized by an economic graph known as the Phillips Curve, says that a little bit of short-term consumer pain, and a willingness to tolerate higher levels of unemployment for a few months or even a couple years, ought to do the trick in putting the inflation genie back in its bottle. Proponents of this model argue that workers’ short-term pain is more than compensated for by the longer-term gains that come with stable prices.
Yet, a strange thing is happening in this current bout with inflation, as many progressive economists, such as Joseph Stieglitz and Dean Baker, had predicted would be the case. As interest rates soar, housing demand is, indeed, easing back, as the model would predict. But the broader labor market remains tight — in part because so many Americans dropped out of the job market during the pandemic, either out of fear of exposure, because they couldn’t find child care, or in many instances, because they ended up suffering debilitating effects from long COVID. And, despite momentary optimism that inflation was peaking in June and July, the recently released numbers for August, which sent the stock market into a swoon last week, suggest that a higher-than-wanted level of inflation (the Federal Reserve aims for inflation in the 2 percent range) is firmly entrenched at the moment.
Similarly bad inflation numbers are also being posted by other major industrial democracies: The inflation rate in the U.K. is slightly higher than in the U.S., and some models predict it could hit as much as 18 percent by year’s end, although these worst-case scenarios are likely to have been muted somewhat by Prime Minister Liz Truss’s recent announcement that the government would cap energy prices. In the EU, the inflation rate is above 9 percent. In Canada, it is just under 8 percent. In Australia, inflation is hovering at around 6 percent. And even in Japan, which has extraordinarily low levels of inflation due in part to decades of stagnant growth, and in part to the government subsidizing a wide range of consumer products, all the inflation indicators have gone up in recent months, though price increases still remain far less of a problem there than in most other wealthy nations.
This stubborn persistence of inflation globally oughtn’t to be surprising: the traditional model assumes inflation is triggered by excess demand, and thus can be curbed by reining in demand. But the last couple years of supply chain disruptions have shown that when an unpredicted but catastrophic “black swan event” such as a pandemic holds the world in its grip, prices around the world get driven up by a cascading series of glitches that make it harder both to produce goods and then to ship the finished product to stores and to consumers.
Why, for example, are consumers paying so much more for cars? Not because there’s suddenly been a spike in the number of drivers on the road, but because at every level of the supply chain — from rubber and steel to semiconductors — there are shortages or delivery bottlenecks. In the globalized economy, a consumer in an import-heavy economy such as the U.S. is particularly vulnerable to, say, price spikes caused by supply shortages triggered by COVID lockdowns half a world away in China.
Given this, raising interest rates ad nauseam is an extraordinarily clumsy way to deal with the problem. Sure, eventually demand will be curbed so much by the unaffordability of borrowing money that it will tamp down inflation. But before it does that, it’s likely to cause a huge amount of pain. And that hurt won’t be evenly distributed.
Since the labor market remains tight, those higher up the economic ladder, those with more marketable skills and higher education qualifications, are more frequently able to largely neutralize the loss of purchasing power that comes with inflation through successfully negotiating for wage increases, for starting bonuses, and for other compensation.
As a result, the inflation spiral will most heavily impact poorer residents, who have less money saved; have less power to negotiate wage increases; and have poorer credit to begin with, meaning that they will pay disproportionately more when they seek to borrow during a moment of rising interest rates.
Meanwhile, low-income residents face particularly dire circumstances in poorer countries, mainly in the global South, whose governments lack the clout to intervene in the energy and food markets to try to lower costs or to cushion the blow on poorer people through implementing price subsidies for food and energy. In much of the world, inflation, triggered by the twinned dislocations of pandemic and of war, is soaring beyond anything experienced in the first world. Argentina’s inflation is roughly 80 percent, Lebanon’s 116 percent, Sri Lanka’s increased from 5.7 percent a year ago to over 60 percent today, and so on.
Last week, the head of the United Nations World Food Programme warned that up to 345 million people worldwide— or roughly 50 times the number known to have died from COVID so far —could face starvation as food prices soar and as shortages increase. This represents a doubling in global food insecurity since early 2020. Already, roughly 50 million people are facing acute malnutrition. With the recent catastrophic flooding in Pakistan, and the displacement of tens of millions from their homes, that number will surely increase over the coming months. The war in Ukraine, with the resulting disruptions to global markets in grain, wheat, soy and other staples has, the UN estimates, pushed 70 million people closer to starvation.
The UN’s stark warning ought to have generated headlines around the world; instead, it simply became a side story.
But, even while economics writers around the world fixate on spiraling inflation in economic powerhouses such as the U.S., the U.K. and the EU bloc, while ignoring even worse inflation — and the damage it causes — in poor countries, there are underlying similarities. To be poor anywhere on Earth is to bear a disproportionate brunt of the impact of failing, one-size-fits-all policies. To be poor is to bear the brunt of inflation spirals; but to be poor is also to bear the brunt of shock-and-awe policy responses designed to wrestle inflation back under control.
There are, however, alternatives ideas on the table for tackling inflation in a fairer way. Last week, the Center for American Progress released a report detailing how the supply chain could be strengthened so as to reduce disruptions and thus rein in prices. The authors called for ramping up COVID vaccine distribution; expanding the child care system so that parents could return to work; increasing immigration levels in countries such as the U.S. to fill jobs left empty by the contracting workforce; going after price-gouging trusts; and ramping up investments in renewable energy so as to wean the economy from fossil fuels and from the profiteering companies who have made such fortunes during the price-increase months since Russia attacked Ukraine in February.
The authors concluded that the Fed’s approach, looking to gently tamp down demand without sinking the economy into a deep recession, was unlikely to work to knock excess inflation out of the economy. They warned that if the Fed keeps raising interest rates, eventually the landing could be extremely hard and painful — in other words, this strategy risks crashing both the housing and the job markets, which would hurt poor Americans the most. Better, they argued, to craft an economic policy that “addresses the supply issues brought into high relief during this recovery.”
Because of the Fed’s outsized influence on global economic policy, the rest of the world is likely to follow where the U.S. goes on interest rates. Raising interest rates moderately may make sense as one tool among many to tackle this rather unique inflationary moment, but raising them immoderately — and excluding more unorthodox supply side anti-inflation interventions — risks doing long-term damage to those at the bottom of the economy. Doing so poses an acute threat to the poor both within the U.S. and in less affluent countries overseas, which could end up plagued by persistently high inflation, rising unemployment and ever-greater difficulties accessing loans for businesses and for house purchases. That’s the sort of lose-lose proposition that could create cascading problems for decades to come.
(@theAliceRoberts) 
Photo: Jess Hurd Photography 
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