Thursday, August 27, 2015

Rhode Island: Slavery's "Deep North"

Once upon a time in a parallel universe, I was trying to enlighten my History 101students about the economy of the American colonies in the 18th century. As an illustration, I mentioned the "Triangular Trade," in which ships loaded with rum sailed from the ports of lower New England to West Africa, where they exchanged their cargo for newly captured slaves, whom they then transported to the sugar plantations of the Caribbean. This leg of the journey was the horrendous "Middle Passage," on which countless thousands were brutalized in chains, contracted various infectious diseases, and were thrown overboard as "shark bait." Those who survived this atrocity were callously auctioned to sugar planters in "payment" for boatloads of the sweet stuff, which they carried back to their ports of origin in lower New England. The sugar was gobbled up by distillers  who combined it with maple syrup to make more rum for eventual transport to West Africa--thus completing the "Triangle."

The obscene profits from this business transaction enriched thousands of ship owners, distillers, brokers, and bankers for whom it became the basis of family fortunes for many of New England's most illustrious dynasties. Conspicuous among these were the Brown family of Providence, Rhode Island whose ill-gotten gains eventually served as a generous endowment for the founding of Brown University, which grew into one of the illustrious pillars of today's Ivy League. Ironically enough, one of my students turned out to be the girl friend of a young man who was then enrolled at Brown. I don't recall whether he was shocked or indignant when she conveyed him the news, but he clearly did not have the slightest inkling of the connection. He asked his friend to find out my sources, and added my somewhat sarcastic observation that Brown probably did not include this historical tidbit in its recruitment or orientation materials.

I forgot about the incident until I was reminded by an article in the August 23rd New York TIMES headed "Rhode Island Church Taking Unusual Step To Illuminate its Slavery Role." According to Katherine Q. Seelye, "one of the darkest chapters in Rhode Island history involved the  state's preeminence in the slave trade, beginning in the 1700s. More than half of the slaving voyages
from the United States left from ports in Providence, Newport, and Bristol--so many, and so contrary to the popular image of slavery as primarily a scourge of the South, that Rhode Island has been called "the Deep North." That history, however, she continued, will soon become common knowledge in the Episcopal diocese here, which "was steeped in the trans-Atlantic slave trade," when it "establishes a museum dedicated to telling the story, the first in the country to do so."       

Many of those involved in the Triangular Trade were Episcopalians; the church supported slavery and continued to profit by it, even after the trade was outlawed and slavery had been banned in the state. Among the most prominent Episcopalian slaveholders, as Seelye points out, were Thomas Jefferson and George Washington. Over the past decade, the Episcopal Church of the United States has formally acknowledged and apologized for its involvement, and several of its dioceses have begun re-examining their culpability and holding services of repentance, while starting programs of truth and reconciliation.

Under the leadership of Bishop W. Nicholas Knisely, the Rhode Island diocese has established a museum focused on the Trans-Atlantic slave trade and slavery and the North's complicity, as part of a new center for reconciliation and healing. The Bishop says that he "wants to tell the story of how the Episcopal Church and religious voices participated in supporting the institution of slavery and how they worked to abolish it.  It's a mixed bag." While some museums and historic sites touch on slavery in the North, none are devoted to the region's deep involvement, according to James DeWolf Perry VI, a direct descendant of what was probably the most prolific slave trading family in the entire country, and author of Interpreting Slavery at Museums and Historic Sites. He is aiding in the planning of the museum and reconciliation center, which are still in the organizing and fund-raising phases. The institutions are to be housed at the 200-year-old stone Cathedral of St. John, which is the seat of the Episcopal Diocese of Rhode Island. The majestic, but deteriorating, cathedral was closed in 2012, due to declining membership.
                   
"We are trying to move in concert with what's happening around the country," said the Rev. David Ames, who is helping to establish the center. "Events like those in Charleston have really focused us on the dire need to improve race relations in this country." Diocesan officials are engaging in conversations with African-American church leaders, universities, and other organizations to sponsor speakers and programs that delve into racial issues, and have scheduled more forums for the fall throughout the state where slave traders once worshipped. The region's economy was inseparable from the slave trade in the late 17th and 18th centuries. The earliest settlers to New England bartered Native Americans they had captured for slaves brought from Africa. Merchants and suppliers who grew wealthy from the slave trade founded and endowed several Ivy League colleges, including Brown. Northern textile mills hummed with Southern cotton picked by slaves.  The first slave ship is believed to have arrived in New England as early as 1638---the first one arrived in Jamestown Virginia less than two decades before. An historic marker will be placed later to mark the spot where  the first ship would have docked. The ceremony held on August 23rd was part of a larger project commemorating the two million slaves who died and the 10 million who survived the Middle Passage, only to spend the rest of their lives horrible captivity.

Thanks to Rhode Island's financiers, seafaring workforce, and officials "who turned a blind eye to the colony's antislavery laws," the colony played a major role in the trade. Many slaving ships were built in Boston, and were supplied, manned, and launched from Rhode Island ports. Between 1725 and 1807 (when Congress officially ended the importation of slaves), more than one thousand slaving voyages---about 58 percent of the total from the American colonies--left from Providence, Newport, and Bristol. Those vessels brought more than 100,000 Africans to the Americas as part of the Triangular Trade. Many of them ended up in the North, where they populated numerous households. According to an investigation by Brown University, which began to explore its own deep ties to slavery in 2003, about ten percent of the colony's people were enslaved.

According to Bishop Knisely, whose own research has revealed "shameful episodes in church history." Many New Englanders switched to the Episcopal Church because Quakers and Baptists in Newport gradually turned to anti-slavery; they were welcomed and their slave holding was not challenged. "We sounded an uncertain trumpet," the bishop confessed, and "were happy to receive their financial support. We allowed ourselves to be convinced by the prejudice of the time and didn't speak out." In establishing the museum and reconciliation center, the church is collaborating with the Brown Center for the Study of Slavery and Justice and several descendants of the Bristol-based  DeWolf family, which alone imported more than 12,000 Africans. The profits of James DeWolf--speaker of the Rhode Island House , U.S. Senator, banker, merchant, privateer, and owner of numerous rum distilleries--made him the second richest man in the U.S. at the time of his death in 1837. One of his descendants, James DeWolf, became the first bishop of the Cathedral of St. John and presiding bishop of the Episcopal Church of the United States. Katrina Browne, a seventh-generation descendant of the family's first slave trader, organized a journey for ten family members to trace their legacy from Bristol through the slave forts in Ghana and old family sugar plantations in Cuba. In 2008, she produced a documentary from the trip called "Traces of the Trade." Along with Perry--a distant cousin--she founded the Tracing Center on Histories and Legacies of Slavery, "dedicated to educating the public about the complicity of the entire nation in slavery and the slave trade.

"The experience of seeing black audiences respond to a white family acknowledging these things ---that's a powerful starting point" Perry insists. "I want my family to remember our family history, both good and bad. I think this is how we need to approach our shared history as a nation."


      

Wednesday, July 8, 2015

Why Did the Confederate States Secede?

Why did the eleven states that comprised the Confederacy secede from the Union? Why did Delaware, Maryland, Kentucky. and Missouri--slave states all--not join them? Why did several of its counties secede from Virginia to form West Virginia? How much opposition to secession emerged in the eleven CSA states?

On the surface these can be dismissed as purely "academic" questions, of importance only to Civil War historians, but they actually speak to the core meaning of our people and our nation. They continually explode into public consciousness during such traumatic events as the picture of racist mass murderer  Dylan Storm Roof with the Confederate flag draped across his lap, and the acrimonious debate over removal of the "Stars and Bars" from the South Carolina statehouse  grounds. The issue even roiled the House of Representatives for three days, from July 8 to10, when Democrats proposed amendments to a spending bill blocking the Confederate flag from display in national cemeteries and banning flag images from gift shops and concession stands operated by the National Park Service. The amendments initially passed without debate or a roll call vote, but several Republican Congressmen persuaded Speaker Boehner to allow the introduction of a measure to undo them. The resulting acrimonious debate put the Republicans under the spotlight on a racially-charged issue, at the very time when the party was struggling to attract minority voters. North Carolina Representative G.K. Butterfield, chairman of the Congressional Black Caucus, countered by asking if Republicans "don't understand that the Confederate flag is an insult to 40 million African-Americans and many other fair-minded Americans?" After several other Democrats contributed to the fray, Boehner recognized that he did not have the votes--either for the Republican measure, or to pass the spending bill without the original Democratic amendment. He then called for a "working group" to review all Confederate symbols at the Capitol, including flags  statues, and paintings. Beyond irony, he proclaimed that "it's time for some adults in Congress to actually sit down and have a conversation about how to address the issue."

There are essentially four major categories of evidence that slavery and race were the most important causes of secession:
1. The chronology of secession
2. The debates and votes in the individual state legislatures or ad hoc conventions
3. The Ordinances of Secession of individual states
4. The constitution of the Confederate States of America
5. The "Cornerstone Speech" of Alexander Stephens

1. The seven Deep South states (South Carolina, Mississippi, Florida, Alabama, Georgia, Louisiana, and Texas), whose economies were entirely dependent upon slave labor, seceded in January and February, 1861, even before Lincoln's March 4 inauguration. The other four (Virginia, Arkansas, Tennessee, and North Carolina) did not secede until April and May, after Lincoln had made clear his intention to keep the Union intact, by military means if necessary, and after the firing on Fort Sumter in the harbor of Charleston, South Carolina. Virginia and Tennessee even required referendum votes before acting. The other four slave-holding states (Delaware, Maryland, Kentucky, and Missouri), who had considerably fewer slaves, debated and delayed until Lincoln occupied their capitals with federal troops.

2. The divisions within the seceding state legislatures generally saw most of the dissenting votes coming from the upcountry, where subsistence white farmers owned few or no slaves. They were considered "poor white trash" by the planter class, and were primarily concerned with maintaining their own illusion of "white supremacy." Most were unsure if secession and the eventual abolition of slavery would help or hurt their already tenuous positions. The most extreme case was in Virginia, where the 50 western counties were so opposed to secession that they "seceded" from the state, eventually forming West Virginia, with its new capital at Wheeling. They were admitted to the Union as a free state in 1863, just in time for Lincoln's reelection. The affirmative votes were overwhelmingly cast by the representatives of the coastal "Black Belt," where blacks frequently outnumbered whites.

According to distinguished historian Eric Foner, the situation was complicated, even in "Deep South" states. Votes in their legislatures or conventions "showed considerable division on secession."  Each were rent by three factions: "those for immediate secession, those who sought delay until the policy of the new administration toward the slave states became clear, and those who believed they could bargain with the new administration." Even though Lincoln proposed a constitutional amendment guaranteeing slavery where it legally existed, and pledged to hold only federal property that was in the possession of the Union as of March 4, 1861, those in favor of immediate secession eventually prevailed. The vote in the Georgia legislature was 208 to 89, that in the Tennessee convention 104,471 to 47,183, and that in the Virginia referendum 132,201 to 37,451.

3. The Mississippi Ordinance of Secession, for example, proclaims that "our position is thoroughly identified with the institution of slavery--the greatest material interest in the world. Its labor supplies the product which constitutes by far the largest and most important portions of the commerce of the earth. These products are peculiar to the climate verging on the tropical regions, and by the imperious laws of nature, none but the black race can bear exposure to the tropical sun. These products have become necessities of the world, and a blow at slavery is a blow at commerce and civilization,--There was no choice left us but submission to the mandates of abolition or a dissolution of the Union, whose principles have been subverted to work out our ruin." In its declaration, Texas insists that it is "maintaining and protecting the institution known as negro slavery--the servitude of the African to the white race within her limits--a relation that had existed from the first settlement of her wilderness by the white race, and which her people intended should exist in all future time. Her institutions and geographical position established the strongest ties between her and the other slave-holding states of the confederacy." South Carolina attributed its decision to secede to "increasing hostility on the part of the non-slaveholding states to the institution of slavery." Georgia argued that " the North demanded the application of the principle of prohibition of slavery to all of the territory acquired from Mexico and all other parts of the public domain then and in all future times....The South with great unanimity declared her purpose to resist the principle of prohibition to the last extremity." Florida proclaimed that election of "an obscure and illiterate man without experience in public affairs or any general reputation mainly if not exclusively on account of a settled and often proclaimed hostility to our institutions and a fixed purpose to abolish them....Can anything be more impudently false than the pretense that this state of things is to be brought about from considerations of humanity to the slaves?" Alabama averred that "it is the desire and purpose of the people of Alabama to meet the slaveholding states of the South, who may approve such purpose , in order to frame a provisional as well as permanent Government upon the principles of the constitution of the United States."

4. The Constitution of the CSA largely follows the US Constitution except that it dealt with slavery directly, not obliquely or by implication. It  boldly established the CSA as a slaveholders' republic and felt no need to obfuscate that reality. Article 1, Section 2, Clause 3 says that "representatives and direct taxes shall be apportioned among the several States, which may be included in this Confederacy, according to their respective numbers, which shall be determined by adding the whole number of free persons, including those bound for service for a term of years, and excluding  Indians not taxed, three-fifths of all slavesArticle 1,Section 9, Clause 4 made slaves a sacrosanct type of property, with special protection under the law: No bill of attainder, ex post facto law, or law denying or impairing the right of property in negro slaves shall be passed. Article 2, section 2, Clause 3 proclaims a ban on the importation of slaves except from the United States. Article 2, Section 2, Clause 1 states that "the citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States; and shall have the right of transit or sojourn in any state of this Confederacy, with their slaves and other property; and the right of property in said slaves shall not be thereby impaired." Article 1, Section 3, Clause 3 stipulates that "the Confederate States may acquire new territory; and Congress shall have power to legislate and provide governments for the inhabitants of all territory belonging to the Confederate States, lying without the limits of the several States, and may permit them, at such times and in such manner by law provide, to form
States to be admitted to the Confederacy in all such territory the institution of negro slavery, as it now exists in the Confederate States, shall be recognized and protected by Congress and by the Territorial government; and the inhabitants of the several Confederate States shall have the right to take such Territory any slaves lawfully held by them in any of the States or Territories of the Confederate States. 

Equally explicit is the "Cornerstone Speech" given by Confederate Vice-President Alexander Stephens at  the Athenaeum in Savannah, Georgia on March 12, 1861, after the secession of the seven Deep South states, and just weeks before the firing on Fort Sumter. In it, he dismisses the ideas of the U.S. Constitution as "fundamentally wrong" because they "rested on the assumption of the equality of races.This was an error. It was a sandy foundation, and the government built upon it fell 'when the storm came and the wind blew.' " He proudly proclaimed that "our new government is founded upon exactly the opposite idea; its foundations are laid, its corner-stone rests, upon the great truth that the negro is not equal to the white man; that slavery, subordination to the superior race, is his natural and normal condition." This new Constitution has put at rest forever all the agitating questions relating to our peculiar institution --African slavery as it exists among us--the proper status of the negro is our form of civilization.     

 In his detailed analysis of current U.S. history texts, historian James Loewen has concluded that "the reason so many people believe false things about the Civil War and the Confederacy is because many of our textbooks teach those wrong things even today." He insists that many Confederate memorials "date conspicuously from the days of George Wallace, rather than Jefferson Davis." Text book publishers are concerned with selling books in all fifty states, so the gap between their content and serious scholarly work in monographs and historical journals is often cavernous. No amount of cleverly contrived obfuscation, nor willful ignorance, however, can hide the shocking reality that the Civil War and its aftermath were fundamentally about slavery and race. Our national amnesia about our own history--our stubborn refusal to accept the logical and historical implications of "all men are created equal and endowed by their creator with certain unalienable rights"--continues to plague us in a million disastrous ways, and could very well lead to our disintegration.                     

Friday, June 19, 2015

Rent-Seeking Predators


What should we call the heartless, greedy, amoral cretins who are responsible for destroying our nation's economy, and for ruining the lives of countless million Americans?  Lets cut right to the heart of the matter and call them Rent-Seeking Predators! 

According to Wikipedia, "predation is "a biological interaction when a predator (an organism that is hunting) feeds on its prey." If you watch NatGeoWild, you know all too graphically what that means in the natural world. Predation in human society, of course, is an analogy. It does not involve actual ingestion of one person by another, but the practical effects on the well-being of "the prey" are every bit as gruesome and catastrophic. In our unnatural and hypercompetitive world, depriving someone of the opportunity to earn a decent livelihood and to realize their full potential is tantamount to devouring their life-chances, and--all too often--cutting short their lives. Many who would not think of committing such inhuman atrocities as individuals often do so--blissfully unaware--as members of predatory organizations and institutions. 

But why call these particular predators "rent-seeking"? Probably the most instructive way to understand what such liberal economists as Joseph Siglitz, James K. Galbraith, and Paul Krugman,    mean by "rent" is  the polar opposite of "profit." Ideally, they consider profit to be the legitimate product of invested capital, ideas, and labor--an award for risk-taking and the most productive utilization of resources. Rent, on the other hand, is the illegitimate "payment made (including imputed value) by non-produced inputs such as location (land) and for assets fortified by creating official privilege over natural opportunities (e.g. patents)." They are income reaped from other people's investment, ingenuity and work, as well as from conditions created by society and government. In simple terms, economic rent is "an excess where there is no enterprise or costs of production." It is "unearned and passive income," and "has important implications for public revenue and tax policy. One of the nastiest words in the economists' lexicon is rentier.

"As long as there is sufficient accounting profit, governments can collect a portion of economic rent for the purpose of public finance." In other words, modern. democratic  governments can tax as much of economic rent as they decide, under constitutional due process, because it is the common property of all its citizens, i.e. "unearned" by any additional effort made by "rentiers." Economic rents are "excess returns," above the "normal levels that are generated in competitive markets--a return" in excess of the resource owner's opportunity costs." They are "extra returns that firms or individuals obtain due to their positional advantages."

The rentier mindset was succinctly captured by Adam Smith in The Wealth of Nations  "As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sown , and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was held in common, cost the laborer only the trouble of gathering them." Once the land is privatized, "he must give up to the landlord a portion of what his labour either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of the land."

Rent-seeking, according to Wikipedia, is "an attempt to gain economic rent (i.e. the portion of income paid to a factor of production in excess of that which is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than creating new wealth. Rent-seeking implies the extraction of uncompensated value from others, without making any contribution to productivity. Rent-seeking is distinguished from profit-seeking, in which entities seek to extract value by engaging in mutually beneficial transactions. Profit-seeking is the creation of wealth, while rent-seeking is the use of social institutions, such as the power of government, to redistribute wealth among different groups without creating new wealth. In a practical context, income obtained through rent-seeking may contribute to profits in the standard, accounting sense of the word. An example is spending money on political lobbying for government benefits or subsidies, in order to be given a share of wealth that has already been created, or to impose regulations on competitors, to increase market share....The concept of rent-seeking would also apply to corruption of bureaucrats who solicit and extract bribes for applying their legal, but discretionary, authority for awarding benefits to clients. Tax officials, for example, may take bribes for lessening the burden of tax payers.            

A closely related concept is regulatory capture, which refers to collusion between firms and the government agencies assigned to regulate them, an extensive rent-seeking behavior, especially when the government agency must rely on the same firms for knowledge about the market. The chair of the British Financial Services Authority, Lord Adair Turner, has argued that innovation in the finance industry is often a form of rent-seeking. The high proceeds of drug trafficking are generally regarded as rents, because they are neither legal profits nor the proceeds of common-law crimes. Rent-seeking also involves a  major moral hazard, because the proceeds are entirely unrelated to any contribution to total wealth or well-being, and because it results in a sub-optimal use of resources--money spent on lobbying rather than on research and development, improved business practices, employee training, or additional capital goods--seriously retarding real economic growth, which depends on actual, rather than ersatz, innovation. In The Rise and Decline of Nations, Mancour Olson argues that, as countries become dominated by organized interest groups, they lose economic vitality and fall into decline. Some critics have argued that rent-seeking has decreased total income in the USA by 45 percent, while many agree that total rent-seeking costs "equal the sum of aggregate current income plus the net deficit of the public sector." Joseph Stiglitz has argued that rent-seeking contributes significantly to income inequality through lobbying for government policies that permit the wealthy and powerful to acquire income, "not as a reward for creating wealth, but by grabbing a larger share that would otherwise have been produced without their effort." Such students of international economics as Thomas Piketty and Emmanuel Saez have concluded that "much of  income inequality is a result of rent-seeking among wealthy tax payers."              

In The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too, University of Texas economics professor James K. Galbraith bluntly defines our "rent-seeking predator state" as "a coalition of relentless opponents of the regulatory framework on which public purpose depends, with enterprises whose major lines of business compete with or encroach on the principal public functions of the enduring New Deal." They" seek to control the state partly in order to prevent the assertion of public purpose and partly to poach on the lines of activities that past public purpose has established" They "have no intrinsic loyalty to any country," and "operate as a rule  on a transnational basis, and naturally come to view the goals and objectives of each society in which they work as just another set business conditions, more or less inimical to the free pursuit of profit." They "assuredly do not adopt any of society's goals as their own, and that includes goals that might be decided upon, from time to time, by their country of origin, the United States. As an ideological matter, it is fair to say that the very concept of public purpose is alien to, and denied by, the leaders and operatives of this coalition."

None of these enterprises has an interest in diminishing the size of the state, (in fact, they want ever bigger government)  and that is "what separates them from the principled conservatives" Their raison d'etre "is to make money off the state--so long as they control it. And this requires the marriage of the economic and the political, which is what, in every single case, we actually observe...The major battlegrounds of American domestic politics emerge clearly once there is an understanding of the Predator State." The real political conflict is not "government versus the state." It is a continuing battle over "who gets cut in on the deal--and a corresponding argument over who gets cut out, and how, for there is profit in both cutting in and cutting out." We actually live in "a corporate republic, where the methods, norms, culture, and corruption of government have become those of the corporation."  A narrow coalition of the high plutocracy actually rules, "mainly from the resource industries (oil, mining, and agribusiness) and the surviving old-line industrial firms (notably automobiles, steel, and defense), combined with big media, insurance, and pharmaceuticals. Ironically, Galbraith insists that this alliance found itself "entirely dependent on noneconomic issues directed at low-income working Americans through the one social institution that effectively reached most of them: their churches." Well, beer commercials help a lot.

But, he cautions, this does not constitute class war, because "not everyone who is successful under capitalism is a fan of the Predator State." It is a "the enemy of honest and independent and especially of sustainable business, of business that simply want to sell to the public and make a decent living over the long run." Predatory regimes, are "more or less exactly, like protection rackets." They are feared, but neither loved or respected. Its demise, he proclaims, will come "only when the more reasonable, more progressive part of the business community insists on it and is willing to make common cause with unions, consumers, environmentalists, and other mobilized social groups to bring the predators to heel." It is, he intones, "a race against time."      

Monday, May 4, 2015

The Scientific Consensus on Guns

An article with that title recently appeared in the Los Angeles Times, written by David Hemenway, who is a professor at the Harvard School of Public Health and director of the Harvard Injury Control Research Center. He was motivated by a conversation with a journalist who told him that the media only abandoned their balanced coverage of a controversial scientific issue--like global warming--"when objective findings indicated that the overwhelming majority of scientists thought climate change was indeed happening, and that it was caused by humans." So Hemenway decided to "determine objectively, through polling, whether there was a scientific consensus on firearms." The results, he found, "won't please the National Rifle Association."

Accordingly, his first step was to compile "a list of relevant scientists," who had published articles on firearms in a peer-reviewed scientific journal within the past four years. Most of the qualifying scholars came from the disciplines of political science, criminology, economics, public policy, or public health. His graduate assistants eventually identified 300 such people and found more than 280 email addresses. Beginning last May, they began sending them short, monthly surveys composed of three basic questions. The first asked how much the respondent concurred with a specific claim related to firearms, while the other two asked them to rate the quality of the scientific research and to state their level of familiarity with the scientific literature on that particular topic.   

One question asked whether having a gun in the home increased the rate of suicide--84 percent of 150 respondents answered YES. This result squares with the findings of numerous area-wide studies that "the differences in rates of suicide across the country are less explained by differences in mental health, suicide ideation or even suicide attempts than they are by differences in levels of household gun ownership." It also agreed with a 2014 meta-analysis conducted by researchers at the University of California at San Francisco, and with a 2012 study by the National Strategy for Suicide Prevention from the National Action Alliance for Suicide Prevention. Ditto a report by the Surgeon General which concluded "firearm access is a risk factor for suicide in the United States."

Responses to other Hemenway questions: 72 percent agreed that a gun in the home increases the risk that a woman residing there will be the victim of a homicide; 64 percent concurred that a gun in the home makes it a more dangerous place to be (only 5 percent said that it made the home safer); 73 percent agreed that guns are used more frequently in the commission of a crime than in self-defense; 62 percent conclude that more permissive gun carrying laws have not reduced crime rates; 71 percent, on to the contrary, agree that stronger gun laws reduce homicide. 

While acknowledging that scientific consensus on any topic is not necessarily always right, he concludes that they are" our best guide to understanding the world." Hemenway concludes with a reasonable request: "Can reporters please stop pretending that scientists, like politicians, are evenly divided on guns. We're not.         

For a closely related Op-Ed Piece, see Robert J. Spitzer, "Stand Your Ground Makes No  Sense," in the May 4 edition of the New York Times.

JDB                     

Saturday, March 7, 2015

Get your billions back, America!!

If you watch TV at all, you have undoubtedly been assaulted by the ad in which an irritating little man in the GREEN (How subtle can you get?) bow tie screaming that mantra. It is a great idea, only it is directed at the wrong target. To hit the right target, read LEGALIZED TAX FRAUD: HOW TOP US CORPORATIONS CONTINUE TO PROFIT THROUGH OPFFSHORE TAX HAVENS, a report from Senator Bernie Sanders, ranking minority member of the Senate Budget Committee. If it doesn't galvanize you to demand real corporate tax reform, check your pulse to make sure that you are still alive. 

The data in the report is based on a study of the Business Roundtable (BRT), a coalition of the CEOs from 201 of the nation's wealthiest corporations, who are, among other atrocities, on record for raising the eligible age for Social Security and Medicare to 70, cutting The benefits of both programs, lowering the corporate tax rate (its true that the US rate is one of the highest in the world, except that almost nobody even comes close to paying at that level. In fact, as this study blatantly documents, some corporations don't pay any income taxes at all!!), and adopting a "territorial" tax system that exempts their offshore profits entirely.

At least 111 0f the 201 use offshore tax havens to avoid paying some $280 billion in taxes on assets of $1,000,000,000.

Twenty-one of these corporations have disclosed that if they brought their collective $235 billion in offshore profits to the US, they would owe taxes of $65 billion--28 % of the total. THE REST OF THEM DO NOT DISCLOSE THIS INFORMATION.

Since they are allowed to deduct whatever income taxes they have paid to foreign governments, they are paying these tax haven levies at a rate of about SEVEN PERCENT.

At least 81 of these BRT corporations who are supposed to pay US federal corporation income taxes have been profitable for five years and yet almost none are paying anywhere near the official rate of 35%. From 2008 through 2011, these 81 companies have received a total of $188 billion in tax breaks--the difference between the 35% that they should have paid and what they actually paid. They have actually paid US corporate income tax at an average rate of 18.1 percent--slightly more than one-half of what they should have paid.

Several of these "fortunate" 81 BRT corporations--American Electric Power, Boeing, Corning, Duke Energy, General Electric, the Interpublic Group. NextEra Energy, PG&E Corporation, Tenet Healthcare, and Verizon--HAVE ACTUALLY RECEIVED REFUNDS!!

111 of these BRT corporations have disclosed ownership of subsidiaries in countries designated by the Government Accountability Office as "offshore tax havens."  Most are banks, technology, and pharmaceutical companies, but the list also includes Catepillar and other manufacturers.

Many of the rest are highly profitable "C companies," which are required to pay US corporate income taxes, but which actually manage to avoid paying most of the statutory 35 percent. That list includes manufacturers, energy companies. utilities, and FedEx.

The report describe the profits earned by many BRT corporations as "officially" held overseas "because much or most of their profits are actually earned in the US or other countries where actual business is being carried out and then manipulated through accounting principles so that they appear to be earned in countries with no corporate income tax at all." They claim to generate more profits in tax havens, MANY OF WHICH ARE TINY COUNTRIES WITH VERY SMALL POPULATIONS AND  MUCH HIGHER PROFITS  THAN COULD POSSIBLY BE EARNED THERE." One of the most egregious examples are corporations is Bermuda, where BRT companies regularly report to the IRS earnings "EQUAL TO 16 TIMES THE ENTIRE GROSS DOMESTIC PRODUCT OF Bermuda." The profits they report to earn in the Cayman Islands "EQUAL 20 TIMES THE GDP OF THAT TINY COUNTRY." Countries like Ireland, the Netherlands, and Luxemburg "provide LOOPHOLES AND SPECIAL DEALS so that profits can be moved through them and into the zero-tax countries like Bermuda and the Cayman Islands."

N.B. This report relies on data compiled by the US Public Interest Research Group and Citizens for Tax Justice from companies' public filings with the SEC comparing disclosed offshore subsidies with the list of tax havens used by the GAO in its 2008 report. Companies are required to disclose only "significant subsidiaries," so many have stopped revealing 99%  of their subsidiaries, rather than actually shutting down or divesting them.

Despite claims by the BRT that lower taxes will provide investment and job growth, "THERE IS NO EVIDENCE THAT CORPORATIONS WITH LOWER TAX BILLS CREATE MORE JOBS THAN THOSE WITH HIGHER TAX BILLS." A December 2013 report by the Center for Effective Government compared 30 of the higher taxed corporations with 30 of the lowest taxed  and "found that the high-tax group created almost 200,000 jobs between 2008 and 2012, while the low-tax group collectively REDUCED EMPLOYMENT BY 51,999 JOBS."    The "clear winner" is VERIZON, which has eliminated 62, 338 jobs since 2008, despite having an effective income tax rate of TWO PERCENT!

The remainder of the report is a detailed analysis of each of the BRT companies taking advantage of offshore tax havens, ranging in alphabetical order from CITIGROUP to THE WILLIAMS COMPANIES, INC, revealing each one's taxpayer bailout from the Federal Reserve and the Treasury Department during the financial crisis of 2008 to 2011, its number of subsidiaries in offshore tax havens in early 2014, its profits officially held offshore by that date, and the amount of federal income tax each would have to pay--at 27 percent--if those profits were brought to the US. Each example concludes with the charge that "there is strong EVIDENCE that many American corporations are simply choosing NOT to disclose as many of these subsidiaries as they had in the past."

For those who prefer to ingest their poison in tabular form, there is a four-page appendix detailing that information for each of the BRT companies.

If you have not yet filed your 1040 forms for 2014, I would recommend doing so before reading this report. Afterwards, you probably won't want to.

Keep on keeping on, JDB
     
  

Friday, February 20, 2015

Does Social Security Work? You Betcha!

Will Social Security "be there for me" when I need it?  That is the ultimate question, so far as most people are concerned. What about all those predictions that the system is on the verge of "bankruptcy," or that it is nothing but a glorified "Ponzi scheme"? Does it need to be "privatized" in order to survive?

Whenever anybody tries to persuade you of any such claptrap, simply tell them to read Social Security Works! Why Social Security Isn't Going Broke and How Expanding It Will Help Us All, written by Nancy J. Altman and Eric R. Kingson. and just recently published by The New Press. She is a former faculty member of both the Harvard University Law School and its Kennedy School of Government, She is currently a member of the Boards of the National Academy of Social Insurance and the Pension Rights Center and is the author of The Battle for Social Security: From FDR's Vision to Bush's Gamble. He is a professor at Syracuse University's School of Social Work, and the co-author of four books on Social Security and Medicare, including Ties That Bind: The Interdependence of Generations.   

The book is divided into five parts: The Facts; The Challenges; The Solution; The Threats; and Next Steps. Each part includes two or more essays:

I.   Facts: The Changing  Conversation; Social Security Works For All Generations.
II.  Challenges: The Precarious Lives of Today's Old; The Coming Retirement Income Crisis; The
                          Debt Owed To Those Who Care; The New Gilded Age
III. Solution: Expand Social Security For All Generations and Paying the Bill
IV. Threats: The Billionaire's War On Social Security; The Conventional "Wisdom" Is Just Plain
                      Wrong
V. Next Steps: There They Go Again: Why the Supporters of Social Security Must Remain Vigilant;  
                        Passing Social Security Forward: A Legacy For All Generations 
 
The book also includes four appendixes:

A: Additional information About How Social Security Works
B. Additional Information About The Social Security Works All Generations Plan and Other    
Proposals, including Cost and Revenue   
C. Descriptions of Various Social Security Expansion Legislative Bills and Organization's Plans
D. Leading Organizations Working to Expand Social Security 


The entire book is a treasure trove of reason and truth, with reams of statistics, so I will highlight a few of my favorites. For example, The Coming Retirement Crisis reveals that the "difference what people have saved for retirement and what they should have at this point--is a staggering $6.6 trillion, and half of Americans have less than $10,000 in savings."

According to a poll conducted by National Academy of Social Insurance in 2013, 89 percent of respondents believe that " S.S. benefits are more important than ever," 84 percent did not mind paying its payroll tax "because it provides security and stability to millions," and 75 percent believe "we should consider increasing S.S. benefits."  Even 81 percent of Republicans agree with statement #1, 74 percent agree with statement #2, and 62 percent agree that we should consider raising benefits. Broken down by generation, the positive responses to #1 ranged from 84% of "Generation Y to 93% of "baby boomers"; by family income, the positive range is 87% for those in the $75,000 to $99,999 bracket to 93% for those  making between $30,000 and $49,888.  On "consider raising benefits," the lowest positive response is 72% for the "silent generation;" 67% for those making $100,000 or more; and 62% for Republicans.

SO WHERE DOES THE "CONVENTIONAL WISDOM" COME FROM AND WHY DO SO MANY PEOPLE REGARD IT AS "SOMETHING EVERY KNOWS, LIKE THE SUN RISING IN THE EAST (WHICH OF COURSE IT DOESN'T REALLY?).

The answer is "THE BILLIONAIRES' WAR AGAINST SOCIAL SECURITY," along with the obviously intertwined circumstance "that much of the press has reported only one side of this story using "facts" that are misleading or flat-put wrong while ignoring others." This litany of despair "has resulted from a deliberate campaign, backed by hundreds of millions of dollars and a cottage industry of academics who have built their careers on criticizing Social Security. Together, these forces have brought a veneer of respectability to claims that Social Security is unsustainable, in crisis, and spawning  competition and conflict between generations." <Or as the pompous governor of my home state has openly bragged on numerous occasions: DIVIDE AND CONQUER!>

Broadcasting that campaign "have been journalists and politicians who have either willingly advanced an anti-Social Security agenda or have fallen prey to myths, half-truths, and a few outright lies that have been masquerading as incontrovertible facts." Their three-decade long assault is a "tale of three commissions: " the one chaired by Ayn Rand devotee Alan Greenspan in the early 1980s, the Bipartisan Commission on "Entitlements" and Tax Reform of the 1990's  which branded S.S., Medicare, and Medicaid combined as one humongous "entitlement crisis," and the Obama administration's  National Commission on Fiscal Responsibility and Reform, chaired by Erskine Bowles and Alan Simpson. In the process, S.S. was calculatedly transformed from a program of social insurance paid for by a carefully calibrated "payroll tax" on employers and employees over the entire work-life of the latter to an unearned "welfare handout," whose escalating cost would bankrupt not only the system itself, but the entire United States. (The same slight-of-hand stigmatized the Affordable Care Act as "Obamacare.") The "money behind the campaign" that effected the triumph of that "Big Lie" has been primarily that of Peter G. Peterson, former Nixon Secretary  of Commerce, one-time CEO of Lehman Brothers, and the 147th richest American, with a reported net worth of near $3,000, 000,000. He has bankrolled several foundations dedicated to obliterating Social Security, including Fix The Debt, of which his son Michael is president and whose board of directors includes both Bowles and Simpson.

In an absolutely mind-blowing table titled THE RETIREMENT SAVINGS OF SOME FIX THE DEBT CEOS WHO WANT TO CUT YOUR SOCIAL SECURITY spells out in graphic detail their "Total CEO Retirement Assets," "Estimated CEO Monthly Pensions," and "Employee Pension  Deficit Fund." The list includes the CEOs of 13 of the nation's richest corporations. It could just as well be captioned " The Personification of Greed and Hypocrisy." (See p. 155). Their total CEO retirement assets range from a "low" of $20,677,631 to a high of $78,084,417, while their estimated monthly pension benefits range from a "low" of $113,363 to a high of $428,092. <The average monthly Social Security benefit is $1,294; for "widowed caregiving parents with two children" it is $2,593.> Estimated employee pension fund deficits range from $454,000,000 at Corning to $21,756,000,000 at General Electric. "Independent Living" accommodations at the newly-opened Primrose Retirement Community" in my hometown start at $2,695/monthly for a one-bedroom apartment; $3,595 for "assisted living.">

The best feasible "SOLUTION", according to Altman and Kingson, is the "Social Security Works All Generations Plan,"(SSWAGP)-- " a comprehensive package of benefit and revenue changes that expands Social Security's protections in important ways."
1. Increase benefits for current and future beneficiaries by 10%, up to a maximum of $150 monthly
2. To prevent erosion of benefits over time, use the Consumer Price Index for the Elderly
3. Minimum benefit of 125% above poverty for those reaching retirement age after 30 years work
4. Twelve weeks of family leave upon birth or adoption of child or illness of covered worker
5. Up to five years of SS benefit credits for care of one or more children under age 6
6. Restore student benefits up to age 22 in case of death or disability of covered parents  
7. A new benefit of $1,000 upon birth or adoption of a child
8. Eliminate maximum taxable wage base, giving credit for those contributions
9. Dedicated 10% marginal income tax on those with income more than $1,000,000
10. Gradually increase contribution rate by 1% for both employers and employees
11. Gradually diversify SS portfolio by investing 40% of its reserve in broad-based equity funds
12. Treat all salary deduction plans the same as 401(k) with respect to definition of SS wages
13. Combine OASI and DI Trust Funds

The authors' assert that, except for modest in the SS premium rate, these revenue sources "would have no impact on the vast majority of Americans." The existing refundable Earned Income Tax Credit could be expanded to offset any increased burden on lower income workers.  These various revenue sources could be "mixed and matched depending upon how substantially the nation want to expand SS," and phased in gradually to blunt impact on individuals."  They would build upon SS "existing financing and retain premiums as the primary source of income, consistent with the earned-benefit nature of Social Security."  They also provide precise estimates of how much each of their proposals would cost in the taxable payroll and in percent of GDP. In almost every case, the increased cost would amount to considerably less than 1% of either one. They are all "fully affordable." So what's the hang- up? "Standing in the way, they state flatly, are determined, powerful, and well-financed foes," which they spell out in frightening detail as "THE BILLIONARIES WAR AGAINST SOCIAL SECURITY"             
         
This is most definitely a war and one which the vast majority of Americans are losing! The ammunition for mounting a successful counter-offensive lies clearly between the covers of SOCIAL SECURITY WORKS! 
               
 

 

Friday, September 5, 2014

What's The Reason It Isn't Treason?


"Treason doth never prosper, what's the reason? For if it prosper, none dare call it treason." Words of wisdom from Sir John Harrington (1561-1612), Elizabethan Era courtier, affectionately known as the Queen's "saucy Godson," until he fell out of her good graces by penning a political allegory and coded attack on the monarchy titled A New Discourse on a Stale Subject in 1596. He is perhaps better known, appropriately, as the inventor of the flush toilet.

And, indeed, "it" does prosper. What's it? "It" is pseudo-Americans depriving the nation of untold billions of dollars in revenue by hiding much of their income in secret bank accounts in Switzerland and the Caribbean, and by practicing "inversion": partnering with foreign companies to avoid paying their fair share of U.S. income taxes. "It" is ersatz Americans reaping obscene profits by enjoying the manifold benefits and protections of U.S. citizenship, while not contributing their fair share of the costs.

Of course, every American schoolchild knows that the Constitution defines "Treason" very narrowly and precisely:Treason against the United States shall consist only in levying war against them, or to adhering to their Enemies, giving them Aid and Comfort. No person shall be convicted of Treason unless on the Testimony of two Witnesses to the overt Act, or on Confession in open Court.    

The use of them is perplexing. It seems to indicate a pre-Constitution mind-set that the United States means the States that happen to be United, which sounds like the nature of the Union as set forth in the Articles of Confederation and the Ordinances of Secession proffered by southern slave states in 1861. In any case, that fiction was obliterated by the preamble to the Constitution and a plethora of Supreme Court decisions.: "We the people of the United States...In order to form a more perfect Union." So who is them? The States or The People? Whose "ox is being gored"? Who or what is the victim of Treason? Can the "victim" and the "perp" be one and the same? The Civil War and the 14th Amendment (which obviously came much later) supposedly settled that question in favor of the people, but many of "the Makers" seemingly meant the States.

That aside, the Constitution defines Treason itself "levying war against them" or "giving them Aid and Comfort." The first offense clearly means taking up arms in a "shooting war" against the U.S. You could possibly interpret what these "tax dodgers" are doing as waging metaphorical "war," but that would be quite a stretch, one which their army of obsequious attorneys would have no difficulty in laughing out of court.  <I have always assumed--obviously naively--that  paying one's fair share of legally constituted taxes is one absolute and irreducible principle of true citizenship and patriotism. Apparently not everyone agrees! To clarify that issue, it would probably take a constitutional amendment--one that would obviously be vehemently opposed by the nation's most rich and powerful. But something very similar was accomplished during the Progressive Era, when a broad-based, painstakingly constructed nationwide coalition eventually overcame the adamant opposition of the "robber barons" and "malefactors of great wealth" to enact the Sixteenth Amendment and the federal income tax. [See  my The Income Tax and the Progressive Era  (New York: Garland Publishing, Inc.,1985).

That signal achievement took from 1895 until 1913, and survived a veritable tsunami of attacks and challenges, but it finally succeeded! Whether the construction of such a coalition is even a remote possibility today seems highly problematic, but what is the alternative? I seriously doubt that any of todays' "malefactors of great wealth" would ever "confess in open court," but they might possibly be convicted by the testimony of millions of witnesses.

To quote Senator Elizabeth Warren, "these companies are renouncing their American citizenship, turning their backs on this country, simply to boost their profits." To stop this nefarious and unpatriotic practice, she and fellow Senator Sander Levin have introduced the "Stop Corporate Inversions Act," which allows American corporations "to renounce their citizenship only if they truly give up control of their company to a foreign corporation and truly move their operations overseas." These corporations, Senator Warren correctly charges "are not actually leaving America behind. They just don't want to pay for it." America, she boldly asserts, "is a great place to do business because of the investments we have made together." Those investments, she insists, include public education to produce millions of skilled workers, the infrastructure of roads, bridges, and ports that make it possible to move products to market, and scientific and medical research giving American  corporations access to the most innovative and cutting-edge technologies.

How absurd can it get? In the Wisconsin State Senate, minority leader Peter Barca has managed to hoist Governor Scott Walker on his own petard, so to speak. Barca has introduced a bill that would prevent firms "offshoring" jobs from receiving state money and tax incentives. Since Walker is normally one of the big supporters of permitting Wisconsin corporations to "offshore" everything, it would follow that his administration would fight Barca's proposal "tooth and nail." BUT, it turns out that one of his biggest attacks on his Democratic gubernatorial opponent, Mary Burke, is that her jointly-owned company--Trek Bicycles--has, in fact, "offshored" some of its jobs. So Walker, the candidate, had no choice but to publicly support Barca's bill, thus enraging the very companies that  Walker, the governor, relies upon for campaign contributions and other considerations. Irony doesn't even begin to describe his dilemma!  So now Walker, who, from day one, has alienated most of the state's  moderate to liberal voters, is also getting some flak from the right. This "flip flop" is even more problematic than insisting that he has fulfilled his pledge to create 250,000 private sector jobs, when he has clearly failed to produce half that number (and has eliminated tens of thousands of public sector jobs in the process.)

Like the reactionary, corrupt, racist Senator Billboard Rawkins in Finian's Rainbow, Walker is boldly leading Wisconsin FORWARD--FORWARD TO YESTERDAY!!!!