Truthout Stories Mon, 22 Sep 2014 12:27:29 -0400 en-gb Voices From the People's Climate March: Indigenous Groups Lead Historic 400,000-Strong NYC Protest

As many as 400,000 people turned out in New York City on Sunday for the People’s Climate March, the largest environmental protest in history. With a turnout far exceeding expectations, the streets of midtown Manhattan were filled with environmentalists, politicians, musicians, students, farmers, celebrities, nurses and labor activists — all united in their demand for urgent action on climate change. Organizers arranged the People’s Climate March into different contingents reflecting the movement’s diversity, with indigenous groups in the lead. Democracy Now!’s Aaron Maté was in the streets to hear from some of the demonstrators taking part in the historic protest.


This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn now to the People’s Climate March. Organizers estimate as many as 400,000 people marched in New York Sunday in the largest climate protest in history. The turnout far exceeded expectations. Other marches and rallies were held in 166 countries. More protests are planned for today. Climate activists are gathering today in downtown Manhattan for a mass sit-in dubbed "Flood Wall Street." The actions are timed to coincide with the United Nations climate summit taking place here in New York Tuesday. President Obama and over 100 other world leaders are scheduled to attend.

Sunday’s events in New York began with an indigenous sunrise ceremony in Central Park. Indigenous activists then led the march. Democracy Now!'s Aaron Maté was in the streets at the People's Climate March.

AARON MATÉ: We’re near the very front of the People’s Climate March, and the sign behind me reads: "Front Lines of Crisis, Forefront of Change." This march has been divided up into different groups, and at the front are indigenous and front-line communities most impacted by climate change.

CLAYTON THOMAS-MULLER: Hi. My name is Clayton Thomas-Muller. I’m an organizer with the indigenous peoples’ social movement Idle No More and Defenders of the Land. Things today are going really, really well. We’ve got tens of thousands, if not hundreds of thousands, of people on the street. We have front-line indigenous communities from communities that are disproportionately affected by President Obama’s all-of-the-above energy policy. We’ve got leaders from communities fighting fracking, fighting tar sands, pipelines, all kinds of pipeline fighters from across the continent who are organizing in solidarity with First Nations from the belly of the beast in Alberta who are trying to stop tar sands expansion at the source. And we’re here to send a very clear message to President Obama, Stephen Harper and the rest of the world leaders that we need legally binding mechanisms on climate change right now passed, and if they ain’t going to do it, that the people certainly will.

INDIGENOUS ACTIVIST: Hi. We’re here to march for the next seven generations and to take astand against Big Oil companies that are coming through our territories and trying to take our ancestral lands and destroy them. We’re here because it’s going to take all of us—all of us—not just the indigenous people, but everyone in the whole world, to come together to save our water.

PERUVIAN ACTIVIST: We are from the Peruvian delegation here on the March. And we are marching because we are fighting for climate justice, and we are fighting because this December, the next COP event is going to be in our country. And we are preparing a people’s summit and the next march in December 10 in Lima. And we are asking the Peruvian government, Ollanta Humala, for coherence, because even if they are taking pictures here near Ban Ki-moon, they are not doing that kind of commitments in the country. So, we need to fight here, we need to fight in our country. This is a global fight.



EL PUENTE ACTIVIST: What do we stand for?

EL PUENTE ACTIVISTS: Peace and justice!

FRANCES LUCERNA: My name is Frances Lucerna. I’m the executive director of El Puente. We have about 300-strong here of our young people. We are a human rights organization located in Williamsburg, Brooklyn. Most of our young people are from Puerto Rico, from Dominican Republic. And the connection between what’s happening in terms of our islands and also what’s happening here in our waterfront community that Williamsburg is part of, we need, really, the powers that be to come together with our people and really make decisions that are about preserving our Earth.

CARLOS GARCIA: Hi. My name is Carlos Garcia. I’m the secretary-treasurer of the New York State Public Employees Federation. We represent 54,000 New York state employees who are professional scientific and technical workers. And we’re out here to say to the U.S. government, New York state government, let’s take care of our climate, let’s take care of our environment.

IRENE JOR: My name is Irene Jor. I’m with the National Domestic Workers Alliance with the New York domestic workers here today. And for us, we’re here because, as domestic workers, it’s time to clean up the climate mess.

DOMESTIC WORKERS: We are domestic workers! We want climate justice now!

IRENE JOR: Domestic workers have been part of the struggle for a long time. We’re disproportionately impacted by climate change. For those of us who are migrant women workers, we often come here because of what extractive resources and climate crisis has done to our home countries.

AARON MATÉ: We’ve come upon a huge contingent of young people, many carrying signs reading "Youth choose climate justice."

YOUTH ACTIVISTS: Obama, we don’t want no climate drama! Hey, Obama, we don’t want no climate drama!

JONAH FELDMAN: My name is Jonah Feldman. I’m here with the Brandeis Divestment Campaign from Brandeis University.

AARON MATÉ: And what does your sign say?

JONAH FELDMAN: It says, "Divest from Climate Change." We believe that our university should sell off all its investments in the fossil fuel industry—that’s in coal, oil, natural gas, tar sands—and to reinvest into clean, renewable alternatives.

LUIS NAVARRO: Hello. My name Luis Navarro. I’m 16. I’m from Boston, Massachusetts. I’m with the Boston-area Youth Organizing Project. Well, as a youth, I feel like every youth should be a part of this, because it concerns them and their future, whether or not if they can live by 20 years from now with this climate change. And I feel like it’s important for me to be here to show them that the youth is on our side.

AARON MATÉ: As we weave through this march that has taken over midtown Manhattan, tens of thousands out in full force, coming across all different sorts of diverse groups.

VEGAN: Number one way to fight climate change: Go vegan.

REV. SUSAN DE GEORGE: I’m Susan De George, and I’m with both Green Faith and with Hudson River Presbytery. We have everybody from Jains, Sikhs, Buddhists, Hindus, Catholics, Protestants, atheists, agnostics, all marching in a group.

PROTESTERS: What do we want? Climate justice! When do we want it? Now!

CAITLIN CALLAHAN: My name is Caitlin Callahan. I’m from Rockaway Beach, and I’m an organizer with Rockaway Wildfire. Superstorm Sandy devastated the Rockaway Peninsula. We know that climate change is being worsened and exacerbated by all of the systemic profiteering that’s happening throughout our world. And it’s time for that to stop. If you haven’t been involved in climate justice activism before, it’s time to get involved in climate justice activism, because this is affecting all of us.

BRADEN ELLIOTT: My name is Braden Elliott. I’m a Ph.D. student at Dartmouth College, and I’m here because I care.

AARON MATÉ: And the banner under which the scientists are marching is "The Debate is Over"?

BRADEN ELLIOTT: Correct. The banner says "The Debate is Over" because the core part, the part that the planet is warming and that humans are responsible for the lion’s share of it, is settled. There’s always debate to be had on the edges of a large topic, but the call to action is very clear.

AARON MATÉ: And now we’re in the bloc of demonstrators under the banner of "We Know Who is Responsible," anti-corporate campaigners, peace and justice groups, those who are organizing against the groups they say are holding back progress.

SANDRA NURSE: My name is Sandra Nurse. I’m here with the Flood Wall Street contingent. We’re calling on people to do a mass sit-in in the financial district to highlight the connections between corporate capitalism, extractive industries, the financing and bankrolling of climate change, the financing of politicians who will not bring meaningful legislation to the table and who are blocking the process of actually bringing meaningful legislation against climate change.

FLOOD WALL STREET CONTINGENT: All day, all week, let’s flood Wall Street!

AMY GOODMAN: Some of the voices from the 400,000-strong People’s Climate March here in New York. Special thanks to Aaron Maté and Elizabeth Press in the streets for Democracy Now!

News Mon, 22 Sep 2014 12:20:53 -0400
Most Members of the Black Caucus Have Supported Police Militarization


SHARMINI PERIES, EXEC. PRODUCER, TRNN: This is The Real News Network. I'm Sharmini Peries, coming to you from Baltimore.

Welcome to the Glen Ford Report on The Real News Network. Glen is the executive editor of the Black Agenda Report and a regular commentator on The Real News Network.

Glen, in a report recently on the Black Agenda Report, you wrote that 80 percent of the members of the Congressional Black Caucus refused to defund Pentagon's militarization of local police departments, also known as the Grayson amendment. That is shocking news, given the police brutality of the black community in this country. And I'm wondering if you have more to say on that.

GLEN FORD, EXEC. EDITOR, BLACK AGENDA REPORT: Well, actually, it was 27 who voted against Alan Grayson's measure that would have forced the Pentagon to stop sending all these weapons and military gear to local police department. Twenty-seven voted against the amendment. Five abstained, which is just as good as voting against it. And that makes 32 out of only 40 caucus full-voting members. That's four out of five of the Black Caucus voted to continue the Pentagon's massive infusions of guns and tanks and other military gear into local police departments.

But that's only one of the complaints that's being voiced by a group, a coalition in Washington that's planning to hold a "Shame on the Congressional Black Caucus" rally on September 24. September 24 is the first day of the Congressional Black Caucus's annual legislative conference and gala. That's the time of the year that every year the caucus draws thousands of people, all dressed to the nines, for a bunch of workshops and stuff, but mainly for their gala dinner and lots of music and entertainment and festivities, and basically about three or four days of the caucus patting itself on the back for all the good deeds it's done, or maybe just for being here.

This year, finally, a group of activists in D.C. are putting their two cents in and saying, no, we don't appreciate a bit what you've been doing. And so they're focusing on the caucus's vote back in July, just three days after the Israelis begin bombing Gaza, a vote to join with the rest of the House unanimously in giving a blank check to Israel. The organizers of that protest are also outraged at the fact that most members of the Congressional Black Caucus seemed ready to go along with corporate America and turn the internet over to the corporations, to destroy internet neutrality. The fact of the matter is that since 2005, the Congressional Black Caucus has been more aligned with the telecoms, the big corporations that want to control the internet and all of our communications, they've been more aligned with these corporations than the Democratic Caucus as a whole. And this is ongoing. This has been for the last nine years.

And since the organizers planned to do this "Shame on the Congressional Black Caucus" rally, of course, Ferguson happened. And so they're going to call attention to the fact that four out of five of the Congressional Black Caucus members voted to continue the militarization of the police. And now almost all of them--all of them, in fact, are pretending like, well, they were against militarization all along. They weren't. Four out of five were for it.

PERIES: Four out of five were for funding and militarizing local police forces. What--.

FORD: And they had a choice. With Alan Grayson's amendment, they could have brought it to a halt. They chose to continue it. It's pretty clear, cut and dried.

PERIES: What justification is there for such a move, particularly given Ferguson now? Is there an attempt to reverse the decision? Is there any consciousness post-Ferguson?

FORD: Actually, Hank Johnson, who voted for the amendment, after Ferguson happened, then he announced plans to reintroduce the amendment. I guess the idea is that now that the caucus has been caught on the wrong side in the glare of publicity, maybe they'll change their votes.

What really happened back in June is the caucus thought it was voting in the dark, that nobody was looking. And, in fact, very few people are looking. There's very, very little independent black media that is watching every day the goings-on on Capitol Hill. And so, yeah, they were voting in the dark.

This rally on September 24, which will be right in front of the Washington Convention Center, where the caucus is holding all of its entertainment and other festivities, well, that may set them back a little bit with this very public demand for accountability. And that's what people are talking about. The caucus needs to be accountable. And if it were accountable to black sentiment, then it could still use in good faith its slogan, which is we are the conscience of the Congress. But the caucus has not been the conscience of the Congress, it has not been a dependable progressive body for a very, very long time.

PERIES: Glen, is this an effort to raise funds for the caucus? What is there to celebrate?

FORD: Oh! Oh, it is their big fundraiser. And all you have to do is go there and you will see where the funds come from. The corporations are, oh, certainly well represented. The CBC has become one of the biggest fundraising caucuses in the Congress. It is the go-to place to buy influence not in the black community, but among its representatives on Capitol Hill.

And shaming is in fact what's important here in this exercise that's going on, that will be going on on the 24th. Shaming is a very, very important tool for people, especially people who don't have power. The corporations have power in this country. And poor folks and black folks don't have much more than the ability to shame those who purport to represent them by saying loud and clear, you don't represent us.

And it's more than just the emotional impact of shaming. It's not just attempting to get wayward elements of the caucus to see the light or to be embarrassed. When groups say, as the rally is trying to say, that these people do not represent us, they in fact devalue, they lessen, diminish the value of the caucus to the corporations. And that applies also to individual politicians and so-called leaders. Corporations, people with power, go out and buy the influence of so-called black leaders because they think it's worth something, because they think it translates into assent on the part of the black masses to what the corporations are doing. But when people rise up and say, no, no, no, no, we don't support that organization, we don't support that politician, we don't support that caucus, then the value of those individuals and organizations that offer themselves as agents for power is diminished. So it has real impact beyond emotional, beyond just an appeal to the reason and decency of the politician or the so-called black leader.

PERIES: Glen, is there any members of the Black Caucus that is upholding the values and consciousness of the black community here?

FORD: Well, there have been some seminal votes. And I think the vote on militarization of local police forces was one of them in which you only had seven who voted correctly. Those included John Conyers and Barbara Lee and Congresswoman Waters and Hank Johnson and about three others. But with the vote on Israel, it was unanimous: just like the whole House voted in favor of giving Israel a blank check, all of the caucus went along, and without even one abstention. I would say off the top of my head that there's no more than seven or eight Congressional Black Caucus members who are worth a damn, even sometimes. Sometimes none of them are worth a damn.

PERIES: Glen, thank you so much for joining us again on The Real News Network.

FORD: Thank you.

PERIES: And thank you for joining us on The Real News Network as well.

News Mon, 22 Sep 2014 12:07:36 -0400
Bernie Sanders at People's Climate March: To Stop Global Warming, Get Dirty Money Out of Politics

Speaking at the People’s Climate March in New York City, independent Senator Bernie Sanders discusses a potential 2016 presidential run and how getting money out of politics is critical to addressing the climate crisis. "[President Obama] can and should do more," Sanders says. "But the major impediment right now is not Obama, it is the Republican Party. We have to call them out on this. We don’t do it enough. These are people who do not even acknowledge the scientific reality because they are beholden to Big Energy money and the Koch brothers."

Please check back later for full transcript.

News Mon, 22 Sep 2014 11:54:11 -0400
Marijuana Decriminalization a Racial Justice Victory in Philadelphia

Philadelphia will soon become the largest US city where you can have marijuana and smoke it too — at least without going to jail. Rather than arrest, being caught with anything under an ounce of marijuana will carry with it a $25 fine and citation. Getting caught smoking in public means a slightly heavier penalty: a citation and a $100 fine that can be avoided with 9 hours of community service. Combined, this year’s series of national victories around marijuana decriminalization may look spontaneous, but they in fact speak to years of racial justice organizing and the cultural shift around criminalization that they’ve helped bring about.

The Philadelphia City Council voted 13-3 to decriminalize marijuana back in June, but putting the decision into law has been dependent on Philadelphia Mayor Michael Nutter’s signature. The bill, introduced by councilman Jim Kenney in May, originally included even less severe penalties, but was beefed up in a compromise with Nutter’s administration. In return, he’s agreed to sign the bill into law.

Nutter has been quick, however, to draw a distinction between legalization and decriminalization. On KYW Newsradio, he clarified that there will still be “a consequence to people violating the law.” Nutter scoffed at the council’s decision earlier this summer, saying, “Suddenly, this is the great civil rights issue of our day — that black guys should be allowed to smoke as much dope as they want.” As Dan Denvir pointed out for Philadelphia’s City Paper, Nutter’s class-tinged moral posturing around marijuana use has become an anachronism in light of a shifting political context; a Quinnipiac University poll found that 85 percent of Pennsylvanians favor not just the decriminalization, but legalization of marijuana.

Philadelphia’s decision is part of a growing trend among state and municipal governments. Washington, D.C., has a similar law, while Washington state and Colorado each voted to legalize recreational marijuana use last November. Twenty-three states have legalized the use and sale of the substance for medicinal purposes. Soon, Florida might become the first southern state to do the same.

Kenney described marijuana decriminalization as a cut and dry racial justice issue: “Marijuana possession and use has been decriminalized in Philadelphia for years… if you’re a white person.” Indeed, African Americans accounted for 83 percent of the over 4,314 marijuana arrests last year in the city. As Kenney told Policy Mic, city police have been far more reluctant to make arrests at Phish concerts or frat houses than predominantly black working-class neighborhoods.

Philadelphia is the nation’s poorest major city. The poverty rate is an astounding 26 percent, with 40 percent of children living below the poverty line. One in four people are at risk for hunger. As public education is gutted and prisons crop up around the city, it’s become harder for even the city’s most well-off to avoid the racial disparities embedded in the criminal justice system. Former gubernatorial candidate John Hanger made decriminalization a centerpiece of his Pennsylvania People’s Campaign, arguably pushing other primary contenders further left on the issue. The Hangar campaign itself was built on the foundation of groups like the Institute for the Development of African American Youth, or IDAAY, and Decarcerate PA, which for years have been fighting the prison expansion in the state.

Councilman Kenney’s use of phrases like “school-to-prison pipeline” didn’t spring out of nowhere; that one of America’s highest elected city officials has started using the talking points of prison reform and abolitionist movements is thanks to those movements themselves and the public pressure they’ve built. Kenney admitted as much to the Philadelphia Tribune, saying, “City government would not have gotten to this point without IDAAY and other groups’ grassroots effort to change the mayor’s opinion and get him to implement this policy.” IDAAY executive director Archye Leacock echoed the sentiment, and said that his group would work to hold the mayor and city council accountable to implementing the law on “terms that are agreeable to community stakeholders.”

Given the heightened visibility of racist violence in Ferguson, Mo., and elsewhere this summer, waves of marijuana legalization aren’t the only thing drawing national attention towards what can most generously be described as the country’s unequal justice system. Ideally, Philadelphia’s ruling will be the first of many movement victories decriminalizing not only marijuana, but whole segments of the population.

News Mon, 22 Sep 2014 11:21:17 -0400
Giant Corporations Want to Control All of Your Beer

The variety of the craft-brewing wave sweeping the US makes drinking beer more fun than ever. Maine’s Flying Dog Brewery brews a beer from local oysters, and the Delaware-based Dogfish Head uses an ancient beer recipe they dug up from 2,700-year-old drinking vessels in the tomb of King Midas.

But as this trend spreads, there’s another revolution going on that’s concentrating most of the world’s beer into the hands of just a few mega-corporations. These kings of beer are riding the wave of craft brewing enthusiasm, buying up smaller breweries, and duping customers along the way.

“If you want to listen to Milli Vanilli, I suppose that’s a choice you get to make. Just know that you’re making that choice,” is how Greg Koch of Stone Brewing Company put it.

Take Blue Point, Long Island’s first microbrewery. A couple of home brewers started the company ten years ago, but this year, Anheuser-Busch InBev bought Blue Point for $24 million. John Hall, the founder of Chicago’s Goose Island beer, told a reporter in 2013, “Goose Island is a craft beer, period.” Yet it too was sold to AB InBev in 2011.  

Whereas craft beers only made up about six percent of the beer sales in the US in 2012, AB InBev owns almost half of the US market. Together the top-four beer companies – AB InBev, MillerCoors, Heineken, and Modelo – brew 78 percent of the beer sold in the US. The diversity of beer has changed – in 1978, the US was home to just 89 breweries, and as of last year, that number had climbed to 2,336—but the craft and microbrew boom still seems unlikely to make a major dent in the corporations’ power.

The strange brew of each dominant beer company’s name speaks of the rapid monopolization of the industry over the past ten years. The story of AB InBev, the biggest beer corporation in the world, is emblematic of this shift. In 2004 Brazil’s Companhia de Bebidas das Américas (AmBev) merged with Belgian’s InterBrew to form InBev, and in 2008, this conglomerate went on to take over Anheuser-Busch to form AB InBev. In the process, they gained one of China’s biggest brewers, Harbin, and Canada’s Labatt beer company.

The world’s second biggest brewing conglomerate, SAB Miller, has followed a similar path. The mega-brewer formed after South African Breweries purchased Miller in 2002 and bought Bavaria, the second biggest brewer in South America in 2004. Two years later, the giant merged with MolsonCoors to make MillerCoors, which in 2011 purchased Foster’s, Australia’s largest brewing company, and Efes, Russia’s second biggest beer business.

The result is a world whose beer is mostly in the hands of just a few corporations, with AB InBev leaping ahead as the king of beers.

And what about all of those brews often considered to be craft beers or imported, but actually turn out to be from the same place that produced nearly everything else at the corner store? For example, Heineken now owns Dos Equis, Tecate and Sol. MillerCoors owns Fosters and Molson Canadian. Along with Budweiser, Beck's, Bud Light, Brahma and Quilmes, AB InBev owns Stella Artois, Corona, and Goose Island—as well as about 18 percent of the rest of the beer produced on the planet.

“AB InBev aims to dominate the world’s beer supply, one country at a time,” explained a Fortune profile of the company.

Their plan has worked so far—they own over 200 different beers across the globe—but they have also run into trouble. In January of last year, the US Department of Justice launched a lawsuit to prevent AB InBev from buying Mexico’s Grupo Modelo. In a statement Bill Baer, the Assistant Attorney General in charge of the Department of Justice’s Antitrust Division, said the merger plans threatened to hurt competition in the US beer market and concentrate the beer industry, resulting in “less competition and higher beer prices."

Who runs AB InBev’s beer empire? Carlos Brito is the Brazilian-born, Stanford-educated, CEO of the company, who worked at Shell Oil before coming to the beer business. He’s known on Wall Street as a low profile, frugal boss with an eye for making a profit. Brito is the one who acquired Anheuser-Busch in 2008, then went ahead and laid off 1,400 of the AB workers, used thinner glass for its bottles, weaker cardboard for its 12 packs, and ditched the traditional and often-touted “beechwood aging” of Budweiser to save money. Indeed, there are plenty of pissed off drinkers who have complained about the lower quality of their beer since Brito’s corporate monster took over what they drink.

The multimillionaire clearly knows how to cut costs. “I don’t have a company car. I don’t care. I can buy my own car,” Brito explained at a 2008 speech at Stanford, “I don’t need the company to give me beer. I can buy my own beer.”

If Brito has his way, everybody else will have to buy his beer too.

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News Mon, 22 Sep 2014 11:04:33 -0400
The Troubling Way We Pay Hospitals in Maine and Throughout the US

A study published in the current issue of Health Affairs found that hospitals in the US spend about twice as much per capita on administration as the seven other countries studied. If spending on administrative costs were reduced to the average level of spending in the other countries, we could reduce by about $150 billion the $750 billion a year we waste in health care.

These findings reminded me of my recent trip to Nova Scotia. While there, I visited a small hospital on Cape Breton. I asked the hospital’s director what they charge for a CT scan. “We don’t charge for every test,” she replied, “but simply bill the provincial health fund for each day in the hospital. The cost of the CT scan is bundled in. The only time we charge individually for CT scans is if we treat a visiting American and think it is worth the trouble to bill their insurance company.”

“May I speak to somebody in your billing department about CT scan prices?” I asked.

“Sure, but you’ll have to come back another day,” the hospital’s director replied. “She (meaning the billing ‘department’) only works part-time.”

Compare that to the gargantuan billing departments in US hospitals.

In talking to the long-serving doctors at that Canadian hospital about their experience practicing medicine, I was struck by how much their focus is on patient care, not money. Money is almost all I hear about when I talk to American doctors and hospital directors.

In Canada there is only one insurance company: the provincial government. A bill for each patient is sent to the province and is paid (no questions asked) within several weeks.

Like most other wealthy countries, they have simplified a lot of costs out of their health care system. In contrast, US hospitals must deal with scores of insurance plans (each playing by their own rules); submit detailed bills for every test, procedure, drug or other supply; and then be prepared to justify them as hospitals try to maximize their revenues and insurance companies try to minimize their “medical losses.” Unfortunately, the Affordable Care Act is complicating things even more.

All of this fighting about money costs plenty of it and contributes to the unconscionable amount of waste documented by the Health Affairs study while actually interfering with patient care. The effects of this money-driven system on the quality of care may be even more damaging than the financial costs.

In the US, hospital managers spend huge amounts of time, effort and money chasing and maximizing profitable revenue. They do this in two ways. The most obvious is fighting directly with insurance companies over payment — when and whether to pay and if so, how much.

But less well-known and understood are the powerful ways our insurance-based system affects the types of services hospitals offer and promote, and the ways doctors practice. Caregivers are strongly encouraged by hospital managers to promote services that are profitable and discouraged from recommending those that are not, often without much regard to the actual needs of patients.

A physician employed by a large Maine hospital recently complained to me about her resentment at being pressured by hospital management to order completely unnecessary tests and procedures in order to meet the hospital’s revenue goals. Doctors throughout Maine, and the US, can relate to that.

That’s why we have hospitals with too many scanners and other fancy and expensive gadgets and too few primary care physicians. That’s why physicians are forced to see too many patients and spend too little time with each of them. That’s why more and more physicians are burning out and retiring. This will not change until we change the ways we pay hospitals and our “healthcare is a business” culture.

Canada and most other wealthy countries have shown that there are better ways to do things. Hospitals there are on a lump-sum budget or something very similar. The pursuit of revenue that is so consuming in US hospitals is mostly eliminated.

If we were to adopt a similar system here, doctors and hospital managers in the US would be able to focus on how to best provide care to their communities. Most would likely jump at the chance if they believed the corporate interests and their political enablers who are blocking real reform would allow it to happen.

That would save money and improve the quality of care at the same time. What’s not to like about that?

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Opinion Mon, 22 Sep 2014 10:51:47 -0400
Uganda's Youth Discover the Beauty in Farming

Kampala - Before she entered the Miss Uganda beauty contest, 24-year-old Fiona Nassaka was a farmer.

“You grow your lettuce, you go and supply it to any market like Capital Shoppers [a Kampala supermarket] and you get your money at the end of the month,” says the young beauty queen who is also not afraid to get her hands dirty growing peppers and passion fruit, and through rearing pigs, rabbits and hens.

“As a young person getting your own cash from your own product, you become really proud of yourself,” she tells IPS.

Today the glamorous Ugandan woman is the reigning Miss Talent, having won that category of the national beauty competition ahead of the finals on Oct. 25. But Nassaka is first and foremost a farmer.

Now she’s encouraging other young ladies to move into agriculture through this year’s contest, which has a new theme, “Promoting agriculture entrepreneurship among the youth”.

The 2014 Miss Uganda pageant is particularly trying to recruit women aged between 18 and 25 into farming. There’s also a new, unlikely sponsor: the Ugandan army.

According to the State of Uganda Population Report 2013, four out of every five of Uganda’s 17.3 million women are employed in agriculture, the majority of whom work as subsistence farmers.

But Nassaka says many young women turn up their noses at working in the sector, despite the fact that youth unemployment is said to be as high as 62 percent, according to “Lost Opportunity? Gaps in Youth Policy and Programming in Uganda” by ActionAid International.

“Women think agriculture is only for the older people, they think it’s not profitable,” Nassaka says. “But most of the rich people in the world are related to agriculture.”

“At the end of the day we’re going to fight poverty. We’re all going to be happy,” she adds.

The new direction for Miss Uganda has raised some eyebrows. But organisers insist it is all about encouraging young women to develop skills to take care of themselves and their families, boosting the economy, and of course, in pageant speak, “beauty with a purpose”.

Brenda Nanyonjo, the chief executive of Miss Uganda Ltd, says in the lead-up to the winner being crowned the 20 competition finalists will take part in a cattle and poultry farm boot camp and visit the marketplace to gain hands-on agricultural experience. Eventually, many could get good jobs in what is the biggest industry in Uganda.

“You feed the nation, you feed the community. You make a bigger difference than having a boutique,” Nanyonjo says.

“That’s why we chose the theme. To some people it was weird, funny, ‘it can’t happen’. But it’s going to happen because we are going to run this campaign for the rest of the year and it’s not a one-off campaign.”

2014 0922schartj According to an ActionAid International report, Uganda’s youth are extensively involved in agriculture. Courtesy: ActionAid International

Dr Kihura Nkuba is the chief strategist at Operation Wealth Creation (OWC). It’s an initiative spearheaded by the army and tasked by the presidency to galvanise production in rural areas.

‘We can start industries, we can increase our foreign exchange revenue,” Nkuba said speaking the launch of the Miss Uganda contest on Monday, Sept. 15.

“We can become food secure. We can have seeds, we can grow our own food and have granaries and silos.”

OWC will fund Miss Uganda and four winners to market Uganda’s local produce within and outside Uganda for two years, he says.

Miss Uganda contestants could eventually market products the country is already producing, such as juice, cornflake and honey.

“Uganda produces a lot of products which are not known,” Nkuba says. “Miss Eastern Uganda should be rooting for her own products, which is rice. Miss Western Uganda should be rooting for Ugandan milk.”

The competition organisers and sponsors aren’t the only people talking up agriculture.

“The ones living in the paradise called Uganda are having food shortages,” the country’s President Yoweri Museveni told 200 Ugandan students as they left for agricultural apprenticeships in Israel, the Daily Monitor newspaper reported over a week ago.

“People don’t know they can get money from agriculture. The problem is not skills but attitude.” Nassaka says she was “so supportive” of her leader, because “agriculture is our backbone in Uganda”.

“Uganda, they call it the Pearl of Africa because of its favourable climate, because of its fertile soil,” she says.

“So we need to go back to our roots and say what can we do best? Planting, rearing cattle. At the end of the day we are fed and hunger and poverty is eradicated.” But those women already working in the sector struggle compared to their male counterparts, many point out.

Most engage in small-scale farming and business activities which earns little money, and few know the market dynamics of what they’re selling, often underpricing their produce, a “clear case of poor returns for the months of labour spent in the fields,” according to the State of Uganda Population Report.

Some women sell their produce and are then forced to surrender the money to their husbands, it says.

“They’re just in the background digging and growing the food crops, not going to the market to sell them,” Bridget Mugambe, a policy advocate from Alliance for Food Sovereignty in Africa (AFSA), tells IPS.

“The lucky ones will have maybe a few roadside stalls. But if you actually visited a lot of the rural gardens the women do a lot of farming. But for cash crops like maize and coffee, all that harvesting will be done by the men.”

Nancy Mugimba, the National Coordinator at Eastern and Southern Africa Small Scale Farmers’ Forum Uganda, tells IPS that she doesn’t think it’s women who have a negative attitude towards agriculture.

“It is not that they don’t want [to engage in the sector] but they’re dealing with issues of land ownership, how do I get access to products and resources, land, water?”

Mugambe says the questions needs be asked about how to “bring women to the forefront of the sector where they are the majority?”

This could also be where the 2014 Miss Uganda beauty contest comes in.

“Women are the ones who do the work and then the men take the output,” Judith Acayo, 24, a records officer, poultry farmer and the current Miss Uganda Northern Region, admits to IPS.

“I entered Miss Uganda to speak out about their rights.”

Visit IPS news for fresh perspectives on development and globalization.

News Mon, 22 Sep 2014 10:25:05 -0400
Obamacare ]]> Art Mon, 22 Sep 2014 09:44:05 -0400 Education With a Debt Sentence: For-Profit Colleges as American Dream Crushers and Factories of Debt

Graduates during commencement(Image: Graduates during commencement via Shutterstock; Edited: MS / TO)Imagine corporations that intentionally target low-income single mothers as ideal customers. Imagine that these same companies claim to sell tickets to the American dream -- gainful employment, the chance for a middle class life. Imagine that the fine print on these tickets, once purchased, reveals them to be little more than debt contracts, profitable to the corporation’s investors, but disastrous for its customers. And imagine that these corporations receive tens of billions of dollars in taxpayer subsidies to do this dirty work. Now, know that these corporations actually exist and are universities.

Over the last three decades, the price of a year of college has increased by more than 1,200%. In the past, American higher education has always been associated with upward mobility, but with student loan debt quadrupling between 2003 and 2013, it’s time to ask whether education alone can really move people up the class ladder. This is a question of obvious relevance for low-income students and students of color.

As Cornell professor Noliwe Rooks and journalist Kai Wright have reported, black college enrollment has increased at nearly twice the rate of white enrollment in recent years, but a disproportionate number of those African-American students end up at for-profit schools. In 2011, two of those institutions, the University of Phoenix (with physical campuses in 39 states and massive online programs) and the online-only Ashford University, produced more black graduates than any other institutes of higher education in the country. Unfortunately, a recent survey by economist Rajeev Darolia shows that for-profit graduates fare little better on the job market than job seekers with high school degrees; their diplomas, that is, are a net loss, offering essentially the same grim job prospects as if they had never gone to college, plus a lifetime debt sentence.

Much of the American public does not understand the difference between for-profit, public, and private non-profit institutions of higher learning. All three are concerned with generating revenue, but only the for-profit model exists primarily to enrich its owners. The largest of these institutions are often publicly traded, nationally franchised corporations legally beholden to maximize profit for their shareholders before maximizing education for their students. While commercial vocational programs have existed since the nineteenth century, for-profit colleges in their current form are a relatively new phenomenon that began to boom with a series of initial public offerings in the 1990s, followed quickly by deregulation of the sector as the millennium approached. Bush administration legislation then weakened government oversight of such schools, while expanding their access to federal financial aid, making the industry irresistible to Wall Street investors.

While the for-profit business model has generally served investors well, it has failed students. Retention rates are abysmal and tuitions sky-high. For-profit colleges can be up to twice as expensive as Ivy League universities, and routinely cost five or six times the price of a community college education. The Medical Assistant program at for-profit Heald College in Fresno, California, costs $22,275. A comparable program at Fresno City College costs $1,650. An associate degree in paralegal studies at Everest College in Ontario, California, costs $41,149, compared to $2,392 for the same degree at Santa Ana College, a mere 30-minute drive away.

Exorbitant tuition means students, who tend to come from poor backgrounds, have to borrow from both the government and private sources, including Sallie Mae (the country's largest originator, servicer, and collector of student loans) and banks like Chase and Wells Fargo. A whopping 96% of students who manage to graduate from for-profits leave owing money, and they typically carry twice the debt load of students from more traditional schools.

Public funds in the form of federal student loans has been called the “lifeblood” of the for-profit system, providing on average 86% of revenues. Such schools now enroll around 10% of America’s college students, but take in more than a quarter of all federal financial aid -- as much as $33 billion in a single year. By some estimates it would cost less than half that amount to directly fund free higher education at all currently existing two- and four-year public colleges. In other words, for-profit schools represent not a “market solution” to increasing demand for the college experience, but the equivalent of a taxpayer-subsidized subprime education.

Pushing the Hot Button, Poking the Pain

The mantra is everywhere: a college education is the only way to climb out of poverty and create a better life. For-profit schools allow Wall Street investors and corporate executives to cash in on this faith.

Publicly traded schools have been shown to have profit margins, on average, of nearly 20%. A significant portion of these taxpayer-sourced proceeds are spent on Washington lobbyists to keep regulations weak and federal money pouring in. Meanwhile, these debt factories pay their chief executive officers $7.3 million in average yearly compensation. John Sperling, architect of the for-profit model and founder of the University of Phoenix, which serves more students than the entire University of California system or all the Ivy Leagues combined, died a billionaire in August.

Graduates of for-profit schools generally do not fare well. Indeed, they rarely find themselves in the kind of work they were promised when they enrolled, the kind of work that might enable them to repay their debts, let alone purchase the commodity-cornerstones of the American dream like a car or a home.

In the documentary "College Inc.," produced by PBS’s investigative series Frontline, three young women recount how they enrolled in a nursing program at Everest College on the promise of $25-$35 an hour jobs on graduation. Course work, however, turned out to consist of visits to the Museum of Scientology to study “psychiatrics” and visits to a daycare center for their “pediatrics rotation.” They each paid nearly $30,000 for a 12-month program, only to find themselves unemployable because they had been taught nearly nothing about their chosen field.

In 2010, an undercover investigation by the Government Accountability Office tested 15 for-profit colleges and found that every one of them “made deceptive or otherwise questionable statements” to undercover applicants. These recruiting practices are now under increasing scrutiny from 20 state attorneys general, Senate investigators, and the Consumer Financial Protection Bureau (CFPB), amid allegations that many of these schools manipulate the job placement statistics of their graduates in the most cynical of ways.

The Iraq and Afghanistan Veterans of America, an organization that offers support in health, education, employment, and community-building to new veterans, put it this way in August 2013: "Using high-pressure sales tactics and false promises, these institutions lure veterans into enrolling into expensive programs, drain their post-9/11 GI Bill education benefits, and sign up for tens of thousands of dollars in loans. The for-profits take in the money but leave the students with a substandard education, heavy student loan debt, non-transferable credits, worthless degrees, or no degrees at all.”

Even President Obama has spoken out against instances where for-profit colleges preyed upon troops with brain damage: “These Marines had injuries so severe some of them couldn’t recall what courses the recruiter had signed them up for.”

As it happens, recruiters for such schools are manipulating more than statistics. They are mining the intersections of class, race, gender, inequality, insecurity, and shame to hook students. "Create a sense of urgency. Push their hot button. Don't let the student off the phone. Dial, dial, dial," a director of admissions at Argosy University, which operates in 23 states and online, told his enrollment counselors in an internal email.

A training manual for recruiters at ITT Tech, another multi-state and virtual behemoth, instructed its employees to "poke the pain a bit and remind them who else is depending on them and their commitment to a better future.”  It even included a "pain funnel" -- that is, a visual guide to help recruiters exploit prospective students’ vulnerabilities. Pain was similarly a theme at Ashford University, where enrollment advisors were told by their superiors to “dig deep” into students’ suffering to “convince them that a college degree is going to solve all their problems.”

An internal document from Corinthian Colleges, Inc. (owner of Everest, Heald, and Wyotech colleges) specified that its target demographic is “isolated,” “impatient” individuals with “low self-esteem.”  They should have “few people in their lives who care about them and be stuck in their lives, unable to imagine a future or plan well.”

These recruiting strategies are as well funded as they are abhorrent. When an institution of higher learning is driven primarily by the needs of its shareholders, not its students, the drive to get “asses in classes” guarantees that marketing budgets will dwarf whatever is spent on faculty and instruction. According to David Halperin, author of Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Student’s Lives, “The University of Phoenix has spent as much as $600 million a year on advertising; it has regularly been Google’s largest advertiser, spending $200,000 a day.” 

At some schools, the money put into the actual education of a single student has been as low as $700 per year. The Senate’s Health, Education, Labor, and Pensions Committee revealed that 30 of the for-profit industry’s biggest players spent $4.2 billion -- or 22.7% of their revenue -- on recruiting and marketing in 2010.

Subprime Schools, Swindled Students

In profit paradise, there are nonetheless signs of trouble. Corinthian College Inc., for instance, is under investigation by several state and federal agencies for falsifying job-placement rates and lying to students in marketing materials. In June, the Department of Education discovered that the company was on the verge of collapse and began supervising a search for buyers for its more than 100 campuses and online operations. In this “unwinding process,” some Corinthian campuses have already shut down. To make matters worse, this month the Consumer Financial Protection Bureau announced a $500 million lawsuit accusing Corinthian of running a “predatory lending scheme.”

As the failure of Corinthian unfolds, those who understood it to be a school -- namely, its students -- have been left in the lurch. Are their hard-earned degrees and credits worthless?  Should those who are enrolled stay put and hope for the storm to pass or jump ship to another institution? Social media reverberate with anxious questions.

Nathan Hornes started the Facebook group “Everest Avengers,” a forum where students who feel confused and betrayed can share information and organize. A 2014 graduate of Everest College’s Ontario, California, branch, Nathan graduated with a 3.9 GPA, a degree in Business Management, and $65,000 in debt. Unable to find the gainful employment Everest promised him, he currently works two fast-food restaurant jobs. Nathan’s dreams of starting a record label and a music camp for inner city kids will be deferred even further into some distant future when his debts come due: a six-month grace period expires in October and Nathan will owe $380 each month on Federal loans alone. “Do I want to pay bills or my loans?” he asks. Corinthian has already threatened to sue him if he fails to make payments.

Asked to explain Corinthian’s financial troubles, Trace Urdan, a market analyst for Wells Fargo Bank, Corinthian’s biggest equity investor, argued that the school attracts “subprime students” who “can be expected -- as a group -- to repay at levels far lower than most student loans.” And yet, as Corinthian’s financial woes mounted, the corporation stopped paying rent at its Los Angeles campuses and couldn’t pay its own substantial debts to lenders, including Bank of America, from whom it sought a debt waiver.

That Corinthian can request debt waivers from its lenders should give us pause. Who, one might ask, is the proper beneficiary of a debt waiver in this case? No such favors will be done for Nathan Hornes or other former Corinthian students, though they have effectively been led into a debt trap with an expert package of misrepresentations, emotional manipulation, and possibly fraud.

From Bad Apples to a Better System, or Everest Avenged

As is always the case with corporate scandals, Corinthian is now being described as a “bad apple” among for-profits, not evidence of a rotten orchard. The fact is that for-profits like Corinthian exemplify all the contradictions of the free-market model that reformers present as the only solution to the current crisis in higher education: not only are these schools 90% dependent on taxpayer money, but tenure doesn’t exist, there are no faculty unions, most courses are offered online with low overhead costs, and students are treated as “customers.”

It’s also worth remembering that at “public” universities, it is now nearly impossible for working class or even middle class students to graduate without debt. This sad state of affairs -- so the common version of the story goes -- is the consequence of economic hard-times, which require belt tightening and budget cuts. And so it has come to pass that strapped community colleges are now turning away would-be enrollees who wind up in the embrace of for-profits that proceed to squeeze every penny they can from them and the public purse as well. (All the while, of course, this same tale provides for-profits with a cover: they are offering a public service to a marginalized and needy population no one else will touch.)

The standard narrative that, in the face of shrinking tax revenues, public universities must relentlessly raise tuition rates turns out, however, to be full of holes. As political theorist Robert Meister points out, this version of the story ignores the complicity of university leaders in the process. Many of them were never passive victims of privatization; instead, they saw tuition, not taxpayer funding, as the superior and preferred form of revenue growth.

Beginning in the 1990s, universities, public and private, began working ever more closely with Wall Street, which meant using tuition payments not just as direct revenue but also as collateral for debt-financing. Consider the venerable but beleaguered University of California system: a 2012 report out of its Berkeley branch, “Swapping Our Futures,” shows that the whole system was losing $750,000 each month on interest-rate swaps -- a financial product that promised lower borrowing costs, but ended up draining the U.C. system of already-scarce resources.

In the last decade, its swap agreements have cost it over $55 million and could, in the end, add up to a loss of $200 million. Financiers, as the university’s creditors, are promised ever-increasing tuition as the collateral on loans, forcing public schools to aggressively recruit ever more out-of-state students, who pay higher tuitions, and to raise the in-state tuition relentlessly as well, simply to meet debt burdens and keep credit ratings high.

Instead of being the social and economic leveler many believe it to be, American higher education in the twenty-first century too often compounds the problem of inequality through debt-servitude. Referring to student debt, which has by now reached $1.2 trillion, Meister suggests, “Add up the lifetime debt service that former students will pay on $1 trillion, over and above the principal they borrow, and you could run a very good public university system for what we are paying capital markets to fund an ever-worsening one."

You Are Not a Loan

The big problem of how we finance education won’t be solved overnight. But one group is attempting to provide both immediate aid to students like Nathan Hornes and a vision for rethinking debt as a systemic issue. On September 17th, the Rolling Jubilee, an offshoot of Occupy Wall Street, announced the abolition of a portfolio of debt worth nearly $4 million originating from for-profit Everest College. This granted nearly 3,000 former students no-strings-attached debt relief.

The authors of this article have both been part of this effort. To date, the Rolling Jubilee has abolished nearly $20 million dollars of medical and educational debt by taking advantage of a little-known trade secret: debt is often sold to debt collectors for mere pennies on the dollar. A medical bill that was originally $1,000 might sell to a debt collector for 4% of its sticker price, or $40. This allowed the Rolling Jubilee project to make a multi-million dollar impact with a budget of approximately $700,000 raised in large part through small individual donations.

The point of the Rolling Jubilee is simple enough: we believe people shouldn’t have to go into debt for basic needs. For the last four decades, easy access to credit has masked stagnating wages and crumbling social services, forcing many Americans to debt-finance necessities like college, health care, and housing, while the creditor class has reaped enormous rewards. But while we mean the Jubilee’s acts to be significant, we know it is not a sustainable solution to the problem at hand. There is no way to buy and abolish all the odious debt sloshing around our economy, nor would we want to. Given the way our economy is structured, people would start slipping into the red again the minute their debts were wiped out.

The Rolling Jubilee instead raises a question: If a ragtag group of activists can find a way to provide immediate relief to even a few thousand defrauded students, why can’t the government?

The Consumer Financial Protection Bureau’s lawsuit against Corinthian Colleges, Inc. is a good first step, but it only applies to specific private loans originating after 2011, and it will likely take years to play out. Until it's resolved, students are still technically on the hook and many will be harassed by unscrupulous debt collectors attempting to extract money from them while they still can. In the meantime, the Department of Education (DOE) -- which has far greater purview than the CFPB -- is effectively acting as a debt collector for a predatory lender, instead of using its discretionary power to help students. Why didn’t the DOE simply let Corinthian go bankrupt, as often happens to private institutions, and so let the students’ debts become dischargeable?

Such debt discharge is well within the DOE’s statutory powers. When a school under its jurisdiction has broken state laws or committed fraud it is, in fact, mandated to offer debt discharge to students. Yet in Corinthian’s opaque, unaccountable unwinding process, the Department of Education appears to be focused on keeping as many of these predatory “schools” open as possible.

No less troubling, the DOE actually stands to profit off Corinthian’s debt payments, as it does from all federally secured educational loans, regardless of the school they are associated with. Senator Elizabeth Warren has already sounded the alarm about the department’s conflict of interest when it comes to student debt, citing an estimate that the government stands to rake in up to $51 billion dollars in a single year on student loans. As Warren points out, it’s “obscene” for the government to treat education as a profit center.

Can there be any doubt that funds reaped from the repayment of federally backed loans by Corinthian students are especially ill-gotten gains? Nathan Hornes and his fellow students should be the beneficiaries of debt relief, not further dispossession.

Unless people agitate, no reprieve will be offered. Instead there may be slaps on the wrist for a few for-profit “bad apples,” with policymakers presenting possible small reductions in interest rates or income-based payments for student borrowers as major breakthroughs.

We need to think bigger. There is an old banking adage: if you owe the bank $1,000, the bank owns you; if you owe the bank $1 million, you own the bank. Individually, student debt is an incapacitating burden. But as Nathan and others are discovering, as a premise for collective action, it can offer a new kind of leverage. Debt collectives, effectively debtors’ unions, may be the next stage of anti-austerity organizing. Collective action offers many possibilities for building power against creditors through collective bargaining, including the power to threaten a debt strike. Where for-profits prey on people’s vulnerability, isolation, and shame, debt collectives would nurture feelings of strength, solidarity, and outrage.

Those who profit from education fear such a transformation, and understandably so. “We ask students to make payments while in school to help them develop the discipline and practice of repaying their federal and other loan obligations,” a Corinthian Colleges spokesman said in response to the news of CFPB’s lawsuit.

It’s absurd: a single mother working two jobs and attending online classes to better her life is discipline personified, even if she can’t always pay her loans on time. The executives and investors living large off her financial aid are the ones who need to be taught a lesson. Perhaps we should collectively demand that as part of their punishment these predators take a course in self-discipline taught by their former students.

News Mon, 22 Sep 2014 12:16:25 -0400
The Mysteries of Inequality Are Only Mysterious to Elites

Developing explanations for the growth in inequality over the last three decades has been a huge growth industry in economics and policy circles. Many economists have made their careers with a novel explanation of how the natural development of technology and the market has concentrated income and wealth in the top 1 percent. It’s even better if you can show that inequality hasn't risen.

Janet Yellen, chairwoman of the Federal Reserve, testifies before the Senate Banking, Housing and Urban Affairs Committe in Washington, July 15, 2014. (Photo: Doug Mills / The New York Times)Janet Yellen, chairwoman of the Federal Reserve, testifies before the Senate Banking, Housing and Urban Affairs Committe in Washington, July 15, 2014. (Photo: Doug Mills / The New York Times)Developing explanations for the growth in inequality over the last three decades has been a huge growth industry in economics and policy circles. Many economists have made their careers with a novel explanation of how the natural development of technology and the market has concentrated income and wealth in the top 1 percent. It’s even better if you can show that inequality hasn’t risen. While the explanations that blame inequality on technology can get complicated, there were three items in the last week that painted the picture very clearly for the rest of us.

First, we got new data from the Federal Reserve Board and the Census Bureau, both of which showed that typical families are still seeing very little benefit from the recovery to date. The Fed released the 2013 Survey of Consumer Finance which showed median family wealth was still below the 2010 level in spite of the run-up in the stock market.

The Census Bureau released its annual data on income, poverty, and health insurance coverage. While there was some good news on the latter two, median income remained flat. The story in both the Fed and Census analysis remains the same; those at the top continue to get the bulk of the benefits from economic growth.

The other two items tell us why this is not a surprise. First, we had a meeting of the Federal Reserve Board in which they discussed when they should start raising interest rates. There was a bit of good news for the nation’s workers as Janet Yellen, the Fed chair, continued to hold sway with her policy of maintaining the Fed’s zero interest rate policy.

However the bad news is that many members of the Fed’s Open Market Committee (FOMC) already are pushing for the Fed to pull the trigger and start raising interest rates. Furthermore, others have indicated that they are prepared to join the trigger happy group as soon as there is any evidence of wage growth. Yellen as chair has the most important voice, but if she loses the support of the rest of the FOMC, interest rates will rise.

There should be no doubt what that means. The purpose of the Fed’s raising interest rates is to slow the economy to keep people from getting jobs. By keeping the unemployment rate up, the FOMC will be reducing workers’ bargaining power and keeping them from getting pay increases. This disproportionately hurts those at the bottom of the income distribution, but puts downward pressure on the wages of most workers.

In other words, we have the central bank of the United States acting deliberately to keep workers from getting pay increases. They justify their actions over concerns about inflation, but we need not take these seriously. Who knows what they believe, but the real world risk of a dangerous inflationary spiral ranks alongside the risk of attacks by Martians. It ain’t going to happen and they should know this.

Of course high unemployment is not the only policy that has kept wages down over the last three decades. Trade policy has also been designed for this purpose. Our manufacturing workers have to compete with low paid workers in the developing world; our doctors are protected from this competition. The downward pressure on the wages of ordinary workers is worsened by our high dollar policy which puts domestic workers at an even greater disadvantage.

Government policy has also made it almost impossible for workers to organize unions. And of course we have let the minimum wage fall way behind the cost of living and even further behind productivity.

The other item in the news last week was the anniversary of the collapse of Lehman and the beginning of the bailout. This is the other essential part of the picture. While the government is prepared to act to keep wages from rising, when the Wall Street banks effectively put themselves into bankruptcy, the government was very quick to come to the rescue. Both the Fed and the Treasury Department made it their central mission to keep the Wall Streeters alive. As former Treasury Secretary Timothy Geithner said repeatedly in his autobiography, there would be no more Lehmans.

So that’s the basic story in the simplest possible terms. The government openly acts to ensure that wages don’t rise and also to protect Wall Street high flyers who managed to sink their banks with their bad bets. Maybe an economist will win a Nobel prize for figuring out why inequality is increasing.

Opinion Mon, 22 Sep 2014 11:39:10 -0400