Abolish the debt that is drowning Puerto Rico

We need to organize for immediate disaster relief for Puerto Rico–but we can also expose and oppose the debt disaster that came before the hurricanes.

Families begin to rebuild after the hurricane in Patillas, Puerto Rico (Andrea Booher | Wikimedia Commons)

Families begin to rebuild after the hurricane in Patillas, Puerto Rico (Andrea Booher | Wikimedia Commons)

SOCIALIST WORKER supports President Trump in his call to cancel Puerto Rico’s punishing debt.

We can pretty much guarantee you’ll never see the first five words of that sentence here ever again–and the supervisors of the “adult day care center” at 1600 Pennsylvania Avenue are obviously trying like hell to make sure we never have reason to.

But it says a lot about the Wall Street-made catastrophe that has plagued Puerto Rico for years before Hurricane Maria that even a reactionary fanatic like Trump didn’t think twice before stating the obvious.

“They owe a lot of money to your friends on Wall Street, and we’re going to have to wipe that out,” Trump said in an interview last week with Geraldo Rivera of Fox News. “I don’t know if it’s Goldman Sachs, but whoever it is, you can wave goodbye to that.”

“Wall Street promptly freaked out,” Politico reported the next day. That was an understatement. Heavy trading on the normally stable bond market pushed the value of Puerto Rico’s general obligation bonds–already devalued to 56 cents on the dollar after the island effectively declared bankruptcy earlier this year–down to 37 cents on the dollar.

The White House then “move[d] swiftly to clean up Trump’s seemingly offhand remarks,” Politico continued. Again an understatement. Office of Management and Budget Director Mick Mulvaney was rushed in front of a television camera to tell CNN: “I wouldn’t take it word for word with that.”

Just to make sure Wall Street got the message that no one in the Trump administration had any intention of doing what the head of the Trump administration had just said, Mulvaney was more explicit–and more contemptuous of the Puerto Rican people–in a second interview with Bloomberg: “We are not going to bail them out. We are not going to pay off those debts.”

Anyone want to bet that Trump doesn’t talk about “saying goodbye” to Puerto Rico’s debt again?

But the simple fact is that justice demands exactly that: The cancelation of all of Puerto Rico’s debt repayments, by the action of the U.S. government, taking responsibility for the Wall Street loan sharks who inflicted the damage in the first place.

Puerto Rico is caught in the same kind of debt trap that has ensnared poor countries in hock to the International Monetary Fund and World Bank–or more advanced economies like Greece, at the hands of European bankers and bureaucrats. The aim is to force vulnerable societies to knuckle under to the will of the ruling class.

And now, the devastation of neoliberal policies has made Puerto Rico’s crisis following Hurricanes Irma and Maria much, much worse.

People who want to show solidarity with Puerto Rico today will rightly focus on ways to provide immediate relief to communities desperate for food, water and critical supplies. SW hopes its readers will raise what money they can to donate to grassroots efforts–see the What You Can Do box with this article.

But we have another job to do now, while Puerto Rico lingers in the media spotlight: expose the debt trap that made the island more vulnerable when Maria struck and demand that it end.

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IN MAY of this year, Puerto Rico’s government went to federal court to file for the equivalent of bankruptcy on a debt that includes over $74 billion in repayments on government bonds and $49 billion in pension obligations. But in return for immediate relief, Puerto Rico will have to abide by even harsher austerity dictates.

The debt burden–which is larger than the annual economic output of the island when pension obligations are added in–is one consequence of a recession that has lasted for more than a decade.

The economic slump began when Corporate America–after many years of making super-profits off operations in Puerto Rico, particularly pharmaceutical production–abandoned the island after favorable tax incentives for investment were phased out starting in the early 2000s. Annual corporate investment in Puerto Rico peaked at 20.7 percent of gross domestic product in 1999–it has fallen to under 7.9 percent as of 2016.

Successive governments–whether led by New Progressive Party, which is aligned with the U.S. Republicans, or the Popular Democratic Party, tied to the Democrats–imposed policies that were guaranteed to make the crisis worse: neoliberal austerity.

Social spending was cut drastically–reductions in the island’s education budget led to hundreds of schools being closed, for example. Public-sector workers have been under intense pressure, with tens of thousands of layoffs and attacks on their unions. Regressive taxes have been hiked, making the sales tax of 11.5 percent higher than any U.S. state.

A succession of state assets were privatized on terms guaranteed to benefit the private purchasers: Back in the 1990s, conservative Gov. Pedro Rosselló González sold off hospitals that were part of a public health care system that was once fairly accessible and affordable at around half their market value.

Austerity measures propelled the vicious circle: Continuing economic decline made shortfalls in government revenues worse, leading to more spending cuts and regressive taxes that caused further economic contraction, and on and on.

The consequences even before Hurricane Maria were dire: Official unemployment is 11.7 percent, well over double the rate in the U.S. as a whole. Just under half of people on the island live in poverty, including three in five children.

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THROUGH IT all, debt was the straitjacket to make sure Puerto Rico didn’t stray from austerity.

Faced with declining revenues as a result of the contracting economy, various branches and agencies of the Puerto Rican government issued bonds to raise money–but these came not only with the usual obligation to repay the cash with interest, but increasing pressure to intensify neoliberal measures.

The vultures of Wall Street were eager to set up the increasingly complex bond issues. They paid better than most municipal issues, and interest on income from Puerto Rico bonds is exempt from city, state and federal taxes.

But the biggest gamblers on Wall Street see more than a tax loophole in the suffering of the people of Puerto Rico. A 2015 report from the Hedgeclippers.org website paints an ugly picture:

Several groups of hedge funds have bought up large chunks of Puerto Rican debt at discounts and have also pushed the island to borrow at extremely favorable terms for creditors. Hedge fund managers are also recommending the implementation of austerity measures.

Known as “vulture funds,” these investors have followed a similar game plan in other debt crises, in countries such as Greece and Argentina. The spoils they ultimately seek are not just bond payments, but structural reforms and privatization schemes that give them extraordinary wealth and power–at the expense of everyone else.

It’s been obvious for several years that Puerto Rico’s debt burden is unpayable, but the hedge-fund vultures are counting on enforcers in the form of the U.S. government.

A law pushed through Congress last year by Barack Obama and the Democrats established a seven-person Fiscal Control Board with broad powers to direct government agencies on the island and dictate laws and policies. It has ordered, for example, exemptions to federal standards on the minimum wage, Medicaid and Temporary Assistance to Needy Families.

To top it off, the seven members of the board include some of the same financiers who imposed neoliberal policies and arranged the deals that caused the debt burden.

Bondholders may still be forced to take a “haircut”–that is, accept less than what they are owed on Puerto Rico’s bonds. But the mission of the Fiscal Control Board is to make sure working people on the island, not investors, pay as much of the price as possible.

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ALL THIS “reads like the 21st century equivalent of the metropolitan looting of wealth from the colonies,” as Lance Selfa wrote for SocialistWorker.org after Hurricane Maria struck Puerto Rico head on.

And we know who the looters and their accomplices are.

The hedge-fund parasites who are trying to inflict more suffering on Puerto Rico rather than lose a penny from their investment gambles should face pickets outside their offices. Members of Congress–Republican and Democrat alike–should be greeted at public events by solidarity activists demanding that they remove the noose that is strangling the island.

There is much work to be done to organize for immediate relief in Puerto Rico after the hurricane catastrophe. But the left has an opportunity to also expose and oppose the unnatural disaster that came before Irma and Maria.

We may not hear any more about canceling the debt from Donald Trump, but we can raise our own voices to demand that this crushing burden be lifted off the people of Puerto Rico.



Ten percent of Mexican families earn two thirds of country’s income

By Alex González
23 August 2017

A new study by the United Nation’s Economic Commission for Latin America and the Caribbean (CEPAL) reveals that economic inequality in Mexico is much higher than had been previously estimated. According to the study, the top 10 percent of Mexicans received over two thirds of the country’s income in 2012, while the bottom 10 percent earned just 0.4 percent that same year. This level of inequality is 77 percent higher than what had been previously calculated using official data.

According to the study, the richest 1 percent of Mexicans—between 125,000 and 220,000 people—own one third of the country’s assets. Meanwhile, half of the population—over 60 million people—lives in poverty. If the country’s wealth were to be equally divided among the population, each individual would receive a lump sum of $56,300, an amount greater than one person working at the minimum wage would earn working every day for 30 years.

After two centuries of vast improvements in the productive process, contemporary levels of inequality have reached standards not seen since feudal times. In nineteenth century New Spain, a mine’s owner earned between 700 and 1,000 times more than an average miner. In 2012, the top 1 percent earned 729 times more than the bottom 1 percent.

The results of the study would place Mexico, alongside Chile, as the countries with the highest levels of inequality in the Organization for Economic Co-operation and Development (OECD), an organization encompassing supposedly “developed” countries.

Most workers in Mexico—some 24 million people—work without a contract or as temporary workers. One of out every five Mexicans goes hungry, and the daily minimum wage ($5 USD) is not sufficient to support a family. Over half of the population does not earn enough to cover basic expenses, such as food, clothing, transportation, and housing. According to a 2015 report by Oxfam, the wealth of Mexico’s 16 billionaires multiplies fivefold each year, while 48 percent of state schools have no access to sewage, 31 percent have no drinking water, 13 percent have no bathrooms or toilets, and 11 percent have no access to electricity.

The study lays bare the degree to which financial corporations, many from the United States, have come to dominate every aspect of life in Latin America, producing widespread social misery while filling the pockets of the top 1 percent and the next 9 percent.

In Mexico, the average yield from capital has been 15 percent annually in recent years, compared to a rise in the average industrial wage of only 4 percent per year. Eighty percent of financial assets in the country are in the hands of 10 percent of the population. A mere 23,000 people and corporations control about one fifth of the country’s financial assets, while half of the population does not even have a bank account.

The vast monopolization of the economy is also present outside of the financial sector. Six hundred companies own 64 percent of assets in the manufacturing sector, 40 companies own one-third of assets in retail, and 22 companies own 89 percent of assets in the telecommunications sector. Overall, just 10 percent of Mexican companies control 93 percent of the country’s assets.

While nominally owned by Mexican firms, these companies are overwhelmingly controlled by US finance capital. In 2015, Delta Air Lines announced plans to acquire up to 49 percent of Aeroméxico, the airline with the highest domestic market share and second highest international market share in the country. Delta’s majority shareholders are Berkshire Hathaway, Vanguard, and J.P Morgan. Vanguard is also the largest shareholder of Bachoco, the country’s largest chicken producer, while mutual fund company Dodge & Cox is a leading shareholder of Mexican multinational building materials company CEMEX.

The claims of various pseudo-left groups that Chinese trade in Latin America has supplanted US hegemony in the region are nothing short of absurd. As the figures from the CEPAL study lay bare, it is US finance capital that calls the shots in the Mexican economy. Their cries of “Chinese imperialism” serve to obscure the reactionary role of the US in the region and to position their own forces as willing partners in the suppression of working class opposition.

These conditions of mass misery and want have created a social powder keg, where further attacks on the living conditions of the working class can generate reactions—such as the spontaneous gasolinazo protests that erupted throughout the country earlier this year—that could explode into a massive movement throughout Mexico, and even throughout the continent.

In this context, Andrés Manuel López Obrador of the “left” Movement for National Regeneration (Morena) is seeking to channel this social anger into a nationalist program that blames “corruption” and the “mafia in power” for massive inequality in Mexico.

In fact, the growth of millionaires and inequality in Mexico is the inevitable outcome of capitalist economic relations, where the socially produced labor of workers enriches the private owners of the means of production. López Obrador speaks for the “next 9 percent” of Mexican society, who seek better terms for the Mexican bourgeoisie from US finance capital and are deeply hostile to the Mexican working class.

As the CEPAL study’s figures starkly reveal, any significant improvement in the lives of the Mexican masses will require a direct attack on the wealth of the ruling class, in Mexico and around the world. This reallocation of wealth from the pockets of the few to the benefit of the masses can only take place in a struggle for international socialism in unity with their North and South American class brothers and sisters.


Concentration of poverty in New York City neighborhoods on the rise

By Philip Guelpa
27 June 2017

Despite being elected on a campaign slogan invoking “Tale of Two Cities,” pledging to fight the extreme economic inequality in New York City, the mayoralty of self-styled progressive Democrat Bill de Blasio has presided over a marked increase in poverty and a continuing rise in the cost of housing. Far from lessening the divide between the two “cities,” which has been growing for decades, the segregation, both economic and geographic, between the city’s wealthy elite and the working class, has only intensified.

The rate of poverty and the concentration of poor people living in impoverished neighborhoods in New York City have both risen dramatically in recent years. These are the findings of a newly released study by the Furman Center at New York University— State of New York Citys Housing and Neighborhoods in 2016. During the period from 2011 to 2015, 1.7 million city residents were classified as living below the official poverty line, set at the absurdly low level of $24,036 annually for a family of four. This represents 20.6 percent of the population, up from 19.1 percent in the 2006-2010 time span. Other, more realistic studies have shown that nearly two thirds of the city’s population suffer from some form of economic distress. Thirty percent of the city’s children are officially poor.

The gap between rich and poor continues to widen. The percentages of New Yorkers at the upper and lower ends of the income range grew, while those in the middle shrank. Between 2000 and 2015, households earning less than $40,000 per year increased by nearly three percentage points; those earning more than $100,000 grew by about one percentage point, but the ones in between shrank from 36 to 33 percent. Clearly, those in the middle are predominantly falling into poverty.

According to the Furman Center study, the geographic concentration of people living in areas of extreme poverty, neighborhoods where more than 40 percent of the residents are officially classified as poor, had fallen somewhat since 2000, when it was 25.4 percent, to 19.4 percent in 2006-2010. This increased markedly, to 23.5 percent, from 2011 through 2015—a period of supposed recovery from the financial meltdown of 2008-2009. These are only the most acute examples. Nearly 45 percent of the city’s population live in areas of either high or extreme poverty (30-40 percent of the residents below the poverty line, respectively). Neighborhoods encompassing 16.5 percent of the city’s population, 1.4 million people, experienced a 10 percent increase in the rate of poverty, the study found.

Living conditions in these poor neighborhoods are appalling. In extreme poverty areas, serious housing code violations were registered at five times the city average and the employment rate was 20 percentage points lower.

Of the five New York City boroughs, the Bronx has the highest percentage of neighborhoods experiencing high or extreme poverty—52.6 percent.

One of the processes driving the increase in poverty is revealed by the report’s finding that the employment rate for the city as a whole increased by 2.4 percentage points between 2005 and 2015. Thus, while a slightly higher percentage of the population is working, the real value of their income is decreasing.

The Furman Center also found that as poverty is increasing, rents are continuing to climb, creating unbearable living conditions for a large portion of the city’s population. These are related phenomena. As the overall cost of housing continues to rise, relatively better off people are forced to move to poorer neighborhoods in search of more affordable rents. This, in turn, prompts landlords to raise rents in those areas, impacting existing low-income residents.

As an example, the study describes the case of East Harlem, a predominantly working class neighborhood in northern Manhattan. In 2000, the poverty rate was 37.1 of the population. It is now 37.5—again based on the absurdly low official poverty line. However, the number of residents with annual incomes of more than $100,000 has risen by more than 4 percent. Thus, while the overall percentage of people living in poverty is increasing, the economic spread between rich and poor is widening.

Simultaneously, rents in East Harlem are increasing at a rapid rate, with the monthly median rising $120 between 2015 and 2016 alone, putting extreme pressure on the already economically stressed residents.

Citywide, between 2005 and 2015, median gross rent increased 18.3 percent, while median household income for renters increased just 6.6 percent.

The acute lack of affordable housing is driving large numbers of people onto the streets. Between 2006 and 2016, the number of city residents spending the night in homeless shelters increased by 87 percent, to about 61,000.

The situation is not new, but is becoming ever more severe. Despite fluctuations, the general trend of increasing poverty and lack of affordable housing has been continuing for decades, but has accelerated in recent years as the global economic crisis intensifies.

The extreme economic inequality that exists in New York City is starkly illustrated by the fact that while nearly two thirds of the population experience some form of economic distress, with over a third living in deep poverty, New York has the second highest GDP of all cities in the world. And yet, despite this huge amount of wealth that could be used to address the crises of poverty and lack of affordable housing, the living conditions for the city’s working class continue to deteriorate.

These statistics and many more presented in the Furman Center report starkly illustrate the utter failure to address the huge economic disparity between the city’s rich and poor by both Republican and Democratic administrations. The two parties, regardless of who lives in Gracie Mansion (the official mayoral residence) or who controls the City Council, are the representatives of the city’s financial and corporate elite.

All of the myriad programs that have over the years been presented allegedly to combat poverty, the lack of affordable housing, and resulting homelessness have been predicated on the need to maximize the wealth of the ruling elite. These programs have utterly failed to improve the former, while definitely facilitating the latter. Indeed, conditions for the mass of the population have only gotten worse.

In just one of many examples, there was a sharp decline in the issuance of permits for construction of new housing units in 2016, following the failure to renew the 421-a tax incentive program. That program, while greatly benefiting developers and large landlords, had done nothing to reduce the critical lack of affordable housing.

The working class of New York is rapidly approaching the breaking point. Mass revolt against increasingly unlivable conditions may erupt at any time. The anger and frustration find no expression within the present political establishment. What is required is the building of a party that fights for a socialist program to expropriate the vast wealth of the city’s elite and employ it to benefit the great majority of the population.


The author also recommends:

Indebted New York City Housing Authority plans to lease public housing land to private developers
[5 June 2017]

New York mayor’s shelter plan will not reduce the city’s growing homeless population
[21 March 2017]

Life expectancy study shows 20-year gap between richest and poorest US counties

By Naomi Spencer
10 May 2017

The growth of social inequality is manifested in every facet of American life, including the health and lifespans of individuals. Inequality in life expectancy has grown substantially since 1980, a new study published May 8 in the American Medical Association’s JAMA: Internal Medicine confirms. The study documents “large—and increasing—geographic disparities among counties in life expectancy over the past 35 years.”

Researchers from the University of Washington’s Institute for Health Metrics and Evaluation (IHME) and Erasmus University in the Netherlands analyzed death records and population counts from all US counties.

Their study, “Inequalities in Life Expectancy Among US Counties, 1980 to 2014: Temporal Trends and Key Drivers,” drew data from the National Center for Health Statistics (NCHS), along with population counts from the US Census Bureau, NCHS, and the Human Mortality Database. This data set allows for a fuller picture of the scale of inequality in life expectancy that other recent research has shown. (The IHME maintains an interactive county-level map)

The study found that in 2014 life expectancy at birth for both sexes at the national level was 79.1 years (76.7 years for men and 81.5 years for women). The combined average amounts to a 5.3-year growth in life expectancy over the 1980 average of 73.8 years.

Life expectancy at birth

Behind this overall growth in lifespan, however, the study found a staggering 20.1-year gap between the lowest and highest life expectancy among all US counties.

Three wealthy counties in central Colorado—Summit, Eagle, and Pitkin—recorded the longest life expectancies in the country, at 86 years on average. At the other end of the spectrum, several counties in South and North Dakota had the lowest life expectancy, along with “counties along the lower half of the Mississippi [the Delta region] and in eastern Kentucky and southwestern West Virginia,” the study found. These areas “saw little, if any, improvement” since 1980. Thirteen counties registered a decline in life expectancy.

In the Dakotas, several of the shortest-lived counties encompass Native American reservations. Oglala Lakota County in South Dakota, home to the Pine Ridge Native American reservation, had the lowest life expectancy in the country in 2014, at just 66.8 years. In a press release, the IHME researchers noted that this was lower than the life expectancies of Sudan and Iraq—countries that have been torn apart by brutal wars over the course of decades.

“Looking at life expectancy on a national level masks the massive differences that exist at the local level, especially in a country as diverse as the United States,” lead author Laura Dwyer-Lindgren of IHME explained. “Risk factors like obesity, lack of exercise, high blood pressure, and smoking explain a large portion of the variation in lifespans, but so do socioeconomic factors like race, education, and income.”

The study found that all counties saw a decline in the risk of dying before age 5 since 1980, attributable to improvements in health programs for infants and children. At the same time, the data showed an increased risk of death for adults aged 25-45 in 11.5 percent of counties, a phenomenon partially explained by the rise in suicides and drug addiction.

Although the research points to “a combination of socioeconomic and race/ethnicity factors, behavioral and metabolic risk factors, and health care factors” to account for the disparities in life expectancy, all of the factors intersect with poverty. It is not a coincidence that the poorest areas recorded the shortest life expectancies and the wealthiest areas recorded the longest lifespans.

Risk factors like obesity, diabetes, high blood pressure, smoking, and physical inactivity are highly correlated to poverty, unemployment and lack of education. In areas where the population lacks access to preventive care or they cannot afford basic health care, chronic conditions become debilitating. Cancers go undetected, mental illness is undiagnosed, pregnancies are carried without adequate prenatal care, heart disease is untreated, and work-related injuries are managed with highly addictive pain medications instead of physical therapy and rest.

Of the 10 counties where lifespans fell the most since 1980, eight are in the coalfields region of eastern Kentucky: Owsley (-3 percent); Lee (-2 percent); Leslie (-1.9 percent); Breathitt (-1.4 percent); Clay (-1.3 percent); Powell (-1.1 percent); Estill (-1 percent); Perry County, Kentucky (-0.8 percent). Kiowa County, Oklahoma, (-0.7 percent), and Perry County, Alabama, (-0.6 percent) round out the list of counties where life expectancy declined the most.

Change in life expectancy at birth

Residents of Owsley County, Kentucky saw a decline in life expectancy from 72.4 in 1980 to 70.2 in 2014—comparable to the life expectancy in Kyrgyzstan or North Korea.

Owsley County was found by a 2016 Al Jazeera analysis to be the poorest white-majority county in the US. Some 45 percent of the county’s 4,500 residents, and 56.3 percent of children, live below the poverty threshold. Official unemployment stands at 10 percent, but with only 35 percent of the working age population included in the labor force, real unemployment is approaching 75 percent. Per capita income as of 2015 stands at $15,158, according to federal Census Bureau data.

As with the rest of the Appalachian coalfields region, the counties where life expectancy has dropped have seen every metric of economic and social well-being decline over the past several decades. Coal mining employment in eastern Kentucky has fallen to levels not seen in a century. With hundreds of mines shuttered, counties have lost so-called coal-severance tax revenue paid by companies per ton of coal extracted. Thousands of families have left in search of work, triggering a further collapse in the tax base for local governments, school districts, and social programs. The elimination of thousands of coal mining jobs has left mostly low-wage occupations for residents.

Lee County, second to Owsley in terms of the decline in life expectancy, is home to “America’s poorest white town”—Beattyville, Kentucky, the county seat. Beattyville has seen an explosion of opioid addiction since the closure of its few coalmines and decline of the oil and timber industries. The median household income in the town stands at $14,871, less than a third of the national median. Like its measure of life expectancy, Lee County’s household income is lower today than it was in 1980.

Kentucky and neighboring West Virginia have among the highest opioid overdose rates in the country, with the coalfields counties especially hard-hit. In 2013, drug overdoses accounted for 56 percent of all accidental deaths in Kentucky; the state’s death rate for overdoses is 29.9 per 100,000. In the eastern counties, emergency services are less able to reach and save overdose victims and health providers have struggled to afford lifesaving anti-opioid treatments like Narcan.


New research on why Republicans hate poor and sick people

The “pro-life” party has become the party of death:

New data and the health care debate reveal how Republicans feel about poor people who get sick: They deserve it

The "pro-life" party has become the party of death: New research on why Republicans hate poor and sick people
Trey Gowdy; Paul Ryan; Kevin McCarthy (Credit: AP/Susan Walsh/J. Scott Applewhite/Reuters/Gary Cameron)

On Thursday, Republicans in the House of Representatives will attempt to force through a health care “reform” bill that is likely to leave millions of Americans without health insurance, especially those who suffer from chronic illnesses such as cancer, diabetes and heart disease. It has been estimated that if the Republican Party is successful in eliminating the Affordable Care Act that at least 43,000 Americans a year will die from lack of adequate health care.

The Republican Party is pursuing this policy in order to give millions of dollars in tax cuts to the very rich. President Trump, who is a billionaire, would financially benefit if Republicans succeed in repealing the ACA.

It is abundantly clear that Trump and his party possess a deep disdain for sick people, the poor and other vulnerable members of American society and wish to do them harm.

For example, several days ago Rep. Mo Brooks, R-Ala., said this during an interview on CNN:

My understanding is that [the new proposal] will allow insurance companies to require people who have higher health care costs to contribute more to the insurance pool. That helps offset all these costs, thereby reducing the cost to those people who lead good lives, they’re healthy, they’ve done the things to keep their bodies healthy. And right now, those are the people — who’ve done things the right way — that are seeing their costs skyrocketing.

These comments are abominable. Does Brooks believe that babies and children with serious illnesses deserve their fate, or that those who have “done the things to keep their bodies healthy” and still develop chronic diseases like cancer have done things the “wrong way”? The Republican Party’s war on the American people and the common good should be condemned by all decent human beings. Any Republicans who vote to repeal the Affordable Care Act should be publicly shamed and voted out of office.

But an important set of questions still remain: Why do Republicans and conservatives have such disdain for the weak, the vulnerable and the sick? Why do they want to kill the “useless eaters?” What does this tell us about how Republicans and conservatives view the world, as well as their relationships and obligations to other human beings?

A new survey from the Pew Research Center offered some helpful insights on these questions:

In assessing why some people are poor, 53% think it is because of circumstances beyond their control, while 34% attribute it to a lack of effort. There has been little change in these opinions in recent years, according to a survey in December.

By about three-to-one (66% to 21%), Republicans and Republican-leaning independents say hard work, rather than a person’s advantages, has more to do with why someone is rich. By nearly as wide a margin, Democrats and Democratic leaners say the opposite: 60% say a person is rich because they had more advantages than others, while just 29% say it is because they have worked harder.

As with many other issues, partisan differences in views of why people are rich and poor have increased in recent years. Since 2014, the share of Republicans who say a person is rich more because they have worked harder than others has risen 12 percentage points, from 54% to 66%. Democrats’ views have shown less change.

This survey from Pew continued:

Republicans are more likely to say the reason someone is poor generally has more to do with of a lack of effort (56%) than circumstances beyond a person’s control (32%). By 71%-19%, more Democrats say that circumstances beyond one’s control are generally more often to blame for why a person is poor. The share of Democrats who link a person being poor to a lack of effort has declined since 2014 (from 29% to 19%).

A belief in the “just world hypothesis” is a unifying theme in Pew’s findings: Republicans and conservatives are more likely to hold the erroneous belief that good things happen to good people and that individuals who suffer disadvantages in life that are out of their control are somehow responsible for their circumstances. The just world hypothesis is a fallacy.

In reality, people exist in a society where their life trajectories are largely determined by impersonal social and political systems. Nevertheless, the just world hypothesis can be compelling. It allows the privileged, the powerful and the rich to rationalize their opportunities: “I earned it! Those people are lazy!” “Good things happen to good people! Those people are immoral and made bad choices unlike me!” “Their problems aren’t my responsibility!”

Pew’s recent findings also demonstrate the enduring power of the Horatio Alger myth and the conception of meritocracy in America society.

The Horatio Alger myth — a belief that hard work and motivation determine success in America — had its origins in a series of dime-store novels written between 1860 and 1899. These absurd stories of success during the Gilded Age were derided and mocked even then by serious social reformers as well as luminaries such as Mark Twain.

The claim that America is a meritocracy, where talent and hard work are more important than good fortune or accidents of birth, goes far back into our history. It was also captured in a famous dystopian short story from 1958 by Michael Young, about a world in which people were constantly evaluated by tests and other means to ensure that the “best” people rose to the top. Of course, this supposed meritocracy was grossly unfair and unequal to the vast majority of citizens.

Social scientists have repeatedly demonstrated that American (and Western) society is extremely hierarchical and that family wealth and income — as well as race and gender — are more important than “hard work” in determining a given individual’s intergenerational class mobility.

Pew’s findings echo in the debate about health care policy, which reflects the belief among Republicans and conservatives that those who seek assistance from society have no right to receive it. If people do not have the resources to provide adequate health for themselves and their families, that’s their own fault. Most important, the sick deserve their illnesses; the healthy and strong have earned their advantages.

Once again, the repeated efforts by the Republican Party to repeal the minimal protections offered by the Affordable Care Act serve to remind us that conservatism is a type of socially motivated cognition that minimizes any sense of human obligation and connection to other people, outside a narrowly defined kin or other peer group.

Today’s version of American conservatism is also a celebration of selfishness — and a belief that true freedom and liberty are based on a perverse individualism with little sense of common decency or linked fate with someone’s fellow citizens. Today’s American conservatism also embraces an extreme form of neoliberalism whereby human worth and dignity are determined by profit-and-loss statements and capitalism and democracy are confused with one another. Ultimately, American conservatism is a value system that is antisocial, anti-democratic and anti-freedom.

There is a moral obligation to speak plainly and directly in a time of crisis. To wit: The Republican Party’s so-called health care reform is designed to kill, injure and bankrupt the poor, the sick and the weak, in order to line the pockets of the 1 percent. As Republicans have repeatedly shown, the supposed “party of life” is actually the “party of death.”

It is long overdue that the American people begin to use this more accurate language to describe the Republican Party, Donald Trump and the right-wing voters who support them. The debate about “repealing and replacing” the Affordable Care Act is not about normal political disagreement or budgetary priorities. It is about who should live and who should die and whether that should reflect how much money you have in your bank account.

Chauncey DeVega is a politics staff writer for Salon. His essays can also be found at Chaunceydevega.com. He also hosts a weekly podcast, The Chauncey DeVega Show. Chauncey can be followed on Twitter and Facebook.

Democrats agree to increase military and border spending while cutting food stamps

By Barry Grey
2 May 2017

Republican and Democratic congressional leaders announced an agreement late Sunday on a $1 trillion omnibus spending bill to fund the federal government for the remainder of the 2017 fiscal year, which ends September 30. The measure is expected to be passed later this week by both houses of Congress and signed into law by President Donald Trump, averting the threat of a government shutdown at midnight Friday.

Despite Republican control of both the House of Representatives and the Senate, Trump and the Republicans are dependent on the Democrats to supply the margin needed to pass the measure, particularly in the narrowly divided Senate, where it would take eight Democratic votes to end debate and bring the measure to the floor for a final ballot.

This underscores the reactionary role of the Democrats in backing a bill that grants Trump’s demands for a significant increase in military spending as well as funds to further militarize the US-Mexico border, while slashing the food stamp program and the Department of Education.

Last week the Democrats made a show of opposition to Trump by refusing to include in the bill $1 billion to go toward the construction of his border wall, while making it clear they supported additional funds to strengthen existing border barriers and increase surveillance, including by means of drones. The administration withdrew its demand for funds earmarked for the border wall in return for an agreement from the Democrats to support $1.52 billion in additional border funding as well as $15 billion more in military spending.

A bipartisan stop-gap measure was passed on Friday to extend funding of the government for one week so as to provide sufficient time to work out the details of the final 2017 budget agreement. Republicans and Democrats on the House and Senate appropriations committees negotiated throughout the weekend and announced a deal late Sunday.

To secure passage, Trump dropped his demand for money earmarked for the border wall as well as $18 billion in non-defense domestic cuts. These include a wish list of reactionary measures such as cuts to so-called “sanctuary cities” (cities that refuse to allow their police to function as de facto immigration police), massive cuts to the Environmental Protection Agency (EPA) and defunding of Planned Parenthood. Trump also dropped his demand for funds to establish a new deportation force.

He agreed to include $295 million to prevent the Medicaid program in Puerto Rico from going bankrupt. Republican as well as Democratic leaders agreed to allocate $4.6 billion to permanently extend health benefits to 22,000 retired Appalachian coal miners and their families, who faced the immediate termination of their benefits. The deal also includes an additional $2 billion in disaster money for states.

However, the Democrats accepted a 1 percent cut to the EPA, reducing the agency’s budget by $80 million. They also agreed to cut the Education Department by $1.2 billion.

Most cruel of all is a cut of $2.4 billion to the food stamp program, which was already heavily cut during the Obama administration. The justification given for slashing the program, relied upon by more than 45 million Americans, one in seven, was “declining enrollment.”

Other reactionary provisions include an extension through 2019 of a private school voucher program in Washington, D.C.’s school system and a continued ban on federal funding for abortions as part of the federal Employee Health Benefits Program.

Republicans hailed the agreement as a down payment on Trump’s demands, incorporated into his proposal for fiscal year 2018, which begins October 1, for a massive $54 billion increase in the Pentagon budget to be paid for with brutal cuts in domestic social programs.

Vice President Mike Pence praised the deal in an interview Monday on “CBS This Morning,” saying, “It will avert a government shutdown, but more important than that, it’s going to be a significant increase in military spending.”

Republican House Speaker Paul Ryan said the bill “acts on President Trump’s commitment to rebuild our military for the 21st century and bolster our nation’s border security to protect our homeland.”

Democratic leaders presented the deal as a victory over the Trump administration. House Minority Leader Nancy Pelosi congratulated the Democrats for eliminating “more than 160 Republican poison pill riders” and temporarily blocking funding for Trump’s “immoral and unwise border wall.”

Senate Minority Leader Charles Schumer issued a statement Sunday night declaring the budget deal to be “a good agreement for the American people” and touting the fact that it excludes funding for an “ineffective” border wall.

“Early on in this debate,” he added, “Democrats clearly laid out our principles. At the end of the day, this is an agreement that reflects those principles.”

And so it does. These principles support a $137 million increase for Customs and Border Enforcement, bringing funding for the Gestapo-like border police to $11.4 billion. It includes money for 100 new Immigration and Customs Enforcement officers and 5,000 more detention beds. It also pays for 10 more federal immigration judges to speed up the deportation of undocumented workers.

The Democrats’ principles also sanction eight-figure funding increases for the FBI, the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco and Firearms.

For the US war machine, the Democrats have sanctioned an immediate increase of $12.5 billion, to be followed by an additional $2.5 billion once the administration presents to Congress its plan to fight ISIS.

Included in the bill’s allocations for military hardware are:

* $21.2 billion to procure 13 Navy ships

* $8.2 billion for 74 F-35 aircraft

* $1.1 billion for 14 F/A-18E/F Super Hornet aircraft

* $1.2 billion doe 62 UH-60 Blackhawk helicopters

* $702 million for 145 Patriot MSE missiles

* $1.8 billion for 11 P-8A Poseidon aircraft

* $2.6 billion for 15 KC-46 air tankers

* $1.3 billion for 17 C/HC/KC/MC-130J aircraft



Blaming the Boomers for Growing Poverty in America Is Just a Media Distraction in Service of the 1%

It’s alternative facts day at the Boston Globe.

mini college graduation cap on cash
Photo Credit: zimmytws

The main economic story of the last four decades is the massive upward redistribution of income that has taken place. The top 1 percent’s share of national income has more than doubled over this period, from roughly 10 percent in the late 1970s to over 20 percent today. And this is primarily a before-tax income story: The rich have used their control over the levers of economic power to ensure that an ever-larger share of the country’s wealth goes into their pockets. (Yes, this is the topic of my book, Rigged.) (It’s free.)

Anyhow, the rich don’t want people paying attention to these policies (hey, they might try to change them), so they endlessly push out nonsense stories to try to divert the public’s attention from how they structured the rules to advance their interests. And, since the rich own the newspapers, they can make sure that we hear these stories.

This meant that last week the New York Times (3/28/17) gave us the story of how robots are taking all the jobs and driving down wages. Never mind that productivity growth is at its slowest pace in the last seven decades (Beat the Press3/19/17). Facts and data don’t matter in the alternative world, where we try to divert folks’ attention from things like the Federal Reserve Board (who are not robots, last I checked) raising interest rates to make sure that we don’t have too many jobs.

One of the other big alternative facts for the diverters is the generational story. This is the one where we tell folks to ignore all those incredibly rich people with vast amounts of money—the reason most people are not seeing rising living standards is the damn Baby Boomers who expect to get Social Security and Medicare, just because they paid for it. The Boston Globe (2/26/17) gave us this story with a piece by Bruce Cannon Gibney, conveniently titled “How the Baby Boomers Destroyed Everything.” (Full disclosure: I am one of those Baby Boomers.)

There is not much confusion about the nature of the argument, only its substance. Gibney complains about

the unusual prevalence of sociopathy in an unusually large generation. How does that disorder manifest? Improvidence is reflected in low levels of savings and high levels of bankruptcy. Deceit shows up as a distaste for facts, a subject on display in everything from Enron’s quarterly reports to daily press briefings. Interpersonal failures and unbridled hostility appeared in unusually high levels of divorce and crime from the 1970s to early 1990s.

Starting with the bankruptcy story, the piece to which Gibney helpfully linked noted a doubling of bankruptcy rates for those over 65 since 1991. It reported:

Expensive healthcare costs from a serious illness before a patient received Medicare and the inability to work during and after a serious illness are the prime contributors to financial crises among those 55 and older.

Yes, we have clear evidence of a moral failing here.

The correlation between lead exposure and violent crime. (source: Mother Jones)

The crime rate story is interesting. We had a surge in crime beginning in the 1960s and running through the 1980s, with a sharp fall beginning in the 1990s. Gibney would apparently tie this one to the youth and peak crime years of the Baby Boomers. There is an alternative hypothesis for which there is considerable evidence: exposure to lead. While the case is far from conclusive, it is likely that lead exposure was an important factor. More importantly, the point is that crime was a story of what was done to Baby Boomers, not just kids acting badly.

I really like the complaint about the low level of savings among Baby Boomers. I guess Gibney is the Boston Globe‘s Rip Van Winkle who missed the housing bubble collapse and resulting recession. A main complaint among economic policy types in the last decade has been that people were not spending enough. The argument was that people were being too cautious in the wake of the crash, and not spending the sort of money needed to bring the economy back to full employment.

But Gibney wants to blame Baby Boomers for spending too much. Oh well, it’s alternative facts day at the Boston Globe!

The rest of the piece is in the same vein. Boomers are blamed for “unaddressed climate change.” Well, Boomers also were the force behind the modern environmental movement. Many of us Boomers might look more to folks like ExxonMobil and the Koch brothers who have used their vast wealth to try to stifle efforts to combat climate change—but hey, why focus on rich people acting badly when we can blame a whole generation?

Gibney blames Boomers for every bad policy of the last four decades, including the war on crime, which took off in the late 1970s, when many of the Boomers had not even reached voting age. We even get blamed for the repeal of Glass-Steagall, another great generational cause.

The amount of confusion in this piece is impressive. We get this one:

From 1989 to 2013, wealth gaps between older and younger households grew in the same way as those between the top 5 percent and the bottom 95 percent. Today’s seniors (Boomers) are much wealthier relative to the present young than the seniors of the 1980s were to then-young boomers. All those tax breaks, bailouts, easy money, deregulation, and the bubbles they spawned supported that Boomer wealth accumulation while shifting the true costs to the future, to the young.

Wealth is a virtually meaningless measure for the young. Gibney is crying for the Harvard Business school grad with $150,000 in debt. Young people do have too much debt, but the bigger issue is the horrible labor market they face (partly the result of Boomers saving too much money). Furthermore, while the ratio of Boomer wealth to wealth of the young has risen (because of college debt), the typical Boomer reaching retirement actually has less wealth than their parents.

It’s also important to remember in these comparisons that Boomer parents likely had a traditional pension (an income stream that does not get included in most wealth measures). If Boomers are to have any non–Social Security income in retirement, it will likely be in the form of a 401(k) that does count as wealth.

And, of course, we get the completely meaningless national debt horror story:

Still, no amount of tax reallocation could keep the government together and goodies flowing, so Boomers tolerated astounding debt expansion while chopping other parts of the budget. Gross national debt, 35 percent of GDP when the Boomers came of age, is now 105 percent, a peacetime record, expanding 3 percent annually, forever.

Economics fans would note that interest on the debt (net of money refunded by the Federal Reserve Board) is around 0.8 percent of GDP, near a post-war low.

They would also point out that formal borrowing is just one way in which the government can create obligations for the future. The government also pays for things like innovation and creative work with patent and copyright monopolies. These monopolies effectively allow their owners to impose taxes on consumers. Due to these monopolies, we will pay $440 billion on prescription drugs this year for drugs that would likely sell for less than $80 billion in a free market. The difference of $360 billion is more than twice the net interest burden of the debt that Gibney wants us to worry about. And this is just patent protection for prescription drugs; the costs for the full range and patent and copyright monopolies throughout the economy would almost certainly be two or three times as large.

Of course, Gibney could also blame the commitment of these monopoly rents on Baby Boomers (after all, people elected by Baby Boomers were the ones who made these monopolies stronger and longer), but that might be a bit hard to sell. It would look pretty obvious that the story is one  of a massive upward redistribution to the rich—some of whom happen to be Baby Boomers—and that would undermine the whole effort at distraction in which Gibney and the Globe is engaged.


Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.