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PressTV – Austerity versus a people’s budget

Mark Vorpahl, Counterpunch
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Its no secret that most cities, counties, states and school districts in the U.S. are facing big deficits. What is less understood is the extent to which austerity cuts have become politicians bi-partisan response to the situation. The dramatic measures being implemented in Portland, Oregon are no exception.

By austerity is meant a bag of policies intent on reforming, that is, reducing spending by cutting jobs and public services, tearing up social contracts that workers have benefited from, and, in general, making workers and the poor do all the sacrificing to close budgetary imbalances. These austerity measures range from potential cuts to Social Security and Medicare to cuts on a local level that go after our schools, social services, parks, and infrastructure.

While this sacrificing is imposed on the vast majority of citizens, obscenely low tax rates for big business and the wealthy are being left in place as their profits swell and their dominance over the political system increases. To appreciate the scope of this trend, one need merely note The New York Times report that there are nearly $1.1 trillion in annual deductions, credits and other tax breaks that flow disproportionately to the highest income Americans and that cost more, each year, than Medicare and Medicaid combined.

The Case in Portland

Portlands newly elected Democratic Mayor Charlie Hales has announced that there is a $25 $40 million hole in the citys budget. In response, he is demanding that all 27 city bureaus submit budget proposals with 10 percent cuts. This latest round follows several consecutive years of budget cuts.

The cuts already put into effect have resulted in lost jobs, underfunded services and a decline in Portlands livability. While it is not clear yet how Hales will wield his cleaver, he is signaling that his cuts will be the deepest yet. The programs that he has already targeted at-risk teen summer internships, job-training efforts and youth bus passes, among others will have an immediate impact on great numbers of households, shifting the costs of these publicly funded programs onto the shoulders of families that can least take the burden.

The majority of Portlands residents can ill afford the costs of trying to close the deficit without damaging the regional economy further. Portlands unemployment rate is 7.9 percent. According to the Business Journal, 8.3 percent of Portland families live below the poverty level; for families with children the number is 12.9 percent, and 27.4 percent for single, divorced and separated women. If he gets his way, Mayor Hales austerity axe will continue to swing at the citys most vulnerable citizens.

Portlands top companies make hundreds of millions, if not billions, every year. In Oregon the share of total state income collected by the wealthiest 1 percent increased by 70 percent from 1979 to 2009. In contrast, during that same period, the bottom 80 percent of Oregonians saw their income decline.

In 2009 the highest effective state tax rate for corporations with profits over $10 million was less than 1 percent. For a middle income Oregon household, the average effective rate of payment was 4.1 percent.

If corporations paid the same rate of state and city income taxes that is expected of most citizens, there would be no deficit, no crisis, no need for cuts. Given the vast amount of untouched revenue tucked away in these corporate coffers, Hales call for public sacrifice to balance the citys budget amounts to a shell game to distract people from asking, Where is the money?

Portland is not broke. The problem is that those with the money are being let off the hook.

Special Arrangements

In addition, Portlands city budget is far from transparent. It is divided into a General Fund, which is where the so-called deficit is located, as well as Internal Service Funds (ISF). ISFs are unrestricted net assets of the city. They can be used for any purpose. The amount of money in this part of the budget has been steadily increasing. In 2010-2011, the ISF balance was $120.6 million.

But rather than using this money to benefit Portlands working class communities, the City Council keeps it stashed away for pet projects to lure wealthy investors to the city. Since the ISF lacks transparency and accountability, it is difficult to determine how the money in these funds is used; we only know that it isnt available when the tax paying public needs it.

Another way Portlands politicians stash away huge sums to benefit big business is through the use of Urban Renewal (UR). UR requires that money be spent on development projects in a certain area. The revenue created by this development, including property taxes, remains locked up in the area for decades from 20 to 50 years.

UR taxes in 2010-2011 amounted to $35 million for the city of Portland alone. These funds can only be spent in the UR areas from which they were collected. Consequently, while the posh UR area of Portlands Pearl District enjoys more public funds than it needs, elsewhere in Portland school closures are looming, streets remain unpaved and infrastructure and park maintenance is done on the cheap, if at all.

Put simply, UR is a means of enriching developers and other corporate interests like big contributors to politicians campaign funds to the detriment of Portlands working class communities. The fact that this model, which results in widening inequality, continues to be pursued by those advocating cuts to public programs could not make more clear where these politicians allegiances lie.

While Mayor Hales is blaming the citys deficit on several factors, the math does not add up. When low corporate tax rates, the millions kept in shady city funds, and the revenue drain of development programs such as UR are taken into account, it becomes clear that Portlands deficit hawks are manufacturing a crisis in order to continue arrangements where workers are left to pay for big business greed.

Our Priorities, Our Budget

In addition to the I feel your pain displays by Mayor Hales towards those affected by his cuts, he will also employ the tactic of divide and conquer. Those threatened by these cuts will be told the lie that raising revenue by taxing big business and the wealthy is off the table. The pie is only so big, promoters of the cuts moan, you must decide your own priorities. And in this way they hope to set different communities and unions against one another.

It should be clear, for reasons already discussed, how false this storyline is. While there is likely more than a little padding in upper management that can be cut, and plenty of taxes that remain uncollected, the truth is that a real solution to Portlands deficit wont emerge until these priorities are confronted and turned around.

What would a budget that prioritizes peoples needs look like? Rather than job cutting, it would fund job creation. Instead of slashing social programs, it would build a thriving and accountable public sector. And corporate interests would take second place behind the health of working class communities. A peoples budget could easily be funded if the 1 percent paid their fair share in taxes and were not given the drivers seat in determining Portlands development and political policies.

To change business as usual in Portland will require mobilizing an independent grassroots social force to oppose Hales cuts and the corporate interests behind them. It will take a unified Labor and community movement capable of expanding its goals towards winning a peoples budget.

The demands to unite such a movement must be those that the greatest numbers are willing to mobilize behind. No Cuts! Tax the Rich! would be a good place to start. While each union and community group has its own priorities, highlighting those which build the broadest unity in mass campaigns and rallies is the best way to bring these organizations specific concerns and struggles to the greatest number.

With his austerity cuts, Mayor Hales has issued a challenge to the grassroots. A unified fightback is necessary to meet it. With such a movement it will be possible to shift the political dialogue towards measures that serve the vast majority of citizens. Without it, Portland will be left with Hales cuts and worse.

At the same time, a big fight is gearing up as Oregons democratic governor has threatened cuts to public workers jobs and retirement benefits, on the tail of passing emergency legislation to lock in Nikes absurdly low tax rate for 30 years. In building a citywide response, Labor and community groups will be strengthening their capacity to take on austerity at a statewide level as well.

Every city, county and statewide struggle against the corporate austerity attacks can set an example for and strengthen our ability to resist cuts to Medicare, Social Security and other socially needed federal programs. From this resistance a movement can develop with the ability not only to resist attacks but to fight for and implement policies that benefit all working people.

http://www.presstv.ir/usdetail/292112.html


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Lords of Disorder: Billions for Wall Street, Sacrifice for Everyone Else

The Presidents sequester offer slashes non-defense spending by $830 billion over the next ten years. That happens to be the precise amount were implicitly giving Wall Streets biggest banks over the same time period.

Were collecting nothing from the big banks in return for our generosity. Instead were demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class pretty much everybody, in fact, who isnt too big to fail.

Thats injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoints, rather than with scrolls and trumpets and kingly proclamations.

And remember: The White House represents the liberal side of these negotiations.

The Grandees

The $83 billion subsidy for Americas ten biggest banks first appeared in an editorial from Bloomberg News which, as the creation of New Yorks billionaire mayor Michael Bloomberg, is hardly a lefty outfit. That editorial drew upon sound economic analyses to estimate the value of the US governments implicit promise to bail these banks out.

Then it showed that, without that advantage, these banks would not be making a profit at all.

That means that all of those banks CEOs, men (theyre all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence they would probably lose their jobs again today.

Tell that to Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of Goldman Sachs, both of whom have told us its imperative that we cut social programs for the elderly and disabled to save our economy. The elderly and disabled have paid for those programs just as they paid to rescue Jamie Dimon and Lloyd Blankfein, and just as they implicitly continue to pay for that rescue today.

Dimon, Blankfein and their peers are like the grandees of imperial Spain and Portugal. Theyve been given great wealth and great power over others, not through native ability but by the largesse of the Throne.

Lords of Disorder

Just yesterday, in a rare burst of candor, Dimon said this to investors on a quarterly earnings call: This bank is anti-fragile, we actually benefit from downturns.

Its true, of course. Other corporations in fact, everybody else has to survive or fail in real-world conditions. But Dimon and his peers are wrapped in a protective force field which was created by the people, of the people, and for well, for Dimon and his peers.

The term antifragile was coined by maverick financier and analyst Nassim Taleb, whose book of the same name is subtitled Things That Gain From Disorder. Thats a good description of JPMorgan Chase and the nations other megabanks.

Arbitraging Failure

Dimons comment was another way of saying that his bank, and everything it represents, is The Shock Doctrine made manifest. The nations megabanks are arbitraging their own failures, and the economic crises that flow from those failures.

These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldnt do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.

We who have made these banks antifragile have crowned their leaders our Lords of Disorder.

Once Dimon told reporters that he explained to his seven-year-old daughter what a financial crisis is something that happens every five to seven years, which we need to do a better job managing.

Thanks to fat political contributions, Dimon manages them well. So do his peers. Misery is the business model. And by Dimons reckoning another shocks coming any day now.

Truthout does not allow reblogs of this story, so this intro is only an excerpt-you can read the full story at the link below-

http://www.truth-out.org/opinion/item/14884-lords-of-disorder-billions-for-wall-street-sacrifice-for-everyone-else


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The New Extremism and Politics of Distraction in the Age of Austerity

This is an excerpt from the middle of the article-because these are the paragraphs I most wished to highlight. This is worth reading and sharing-finding out how we are being tricked, what is REALLY going on is very helpful to changing it.

Read the whole article at Truthout (http://truth-out.org/opinion/item/13998-the-new-extremism-and-politics-of-distraction-in-the-age-of-austerity)

The expanded reach of politics in this discourse of distraction shrinks, and in doing so separates private troubles from public considerations, while undermining any broader understanding of the confluence of socio-economic-cultural interests and interrelated issues and problems that characterize a particular age. For instance, the debate on gun control says little about the deep-rooted culture of symbolic and structural violence that nourishes America’s infatuation with guns and its attraction to the spectacle of violence. Similarly, the mainstream debate over taxing the rich refuses to address this issue through a broader analysis of a society that is structurally wedded to producing massive inequities in income and wealth along with the considerable suffering and hardships produced by such social disparities.

In this denuded notion of politics, the connection between facts and wider theoretical frameworks and the connection between politics and power disappear just as the relationship between private troubles and larger social realities are covered over. Under such circumstances, politics is cleansed of its extremist elements and informed modes of dissent are not only marginalized but also actively suppressed, as was obvious in the FBI surveillance of Occupy Wall Street protesters and the police’s ruthless suppression of student dissenters on campuses across the country.

Blind Publics in an Authoritarian Age

What is missing in the current debates dominating Washington politics is the recognition that the real issues at stake are neither the debt ceiling nor the state of the economy, however important, but a powerful and poisonous form of authoritarianism that poses a threat to the very idea of democracy and the institutions, public values, formative cultures and public spheres that nourish it.5 The United States occupies a critical juncture in its history, one in which the forces of extremism are not just on the rise but are in the midst of revolutionizing modes of governance, ideology and policy. The politics of disconnect is just one of a series of strategies designed to conceal this deeper order of authoritarian politics. In a society that revels in bouts of historical and social amnesia, it is much easier for the language of politics and community to be stolen and deployed like a weapon so as to empty words such as democracy, freedom, justice and the social state of any viable meaning. Arundhati Roy captures the anti-democratic nature of this process in the following insightful comment. She writes:

This theft of language, this technique of usurping words and deploying them like weapons, of using them to mask intent and to mean exactly the opposite of what they have traditionally meant, has been one of the most brilliant strategic victories of the czars of the new dispensation. It has allowed them to marginalize their detractors, deprive them of a language to voice their critique and dismiss them as being “anti-progress,” “anti-development,” “anti-reform,” and of course “anti-national” – negativists of the worst sort. To reclaim these stolen words requires explanations that are too tedious for a world with a short attention span, and too expensive in an era when Free Speech has become unaffordable for the poor. This language heist may prove to be the keystone of our undoing. 6

This undoing of democracy to which Roy refers, and the dystopian society that is being created in its place, can be grasped in the current subordination of public values to commercial values and the collapse of democracy into the logic and values of what might called a predatory casino capitalism where life is cheap and everything is for sale. More specifically, from the ailing rib of democracy there is emerging not simply just an aggressive political assault on democratic modes of governance, but a form of linguistic and cultural authoritarianism that no longer needs to legitimate itself in an idea because it secures its foundational beliefs in a claim to normalcy;7 that is, Americans are now inundated with a pedagogy of cultural authoritarianism whose ideology, values, social practices and social formations cannot be questioned because they represent and legitimate the new neoliberal financial order. This is a mode of predatory casino capitalism that presents itself as a universal social formation without qualification, a social form that inhabits a circle of ideological and political certainty and cultural practice that equates being a citizen with being a consumer – in other words, predatory capitalism is transforming into a universal ethic that has exhausted all political differences, economic alternatives and counter readings of the world in the service of benefitting a financial and corporate elite and a savage form of economic Darwinism.

We get hints of the current mechanisms of diversion and its hidden order of politics in Robert Reich’s claim that the debate over the fiscal cliff should not only be about the broader issue of inequality but also must ask and address crucial political questions regarding the increasing concentration of power and “entrenched wealth at the top, and less for the middle-class and the poor.8 We also see it in Frank Rich’s insistence that the endless debate conducted largely in the mainstream media about Washington being dysfunctional misses the point. Rich argues that beyond media’s silly argument that both parties are to blame for the current deadlock, lies a Republican Party strategy to make the Federal government look as dysfunctional as possible so as to convince the wider American public that the government should be dismantled and its services turned over to for-profit private interests. In fact, a number of recent critics now believe that the extremist nature of the current Republican Party represents one of the most difficult obstacles to any viable form of governance. Thomas E. Mann and Norman J. Ornstein, two prominent conservative commentators, recently have argued that moderates not only have been pushed out of the Republican Party but they are for all intents and purposes “virtually extinct.” They go even further in stating that:

In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party. The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country’s challenges. 9

Robert F. Kennedy Jr. has gone further and has characterized the Republican Party and its “corporate-centric super-PACs as treasonous.” He states that Americans “are now in a free fall toward old-fashioned oligarchy; noxious, thieving and tyrannical” and that given the role of the most corporate-friendly Supreme Court since the Gilded Age with its passage of the Citizens United decision, “those who have the money now have the loudest voices in our democracy while poor Americans are mute.”10

More radical critics like Noam Chomsky, Chris Hedges, Sheldon Wolin, Stanley Aronowitz, Judith Butler, Robert Scheer, Jeffrey St. Clair, Matt Taibbi, Angela Davis and David Theo Goldberg, among others, have long recognized the transformation of the United States from a weak democracy to a spirited authoritarian state. All of these theorists have challenged the permanent war economy, the erosion of civil liberties, the power of the corporate state, the moral bankruptcy of the liberal intelligentsia, the corporate control of the media, the criminal wars of repression abroad, the rise of the torture state and the increasing militarization of everyday life.

However extremist the Republican Party has become with its ongoing war on women, immigrants, young people, the welfare state, voting rights and all manner of civil rights, this should not suggest that the Democratic Party occupies a valued liberal position. On the contrary, policy in the United States is now being shaped by a Democratic Party that has become increasingly more conservative in the last 30 years along with a Republican Party that now represents one of the most extremist political parties to ever seize power in Washington. And while the Republican Party has fallen into the hands of radical extremists, both parties “support shifting the costs of the crisis and the government bailouts of banks, large corporations and the stock market, onto the mass of the citizens.”11 Both parties support bailing out the rich and doing the bidding of corporate lobbyists. Moreover, both parties reject the idea of democracy as a collectively inhabited public space and ethos that unconditionally stands for individual, political and economic rights. President Obama and his Wall Street advisors may hold onto some weak notion of the social contract, but they are far from liberal when it comes to embracing the military physics of the corporate warfare state.

Read the whole article at Truthout (

http://truth-out.org/opinion/item/13998-the-new-extremism-and-politics-of-distraction-in-the-age-of-austerity)