Democracy at the Crossroads: Class Warfare and the 2012 Elections

How did the vast wealth of our country end up in the hands of a tiny group of billionaires? What caused the economic meltdown of 2008? Why has right-wing extremism become such a threat to our democracy? Why is the 2012 election decisive for the future of our country?

Check out peoplesworld.org's new pamphlet "Democracy at the Crossroads: Class Warfare and the 2012 Elections."

Available as a PDF, or you can order in quantity. More info here:

http://www.peoplesworld.org/democracy-at-crossroads-class-warfare-and-2012-elections-released/

Its analysis is applicable to most western capitalist countries, not just the USA.

New Labour Thinking? More Bull from the USA, No Socialism!

Stock Exchange Speech: So, this is Miliband’s “new thinking”:

A responsible capitalism is a resilient capitalism… Predistribution is about saying that we cannot allow ourselves to be stuck with permanently being a low-wage economy. Our aim must be to transform our economy so it is a much higher skill, higher wage economy. Think about somebody working in a call centre, a supermarket or in an old people’s home. Redistribution offers a top-up to their wages. Predistribution seeks to offer them more. Higher skills, with higher wages, and an economy that works for working people.

We've heard all that baloney about a high wage, high skill society 30 years ago. He added that “the move toward a more responsible capitalism is actually being led by many business people”. The Labour leader is importing US jargon that baffles most people in Britain. What do predistribution, the squeezed middle, and responsible capitalism mean?

Predistribution was dreamed up by US academic James Hacker. It actually means no more than that people would not need benefits (redistribution) if they were paid a decent wage (predistribution)! Who are the “squeezed middle”? Despite the sound of it, it means the working people are the ones who are squeezed. US politicians speak of the “middle class” when they mean the working class to kid workers into thinking they are not the bottom rung of society.

Responsible capitalism? To whom is it responsible? Business leaders are responsible only to shareholders, the people who get the dividends if any profit is made, or handouts from our taxes otherwise! Have we already forgotten the banking crisis? Capitalists have only one interest—themselves.

Miliband’s speech at the Stock Exchange confirmed that New Labour remains the New Labour of Tony Blair, an alternative capitalist party to the Tories and Lib Dems. There can be nothing socialist in the principle that only the private sector can run the economy. Miliband has noted that ConDem ministers have been loudly booed in public, but still does not get it. He should pledge to expand public ownership.

The English Revolution 1653

What we need today is what we had then—an Oliver Cromwell!

Some Benefits of Women in the Boardroom

Professor Renee B Adams of the university of New South Wales (Women in the Boardroom and Their Impact on Governance and Performance) says that of the many reasons put forward to promote gender diversity in workplaces, a call for general fairness is one of the more effective and is easily understood. Female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, female directors brought several benefits to boards:

• they are more conscientious than men, having better attendance records than male directors
• they promote better corporate governance and performance accountability, promoting more compensation based on equity for directors
• they are tougher monitors of management, are more likely to join monitoring committees and so promote monitoring—a CEO will be more likely to get fired if performance goes down when more women are on the board
• women on boards are less bound by tradition, and less averse to risk than men, so they may facilitate innovation
• men on the board show up for more meetings when there are more women present on it! (Madmen, maybe?)

There’s support across the globe for increased female participation at leadership levels. In Norway, it’s a legislative requirement that at least 40% of the board members of listed companies are women. Spain, Italy, Belgium and The Netherlands also have mandated quotas. Firms and organisations in other countries, including Australia, are voluntarily adopting gender targets. But while it is obvious that a good female director is better than a poor male one, Professor Adams thinks the substitution of a woman for a man on a board cannot make any significant difference in general, it simply being a random change of one set of abilities for another. Scientifically speaking a direct swap of some men for some women directors randomly is unlikely to make a difference. So, some companies may do better with more women, but others may not.

Failure to Register to Vote Leaves Latinos and Asians Less Democratic Say

A University of California, Davis, study finds that Latinos and Asians make up half of California's population—in 2010, 38 percent of the state’s population was Latino and 13 percent was Asian—but a smaller proportion register to vote than the general population. The voter registration gap means that these ethnic groups have proportionately less say in the electoral process compared to the average citizen.

Yet between 2002 and 2010, voter registration for Latinos increased 40 percent raising their proportion of the general registered electorate to 21.2 percent, while Asian registration increased by 39.4 percent to 8 percent of the registered electorate. Overall voting registration level recorded in the 2010 election was 77.5 percent up by only 14 percent from 2002 to 2010. An additional 520,000 Latinos and 800,000 Asians would need to register to vote to raise the registration rates of these groups to the overall registration level.

The study breaks down registration by county:

• the gap in the Latino percentage of general registered voters and their proportion of the general population is highest in Los Angeles, Riverside and San Bernardino counties
• the Asian population has the largest gap in the Bay Area counties of San Francisco, San Mateo and Alameda, and Sacramento County.

New Actors Can Challenge Austerity With Equality: Lessons from the Fawcett Society Legal Challenge

A study by Dr Hazel Conley, from the School of Business and Management at Queen Mary College, University of London and a member of the Centre for Research in Equality and Diversity (CRED) analyses the 2010 Fawcett Case. It finds the UK government has failed to apply laws that protect working women in the wake of the economic crisis. The paper also shows that equality legislation has created opportunities for women’s rights groups besides trades unions to influence industrial relations.

A legal challenge to the 2010 emergency budget was made by the Fawcett Society—an old established feminist organization which campaigns and lobbies for equality for women—on the grounds that it would have a disproportionately negative impact on them. It attempted to get a judicial review of the ConDem coalition’s new austerity drive.

It argued that 72 per cent of public sector cuts announced would be met from women’s income, as would £6bn of the £8bn savings generated in one year. Dr Conley explains:

In addition to these measures on public sector employees, the majority of whom are women, child welfare benefits were frozen, Sure Start maternity grants limited to one child and child tax credits significantly reduced. Poor mothers and women from black and ethnic minorities were the main financial losers.

The overlapping roles of the state as legislator, employer and paymaster, all seem to have had a bearing on the Fawcett Society challenge and its outcome. Before the budget was unveiled, gender equality duties were introduced as part of the Equality Act 2006. These duties were regulations that required public authorities actively to remove unlawful discrimination and inequality from their practices and processes. Failure to enforce could have resulted in a judicial review.

The article draws on documentary evidence, including the Fawcett case judgment produced by the Royal Courts. In the transcript’s opening sections there is a government admission that it had not undertaken the duties’ legally required equality impact assessment of the budget. Despite this legal compliance failure, the Fawcett challenge did not secure a judicial review. Dr Conley says:

The state is the UK’s largest single employer and the judiciary is not class-neutral. Being armed with reflexive equality legislation did not provide Fawcett with any additional powers to challenge the state machinery. The enactment of equality duties and the provisions for enforcement would seem to suggest the government’s commitment to change. In the aftermath of the banking crisis, however, the coalition unleashed a political zeal for economic austerity that has been unrelenting since it took office. If the Fawcett challenge had succeeded the impact would have been momentous. The emergency budget would have been declared unlawful and the new and fragile coalition government would have been rendered virtually paralysed. The government and the judiciary appear to have moved to protect the interests of capital at the expense of working women. There is a clear gap between rhetoric and compliance in this specific but crucial case.

In spite of the High Court ruling, the Fawcett challenge fuelled an intense media debate on the inequality of the budget, particularly in relation to the loss of jobs in the public sector and the ensuing impact on women’s working lives. One tangible outcome of the challenge was that the government produced an equality impact assessment of sorts for the 2011 comprehensive spending review and budget. Another is that, because the Fawcett case failed, the problem is being pushed down to local government and, as the public sector budget cuts continue to bite, equality groups are applying for judicial reviews against several local authorities axing services.

The actions of the Fawcett Society, says Dr Conley, provide empirical evidence that challenging the loss of thousands of public sector jobs need not lie solely with trade unions. Although in the Fawcett case this is likely to complement rather than compete with the role of the unions in industrial relations. Dr Conley warned that equality duties have opened up important ways for “new actors” such as Fawcett to use the law to challenge inequality at work, but “they do not meet their potential if the enforcement mechanisms can be undermined and weakened to suit political and economic objectives”.

The Thirty Year Assault on the Middle Classes

A national Pew Research Center survey has found that, since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some of its characteristic faith in the future. Interviews with 1,287 adults, describing themselves as middle class—adults whose annual household income is two thirds to double the national median, ie $39,418 to $118,255 in 2011 dollars, incomes adjusted for household size and scaled to a three person household—were combined with with data from the US Census Bureau and Federal Reserve Board of Governors.

85% of these middle class people say it is more difficult now than it was a decade ago for them to maintain their standard of living. Of this 85%, 62% say much of the blame lies with Congress, 54% say it is with banks and financial institutions, 47% say it is with large corporations, 44% with the Bush administration, 39% with foreign competition and 34% with the Obama administration. Just 8% say a lot of the blame is with the middle class itself.

For the first time since the end of World War II, in the decade 2000-2010, mean American family incomes in all income levels declined. But this middle income level is the only one that also shrunk in size, a trend that has continued over the past four decades:

• in 2011, it included 51% of all adults
• in 1971, it included 61%.

The fall in this level of the middle class was by some getting richer, and some by them getting poorer.

The higher income level:

• in 2011, was 20% of adults
• in 1971, it was 14%.

The lower income level:

• in 2011, was 29% of adults
• in 1971, it was 25%.

But in this 40 year interval, only the higher income level increased its share of national household income. It now takes in 46%, up from 29% four decades ago. The middle tier now takes in 45%, down from 62% four decades ago. The lower tier takes in 9%, down from 10% four decades ago.

For the middle income level of the middle class, their loss of wealth is worse than their loss of income. The median income of the middle income level fell 5%, but median wealth (assets minus debt) declined by 28%, to $93,150 from $129,582. During this period, the median wealth of the upper income level was essentially unchanged. It rose by 1%, to $574,788 from $569,905. Meantime, the wealth of the lower income level plunged by 45%, albeit from a much smaller base, to $10,151 from $18,421.

These figures plainly show that most of those considering themselves middle class are being conned by the state, academia and the media. Frankly, they are poor! Even what is the middle level of the middle class is not really well off, and that wealth is declining, leaving only the truly middle class, those who are well off by any standards, albeit not in the megarich class, are getting richer.

The reason is plain in this figure from the Pew Survey with some annotations.