Under the Radar
By Ben Becker
“[T]o exist, you need an ideology. The question is whether it is accurate or not.
And what I'm saying is, yes, I found a flaw.”
—Alan Greenspan, in an October 2008 response to whether he feels that his ideology pushed him to make decisions he wishes he hadn’t made.
Chicago Community Center Holds Twenty-Four-Hour Vigil, Protesting against New Parking Meter Policy
In December 2008, the City of Chicago turned over its thirty-six thousand parking meters to Morgan Stanley, which bought the rights to meter revenues for $1.2 billion. Some estimate the actual worth of the meters, which will belong to the finance company for seventy-five years, at $5 billion. Upon receiving the meters, the Wall Street giant immediately raised parking fees (up to 400 percent in some locations), installed thousands of new pay boxes, and lengthened the metered hours and days. Morgan Stanley is planning to raise parking rates every year until 2013.
The issue came to a head outside of the Centro Communitario Juan Diego (a community center on the South Side that specializes in literacy and health care services, as well as tenant activism). To prevent the planned installation of new parking meters outside of their center, community members conducted a twenty-four-hour, around-the-clock vigil and marched on the Chamber of Commerce. The People’s Parking Meter Campaign delivered fifteen hundred petitions to keep the streets clean of meters.
Mayor Richard Daley has defended the move as an expedient way to cover the city’s budget shortfall, but he faces growing pressure from working-class residents who are demanding that he: “Stop the rate hikes [and] make the banks pay for their crisis!”
Police Checkpoints Ruled Unconstitutional in D.C. Community
Community activists in Washington, D.C. scored a precedent-setting legal victory against a checkpoint program set up by the Metropolitan Police Department (MPD). The MPD set up the checkpoints last year in the African-American community of Trinidad, after a string of murders in the area. Only drivers with reasons deemed “legitimate” by the police were allowed to pass into the neighborhood. Activists and community members rejected the city’s anti-crime rationale, calling the checkpoints a form of “martial law” meant to protect gentrification in an adjacent neighborhood.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit struck down the checkpoints on constitutional grounds. “This decision is extremely significant because if the government had succeeded in establishing military-style checkpoints in D.C., it would have been a model used in urban areas around the country,” stated Mara Verheyden-Hilliard, co-founder of the Partnership for Civil Justice, which filed the lawsuit on behalf of four D.C. residents.
Taking Over the Enterprise: A New Strategy for Labor and the Left
By Rick Wolff
We are overdue for a new strategy. Labor and the Left are at low points in long declines. One cause has been adherence to a failed strategy. We need to acknowledge that reality and answer two linked questions. First, what part of getting into this situation was our own doing? Second, what changes in labor’s and the Left’s strategy could revive the two groups and rebuild their coalition into a powerful political force? To answer the first question: labor’s and the Left’s strategic attitude toward capitalism undermined both partners and their coalition. To answer the second: changing their attitude toward capitalism could, I believe, revive them significantly in the near future.
With rare exceptions, the strategic orientation of labor and the Left toward capitalism has been one-sidedly macro-focused on the nature and extent of state economic interventions. Thus it emphasized taxing enterprises rather than workers, the rich rather than the middle- and lower-income earners. It generally favored state regulation of the private economy rather than laissez-faire, public over private enterprises, and state planning/controls over private/free markets. The welfare state, social democracy, socialism, and communism were all understood chiefly in the macro sense of state intervention. Differences among them concerned the extent of those interventions (ranging from regulation, to control, to state ownership of enterprises and productive resources).
In contrast, labor and the Left paid far less attention to capitalism at the micro level, the internal organization and operation of the enterprise. They did not challenge the basic position of corporate boards of directors as appropriators and distributors of the surpluses produced by other people, the workers. They accepted—or simply presumed—that those boards would exclude workers from the appropriation and distribution of the enterprise’s surpluses (or profits). Rarely did Left forces seriously raise the goal of workers themselves becoming, collectively, the appropriators and distributors of enterprise surpluses. When that idea surfaced, it was usually dismissed as unworkable, utopian, and irrelevant to workers’ practical interests. The Left restricted itself to demanding state-enforced limits on employers’ exploitation of workers, deception of customers, and abuse (both socially and environmentally) of surrounding communities.
Labor’s and the Left’s implicit micro-level strategy with regard to the enterprise thus became reduced to improving the terms of the employer-employee relationship for the workers, not eliminating that relationship altogether. Unions were to bargain collectively for better wages, benefits, and working conditions, leaving employers to receive and distribute the surpluses. Such (micro) bargaining within enterprises was to be allied with leftist political (macro) struggles for state interventions to benefit workers (via tax reforms, market regulations, greater welfare payments and/or subsidized public services, and socialized medicine).
Capitalist employers have always responded by deploying the surpluses they kept appropriating to evade, weaken, and undo whatever reforms and gains labor and the Left could win. They did so at both the micro and macro levels. They distributed portions of their appropriated surpluses at the micro level to support intrusive supervisors, to alter technologies, and to outsource production. They distributed other portions of their surpluses to support think tanks, build mass media connections, finance selected academics, and buy politicians to improve their macro-level conditions. Such dispositions of capitalists’ surpluses eventually undid most of the gains that the Left and labor won via Roosevelt’s New Deal. Examples include the 1947 Taft-Hartley Act, as well as the subsequent undermining of progressive taxation in favor of profit-oriented deregulation, and so on. Capitalists’ surpluses today fund all the major efforts to block or weaken reforms initiated by Obama’s administration.
Empire’s Senescence: U.S. Policy in Latin America
By Greg Grandin
Washington’s relations with Latin America—particularly in terms of the gap between what its policy toward the region is and what it could be—precisely measure the degree to which domestic ideologies, narrow corporate and sectional interests, and a sclerotic political system are hastening the decline of the United States as a global power. As a result, the U.S. is deepening its dependence on unstable policies in order to leverage its dwindling influence in the hemisphere.
It is easy to imagine an improved U.S. diplomacy toward Latin America, designed not to advance a set of altruistic ideals but merely to defend its interests—broadly defined to mean stable politics and economies that are open to U.S. capital and commodities—and to achieve what those in the liberal wing of the foreign policy establishment have long advocated: a maximization of U.S. “soft power.” Harvard’s Joseph S. Nye defines soft power as “the ability to get what you want through attraction rather than coercion,” through an enhanced understanding and utilization of multilateral institutions, mutually beneficial policies, cultural exchanges, and commercial relations.
There are no immediate threats to the U.S. in Latin America. A majority of the region’s political elite—even most of its current governing leftists—share many of the same values the United States claims to embody, even more so following the election of the first African-American president, who is wildly popular in Latin America. As a result, there is no other place in the world that offers U.S. president Barack Obama the opportunity to put into place the kind of intelligent foreign policy that he and his closest advisors, such as United Nations (U.N.) ambassador Susan Rice, believe is necessary to stop the hemorrhaging of U.S. prestige—one that would both improveWashington’s ability to deploy its many competitive advantages, while removing key points of friction.
Here’s what such a policy could look like: Washington would concede to longstanding Brazilian demands by reducing tariffs and subsidies that protect the U.S. agricultural industry, opening its market to Brazilian commodities, especially soy and sugar, as well as value-added ethanol. It would yield on other issues that have stalled the proposed Free Trade Agreement of the Americas (FTAA), such as a demand for strident intellectual property rights enforcement, which Brazil objects to because it would disadvantage its own pharmaceutical industry and hinder its ability to provide low-cost medicine to those infected with the HIV virus. Such concessions would provide an incentive for Brasilia to take the lead in jumpstarting the FTAA, a treaty that would ultimately benefit U.S. corporations, yet would be meaningless without Brazil, South America’s largest and most dynamic economy.
Is Social Democracy Dead?: The Crisis of Capitalism in Europe
By Norman Birnbaum
At the end of the twentieth century, neither historical accident nor social purpose seemed capable of halting the ascent of a new capitalism. What was new about it was the supreme self-confidence of its apologists, the ruthless certainty of its agents, the global reach of its operations, and the now passive—only sporadically agitated—character of the resistance to it. True, there were the demonstrations in Seattle and Genoa, and at the World Social Forum in Porto Alegre. There were even (very occasional) discreet invitations extended to (selected) adversaries of the new leviathan to cross the police lines guarding the participants at the Davos Economic Forum’s services of worship to explain their market-critical impieties. Pope John Paul II’s reminders of the Christian character of institutions of solidarity were ignored by many in his own flock, and treated by others as a public exercise in sentimentalism which cost nothing and made some feel better.
Then came the global economic crisis of 2008. The contagion spread across time zones, as the availability of credit shrank—and then disappeared—within and between nations and continents.
In Europe, Iceland and Latvia were effectively bankrupt and had to be rescued by the International Monetary Fund, which imposed austerity measures otherwise applied only south of the Sahara. Ireland avoided the same fate only by imposing austerity upon itself, erasing two decades of gains in the standard of living.
In the United Kingdom, the government spent huge sums to save the threatened banking system. The European Central Bank, despite its inflationary obsessions and monetarist theology, suddenly lowered interest rates and printed money for immediate distribution throughout the Eurozone (especially in Eastern Europe). The government of Europe’s largest economy, Germany, after insisting on the soundness of the German banks, rushed to rescue some of the nation’s major ones. The president of France rejected the usual admonitions about budgetary deficits or state intervention from the European Commission in Brussels—he would do what was necessary to restart the national economy. He noted that the epoch of Anglo-Saxon-type capitalism was over, even if he had previously proclaimed his intention to make French capitalism less French, that is, to reduce the omnipresence of the French state in the economy.
The public initially responded to the financial crisis with numbed shock. The European citizenry’s confidence in government, and especially in government’s capacity to master economic problems, has been declining (witness reduced voting rates in elections across the Continent in the recent past). Still, the solidity of banks and the reliability of public pension systems were not in doubt. Now average Europeans were told that they had reason to fear the worst.
Additionally, the crisis affected regional and local governments’ funding, and threatened the continuity of the many public services they provided. In the private sector, firings, layoffs, and shortened work weeks (with the threat of even more scale-backs to come) intensified a general sense of apprehension. The reassurances proffered by governments, and the televised spectacles of European and world leaders rushing to meetings to issue stereotypical statements, evoked even more anxiety. The shock did not generate a European wave of protest, much less widespread social turmoil. The European Left could not organize protest, since it was divided, disoriented, and ideologically disarmed.
Vietnam at the Crossroads: Market Socialism and the Vietnamese Labor Movement
By Gregory Mantsios
One of the first things that struck me upon my arrival in Saigon was the enormous billboard for Coca-Cola. The year was 1996: just two decades after three million Vietnamese soldiers and civilians lost their lives in a war against capitalist exploitation and foreign domination. My partner, Paula, turned to me and said, “I thought U.S. capitalism lost the war in Vietnam.”
In fact, in 1996—one year before the Asian economic crisis—the World Bank reported that Vietnam had a higher level of foreign investment than any other developing country in the world. That was also the year the Nike Corporation began to move its sneaker operations to Vietnam because—as Nike’s CEO Philip Knight explained—labor costs in Indonesia were “skyrocketing.” Workers in Vietnam, at the time, were paid $30 a month. What’s more, Thanh—our friend and host in Saigon—was an American Studies scholar dedicating her life to satisfying the curiosity of university students for everything American. For me—someone who cut his political teeth in the anti-war movement, trying to get the U.S. out of Vietnam—the world, at that moment, seemed to have been turned on its head.
How did it come to this? What do these changes mean for Vietnam’s workers and unions, and what are their broader implications? Here, I offer some observations based on several trips to Vietnam. I made my first trip in 1996 as an independent traveler/scholar, and the last two trips—in 2005 and 2008—as a member of delegations hosted by the Vietnamese General Confederation of Labor (VGCL), the country’s national labor federation.
How Did It Come to This?
Vietnam has experienced enormous changes in the course of a lifetime—colonial rule, war, reconstruction, a socialist planned economy, privatization and a shift to a market economy, and rapid economic growth. The legacy of foreign domination and war comprises an inescapable backdrop for understanding Vietnam today. There isn’t anyone over the age of forty in Vietnam who doesn’t have a wrenching story about the War.
I first met Chau Nhat Binh in April 2005, when he hosted our trade union delegation to Hanoi: a war veteran of the North Vietnamese Army, a Communist Party member, and a dyed-in-the-wool unionist, he serves as the deputy director of international affairs for the VGCL. He is also fluent in English and has a warm heart, a gentle manner, and an uncanny way with American colloquiums. In private moments, Binh talks about his transformation from a shy, quiet child to a soldier in a war against U.S. aggression. He inherited his sense of justice and national pride from his parents, who fled to the jungles to join the insurgency against the French occupation—a decision that cost his mother her right arm when the French army attacked their encampment. The end of the French Indochina War split the country in two, North and South, but provided enough of a reprieve from war activity for his parents to raise five children—not an easy task for a mother with only one arm, and a task that became increasingly difficult when his father left to fight the American troops. The Americans came, they said, to prevent the fall of the South to communism: as Binh’s father saw it, they came to exploit Vietnam and prevent its reunification. With his family scattered across the country, Binh joined an army of children forced to trek hundreds of miles through the jungles for their own protection.
Looking Backward: International Labor’s Forgotten Plan to Fight the Great Depression
By Jeremy Brecher, Tim Costello, and Brendan Smith
In the early 1930s, as global unemployment tripled within two years and the world plunged into the Great Depression, the world's labor movements developed a program for fighting the global crisis through international public works. It's a little-known historical might-have-been that could have helped halt the Great Depression, the rise of Adolph Hitler, and the Second World War. And, as the efforts of world leaders to address today's "Great Recession" threaten to break down in nationalist rivalry and petty political bickering, it bears lessons—and perhaps an alternative vision—for today.
Workers and organized labor have historically advocated government public works programs as a solution to unemployment. Not only would they provide jobs and income for those directly employed, but they would raise overall purchasing power, thereby creating demand for the products of other workers and creating a virtuous circle of economic growth. In the context of swelling unemployment in the early Depression, discussion of national public works programs developed in many countries.
The proposal for international public works originated with the General German Trade Union Alliance (ADGB), which included most of Germany's trade unions and represented the great majority of its workers. The plan won the support first of the ADGB, then of unions around the world, and finally of the League of Nations' International Labour Organization (ILO).
The plan was worked out by the head of the ADGB's statistical department, W.S. Woytinsky. Woytinsky was a Russian émigré who had been president of the St. Petersburg Council of the Unemployed during the 1905 revolution, and had organized mass action to force the city to provide public works employment. Observing Germany's combination of spiraling deflation and spiraling unemployment in the early 1930s, he came up with the idea of using credit expansion to finance massive public works.
Taking a cue from recent League of Nations policy proposals, Woytinsky proposed an international agreement that would allow the lowering of gold reserve requirements for national currencies. That would let central banks create new money that could finance international public works and thereby create the purchasing power needed to reflate the economy.
In a June 1931 article, Woytinsky proposed an "Action Program for Reviving the Economy." It called for the labor movement to "assume the role of conveyor of the idea of an activist world economic policy." It was up to the labor movement to "force the state and all public institutions to implement measures to revive the economy."
Labor's policy "must be a global economic policy. All nations are suffering because the world economy is sick, and therefore they must all concentrate their forces upon joint action to overcome the worldwide crisis." The international agreement would provide an alternative to the rise of economic nationalism, supporting "tariff reductions and European economic unification" as well as "internationalization of wage policy and social policy." The program would also support workers' fight for higher wages, shorter hours, social rights, and the regulation of business.
The funds freed up by international money-creation policies would be applied to job creation through "public works on a grand scale" for a "grand plan for European reconstruction" with "the employment of one million unemployed." The creation of jobs would "spark a revival of the consumer goods industry, thereby sucking a further, considerable number of unemployed back into employment."
The (Mis)Measure of Prosperity: Morning in America and the Decline of the Social Wage
By Shawn Fremstad and Heather Boushey
The three decades of post-World War II, broadly shared prosperity in the United States were largely the product of intentional public policy decisions, not the private ones of a theoretically autonomous market or “natural” economy left to its own devices. These decisions—including the GI Bill, which made it possible for millions of World War II veterans to attend college or vocational school; the creation and strengthening of labor market institutions, through measures such as the minimum wage and collective bargaining; and sensible financial regulation that limited asset bubbles and other abuses—helped make a vibrant middle-class a reality.
The rise of conservatism in the mid-1970s, and the subsequent election of Ronald Reagan in 1980, brought a decisive halt to this long wave of investment in the social infrastructure that was necessary to build and sustain a broad middle-class. Conservatives claimed their radical ideas would result in greater economic growth and productivity, to the benefit of all Americans. President Reagan, for example, opened his first Economic Report, in 1982, with the assertion that the conservative “reorientation of the role of the federal government in our economy” would mean “more jobs, more opportunity, and more freedom for all Americans.”
This reorientation did not deliver on its promises. Over the last three decades, the economy and productivity have grown, on average, at slower rates than during the post-World War II era of shared prosperity. And the share of American jobs that can be categorized as “good”—ones that pay wages that will produce at least a moderate income for a full-time worker, and provide health and retirement benefits—has barely budged, despite substantial increases in workers’ education levels and the technology they use on the job. On top of this, the benefits of the gains in growth and productivity that did occur were disproportionately captured by the few at the very top. Between 1979 and 2007, the share of total market income (before individual income taxes and social transfers) going to the top 10 percent of taxpayers increased from a little over a third to almost half. By 2007, workers in low-wage jobs were being paid no more per hour, in real terms, than they were in 1979. So much for the conservative promise of “more freedom and more opportunity” for all Americans.
Economic Prospects
By Robert Pollin
At a forum last May in Detroit on the economic disaster now facing the United States auto companies, and the Midwest manufacturing sector more generally, somebody asked me a pointed and important question: Why doesn’t the U.S. have an industrial policy? The premise motivating the question was straightforward. The revival of manufacturing in the U.S. will entail a wave of innovations that raise competitiveness, expand job opportunities, and advance the construction of a clean energy economy. To pull this off successfully will require a clustering of large-scale public policy initiatives that could, as a combination, fairly be described as industrial policies.
Yet I think my answer at the forum surprised people. I said that the U.S. does already practice industrial policy right now, and has done so for a long time. But the problem is that industrial policy in the U.S. operates primarily through the Pentagon. In fact, this answer was only half-right. Military-based industrial policy has indeed been a major force shaping the development trajectory of U.S. capitalism for at least a century. It has produced epoch-defining technical breakthroughs, including jet aviation, the computer, and the Internet. It has also produced an unending stream of pork-barrel opportunities and scandals. But industrial policies in the U.S. also extend beyond the Pentagon, frequently operating without a clear sense of purpose, sometimes even at cross-purposes.
So a better answer to have given at the Detroit forum would have been that, in fact, the U.S. operates with a variety of industrial policies—in fact, too many. If we are going to successfully confront the crisis of U.S. manufacturing, what we really need are measures that are more carefully designed, focused, and executed. This will entail building from the major successes that have been achieved, as well as gaining greater understanding of and power over the forces that produce failures.
What Is Industrial Policy?
Although there are other ways the term can be used, industrial policy is often associated closely with the concept of a “developmental state.” As one key element within a developmental state, industrial policy generally focuses on promoting research and development (R&D), moving the technical innovations emerging from R&D investments into commercial use, and raising productivity and competiveness by getting businesses to adopt these innovations as rapidly as possible.
But we need to clarify this broad idea further. This is because, with industrial policy as a tool of a developmental state, a range of policy instruments and targets can be put into play. These could include R&D subsidies for government, university, or private-business research centers. It could also include preferential tax treatment, credit opportunities, or direct subsidies for specific sectors of the economy, different regions, or even individual business firms. Some types of business regulations—such as auto fuel-efficiency standards, or financial regulations aimed at channeling credit to preferred sectors, or activities at subsidized rates—could also be seen as industrial policy interventions.
If We Can Change the White House, We Can Change the Hog House
By Gene Bruskin
On December 11, 2008, forty-six hundred mostly black and Latino Smithfield Foods slaughterhouse workers in Tar Heel, North Carolina voted to join the United Food and Commercial Workers Union (UFCW). They ratified their first union contract the following July, after a sixteen-year fight against one of the most insidious anti-union employer campaigns in recent decades. The victory was the result of both a national campaign to win public support and a persistent on-the-ground organizing program. This article will focus on the successful in-plant organizing segment—the largest victory in UFCW history.
Smithfield’s History
The 1992 construction of the million-square-foot Tar Heel hog plant marked a transformative moment for both Smithfield and the pork industry. The plant was designed to enable workers to kill more than thirty-two thousand hogs a day (Smithfield raised its own supply of eight million hogs a year for the plant in the surrounding rural counties). This provided Smithfield with a competitive advantage referred to as “vertical integration,” described by the company as a way to control production “from the squeal to the meal.”
Workers immediately began to organize.
Smithfield Foods expanded—nationally and internationally—over the next fifteen years by acquiring a series of profitable companies in the Midwest, leaving the unions, the well-known product brand names, and the existing management teams of the newly acquired companies in place. By 2008, more than half of Smithfield’s thirty-six thousand pork-plant workers were under union contracts—mostly with the UFCW—and Smithfield became the largest pork- and turkey-producing company in the world, with $12 billion in revenues. But CEO and Chairman of the Board Joe Luter III, grandson of the company’s founder, believed that if the massive Tar Heel plant went union, there would be a dramatic balance of power shift between the UFCW and Smithfield. And he was determined to prevent that from happening.
The Challenge of Mobilizing Workers
Two National Labor Relations Board (NLRB) elections lost by the union, in 1994 and 1997, were overturned by the NLRB due to Smithfield’s flagrantly illegal acts of misconduct. In June 2006, the UFCW expanded the Justice@Smithfield campaign into both a national media-focused and a community-based campaign to mobilize consumer and public support for the Tar Heel plant workers, to convince Smithfield to agree to a set of rules for a free and fair election that went beyond those required by the NLRB. The UFCW thus found itself faced with a contradiction common to comprehensive organizing campaigns: how do you actively engage workers in an open-ended fight for a free and fair process when there is no election scheduled?
Beating the System Is the System: A Survey of Workplace Violations in Chicago, Los Angeles, and New York City
By The Workplace Violations Survey Project
At the start of the twenty-first century, America’s core employment and labor laws are failing to protect the nation’s workers. These are laws that most of us consider absolute and inviolate, most of which date back to the New Deal. Employers must pay workers at least the minimum wage, and time and a half for overtime hours. They must follow regulations to protect workers’ health and safety, and carry workers’ compensation insurance in case of injury. They may not discriminate against workers on the basis of age, race, religion, national origin, gender, sexual orientation, or disability. And they must respect workers’ right to organize and bring complaints about working conditions.
In recent years, we have seen growing evidence that employers are breaking these bedrock laws—not just in manufacturing plants outside our borders, or in the sweatshops that flourished a century ago, but in a wide range of core industries inside the United States, from construction to retail, restaurants, janitorial services, and home health care. However, until now, very few researchers have been able to accurately estimate the proportion of workers experiencing workplace violations, or the proportion of employers committing them. As a result, we lack robust benchmarks of the magnitude of the problem, the industries that are the biggest offenders, or the workers who are most affected. The limited data, in turn, hamper effective policy responses at the federal, state, and local levels.
This article summarizes new research findings that begin to fill the gap. In 2008, we surveyed 4,387 workers in low-wage industries in the three largest U.S. cities—New York City, Los Angeles, and Chicago—using a rigorous survey methodology that allowed us to reach vulnerable workers who are often missed in standard surveys. We attempted to answer the following questions: (1) How common are workplace violations, such as the percentage of workers earning less than the minimum wage or working overtime without pay?; (2) Which industries and occupations have the highest concentration of violations?; and (3) Who are the workers most affected? We think of this survey as a census of the invisible because, from the standpoint of public policy and government regulation, these jobs (and the workers who hold them) are all too often off the radar screen.
The Odd Couple: Wall Street, Union Benefit Funds, and the Looting of the American Worker
By John Adler and Jay Youngdahl
Readers of this journal are familiar with the contemporary struggles of American workers to retain health and pension benefits, long promised but now often denied. The painful and shameful treatment of retired auto and other industrial workers—who have seen their pensions and health insurance eviscerated and ridiculed as undeserved “Cadillac” legacy benefits—has recently occupied center stage.
What has received less notice is the amount, status, and use of the money that unionized workers have accumulated to pay for health and pension benefits in labor-affiliated benefit funds. The sums involved are huge. Before the market crash of the “Great Recession” in the last quarter of 2008, defined-benefit pension funds that are affiliated with unions and unionized public employers held assets in excess of $3 trillion. Even with the downturn in financial markets and the attacks on the safety net that workers built through collective bargaining, assets of labor-affiliated benefit funds serve as important providers of capital for the U.S. and global economies.
The fundamental role of labor-affiliated funds is to provide decent benefits for the worker participants. Yet in their efforts to provide and safeguard these benefits, these funds have invested with Wall Street in ways that have been, for the most part, indistinguishable from those of any other large investment pool. Labor-affiliated funds are universal investors; that is, as a group, they invest in every nook and cranny of the economy, in every type of asset, and with nearly every major investment manager. Their collective, though often unfocused, decision-making has a major effect on the economy.
By their nature, nearly all labor-affiliated funds are long-term investors, though they often do not act like it. These funds invest in order to protect and grow the assets necessary to pay off benefit liabilities that stretch out for years in the future. An understanding of the real potential of progressive capital strategies for these funds, and a concerted effort to implement a coherent approach across the labor movement, could dramatically affect the current dynamics of the capital markets, and, indeed, the overall economy. Instead of being at the mercy of financial gyrations, we could build and truly protect assets held in trust for those who labor.
Comparing the assets in labor-affiliated funds to the falling union density rates, it is obvious that the labor movement has the ability to punch significantly above its weight in the capital markets, as it has in its engagement in electoral politics. Yet labor has not exercised this ability; it should.
In the Rearview Mirror
By Steve Fraser and Joshua B. Freeman
Whatever the complex causes of our economic calamity, no one doubts the culpability of the financial and business elite. Their avarice, fraud, hubris, incompetence, and a willful suspension of disbelief about their own speculative fantasies laid the country low. However, their misdeeds, and the underlying reasons they committed them, have so far escaped systematic scrutiny by our representatives in Congress. Senators and House members berated a few CEOs of companies that were bailed out by the government for giving huge bonuses to bankers and traders who nearly destroyed the world economy. After that, virtual silence.
This is remarkable. During the Great Depression, the banking and corporate leaders who led the nation into economic collapse were subjected to a barrage of congressional investigations that undermined the credibility and legitimacy of the old ruling class. Those inquiries helped make possible the rise of the New Deal order, which endured for nearly a half-century.
Of the half-dozen major congressional investigations that targeted the country’s business establishment, the “Pecora Committee” garnered the most attention. Ferdinand Pecora, a Sicilian immigrant, had been a stalwart supporter of Teddy Roosevelt’s Progressive Party. Later, as an assistant district attorney in New York, he went after shady Wall Street operations. In January 1933, the Republican-led Senate Banking and Currency Committee made Pecora, known for his impeccable integrity and refusal to be intimidated by the high and mighty, the chief counsel of its very public investigation of the financial community, which kept making news well into 1934. Running concurrently, the Senate Finance Committee conducted its own inquiry. Together their hearings utterly discredited the country’s leading financiers.
Before the Senate committees, men like Wall Street speculator Bernard Baruch, William Atterbury (the president of the Pennsylvania Railroad), Myron Taylor (the head of U.S. Steel), and Jackson Reynolds (of the First National Bank) admitted they had no solution to the economic crisis. Pecora exposed a whole host of shenanigans committed by Wall Street’s most august figures. It turned out that Jack Morgan and many of the senior partners of the House of Morgan had paid no income tax for years. Morgan, along with other investment banks, had regularly engaged in insider trading, compiling “preferred lists” of notables—such as Owen Young of General Electric and former secretary of war and Democratic Party powerhouse Newton Baker—who were offered stock at low prices by Morgan-controlled investment trusts, which would then manipulate the market to send the price soaring until dumping the stock onto the public. The major investment houses also had favored insiders through rigged stock pools, the deliberate hyping of bad investments (“Peruvian bonds” were the subprime mortgages of that era), and outsized bonuses. Charles Mitchell, the chairman of the nation’s largest bank (National City), short-sold the stock of his own firm because he knew, long before the investing public did, how shaky it really was.
Following a Father's Footfalls: Love and Estrangement in the Alleghenies
By Margaret Costello
I am always somewhere in between past and present, birthed and cross-fertilized between Cumberland, Maryland, where I grew up, and Massachusetts, where I have lived for more than half my life. For more than three decades, I have made the 536-mile trip home to Cumberland at least every few months. And home it has remained.
Cumberland is a narrow piece of Maryland in the Allegheny region of the Appalachians, sitting alongside the infant stages of the Potomac River, wedged between West Virginia and Pennsylvania. The C&O Canal ended here. Cumberland is a passage in the mountains, where the trains loaded with coal and goods can get through the southern part of the Alleghenies without going up and down. Leo Mazzone, a National League baseball coach from Westernport, Maryland, stated in an interview that Cumberland is a rough, tough town in Western Maryland, an old, dirty railroad town with some unique characteristics. People in the surrounding areas go into West Virginia, Maryland, and Pennsylvania like most people go from one side of a town to another. Same mountains, same culture. We know each other’s parents, each other’s siblings. Being in Cumberland is like swimming into ripples of love and memories, into the blue.
It is all about the mountains. The mountains lie in geologic ripples. All the houses, until recently, have been built in the valleys, in tightly crammed rows, mostly brick, running parallel to the base of the mountains. Like the ripples of houses and the ripples of the Alleghenies, there are ripples of stories in the Cumberland area. People’s lives are tightly intertwined, and stories—that never leave the area—evolve. The stories are shaped by the mountains. There is something about the insulating quality of the mountains that makes the stories echo back into the valley. Generations pass, echo and re-echo, intertwining with the past and present. There are voices of generations that never spread out beyond the mountains. There are voices, like my own, that leave but are pulled back.
I was about fourteen years old when I met Linda. We both had a quirky sense of humor about our mothers. Her mom had fifteen kids, and my mom had seven and was crippled. Although we lived only about four miles from each other, I was from Cumberland, Maryland, and she was from Wiley Ford, West Virginia. Linda’s dad worked at the Kelly Springfield Tire Factory in Cumberland. My father had been in construction and was dead. Linda was nimble, a gifted athlete with a good arm, strong and close to the ground. We had different everyday friends at school, but hung around outside of school. Linda was the second child, the oldest daughter, shouldering most of the housework for her seventeen-member family. Often I would go to Linda’s house, and help her bathe, brush, and pajama all her younger siblings. And then Linda and I would go for a ride on narrow mountain backroads, talking.
Caught in the Web
By Kim Phillips-Fein
Many websites about the wars in Afghanistan and Iraq take the form of news digests or compendiums, gathering articles that are hidden in plain sight within the back pages of newspapers. The stories are there, they’re just overlooked. Perhaps the most thorough of these online “wire services” for news about the wars—and about the resistance to them—is Antiwar.com, a site run by people motivated by libertarian principles and “non-interventionism,” in the spirit of the Old Right. Read by “libertarians, pacifists, leftists, ‘greens,’ and independents alike” (according to the site), it is a rich source of news both about the empire and about the antiwar movement. It reveals a sharply different vision of world affairs; for example, readers could find stories about the Senate Appropriations Committee agreeing to hundreds of billions of dollars more for the wars in Iraq and Afghanistan, and the pressure on the United States to get involved in a civil war in Yemen. The site also contains links to an archive of resources dealing with abuses at Abu Ghraib (including photographs and a video of prisoner abuse), as well as photographs of American flag-draped coffins that are likely returning from Iraq. The spirit of skepticism toward both political parties on display at Antiwar.com is especially helpful. Check it out at http://www.antiwar.com.
Another strong website is Just Foreign Policy.org, which goes beyond many others in its activist bent. Instead of simply posting articles about Afghanistan, the site contains a link to a petition that readers can sign to oppose the expansion of the war and adopt a timetable for withdrawal. A piece about British politicians who want to withdraw troops from Afghanistan includes a letter that readers can send to support the resolution. The tone is optimistic and positive, giving readers an alternative to the all-too-normal mood of anxiety and malaise. Visit the site at http://www.justforeignpolicy.org. For activists, there’s a critical website—belonging to the organization Iraq Veterans Against the War (IVAW)—that describes the activities of one of the most important parts of the antiwar movement. The site contains links to videos of IVAW’s Winter Soldier testimonials; panel discussions at which veterans of the wars in Iraq and Afghanistan testified about their experiences on the ground and the realities of the wars; and materials from IVAW about counter-recruitment and—especially moving—the writing and art of veterans. Check out IVAW at http://www.ivaw.org.
The National Priorities Project—whose work on the costs of war has been covered in this column before—has an excellent special website featuring tickers that show the staggering, ever-rising costs of the wars in Afghanistan and Iraq since 2001. There’s a feature that permits the viewer to break down the total costs by state. I’d report the numbers, which are depressingly high, but they’ll surely have gone up dramatically by the time this column goes to press, so just visit the site at http://costofwar.com.
Books and the Arts
And Their Children after Them: Deindustrialization Lit
American Rust
By Philipp Meyer
Reviewed by Sherry Lee Linkon
Deindustrialization is not a short-term condition. Consider the example of my city, Youngstown, Ohio. The steel and auto industries shaped this community, defining the landscape, local culture, and the city’s identity. Mill closings and downsizing in the auto industry have had an equally powerful impact, creating a landscape of decay and erasure, a culture of self-defeat, and a reputation as the poster child for deindustrialization. Youngstown’s story has become America’s story, and journalists and scholars keep asking what the rest of the country, indeed, the rest of the world, can learn from Youngstown. Perhaps the most important lesson is this: we can’t just get over our history. Our past makes us who we are, and that is as true for young people who were born long after the steel mills closed as it was for their parents and grandparents.
If you want to understand the long-term effects of factory closings, an emerging genre of novels—what I call “deindustrialization lit”—is a good place to begin. Writers such as Tawni O’Dell (Back Roads, Coal Run, Sister Mine), Shauna Seliy (When We Get There), Dean Bakapoulos (Please Don’t Come Back from the Moon), and Christopher Barzak (One for Sorrow) explore the experiences of the children of former coal miners, autoworkers, and steelworkers in regions that have been decimated by plant closings. In most of these novels, family dysfunction and individual psychological struggles intertwine with economic limitations and decaying landscapes, illustrating the ways in which deindustrialization is at once personal, social, and economic. Philipp Meyer’s American Rust follows the same pattern, tracing the physical, economic, and emotional tolls of deindustrialization on two families long after the mills closed.
Set in Buell, a fictional town modeled after the many small steel and coal towns in the hills surrounding Pittsburgh, the novel captures the landscape of deindustrialization in vivid descriptions of abandoned, crumbling industrial structures, places where, after years of disuse, nature is reclaiming the land with weeds and mud. An old steel car factory is described as “half-collapsed, bricks and wood beams piled on top of the old forges and hydraulic presses, moss and vines growing everywhere” (pp. 9-10). Meyer highlights the struggling commercial landscape in town as well, where a few businesses remain open—small medical facilities, a gun shop, a drugstore; but many have closed—“Montgomery Ward, the closed pharmacy, the closed Supper Club, the closed McDonald’s” (p. 61).
While Meyer describes the place vividly, his characters don’t seem to feel much connection to it. The narration moves among six characters, but almost nothing they see evokes a positive memory. The one exception—police chief Bud Harris’s contentment with the hilltop cabin in which he lives outside of town—emphasizes the disconnection from place that shapes many of the characters’ lives. Harris’s log cabin reflects nostalgia for a pre-industrial past, as well as separation from the community. So much for solidarity.
Because They Can: Employers and the Payday Heist
Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid—and What We Can Do About It
By Kim Bobo
Reviewed by Bethany Moreton
Readers of New Labor Forum are no strangers to the uncanny illogic of the American economy. If we needed a refresher course, we got one recently by trying to explain that health care is already rationed, or that “too big to fail” is an oxymoron coming from a big, failed bank. But if the title of Kim Bobo’s Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid—and What We Can Do About It strikes labor insiders as old news, consider this: Bobo’s book may be the single most effective grassroots organizing tool available during this crucial window of opportunity for labor.
Her first accomplishment is to gather the evidence of wage theft in one place; the result may rattle even those already familiar with workplace injustice. Employers steal billions of dollars annually from millions of workers by illegally denying overtime rates; tampering with time cards; refusing mandated breaks; underpaying the agreed-upon wages or the legal minimum; paying minimum wages on federal projects and pocketing the difference between the prevailing wage and the minimum; avoiding employer contributions to Social Security, Medicare, unemployment insurance, and workers’ compensation insurance; deducting specious charges from paychecks; seizing tips; or flat-out refusing to pay for work performed, period. Studies by the Department of Labor, the Government Accountability Office, the Urban Institute, Human Rights Watch, and even the business-backed Economic Policy Foundation reveal that these tactics of theft can be found across industries, with particularly high incidences in nursing homes, garment factories, large-scale farms, restaurants, residential construction sites, and poultry processing plants.
Management apologists cannot hide behind individual mom-and-pops hopelessly confused by byzantine regulations, although Bobo advocates common sense revisions that would eliminate this genuine hazard. But the scale of the larceny demonstrates that wage theft is largely a deliberate method of cost control. Employers display their knowledge of the laws they are breaking by the ingenuity of their tactics. One car wash in Nashville clocked workers out when customers were not present. A Wisconsin cook worked eighty hours a week in two different restaurants within the same chain; the employer denied him overtime rates by counting these as two separate jobs. A packing house in California required every worker to provide two Social Security numbers, splitting their hours between the two to avoid paying for overtime work. Lawsuits successfully prosecuted or settled have involved tens of thousands of workers at nationally known companies: $6.5 million to fifty-six thousand Wal-Mart employees who had been forced to work off the clock; $65 million to thirty-two thousand misclassified “permatemps” at IBM; $120 million to three thousand insurance adjusters at Allstate.
Caution: Writers at Work
Working: An Anthology of Writing and Photography
Edited by Greg Hart, Mary Ellen Mangino, Zoeanne Murphy, and Ann Marie Taliercio
The Way We Work: Contemporary Writings from the American Workplace
Edited by Peter Scheckner and M. C. Boyes
Reviewed by Katherine Sciacchitano
Over the last two decades, with the help of the working-class studies movement, class has managed to expand beyond its restrictive perch as a category of political and economic analysis into a broader lens for shared experience. Conversation about class may still be discouraged, even punished, but fewer question the political and social importance of personal struggle and reflection around our class experiences and origins.
Working: An Anthology of Writing and Photography, and The Way We Work: Contemporary Writings from the American Workplace give us a chance to read and think about class (in the case of Working) and work (in the case of The Way We Work). Read together, they also invite us to reflect on how our class experience affects us as readers and writers and how the act of writing, in turn, affects our experience of class.
Working is testimony written by workers. The Way We Work—an anthology of pieces culled from both previously published work and responses to an ad in a literary journal—is self-proclaimed literature. As testimony, Working demands that we remember both the condition of the speaker and the circumstances of the account. As literature, the stories in The Way We Work often conceal both the processes and the experiences of their authors. Reading testimony challenges us to reevaluate our own experience in light of the speaker’s. Reading literature, we know we’re not only entitled to but are, in fact, expected to judge from a distance. Literature offers process and order, imagery and transport, not to mention a celebration of the skill of its creator. As the editors of Working bothtell us and show us, sometimes writing isn’t literature, but rather “that complex intermingling of necessity and intellect that marks working-class culture” (p. 7). And some authors are not celebrated, but forgotten.
The authors of Working reach into their experiences of working-class life to make collective sense of their struggles for economic and emotional survival, and intellectual understanding. The power of the more than two dozen short pieces, poems, and photographs in the collection doesn’t come from imagery and order. First and foremost, it comes from the authors’ survival and courage, not only to express their experiences of class but to force us as readers to confront their experiences with them. The result is still transport, but of a different kind: transport that doesn’t focus on specific words or images, but on quiet contact with the complex realities of gender, race, and class that are both brought into existence and strangled into silence by the structures of everyday life.
In short, Working returns us to ourselves byforcing us to listen to others. The result is an immediacy that is slow for the reader to grasp and feel, but hard to let go of.
Of Medals and Myths
Milk
Directed by Gus Van Sant
Reviewed by Patrick McCreery
On July 30, 2009, the White House announced that President Barack Obama would award a posthumous Presidential Medal of Freedom to Harvey Milk, the gay rights activist and San Francisco politician who was assassinated in 1978. Milk was one of sixteen individuals whom Obama announced he would honor with the annual award. Others included physicist Stephen Hawking; former Supreme Court justice Sandra Day O’Connor; tennis star Billie Jean King; singer Chita Rivera; civil rights pioneer Joseph Lowery; and Joseph Medicine Crow, a historian of the Crow Tribal Nation. In a statement, Obama said that “These outstanding men and women represent an incredible diversity of backgrounds . . . Yet they share one overarching trait: each has been an agent of change.”
We can only surmise what the slain activist, most recently memorialized in Gus Van Sant’s uplifting Milk, would have thought of the gesture. On one hand, as the film makes clear, Milk loved the limelight and surely would have lapped up the attention Obama paid him as the first openly gay elected official of a major U.S. city. After all, this was the man who, when the circus visited San Francisco, donned a clown suit, jumped on a trolley car and told bemused passengers that “I pass laws! I run this city!”
On the other hand, it is easy to imagine Milk the militant activist using the award as an opportunity to take Obama to task for not pressuring Congress to pass the proposed Employment Non-Discrimination Act, which would protect workers from discrimination based on their sexual orientation or gender identity. One could also envision Milk throwing in a few choice words about the president’s lackadaisical approach to repealing the odious “Don’t Ask, Don’t Tell” military employment policy, which prevents openly gay men and women from serving in the armed forces.
Milk was a complex person, morphing over the course of a decade from closeted Goldwater Republican to pony-tailed, pot-loving hippie to outspoken gay rights activist. He lost three races in San Francisco before being elected to the Board of Supervisors in 1977, only to be murdered a year later by a disgruntled former colleague. Milk’s short political career corroborated Tip O’Neill’s assertion that “All politics is local.” He finally won office through careful cultivation of important community factions: seniors, organized labor, and—most importantly—the tens of thousands of lesbians and gay men who moved to San Francisco in the early and mid-1970s in search of sexual freedom.