Remember the video of the guy in the "pimp costume" who got advice from ACORN employees on how to run his prostitution ring? Turns out the whole story was just a lie, a doctored-video smear job on an important organization. The guy never wore a "pimp costume" and the real, undoctored videos showed that ACORN employees did nothing wrong. But a lie travels around the world before the corporate media bothers to check the facts. The "news" media blasted the story everywhere, and Congress was so outraged they forced ACORN to close its doors. And here we are again.

The corporate media is blasting out the story that the IRS "targeted conservative groups." Some in the media say there was "IRS harassment of conservative groups." Some of the media are going so far as claiming that conservative groups were "audited."

This story that is being repeated and treated as "true" is just not what happened at all. It is one more right-wing victimization fable, repeated endlessly until the public has no choice except to believe it.

Conservative Groups Were Not "Targeted," "Singled Out" Or Anything Else

You are hearing that conservative groups were "targeted." What you are not hearing is that progressive groups were also "targeted." So were groups that are not progressive or conservative.

All that happened here is that groups applying to the IRS for special tax status were checked to see if they were engaged in political activity. They were checked, not targeted. Only one-third of the groups checked were conservative groups.

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President Obama has nominated five people to the National Labor Relations Board (NLRB). Two are Republicans. All are waiting for confirmation by the Senate. Let your Senators know these nominees should be confirmed so the NLRB can get back to work.

What Is The NLRB?

The NLRB is the agency that "safeguards employees' rights to organize and to determine whether to have unions as their bargaining representative. The agency also acts to prevent and remedy unfair labor practices committed by private sector employers and unions."

The NLRB supervises elections to form or decertify unions in the workplace. It investigates charges that employees, unions or employers violated rules over labor practices and rules on the charges. It works to get problems resolved rather than taken to court. And finally, when the NLRB has issued a ruling that is ignored it can take the parties to court.

But if the NLRB is prevented from operating there is no one to make sure that the rules for labor practices are being enforced. This hurts workers and companies.

Background Of The Nomination Battle

Individual workers have little power when up against giant corporations. They can ask for better pay, benefits and working conditions, please, and the giant companies can just say, "you're fired" if they do -- and working people know that. However, when the employees all band together it gives them collective power. It's the old story of how a person can break a single stick, but when all the sticks are bundled together the person is not able to break them. Banding together the workers have the power to get better wages, benefits and working conditions.

The other side of this is that big companies can make a lot of money if they can keep their workers from organizing unions. So they use their money and power to try to stop workers from organizing unions.

Because the economy does better when people have better wages, benefits and working conditions, and because strikes and lawsuits can plug things up, it is the law that workers have the right to form unions and bargain collectively to balance out the immense power of the giant corporations.

This is why the NLRB battle matters. For years elected officials allied with anti-union businesses worked to block the NLRB from operating, so that workers are not able to form unions and existing unions are not able to enforce labor rules. At the same time these elected officials worked to get anti-union judges into the courts and block impartial judges from being confirmed. This enabled the giant companies to make more money -- and working people less money. (Meanwhile as wages dropped nationally the economy slowed and slowed.)

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What does it mean to be an American? What does it mean to be an American corporation? An article in the Wall Street Journal the other day should trigger questions like these.

WSJ: Domestic-Based Multinationals Hiring Overseas,

Multinational companies based in the U.S. boosted their global work forces in 2011 almost entirely by hiring workers overseas, underscoring the slow growth in the U.S. job market.

... The paltry hiring at home reflects where multinational companies are focusing their attention. Stronger economic growth in overseas markets in Asia and Latin America is driving their expansion, reinforcing their shift toward cheaper labor or closer access to customers.

The U.S. parents of multinational firms account for about one-fifth of total private U.S. employment. Since 1999, employment by U.S. multinationals is down by 1.1 million inside the U.S., while it is up by 3.8 million overseas.

The hiring by American companies is not happening in the U.S. At the same time these companies are holding $1.7 trillion of profits outside of the country, away from their own shareholders and our economy to avoid their taxes, while pushing to dramatically lower the taxes they pay us – and even to get out of paying any taxes at all on money they make outside of the country!

Why Do We Have Corporations?

Why do We the People even have laws that allow corporations and give them special benefits? The answer obviously is for our common benefit -- why else would we do it? The corporate form of a business enables the company to easily obtain capital from investors, in order to accomplish large-scale projects that benefit us. To encourage this we give these entities special privileges. For example, we limit liability which means the investors are not held liable for the actions of the company – they won't lose more than their investment if the company gets sued for some reason. We provide a system that helps them obtain financing, insurance, market liquidity and all kinds of things to help those investors get a good return on their money.

Benefit: We the People want railroads, but it takes a lot of money to build and operate a railroad. And our system wants private companies to do the work of building and operating railroads instead us just doing it ourselves. So we set up a way for a private company to gather investment from lots of people.

Why Do We Want "American" Corporations?

Why don't we just contract with any old corporation that comes along to get things done for us? Who cares what country these entities are from? Why should we as a country want to encourage and support our American corporations? Because American corporations make money for us. That is the whole point.

Other countries see themselves as countries, and compete with us as a country, for their benefit and the benefit of their people. As much as some of us might want a world in which we all cooperate and share and have "free trade" and other ideals and dreams, the fact is that other countries understand themselves as countries. Companies and industries located in other countries are operated to benefit their people. Their governments give them special benefits to help them compete with our companies. And then they are taxed so their country can have good schools and infrastructure and all the rest of the benefits of the modern world, for them.

And if we do not respond in kind, then their people end up better off at the expense of our people.

As long as other countries operate for the benefit of their people, it is our job to keep up our end of the bargain as it exists and operate as a country for the benefit of our people. This means that we support our companies, and expect them to bring the money they make back here, and share the returns with us.

We The People Used To Understand Who Is The Boss

We the People (used to) understand that these companies exist for our common benefit and (used to) expect certain things back from these corporations. We (used to) expect them to provide high-quality products and services and not engage in fraud and trickery. We (used to) expect them to provide a safe and fair work environment with good wages and benefits. We (used to) expect them to be good citizens that benefit the communities where they operate. And our laws and enforcement (used to) make sure they operated that way – for our common benefit.

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For years now, Senate Republicans have been filibustering ... everything. At the end of last year, there was an effort to convince Democrats in the Senate of the need to reform the filibuster so things We the People need to get done could get done. At the last minute, however, this effort was scuttled by House Majority Leader Harry Reid who instead made a gentleman's agreement with Republican leader Mitch McConnell. So now Republicans are filibustering ... everything. And Reid, in a strongly-worded statement, threatened to issue a sternly-worded letter.

Silent Obstruction

In the last few years pretty much everything We the People were hoping to accomplish to make our lives better was filibustered by Senate Republicans. So many bills and nominees that were so important to us ... the American Jobs Act, a terrible cost. The Bring Jobs Home Act and the Ending Offshoring Act to end tax incentives for sending jobs and factories out of the country, the Public Option, the DREAM Act, the Repeal Big Oil Tax Subsidies Act, the Emergency Senior Citizens Relief Act, and the DISCLOSE Act so we could at least know what companies and countries were bribing our politicians. ... Just so much cost...

Public Doesn't Know

The public doesn't even know that so many important acts and nominees have been filibustered! The public believes a filibuster is Senators taling all night, but rules changes allowed Senators to block bills without doing anything. The media did not report these obstructions as filibusters, only saying things like "the Senate failed to pass a bill to..." or "Senate rules requiring 60 votes ..." or, most destructive to democracy, "Democrats failed to gain -passage of ..." The public had no idea what was happening, no idea of the extent of the obstruction, and no way to know who to hold accountable for the failure of government to accomplish anything. Democracy can not function without an informed citizenry.

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At UC Berkeley, Robert Reich with the Mario Savio Memorial Lecture on Class Warfare in America.

This is the story of Bob the businessman.

Suppose a local businessman, let’s call him Bob, went around town raising money from the townspeople to open a car dealership. Dozens and dozens of people in town invested, putting in $1,000, $5,000, and a few putting in as much as $50,000 and $100,000. Bob raised a lot of money for his business.

After a while the investors found out Bob the Businessman was using some of their money to help his brother run for Mayor and several cousins to run for city council, and some of it to make his wife head of the Arts Council for a good salary. Then they learned that he was using some of it to fund a local organization that did nothing but push for tax breaks for . . . businesses just like Bob’s. (And to push for "deregulation" letting Bob use his company's money to do things like ... fund the organization.)

In the election his brother was elected Mayor and his cousins took over the council. Once in charge of the city, they pushed through a big contract for Bob to supply cars to the city (many of which the city didn’t even need.) The city also exempted Bob’s business from taxes, even giving it subsidies.

This all of course made the car dealership very profitable, and the investors started asking when they were going to get a dividend. But they found out that Bob’s business opened a subsidiary based at a post office box in the Cayman Islands. This Cayman Islands subsidiary had been buying cars from the manufacturer at wholesale and turning around and selling them to Bob’s parent company for just under what the dealership sells them to the public for. As a result, all the profits went to the Cayman Islands subsidiary, and Bob wasn’t bringing any of it back to distribute to the shareholders!

Next, the investors learned that Bob had been living really high on the hog, paying himself many millions of dollars.

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You may have seen the charts showing how working people's wages stopped going up along with productivity gains:

Here is another chart of productivity gain and wages, from EPI's The wedges between productivity and median compensation growth:

This means the gains went ... somewhere else. See if you can guess who got them? (Hint: it's the 1%; this is one driver of the terrible income and wealth inequality.) This breakoff of wages from productivity growth is partly (largely?) the result of trade agreements that pit Americans against exploited workers in non-democracies. This weakened the bargaining power of unions, moved factories and industries out of the country, devastated entire regions of our country -- and gave the giant multinational corporations, Wall Street and the billionaires the leverage they needed...

Economist Dean Baker describes one effect of this in Minimum Wage: Who Decided Workers Should Fall Behind?

"If the minimum wage had risen in step with productivity growth [since 1968], it would be over $16.50 an hour today. That is higher than the hourly wages earned by 40 percent of men and half of women."

Baker is referring to this CEPR study: The Minimum Wage and Economic Growth.

40% Of Americans Now Make Less Than 1968 Minimum Wage

Read what Baker wrote again. The minimum wage would be $16.50 an hour -- $33,000 a year -- if it had kept up with the growth of productivity since 1968. To put the effect of this a different way, 40% of Americans now make less than the 1968 minimum wage, had the minimum wage kept pace with productivity gains.

To put this even another way, the average American's living standard would be much, much higher today if wages had not decoupled from productivity gains - with the gains all going to the 1% instead of being shared by We, the People. If wages had kept pace we wouldn't feel the terrible squeeze that everyone in the middle class is feeling. (Never mind what has happened to those below the middle class.)

This is one more way to understand the effect of income and wealth inequality on each of us. The 1%/99% thing is real. When you hear that the 6 Walmart heirs have more wealth than 1/3 (or more) of all Americans combined, it is real. When you hear that the people on the Forbes list of the 400 wealthiest Americans have more wealth than half of all Americans combined, it is real.

And the effects on the rest of us are real.

Is This Where The (Middle-Class) Money Went?

Now, here's another chart. This chart shows that financial-sector and non-financial-sector compensation used to rise together, but in the late 70's / early 80's they decoupled. Financial-sector compensation took off, while non-financial-sector compensation did not.

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Florida Senator Marco Rubio gave a "Republican Response" to the President's State of the Union address. He said that taxes cause employers to reduce hours or lay people off. Others say that raising the minimum wage will mean layoffs. Let's take a closer look at that.

In Wednesday's post, What Do Republicans, Rubio And Rand Have If They Don’t Have Deficits? I focused on one line from Rubio's speech,

One line of Rubio’s stands out: “Because more government raises taxes on employers who then pass the costs on to their employees through fewer hours, lower pay and even layoffs.”

With this Rubio is trying to scare people who are worried about jobs. Business taxes are on profits. Good businesses employ the right number of people, so a company that is making profits isn’t going to reduce staff or hours. That is simply preposterous to anyone who has ever run a business.

I was in a local CVS store today. There weren't enough employees in the store, and there was a long line of people waiting to pay for items at the only checkout register. There was also a long line of people in line at the pharmacy. I saw a one person give up, leave their nearly-full carrier on a shelf, and just leave the store. I saw another person come in the door, take one look at the line and leave. I left without buying anything and went to a different store -- not a CVS, for what I was looking for.

Was this CVS "saving money" by employing fewer people? Or were they being "penny-wise and pound-foolish" and costing themselves business today as well as in the future?

How many times have you seen this happen at a business that is not employing enough people to "save money?? You are at a business, they don't have enough people working, and people give up and take their business somewhere else?

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The Trans Pacific Trade Agreement is worse than NAFTA.

When you hear anyone from the big multinationals or Wall Street using the word "reform," watch out! The way they use the word, it means give them more and We, the People get less. They want to "reform" Social Security, "reform" Medicare and "reform" the income tax code. And now they want to "reform" the taxes corporations pay on money made outside the US. It's like "reforming" an oak tree with an ax.

$420 Billion In Taxes Owed

American corporations are holding a lot of (their shareholders') cash "outside of the country." (But not really outside.) HOW much money are we talking about? Approximately $1.2 trillion as of last March. This is money these companies have made in international profits, owed to their shareholders or potentially used for investment in US jobs, facilities and equipment. But they won't bring the money back to the US because they would have to pay taxes if they did. Instead they are holding it "outside of the country" and pushing for "reform" -- meaning let them out of their tax bill. If this $1.2 trillion were repatriated and taxed at the full corporate tax rate of 35% this would bring an additional $420 billion to the treasury for We, the People to use to rebuild our infrastructure, etc.

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Yesterday, the president of the United States held a press conference with the DC elite press corps. They had the opportunity to ask the president what our government is doing about the nation's most serious problems.

There were no questions about the climate change emergency.

There were no questions about the 400,000+ Americans killed by cigarettes each year.

There were no questions about ways to get millions and millions of unemployed and hurting people into jobs.

There were no questions about what we should do about our crumbling infrastructure.

There were no questions about the huge trade deficit that drains hundreds of billions out of our economy.

There were no questions about the trade agreements that pit our workers against exploited, underpaid workers in countries where people have no say, thereby undermining our democracy, wages and middle class.

There were no questions about the government's failure to hold banks and banking executives accountable for fraud and other crimes.

There were no questions about worsening income and wealth inequality, with all income gains going to the top 1% and the bulk of new jobs being low-wage jobs

There were no questions about the obesity/diabetes epidemic, and the possible link to corn syrup.

There were no questions about the crushing student-loan debt that holds so many of our younger people back.

There certainly and for obvious reasons were no questions about what the government is doing to fight media concentration, with most media now owned by only six giant corporations.

There certainly were no questions about how we are going to return to democracy from this corporate/billionaire plutocracy.

There were no questions about the influence of money over our government and the things we talk and even think about.

But the influence of the billionaires and their corporations over our government and our media and the things we talk and even think about is WHY there were no questions about any of these problems. The solutions to the problems are obvious, but are being blocked. We are even being blocked -- by money -- from even talking about the problems, never mind solving them.

This Is Not About Ideology

Getting paid by corporations to block government action from helping We, the People but hurting corporate profits isn't an ideology, it's corruption.

Getting paid by corporations to cut taxes and regulations for corporations isn't an ideology, it’s corruption.

Getting paid by billionaires to cut taxes for billionaires isn't an ideology, it is corruption

Call it what it is, don’t launder it by calling it ideology. It is corruption.

--

I am a Fellow with Campaign for America's Future. Follow me and CAF on Twitter:

Should we cut Social Security to "save" it from cuts?

Just two days after the President pledged during the State of the Union address to improve Social Security "without putting at risk current retirees" and "without slashing benefits for future generations" the program is again being subjected to widespread, misleading attacks in the media.

With the headline Social Security fund will be drained by 2037, AP ran a (since-changed, original is still available here. It is worth comparing the original with the revised.) op-ed story that began,

Sick and getting sicker, Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037, congressional budget experts said Wednesday in bleaker-than-previous estimates.

"Drained?"

The CBO story about Social Security is part of a larger overall budget deficit projection, the result of the recent vote to give more tax cuts to the wealthy. The AP story, widely echoed in the media, is instead focusing only on Social Security. But it is not "news" that the trust fund will be exhausted in 2037 (assuming continuing poor economic and wage growth -- read this and everything Bruce Webb writes about Social Security at Angry Bear), it is the projection that had been understood for years. However, using better economic assumptions that could result from policies that increase the wages of working people and reduce the concentration of wealth the trust fund does not run out at all.

Even so, in 2037, under these bad-case scenarios, Social Security will still be able to pay 78% of projected benefits, which are higher than today's benefits. So in this poor-case scenario, if nothing is done, recipients will face a cut of 22%.

Saying that we need to cut Social Security now because it might -- might -- have to be cut 22% in 2037 is saying we need to cut it to "save" it from cuts.

Deficit Commission Recommendations?

The AP story wrongly stated that the "Deficit Commission" had made recommendations to increase the retirement age and cut the program through reduced cost-of-living increases. In fact the commission was unable to agree on any recommendations.

A debt commission appointed by President Barack Obama has recommended a series of changes to improve Social Security's finances, including a gradual increase in the full retirement age, lower cost-of-living increases and a gradual increase in the threshold on the amount of income subject to the Social Security payroll tax.

Obama, however, has not embraced any of the panel's recommendations. Instead, in his State of the Union speech this week, he called for unspecified bipartisan solutions to strengthen the program while protecting current retirees, future retirees and people with disabilities.

Experts?

To assist with its anti-Social Security formulation the AP story claimed "experts" (plural) are calling for "reform" by quoting one "expert" (singular) from the conservative think tank American Enterprise Institute.

Running A Deficit?

Conservative outlets are expanding on the CBO report, claiming that Social Security is running deficits -- as long as you don't cont the interest that the program's bonds earn. For example, note the use of the word "effectively" in CNS' CBO: Social Security to Run $45 Billion Deficit in 2011

The Congressional Budget Office (CBO) reports that Social Security will effectively run a $45-billion deficit in 2011 and continue to run deficits totaling $547 billion over the coming decade.

National Review, uses the word "broke" in CBO: Social Security Now Officially Broke, and claims the interest is only "camouflage,"

Today’s CBO report has some bad news about the deficit. But CBO has some really, really bad news about Social Security: It’s officially broke.

... But there’s a bit of camouflage attached: If you include the “interest” that the federal government “owes” the fictitious Social Security “trust fund,” then the program is in the black.

And so on...

Cut The Program To Save It From Cuts?

So does it make sense to cut the program to save it from cuts? The real agenda behind calls for cuts is so that the money does not have to be found elsewhere to repay the trust fund. The trust fund masked the harm done by tax cuts, and undoing tax cuts is what will be needed to pay back the money that working people have set aside for retirement,

Claiming that Social Security needs to be cut, or the retirement age raised, so that Social Security needs less funding is like your bank telling you that you need to cut back on food so they won't have to pay you back the money you put into a savings account.

Update - As this was posted AP released an astonishing new attack, Social Security posting $600B deficit over 10 years. Ignoring the program's huge trust fund and that there is no deficit at all when interest paid to that trust fund is counted, AP writes,

Social Security will post nearly $600 billion in deficits over the next decade as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, according to new congressional projections.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.

. . . But the new projections show nothing but red ink until the Social Security trust funds are exhausted in 2037.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.