‘We need to send a very loud and very clear message to corporate America: the era of outsourcing is over’
In a statement issued Saturday, the former Democratic presidential candidate took a stand against the air conditioner manufacturer United Technologies (UTX), which is planning to move 2,100 jobs to Mexico to maximize profits, as he announced legislation to prevent the outsourcing of U.S. factory jobs—and demanded that Trump follow through on his own vows to keep the company from going overseas.
“I call on Mr. Trump to make it clear to the CEO of United Technologies that if his firm wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico,” Sanders said. “We need to send a very loud and very clear message to corporate America: the era of outsourcing is over. Instead of offshoring jobs, the time has come for you to start bringing good-paying jobs back to the United States of America.”
Sanders’ legislation, the Outsourcing Prevention Act, would prevent companies sending jobs overseas from receiving federal contracts, tax breaks, or other financial assistance; claw back federal subsidies that outsourcing companies received over the past decade; impose a tax of either 35 percent of the company’s profits or an amount that equals the money saved by moving jobs overseas, whichever is higher; and imposing stiff tariffs on executive bonuses like golden parachutes, stock options, and other gratuities.
UTX, which makes the air conditioner Carrier, told its unionized workers in February that it would be shipping operations from Huntington and Indianapolis, Indiana to Monterrey, Mexico. Video footage of the layoff announcement, and the workers’ angry response, went viral (see video below); throughout his campaign, Trump vowed that if elected, he would convince UTX executives to stay in the U.S. or face a 35 percent tax.
“All of us need to hold Mr. Trump accountable to make sure that he keeps this promise,” Sanders said Saturday. “Let’s be clear: it is not good enough to save some of these jobs. We cannot rest until United Technologies signs a firm contract to keep all of these good-paying jobs in Indiana without slashing the salaries or benefits workers have earned.”
The New York Times reported last week that Carrier’s employees in Indiana earn between $15 and $26 per hour; the workers in Monterrey stand to make that much in a single day.
Trump tweeted on Thursday that he had been “making progress” on getting Carrier to stay in the U.S. The company confirmed it had “discussions” with the incoming administration, but had “nothing to announce at this time.”
A NY Times article today says that Hillary Clinton blames FBI Director Comey for her loss. I understand her complaint, but her loss was multifaceted. The Comey sabotage was a factor, but so was her campaign’s failure to focus more on the Dem platform (partially crafted by Sanders’ followers) in order to portray her as an agent of change (rather than, as most people saw her, the candidate of the status quo establishment, or Obama 2.0). There were other contributing factors as well, such as the Democratic Party’s abandonment of the middle class over the last several decades (see Thomas Frank’s new book “Listen, Liberals”).
Democrats (if they hope to have electoral success in the future) must do some deep self-reflective soul searching, and especially connect with their historically traditional working and middle class roots. Merely blaming one hostile opponent outside the Democratic Party, however influential, doesn’t begin to get to the depth of the work they need to do.
With all due respect, the Clintons — after last Tuesday — will not play an appreciable role in the future of the Democratic Party, if it is to be successful electorally.
Politically, they’re done.
Reprinted with permission from TomDispatch.com
By Ann Jones
Donald Trump grabbed a new lifeline. Speaking at a rally in Charlotte, North Carolina, on October 15th, he raised a hand as if to take an oath and declared: “I am a victim!” The great business tycoon, the one and only man who could fix America and make the place great again (trust me, folks), was laying claim to martyrdom — and spinning another news cycle. “I am a victim,” he declared, “of one of the great political smear campaigns in the history of our country. They are coming after me to try and destroy what is considered by even them the greatest movement in the history of our country.”
“I am a victim.” That pathetic line echoed in my head, which is why I’m writing this. In my long life, I had seen a large white man stand up in a public arena and proclaim those words — the shrill, self-pitying complaint of the remorseless perpetrator — only once before. That was in a courtroom in lower Manhattan in 1988. The man was Joel Steinberg, a New York lawyer who, over a 12-year period, had brainwashed and beaten into oblivion a woman named Hedda Nussbaum, once a successful young editor of children’s books.
In the early years of their relationship, she had run away several times, seeking help, and every time a doctor or friend had called Steinberg to come and get her. At that point — time and again — Steinberg would administer “punishment,” breaking her bones and her spirit. She took on what police would later describe as “a zombie-like quality.”
Some years earlier, a teenage girl had hired Steinberg to arrange an adoptive home for her baby. Instead he kept the child, Lisa, until one evening when she was six years old and “stared” at him in a way he didn’t like. He responded by striking her repeatedly in the head. After which he went out to dinner with his cocaine dealer, leaving the child unconscious on the floor. Nussbaum, by then so traumatized, so absent from anything like life, thought vaguely of calling a doctor, but she was not allowed to use the phone in Steinberg’s absence. Instead, she sat on the floor and watched over the girl as she lay dying.
On trial for the child’s murder, Steinberg blamed everyone but himself. “I’m the victim here,” he whined in court. He swore that he had “never hit anyone,” not anyone, even though he was known to have assaulted a business associate and three other women before he settled into the single-minded, single-handed demolition of Hedda Nussbaum.
Judge Harold Rothwax observed that Steinberg was “a man of extraordinary narcissism and self-involvement” who had “an extreme need to control everyone in his ambit” while he lived a “life of self-gratification.” Yet Steinberg could not see in himself the man Judge Rothwax described. He thought people should feel sorry for him. He had been disbarred and had lost a child (not to mention his Greenwich Village apartment). He railed at those who had conspired to bring him down: the police, the neighbors, the judge, the prosecutor, the expert medical witnesses, his defense attorney, the jurors, the press, and Hedda Nussbaum. “I’m the victim here,” he claimed.
At the time, nearly 30 years ago, the public blamed Hedda Nussbaum. The district attorney, the police, the doctors and psychiatrists who treated her intensively for more than a year before the trial all agreed that, on the evening in question, she was too physically and mentally “incapacitated” either to cause the girl’s injuries or take action to save her. Nonetheless, she was tried and condemned by the press and public opinion, including women who called themselves “feminists.” In court, the jurors were merciless. When they began to deliberate, only four thought Steinberg guilty of murder as charged, five were “in the middle,” and three held out for lesser charges, feeling certain that Hedda Nussbaum had somehow been responsible for killing the child.
They finally agreed upon a verdict of manslaughter. Even then, a woman juror assured the press that Nussbaum was “a very sick woman” who should have been charged and convicted of “some crime.” Another juror, also female, expressed popular opinion this way: “I just feel that she was to blame.” And a third woman juror, who claimed that “certain others” agreed with her, said, “Poor Joel. Joel’s a victim. We have to send a message to the system: ‘You don’t make victims out of nice men like Joel.’”
Judge Rothwax sentenced Steinberg to eight and a half to 25 years. Released after 17 years, Steinberg, now in his seventies, still claims to have done nothing hurtful to anyone. He has not paid a civil court-ordered settlement of $15 million to the birth mother of the dead child, nor has he ever been charged with any crime for what he did to Hedda Nussbaum.
Two lessons lurk in this story, one old and one very up to date. First, it’s a reminder of how much women at that time, even after a great wave of feminism, still blamed women (including themselves) for whatever happened to them at the hands of men; second, a man with a character like Steinberg’s is not the kind of guy you want to choose for high office — or any office at all.
Joel Steinberg stalked a far tinier stage than Donald Trump and he did more deadly damage, but the two men seem to be brothers under the skin, sharing common character defects well described in psychiatric texts: extreme narcissism, a taste for sexual predation, and very similar views of the women on whom they prey. Like Steinberg, who was incapable of seeing himself as the judge accurately described him, Trump seems blind to the real nature of his own behavior. (His current wife describes him as a “boy.”) Neither man seems capable of taking responsibility for the harm he’s done, and when their own actions finally call down retribution, branding them as losers — ah, then come the conspiracy theories and the vindictive wail of the victim.
Men Who Use Women
Last June, I published a piece at TomDispatch venturing to explain why candidate Donald J. Trump was getting “rock-bottom ratings” in the polls from women voters. Nearly 70% of them reportedly couldn’t stand the guy. I pointed out what seemed to me to be the obvious: “Trump’s behavior perfectly fits the profile of an ordinary wife abuser.”
In a sworn deposition introduced in divorce proceedings, his first wife Ivana swore under oath that he had torn out her hair and forcibly raped her, raging at her because he didn’t like the results of a “scalp-reducing” procedure (meant to remove a bald patch) performed on him by a plastic surgeon she had recommended. (Before she collected a $14 million divorce settlement, she toned her story down, saying the assault was not “criminal.”)
About one in three American women are survivors of some version of such treatment, euphemistically called “domestic abuse.” That’s roughly 65 million women voters who, as I wrote last June, “know a tyrant when they see one.” I raise this subject again because the now-infamous tape of Trump’s open-mic Hollywood Access bus ride in 2005 added a new page to the rap sheet of this particular abuser.
In that piece of mine, I traced the history of the principal tactics of coercion used by controlling men like Trump. Some of those tactics, including Steinberg’s favorites, involve physical force, but most, when used by a skilled abuser, require no force at all. Trump applies the handiest tools to his targeted victims regularly, leaving no physical marks behind: threats, intimidation, degradation, put-downs, humiliation, insults, trivial demands, occasional indulgences (a flash of charm, for example, or a bit of feigned reasonableness). The lesson is simple and clear: the mind can be bent and the spirit shattered without battering the body.
I neglected, however, to mention one of the most insidious tactics of such abusers, perhaps because it’s so obvious that it regularly hides in plain sight. In the military, it’s called “pulling rank.” High status is itself a powerful coercive force that can stifle resistance in a lower-status victim and so silence him or her. Status is Trump’s brandished weapon, his open carry. On this, he couldn’t have been clearer in boasting of his pussy-grabbing skills on that Hollywood Access tape: “When you’re a star they let you do it. You can do anything.”
The most chilling moments on that tape, however, occur after Trump emerges from the bus in all his orange splendor, followed by his escort Billy Bush — now a former NBC “personality” — who could be heard on that tape laughing as Trump recounted his compulsive assaults. Bush then greeted his television colleague Arianne Zucker, who like so many women on American TV was less fully clothed than the men around her, and whom Trump had been ogling from the bus while sucking Tic Tacs to freshen his potty mouth for a possible kissing attack. Billy Bush “asked” Ms. Zucker, “How about a little hug for The Donald?”
In that short bus trip across the parking lot, Bush had learned just what to do to get in good stead with his high-status guest, and so, without missing a beat, he threw his lower status co-worker to his peppermint-salivating pal. He then collected a hug from her, too, as Trump is heard exonerating himself with the bizarre remark, “Melania said this was okay.”
It hardly seemed to matter what Arianne Zucker wanted or believed to be okay. Billy Bush’s question wasn’t actually a question, but a notice of what was expected. Clearly, she wanted to keep her job and, just as clearly, hugging predatory, high-status stars and coworkers had never been part of her job description, but was a little instant add-on of coercion from her colleague. Setting the star power aside, all of this amounts to commonplace harassment in what appears to be a hostile workplace, and it just happens to be against the law.
One in three women between the ages of 18 and 24 say that they have been harassed at work. Yet 70% of all workers (woman and men) harassed on the job do not report the offense, often for fear of disbelief or reprisal. Think of all the women in television who were subjected to harassment and worse by Roger Ailes — the charges now reach back 50 years — fired at last by Fox News, only to become official media adviser to whom else but presidential candidate Donald Trump.
Some in the media glossed over Trump’s bragging as just so much “lewd conversation” — or as Trump himself put it “locker room talk” — while his wife Melania dismissed it as “boy talk.” In fact, Trump’s unwanted kissing and groping — his self-described M.O. substantiated by one victim after another — can be classified in his home state (under New York Penal Law, Article 130, Section 130.52: forcible touching) as a Class A misdemeanor. That may not sound serious, but it’s punishable by a maximum fine of $1,000 (chump change for The Donald) and a more sobering potential year behind bars.
It was that tape, all over the media on October 7th, that prompted Anderson Cooper during the second presidential debate to ask Trump three times if he had actually done the sort of things he described to Billy Bush, which Cooper correctly named “sexual assault.” Trump finally answered: “And I will tell you, no I have not” — and women who had lived for five, 10, 20, even 30 years with nagging memories of a Trump assault and humiliation had to restrain an immediate impulse to smash the TV set and instead called a news outlet or a lawyer.
As of this writing, more than a dozen women have gone public with reports of Trump’s sexual attacks since the release of that Hollywood Access tape. They join a list of women and girls who had previously reported offenses ranging from outright sexual assault to crashing dressing rooms at beauty contests where nude and semi-nude women and girls were preparing to compete for the titles of Miss Universe or Miss Teen America. That brings the number of Trump’s accusers, as I write, to at least 24. Journalists and lawyers have generally managed to verify their accounts.
Of course, Trump has repeatedly denied the women’s allegations, saying before, during, and ever since the third presidential debate that he had never seen those women before, had no idea who they were, found them insufficiently attractive to warrant his attention, and that their stories had, in any case, been debunked. None of his claims were true. (And, for good measure, he announced during his version of a Gettysburg Address that he would sue every one of them after the election was over.)
In my June post, I wrote:
“Trump’s behavior perfectly fits the profile of an ordinary wife abuser — but with one additional twist… Trump has not confined his controlling tactics to his own home(s). For seven years, he practiced such tactics openly for all the world to see on The Apprentice, his very own reality show, and now applies them on a national stage, commanding constant attention while alternately insulting, cajoling, demeaning, embracing, patronizing, and verbally beating up anyone… who stands in the way of his coronation.”
In this fashion, he humiliated his male Republican primary opponents, demeaning them with nicknames — Little Marco, Lyin’ Ted, Low-Energy Jeb — and denigrated his only female primary opponent, Carly Fiorina, by unfavorably appraising her appearance. (“Look at that face! Would anyone vote for that?”) More recently, of course, he’s disparaged “Crooked Hillary” in a similar fashion. (“Such a nasty woman!”)
Growing Up in America
Hillary Clinton, as Trump himself has acknowledged, is a fighter who will not quit — unperturbed even by his stalking her on stage throughout the second presidential debate and body-shaming her afterwards. “She walked in front of me,” he said of a moment in that debate when she crossed the stage to speak to a questioner in the audience. “Believe me, I wasn’t impressed.” In the third debate, she called him out directly on his behavior. “Donald thinks belittling women makes him bigger,” she said. “He goes after their dignity, their self-worth, and I don’t think there is a woman anywhere who doesn’t know what that feels like.”
Here was something new under the sun: a woman on a presidential debate stage calling out an insufferable man — a serial predator, at that — on behavior so common among men for so long that the vast majority of women in this country have experienced it and learned to call it “life.”
Some women still see it that way. The New York Times, for instance, interviewed a 62-year-old woman voting for Trump who said that other women offended by his “banter” should “grow up.” I like to think that hers is a good description of what’s happening nationally at the moment, though obviously not in the fashion that she imagined. After all, grown-up womenled the way, among congressional representatives, in calling Trump out. Republican Congresswomen Barbara Comstock of Virginia and Martha Roby of Alabama both asked him to withdraw from the race. Kay Granger of Texas, Mia Love of Utah, and Ann Wagner of Missouri said they could not vote for him. Republican Senators Lisa Murkowski of Alaska, Susan Collins of Maine, Deb Fischer of Nebraska, and Shelley Moore Capito of West Virginia withdrew their support. Susana Martinez, Republican governor of New Mexico, said she would not support Trump, while former Republican presidential candidate Fiorina said that Trump should step aside. Republican former Secretary of State Condoleeza Rice wrote on her Facebook page: “Enough! Donald Trump should not be President. He should withdraw.”
Still, don’t expect a serial abuser to be a quitter either. Faced with accusations of abhorrent and criminal acts he can’t acknowledge, plus impending incomprehensible defeat at the polls, and the very real possibility of becoming one of those people he so despises — a loser — Trump casts about for others to blame. Given his character, it’s not surprising that he follows, as if by instinct, what we might call the Joel Steinberg path to self-exoneration — painting himself, and himself alone, as the ultimate innocent victim of abusive others in a world whose every aspect is “rigged” against him.
In his own telling, he, not the women he’s demeaned or assaulted, is the abused one and he’s taking it for us, for America. It’s quite a self-portrait when you think about it and should make us appreciate all the more those women who stepped before the cameras, reported his sexual assaults, and left themselves open to further abuse from Trump and his supporters. They have done something rare and brave. It’s one thing for a woman to say publicly that she has been sexually assaulted or battered or raped. Feminist speak-outs taught us decades ago to support our sisters by sharing our experience in this way. But it’s another thing to name the perpetrator and call him to account. That’s what these women have done. And wonder of wonders, most women and a whole lot of men believe them, and more than 60%, in the tepid language of the pollsters, “have some concerns” about the issue. Count that as a positive change of recent years — a light in dismal times.
On the dark side, you never know what a sore loser and his loyal, bullying, misogynist followers might do. Say, for example, followers of the type who show up outside Hillary rallies with banners reading “Trump that Bitch!” The moment the trial of Joel Steinberg ended, armed guards surrounded him and hustled him off to prison. Unfortunately, when this election is over, whether Trump wins or loses, he’s not likely to go away.
Ann Jones, a TomDispatch regular, is the author of several books on violence against women, including the feminist classic Women Who Kill and Next Time, She’ll Be Dead: Battering and How to Stop It, which Gloria Steinem calls “the one book you should read” on the subject. It includes a chapter on the Steinberg case. She is also the author of the Dispatch Books original, They Were Soldiers: How the Wounded Return from America’s Wars — The Untold Story.
Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, Nick Turse’s Next Time They’ll Come to Count the Dead, and Tom Engelhardt’s latest book, Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.
Copyright 2016 Ann Jones
Only in a surrealistic election year such as this could an otherwise ironic remark like the following — by Sherry Turkle — be read as straight-up un-ironic truth:
” … that this man who stood against democratic institutions is also a misogynist is a stroke of good fortune. The next time we may not be so lucky.”
(From “We Need to Talk about Donald“)
We live in Trump-country, a red county in the foothills of the Sierra Nevada mountains, near — but oh so far politically — from the coast. In a recent “President’s Day Parade,” our guests from the Bay Area got depressed when a pro-Trump display passed by.
It’s mostly peaceful here, save for the occasional wintertime flock of shrieking geese flying overhead and the bucolic sounds of butane honey-lab houses exploding.
Trump-love makes no sense to me, except as a sort derangement. We have some family further up the West Coast, a group of devout Christians, one of whom (Facebook informs me) recently joined “Prophets for Trump.” I’m still trying to parse the morality of that.
Meantime, what will happen to the children?
Which means, if Trump wins, everyone else loses.
By Bill Moyers
Reprinted with permission from TomDispatch.com
Sixty-six years ago this summer, on my 16th birthday, I went to work for the daily newspaper in the small East Texas town of Marshall where I grew up. It was a good place to be a cub reporter — small enough to navigate but big enough to keep me busy and learning something every day. I soon had a stroke of luck. Some of the paper’s old hands were on vacation or out sick and I was assigned to help cover what came to be known across the country as “the housewives’ rebellion.”
Fifteen women in my hometown decided not to pay the social security withholding tax for their domestic workers. Those housewives were white, their housekeepers black. Almost half of all employed black women in the country then were in domestic service. Because they tended to earn lower wages, accumulate less savings, and be stuck in those jobs all their lives, social security was their only insurance against poverty in old age. Yet their plight did not move their employers.
The housewives argued that social security was unconstitutional and imposing it was taxation without representation. They even equated it with slavery. They also claimed that “requiring us to collect [the tax] is no different from requiring us to collect the garbage.” So they hired a high-powered lawyer — a notorious former congressman from Texas who had once chaired the House Un-American Activities Committee — and took their case to court. They lost, and eventually wound up holding their noses and paying the tax, but not before their rebellion had become national news.
The stories I helped report for the local paper were picked up and carried across the country by the Associated Press. One day, the managing editor called me over and pointed to the AP Teletype machine beside his desk. Moving across the wire was a notice citing our paper and its reporters for our coverage of the housewives’ rebellion.
I was hooked, and in one way or another I’ve continued to engage the issues of money and power, equality and democracy over a lifetime spent at the intersection between politics and journalism. It took me awhile to put the housewives’ rebellion into perspective. Race played a role, of course. Marshall was a segregated, antebellum town of 20,000, half of whom were white, the other half black. White ruled, but more than race was at work. Those 15 housewives were respectable townsfolk, good neighbors, regulars at church (some of them at my church). Their children were my friends; many of them were active in community affairs; and their husbands were pillars of the town’s business and professional class.
So what brought on that spasm of rebellion? They simply couldn’t see beyond their own prerogatives. Fiercely loyal to their families, their clubs, their charities, and their congregations — fiercely loyal, that is, to their own kind — they narrowly defined membership in democracy to include only people like themselves. They expected to be comfortable and secure in their old age, but the women who washed and ironed their laundry, wiped their children’s bottoms, made their husbands’ beds, and cooked their family’s meals would also grow old and frail, sick and decrepit, lose their husbands and face the ravages of time alone, with nothing to show from their years of labor but the crease in their brow and the knots on their knuckles.
In one way or another, this is the oldest story in our country’s history: the struggle to determine whether “we, the people” is a metaphysical reality — one nation, indivisible — or merely a charade masquerading as piety and manipulated by the powerful and privileged to sustain their own way of life at the expense of others.
“I Contain Multitudes”
There is a vast difference between a society whose arrangements roughly serve all its citizens and one whose institutions have been converted into a stupendous fraud, a democracy in name only. I have no doubt about what the United States of America was meant to be. It’s spelled out right there in the 52 most revolutionary words in our founding documents, the preamble to our Constitution, proclaiming the sovereignty of the people as the moral base of government:
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
What do those words mean, if not that we are all in the business of nation-building together?
Now, I recognize that we’ve never been a country of angels guided by a presidium of saints. Early America was a moral morass. One in five people in the new nation was enslaved. Justice for the poor meant stocks and stockades. Women suffered virtual peonage. Heretics were driven into exile, or worse. Native people — the Indians — would be forcibly removed from their land, their fate a “trail of tears” and broken treaties.
No, I’m not a romantic about our history and I harbor no idealized notions of politics and democracy. Remember, I worked for President Lyndon Johnson. I heard him often repeat the story of the Texas poker shark who leaned across the table and said to his mark: “Play the cards fair, Reuben. I know what I dealt you.” LBJ knew politics.
Nor do I romanticize “the people.” When I began reporting on the state legislature while a student at the University of Texas, a wily old state senator offered to acquaint me with how the place worked. We stood at the back of the Senate floor as he pointed to his colleagues spread out around the chamber — playing cards, napping, nipping, winking at pretty young visitors in the gallery — and he said to me, “If you think these guys are bad, you should see the people who sent them there.”
And yet, despite the flaws and contradictions of human nature — or perhaps because of them — something took hold here. The American people forged a civilization: that thin veneer of civility stretched across the passions of the human heart. Because it can snap at any moment, or slowly weaken from abuse and neglect until it fades away, civilization requires a commitment to the notion (contrary to what those Marshall housewives believed) that we are all in this together.
American democracy grew a soul, as it were — given voice by one of our greatest poets, Walt Whitman, with his all-inclusive embrace in Song of Myself:
“Whoever degrades another degrades me,
and whatever is done or said returns at last to me…
I speak the pass-word primeval — I give the sign of democracy;
By God! I will accept nothing which all cannot have their counterpart of on the same terms…
(I am large — I contain multitudes.)”
Author Kathleen Kennedy Townsend has vividly described Whitman seeing himself in whomever he met in America. As he wrote in I Sing the Body Electric:
“– the horseman in his saddle,
Girls, mothers, house-keepers, in all their performances,
The group of laborers seated at noon-time with their open dinner-kettles and their wives waiting,
The female soothing a child — the farmer’s daughter in the garden or cow-yard,
The young fellow hoeing corn –”
Whitman’s words celebrate what Americans shared at a time when they were less dependent on each other than we are today. As Townsend put it, “Many more people lived on farms in the nineteenth century, and so they could be a lot more self-reliant; growing their own food, sewing their clothes, building their homes. But rather than applauding what each American could do in isolation, Whitman celebrated the vast chorus: ‘I hear America singing.’” The chorus he heard was of multitudinous voices, a mighty choir of humanity.
Whitman saw something else in the soul of the country: Americans at work, the laboring people whose toil and sweat built this nation. Townsend contrasts his attitude with the way politicians and the media today — in their endless debates about wealth creation, capital gains reduction, and high corporate taxes — seem to have forgotten working people. “But Whitman wouldn’t have forgotten them.” She writes, “He celebrates a nation where everyone is worthy, not where a few do well.”
President Franklin Delano Roosevelt understood the soul of democracy, too. He expressed it politically, although his words often ring like poetry. Paradoxically, to this scion of the American aristocracy, the soul of democracy meant political equality. “Inside the polling booth,” he said, “every American man and woman stands as the equal of every other American man and woman. There they have no superiors. There they have no masters save their own minds and consciences.”
God knows it took us a long time to get there. Every claim of political equality in our history has been met by fierce resistance from those who relished for themselves what they would deny others. After President Abraham Lincoln signed the Emancipation Proclamation it took a century before Lyndon Johnson signed the Voting Rights Act of 1965 — a hundred years of Jim Crow law and Jim Crow lynchings, of forced labor and coerced segregation, of beatings and bombings, of public humiliation and degradation, of courageous but costly protests and demonstrations. Think of it: another hundred years before the freedom won on the bloody battlefields of the Civil War was finally secured in the law of the land.
And here’s something else to think about: Only one of the women present at the first women’s rights convention in Seneca Falls in 1848 — only one, Charlotte Woodward — lived long enough to see women actually get to vote.
“We Pick That Rabbit Out of the Hat”
So it was, in the face of constant resistance, that many heroes — sung and unsung — sacrificed, suffered, and died so that all Americans could gain an equal footing inside that voting booth on a level playing field on the ground floor of democracy. And yet today money has become the great unequalizer, the usurper of our democratic soul.
No one saw this more clearly than that conservative icon Barry Goldwater, longtime Republican senator from Arizona and one-time Republican nominee for the presidency. Here are his words from almost 30 years ago:
“The fact that liberty depended on honest elections was of the utmost importance to the patriots who founded our nation and wrote the Constitution. They knew that corruption destroyed the prime requisite of constitutional liberty: an independent legislature free from any influence other than that of the people. Applying these principles to modern times, we can make the following conclusions: To be successful, representative government assumes that elections will be controlled by the citizenry at large, not by those who give the most money. Electors must believe that their vote counts. Elected officials must owe their allegiance to the people, not to their own wealth or to the wealth of interest groups that speak only for the selfish fringes of the whole community.”
About the time Senator Goldwater was writing those words, Oliver Stone released his movie Wall Street. Remember it? Michael Douglas played the high roller Gordon Gekko, who used inside information obtained by his ambitious young protégé, Bud Fox, to manipulate the stock of a company that he intended to sell off for a huge personal windfall, while throwing its workers, including Bud’s own blue-collar father, overboard. The younger man is aghast and repentant at having participated in such duplicity and chicanery, and he storms into Gekko’s office to protest, asking, “How much is enough, Gordon?”
“The richest one percent of this country owns half our country’s wealth, five trillion dollars… You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now, you’re not naïve enough to think we’re living in a democracy, are you, Buddy? It’s the free market. And you’re part of it.”
That was in the high-flying 1980s, the dawn of today’s new gilded age. The Greek historian Plutarch is said to have warned that “an imbalance between rich and poor is the oldest and most fatal ailment of a Republic.” Yet as theWashington Post pointed out recently, income inequality may be higher at this moment than at any time in the American past.
When I was a young man in Washington in the 1960s, most of the country’s growth accrued to the bottom 90% of households. From the end of World War II until the early 1970s, in fact, income grew at a slightly faster rate at the bottom and middle of American society than at the top. In 2009, economists Thomas Piketty and Emmanuel Saez explored decades of tax data and found that from 1950 through 1980 the average income of the bottom 90% of Americans had grown, from $ 17,719 to $ 30,941. That represented a 75% increase in 2008 dollars.
Since 1980, the economy has continued to grow impressively, but most of the benefits have migrated to the top. In these years, workers were more productive but received less of the wealth they were helping to create. In the late 1970s, the richest 1% received 9% of total income and held 19% of the nation’s wealth. The share of total income going to that 1% would then rise to more than 23% by 2007, while their share of total wealth would grow to 35%. And that was all before the economic meltdown of 2007-2008.
Even though everyone took a hit during the recession that followed, the top 10% now hold more than three-quarters of the country’s total family wealth.
I know, I know: statistics have a way of causing eyes to glaze over, but these statistics highlight an ugly truth about America: inequality matters. It slows economic growth, undermines health, erodes social cohesion and solidarity, and starves education. In their study The Spirit Level: Why Greater Equality Makes Societies Stronger, epidemiologists Richard Wilkinson and Kate Pickett found that the most consistent predictor of mental illness, infant mortality, low educational achievement, teenage births, homicides, and incarceration was economic inequality.
So bear with me as I keep the statistics flowing. The Pew Research Center recently released a new study indicating that, between 2000 and 2014, the middle class shrank in virtually all parts of the country. Nine out of ten metropolitan areas showed a decline in middle-class neighborhoods. And remember, we aren’t even talking about over 45 million people who are living in poverty. Meanwhile, between 2009 and 2013, that top 1% captured 85% percent of all income growth. Even after the economy improved in 2015, they still took in more than half of the income growth and by 2013 held nearly half of all the stock and mutual fund assets Americans owned.
Now, concentrations of wealth would be far less of an issue if the rest of society were benefitting proportionally. But that isn’t the case.
Once upon a time, according to Isabel Sawhill and Sara McClanahan in their 2006 report Opportunity in America, the American ideal was one in which all children had “a roughly equal chance of success regardless of the economic status of the family into which they were born.”
Almost 10 years ago, economist Jeffrey Madrick wrote that, as recently as the 1980s, economists thought that “in the land of Horatio Alger only 20 percent of one’s future income was determined by one’s father’s income.” He then cited research showing that, by 2007, “60 percent of a son’s income [was] determined by the level of income of the father. For women, it [was] roughly the same.” It may be even higher today, but clearly a child’s chance of success in life is greatly improved if he’s born on third base and his father has been tipping the umpire.
This raises an old question, one highlighted by the British critic and public intellectual Terry Eagleton in an article in the Chronicle of Higher Education:
”Why is it that the capitalist West has accumulated more resources than human history has ever witnessed, yet appears powerless to overcome poverty, starvation, exploitation, and inequality?… Why does private wealth seem to go hand in hand with public squalor? Is it… plausible to maintain that there is something in the nature of capitalism itself which generates deprivation and inequality?”
The answer, to me, is self-evident. Capitalism produces winners and losers big time. The winners use their wealth to gain political power, often through campaign contributions and lobbying. In this way, they only increase their influence over the choices made by the politicians indebted to them. While there are certainly differences between Democrats and Republicans on economic and social issues, both parties cater to wealthy individuals and interests seeking to enrich their bottom lines with the help of the policies of the state (loopholes, subsidies, tax breaks, deregulation). No matter which party is in power, the interests of big business are largely heeded.
More on that later, but first, a confession. The legendary broadcast journalist Edward R. Murrow told his generation of journalists that bias is okay as long as you don’t try to hide it. Here’s mine: plutocracy and democracy don’t mix. As the late (and great) Supreme Court Justice Louis Brandeis said, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” Of course the rich can buy more homes, cars, vacations, gadgets, and gizmos than anyone else, but they should not be able to buy more democracy. That they can and do is a despicable blot on American politics that is now spreading like a giant oil spill.
In May, President Obama and I both spoke at the Rutgers University commencement ceremony. He was at his inspirational best as 50,000 people leaned into every word. He lifted the hearts of those young men and women heading out into our troubled world, but I cringed when he said, “Contrary to what we hear sometimes from both the left as well as the right, the system isn’t as rigged as you think…”
Wrong, Mr. President, just plain wrong. The people are way ahead of you on this. In a recent poll, 71% of Americans across lines of ethnicity, class, age, and gender said they believe the U.S. economy is rigged. People reported that they are working harder for financial security. One quarter of the respondents had not taken a vacation in more than five years. Seventy-one percent said that they are afraid of unexpected medical bills; 53% feared not being able to make a mortgage payment; and, among renters, 60% worried that they might not make the monthly rent.
Millions of Americans, in other words, are living on the edge. Yet the country has not confronted the question of how we will continue to prosper without a workforce that can pay for its goods and services.
You didn’t have to read Das Kapital to see this coming or to realize that the United States was being transformed into one of the harshest, most unforgiving societies among the industrial democracies. You could instead have read the Economist, arguably the most influential business-friendly magazine in the English-speaking world. I keep in my files a warning published in that magazine a dozen years ago, on the eve of George W. Bush’s second term. The editors concluded back then that, with income inequality in the U.S. reaching levels not seen since the first Gilded Age and social mobility diminishing, “the United States risks calcifying into a European-style class-based society.”
And mind you, that was before the financial meltdown of 2007-2008, before the bailout of Wall Street, before the recession that only widened the gap between the super-rich and everyone else. Ever since then, the great sucking sound we’ve been hearing is wealth heading upwards. The United States now has a level of income inequality unprecedented in our history and so dramatic it’s almost impossible to wrap one’s mind around.
Contrary to what the president said at Rutgers, this is not the way the world works; it’s the way the world is made to work by those with the money and power. The movers and shakers — the big winners — keep repeating the mantra that this inequality was inevitable, the result of the globalization of finance and advances in technology in an increasingly complex world. Those are part of the story, but only part. As G.K. Chesterton wrote a century ago, “In every serious doctrine of the destiny of men, there is some trace of the doctrine of the equality of men. But the capitalist really depends on some religion of inequality.”
Exactly. In our case, a religion of invention, not revelation, politically engineered over the last 40 years. Yes, politically engineered. On this development, you can’t do better than read Winner Take All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Classby Jacob Hacker and Paul Pierson, the Sherlock Holmes and Dr. Watson of political science.
They were mystified by what had happened to the post-World War II notion of “shared prosperity”; puzzled by the ways in which ever more wealth has gone to the rich and super rich; vexed that hedge-fund managers pull in billions of dollars, yet pay taxes at lower rates than their secretaries; curious about why politicians kept slashing taxes on the very rich and handing huge tax breaks and subsidies to corporations that are downsizing their work forces; troubled that the heart of the American Dream — upward mobility — seemed to have stopped beating; and dumbfounded that all of this could happen in a democracy whose politicians were supposed to serve the greatest good for the greatest number. So Hacker and Pierson set out to find out “how our economy stopped working to provide prosperity and security for the broad middle class.”
In other words, they wanted to know: “Who dunnit?” They found the culprit. With convincing documentation they concluded, “Step by step and debate by debate, America’s public officials have rewritten the rules of American politics and the American economy in ways that have benefitted the few at the expense of the many.”
There you have it: the winners bought off the gatekeepers, then gamed the system. And when the fix was in they turned our economy into a feast for the predators, “saddling Americans with greater debt, tearing new holes in the safety net, and imposing broad financial risks on Americans as workers, investors, and taxpayers.” The end result, Hacker and Pierson conclude, is that the United States is looking more and more like the capitalist oligarchies of Brazil, Mexico, and Russia, where most of the wealth is concentrated at the top while the bottom grows larger and larger with everyone in between just barely getting by.
Bruce Springsteen sings of “the country we carry in our hearts.” This isn’t it.
Looking back, you have to wonder how we could have ignored the warning signs. In the 1970s, Big Business began to refine its ability to act as a class and gang up on Congress. Even before the Supreme Court’s Citizens Uniteddecision, political action committees deluged politics with dollars. Foundations, corporations, and rich individuals funded think tanks that churned out study after study with results skewed to their ideology and interests. Political strategists made alliances with the religious right, with Jerry Falwell’s Moral Majority and Pat Robertson’s Christian Coalition, to zealously wage a cultural holy war that would camouflage the economic assault on working people and the middle class.
To help cover-up this heist of the economy, an appealing intellectual gloss was needed. So public intellectuals were recruited and subsidized to turn “globalization,” “neo-liberalism,” and “the Washington Consensus” into a theological belief system. The “dismal science of economics” became a miracle of faith. Wall Street glistened as the new Promised Land, while few noticed that those angels dancing on the head of a pin were really witchdoctors with MBAs brewing voodoo magic. The greed of the Gordon Gekkos — once considered a vice — was transformed into a virtue. One of the high priests of this faith, Lloyd Blankfein, CEO of Goldman Sachs, looking in wonder on all that his company had wrought, pronounced it “God’s work.”
A prominent neoconservative religious philosopher even articulated a “theology of the corporation.” I kid you not. And its devotees lifted their voices in hymns of praise to wealth creation as participation in the Kingdom of Heaven here on Earth. Self-interest became the Gospel of the Gilded Age.
No one today articulates this winner-take-all philosophy more candidly than Ray Dalio. Think of him as the King Midas of hedge funds, with a personal worth estimated at almost $16 billion and a company, Bridgewater Associates, reportedly worth as much as $154 billion.
Dalio fancies himself a philosopher and has written a book of maximsexplaining his philosophy. It boils down to: “Be a hyena. Attack the Wildebeest.” (Wildebeests, antelopes native to southern Africa — as I learned when we once filmed a documentary there — are no match for the flesh-eating dog-like spotted hyenas that gorge on them.) Here’s what Dalio wrote about being a Wall Street hyena:
“…when a pack of hyenas takes down a young wildebeest, is this good or bad? At face value, this seems terrible; the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently evil behavior exists throughout nature through all species… like death itself, this behavior is integral to the enormously complex and efficient system that has worked for as long as there has been life… [It] is good for both the hyenas, who are operating in their self-interest, and the interests of the greater system, which includes the wildebeest, because killing and eating the wildebeest fosters evolution, i.e., the natural process of improvement… Like the hyenas attacking the wildebeest, successful people might not even know if or how their pursuit of self-interest helps evolution, but it typically does.”
He concludes: “How much money people have earned is a rough measure of how much they gave society what it wanted…”
Not this time, Ray. This time, the free market for hyenas became a slaughterhouse for the wildebeest. Collapsing shares and house prices destroyed more than a quarter of the wealth of the average household. Many people have yet to recover from the crash and recession that followed. They are still saddled with burdensome debt; their retirement accounts are still anemic. All of this was, by the hyena’s accounting, a social good, “an improvement in the natural process,” as Dalio puts it. Nonsense. Bull. Human beings have struggled long and hard to build civilization; his doctrine of “progress” is taking us back to the jungle.
And by the way, there’s a footnote to the Dalio story. Early this year, the founder of the world’s largest hedge fund, and by many accounts the richest man in Connecticut where it is headquartered, threatened to take his firm elsewhere if he didn’t get concessions from the state. You might have thought that the governor, a Democrat, would have thrown him out of his office for the implicit threat involved. But no, he buckled and Dalio got the $22 million in aid — a $5 million grant and a $17 million loan — that he was demanding to expand his operations. It’s a loan that may be forgiven if he keeps jobs in Connecticut and creates new ones. No doubt he left the governor’s office grinning like a hyena, his shoes tracking wildebeest blood across the carpet.
Our founders warned against the power of privileged factions to capture the machinery of democracies. James Madison, who studied history through a tragic lens, saw that the life cycle of previous republics had degenerated into anarchy, monarchy, or oligarchy. Like many of his colleagues, he was well aware that the republic they were creating could go the same way. Distrusting, even detesting concentrated private power, the founders attempted to erect safeguards to prevent private interests from subverting the moral and political compact that begins, “We, the people.” For a while, they succeeded.
When the brilliant young French aristocrat Alexis de Tocqueville toured America in the 1830s, he was excited by the democratic fervor he witnessed. Perhaps that excitement caused him to exaggerate the equality he celebrated. Close readers of de Tocqueville will notice, however, that he did warn of the staying power of the aristocracy, even in this new country. He feared what he called, in the second volume of his masterwork, Democracy in America, an “aristocracy created by business.” He described it as already among “the harshest that ever existed in the world” and suggested that, “if ever a permanent inequality of conditions and aristocracy again penetrate the world, it may be predicted that this is the gate by which they will enter.”
And so it did. Half a century later, the Gilded Age arrived with a new aristocratic hierarchy of industrialists, robber barons, and Wall Street tycoons in the vanguard. They had their own apologist in the person of William Graham Sumner, an Episcopal minister turned professor of political economy at Yale University. He famously explained that “competition… is a law of nature” and that nature “grants her rewards to the fittest, therefore, without regard to other considerations of any kind.”
From Sumner’s essays to the ravenous excesses of Wall Street in the 1920s to the ravings of Rush Limbaugh, Glenn Beck, and Fox News, to the business press’s wide-eyed awe of hyena-like CEOs; from the Republican war on government to the Democratic Party’s shameless obeisance to big corporations and contributors, this “law of nature” has served to legitimate the yawning inequality of income and wealth, even as it has protected networks of privilege and monopolies in major industries like the media, the tech sector, and the airlines.
A plethora of studies conclude that America’s political system has already been transformed from a democracy into an oligarchy (the rule of a wealthy elite). Martin Gilens and Benjamin Page, for instance, studied data from 1,800 different policy initiatives launched between 1981 and 2002. They found that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy while mass-based interest groups and average citizens have little or no independent influence.” Whether Republican or Democratic, they concluded, the government more often follows the preferences of major lobbying or business groups than it does those of ordinary citizens.
We can only be amazed that a privileged faction in a fervent culture of politically protected greed brought us to the brink of a second Great Depression, then blamed government and a “dependent” 47% of the population for our problems, and ended up richer and more powerful than ever.
The Truth of Your Life
Which brings us back to those Marshall housewives — to all those who simply can’t see beyond their own prerogatives and so narrowly define membership in democracy to include only people like themselves.
How would I help them recoup their sanity, come home to democracy, and help build the sort of moral compact embodied in the preamble to the Constitution, that declaration of America’s intent and identity?
First, I’d do my best to remind them that societies can die of too much inequality.
Second, I’d give them copies of anthropologist Jared Diamond’s book Collapse: How Societies Choose to Fail or Succeed to remind them that we are not immune. Diamond won the Pulitzer Prize for describing how the damage humans have inflicted on their environment has historically led to the decline of civilizations. In the process, he vividly depicts how elites repeatedly isolate and delude themselves until it’s too late. How, extracting wealth from commoners, they remain well fed while everyone else is slowly starving until, in the end, even they (or their offspring) become casualties of their own privilege. Any society, it turns out, contains a built-in blueprint for failure if elites insulate themselves endlessly from the consequences of their decisions.
Third, I’d discuss the real meaning of “sacrifice and bliss” with them. That was the title of the fourth episode of my PBS series Joseph Campbell and the Power of Myth. In that episode, Campbell and I discussed the influence on him of the German philosopher Arthur Schopenhauer, who believed that the will to live is the fundamental reality of human nature. So he puzzled about why some people override it and give up their lives for others.
“Can this happen?” Campbell asked. “That what we normally think of as the first law of nature, namely self-preservation, is suddenly dissolved. What creates that breakthrough when we put another’s well-being ahead of our own?” He then told me of an incident that took place near his home in Hawaii, up in the heights where the trade winds from the north come rushing through a great ridge of mountains. People go there to experience the force of nature, to let their hair be blown in the winds — and sometimes to commit suicide.
One day, two policemen were driving up that road when, just beyond the railing, they saw a young man about to jump. One of the policemen bolted from the car and grabbed the fellow just as he was stepping off the ledge. His momentum threatened to carry both of them over the cliff, but the policeman refused to let go. Somehow he held on long enough for his partner to arrive and pull the two of them to safety. When a newspaper reporter asked, “Why didn’t you let go? You would have been killed,” he answered: “I couldn’t… I couldn’t let go. If I had, I couldn’t have lived another day of my life.”
Campbell then added: “Do you realize what had suddenly happened to that policeman? He had given himself over to death to save a stranger. Everything else in his life dropped off. His duty to his family, his duty to his job, his duty to his own career, all of his wishes and hopes for life, just disappeared.” What mattered was saving that young man, even at the cost of his own life.
How can this be, Campbell asked? Schopenhauer’s answer, he said, was that a psychological crisis represents the breakthrough of a metaphysical reality, which is that you and the other are two aspects of one life, and your apparent separateness is but an effect of the way we experience forms under the conditions of space and time. Our true reality is our identity and unity with all life.
Sometimes, however instinctively or consciously, our actions affirm that reality through some unselfish gesture or personal sacrifice. It happens in marriage, in parenting, in our relations with the people immediately around us, and in our participation in building a society based on reciprocity.
The truth of our country isn’t actually so complicated. It’s in the moral compact implicit in the preamble to our Constitution: we’re all in this together. We are all one another’s first responders. As the writer Alberto Rios once put it, “I am in your family tree and you are in mine.”
I realize that the command to love our neighbor is one of the hardest of all religious concepts, but I also recognize that our connection to others goes to the core of life’s mystery and to the survival of democracy. When we claim this as the truth of our lives — when we live as if it’s so — we are threading ourselves into the long train of history and the fabric of civilization; we are becoming “we, the people.”
The religion of inequality — of money and power — has failed us; its gods are false gods. There is something more essential — more profound — in the American experience than the hyena’s appetite. Once we recognize and nurture this, once we honor it, we can reboot democracy and get on with the work of liberating the country we carry in our hearts.
Bill Moyers has been an organizer of the Peace Corps, a top White House aide, a publisher, and a prolific broadcast journalist whose work earned 37 Emmy Awards and nine Peabody Awards. He is president of the Schumann Media Center, which supports independent journalism. This essay is adapted from remarks he prepared for delivery this past summer at the Chautauqua Institution’s week-long focus on money and power. He is grateful to his colleagues Karen Kimball and Gail Ablow for their research and fact checking.
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Copyright 2016 Bill Moyers
By Abrahm Lustgarten (Reprinted with permission from ProPublica)
ProPublica’s reporting on the water crisis in the American West has highlighted any number of confounding contradictions worsening the problem: Farmers are encouraged to waste water so as to protect their legal rights to its dwindling supply in the years ahead; Las Vegas sought to impose restrictions on water use while placing no checks on its explosive population growth; the federal government has encouraged farmers to improve efficiency in watering crops, but continues to subsidize the growing of thirsty crops such as cotton in desert states like Arizona.
Today, we offer another installment in the contradictions amid a crisis.
In parts of the western U.S., wracked by historic drought, you can get a tax break for using an abundance of water.
That’s a typo, right? A joke?
Ah, no. But we understand your bafflement. The Colorado River has been trickling, its largest reservoirs less than half full. As recently as 2014 parts of Texas literally almost dried up. The National Academy of Sciences predicts the Southwest may be on the cusp of its worst dry spell in 1,000 years. Scientists are warning that the backup plan — groundwater aquifers from California to Nebraska — are all being sucked dry.
But, yes, the tax break exists — in parts of eight High Plains states.
Here’s how it works: Farmers — or anyone who uses water in a business — can ask the Internal Revenue Service for a tax write-off for what’s called a “depleted asset.” In certain places, water counts as an asset, just like oil, or minerals like copper. The more water gets used, the more cash credit farmers can claim against their income tax. And that’s just what almost 3,000 Texas landowners in just one water district appear to have done last year — a year in which nearly half of Texas was in a state of “severe” or “extreme” drought.”
Yikes. How much can they write off?
A bunch it seems, especially if you’re a big farm and own a lot of land. We talked to an accountant in Levelland, Texas. He had a client who wrote off $10,000. “Whenever you buy land, you’re getting the dirt … and of course you are getting the water,” said Sham Myatt, the accountant. And the idea is that that water is part of what you paid for in the land deal. If the aquifer was 50 feet deep at the time of the land sale, and it drops 10 feet in a dry year, then the farmer can deduct one-fifth of the value, and so on, until all the water is gone.
That’s not going to do much to conserve water, is it?
No. It’s not. In fact it’s an incentive to do the exact opposite. A farmer who tries to use less water because of the drought, say, by switching to really efficient irrigation techniques, could actually make less money. His water might last longer, but producing his crop would get a lot more expensive.
We called Nicholas Brozovic, an associate professor of agricultural economics and director of policy at the University of Nebraska’s Robert B. Daugherty Water for Food Institute. He’d actually never heard of the water deduction; it’s that obscure. But he laid out some textbook economics: If you’re overusing your water, then you are depreciating it, he said. And if the government pays for that, they are subsidizing that depreciation. “The more you deplete your groundwater, the higher your tax exemption and that must create an incentive not to conserve,” he said.
Hasn’t the federal government spent billions subsidizing conservation and the protection of the West’s groundwater, in part by building dams and encouraging people to use the water in rivers instead? Why would they forfeit federal tax dollars to do the opposite?
We called the IRS, and they initially shared our doubts. Not because they cared much about groundwater (it’s a tax agency!) but because they said they were pretty sure no such deduction was legal. They pointed us to section 613 of the tax code, and it couldn’t be more explicit: For the purposes of deducting the depreciating value of minerals, the definition “does not include soil, sod, dirt, turf, water, or mosses.” Ok, who would ever have thought of deducting mosses or sod? But anyway. That left us really confused.
Right, there were, after all, those farmers in Texas who seemed to have benefited from what the IRS said was not possible.
We encouraged the IRS to check again. They did. And then they found the provision they thought didn’t exist — right there in the text for Revenue Rule 65–296. An IRS spokesperson laid out for us the specifics: “Taxpayers are entitled to a cost depletion deduction for the exhaustion of their capital investment in the ground water extracted and disposed of by them in their business of irrigation farming specifically from the Ogallala Formation.”
Seems like some follow-up questions were in order.
For sure. We asked for clarification. The IRS said it would try to explain. Most importantly, they wanted to say it wasn’t quite as crazy as it sounded. The deduction is only available for one small part of the country — an area that includes parts of Texas, New Mexico, Oklahoma, Nebraska, Kansas, South Dakota, Wyoming and Colorado. And it should only apply if people are using water from a source that is running dry anyway.
But wait, what? You get a break when you use resources that are already in danger of vanishing?
Yes, that’s why it is what’s called a depleted asset. It’s of less and less value with every day. Your car is worth less the moment you drive it off the lot. Or, more similarly, oil companies track the falling value of their reserves the more they pump out from underground. In fact, energy companies have been taking oil depletion breaks for decades. Texas landowners would say their property is getting less valuable the less water there is to use on it.
Okay, okay, but water isn’t oil. It’s not a commodity. Access to it is a basic right. Yes? Please say that’s right.
Wrong. Ouch. I know, it hurts. But ProPublica last year wrote about all the ways water is coveted and controlled — and then often wasted — by just a few powerful groups. In most of the West, only some people and businesses have rights to it, depending on who showed up to claim it first. One big trend is that water is increasingly being bought and sold — including by hedge funds and big Wall Street investors, and the less water there is, the more the price is going up.
That’s a little scary. Let’s get back to depleted assets. So when did this tax break start?
About 50 years ago. A farmer in the Texas panhandle — along with his local water district — successfully sued the IRS, arguing that the roughly 200 million gallons he drew from his groundwater each year was no different than the depletion of the state’s other great natural resource, oil. He won, and the IRS was obliged to create rule 65–296 — the special allowance for tax credits that the IRS almost forgot about.
Again, it was supposed to be limited — just to a slice of Texas and eastern New Mexico. The court even went so far as to warn that the case shouldn’t become a precedent for groundwater tax claims elsewhere, saying the conditions in that area of the country were unique. But it didn’t take long for the rule to be expanded, albeit just a little bit. By the mid 1980’s any landowner overlying the sprawling Ogallala aquifer — a giant underground vault of precious but dwindling water — was eligible to file for the deductions, not just in North Texas and New Mexico.
That still doesn’t sound like much of a big deal … why does it matter?
Well, the Ogallala, which spans from central Texas north to Nebraska and South Dakota is the nation’s largest groundwater reserve and is one of the most important, and (famously) threatened water supplies in the country. Its heavy overuse and plummeting water levels rang alarms among policymakers more than half a century ago. So this is no insignificant place to be even indirectly encouraging overuse. Texas’ High Plains are one of the most intensely irrigated and productive farming regions in the country. Hundreds of thousands of acres of cotton and corn, among other staple commodities, are grown there using this Ogallala water.
So, do we know what’s happening to the Ogallala where all this farming is taking place?
We looked at recent water level changes in just one district — the one with thousands of tax credit claims — and found a disturbing trend. Underground water levels in the 16 counties of the High Plains Underground Water Conservation District have dropped nearly 10 feet over the last 10 years. Some parts of Castro County saw water levels drop more than five feet over the course of 2015 alone. The federal government estimates nearly 100 cubic miles of water have been withdrawn from the Ogallala in that part of Texas. That doesn’t automatically mean the tax credits are responsible — water levels are dropping in most places thanks to overuse and it would take a lot more research to link up the cause and effect. But it certainly isn’t a portrait of sustainability.
Aquifers are at risk across Arizona, California and other states as well, right? At least people can’t claim tax breaks there?
Not yet. But that could change, as water supplies worsen and word of the tax break circulates more widely. Almost no one we spoke with had heard of it — not water lawyers in Arizona or groundwater conservation scientists in California. Armed with the knowledge, there’s a pretty good chance farmers and businesses across the West could seek tax relief.
Because there is precedent?
What does the IRS say to that?
They say it’s very unlikely, mostly because they think the conditions in the Ogallala are rare, and that the agency’s policy is to reject water allowance claims anywhere outside of the places covered in the original lawsuit. But if more landowners, in more places, were to file suits challenging the IRS to allow them to deduct for their water, or if they were to petition the IRS directly, the agency says it would undertake a review to consider it on a case by case basis. Landowners would have to present extensive scientific evidence that showed their situation was more or less the same as in North Texas.
Is the IRS equipped to make such judgments?
Fair question. John Leshy, professor emeritus at the University of California Hastings College of the Law, and a former solicitor for the U.S. Department of Interior, isn’t persuaded. “The IRS has really created a can of worms for itself,” he said. “It doesn’t have any hydrological expertise.”
Hmmm. Not ideal. But what’s the bottom line? Are these tax breaks going to make any real difference in how quickly we use up the water supply?
It’s hard to tell, partly because no one appears to have examined that question. We asked the IRS for data on the number of claims and it hasn’t responded. Folks in Texas dismiss the suggestion that the tax benefits are incentivizing water use as ludicrous. Myatt, the accountant, points out that only about one-third of the deducted value translates to cash in hand, and says for many smaller farmers that amounts to just a few hundred dollars. Jason Coleman, manager of the High Plains Underground Water Conservation District, says his members are as concerned about conserving their water for the future as anyone. “Its already a declining resource,” he said. “I just can’t imagine someone saying I’m going to depreciate our resource any more because of a tax claim.”
But the academic consensus is that incentives encourage use, even overuse. And if the effect of depletion allowances on oil production are any guide — Leshy says they have spurred overproduction and led to artificially cheap, subsidized fuel prices — any significant expansion of the groundwater tax credit to other states could have lasting impacts on the way groundwater is used across the country.
So is anyone trying to do anything about this?
Not really, which is why people like Brent Blackwelder, president emeritus of the environmental group Friends of the Earth, which has long been involved in rooting out tax policy disincentives to conservation, are fuming. “It’s a pretty major outrage that we would so stupidly reward the over extraction and non-sustainable use of groundwater,” he told me. Blackwelder helped push to purge the tax code of perverse anti-conservation incentives like this one way back in the Reagan administration, with the 1986 Tax Reform Act. They were largely successful, weeding out several other odd loopholes. But the groundwater depletion allowance persisted. And since then, apparently, it’s been forgotten about by all but the farmers who rely on it.
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“There is no moral core inside Donald Trump.”
Reprinted with permission from AlterNet
David Cay Johnston has been one of the nation’s premier investigative reporters for decades, specializing in the ways government works for the wealthy at the expense of everyday Americans. He first met and covered Donald Trump in the 1980s. In his latest book, The Making of Donald Trump, he profiles the many ways the Republican presidential nominee has gotten wealthy by bilking others, colluding with criminals, evading prosecution, and romancing the press. I spoke with Johnston recently about his new book.
Steven Rosenfeld: What are you trying to show readers about Donald Trump that they might not know?
David Cay Johnston: As you know, I’ve been trying to show people how government is creating inequality though all of these rules and laws that nobody knows about. The political donor class—a phrase that I coined by the way—are doing what economists call rent seeking. So I understand people who are terrified—they should be—and who think the government has worked against them. What’s nutty is this belief that Donald Trump is their friend.
This is a man who started his [presidential] campaign by saying wages are too high. This is a man who, when he does construction projects, deals with mob-controlled unions. That’s why Trump Towers [in Manhattan] are concrete, because the steelworkers are an honest union. This is a man who cheats workers out of their pay. Four dollars an hour he paid, and he cheated them out of some of their pay. That’s what a judge found. This is a man who tells vendors, Do this work. They do it and then he says, I am not going to pay you.
I don’t know if you saw the piece the other day where the manager, or whoever was responsible as his witness, at the Doral [Miami], over this guy who didn’t get paid the last $34,000 for his paint—he was a Benjamin Moore paint dealer—testified Mr. Trump felt he had paid enough. Nobody runs their business on that basis. You can think, and with good reason, of all sorts of bad things that corporations do. But they don’t go around saying to vendors or workers, “Uh, we paid enough. We’re not going to pay you.”
He is an enemy of these people. He is an active enemy of the people who have been ruined by this economy. And they’re buying his con job.
SR: Did he get his con artist skills from his dad, the builder Fred Trump?
DCJ: Partly he got it from his dad, whose business partner was a mob front and, as I show in the book, cheated and profiteered on the housing for returning GIs [after WW2]. But Donald also learned a lot from Roy Cohn [New York City mob lawyer and Sen. Joseph McCarthy’s assistant in the 1950s anti-communist witch hunts] about how to create a falsehood. Like when the government went after Trump and his dad for discriminating against blacks and Puerto Ricans, and they said, “This was an effort to put people on welfare in our buildings.” No it wasn’t. The [government’s] housing testers who were sent were black and Hispanic people who were economically qualified and they were turned away and then white people showed up with the exact same economics and they were shown multiple apartments.
SR: Since we are seeing some of that in other aspects of the campaign, tell me more about the lessons from Roy Cohn, like Trump’s assertion that if he doesn’t win big, the election is rigged.
DCJ: Always go on the attack. Always accuse the other side of dishonesty. And be ruthless. Remember one of the reasons he loved Roy Cohn—I quote him in the book—whom he regarded as not just as a mentor but as a second father, was he said Roy would brutalize for you. That’s the lesson. Listen, for Donald’s entire life he has broken the rules or ignored the rules and it’s done well for him. So why would you behave any other way? If you were raised in the household where your parents told you be immoral, and you got away with it, well, of course you’d be immoral.
SR: Have you seen that impulse change since you started covering him in the ’80s?
DCJ: Donald is 70 years old. I’m almost the same age, I’m 67. He’s not any different than when I met him, when he was in his early 40s. Donald is a guy who has no empathy for other people, who doesn’t see other people as human beings. He sees them as things to be used. That’s why when he was challenged about cutting off health care for his sickly grandnephew, over money, and he was asked, as I report in the book, “Don’t you think that will look cold-hearted?” [He replied] “What else can I do?” There is no moral core inside Donald Trump. There is no moral compass. It doesn’t exist.
SR: These stories in your book remind me of the badly behaving men in my grandfather’s generation. They were born around WW1, grew up in Brooklyn, didn’t have much to do with people outside their ethnicity and religion. They were sexist, bigots, didn’t need or want college education. They felt if they could just bluff and boss their way around and take whatever they could home, that they were big-time successes. Am I imagining something there?
DCJ: That’s a perfectly accurate way to view this… Donald is a product of his family history, of his time and place, and of his belief that he’s a really superior person, therefore all these other things don’t matter. You either worship and recognize Donald’s greatness or he has a word for you: loser! And it has worked for him. You do things that work for you.
His skill at shutting down law enforcement investigations—I cite those four grand juries, etc.—is extraordinary. He knows when to run to the cops and rat out people, or tell them information that will help them. He knows how to use the court system to cover up what he’s done by making a settlement on the condition that the record be sealed. And he’s masterful at this. It’s just astonishing how masterful he is at it. And then he’s masterful at the conventions of journalism.
All journalists who keep their jobs accurately quote what people tell them. Most journalists, even at the best papers, they don’t have a deep understanding of the things that they are reporting on. I can show you people at the New York Times, the L.A. Times, the Wall Street Journal, who really know their stuff. But I can also show you a lot of them who don’t and have pretty superficial knowledge of what they’re doing. Donald avoids group A and he goes for group B.
And his hiring of this guy from Breitbart [Stephen K. Bannon, chairman of Breitbart News site, as his campaign’s new chief executive]. There’s a very good piece I read this morning, how Donald’s lines line up with what’s in Breitbart. Because he clearly reads it. He’s brought this guy over. And so this is Donald’s view of reality, these people who are way off on the fringe crazy.
SR: Tell us how he typically overplays his hand and then reacts and treats others.
DCJ: Donald is not a good negotiator. He’s not a good businessman. And he often overplays his hand because of hubris. What he does when that happens is that he threatens to make terrible trouble for people with litigation, to tie them all up, so what they’ll do is settle with him, because who wants to spend—as one brave guy in the demolition workers did—spend 18 years in litigation with Trump. You just want it to go away. And he knows that. And he uses it. And if you don’t have the money to pursue him for 18 years, you have to have a lawyer who’s really willing to do that, you’re going to be told by the lawyers, there’s no gain here. And he knows that.
SR: The pollster Celinda Lake told me you can’t do much to convince people who believe in Trump to change their minds, but that he can do something to turn them off. Does that sound right to you?
DCJ: I would agree with you, sort of. George Lakoff points out that the people who are drawn to the father figure are very, very loyal, unless something happens that breaks that connection, and then they become fiercely opposed. Where Donald goes too far somewhere, or his statements appear to people to be outside of their acceptable range, some of them will justify it, but some of them will begin pulling away.
On the other side of this, however, is that a lot of the people supporting him—not all of them, but a lot of them—they believe all of this stuff that’s been planted for years about Hillary. I have had grown men with college degrees or advanced degrees who I know personally, because they are in my social circle, who are successful, tell me they can’t vote for Hillary. Well, why, I ask? “Well, because of all the people she’s had killed.” You mean Benghazi, I say? They go, “No. No. No. All the people that she’s had killed and murdered.” You look at them and say this is crazy. But they believe that. And if you believe that Hillary Clinton is really this evil person, then now you are faced with this choice between two evils and you’d rather take the guy who says he’s your champion as you understand the world.
People don’t know that Hillary Clinton, when she graduated from Yale and could have gotten an extraordinarily well-paying job at a top law firm—she would have been in complete demand—she went to work for the Children’s Defense Fund building a case for disabled children, kids in wheelchairs and things, who were denied a public education because of their disability.
SR: I hear this all the time too.
DCJ: I’ll you one thing I do tell people. Without a question, Hillary Clinton said she was under sniper fire—I think it was Bosnia. And it wasn’t true. What was true was they were warned about that. But here’s where she’s different from some other people. As soon as it was pointed out to her that that’s not right, she didn’t repeat it. She didn’t expand the story. She didn’t double down or triple down. She didn’t do what [former NBC anchor] Brian Williams did, where he enhanced the story and it got bigger and bigger. She immediately stopped.
All of us remember things that were wrong. When I was writing The Making of Donald Trump, I did half of a chapter and thought, that’s really good. And then I took a nap. I woke up and took a look and said, Okay, now I have to back and check my clips. I had it wrong. I misremembered what was there. And then I had to rewrite the chapter. Our memories are not computer records. Our memories change with time. We conflate things. We get them wrong. But the difference is Donald just makes things up. And he does it all the time.
SR: I wonder if the people reading your book or hearing about it will finally get that. He’s masterful at knowing that if you throw the first punch in the press, it will be quoted and nine times out of 10 no one will come around to question what’s behind it.
DCJ: That’s right. But to people who are in economic terror—that’s about half the population—Donald Trump poses as a savior. “I will save you.” “Only I can save you.” And to people who have been abandoned by both parties, they’ve been actively worked against by both parties, that’s a powerful message.
And basically it’s the same people who Bernie had, except they don’t have all the baggage with racism and hatred. I hear some of these young Bernie folks being interviewed on TV, and I am sure it’s a relatively small number of them and it’s misleading, but to see them on TV, saying, “I’m going to vote for Trump.” It’s like, how politically ignorant are you?
And I don’t believe the polls are reliable here at all. The polls have been all over the place this year. We have cell phones that have changed the nature of things, and I think lots of people do not want to sit next to a black person on an airplane, or in a restaurant, or work with them, but know if they say that it’s very bad for their work life. I think there are lot of people who will vote for Donald who will never tell a pollster that.
SR: He’s still dominating the news every day.
DCJ: Let me tell you one more thing that I think your audience would cotton to. Last week I did 19 hours on TV and radio one day, and then 12 hours, and 12, and 11. It’s all I’ve been doing since the book came out. It’s TV and radio to the point where it’s all a big blur. I have been on national television in Australia, multiple channels; Japan, Canada, multiple channels; England, multiple channels; France, multiple channels; Germany, national news programs.
None of the three U.S. networks have had a word bout my book. And they have not had me on the Sunday morning talk shows.
I had a producer for a cable show, who I know and bitched about some of this with, and who said to me, “David, they would never have you on a Sunday morning talk show for the most obvious reason. You should know that.” I said, “What’s the obvious reason?” She said, “Well, you would talk actual facts and substance. Watch these shows, they’re all superficial nonsense.” That’s my word—superficial nonsense. It would show up to audiences—the paucity of this. PBS had me on. Everything I said that dealt with Donald and crooks and mobsters, they cut out.
When the election is over, I am going to write some big pieces. One of them is about the press.
By David Morris
Reprinted with permission from the Institute for Local Self-Reliance
[Editor’s Comment: Note in the article that follows the discussion of the Bank of North Dakota, which has received particular attention in the last few years because of its beneficial role in helping North Dakota weather the storms of the Great Recession. Note especially in this regard the writings of Ellen Brown, President of the Public Banking Institute, author of Web of Debt and the The Public Bank Solution. See also her article, “NORTH DAKOTA’S ECONOMIC “MIRACLE”—IT’S NOT OIL.”]
On June 14th, North Dakotans voted to overrule their government’s decision to allow corporate ownership of farms. That they had the power to do so was a result of a political revolution that occurred almost exactly a century before, a revolution that may hold lessons for those like Bernie Sanders’ supporters who seek to establish a bottom-up political movement in the face of hostile political parties today.
Here’s the story. In the early 1900s North Dakota was effectively an economic colony of Minneapolis/Saint Paul. A Saint Paul based railroad tycoon controlled its freight prices. Minnesota companies owned many of the grain elevators that sat next to the rail lines and often cheated farmers by giving their wheat a lower grade than deserved. Since the flour mills were in Minneapolis, shipping costs reduced the price wheat farmers received. Minneapolis banks held farmers’ mortgages and their operating loans to farmers carried a higher interest than they charged at home.
Farmers, who represented a majority of the population, tried to free themselves from bondage by making the political system more responsive. In 1913 they gained an important victory when the legislature gave them the right, by petition, to initiate a law or constitutional amendment as well as to overturn a law passed by the legislature.
But this was a limited victory for while the people could enable they could not compel.
In 1914, for example, after a 30-year effort, voters authorized the legislature to build a state-owned grain elevator and mill. But in January 1915 a state legislative committee concluded it “would be a waste of the people’s money as well as a humiliating disappointment to the people of the state.” The legislature refused funding.
A few weeks later, two former candidates on the Socialist Party ticket, Arthur C. Townley and Albert Bowen, launched a new political organization, the Non Partisan League (NPL). The name conveyed their strategy: To rely more on program-based politics than party-based politics. According to the NPL its program intended to end the “utterly unendurable” situation in which “the people of this state have always been dependent on their existence on industries, banks, markets, storage and transportation facilities either existing altogether outside of the state or controlled by great private interests outside the state.”
The NPL’s platform contained concrete and specific measures: state ownership of elevators, flour mills, packing houses and cold storage plants; state inspection of grain grading and dockage; state hail insurance; rural credit banks operating at cost; exemption of farm improvements from taxation.
In his recent book, Insurgent Democracy Michael Lansing explains, “Small-property holders anxious to use government to create a more equitable form of capitalism cannot be easily categorized in contemporary political term.” The NPL “reminded Americans that corporate capitalism was not the only way forward.” Supporters of the NPL wanted state sponsored market fairness but not state control. They wanted public options, not public monopolies.
In the language of our 2016 political campaigns, it would not be much of a stretch to characterize the NPL as a movement for an American-style decentralized, anti-corporate, democratic socialism.
The NPL was as one contemporary observer, Thorstein Veblen described it, “large, loose, animated and untidy, but sure of itself in its settled disallowance of the Vested Interests… “
The movement was membership-based. Members were kept informed through a regular newsletter. This was part of a massive popular education effort. Membership fees allowed the NPL to hire organizers and lecturers who traveled throughout the state. Townley, the founder and leader of the NPL, proved an entertaining and charismatic speaker. Sometimes thousands would gather to hear him speak. Speeches themselves were community affairs.
The goal was to convince farmers that collectively they could significantly influence the decisions that would affect their personal and business lives.
To gain power the NPL relied on a political tool born of the Progressive movement: the political primary. To make government more responsive and transparent, Progressives urged states to bypass political conventions, political bosses and backroom deals and adopt direct primaries. By 1916, 25 of the then 48 U.S. states had adopted the primary as the vehicle for nominating political candidates.
The primary system gave people the power to elect candidates of their political party, but the key to the remarkable political revolution that swept through North Dakota was its adoption, in 1908, of an “open primary” law that allowed anyone to vote in a party’s primary even if unaffiliated with that party.
On March 29, 1916 the NPL took advantage of that law by convening its first convention. Attendees endorsed candidates who swore allegiance to its platform. These candidates ran in the June Republican primary, a primary targeted by the NPL because then (as now) the Republican Party dominated North Dakota.
In June 1916 the NPL effectively took over the Republican Party. In November 1916 NPL –endorsed candidates won every statewide office except one and gained a majority in the state Assembly, although not in the Senate. By that time the NPL boasted 40,000 members, an astonishing number given the state population of only 620,000.
In the succeeding legislative session the NPL was able to implement parts of its platform: a grain grading system, a 9-hour workday for women, regulation of railroad shipping rates and increased state aid to rural schools. But the Senate narrowly defeated the key to implementing NPL’s broad vision: a constitutional amendment to allow for state-owned businesses.
In 1918, the NPL gained a majority in the state Senate. That year North Dakotans voted on 10 constitutional amendments. They approved every one. One, endorsed by a resounding margin of 59-41 gave state, county and local governments permission “to engage in industry, enterprises or businesses.” Another allowed the state to guarantee $2 million in bonds and established voting requirements for future bonding. Another created state hail insurance.
Other amendments expanded the possibility of direct democracy by reducing the number of signatures required to put an initiative on the ballot, and by allowing constitutional amendments to be passed by a simple majority of the voters.
In June 1919, voters approved 6 of 7 legislatively referred statutes, including the establishment of a state bank, that latter by a vote of 56-44. The one ballot initiative North Dakotans rejected—giving the Governor the authority to appoint every county school superintendent—was itself revealing. North Dakotans wanted a state that could stand up to big out-of-state corporations but they preferred local control to state control.
The Bank of North Dakota (BND) was the centerpiece of the NPL’s effort to take back control of their economy. It was intended to strengthen, not undercut local banks. It established no branches, nor did it accept independent deposits or accounts. The Bank “strongly recommended” that borrowers seek mortgages by working through local institutions. Banks across the state used the BND as a clearinghouse for various financial transactions.
Farmers immediately benefited as their interest rates on loans dropped to about 6 percent from the prevailing 8.7 percent.
In November 1920 voters strengthened the BND by narrowly approving an initiative requiring all state, county, township, municipal and school district funds be deposited there.
In March 1920 the NPL legislature referred to the people a constitutional amendment allowing them to petition for the recall of any elected officials. That unprecedented extension of direct democracy proved its undoing, for in late 1918, at the peak of the NPL’s power, political opposition had coalesced into a new organization, the Independent Voters Association (IVA). As the NPL battled internal divisions and a growing unease that it had begun to pursue measures beyond its mandate, the IVA gained support.
The IVA used the political tools the NPL had created. In 1921 its members successfully petitioned for recall elections for the three state officers who constituted the membership of the Industrial Commission that oversaw state enterprises: the governor, attorney general and commissioner of agriculture. The IVA slate won by a whisker. It was the first and last time a U.S. Governor has been successfully recalled.
The IVA immediately set about to undo the NPL program by putting nine provisions on the ballot, including one to abolish the state Bank. Another intended to shrink the capacity of state government by reducing the amount of state bonded debt. Another would have undermined the open primary by requiring separate party ballots for primaries.
Every ballot measure lost, albeit by very narrow margins.
In November 1922 the IVA achieved what the NPL had four years before: Control of all three branches of state government. The NPL’s abrupt disintegration resulted from a number of factors. In 1921 the price of wheat dropped about 60 percent. The resulting economic pain would have reduced the support for any sitting government. The Russian Revolution ushered in a nationwide “Red Scare.” The opposition labeled the NPL’s leaders Communists and Bolsheviks and launched a new magazine called Red Flame. Townley himself was jailed under a Minnesota sedition law for opposing the U.S. involvement in WWI. Meanwhile, internal divisions continued to beset the NPL.
The Legacy of the NPL
As the Nation magazine observed in 1923, “…although the visible machinery largely melted away, a sentiment and a point of view had been established in the minds of hundreds of thousands of farmers and ranchers.” Looking back in 1955, Robert L. Morian, author of the classic Political Prairie Fire, comment that the NPL helped to develop “some of the most independently minded electorates in the country.”
Those independently minded electorates and their anti-corporate, pro-cooperative and independent business sentiment continued to inform and often guide policymakers in the decades to come.
The North Dakota Mill and Elevator Association began operation in a modern facility in 1922. Today it consists of 7 milling units, an elevator and flour mill and a packing warehouse to prepare bagged products for shipment. It is the largest flour mill in the U.S. and the only state-owned milling facility.
In 1932, North Dakotans voted 57 to 43 to ban corporations from owning or leasing farmland.
In 1963 the legislature enacted a law that required pharmacies be owned by a state-registered pharmacist. The effect was to ban chains, except those operating at the time the law was passed.
In 1980 North Dakotans voted to establish a State Housing Finance Agency to provide mortgages to low income households.
In recent years several of these laws protecting independent farmers and businesses have come under attack by big corporations. After several attempts by Big Pharmacy failed to convince the legislature to repeal the Pharmacy Ownership Law, Wal Mart spent $9.3 million to finance a ballot initiative. In November 2014, by a vote of 59-41 the initiative lost.
In 2015 big corporations did convince the legislature to overturn the 1932 anti-corporate farming law. This June, as noted at the beginning of this article, by a resounding margin of 76-24 North Dakotans voted to reinstate the old law.
Today the economic structure of North Dakota reflects its focus on independent and cooperative businesses.
The Pharmacy Ownership law, for example, has markedly benefited North Dakota. A report by the Institute for Local Self-Reliance (ILSR) found that on every key measure of pharmacy care, including quality and the price of drugs, North Dakota’s independent pharmacies outperform those of neighboring states and the U.S. as a whole. Unsurprisingly North Dakota also has more pharmacies per capita than other states. Its rural residents are more likely to have a nearby pharmacist.
North Dakota’s banking system reflects a similar community-based structure. An analysis by ILSR found that, on a per capita basis, the state boasts almost six times as many locally owned financial institutions as the rest of the nation. (89 small and mid sized community banks and 38 credit unions). These control 83 percent of the deposits of the state. North Dakota’s community banks have given 400 percent more small business loans than the national average. Student loan rates are among the lowest in the country.
As Stacy Mitchell, Director of ILSR’s Community-Scaled Economy Initiative observes, “While the publicly owned BND might well be characterized as a socialist institution, it has had the effect of enabling North Dakota’s local banks to be very successful capitalists.” In recent years local banks in North Dakota have earned a return on capital nearly twice that of the nation’s largest 20 banks.
In the last two decades years the BND has generated almost $1 billion in “profit” and returned almost half of that to the state’s general fund.
Recall that in 1919, voters had approved the Bank of North Dakota, by the very slim margin of 51-49. A switch of 2,000 votes would have killed the Bank in its infancy. Today no party would dare propose its destruction.
North Dakota’s impressive 21st century telecommunications infrastructure is also a testament to its historic focus on local and independent ownership. The state ranks 47th in population density. That means it has one of the highest costs per household for installing state-of-the-art high-speed fiber networks. Nevertheless it boasts the highest percentage of people with access to such networks in the country. Why? One reason is its abundance of rural cooperatives and small telecom companies, 41 providers in all, including 17 cooperatives.
North Dakota is also home to the Dakota Carrier Network. Owned by 15 independent rural telecommunications companies, the DCN crisscrosses the state with more 1,400 miles of fiber backbone. In the last five years independently owned companies have invested more than $100 million per year to bring fiber to the home. They now serve more than 164,000 customers in 250 communities.
What Should Bernie’s Brethren Do?
Certainly the road to political power faces many more obstacles now than the NPL faced a century ago. North Dakota was a largely agricultural state. The key to NPL’s organizing effort was access to a car and gas money, not an easy get in those days, but much easier than the amount of money now needed to mount a political campaign.
Most new movements will be unable to take advantage of the open primary. After the NPL gained power in more than half a dozen states, the existing parties fought back. Nevertheless, 11 states still have pure open primaries; about a dozen more have hybrid systems.
Recently the courts have not been sympathetic to the open primary. Not long ago the Supreme Court invented a new “right of association” and bestowed that right on political parties. In 2000, for example, by a 7-2 vote, the Court overturned a California form of open primary approved by the voters by a 60-40 vote. Writing for the Majority, Justice Antonin Scalia objected that the California law “forces political parties to associate with—to have their nominees, and hence their positions, determined by—those who, at best, have refused to affiliate with the party, and, at worst, have expressly affiliated with a rival.”
After the California decision the voters of Washington, by a similar 60-40 vote, adopted an open primary system similar to California’s but with a key difference: The candidate would have to declare a “party preference” that would appear next to his or her name on the ballot. In 2008, the Supreme Court, again by a 7-2 vote, this time upheld that law, a ruling that might allow for a variant of the NPL strategy.
Before we develop a strategy for winning office we need to take a page from the NPL playbook and develop a platform, one consisting of specific, concrete, policies, not a laundry list of all desirable policies.
Bernie Sanders and his followers currently are working to write a platform for the Democratic Party convention. That is important and useful, but that platform by its nature will have a national focus and speak to the exercise of power by the federal government. We also need platforms that focus on states and cities and counties and school districts and offer concrete measures they have the authority to enact.
Those platforms will provide the basis for endorsing candidates, regardless of their political affiliation or whether they run in a closed or open primary state. In those states that permit, we may be able to enact various planks of the platform through initiative and referendum. At this point 27 states have initiative and 24 have referendum. Nineteen allow constitutional amendments by initiative.
The Nonpartisan League’s tenure in power was brief, but its policies, the public institutions it built and perhaps most important, the public sentiment it nurtured and brought to maturity, endure to this day: A true example of a political revolution from the bottom up.
Elsewhere in the biased media, check out the lies that have been propagated about the convention fracas in Nevada:
Jon Ralston, the dean of political reporting in Nevada, has spread nothing less than a pack of lies about what went down at the state’s Democratic convention on Saturday. And the fact averse oligarchic national media has run completely riot with the provable falsehoods. No chairs were thrown at the convention Saturday. No death threats were made against the chair of the convention Roberta Lange. And Bernie Sanders delegates were not simply mad because their louder shouting was ignored.
Rachel Maddow ran a deceptive clip on MSNBC saying chairs were thrown while reportedly showing footage of chairs thrown at a wrestling production. (I cannot find the original Maddow clip with this as of yet). People on social media then insisted that networks had shown actual footage of chairs thrown at the convention. Maddow retreated only a bit by having Ralston on to say that even though he had not seen the chairs thrown, other eyewitnesses have told him the video is wrong. CNN had Debbie Wasserman-Schultz on to denounce Bernie Bros throwing chairs at the stage.
The biggest truth I’ve learned during this election season:
It’s not about the candidates. It’s never just about the candidates and the “horse race.” It’s always about something much much bigger. And most of us — because of our fascination with celebrity and the seemingly larger-than-life individuals in history — end up acting like enablers of the pernicious lie that it’s just about Bernie and Hillary (and their personal ambitions).
It’s difficult to conceive of a candidate who’s committed to the more prosaic truth that it’s really about all of us … and about the hard work of building a movement, and about our responsibility to work for the success of our principles down-ballot, and in our neighborhood.