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In the Public InterestDebunking the Myths about governMent, governMent Workers, anD unions

IN THE PUBLIC INTERESTDebunking the Myths about Government, Government Workers, and Unions

Gregory Mantsios, Joseph S. Murphy Institute for Worker Education and Labor Studies, School of Professional Studies, City University of New York

Illustrations: Mike Konopacki Research: David Dembo Editing: Laura McClure Research and Production Assistance: Beatriz Gil Design: Roher/Sprague Partners

Thanks to Steve Shalom, Paula Finn, and Cate Poe.

Special thanks to: Arthur Cheliotes and the Communications Workers of America Local 1180 for requesting and funding this research.

A Project of the CityWorks Foundation

The views expressed in this booklet are not necessarily those of CityWorks, the Murphy Institute, SPS, or CUNY

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1

These are hard times, no doubt about it. People are out of work, prices are soaring, public services are down, wages are

stagnant, and families are losing their homes.1

In the midst of all this, there is a concerted eff ort on the part of the Radical Right to convince the American public that overpaid government workers are to blame for the nation’s economic problems. Attacking public sector workers conveniently focuses attention on the two things the Radical Right hates most: government and unions. Ranting about the evils of government and unions isn’t new. What’s diff erent now is that the country is in terrible economic straits, people want an explanation, and some politicians and media personalities have gained considerable traction by repeating the same myths and hoping they will stick.

But it’s not just the Radical Right and talk show hosts who are promulgating these myths; it’s the mainstream media as well.

Demonizing government and unions and making progressive public offi cials and public sector workers into villains has serious consequences: it divides well-meaning people and promotes hatred based on misinformation, distortions, and outright falsehoods.

Not only that, these myths divert public attention from some of the real problems in our nation: a fi nancial sector that has wreaked havoc on our economy; tax cuts for the wealthy that have increased our national debt at the worst possible time; vast concentrations of wealth and power alongside economic hardship and insecurity; and the ability of the “monied class” to pervert the democratic process, dominate the mass media, and shape public opinion in ways that hurt the vast majority of Americans.

The Great Recession

Prices

cost of feeding a family of four has risen from $598 in 1994 to $949/month in 2010 - an increase of 59%

Wages

average weekly wages (adjusted for in�ation) are 8% less than they were in 1970

Housing

the number of foreclosures increased from 885,000 in 2005 to 2.8 million in 2010

Jobs

17% of Americans are out of work (nearly 10% by o�cial count) compared to 7.0% in 2000

“If you tell the same story five times, it’s true.” – Ronald Reagan’s White House spokesperson, Larry Speakes, only half jokingly commenting on his boss’ habit of endlessly retelling an inspirational WW II story that the press eventually discovered was a movie fiction.2

“Public Sector Workers are the New Privileged Elite Class” – M. Zuckerman, editor-in-chief, US News and World Report, owner of the NY Daily News, and one of the wealthiest people in the United States. 3

2 In the Public Interest

Rad•i•cal Right (ra-di-kəl\ rīt\) n. 1. Politicians, media personalities, groups, and individuals who promote an ultra-conservative and libertarian agenda focused on individualism and a market economy that is unrestricted by government regulations. 2. Anti-government: seeks to abolish taxes (including those that aff ect corporations and the wealthy) and eliminate regulation of business and fi nance (including those regulations that protect consumers, workers, and the environment). 3. Anti-union: seeks to eliminate workers’ rights, including the right to collective bargaining. 4. Closely tied to and well funded by right wing foundations, think tanks, and the wealthy corporate elite.4

Th ose who promulgate these myths – whether or not they are part of the concerted well-fi nanced campaign to demonize public sector workers – are hurting workers and serving the interests of the wealthy and corporate elite.

Th is pamphlet is about seven myths perpetuated by the Radical Right. It describes the myths, outlines why the myths are wrongheaded, and off ers some alternative explanations and remedies.

f Myth #1: Government Workers Have It Too Good

f Myth #2: Government Is Too Big

f Myth #3: Public Sector Unions Are Too Powerful

f Myth #4: Public Pensions Are Too Generous

f Myth #5: Government Is Too Focused on the Poor

f Myth #6: Government Imposes Too Many Regulations

f Myth #7: Liberal Tax and Spend Policies Have Created Defi cits and Debts Th at Are Too Big

David and Charles Koch (pronounced “coke”) are lifelong libertarians who have given more than $100 million dollars to right-wing causes. The Koch’s holding company operates oil refineries in six states and owns Brawny towels, Dixie Cups, Georgia-Pacific Lumber, Stainmaster carpet, and Lycra among other products: it is ranked, by Forbes magazine, as the second largest private company in the U.S. The combined wealth of the two brothers is estimated to be over $35 billion and is exceeded only by that of Bill Gates and Warren Buffet. The Kochs believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry – especially environmental regulation. These views dovetail with the brothers’ corporate interests. One study named Koch Industries one of the top ten air polluters in the country. The Koch brothers have underwritten a huge network of foundations, political front groups, and think tanks (including the Cato Institute which has more than 100 full-time employees).5

3

MYTH #1: GOVERNMENT WORKERS HAVE IT TOO GOODPublic sector workers have much higher salaries than other workers – plus gold-plated benefits and perks. The average worker is forced to pay taxes to support a level of compensation they themselves can only dream of. Public sector workers are lazy, rude and unproductive. And they’re on permanent vacation.

REALITY: f The Radical Right and the media are fond of highlighting government abuses. Some

of these abuses are very real. But they also exaggerate reality and misrepresent the facts to make all government workers look like villains.

f The work of government employees – police, firefighters, teachers, train track workers – is important, often stressful, and sometimes dangerous. The salaries of public sector workers are well earned.

f Public sector salaries are not lavish. The Radical Right likes to compare private and public sector wage figures without considering important factors that are relevant to salaries – like age, years of experience, and the level of education required for the job (government workers are twice as likely to have a college degree). One important study shows that when those factors are considered, public sector workers earn 11% less than comparable workers in the private sector. Even when health and retirement benefits are included, public sector workers earn less than their private sector counterparts with comparable educational levels.7

During one of the worst snowstorms in New York City’s history, the New York Post displayed a photo of a sanitation worker asleep in his plow-equipped sanitation truck. “These garbage men really stink,” said the Post. The worker in the photo, Barry Delisle, had been working for 16 hours straight when his truck broke down and his supervisor ordered him to stay with it until it could be towed.6

$49,072 $55,132

$69,108 $71,109

Workers in Public Sector Comparable Workers in Private Sector

Public and Private Sector Wages

Wage Earnings Total Compensation


f Public sector workers – like their private sector counterparts – have increased their productivity signifi cantly over the years. But neither group has been compensated for increased productivity.8 If workers wages kept up with productivity, they would be making a lot more money.9

$1,171

$612

$746

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

1947

1952

1957

1962

1967

1972

1977

1982

1987

1992

1997

2002

2007

Real Wages vs Productivity Enhanced Wages

Real wages

What wages would look like if they kept up with productivity

f In fact, wages in the public sector, like those in the private sector, have been stagnant. Lately, public sector unions and their members have been taking a beating. Last year, 51% of cities across the country froze or reduced pay, while 25% laid off workers, 24% reduced health benefi ts, and 22% revised union contracts to reduce pay and benefi ts.10

f Public sector workers have families that depend upon them for fi nancial support. And they and their families are part of communities that thrive when people are working.

The Vicious Cycle Cutting the public sector will exacerbate the economic crisis!

Cutting jobs & salaries

More need for social services

Less consumption

Lower revenues

Smaller budgets

f Laying off workers or cutting back on their compensation not only puts workers in jeopardy, it aff ects the economic and social wellbeing of their communities.

5

f In effect, the Radical Right wants to turn good jobs into bad jobs – jobs without decent pay, benefits, security, or pensions. Anti-union efforts have already succeeded in doing this in the private sector. Over the past 30 years, many private employers have cut pay and stopped offering health care, pensions and other benefits. Now the Radical Right is turning its attention to the public sector, closing off more opportunities for people to enter and stay in the middle class.

f Cutting back on public sector employment affects everyone, but impacts on some more than on others. Government jobs have been an important avenue for upward mobility for women. And while the vast majority of public sector workers are white, a disproportionate number are African American. Increasingly, public sector jobs have become a source of employment for Latinos as well. Public employment has been a path to the middle class and has brought a level of economic stability to these communities. Veterans, too, have benefited from public employment (according to the Bureau of Labor Statistics, 13% of all employed veterans work for state and local government). Cutbacks hurt these constituencies more than others.

f Well funded, orchestrated attacks on public sector workers encourage workers to blame each other for our problems. These attacks amount to “blaming the victim.”

f The real and obscene differences in compensation are those between workers and corporate executives – especially when considering such perks as bonuses, stock options, and golden parachutes. Compensation for the CEOs of the 500 largest companies averaged $8 million last year.


f Th e real culprits are the fi nanciers and corporate elite who got us into this mess and continue to make handsome profi ts.

A BETTER PLAN f Increasing revenues (by taxing corporations and the very wealthy), expanding public works, and

creating new jobs with better wages and benefi ts for public and private sector workers will build stronger communities and create a fi rm foundation for economic growth.

Compensation for the top 25 hedge fund and private equity fund managers averages $1.01 billion a year – that is more than 30,496 times as much as a typical U.S. worker earns.11

7

MYTH #2: GOVERNMENT IS TOO BIGGovernment is one big, bloated bureaucracy with too many workers. Besides, much of what government does could be done better and more efficiently by private companies. We need to cut government services.

REALITY: f Government provides services that are essential. Public sector workers teach our

children, pave our roadways, repair our bridges, collect our garbage, staff our libraries, patrol our streets, and put out fires. That doesn’t mean that government always gets it right or that efficiency couldn’t improve. But the work that public employees do to keep us safe, healthy, and educated is important to our daily lives and all too often is taken for granted.

f There is no evidence that turning government work over to private companies – “contracting out” – saves money. When overruns, contract monitoring, contract administration, and other direct and hidden costs are considered, contracting out can be very expensive. One estimate puts the added cost at 25%.12

f And there are plenty of examples of contracting out leading to greater inefficiencies, declines in services, corruption, and/or increases in user fees. And because of legal fees, getting out of privatization agreements can be costly as well.

f Besides, private companies cherry pick the goods and services that can turn a profit – and leave the rest for the government to handle. You won’t find, for example, companies taking on mail service to rural areas or healthcare services for the poor. Privatizing forces taxpayers to pick up the tab for expensive but necessary services the private sector doesn’t want to provide, while private companies walk off with the profits from the easy jobs.

f Education, public safety, legal protection, a clean environment – all are essential to a healthy democracy. It’s dangerous to rely on private companies to meet these needs. While public agencies are subject to close scrutiny and oversight and must meet clearly defined standards (in wages, safety, ethics), private companies are much less accountable. While the public sector’s goal is to meet the public need, the chief goal of any private company is to make the biggest profit possible.

A government audit in Wisconsin revealed that 60% of the engineering work outsourced by the Department of Transportation could have been done at a lower cost by state workers.

In February 2009, the City of Chicago signed a 75 year concession agreement with a private company to operate its 36,000 parking meters. Along with many problems related to malfunctioning meters, rates increased significantly – frustrating both residents and local merchants. In some areas of the city, rates increased in the first months to 28 quarters ($7) for 2 hours of parking time. And parking charges were extended from 6 to 7 days a week.

Pay to Spray: Gene and Paulette Cranick live in Obion County, Tennessee. Faced with a budget deficit, Obion County decided to save money by abolishing its fire department and contracting fire protection to a nearby city. That meant that Obion residents had to pay a fee if they wanted fire protection. The Cranicks paid in the past but simply forgot about the $75 fee last year. When their home caught fire, firefighters showed up – but only to make sure the flames didn’t reach the property of a fee paying neighbor. The Cranicks offered to pay, on the spot, whatever it took to put out the fire, but firefighters were instructed to refuse. The Cranick home was completely destroyed, along with three dogs and a cat trapped inside.13


f Th e United States spends less on government services than almost any other developed nation in the world – less than Japan, Canada, Britain, France or Germany.14

41.5% 41.6% 43.6% 47.7%

52.1% 55.5% 56.2%

US Japan Canada Germany UK France Sweden

Government Spending by Percentage of GDP

The amount the U.S. spends on social programs is even less than these numbers indicate because we spend so much more on our military than any other country. Nearly one-half of all military spending in the world is by the U.S.

56.2%2%

weden

f It’s not that government is too big; it’s that the infl uence of the wealthy on government is too large.

f And as the cost of running for public offi ce increases, so does the infl uence of the “monied” class. It now costs on average, $1.4 million in campaign funds to win a seat in the House of Representatives and $7 million to win a seat in the US Senate.15

f Running for offi ce usually requires some very wealthy donors. But sometimes the very wealthy pick up the costs of winning an election themselves.

Over the course of three elections, Michael Bloomberg spent more than $261 million of his own money to become mayor of New York City. He spent $102 million in his last election alone – more than $172 per vote.

Well over one-half of U.S. senators reported a minimum net worth of over $1 million in 2009. The average wealth of U.S. senators is $12.6 million.16

9

f High priced lobbyists also insure that the interests of the wealthy are well represented in the halls of government.

f To shine light on the connection between money and public policy, one useful website, MAPLight.org, tracks the money politicians receive related to each vote they cast. In one case concerning telecommunication companies, Congressional representatives who changed their position to support the telecoms received twice as much in political contributions from the telecoms as those that did not. In another case related to regulating the financial industry, those voting against financial reform received 41 percent more in contributions from big banks than those voting for regulation.17

f One result of the “money talks” culture: Congress passed tax cuts for the wealthy in the midst of one of the worst economic crises the nation has ever seen. Another result: a huge spike in the concentration of wealth in the hands of a few and record levels of economic and social inequality.

A BETTER PLANWorking people and the organizations that represent them can – and often do – check the power of money by organizing at the ballot box and in the streets. Government is contested terrain. Our goal should be to take back our government – not weaken it.

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both – Supreme Court Justice Louis Brandeis

The Greeks had a word for it. “Oligarchy” – control by a few.


MYTH #3: PUBLIC SECTOR UNIONS ARE TOO POWERFULPublic sector unions are the problem. Th rough political contributions, these unions control federal, state, and local governments and set their agendas. Corrupt union bosses wield enormous power and force politicians to toe their line. Unions are bankrupting our government.

REALITY: f Workers join unions because they want a better life. Like everyone else, they want

dignity, fair pay, benefi ts, and a voice in the workplace. Workers achieve these goals more eff ectively by joining together than by acting individually.

f Union leaders are elected by their members. Some are great leaders, some are not. Some are strong and forceful, others not so much. And sometimes there is corruption in the labor movement. Th e Radical Right likes to characterize all union leaders as union “bosses,” but most are hard working people who make signifi cant sacrifi ces and devote their lives to fi ghting for social justice. As long as elections are fair – and the overwhelming majority are – then union leaders are the democratically elected representatives of working people.

f Th ere is no evidence that unions are bankrupting government. For instance, in Texas, where unionization rates are low, the government is facing a catastrophic defi cit. In New York, where unionization rates are high, the defi cit is lower.18

f

Texas New York How big is the budgetdeficit?

$13.4 billion $10.0 billion

Shortfall is what percentage of the budget?

31.5% 18.7%

What percentage of the public sector is unionized?

21% 72.9%

The unionization rate is more than three times as high in New York as it is in Texas, but the budget shortfall in New York is one half of what it is in Texas.

Texas has followed the Radical Right prescription of tax cuts, deregulation, and resistance to unions as a path to economic prosperity and a balanced budget – a strategy that has clearly failed.

f Unions do make a diff erence. Neither union nor non-unionized workers make nearly enough money, but those in unions clearly do better.19

f Higher union wages are good for all workers. Unions keep wage levels up for everyone. When public sector unions succeed in defending decent wages and benefi ts for their members, they set a benchmark and help maintain wage and benefi t standards for all workers.

The Union Advantage: Weekly Earnings 2010

Non-Union workers: $717/week Union worker: $911/week – a 27% advantage for the unionized worker

11

f Public sector unions do have a degree of political power – and that’s good. Union power leads to better jobs, higher wages, a safer workplace, a bigger middle class and a stronger economy. Unions’ political power comes directly from the members through their small, but pooled, political contributions and through their direct involvement in the democratic and electoral process. It also comes from communities that rely on – and fight for – public services.

f Collective bargaining in the public sector is good for workers and for government. Not only do workers win decent wages through collective bargaining, they win fair and consistent work rules and are protected from job discrimination and unsafe working conditions. Collective bargaining also insulates employees from politics and patronage, reducing government corruption.

f When public sector unions fight to protect their members’ jobs, they are also fighting to protect our communities and vital public services. Unions are the first – and often the last – line of defense for public education, health care, Medicare, public safety, and other important social needs.

f At the same time, public sector unions aren’t as strong as the Radical Right makes them out to be: they have fewer bargaining rights than private sector workers. And most don’t have the right to strike.

f Right wing and employer attacks on unions over the past 30 years have severely weakened unions – especially in the private sector.20

Percentage of the workforce belonging to unions 1980 2010Total 23% 13%

In the private sector 21% 7%

f Employment in state and local government has fallen by 400,000 since mid-2008. And, in the first year of the Obama administration, government employment has declined by more than 300,000 – that is, 300,000 fewer teachers, police officers, firefighters, school bus drivers, etc.21 Radical Right politicians want more public employee heads on the chopping block and they’d like to eliminate public sector unions altogether.


f It’s not that unions are too powerful; it’s that Corporate America is too powerful. Our nation’s economy is dominated by huge conglomerates with revenues larger than many countries. Yet these corporations exist solely to maximize the profi ts of the shareholders – and to concentrate wealth and power in the hands of the few who run them. What’s more, most of the companies we consider to be “American” are really global enterprises. Th ey move jobs around the world in search of the lowest wages, shift revenues off shore to avoid paying taxes, and care little about the lives and communities of U.S. workers. Th ey squeeze out family businesses, distort our economic priorities, and wreak havoc on our economy with fi nancial speculation.

f Th ese companies can shape public policy to serve their interests. With their enormous campaign contributions to candidates from both major parties and their extensive lobbying, they call the shots on most policy issues.

f Big corporations also have a strangle hold on the major media. Th ey shape how we view the world, what we crave (that is, buy), and who we blame for our social and economic ills. Ownership and control of the media is increasingly concentrated in the hands of a few mega corporations that control most of the TV networks, cable channels, movie studios, newspapers, magazines, and publishing houses.23

f Workers and unions are up against powerful adversaries that have enormous resources (including the media) at their disposal. Th at’s why attacks on unions have been so eff ective.

A BETTER PLANStrengthen unions to raise the standards for all workers and provide a counterweight to the interests of corporations and the wealthy. A democratic society needs stronger – not weaker – unions.

General Electric employs over 287,000 workers – the majority of them in other countries.22

Rupert Murdoch’s empire includes Fox Broadcasting, the Wall Street Journal, NY Post and hundreds of other newspapers, cable channels, TV stations, book imprints and a movie studio. His net worth was $5.2 billion in 2010 and he was ranked by Forbes Magazine as the 13th most powerful person in the world – well above most heads of state. His media empire reaches a total audience of 4.7 billion people (3/4 of the world’s population).24

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MYTH 4: PUBLIC PENSIONS ARE TOO GENEROUSPension plans are draining the public coff ers and sending our federal, state, and municipal governments into a budgetary tailspin. Working people end up paying taxes to support retirement benefi ts they only wish they could have. Public employees are retiring in luxury.

REALITY:

f Most public sector workers have modest incomes and modest pensions. On average, state and municipal workers earn less than $45,000 per year and when they retire receive a pension of approximately $19,000 per year.25 Th e average annual benefi t for all public retirees (including federal employees) is $22,780.26 Th is hardly aff ords them a life of luxury.

f Some reforms clearly need to be made – for example, closing loopholes that allow some workers to “spike” their fi nal salaries in order to get higher retirement benefi ts. Th e Radical Right, however, is using extreme cases to generalize about all public sector workers and arguing for drastic cuts in workers’ pensions and in all areas of government spending. Th ese cuts would have a devastating impact on workers and communities.

f Everyone should have enough to live on at the end of a long work life – whether through adequate Social Security benefi ts or through a pension. Th e American Dream promises a decent retirement for those who work hard and play by the rules.

f Pensions not only provide economic security for workers in their later years, they are engines of economic growth, curtail poverty, and help maintain the economic stability of seniors and the communities they live in.27

f Since many public workers aren’t covered by Social Security, government isn’t contributing 6.25% of their pay into the Social Security fund as private employers would. For these workers, their pension is the only source of retirement income.28

f Taxpayers only pay 14% of public workers’ retirement costs. Most pension money comes from workers’ own contributions to the plan and returns on investment.29

86%

14%

Public Contribution to Public Sector Pensions

Portion contributed by tax dollars


f Pension expenses amount to only 3.8% of all non-capital spending by state and local governments.30

f

4%

96%

State & Local Government Spending (non-capital)

Cost of Pension Plans

Public workers still rely mostly on pension plans (called “defi ned benefi t plans”) that pool investments, are managed by professionals, and spread risks widely over many years. Most private sector plans have either been eliminated, diluted, or changed to 401(k) plans that require participants to make their own investment decisions and bear the risk of bad investments. Th ese 401(k) plans put all the risk and more of the cost onto the backs of individual workers. And they carry fees that can decimate long term returns. Retirees can and do outlive their 401(k) assets. Only one-in-fi ve private sector workers are still covered by “defi ned benefi t plans” – and only one-in-eight non-unionized workers have this kind of plan.31

f

81%

48%

67%

13% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

union non-union

Percent of Workers in De�ned Bene�t Pension Plans

1984 2010

Now there’s a push to shift public sector pension plans to 401(k)s – or to eliminate them altogether.

f Pension funds in both the private and public sectors oft en leave workers in poor fi nancial straits. So does Social Security, with the average retiree receiving only $1,178 a month.32

f Th e Radical Right is whipping up resentment among private sector workers by exaggerating government workers’ wages and benefi ts and by encouraging what Wharton Economics Professor Olivia Mitchell calls “pension envy.” Th is campaign is fostering tensions between workers, between neighbors, and between parents and teachers. Th e end result is a “race to the bottom” that leaves all workers with little income or security.

Polls show that Americans are scared about their retirement. In a recent Gallup poll of people ages 44 to 75, more than 90% said they are facing a retirement crisis – and 61% said they fear depleting their assets more than they fear dying. Unfortunately they have good reason to be scared.33

15

f Until the 2008 market crash, most public pensions were well funded. But the deep fi nancial downturn of 2008 and 2009 – spurred by Wall Street’s recklessness – caused signifi cant losses for pension funds.34

f Most state and local governments have lost between 10% and 20% of their revenues during the past 2 or 3 years. Many of these governments missed payments they were required to make under their collective bargaining agreements. (Under these agreements, workers gave up part of their salary increases in exchange for promised pension contributions.) Rather than paying into the pension funds as they were supposed to, some of these governments used the money to give tax breaks to special interests. Now they are complaining about having to pay the pension money back and using budget defi cits as an excuse to cut pensions permanently.35

f Th e Radical Right oft en exaggerates the problems facing public pension funds to build the case for eliminating them altogether. But most of these funds are not at imminent risk of default and have years to recover the value they lost during the recession.37

f Controversy over pension funds also diverts attention from the bonuses and golden parachutes given to the CEOs and Wall Street executives who caused the economic meltdown and budget crisis in the fi rst place.

Merrill Lynch recorded a $7.8 billion loss in 2007, BUT CEO E. Stanley O’Neal retired that year with security and retirement benefits valued at $162 million

Citigroup reported a loss of $9.8 billion in the fourth quarter of 2007 alone, BUT Citigroup’s Chair and CEO Charles Prince retired with a package of shares and options that totaled $40 million

A BETTER PLANImprove pensions for all workers and restore defi ned benefi t plans as the standard for pensions. Rather than cutting Social Security, improve it so that all retirees can have a decent standard of living.

In New York City, the cost of supporting pension plans increased significantly in the last few years, mostly because the city reduced its pension contributions during the stock market boom and now has to make up for the decline in pension assets from the market crash and corporate scandals.36


MYTH #5: GOVERNMENT IS TOO FOCUSED ON THE POORThe government provides services mainly for the poor, which is after all only a small percentage of all Americans. Our tax dollars are going to help everyone but ourselves. The poor are already getting more than they should.

REALITY: f Protecting the poor and poor communities is important – and most industrialized

democracies do a better job of it than does the United States. They recognize that providing a safety net is not only the right thing to do, but ensures a stable civil society. Partly because we do so little to help people get back on their feet, poverty in America is both significant and persistent.

f Only 15 cents of every federal tax dollar goes to helping low income families. Most of our tax dollars go to the military, Social Security, and Medicare (which is mostly for seniors).40

20% Military

26% Social Security

12% Medicare

7% Net Interest

Payments on Debt

15% Programs for Low Income Families

9% Health, Education, Veteran's Bene�ts

11% Other Govt

Functions

Where do our federal tax dollars go?

f Cuts in public services will disproportionately affect the most vulnerable – the poor, the elderly, the disabled. Women and people of color – who are more likely to be poor – are hit the hardest.

Chances of Being Poor in America41

White White Hispanic Hispanic Black BlackMale/Female Female

Head of familyMale/Female Female

Head of familyMale/Female Female

Head of family1 in 12 1 in 5 1 in 5 1 in 3 1 in 4 1 in 3

While chances of being poor in America are much greater if you are black or Hispanic, this segment of the population makes up only one half of the total population living in poverty. So, all races and ethnicities are hurt when social programs are cut.42

Approximately 14% of the American population – that is, nearly 1 out of every 7 people in this country – live below the official poverty line (calculated at $10,956 for an individual and $21,954 for a family of four).38 And an increasing percentage of individuals living in poverty work full-time. One out of every five children in the U.S. lives in poverty. An estimated 3.5 million people – of whom nearly 14 million are children – experience homelessness in any given year.39

17

f One way or another, we all depend on services we get from federal, state, and local government: public schools and colleges; police and fire protection; mass transportation; roads, highways and bridges; garbage collection; libraries and parks; health research; national defense and security – not to mention safe food, safe water, and safe buildings.

f And when the bottom falls out for middle class families, government support provides a critical safety net.

f At the same time, many of the services the middle class depends on are being defunded. Some services have been eliminated, others are being provided at increased costs. From 1980 to 2010, funding for higher education, for example, has declined as a proportion of the federal budget by 45%: it’s no wonder that college tuition has increased so dramatically. During that same period, funding for research and general education as a proportion of the federal budget decreased by 50%.44

f It’s not the poor who are getting too much attention from public officials, rather it’s the wealthy and corporate benefactors who finance their political campaigns who do best at the public trough.

A BETTER PLANGovernment should preserve equal opportunity for all. It should be a “great equalizer” that prevents extreme concentrations of wealth, power, and privilege.

By official counts, 1 out of every 10 Americans is unemployed: nearly twice that amount by unofficial counts.43

Princeton political scientist Larry Bartels studied the voting behavior of U.S. senators and found that senators from both political parties were far more responsive to the opinions of wealthy constituents in their districts than to constituents of modest income. Voting turnout, contact with staff, political knowledge, and partisanship had little effect. Constituents with low income had no – or negative – impact on senators’ voting behavior.45


MYTH #6: GOVERNMENT IMPOSES TOO MANY REGULATIONSThe government interferes too much in the economy and is strangling private enterprise. Excessive governmental regulation inhibits competition, stifles innovation, impedes start-ups, and kills jobs. There are too many controls on industry and business.

REALITY: f Everyone wants to eliminate outdated or useless rules – and simplify overly complex

ones. That’s precisely why the call to deregulate is so popular with the Radical Right and why they can easily score points by ridiculing one or two truly absurd regulations. But rallying people to support a major rollback of government regulations is dangerous.

f Many industry regulations and regulatory agencies were created during the New Deal to prevent a repeat of the Great Depression. The Reagan administration set off a tidal wave of deregulation aimed at “reducing the role of government” and abolishing any rules that might “impede the market.” The tidal wave continued under both Republican and Democratic administrations, helped along by huge campaign contributions from corporations and the wealthy.

f One industry that was deregulated was the banking industry.

f Proponents of deregulation argue that it encourages competition. Initially, it often does. But that usually means a downward spiral for workers and their communities. Deregulated companies compete by laying off workers, reducing wages, taking shortcuts on safety, and eliminating less profitable services. As companies go out of business – or are bought out or merged – the field narrows and a few large companies come to dominate the industry. Free now from government restriction, these goliaths often find it profitable to collude with their competitors. They raise prices, add fees, and further reduce services to less profitable markets. The airline industry is a case study of this destructive spiral.

f While scrapping rules that protect consumers has yielded huge profits for companies, it has had a devastating impact on working people and the economy. Financial deregulation led to a reckless gambling spree on Wall Street that has cost millions of people their savings and their homes. An estimated 25% of homeowners today are “underwater” – that is, they owe more money on their mortgages than their houses are actually worth. More than six million families have lost their homes to foreclosure since 2007 and an equal number of families are at risk of foreclosure.48

The percentage of the economy that is regulated dropped from nearly 12% in 1975, to less than 3% in 2006.46

November 12, 1999

“Today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority” – President Clinton, upon signing the Financial Services Modernization Act, deregulating the banking industry.

January 18, 2011

[That deregulation] “led to a lack of proper oversight and transparency that nearly led to the collapse of the financial markets and a full scale depression” – President Barack Obama.47

19

f Once banking rules were gutted, investment bankers were free to sell their complex fi nancial products, which later became known as “toxic assets.” Th e spread of these bad debts across the globe helped plunge nations into a fi nancial meltdown. Th e cost to taxpayers in the U.S. was nearly a half trillion dollars. As one analyst put it, “Goldman Sachs, the investment house, sold poison to unwitting customers – fi nancial [products] deliberately designed to fail. Sure enough, they failed, but they also helped poison the entire system.”49

f Th e “Greed is Good” culture of Wall Street serves a handful of people who make a lot of money – not by producing useful goods or providing important services, but by collecting huge fees for manipulating money in ways that endanger the economy.

f Th e Radical Right touts “the magic of the free market,” a market economy that supposedly thrives because it is unfettered by government interference. By interference, they mean regulations that protect consumers, workers, and communities. But most (though not all) proponents of the “free market” were strikingly silent when it came to protecting huge corporations – like Citibank, AIG, and JP Morgan Chase – from market losses during the fi nancial crisis they helped to create.

f Th e Radical Right insists that deregulation will increase competition and create jobs. But “sweeping deregulation unleashed Wall Street greed that ended up being the biggest job killer since the Great Depression.”51

A BETTER PLANRe-establish and strengthen government regulations that protect consumers, workers, and the environment from profi t hungry corporations.

But as Republican Congressman Spencer Bachus – the new chair of the House Financial Services Committee sees it – “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”50


MYTH #7: LIBERAL TAX AND SPEND POLICIES HAVE CREATED DEFICITS AND DEBTS THAT ARE TOO BIGOur taxes are too high and our government is spending too much money. Taxes are simply strangling our economy. And our government is nearly bankrupt. Thanks to liberal politicians and their ever-expanding social programs our nation is in big trouble.

REALITY:

f A number of factors have contributed to the nation’s debt and the budget deficit. f The collapse of the financial and housing markets which sparked a recession and

caused a loss of jobs and tax revenues f The costly wars in Iraq and Afghanistan f The rising cost of the goods and services

that the government purchases and provides f Tax breaks for the wealthy which have

reduced government revenues52

f No one wants to saddle future generations with unmanageable debt. And no one wants to pay more taxes than they have to – especially in this tough economy. But while the Radical Right is quick to denounce the federal debt and trumpet fiscal responsibility, they are happy to add to the nation’s debt by providing tax breaks for the wealthy and tax loopholes for corporations.

f The Radical Right argues that cutting taxes for the rich means they will spend more of their money – increasing consumption and improving the economy. While middle and lower income families may spend their tax savings on goods and services they need, there is little evidence that the rich will spend the extra money in ways that will boost the economy. The Radical Right also argues that cutting taxes for corporations means they will make more money and hire more people. But Corporate America is just as likely to invest savings abroad and create jobs elsewhere. Radical Right tax policies are outright gifts to the wealthy and to Corporate America that reduce public revenues and exacerbate the financial crisis.

v Cost of tax cuts to the rich: over $60 billion in 2011 v Cost of subsidies to businesses: $365 billion per year53 v Cost of federal tax loopholes in 2010: $1.05 trillion54 – that’s more money than the Federal

government collects from all individual income tax returns ($900 billion)55

21

2010 estimates

Cost of tax loopholes to federal government

Revenues to be collected by the federal government from all personal income taxes

$1.05 trillion $900 billion

f But the financial crisis provides the Radical Right with what one conservative columnist called a “golden opportunity”57 – a chance to undermine unions and defund social programs. In New Jersey, for example, Governor Chris Christie vilified public sector workers – teachers especially – and used the budget deficit as an excuse to both cut programs and to stop paying money the state owes to the employee pension fund. These strategies are having a devastating impact on middle and lower income workers, their families, and their communities.

In Arizona, 1 million low income residents lost access to Medicaid services, and the state stopped paying for organ transplants; Washington State cut benefits to 41,000 physically and mentally incapacitated individuals, leaving them just $258 per month. Hawaii shortened the school year by 17 days. Newark laid off 13% of its police.58 Oregon eliminated in-home care services for residents with Alzheimer’s disease; Georgia increased college tuition by $500 per semester; Colorado cut public school spending by $400 per student.59 And states are still facing staggering deficits.

f It’s not simply that government debt and deficits are too big, it’s that the revenues that come into government coffers from corporations and the wealthy are too small. There are plenty of services that government should be providing, but simply can’t because the most privileged in society just aren’t paying their fair share.

A BETTER PLANIncrease revenues by returning to a more progressive tax structure – like the one we had before the Radical Right began to dismantle it.

Returning the top 400 income earners to the 1955 tax rate would generate an additional $35.9 billion a year – from these 400 individuals alone!!! 56


The Real DealThe riCh Are very riCh And sTill geTTing riCher – And They’re noT PAying Their fAir shAre

f Over the past 30 years, family income for people in the middle income bracket increased only modestly and the income of the poorest fifth of the population actually declined. At the same time, income for the richest 5% of our population increased an astounding 73%.60

-7.4%

+3.7% +11.2%

+22.7%

+49.0%

+72.7%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Bottom 20% Next 20% Middle 20% Next 20% Top 20% Top 5 %

Change in Real Family Income by Quintile and by Top 5 Percent, 1979-2009

f And the share of the nation’s total income declined for each segment of the population except those in the top fifth of all income earners.62

-0.60%

-2.30% -2.80%

-1.30%

+7.00%

+5.10%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Lowest �fth Second �fth Third �fth Fourth �fth Highest �fth Top 5% ofearners

% C

hang

e

Change in the Share of Total Income 1970 - 2009-

In 2010, hedge fund manager John Paulson netted $5 billion – which amounts to $2.4 million an hour. 61

23

f While annual income is highly concentrated in the hands of a few, total wealth is even more concentrated. The wealthiest 1% of the American population holds 36% of the total national wealth. That is over one-third of all the consumer durables (such as houses, cars, and stereos) and financial assets (such as stocks, bonds, property, and savings accounts). The richest 20% of Americans hold just over 87% of the total household wealth in the country.63 That leaves, eighty percent of the American population with less than 13% of the nation’s wealth.64

f Taxes on the rich have decreased dramatically over the past 50 years. All through the 1950s, including the Eisenhower term, the top income tax rate was 91%. It stayed at or above 70% until 1980.The Reagan era tax cuts provided the wealthy with a huge windfall, as did the Bush tax cuts of 2001 and 2003, which have been extended under the Obama administration. The estate tax for the wealthy declined dramatically too – from 77% in 1960 to 35% today.66

shAre of ToTAl WeAlTh: U.s.

Wealthiest 1% of Population

Wealthiest 10%of Population

Wealthiest 20% of Population

Everyone Else

Everyone Else Everyone

Else

There are nearly 400 billionaires in the U.S. today. More than three dozen of them are worth more than $10 billion each. It would take the typical American (earning $49,568 and spending absolutely nothing at all) a total of 20,174 years (or approximately 298 lifetimes) to earn just $1 billion.65


year Personal income tax rate for highest tax bracket

estate tax rate for highest tax bracket

1960 91% 77%1980 70% 70%2000 40% 55%Today 35% 35%

f Cuts in income and estate taxes have been coupled with reductions in the capital gains taxes (reduced from 22.5% in 1990 to 14.2% in 2010). This has been a great boon to America’s superrich, since many of them claim much of their income as capital gains. By calling their income capital gains, they’re taxed at only 15%, instead of the 35% rate they would have had to pay on “earned income.” Estate taxes too, have been greatly reduced – another boon to the wealthy.

f While taxes have been reduced for everyone over the past decade, those cuts have benefited the wealthy much more than anyone else. The total value of tax reductions from 2001 to 2010 was nearly $2 trillion. The top 5% of all earners received 40% of that money.

how much money did the tax cuts put in your pocket?Average federal tax reduction from the 2001- 2006 tax cuts by income group of taxpayer in 2010.

Top 1% $97,440Top 20% $11,286

Middle 20% $1,149Lowest 20% $74

f And when taxes are cut, fees for public services often go up to make up for the shortfall in revenues. That means higher college tuitions, higher transit fares, increased tolls, and a host of other expenses (taxes really) that fall most heavily on those who can least afford them.

25

f The recent extension of the Bush tax cuts resulted in lost revenues of $98 billion a year from the cut to the top 5% of income earners alone.67

f How much do the rich pay in taxes to our state and local governments? As a share of their income, the rich pay less than half of what the lowest income Americans pay.

Average state and local taxes paid as share of family income68

income group lowest 20% top 1%Sales and excise 7% less than 1%Property taxes 4% 1%State/local less than 1% 4%Total 11% 6%Total after federal offset69 11% 5%

ComPAnies Are mAking enormoUs ProfiTs BUT noT PAying Their fAir shAre

f Corporate profits have increased from $327 billion (in 2010 dollars) in 1960 to $1.3 trillion today.70

f The money received by government from corporate income taxes today is less than a third of what it used to be in the 1960s.71

Where does The government get its money?72

1960 2005 2010Sales and excise taxes 13% 4% 3%Social Insurance/retirement 16% 38% 41%Corporate income taxes 23% 11% 7%Individual income taxes 44% 44% 43%Other 4% 4% 6%

f The federal tax rate on corporate profit is supposed to be 35%, but big companies pay high priced tax lawyers to develop elaborate (and sometimes, not so elaborate) tax avoidance schemes. One study of 250 profitable companies over a two-year period found that more than a quarter of those companies avoided federal and state taxes (costing taxpayers $217 billion), and a third escaped federal taxes altogether – even as they were reporting billions of dollars in profits.73

The Carnival Corporation wouldn’t have much of a business without help from various branches of government. The U.S. Coast Guard keeps the seas safe for Carnival’s cruise ships. Customs officers make it possible for Carnival cruises to travel to other countries. State and local governments have built roads and bridges leading up to the ports where Carnival’s ships dock. But Carnival’s biggest government benefit of all may be the price it pays for many of these services. Over the last 5 years, the company has paid total corporate taxes – federal, state, local and foreign – equal to only 1.1% of its cumulative $11.3 billion in profits. Thanks to an obscure loophole in the tax code, Carnival can legally avoid most taxes.74


f Companies use their wealth and influence to insure legislation and tax policies that are in their favor.

f Some economists argue that a fixation on tax avoidance is detrimental to companies themselves because they make decisions based on tax breaks rather than on what is the most efficient investment of their resources. Airlines buy more planes than they need, energy companies drill more wells than they need to – all because there are tax advantages in doing so. That’s not exactly a model of capitalist efficiency.

f Companies use a host of tricks to avoid paying their fair share – including transferring profits to offshore tax havens. Whatever the method, when Corporate America pays less in taxes, the rest of us pay more.

A few years ago, the energy industry coughed up $50 million for political spending to influence pending legislation. When the energy bill was signed into law, it contained more than $50 billion in tax breaks and subsidies for oil, coal, and gas industries, while doing little to reduce U.S. dependence on fossil fuel.75

Aswath Damodaran, New York University professor of finance, warns, “Companies should be making investments based on their commercial potential, not for tax reasons”.76

27

CorPorATe WelfAre is BUsTing oUr BUdgeT

f The U.S. treasury is also being depleted by tax incentives and bailouts – outright gifts really – the government provides to corporations that are supposedly aimed at creating or saving jobs.

f Tax breaks are often provided by communities desperate for economic development. But such sweeteners are often major boondoggles.

GE is considered one of the best tax avoiders in the world.77 During the mid-1980s to mid ‘90s the company paid roughly 30% of its profits to taxes. Last year, despite $10.3 billion in pretax income, GE paid absolutely nothing to Uncle Sam.78 Nothing, Nada, Zilch. The company’s CEO, Jeffrey Immelt, was recently appointed to head President Obama’s Council on Jobs and Competitiveness, which is expected to suggest changes to the corporate tax code.

“The City of Philadelphia ponied up $307 million worth of incentives to persuade Kvaerner ASA, a Norwegian global construction company, to reopen a section of Philadelphia’s moribund shipyard. That created 950 jobs that paid around $50,000 a year – not bad, until you calculate the cost to taxpayers: $323,000 per job.”79


f Tax breaks for big companies like Walmart, Lowes, and Target give them an enormous advantage over local family businesses that don’t get these kinds of breaks. The result: small local companies go out of business.

f It’s estimated that corporate boondoggles cost U.S. taxpayers more than $50 billion a year.81 That’s $50 billion that is not going to schools and hospitals, or for fire and police protection.

f And while some government bailouts of companies actually save jobs and protect the middle class, others like the recent financial bailout did little to alleviate the real problems and in many ways made matters worse. Multi-million dollar bonuses are back and the big banks have emerged bigger and more concentrated than ever.

Between 2004 and 2006, the sporting goods chain Cabela’s collected more in subsidies from the town of Hamburg, PA ($292.7 million) than it made in profits ($223.4 million). That amounts to approximately $8,000 for every man, woman, and child in town.80

29

ClAss WArRecent attacks on workers, unions, and government, are only the latest salvo in a one-sided class war being waged by the Radical Right (and their corporate sponsors) on poor, working, and middle class communities. Deliberate, concerted and well financed efforts over the course of the past 30 years have weakened unions, dismantled the nation’s progressive tax system, and undermined public oversight and regulation of industry. All of these efforts have led to an unprecedented concentration of wealth in the hands of a few. And deregulation has led to a financial crisis that has had disastrous results on the U.S. and the global economy. A recent Congressional inquiry into the financial crisis concluded not only that the crisis was avoidable, but that it was caused by widespread failures in government regulation, intense corporate lobbying for deregulation on the part of industry, corporate mismanagement and ineptitude, heedless risk taking (by Wall Street), and greed and criminal activity by the “captains of finance.” 82 Driven by greed and wrong-headed ideology, these efforts have caused the suffering of millions.

A fAir deAlUnions and other progressive groups have lots of ideas about how things could be different and better. These ideas are not very popular with corporations and the wealthy, but they will generate more tax revenues and put people back to work delivering the goods and services people need and want. How?

f Return to the Eisenhower or Nixon-era tax rates for the very rich (70-90%)

f Raise corporate taxes and close corporate loopholes

f Tax financial transactions. That is, levy a tax on the purchase of stocks and more exotic financial products like credit default swaps, options, and futures.83

We need a Fair Deal – that is, a set of government programs that would create, rather than eliminate, decent well-paying jobs. A Fair Deal will put people back to work repairing our roads and bridges, expanding mass transit, and caring for our children, the sick and the elderly. A Fair Deal will ensure decent wages and benefits for everyone and protect every worker’s rights to organize. It will rebuild our communities by providing improved public services and expanded public works. And like the New Deal of the 1930s and 40s, it will protect our economy, our environment, and our communities by providing real limits on what corporations can and cannot do.

England, Japan, and a host of other countries have a financial transaction tax. While critics say that such a tax would reduce the amount of financial trading, many economists think reducing the amount of short-term speculation that destabilizes the economy is a good thing.84 Based on current trading volumes, economists estimate that a financial transaction tax would raise $353 billion a year.85 We pay 6 to 8% sales tax on necessities every day, but there is zero sales tax on daily purchases of billions in stocks and bonds. 86


yoU Choose

let ge get away with Murder OR Collect taxes from GE (value: $3.6 billion) AND Build 590 new elementary schools (cost: $3.6 billion)

let the rich get away with Murder OR Restore taxes on those making more than $200,000 per year to pre-Bush tax rates (value: $34 billion)AND Double the federal allocation for cancer research ($5 billion),

+ Double the federal budget for Veteran education, training and rehabilitation ($8 billion), + Double international development and humanitarian aid ($19 billion)

let Wall street get away with Murder OR Tax financial speculation (Value: $353 billion) AND Double the federal budget for early childhood education ($11 billion),

+ Double the federal budget for elementary education, + Double the federal budget for high school education (combined $73 billion),

+ Double the federal budget for higher education ($20 billion), + Double the federal budget for job training for unemployed and new workers ($4 billion) + Double the federal budget for PELL grants to insure access to higher education ($17 billion) + Double the entire federal budget for Urban Development ($48 billion) + Double the federal budget for energy conservation ($5 billion)

+ Double the federal budget for disaster relief ($11 billion) + Double the federal budget for the Food and Drug Administration and cut user fees in half ($3 billion) + Double the federal budget for the Centers for Disease Control and Prevention ($7 billion) + Double the federal budget for health research ($31 billion) + Double the federal budget for housing for the elderly and the disabled ($2 billion) + Double the federal budget for community development ($10 billion) + Double the federal budget for rural development ($1 billion) + Double the federal budget for both community based anti-crime initiatives and the investigation

and prosecution of violence against women (combined: $4 billion) + Double the federal budget for housing assistance ($59 billion)

+ Allocate $3 billion (three times the current rate) for Highway Safety to reduce fatalities and injuries on public roads

+ Allocate $23 billion to improve the quality and reduce the cost of public mass transportation

let corporate america get away with Murder OR End Corporate Subsidies (value: $365 billion)87

AND Double the federal budget for the investigation and prosecution of financial fraud ($1 billion) + Double the federal budget for the support of small businesses ($1 billion) + Double the federal budget for consumer and occupational health and safety ($4 billion) + Double the federal allocation for environment protection ($10 billion) + Double the federal budget for tenant based assistance ($18 billion) + Double the federal budget for public housing ($7 billion) + Provide 10 million homeowners with sliding scale grants to purchase ($60,000) solar panels

31

(average grant $30,000) to reduce homeowners energy bills, offset global climate change, and reduce the nation’s dependency on oil ($300 billion)

continue the slide away from progressive taxation OR Restore the 1955 effective (not the written) tax rate to those making more than $2 million

per year (value: $202 billion)AND provide federal funding to the states to cover all budget shortfalls in the coming year ($112 billion)88

+ increase federal grants to state and local governments by 15% ($98 billion)

continue to ignore the tax code and provide jobs for high priced tax attorneys and tax accountantsOR Eliminate just half of all tax loopholes (Value: approximately $600 billion)AND Create 7.4 million private and public sector jobs with union wages and benefits – that is,

enough jobs for everyone who is currently officially and unofficially unemployed ($558 billion)89


1 Data on food prices from U.S. Department of Agriculture, Center for Nutrition Policy and Promotion, “Cost of Food at Home,” available at http://www.cnpp.usda.gov/USDAFoodCost-Home.htm; data on wages from U.S. Department of Labor, Bureau of Labor Statistics, “Employment, Hours, and Earnings from the Current Employment Statistics Survey (National),” data extracted January 15, 2011, available at: http://www.bls.gov/data/; data on housing foreclosures from RealtyTrac press releases, various years, available at: http://www.realtytrac.com/content/press-release/; and unemployment and jobless data from U.S. Department of Labor, Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey,” data accessed January 15, 2011, available at: http://www.bls.gov/data/.2 Rich, Frank. 2011. “Let Obama’s Reagan Revolution Begin,” New York Times, January 8, 2011.3 Zuckerman, Mortimer. 2010. “Public Sector Workers Are the New Privileged Elite Class,” US News and World Report, September 10, 2010.4 This is not a dictionary definition and is meant to suggest only a certain level of uniformity within the far right of the political spectrum.5 Mayer, Jane. 2010. “Covert Operations,” The New Yorker, August 30, 2010.6 Celona, Larry, Sally Goldenberg and Josh Margolin. 2010. “Sanitation Department’s Slow Snow Cleanup Was a Budget Protest,” New York Post, December 30, 2010.7 Keefe, Jeffrey. 2010. “Debunking the Myth of the Overcompensated Public Employee: The Evidence,” EPI Briefing Paper #276, September 15, 2010, available at: http://epi.3cdn.net/8808ae41b085032c.8 EPI analysis of Bureau of Economic Analysis and Bureau of Labor Statistics data, available at: http://www.stateofworkingamerica.org/charts/view/201.9 Based on US Bureau of Labor Statistics data. Calculations by Les Leopold, The Looting of America, White River Junction, VT; Chelsea Green Publishing 2009: page 14. 10 Greenhouse, Steven. 2010. “Labor’s New Critics: Old Allies in Elected Office,” New York Times, June 28, 2010.11 CEO compensation of the largest 500 corporations from Scott DeCarlo. 2010. “What the Boss Makes,” Forbes, April 28, 2010; compensation of hedge fund managers from Taub, Stephen. 2010. “The Rich List,” WWW.ABSOLUTERETURN-ALPHA.COM available at: http://www.absolutereturn-alpha.com, April 2010.12 AFSCME, “Government for Sale: An Examination of the Contracting Out of State and Local Government Services,” 8th edition. Cited in “Privatization Myths Debunked,” available at: http://www.inthepublicinterest.org/node/457.13 Cohen, Adam. 2010. “The Burning Question,” Time, November 1, 2010, p. 73.14 U.S. Census Bureau. 2010. Statistical Abstract of the United States: 2011, available at: http://www.census.gov/compendia/statab.2010.15 “2010 Federal Election,” Campaign Finance Institute, available at http://www.cfinst.org/federal/election2010.aspx, accessed March 22, 2011.16 2009 figures from Center for Responsive Politics: http: //www.opensecrets.org/pfds/averages.php.17 “House No-Voters on Financial Reform Take Cue from Banks,” MapLight.org July 2, 2010; and Owen Poindextr, “Big Banks Lobby on Still-to-be-Written Rules of Financial Regulation,” MapLight.org, September 13, 2010. Also http://abclocal.go.com/kgo/story?section=news/politics&id=6393579.18 Fiscal year 2012 projected budget shortfall as percent of fiscal year 2011 budget. Data on budgets from McNichol, Elizabeth, et al., “States Continue to Feel Recession’s Impact,” Center on Budget and Policy Priorities, March 9, 2011, available at: http://www.cbpp.org/cms/?fa=view&id=711; data on union membership from Unionstats, “Union Membership and Coverage Database from the CPS,” available at: http://www.unionstats.com. 19 Union wage data from the Current Population Survey, available at hhtp://data.bls.gov/PDQ/Servelet/SurveyOutputServlet.20 Data for 1980 from Leo Troy and Neil Sheflin, U.S. Union Sourcebook, West Orange, NJ: IRDIS, 1985. Data for 2010 from U.S. Bureau of Labor Statistics, “Union Affiliation Data from the Current Population Survey,” available at: http://data.bls.gov/PDQ/Servlet/SurveyOutputServlet.21 Krugman, Paul. 2010. “The Humbug Express,” New York Times, January 23, 2010.22 Layne, Rachel. 2011. “GE Employment Fell 5.6 Percent in 2010; U.S. Little Changed,” Bloomberg News, February 25, 2011.23 Ben Bagdikian, The Media Monopoly, Sixth edition, Beacon Press, 2000 cited by the B-Fair Project available at: http://www.b-fair.net/?p=820.24 “The World’s Billionaires,” Forbes, available at: http://www.forbes.com/wealth/powerful-people/gallery/rupert-murdoch, accessed March 28, 2011.25 AFSCME, “AFSCME Facts: The Truth About Public Sector Workers’ Pensions,” available at: http://stopthelies.afscme.org/get-the-facts/document/AFSCME-FactSheet_Pensions.pdf.26 Munnell, Alecia, cited in Elgin, Ben, et al., 2010. “The Political Rumble Over Public Pension Costs,” Bloomberg Business Week, October 13, 2010.27 AFSCME, “Three Myths About State and Local Government Pension Plans,” available at: http://www.afscme.org/issues/12821.cfm.28 “All federal employees hired on or after January 1, 1984 are mandatorily covered under Social Security – the CSRS system is not an option for them. So there are still some Federal employees, those first hired prior to January 1984, who are not participants in the Social Security system. All other Federal government employees participate in Social Security like everyone else.” Social Security Administration History, available at: http://www.ssa.gov/history/hfaq.html. According to the National Active and Retired Federal Employees Association, over one million government employees are not eligible for social security. “NARFE Applauds Kerry for Bill to Protect Federal Retirees from the 2011 Medicare Premium Increase,” November 5, 2010, available at: htt;://www.narfe.org/departments/publicrelations/articles.cfm?ID=2263.29 Reich, Robert. 2011. “The Shameful Attack on Public Employees,” January 6, 2011, available at: http://robertreich.org/post/2615647030.30 Munnell, Alecia, Jean-Pierre Aubry and Larua Quinby. 2010. “The Impact of Public Pensions on State and Local Budgets,” October 2010, Center for Retirement Research at Boston College, available at: http://crr.bc.edu/images/stories/Briefs/slp_13.pdf.31 Bureau of Labor Statistics, “Employee Benefits in Medium and Large Private Establishments,” 1993 Table 204 Bulletin 2456: Bureau of Labor Statistics, “National Compensation Survey: Employee Benefits in the U.S. March 2010,” Table 2 (private sector section).32 Social Security data from the Social Security Administration..._snapshot/; “pension envy” from Johnson, Dave. 2011. “Pension Envy,” OurFuture.Org, January 11, 2011, available at: http://institute.ourfuture.org/blog-entry/2011010210/pension-envy.33 Eisenbery, Ross. 2010. “The Wobbly Stool: Retirement (In)security in America,” Economic Policy Institute, October 7, 2010, available at: www.epi.org/authors/bio/eisenbey_ross.34 AFSCME, “The Truth About Public Service Workers’ Pensions,” available at: http://stopthelies.afscme.org.35 Ibid.36 Parrott, James. 2008. New York Daily News, June 11, 2008.37 Problems facing pensions dubunked in Munnell, Alecia, Jean-Pierre Aubry and Laura Quinby, op.cit.; golden parachutes which caused the problems in the first place described by the Center for American Progress. 2008. “The Golden Parachute: CEO Severance and the Housing Crisis by the Numbers,” February 27, 2008, available at: http://www.americanprogress.org/issues/2008/02/mortgage_ceo_pay.html.

38 U.S. Census Bureau, “Income, Poverty and Health Insurance in the United States: 2009,” available at: http://www.census.gov/hhes/www/poverty/data/incpovhlth/2009/tables.html, accessed January 23, 2011.39 Ibid.40 White House Office of Management and Budget historical tables, available at: http://www.whitehouse.gov/omb/.41 Derived from US Census Bureau, Current Population Survey, Tables POV01 and POV2 available at hhtp://pubdb3.census.gov/macro/032008/pov/toc.htm. 42 Of the 43,569,000 people living in poverty in the United States in 2009, 9.4% were white, not of Hispanic origin; 25.8% were Black; 12.5% were Asian and 25.3% were Hispanic.43 Bureau of Labor Statistics, Table A-15. Alternative measures of labor underutilization, February 2010-February 2011, available at: http://bls.gov/news.release/empsit.t15.htm.44 White House Office of Management and Budget, op. cit.45 Bartels, Larry M.. “Economic Inequality and Political Representation,” August 2005, available at: http://www.scribd.com/doc/36931202/Larry-Bartels-Economic-Inequality-and-Political-Representation.46 Crandall, Robert W. 2007. “Extending Deregulation: Make the U.S. Economy More Efficient,” Brookings Institute, p. 5, February 28, 2007.47 Scheer, Robert. 2011. “Obama Pulls a Clinton on Deregulation,” The Nation, January 19, 2011.48 Kaufman, Greg. 2009. “Yes, Regulators Can Stop Foreclosures,” The Nation, December 10, 2009.49 Greider, William. 2010. “Breaking the Banks,” The Nation, April 22, 2010.50 Puzzanghera, Jim. 2010. “Spencer Bachus, Incoming House Financial Chairman, Gets Heat for Saying Regulators Shouldn’t ‘Serve’ Banks,” Los Angeles Times, December 15, 2010.51 Scheer, Robert. Op. cit.52 Chart from Kathy Ruffing and James Horney, “Critics Still Wrong on What’s Driving Deficits in Coming Years,” Center on Budget and Policy Priorities, June 28, 2010, available at: http://www.cbpp.org/cms/index.cfm?fa=view&id=3036.53 Statement of Robert S. McIntyre Regarding Business Tax Subsidies Administered by the Internal Revenue Service, Citizens for Tax Justice, March 9, 2011, available at: http://www.ctj.org/pdf/mcintyretestimony03092011.pdf.54 Leonhardt, David. 2010. “5 Options for Congress to Cut Taxes,” New York Times, November 2, 2010.55 White House Office of Management and Budget, Historical Budget Tables, available at: http://www.whitehouse.gov/omb/budget/Historicals. 56 Institute for Policy Studies, “Reversing the Great Tax Shift,” available at http://www.commondreams.org.57 Columnist James Pethokoukis quoted in Alterman, Eric, “The Coming Class War,” The Nation, January 6, 2011.58 Lander, Brad. 2010. “Saving Our Cities with Fair Taxes,” The Nation, December 20, 2010.59 Nicholas Johnson, et al., “An Update on State Budget Cuts: At Least 46 States Have Imposed Cuts That Hurt Vulnerable Residents and the Economy,” Center on Budget and Policy Priorities, February 9, 2011. 60 U.S. Census Bureau, Historical Income Tables, available at: http://www.census.gov/hhes/www/income/data/historical/families/index.html, accessed March 20, 2011.61 Les Leopold, “Wall Street Robber Baron Nets $2.4 Million an Hour While 28 Million Need Jobs,” Huffington Post, February 4, 2011, available at: http://www.huffingtonpost.com/les-leopold.62 Derived from U.S. Bureau of the Census, Current Population Reports, available at http://www.census.gov/hhes/www/income.63 Allegretto, Sylvia A. 2011. “The State of Working America’s Wealth: 2011,” EPI Working Paper, March 23, 2011, available at: http://epi.3cdn.net/2a7ccb3e9e618f0bbc_3nm6idnax.pdf.64 Ibid. 65 Mantsios, Gregory. 2010. “Class in America” in Race, Class, and Gender in the United States (New York, NY, Worth, 2010), p. 179.66 Tax rates from U.S. Internal Revenue Service, available at: http://www.irs.gov; data on tax cuts by income group from Leiserson, Greg and Jeffery Rohaly. 2008. “Distribution of the 2001-2006 Tax Cuts: Updated Projections, July 2008,” Tax Policy Center, July 2008.67 Citizens for Tax Justice. 2009. “The Bush Tax Cuts Cost Two and a Half Times as much as the House Health Care Proposal,” September 8, 2009.68 Figures are for 2004 (non-elderly married couples) from Institute for Taxation and Economic Policy “Who Pays: A distributional analysis of the tax system in all 50 states,” November 2009.69 Factors in that state and local taxes offset federal taxes.70 $1.3 trillion based on 2009. U.S. Bureau of Economic Analysis, Survey of Current Business.71 Folbre, Nancy, James Heintz, and Jonathan Teller-Elsberg. 2006. Field Guide to the U.S. Economy: A Compact and Irreverent Guide to Economic Life in America, New York, NY: The New Press, 2006, p. 83. 72 White House Office of Management and Budget, op. cit.73 Robert S. McIntyre and T.D. Coo Nguyen, “State Corporate Income Taxes, 2001-2003,” Citizens for Tax Justice and the Institute on Taxation and Economic Policy, 2005.74 Leonhardt, David. 2011. “The Paradox of Corporate Taxes,” New York Times, February 1, 2011.75 Folbre, Nancy, James Heintz, and Jonathan Teller-Elsberg. 2006. Op. cit. p. 87.76 Leonhardt, David. 2011. “The Paradox of Corporate Taxes,” op. cit.77 Leonhardt, David. 2011. “The Details on Corporate Taxes,” New York Times, February 2, 2011.78 Helman, Christopher. 2010. “What the Top US Companies Pay in Taxes,” Forbes, April 1, 2010.79 Murray, Bobbi. 2003. “Money for Nothing,” The Nation, August 14, 2003.80 Johnston, David Cay. 2007. Free Lunch (London, Eng; Penguin, 2007).81 Quoting Greg LeRoy author of No More Candy Store and founder of Good Jobs First in Murray, Bobbi. 2003. “Money for Nothing,” The Nation, August 14, 2003.82 Chan, Sewell. 2011. “Financial Crisis was Avoidable,” New York Times, January 25, 2011. 83 Collins, Chuck. 2008. “A Fair Plan to Pay for Economic Recovery,” The Nation, September 19, 2008.84 Nader, Ralph. 2011. “Financial Transaction Tax Might Fix Host of Ills,” in Bloomberg Business Week, February 5, 2011.85 Baker, Dean and Robert Polin in Nader, Ralph. 2011. Ibid.86 Nader, Ralph. 2011. Op. cit.87 In fiscal 2011, the Treasury Department’s official, but incomplete list of tax subsidies for corporations, business owners and business investors comes to an estimated $365 billion – from testimony from Robert S. McIntyre, Director, Citizens for Tax Justice, before the Senate Budget Committee, available at: http://www.ctj.org/pdf/mcintyretestimony03092011.pdf.88 The Center on Budget and Policy Priorities estimates that for the 44 states and the District of Columbia that show budget shortfalls for 2012, the shortfall is $112 billion. McNichol, Elizabeth, et al., op. cit. 89 These numbers are estimates and in some cases may overstate projected revenues while in others will understate projections. For example, these estimates do not consider the additional tax revenues that would be generated by creating new jobs.

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