Advanced solutions: suggestions and analysis

I wish to recognize that there are urgent needs that Congress needs to act on, such as the AFL-CIO’s call to make a permanent fix to periodic federal extension of unemployment benefits. This is long overdue, no one who is laid off should loose their home or be evicted because they have run out of unemployment benefits or Congress didn’t include them in this vital income support system. No one should run out of benefits period. Workers didn’t create the crisis and income support should continue until people get back to work. My argument for calling for the following is that if bolder demands were also on the table, they could be the leverage required to more quickly and decisively win the urgent demands.

Job creation: By public capital investments in green economy industries and by expanding social benefits

In addition to direct and indirect outlays of public capital discussed below, job creation strategies should be tied to expanding social benefits that when enacted will create employment. An immediate demand should be made to pass legislation to lower eligibility for full Medicare benefits to 55. It is estimated a minimum of a million older workers would retire if they knew Medicare would meet their health insurance needs. If so, within months of passage, companies would be looking to fill hundreds of thousands of jobs.

I believe this is an immediate winnable demand if it is framed as an emergency act to create jobs. A one-page bill is all that is needed. The administrative machinery is already in place. Medicare is held in high regard as a government program that works. This demand can be made independent of the Democrats health reform legislation, should not detract from their efforts and could act as a lever to get Congress to act. If unity could be built around this goal in the context of a host of more advanced demands for jobs, it may be possible to ignite the underlying sentiment of anger and outrage that has remained largely untapped. To create momentum, however, it should be made absolutely clear that this demand is just the beginning. One issue politics will not excite people, as too many problems need solutions.

To win this and other demands will require moving from what we might call the “Internet lobbying model” that is proving ineffective to organizing mass protests and actions. I am convinced that had mass marches for jobs and health care been organized in the spring of 2009 is several dozen cities a better health care bill would be before Congress and perhaps have passed While Congress must be the primary public pressure point, actions should also be taken to expose corporate organizations that working against change and who control the ‘no’ votes. In the first place the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Bankers Association and America’s Health Insurance Plans. For example, if a march were organized on Washington D.C., thousands should simultaneously demonstrate at the D.C. headquarters of these groups exposing their roles in obstructing action to relieve the burden workers are bearing. Such a vivid portrayal of who the culprits are will do more to educate and motivate workers than 10 million fliers.

What about single-payer health insurance?

I believe unity of labor and other forces could be built around the strategy above, but I am not sure it is possible, at least in the short term, for unity on single-payer. Ideally, the immediate demand for lowering Medicare eligibility would be announced as the first step in a multi-year campaign to enact single payer. Yet if this were a deal breaker, unity around the Medicare demand and taking the more aggressive mass actions outlined above is more important.

Single-payer can also be framed in the context of the unemployment crisis.  Eliminating private health insurance companies does not at first seem that it would create jobs.  But it does so by shifting resources into more productive investments and occupations.  Initially, due to the streamlined administration costs projected for single-payer many existing insurance jobs would be made redundant, even after a public single-payer administration absorbed some.  Redundant workers, of course, would require retraining and income supports.


Single-payer would create jobs by releasing tens of billions of dollars of capital now invested in insurance industry infrastructure for investment in millions of green economy jobs.  This investment capital would come from reducing total U.S. health care expenditures, now at least 5 percent more of GDP than our peer nations, potentially freeing up to $650 billion annually for productive investment. [author calculation]. Additionally, the spending required to cover the tens of millions of uninsured and provide improved Medicare services to the elderly would create 2.6 million new jobs including 734,000 new skilled health care positions. (California Nurses Association sponsored study 2009).

As structured now private, for profit, health insurance is another means for the wealthy and financial institutions to siphon off value workers create by taking a portion of premiums as profit.  This value goes to wealthy stockholders in dividends, pays for huge executive salaries and earns huge profits for Wall Street banks.  It is quite clear this capital has not trickled down to benefit workers.  This is a message workers need to hear in order to understand how the system is designed and why it is that single-payer can lower costs and direct capital to more productive investments.

Additional demands for new social benefits that will create jobs should include:

· Pass legislation to fund six months to-one year of paid maternity or paternity leave for new parents. Although this will not create a large number of permanent job openings it would likely expand the temporary job market.

· Legislate a minimum of four weeks paid vacation for all fulltime workers from their first adult job moving gradually toward parity with European workers who have had four to six weeks paid vacation for decades. Even if only medium and large companies were affected this benefit alone would expand employment hours roughly by a million jobs. Americans already work 400 hours more per year than Europeans, so four weeks paid vacation is a very fair demand.

This jobs strategy through expanding social benefits makes good economic sense and presents an opportunity to communicate with Americans how far behind we are from our peer nation. And it presses the argument that if European companies and nations can afford these benefits so can the United States. A critical role of these demands is to raise the expectations of American workers, who have asked for much too little, yet are still expected to suffer the consequences of capitalism’s crisis and corporations’ corrupt business practices. These demands pose a challenge for social change agents to win workers over to the trade union argument that “we are in it together,” and that the “go it alone” path of “low” taxes and few shared social benefits is not a good defense against capitalism’s relentless effort to strip workers benefits and pensions. American workers are split between these two perspectives as the health care debate shows. This canvass is an experiment in how to convince people that “we are in it together” works better.

Mandatory two-year moratorium on manufacturing plant closings. Since capitalists will not preserve the nation’s manufacturing capacity workers in their own interests and the nations need to raise the demand. This call could very quickly elevate the public discourse and the political struggle over the closing profitable plants. Corporations and their Wall Street owners have been using the crisis as an excuse to close plants. Witness the recent Whirlpool decision to close an Indiana plant and move it to Mexico. There is a growing sense in the country that this is not just another round of plant closings, but the last round. This is mood is fertile territory to raise a bold stopgap measure to protect our future capacity to manufacture products, create value and jobs.

Raise public capital for job creation by gradually raising the tax rates on the wealthiest Americans to the pre-Reagan era rates of 50 to 70 percent in order to raise public capital for job creation. Government borrowing to create jobs in a recession is necessary, but this demand could be framed in a way that it pushes Congress to place the burden on the wealthy in order to avoid adding to the deficit or debt. This framing continues to drive the point that there is capital available for job creation. The government may be “broke” but the wealthy are not. They need to step up to the plate and invest in America. They are not, so raising their taxes is a very reasonable step to get the economy moving.

Call for a windfall profits tax on American oil companies and use the capital to create jobs in alternative energy and green vehicle markets. The big five oil companies used $55 billion in profits to buy back shares since 2005 instead of investing more capital in alternative energy jobs or to even upgrade their aging refineries. These companies have all doubled or nearly double their profits since the beginning of the Iraq War netting $130 billion in 2007 alone and $519 billion since 2001. They have directly benefited from the higher per barrel price that in part have been driven up by the war’s destabilizing effects.

The big five have taken billions of Americans hard earned money in order to increase the value of its stock and handed over billions to wealthy investors. A windfall profits tax should recoup every dime of the $55 billion. Invested smartly in the green economy this would create nearly a million jobs and the ROI could generate new value for years in renewable, clean energy production. This demand surely has to find support among the working class and give workers insight into real solutions to reviving the economy.

Corporate accountability. End the secrecy--open the books for public inspection

The economic catastrophe visited on the nation and workers demands a systematic, public review of the financial condition of select companies. The work of Federal bank examiners, SEC staff and other regulator bodies should be open and public and be reviewed by independent auditors that have no governmental associations. Corporate objections to public accountability based on their need to protect trade and marketing secrets from competitors should no longer be tolerated. Americans are outraged at what has taken place and demands for public accountability have been far too timid. The public and even many members of Congress still do not know what happened. This demand should include public inspection of private equity firms as well where billions of pension funds are invested.

Set immediate cap on usurious interest rates for credit cards and reduce banking fees.

We bailed out the banks and they are still are still charging Americans criminal interest rates and late fees. What kind of thanks is this? It has become too easy for the wealthy and owners of large pools of capital to make high profits on interest and this is a disincentive for them to invest in manufacturing where profits are often lower. Credit will not dry up as bankers will claim, in fact banks and credit card companies have themselves tightened credit to shore up balance sheets and prevent further losses. So much so that credit worthy businesses cannot access to expand. The banking industry’s position is hypocritical.

Foreclosures

Over 1.5 million American homes have already been lost to foreclosure and another two million loans are delinquent. Raising a demand now to stop foreclosures would create the problem of an arbitrary divide between winners and losers, so to legislate an advanced demand is difficult. However, more aggressive demands could be proposed based on recent reports by several investment banks that show a possibility of 8 – 13 million foreclosures in the next five years. Some liberal solutions such as Congress allowing homeowners to seek judicial review and relief are worth supporting. Yet, raising an advanced solution in anticipation of another crisis or if this one were to suddenly deepen (as suggested by the above reports) might work as an educational and organizing tool. Perhaps something along the lines of the British model where the government temporarily pays the mortgage of the long-term unemployed during an economic crisis. Such a demand squarely raises the question of who is responsible—homeowners, or those who caused the crisis, fudged the rules and exploited people? This issue is also a good way to explain the cyclical nature of the system and why mortgage programs like Britain’s are reasonable working class demands. Like unemployment benefits, a mortgage system like Britain’s recognizes that an economic crisis is a failure of the system not the individual.

There is plenty of money!

The first question almost any American will ask about these solutions is how will we pay for it when the government is already has a huge deficit? We need to effectively communicate information such as the following as sources for investment capital. From 2000 to 2006 the after tax profits of U.S. corporations averaged $822 billion. And this is what is remains after the private jets have been discounted, extravagant legal fees paid, billions in bonuses, tens of millions in lobbying expenses, CEO salaries and $5,000 per night business suites rented. Or, that in 2004 the top 20 percent accrued 58 percent of the total income and the top 1 percent 17 percent. But beyond these macro numbers, people will expect social change agents to have sound ideas on how to pay for new social benefits and job creation programs. And it is via this type of communication we can best refute the lie that the nation is broke and cannot afford social progress.