Democratic Socialism: Old Midcoast ideas are new again

By Susan Reider | Apr 04, 2019

This just in: If the federal minimum wage had kept pace with Wall Street bonuses since 1985, the minimum wage would now be $33.51 per hour.

This is just another example of the rampant income inequality that’s destroying American society. Our life expectancy is shorter, our wages are stagnant, our infrastructure is crumbling (as anyone who has driven through Rockland knows), our oceans are warming at an alarming rate, Big Pharma is spreading opioid addiction and death, and the right tells us to blame immigrants for everything we don’t like about our lives. Maine’s economic forecast looks grim and there don’t seem to be any answers.

We’re like the frog in the pot of boiling water that fell in when it was still cool and didn’t realize what was happening until it was too late.

Living in beautiful Midcoast Maine, it’s easy to look away from our problems. What problems, you ask? According to the latest U.S. census figures, the median income in Rockland is $42,804 — $15,000 less than the national average. Meanwhile, 21 per cent of renters in Knox County pay half or more of their household income for rent. And there’s this: 40 percent to 57 percent of children in Knox and Lincoln county schools are eligible for free and reduced-price school lunches, and in some Waldo County schools eligibility reaches 85 percent.

It’s not that Mainers don’t want to work. According to the Good Shepherd Food Bank in Auburn, nearly two-thirds of its clients held a job in the previous 12 months. They are the working poor who can no longer make ends meet with seasonal or minimum-wage jobs.

The water’s getting hotter in more ways than one. Not since the Gilded Age have we seen such rampant greed and distortion of what many of us believed were inherent American values: liberty and justice for all; all people created equal; life, liberty and the pursuit of happiness.

It’s worth noting that the last time things got this bad, people in the Midcoast stood up. The Grange, founded in 1873 after a panic crippled small farms, fought for women’s suffrage, better education, a curb on the power of railroads, and a graduated federal income tax, among other things. The Knights of Labor organized in Warren in 1886 and was strong in Rockland. The Populist Party of Maine was formed in 1891. The Socialist Party of Maine, formed in 1900, ran Norman Wallace Lermond of Thomaston for governor. According to Maine’s foremost labor historian, Charles A. Scontras, “Knox County (was a) nursery of reform movements … in the latter half of the 19th century.”

The vision of a better society offered by progressives, socialists, Marxists and all stripes in between has survived since the Gilded Age. We fought for voting rights, child labor laws, better working conditions and labor standards, the GI Bill, Medicare and Social Security, and environmental protection.

But look how easy it’s been to undo those achievements. Voting rights are threatened. Medicare and Social Security are under attack. Environmental regulations are being rolled back because they might affect the bottom line of major campaign contributors. The Supreme Court has decided that corporations are people and money is speech. Oh, and the earth’s atmosphere is being destroyed.

It’s time for a Green New Deal. We need to break the stranglehold of political and economic elites who now control almost every aspect of our lives. We need to restructure the things that aren’t working in our society, because Big Money has taken over our government, legal system, natural resources and other public goods. And then we can take back the obscene salaries and bonuses the rich give themselves, and the waste that the military industrial complex generates, and use that wealth for the common good. We have to stop listening to the lies about why we can’t have good schools, good health care, good jobs — things that only the rich can now afford.

In the coming weeks, my friends and colleagues will offer a range of Democratic Socialist perspectives about how these things can happen. We’ll write about the Green New Deal and other pressing issues. We’d like to hear from you at dsa.midcoastmaine@gmail.com.

 

Comments (12)
Posted by: Ronald Horvath | Apr 11, 2019 10:59

Unfortunately, Ken, CEOs rarely reap the consequences of their actions, or lack there of.  They have the system rigged before they ever take over to award them their obscene bonuses whether successful or not.  They're rewarded  mostly for punishing those lower on the corporate ladder, like the common workers who lose their jobs, health care, and pensions.

"This is American capitalism at work. In 2017, GM workers in Ohio made $117 million in concessions to the company to keep plant in Lordstown open. In 2018, GM then reaped more than $157 million from Trump and Republicans' corporate tax cuts. But this year, company executives closed the Lordstown plant, causing massive layoffs.

The same year GM workers made their concessions, GM CEO Mary Barra took home $22 million in compensation. Once again, top executives benefit from generous corporate socialism, while American workers get subjected to harsh capitalism."
https://www.latimes.com/business/la-fi-hy-general-motors-lordstown-ohio-union-20190329-story.html?fbclid=IwAR0SVsqpoTioCyP2Wgn2vYEajNmg5WXAS_s_3xyiazlMBvfGXYCWtVns7Hk


"The money that's now going towards stock buybacks and CEO compensation packages has to come from somewhere, and it's coming straight off the backs of everyday working Americans.

 

Even though workers are now more productive than ever, wages have stagnated since the Reagan era.

 

CEOs are quite literally sucking up the profits that used to be shared more equally between management and workers.” http://www.truth-out.org/opinion/item/32102-who-does-our-economy-serve

And, of course, there's always the Hostess fiasco.

"-In 2004, Hostess files bankruptcy. Workers concede $110 million in yearly wage and benefit cuts to help restore company.

-During the same period, CEO compensation is increased from $750,000 to $2,550,000.

-15 months ago, Hostess stops contributing to employee retirement plan, contrary to legal agreement.

-In 2011, Hostess declares bankruptcy once again, demands a 32% cut in wages and benefits, bringing majority of workers bellow poverty threshold, threatens to close 9 facilities.

-Workers refuse accept most recent pay cuts.

-In bankruptcy court documents filed in March 2012, it is revealed that company's failure is not due to labor costs, instead points out these findings:

-years of underinvestment in products, facilities, & equipment

-long term neglect of brand

-failure of distribution system

-failure to innovate and create new products

-half of competitors operate with equal or higher labor costs

-lack of management accountability.

Now someone explain to me how it was the striking workers that caused this?”

-https://www.facebook.com/StephOnTheLeft

 

Fortunately they're fooling no one.

 

"In response to 80 CEOS recently publishing a letter on the Wall Street Journal lecturing America about deficit reduction and urging them to “act on the deficit and reform Medicare and Medicare,” Sanders had the following to say:

'There really is no shame. The Wall Street leaders whose recklessness and illegal behavior caused this terrible recession are now lecturing the American people on the need for courage to deal with the nation’s finances and deficit crisis. Before telling us why we should cut Social Security, Medicare and other vitally important programs, these CEOs might want to take a hard look at their responsibility for causing the deficit and this terrible recession.'

Our Wall Street friends might also want to show some courage of their own by suggesting that the wealthiest people in this country, like them, start paying their fair share of taxes. They might work to end the outrageous corporate loopholes, tax havens and outsourcing provisions that their lobbyists have littered throughout the tax code – contributing greatly to our deficit.

Many of the CEO’s who signed the deficit-reduction letter run corporations that evaded at least $34.5 billion in taxes by setting up more than 600 subsidiaries in the Cayman Islands and other offshore tax havens since 2008. As a result, at least a dozen of the companies avoided paying any federal income taxes in recent years, and even received more than $6.4 billion in tax refunds from the IRS since 2008.

Several of the companies received a total taxpayer bailout of more than $2.5 trillion from the Federal Reserve and the Treasury Department.

Many of the companies also have outsourced hundreds of thousands of American jobs to China and other low wage countries, forcing their workers to receive unemployment insurance and other federal benefits. In other words, these are some of the same people who have significantly caused the deficit to explode over the last four years."
http://www.mintpressnews.com/18-ceos-called-out-by-bernie-sanders-for-taking-trillions-in-bailouts-evading-taxes-and-outsourcing-jobs/210658/

 

Sounds like "unfettered" capitalism, doesn't it.  Time to put on some "fetters?"



Posted by: Kenneth W Hall | Apr 11, 2019 08:00

Don't forget that cigarettes, beer and drugs are purchased before health care!  Who are we to dictate where someone else spends their money?  How much do we pay the robots whom will be taking those minimum wage positions?

 

Making predictions IS tricky!  Predicting for the farmer is just as risky as the prediction of the CEO of Solyndra or Enron.   Just as predicting for the CEO of  Paine Webber, Eastern Airlines, E. F. Hutton......remember that one?  When EF Hutton talks people listen.   Predictions are why the CEO's make the big bucks.  The above companies CEO's made the wrong predictions of the way the world would grow.  How much money are those companies CEO's making now on their stock option packages?  How much are the people that invested in those companies making on dividends while their income is now fixed?

 



Posted by: Ronald Horvath | Apr 11, 2019 06:51

Making predictions is always tricky, Ken.  Ask any farmer how next year is going to turn out.  The element of the unexpected is always there whether you're the CEO of a large company or a small business buying inventory for the coming season.  The best answer is that you do the best you can.

 

And what's killing some big box stores is online shopping.  Running down to the neighborhood store is simple and quicker than running out to the mall or shopping center but sitting down at your computer and letting it do the shopping for you while your purchase is brought to your door is simpler still.  Convenience wins in the end.  What that will mean for the entire economy is anybody's prediction.  One thing is certain, people need money -even surplus income- to buy anything anywhere and if they have to spend it all on rent and food -don't even mention health care- then few of them will be shopping for anything.



Posted by: Kenneth W Hall | Apr 10, 2019 22:48

Yes Ron,  it makes sense to give the fixed income more money.  How would that be calculated?  The increase currently is calculated from last years cost of living.  So the fixed income is always behind.  What is your proposal to correct that?

 

I can agree that those large corporations like Sears put all the small businesses in Belfast out of business.  The large corporations around and in the Bangor Mall are disappearing while the small independent business down town Bangor are flourishing.  Walmart is now down sizing their super stores to smaller sizes and chances are it may find the same path as KMart.  The Sears Roebuck catalog was the latest and greatest.  So much so Sears had reserves and diversified just like you said.  As Dr Phil says ...How's that working for them?

 

 

The fixed income does get increases but always lags behind.  How do you predict what their increase should be?  Do you agree with the sophomore's first job paying more?



Posted by: Ronald Horvath | Apr 10, 2019 14:47

Wouldn't it make sense to increase the "fixed income," Ken?  It's called a "cost of living" increase.  And if the minimum wage is increased wouldn't those workers have more money to spend in those same small businesses, more money to increase the local economy, and higher salaries to increase their tax contribution?  With that increased money in circulation wouldn't it seem foolish to raise prices unduly high and not be competitive for all those extra dollars in people's pockets?  That's the way the free market is supposed to work.  Corporations, however, have huge reserves of money from "diversified" sources with which to invade smaller communities and undercut those mom and pop businesses.  So it is that Wal-Mart can invade and conquer every small town, losing money for years if it has to, til finally winning the market and making it no longer "free" but captured leaving minumum wage people with few options to work or shop.  Is it any wonder that Dollar stores are the fasting growing retail business in the country right now, sinking even lower in their product line to attract customers.



Posted by: Kenneth W Hall | Apr 10, 2019 14:36

For example.......A hardware store pays a high school kid to stock shelves.  If the student wage goes up, the price of the nuts or bolts rise to off set the increase of wages.   The fixed income individual does not get an increase in Social Security until the following year.  The increase reflective of the cost of living.  So a continual increase in minimum wages just makes the nuts and bolts more expensive.  Minimum wage =$10 per hour the nuts and bots are a $1.  Minimum wage is $100 per hour the nuts and bolts are $10.  The small business man labor on his expense line is 10% in both cases.

Another example is the State of Maine and the tourist industry.  The restaurants run a specific labor cost.  What ever the minimum wage is, dictates what the selling price for what the meals are.  Raise the minimum wage, and the price of the meals increase.   The elderly, fixed income are punished from delayed cost of living increases only coming after the year has gone by.

 

What is a sophomore in high school worth per hour who has never worked before?  A person who is incapable of making change at a cash register.  How high do you wish to pay the inexperienced sophomore and punish the fixed income elderly?

 

Do we increase the fixed income pay as well or just make them suffer from the increase in prices?



Posted by: Kenneth W Hall | Apr 10, 2019 14:17

Was that a yes or a no, to harm the fixed income bracket?  The "big bad corporations" or so called, are far out numbered by small businesses that have a labor line on their expense page.  That labor is what ever the individual small business has budgeted in order to make a profit and stay in business.  If minimum wage is increased, the small businesses will increase their cost of goods sold.  Items become more expensive so the wages increase, however every fixed income individual will be punished and forced to choose.  Drugs, food, heat, or any other need the elderly must choose from.  That is why I wanted an answer to the simple question,

Do we increase the fixed income pay as well or just make them suffer from the increase in prices?



Posted by: Ronald Horvath | Apr 10, 2019 06:59

Ken, if wages in general had kept pace with the increase in prices since the seventies then the minimum wage would be $33 an hour.  But wages stagnated and prices increased anyway, along with outrageous profits for corporations.  Who did that hurt?  Who did it help?

 

Furthermore:

 

 

"Before Card and Krueger, most economists just assumed that raising the minimum wage leads to lower employment. But Card and Krueger realized that this was a proposition you can test. Their initial study compared employment in New Jersey and Pennsylvania before and after New Jersey raised its minimum wage. And they found no adverse effect on employment — if anything, a small rise in New Jersey relative to its neighbor.

 

This study opened a new frontier in economic research. Economics is always bedeviled by the lack of controlled experiments; there are so many things going on in the economy that it’s hard to tell what’s causing what. But unilateral state wage hikes amount to natural experiments that tell you far more than standard economic methods.

 

Furthermore, this was a method that could be replicated many times, and has been over the years, right up to the recent round of minimum wage increases in a number of cities. And the preponderance of the results have confirmed Card and Krueger’s initial finding: raising minimum wages has far less negative impact on jobs than standard economics would have predicted.

 

This has implications that go far beyond minimum wages themselves. What Card/Krueger and the research that follows tell us is that labor markets are a lot more complicated than we thought, that market power matters a lot, and that there may be much more room for public policy to raise wages in general than Econ 101 would have it."
https://outlook.live.com/mail/inbox/id/AQQkADAwATEwZGM3LTRjMzMALWUwOWMtMDACLTAwCgAQAFvijG9kTT5OlAZwn5jPMLg%3D



Posted by: Kenneth W Hall | Apr 09, 2019 20:58

Do we increase the fixed income pay as well or just make them suffer from the increase in prices?



Posted by: Ronald Horvath | Apr 08, 2019 11:47

"Socialism isn’t fundamentally about public ownership of private resources. It is about collective action in pursuit of common goals, where private action has destroyed or damaged the common good. It is demonized by concentrated private wealth precisely because it is so effective at redressing so many of the problems that concentrated private wealth has inflicted on society and the world."
https://www.commondreams.org/views/2019/04/05/capitalism-or-socialism-which-will-it-be?fbclid=IwAR3b7A1vVIP_2oos4r5dPiKdCAv6PbI0l7uN4hTf4C9iTDaWeGK8yMRUKME



Posted by: Robert M Rosenberg | Apr 06, 2019 07:43

Well put Susan. You too Ron.



Posted by: Ronald Horvath | Apr 05, 2019 07:21

Well said, Susan, and well written.  And in the words of one of the new generation of politicians:

 

"For what it's worth, I don't think expanding public imagination is a "new style."  It is a return to the Democratic party that went to the moon, passed the civil Rights Act, and strove for the great society.  It's the politics of courage vanquishing fear;  Aspiration over desperation."  


"When we talk about the word 'socialism,' I think what it really means is just democratic participation in our economic dignity and our economic, social, and racial dignity. It is about direct representation and people actually having power and a stake over their economic and social wellness, at the end of the day."


I'm not running "from the left."  I'm running from the bottom.  I'm running in fierce advocacy of working class Americans.  That's my North Star.  Always has been.  Always will be."

 

-Alexandria Ocasio-Cortez



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