Someone Tell Paul Ryan

How the Pie is Sliced

When Paul Ryan appears in Dover NH tomorrow morning (11 am at the McConnell Center), someone should tell him about a new report from the Congressional Research Service, a non-partisan arm of the Library of Congress, on the impact of tax cuts.

In a report released Friday, September 14, Thomas L. Hungerford analyzed the changes in the top tax rates in relationship to GDP growth. 

Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%.

Before you tax-and-spenders out there conclude that high taxes produce faster growth, read on:

There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.

So do changes in the tax rates of people at the top of the income ladder make any difference whatsoever?  Well, yes.  Hungerford concludes:

The top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution….    The evidence does not suggest necessarily a relationship between tax policy with regard to the top tax rates and the size of the economic pie, but there may be a relationship to how the economic pie is sliced.

On this anniversary of the beginning of the Occupy Wall Street protests, this report provides more evidence that the government is working well for the 1%.  So if you get a chance to chat with Paul Ryan tomorrow, ask him if he’s had a chance to read the new CRS study and if it changes his views.

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Notes from an Occupy Trial; Could a Curfew Violation be Ruled a Constitutionally Protected Revolutionary Act?

I admit I have not read all the works of all the great revolutionaries and I may have forgotten most of what I have read. But I can’t recall Lenin, Mao, Gandhi, Che, Paine, Fanon, or Dellinger identifying violation of a municipal curfew as an important revolutionary tactic.  Barbara Deming makes no mention of curfews in “Revolution and Equilibrium.”  I don’t think Dorothy Day was ever busted for being out late after 11 pm. “Curfew violation” isn’t even on Gene Sharp’s famous list of 198 methods of nonviolent action (though I suppose it could be a sub-set of method 137, “refusal of an assemblage or meeting to disperse”). So the June 22 hearing at Manchester  District Court could prove to be historic.

At issue was the claim of 15 Occupy NH activists that the “right to revolution” expressed in the State Constitution gave them the right — and the obligation — to violate Manchester’s city curfew last October. With the legal leadership of Barbara Keshen, staff attorney for the NH Civil Liberties Union, they made a good case.

The facts of the case are not in dispute. After several days in which Occupy activists maintained an encampment in Manchester’s Victory Park they were told by police that the City would insist on enforcing its curfew ordinance, which calls for parks to be empty of human persons between the hours of 11 pm and 7 am. On October 19, they shifted their encampment to Veterans Park, a more visible location a few blocks away. At 11 pm, police warned the activists they would be cited for violating the curfew if they refused to leave. Most of the people in the park (including me) scurried to the outside of the fence on Merrimack Street. Most of those who remained were given a summons for the curfew violation and left the park on their own steam. The few who still refused to leave were placed under arrest, charged with trespass in addition to the curfew violation, and taken to the Manchester Police Station. (See my earlier posts for details.)

The Right to Revolution

What is in dispute is whether Constitutional protections of speech and assembly trump the curfew. Also in dispute is whether Part One, Article Ten of the New Hampshire Constitution, titled “Right to Revolution,” has any bearing.

Article Ten states:

“Government being instituted for the common benefit, protection, and security, of the whole community, and not for the private interest or emolument of any one man, family, or class of men; therefore, whenever the ends of government are perverted, and public liberty manifestly endangered, and all other means of redress are ineffectual, the people may, and of right ought to reform the old, or establish a new government. The doctrine of nonresistance against arbitrary power, and oppression, is absurd, slavish, and destructive of the good and happiness of mankind.”

Once we’ve verified that “emolument” means what we think it means, it’s not hard to make the case that government is serving the private interests of a class of men, that the ends of government have been perverted, that public liberty is long past being at risk, and that conventional means of redress haven’t been all that effective, our own Constitution is telling us it’s time for action.

Defendants Will Hopkins and Matt Lawrence both testified that they have felt unable to influence government through conventional methods. Hopkins, director at NH Peace Action, explained that months of persistent work can go into getting a brief, inconsequential meeting with one of our US Senators. Occupiers are diverse in age and ideology, he said, but share the view that “we no longer have a way to seek redress of our grievances.”

Lawrence said much the same thing, while explaining how the Occupy encampment was set up to house, clothe, and feed everyone who showed up and give voice to all who wanted to participate. “I have an issue with a government that makes it possible for some people to make a ton of money while others are living in squalor,” he told John Blanchard, a Manchester prosecutor, during cross examination.

The hearing’s most dramatic movement was the introduction of proof that the Occupiers were familiar with Article Ten and in fact quite enthusiastic about it. Seth Cohn, a State Representative who identifies with both Occupy and with the Tea Party, participated in the Occupy demonstrations last fall.  On the witness stand, Cohn explained that he had read the relevant constitutional passage during a Veterans Park General Assembly at which the “people’s mic” was being used as a means for sound amplification. Without objection from the prosecution, Kersten Cornell, a UNH law student doing an internship with the NH CLU, set up a laptop and video projector and popped in a DVD. Soon everyone in the courtroom could hear Rep. Cohn shouting out a few words at a time from Article Ten with the whole crowd repeating the words in unison. (It was hard to resist joining in, but I was pretty sure Judge Lyons would not approve.)  At the end everyone cheered. Or as Cohn understated on the witness stand, “there was general agreement with that statement.”

The DVD was admitted as Defense Exhibit E.

Cohn also testified that it’s not just the federal government that is held captive to  moneyed interests. After a two-year term as a State Rep (one of mine, in fact), he said that state government may appear to be accessible to citizens, but that’s because the “influence that happens because of lobbyists is invisible.” Lobbyists, of course, work for organizations and businesses that can pay them. “Ninety percent of what goes on behind the scenes is about money,” he explained.

Law Professor Speaks about Perversion (of government)

 Jim Pope

Once the defense overcame prosecutors objections to his qualification as an expert witness, Jim Pope, a Rutgers University Law Professor, took the stand to make the case that the ends of government have been perverted in the interest of the rich. Using a set of slides familiar to anyone who’s been following discussions of the growing gap between the rich and everyone else, Pope illustrated the nation’s widening income gap, the change in the top marginal tax rate, the recent drop in union membership, and the share of national income claimed by the wealthiest 10% of Americans.

“Are the ends of government perverted?” Attorney Keshen asked.

“There is a gigantic shift in that direction over the last thirty years or so,” the professor responded. “Workers are getting a smaller and smaller proportion of the proceeds of industry,” he added a bit later.

“Is public liberty manifestly endangered?” Keshen asked.

“Public liberty is endangered because of the influence of money on politics,” Pope responded.

It’s not that lobbyists and contributors directly buy votes, he explained. But members of Congress spend 30% of their time raising campaign funds, he said. That means they are calling up rich people on the phone while their constituents futilely try to get their grievances redressed. And there’s little doubt that fundraising has to weigh on them during the 70% of their time they are supposed to be doing the people’s business. It’s “a pervasive kind of influence,” Pope testified.

Pope’s real area of expertise is not economics; he has studied the impact of social movements on the law. American history, he said, has seen a series of major “republican moments” (note the lower case “r”) in which people have risen up to challenge a legally protected status quo. Major examples he cited were the American Revolution, the Jacksonian period, the Civil War and Reconstruction, the Populists, the New Deal, and the Sixties.

During normal times, he said, most people stay out of politics and governments are dominated by elites. But “increasingly the citizenry begins to feel frustrated,” and eventually something happens that ignites a passionate form of politics unlike business as usual. When large numbers of people are drawn into politics and “ordinary people are doing things that are extraordinary,” that’s a “republican moment.”

Pope outlined five features of a republican moment:

1. Unlike normal times, large numbers of people engage in serious political discourse;
2. Arguments are moral rather than “pecuniary,” based on the common good, not private interest;
3. The subjects of debate are fundamental;
4. Representative politics is overshadowed by direct participation; and
5. Social movements displace political parties and interest groups as the most powerful actors.

Citing sit-down strikes and sit-ins of earlier periods, Pope said “occupying spaces is exactly the kind of protest tactic that this kind of movement traditionally uses.” Without commenting on how Article Ten should be interpreted (a topic the Judge had made clear was beyond the expertise Pope was entitled to draw upon), the professor reminded the court that Article Ten came from the generation which escalated its protests from peaceful petitions and boycotts to outright armed struggle.

“Is the reason to make sure power resides in the people?” Keshen asked.

Pope agreed.

I was the final witness and I didn’t take notes, so I don’t remember exactly what I said. But I did enjoy the prosecutor’s question about whether Occupy activists had marched to Mitt Romney’s campaign HQ in Manchester. I explained that this had occurred, that Romney was there, and that the activists had invited him to attend the General Assembly.  (He declined.)  I also affirmed that I delivered a bit of a pep talk about nonviolence and civil disobedience just at the police were moving into the park at 11 pm on October 19.  A set of my photos, which appeared on this blog, was introduced as evidence by the defense. 

Judge Lyons has given both parties ten days to submit legal memos. From their lines of questioning, I expect prosecutors to make a case that Occupy protesters had not exhausted their means of redress and in fact were engaged in all sorts of other actions to make their voices heard. In other words, a presence in the park between the hours of 11 pm and 7 am was not essential. The defense will presumably restate its argument that the 24-hour occupation, along with the principles of direct democracy, is a fundamental part of the social transformation sought by the occupiers, and is therefore in need of Constitutional protection.

I would not count on Judge Lyons to rule for the defense. But the defendants and their attorney are determined to take their case up the legal chain. By the time it’s over, we could see the NH Supreme Court rule that the constitutional right to revolution protects the Occupiers desire to be in a public park after curfew.

(Thanks to Kersten Cornell for the photo of me.) 

IYou can also read coverage of yesterday’s hearing in the Concord Monitor and NH Union Leader, and view a story from WMUR TV.)

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Inequality Matters

When Chuck Collins started United for a Fair Economy (originally called “Share the Wealth”) in the 1990s, some economists denied that economic inequality was growing.  That debate is over.  Speaking in Manchester May 29, Collins said the debate is now whether inequality matters and what can be done about it.

Here’s the short answer:

Inequality matters.

The trends which increased inequality are reversible.

We are in “a new period of extreme inequality,” Collins told more than 80 people at the Unitarian Universalist Church of Manchester, and it’s “trashing all that we care about.”  It’s not jut that some people are poor and some are rich, but that the growing gap leads to a breakdown in social solidarity as the wealthy stop investing in the social infrastructure .  Our children, our health, our culture, our environment, and our democracy all suffer.  

Collins outlines the problem and some solutions in his new book, 99 to 1: How Wealth Inequality is Wrecking the World and What We Can Do About It.  The prescription has three basic components:  invest in opportunity, raise the floor, and tax wealthy people and the corporations they own.  

While the 99 to 1 framework is a tad simplistic, he said, trade and tax policies really have been changed to benefit the wealthiest Americans at the expense of everyone else.  

As the great-grandson of Oscar Mayer (yes, that Oscar Mayer), Collins knows a thing or two about the 1%, including his former schoolmate Mitt Romney.   In addition to development of creative educational techniques to demystify economic issues, Collins has also worked to find allies for change within the ranks of the wealthy. 

A Q&A session that could have gone on much longer touched off an important discussion about whether solutions can emerge from the existing political system.    Collins is not ready to throw out lobbying or electoral politics, but sees the greatest potential in social movements made up of small groups of like-minded people working together on common projects.  He reminded the audience that Gandhi based his program not only on mass nonviolent resistance but also on the “constructive program.”

“Exercise your democracy muscles each day,” he said.

Collins’ talk was sponsored by the UU Church of Manchester, the American Friends Service Committee, Granite State Priorities, Occupy Manchester, NH Citizens Alliance, and the Granite State Organizing Project.  

 

Occupy activists posed with Chuck after the talk.

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“a neo-plutocracy beyond democratic control”

Robert Borosage has a good column on Huffington Post today with useful facts about CEO pay and middle class wage stagnation (tied to declining union density) as the major causes of widening inequality. He makes reference to another piece by Harold Meyerson, who quotes recent studies by Emmual Saez (on how the richest Americans are recovering from the Great Recession) and the Center for American Progress (on the link between union membership and middle class status).

Here’s a few excerpts and the links:

Robert Borosage, “The 1% Stike Back”

“In 2010, as the economy began its slow recovery from the Great Recession, a new study shows the richest 1% of Americans captured a staggering 93% of all income growth, while the incomes of most Americans stagnated. 93%. Occupy that. The 1% are back.”

http://www.huffingtonpost.com/robert-l-borosage/the-1-strike-back_b_1387846.html

 

Harold Meyerson, “The Rich are Different, the Get Richer”

“While never putting a premium on economic equality, America has always prided itself on being the preeminent land of economic opportunity. If all of this nation’s wealth is captured by a narrow stratum of the very rich, however, that claim is relegated to history’s dustbin.”

http://www.washingtonpost.com/opinions/concentrated-wealth-is-a-long-term-threat-to-america/2012/03/27/gIQAMJt1eS_story.html

Emmanual Saez, “Striking it Richer: The Evolution of Top Incomes in the United States”

“[B]ased on the US historical record, falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back. Such policy changes took place after the Great Depression during the New Deal and permanently reduced income concentration until the 1970s. In contrast, recent downturns, such as the 2001 recession, lead to only very temporary drops in income concentration.”

http://elsa.berkeley.edu/~saez/saez-UStopincomes-2010.pdf

David Madland and Nick Bunker, Center for American Progress, “Unions Make Democracy Work for the Middle Class”

“As our research and a number of academic studies find,2 unions strengthen the middle class and significantly reduce economic inequality. In fact studies indicate that the decline in union density explains as much of today’s record level of inequality as does the increasing economic return of a college education.
Most research on the importance of unions to the middle class tends to focus on how unions improve market wages for both union and nonunion workers.4 This research is no doubt vital, but it gives short shrift to the critical role unions play in making democracy work for the middle class.
Unions help boost political participation among ordinary citizens—especially among members, but also among nonunion members.”

http://www.americanprogressaction.org/issues/2012/01/pdf/unions_middleclass.pdf

And by the way, the “neo-plutocracy” quote comes from Harold Meyerson.  

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Call it Math, Not Envy

If Americans are upset about the growing gap between the ultra-rich and everyone else, maybe it proves we’re not mathematics-deficient after all. 

"The rise in inequality in the United States over the last three decades has reached the point that inequality in incomes is causing an unhealthy division in opportunities, and is a threat to our economic growth. Restoring a greater degree of fairness to the U.S. job market would be good for businesses, good for the economy, and good for the country."

Alan B. Krueger, President Obama’s Chairman of the Council of Economic Advisers, January 12, 2012

from the NY Times, January 12, 2012

http://graphics8.nytimes.com/images/2012/01/12/opinion/011212krugman1/011212krugman1-blog480.jpg

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