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Forum Post: The War Against Income Inequality Loses One in Seattle

Posted 6 months ago on Jan. 6, 2014, 10:33 p.m. EST by WSmith (4187) from Cornelius, OR
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The Boeing vote and the death of the middle class

By Michael Hiltzik | LAT | January 6, 2014

Anyone following last Friday's epochal vote in Washington state on a union contract at Boeing could tell from the workers' comments in various forums that the key issue wasn't whether the contract was good or bad, or even whether Boeing was a good or bad company to work for.

The rank-and-file majority seemed to think that the contract stank. No one cared much for Boeing as an employer, either. The issue was whether Boeing was bluffing about moving a big new airliner construction program out of state if the contract vote failed. Those who thought the firm was bluffing voted against the deal; those who thought its threat was real voted "yes."

"Yes" took it, by a razor-thin majority of 51% to 49%. Supposedly this means that Boeing is committed to building its new 777X airliner in the Seattle area. But you probably won't lose money betting that the firm will find a way to outsource some of the work to non-union locales.

That brings us to the real impact of the contract vote, which is that it continues--even accelerates--the hollowing-out of America's once-thriving middle class.

Boeing executives maintained that major concessions were needed from the machinists' union to guarantee the 777X program for Seattle. They said the intense competition in the aircraft industry and price discounts demanded by customers made the givebacks essential.

But what's really happening is that Boeing, which is as financially healthy as it's been in years, is aggressively steering the fruits of its success to its executives and shareholders and shortchanging the workers who got it there.

Let's start at the bottom, with the contract. Actually, it's an eight-year extension to a pact that doesn't expire until 2016. Under its terms, Boeing will abandon its traditional defined-benefit pension plan, substituting an expanded 401(k). The old plan will be frozen, meaning that accruals to pension benefits from worker longevity and wages will shortly cease. (Pension values that workers have already earned they'll keep, as is required by federal law.)

As is true of all 401(k)-style defined contribution plans, the new system places more of the risk of retirement security on the workers, leaving the company largely risk-free. It will match employee contributions up to a certain level, but there's no guarantee that it won't seek to cut that commitment in the future.

The contract limits general pay increases to 1% every other year through 2023, outside of cost-of-living raises and a quality incentive program that could add up to 6% of pay, but could also yield nothing. And it shifts more of the cost of health insurance to the worker, raising deductibles and the workers' share of premiums. Workers who pay $66 a month for family coverage now will be paying $234 by the end of the contract.

Any way you cut it, the workers are getting squeezed. A Boeing machinist job, once the reliable foundation of a middle-class lifestyle, will be much less of one in the future. It won't be exactly hard time--with average pay about $70,000 "it's still one of the best deals you can get for a blue-collar worker without a college degree," observes Leon Grunberg, a labor relations expert at the University of Puget Sound--but it shrinks the workers' economic horizons considerably, especially for younger workers.

Most significant, Grunberg says, is Boeing's attack on the defined-benefit pension. These have been disappearing all over corporate America, but until now companies with strong unions haven't shared in the trend.

"This is a harbinger of what's going to happen in the unionized sector," Grunberg told me. Boeing thus achieved a double-barreled victory--it shed its pension obligations and made the union less relevant to its workers' lives with one stroke.

So if Boeing is gaining so muich with this deal, where are the gains going? The answer, as is true throughout corporate America, is to shareholders and executives. Under Chairman and Chief Executive James McNerney, who took over in 2005, the company has increased its dividend every year but one, from $1.05 to $2.92 in 2014. That's a total increase of 178%, including a huge bump of 51% this year alone.

At the same time, the company has authorized $17 billion in share buybacks. That's just another way of shoveling money out to shareholders, and surely accounts for a good portion of the company's handsome run-up in share price over the last year, when it has appreciated by more than 80%.

McNerney has done well by doing so good for his shareholders. In 2012, the last year reported by Boeing, he collected $27.5 million in cash, bonus, stock and option awards, and other pay. That was a 20% raise over the previous year, in which he got a roughly 16% raise over 2010. He must be a superman to be so uniquely responsible for the company's success--his 2012 pay was almost as much as that collected by the next three highest-paid members of his executive team combined. (CONTINUED:)

http://www.latimes.com/business/hiltzik/la-fi-mh-the-boeing-vote-20140106,0,6329457.story#ixzz2pg4HgX00

War on the Income Gap & Injustice: http://www.stltoday.com/news/opinion/columns/the-platform/editorial-so-damned-unfair-income-inequality-threatens-the-american-dream/article_5a5dceaf-0e15-598b-9343-19b64b09200b.html

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[-] 3 points by OccupyNews (1183) 6 months ago

Which is why there needs to be a MAIN STREET Stock Market that places stock value on companies that are part of a local economies infrastructure rather than how much profit is generated for the board.

A Main Street stock market could reward investors who actually keep their money in a stock rather than those who strategically make multiple transactions per week, even per day.

[-] 1 points by WSmith (4187) from Cornelius, OR 6 months ago

Absolutely!

At the height (or depth) of the WS Inside Job and the Hank Paulson rush to Bailout, a bunch of us dissidents petitioned, mercilessly, MSM and Congress to liquify WS assets (to pay off their gambling debts and protect American's investments) and move there offices into Main St. strip malls with onsite auditors and armed military guards, to protect against further Bankster malfeasance. And make Ralph Nader a Special Prosecutor to round up and convict the cabal of criminal Banksters and Congressional & Bush Administration Comrades.

The lesson here is control. These bastards learned from the Raygun Years that laws that could throw them in prison could not stand (more Banksters and rotten (R) politicians were prosecuted and convicted during and after the Raygun Reign of Shock Doctrine than with any other Administration). So they discouraged Voters, bought our government, planted their moles and changed the laws. Massive Voter participation is the only cure for this pervasively metastasized disease in our government and politics. Never give up, this is doable, and IMPERATIVE.

[-] 2 points by OccupyNews (1183) 6 months ago

As usual, I am ok with compromise. Think of it as a check and balance stock market system. Each state no matter what size gets two senators. Each state based on population gets a certain amount of representatives.

In this instance, keep Wall Street, I just want an ALTERNATIVE. And if an alternative were to exist, suddenly the individual news reporter would have the ability to contrast ethical behavior vs unethical behavior.

[-] 0 points by WSmith (4187) from Cornelius, OR 6 months ago

Boeing is a Greedy, Freeloading Corporation That Screws American Taxpayers and Workers

The aerospace company makes out like a bandit while sucking the lifeblood from the real economy.

December 11, 2013 | By Kenneth Thomas

Boeing is America's Most Wanted Corporation in two senses. First, now that the Machinists' union in Washington state has refused the company's contract demands, it is shopping production (h/t Pacific Northwest Inlander) of the 777x aircraft nationwide and lots of states are making offers for it. Second, it is emblematic of everything the 1% is doing to destroy the middle class: despite being highly profitable, it pays virtually no taxes; it accepts billions of dollars in government subsidies; it is trying to eliminate pensions and cut salaries for its highly skilled workforce; and it is trying to move production away from its unionized workforce, something it has already accomplished in part.

The first part of the story is nauseating enough. With Boeing already threatening to leave its home in Washington state if it didn't get what it wanted from both the state and the union, Democratic governor Jay Inslee called a special session of the state legislature that took three days to approve subsidies for Boeing. The incentive package is the largest ever in U.S. history for a single company, according to Greg LeRoy of Good Jobs First, an astounding $8.7 billion over 16 years (2025-2040). By my own back-of-the-envelope calculations, this looks to be the largest-ever U.S. subsidy on a present value basis as well as in nominal terms.

By the way, this represents a huge jump from Boeing's current tax break package for the 787 Dreamliner, passed in 2003, which was $160 million a year for 20 years ($2.0 billion in present value, by my calculations). Under the new package, this would more than triple to $543 million annually.

Also of note, the World Trade Organization ruled that the 2003 subsidies are illegal under WTO rules, a finding that was upheld by the WTO's Appellate Body in April 2012. While the U.S. government has eliminated some of the illegal subsidies provided by NASA and the Defense Department, the state and local subsidies found to be in violation of the WTO's Agreement on Subsidies and Countervailing Measures have not been eliminated. As noted in the last source, the European Union was seeking permission from the WTO to apply $12 billion worth of sanctions on U.S. exports. The EU will certainly file a new complaint against whatever state and local subsidies Boeing ultimately receives for the 777x, and on the basis of the last case there is every reason to think the EU would again prevail.

But just days after the legislature approved the subsidy, the union rejected the proposed contract by a 2-1 margin. Though the company described it as a "contract extension," there were major changes involved, including replacing the defined benefit pension with a 401(k) (continuing an economy-wide trend contributing to the coming middle-class retirement crisis), increased health care costs for employees, a lower wage structure for new hires, and smaller raises than in the current contract, all in exchange for a one-time bonus of $10,000 for current workers.

After the contract offer rejection, Boeing announced that it would entertain offers from 15 states that might be interested, including Washington state. The proposals were due in less than a month, with the company imposing a December 10 deadline on prospective suitors. As Good Jobs First reported in its January 2013 publication, The Job-Creation Shell Game, we see a two-sided use of the corporate mobility conferred by a location decision to (as I like to describe it) extract economic rents (superprofits) from governments: Job blackmail directed at Washington state and the Machinists' union; combined with an offer to the other 14 states to engage in job piracy by subsidizing the firm's potential relocation. This is an exercise in raw corporate power.

And to what end? We have already seen the details on how Boeing wants to terminate true pensions, reduce other worker benefits, and create a two-tier employment structure. As Greg LeRoy highlights in a recent post, Citizens for Tax Justice has shown that over the decade 2003-2012, Boeing made $35 billion in pre-tax U.S. profits, yet paid negative tax to Washington state of $96 million and a whopping $1.8 billion in federal income tax refunds over that same period! To put the new deal in perspective, LeRoy points out that should it eventually be approved, the $543 million annual subsidy would be "more than twice what the state provides to the University of Washington." So not only are the labor provisions a direct assault on middle class living standards and retirement security, the opportunity cost of the deal will no doubt further imperil public education in Washington at all levels, undermining one of the very factors that gives the state a trained workforce that is attractive to employers in the first place.

Boeing has already shown its willingness to move work away from Washington state, when it built a 787 Dreamliner assembly line in South Carolina despite the billions in subsidies it received from Washington. However, the South Carolina site has been plagued with production problems, which some see as strengthening the bargaining position of the Machinists in Washington.

Personally, I tend to believe that the Machinists do have a strong negotiating position. It is hard to imagine other states coming up with some 20,000 highly skilled workers to take on the job. While I think it is possible that part of the production could be moved away from Washington state, for instance the wing assembly only, I think the company will have to leave most of the work in Washington. Moreover, Boeing only gets the $8.7 billion in tax breaks if it produces the entire project there. Missouri, by contrast, has only offered $1.7 billion in subsidies to attract the facility, which I consider to be unlikely to be successful because Boeing workers in St. Louis are also Machinist union members. But really, there is no way to tell for sure whether the company's desire to weaken the union will overwhelm what looks like a compelling case for staying in Washington.

We do know, however, that Boeing is displaying everything that is wrong with corporate America today. As I wrote recently, there needs to be a federal law against states providing subsidies to move existing jobs out of another state. Banning job piracy would also weaken companies' ability to engage in job blackmail by reducing the economic viability of actually relocating to another state. With Boeing's auction sure to set a new standard in the annals of job blackmail, the sooner we can get action on relocation subsidies, the better.

Thomas is Professor of Political Science, University of Missouri-St. Louis. Author of Competing for Capital: Europe and North America in a Global Era (Georgetown University Press, 2000) and Investment Incentives and the Global Competition for Capital (Palgrave, 2011).

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[-] 1 points by LeoYo (5843) 6 months ago

Private business is not in business for the benefit of the workers...nor should it be. If workers ever want to have fair pay and benefits for themselves, they're going to have to engage in the process of forming their own cooperative businesses and voting on local initiatives to limit the abusive power of corporations.

http://occupywallst.org/forum/the-cooperative-union/

Things will never change until they do.

[-] 2 points by LeoYo (5843) 6 months ago

Noam Chomsky | What Is the Common Good?

Tuesday, 07 January 2014 10:41 By Noam Chomsky, Truthout | Op-Ed

http://truth-out.org/opinion/item/21070-noam-chomsky-what-is-the-common-good

This article is adapted from a Dewey Lecture by Noam Chomsky at Columbia University in New York on Dec. 6, 2013.

Humans are social beings, and the kind of creature that a person becomes depends crucially on the social, cultural and institutional circumstances of his life.

We are therefore led to inquire into the social arrangements that are conducive to people's rights and welfare, and to fulfilling their just aspirations - in brief, the common good.

For perspective I'd like to invoke what seem to me virtual truisms. They relate to an interesting category of ethical principles: those that are not only universal, in that they are virtually always professed, but also doubly universal, in that at the same time they are almost universally rejected in practice.

These range from very general principles, such as the truism that we should apply to ourselves the same standards we do to others (if not harsher ones), to more specific doctrines, such as a dedication to promoting democracy and human rights, which is proclaimed almost universally, even by the worst monsters - though the actual record is grim, across the spectrum.

A good place to start is with John Stuart Mill's classic "On Liberty." Its epigraph formulates "The grand, leading principle, towards which every argument unfolded in these pages directly converges: the absolute and essential importance of human development in its richest diversity."

The words are quoted from Wilhelm von Humboldt, a founder of classical liberalism. It follows that institutions that constrain such development are illegitimate, unless they can somehow justify themselves.

Concern for the common good should impel us to find ways to cultivate human development in its richest diversity.

Adam Smith, another Enlightenment thinker with similar views, felt that it shouldn't be too difficult to institute humane policies. In his "Theory of Moral Sentiments" he observed that "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it."

Smith acknowledges the power of what he calls the "vile maxim of the masters of mankind": "All for ourselves, and nothing for other people." But the more benign "original passions of human nature" might compensate for that pathology.

Classical liberalism shipwrecked on the shoals of capitalism, but its humanistic commitments and aspirations didn't die. Rudolf Rocker, a 20th-century anarchist thinker and activist, reiterated similar ideas.

Rocker described what he calls "a definite trend in the historic development of mankind" that strives for "the free unhindered unfolding of all the individual and social forces in life."

Rocker was outlining an anarchist tradition culminating in anarcho-syndicalism - in European terms, a variety of "libertarian socialism."

This brand of socialism, he held, doesn't depict "a fixed, self-enclosed social system" with a definite answer to all the multifarious questions and problems of human life, but rather a trend in human development that strives to attain Enlightenment ideals.

So understood, anarchism is part of a broader range of libertarian socialist thought and action that includes the practical achievements of revolutionary Spain in 1936; reaches further to worker-owned enterprises spreading today in the American rust belt, in northern Mexico, in Egypt, and many other countries, most extensively in the Basque country in Spain; and encompasses the many cooperative movements around the world and a good part of feminist and civil and human rights initiatives.

This broad tendency in human development seeks to identify structures of hierarchy, authority and domination that constrain human development, and then subject them to a very reasonable challenge: Justify yourself.

If these structures can't meet that challenge, they should be dismantled - and, anarchists believe, "refashioned from below," as commentator Nathan Schneider observes.

In part this sounds like truism: Why should anyone defend illegitimate structures and institutions? But truisms at least have the merit of being true, which distinguishes them from a good deal of political discourse. And I think they provide useful stepping stones to finding the common good.

For Rocker, "the problem that is set for our time is that of freeing man from the curse of economic exploitation and political and social enslavement."

It should be noted that the American brand of libertarianism differs sharply from the libertarian tradition, accepting and indeed advocating the subordination of working people to the masters of the economy, and the subjection of everyone to the restrictive discipline and destructive features of markets.

Anarchism is, famously, opposed to the state, while advocating "planned administration of things in the interest of the community," in Rocker's words; and beyond that, wide-ranging federations of self-governing communities and workplaces.

Today, anarchists dedicated to these goals often support state power to protect people, society and the earth itself from the ravages of concentrated private capital. That's no contradiction. People live and suffer and endure in the existing society. Available means should be used to safeguard and benefit them, even if a long-term goal is to construct preferable alternatives.

In the Brazilian rural workers movement, they speak of "widening the floors of the cage" - the cage of existing coercive institutions that can be widened by popular struggle - as has happened effectively over many years.

We can extend the image to think of the cage of state institutions as a protection from the savage beasts roaming outside: the predatory, state-supported capitalist institutions dedicated in principle to private gain, power and domination, with community and people's interest at most a footnote, revered in rhetoric but dismissed in practice as a matter of principle and even law.

Much of the most respected work in academic political science compares public attitudes and government policy. In "Affluence and Influence: Economic Inequality and Political Power in America," the Princeton scholar Martin Gilens reveals that the majority of the U.S. population is effectively disenfranchised.

About 70 percent of the population, at the lower end of the wealth/income scale, has no influence on policy, Gilens concludes. Moving up the scale, influence slowly increases. At the very top are those who pretty much determine policy, by means that aren't obscure. The resulting system is not democracy but plutocracy.

Or perhaps, a little more kindly, it's what legal scholar Conor Gearty calls "neo-democracy," a partner to neoliberalism - a system in which liberty is enjoyed by the few, and security in its fullest sense is available only to the elite, but within a system of more general formal rights.

In contrast, as Rocker writes, a truly democratic system would achieve the character of "an alliance of free groups of men and women based on cooperative labor and a planned administration of things in the interest of the community."

No one took the American philosopher John Dewey to be an anarchist. But consider his ideas. He recognized that "Power today resides in control of the means of production, exchange, publicity, transportation and communication. Whoever owns them rules the life of the country," even if democratic forms remain. Until those institutions are in the hands of the public, politics will remain "the shadow cast on society by big business," much as is seen today.

These ideas lead very naturally to a vision of society based on workers' control of productive institutions, as envisioned by 19th century thinkers, notably Karl Marx but also - less familiar - John Stuart Mill.

Mill wrote, "The form of association, however, which if mankind continue to improve, must be expected to predominate, is . the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers electable and removable by themselves."

The Founding Fathers of the United States were well aware of the hazards of democracy. In the Constitutional Convention debates, the main framer, James Madison, warned of these hazards.

Naturally taking England as his model, Madison observed that "In England, at this day, if elections were open to all classes of people, the property of landed proprietors would be insecure. An agrarian law would soon take place," undermining the right to property.

The basic problem that Madison foresaw in "framing a system which we wish to last for ages" was to ensure that the actual rulers will be the wealthy minority so as "to secure the rights of property agst. the danger from an equality & universality of suffrage, vesting compleat power over property in hands without a share in it."

[-] 3 points by LeoYo (5843) 6 months ago

Scholarship generally agrees with the Brown University scholar Gordon S. Wood's assessment that "The Constitution was intrinsically an aristocratic document designed to check the democratic tendencies of the period."

Long before Madison, Artistotle, in his "Politics," recognized the same problem with democracy.

Reviewing a variety of political systems, Aristotle concluded that this system was the best - or perhaps the least bad - form of government. But he recognized a flaw: The great mass of the poor could use their voting power to take the property of the rich, which would be unfair.

Madison and Aristotle arrived at opposite solutions: Aristotle advised reducing inequality, by what we would regard as welfare state measures. Madison felt that the answer was to reduce democracy.

In his last years, Thomas Jefferson, the man who drafted the United States' Declaration of Independence, captured the essential nature of the conflict, which has far from ended. Jefferson had serious concerns about the quality and fate of the democratic experiment. He distinguished between "aristocrats and democrats."

The aristocrats are "those who fear and distrust the people, and wish to draw all powers from them into the hands of the higher classes."

The democrats, in contrast, "identify with the people, have confidence in them, cherish and consider them as the most honest and safe, although not the most wise depository of the public interest."

Today the successors to Jefferson's "aristocrats" might argue about who should play the guiding role: technocratic and policy-oriented intellectuals, or bankers and corporate executives.

It is this political guardianship that the genuine libertarian tradition seeks to dismantle and reconstruct from below, while also changing industry, as Dewey put it, "from a feudalistic to a democratic social order" based on workers' control, respecting the dignity of the producer as a genuine person, not a tool in the hands of others.

Like Karl Marx's Old Mole - "our old friend, our old mole, who knows so well how to work underground, then suddenly to emerge" - the libertarian tradition is always burrowing close to the surface, always ready to peek through, sometimes in surprising and unexpected ways, seeking to bring about what seems to me to be a reasonable approximation to the common good.

© 2014 Noam Chomsky

Distributed by The New York Times Syndicate

[-] -1 points by WSmith (4187) from Cornelius, OR 6 months ago

The Corporate Bully Whose Front Groups, Willful Distortions and Hate-Mongering Has Poisoned U.S. Politics
: Meet Richard Berman Big Food’s top flack has pioneered the worst in our political culture.

November 24, 2013 | AlterNet / By Steven Rosenfeld

“Why don’t we know who one of the most powerful people in America is? What he has done? Why '60 Minutes' called him Dr. Evil?” asks Saru Jayaraman, a leader in a growing national movement of restaurant workers demanding better pay and working conditions.

Dr. Evil is Richard Berman, a Washington-based lawyer-turned-hitman for Big Food who pioneered and still deploys many of the most intentionally deceptive, inflammatory and anti-democratic tactics used in corporate propaganda campaigns today. For nearly four decades, Berman’s attacks have tried to smear, discredit and destroy public-interest causes and groups by a toxic brew of industry front groups, distortion-filled attacks, ridicule and bullying to stoke prejudice and hatred as a means of turning the public’s attention and regulators away from his paymasters’ business practices.

Take his effort to cripple the Humane Society of the United States (HSUS) and defame the character of its CEO, Wayne Pacelle. He ran a television ad during the 2013 Academy Awards telling people not to give to HSUS. He created a YouTube video viewed 1.7 million times calling Pacelle “the Bernie Madoff of the charity world.” He set up a non-profit front group called Humane Watch to undermine donations intended for the HSUS and a website attacking its funding. He even threatened the Better Business Bureau to drop HSUS' accreditation under the business group's Wise Giving Alliance, and then attacked BBB when it refused to do so.

Astute observers have concluded that Berman is guilty of the sins he regularly accuses others of. Legitimate watchdog groups, such as CharityNavigator.org, have characterized his web of non-profit front groups, which take in millions in tax-deductible corporate donations, as the fake charities. Tax law experts contacted by Bloomberg.com said his operation was comparable to Madoff’s, a shell game of financial transfers enriching Berman that likely violated tax laws. Investigative reporters have even traced e-mails from front groups who deny they’re working with him back to his office.

Can one man really be held responsible for large slices of any era’s excesses, especially in a city as dominated by opportunists as Washington, D.C.? The answer is yes, there are people who are emblematic of political eras. Ronald Reagan was the “Teflon president,” evading criticism that stuck. Lee Atwater was the dark political operator who revived the GOP’s racist attack machinery for George H.W. Bush’s 1988 presidential campaign. In Berman’s case, there is a decades-long record of gleefully taking fights into the gutter.

Why would Berman and his backers go after a group like the Humane Society of the U.S., the nation's most effective animal protection group? Or enviromentalists concerned about mercury in tuna? Or nutritionists concerned about trans fat? Or physicians worried about the effect of high-fructose corn syrup on obesity? Or restaurant workers seeking a higher minimum wage and paid sick days? Or liberal foundations funding public-interest advocates? Because in every one of these examples, their warnings and advocacy threaten how Big Food—the corporate-dominated food and beverage industry paying Berman—makes its fortune.

Berman and his agribusiness allies didn’t just target the Humane Society of the U.S. They’ve gone after People for the Ethical Treatment of Animals, creating websites and videos saying that PETA kills pets when they can’t find homes. They mock almost all public health efforts as a totalitarian nanny state nightmare. Their bottom line is always the same: protect profits by stifling debate and government regulation. And Berman's methods usually involve playing dirty to intimidate and win on emotion.

In May, the Boston Globe’s deputy Washington bureau chief Michael Kranish wrote a magazine-length report on Washington’s “industry of distortion,” citing Berman’s attack on the Humane Society of the U.S. as Exhibit A. It ended by quoting a 2010 article by the Nebraska Farm Bureau News where Berman boasted about winning on emotion—not truth.

“Emotional understanding is very different; it stays with you,” Berman said. “Intellectual understanding is a fact and facts trump other facts. When I understand something in my gut, you’ve got me in a very different way.” Speaking to Minnesota’s Agri-Growth Council in 2012 about animal rights activists, he was blunter. “We should attack their credibility using ridicule and humor; not for what they’ve said but for who they are.”

Now 70, he has used front groups and exaggerated facts flung with a disregard for public consequences for decades. He created the American Beverage Institute in 1991, which attacked Mothers Against Drunk Driving, saying it was not run by women and that using a cellphone in a car is more dangerous than driving slightly drunk. Like fists on a punching bag, Berman unleashed a series of distorted claims to derail any effort that might alter the booze industry’s business model—such as lowering the legal blood alcohol level. His institute’s experts, on his payroll, blare that new cars will soon have breathalyzers, and that people won’t be able to have a “beer at a ballgame.”

It is stunning how many fights have been picked by Berman's corporate protection racket. He’s also gone after teachers' unions, food processing industry union drives, Obamacare and Obama’s tax policies, and groups such as Center for Science in the Public Interest. He’s defended the tanning salon and payday lending industries. His Employment Policies Institute exists to keep minimum wages as low as possible. Citizens for Responsibility and Ethics (CREW) in Washington, which created BermanExposed.org in 2009, tracks his efforts—the front groups, attack websites and propaganda. “Berman runs at least 23 industry-funded projects, such as the Center for Union Facts, and holds 24 ‘positions’ within these various entities,” BermanExposed said.

Real public-interest groups such as CREW and the Humane Society of the U.S. have tried to hold Berman accountable for years. But they have been thwarted by playing by Washington’s murky rules. In 2004, CREW filed an Internal Revenue Service complaint to revoke his non-profits’ tax status, which let dozens of corporations funnel millions into a political attack machine. The HSUS filed a similar complaint last year. But the IRS does not want to say when campaigns without candidates—like Karl Rove’s 2012 non-profit—cross the line from “educational” to “political,” which would be illegal. Just this week, for example, it approved non-profit applications for dozens of Tea Party chapters, taking their word that they will limit political work to 40 percent of overall activities. Berman’s aides, when they talk to the press, say that his non-profits are educational.

With little legal recourse, Berman’s targets have worked with the media to try to expose his dark tactics. In 2007, CBS’ "60 Minutes" produced a Berman profile, “Meet Dr. Evil,” which was the name union officials gave him. This spring, theBoston Globe profiled the Humane Society attacks, dissecting his methodology, profiteering, refuting his attacks, and concluded that no responsible official or media should heed him. But these more civil tactics—seeking IRS review, being upbraided in the mainstream media—don’t derail a street fighter who enjoys bullying. As a smug Berman told "60 Minutes," “I grew up in the Bronx. Name-calling is not the worst thing that I’ve been subjected to.” (CONTINUED:)

[-] 0 points by WSmith (4187) from Cornelius, OR 6 months ago

(CONTINUED)
If anything, Washington’s political culture has been embracing Berman’s thuggery. October’s federal government shutdown, the ongoing Obamacare and budget wars, and the routine vilification of critics are all signs of increasingly poisoned politics.

The fights that Berman and his allies are picking today are not the same as a few years ago when their message was based around a “personal freedom” mantra and their target was the “nanny state” and its advocates, who called for regulation of their unhealthy or addictive products. Today, Berman and allies like the National Restaurant Association are ramping up attacks on groups such as Restaurant Opportunities Centers United—a powerful nationwide movement of low-wage workers. Why? Because ROC United is challenging the business model of an industry that pays poorly, has few benefits, is rife with sexual discrimination, and has escaped anti-trust regulation for decades.

“They don’t just weigh in on minimum wage and paid sick days,” said Jayaraman, ROC United co-founder. “They’re the ones that got pizza declared a vegetable in Congress. They’re the ones that fight the soda tax bills. They’re the ones that fight the trans fat bills. They have some connection to these groups that set FDA policy…. They all come together in the body of Richard Berman.”

From Big Tobacco to Big Exploitation

When CBS’ Morley Safer talked to Berman, he had been working to stop regulation of addictive substances and unhealthy foods for decades. He grew up in working-class New York where his father ran gas stations and car washes. He went to law school in the 1960s and began his career as a labor lawyer for management at Bethlehem Steel—opposing unions. In the early 1970s, he moved to Washington as director of labor law at the U.S. Chamber of Commerce, where he filed a brief opposing granting healthcare to pregnant women. In 1975, he moved into food and beverages, working for the Steal and Ale restaurant chain. In 1986, he created his firm, Berman and Co., where within a decade cigarette-maker Philip Morris became a multi-million-dollar account.

ConsumerDeception.com, one of the first websites tracking Berman, posts “inter-office correspondence” and other memos documenting his tobacco-defending tactics. Berman proposed creating “The Guest Choice Network… to educate members of the hospitality industry on all the issues that affect their business.” Its goal was to stop second-hand smoke regulations and smoking bans, that day’s anti-smoking efforts. Philip Morris executive Barbara Trach, writing on the margin of a 1995 memo suggesting an initial $600,000 payment, listed the rules that would come to define a Berman operation.

“We can’t tell him what to do—he knows what to do and what’s going on,” she wrote. “We don’t want reportable activities… No direction in grassroots by us… Minimize written correspondence… Check payable to Berman & Co.”

The Guest Choice Network became the Center for Consumer Freedom, which Berman used to attack nearly 60 public interest groups and government agencies, according to ConsumerDeception.com’s count a dozen years ago: health departments; medical and scientific associations; public health, farming and environmental groups. The funders were a who’s who of agribusiness giants, food producers and processors, and fast food and restaurant chains. CREW’s BermanExposed.org has since updated the list.

In the "60 Minutes" profile, Berman described himself as a fighter for corporations in an era dominated by do-gooders. “Businesses themselves don’t find it convenient to take on causes that might seem politically incorrect,” he said. “And I am not afraid to do that.”

Berman says he isn’t in interested in policy debates and position papers, but gut punches that people will remember. In one anti-union drive effort, his television ad begins with a smirking cashier, saying, “You know what I love, paying union dues just so I can keep my job.” A smiling black construction worker followed, saying, “I really like how the union discriminated against minorities.” Then a busy waitress, “Nothing makes me feel better than knowing I’m supporting their fat-cat lifestyles.” It ended, in unison, “Thank you union bosses,” with an on-air credit to the “Center for Union Facts.” In another television ad, a trial lawyer interrogates a Girl Scout on a witness stand because her cookies do not have nutrition labeling.

Berman calls this approach “shooting the messenger,” and told CBS it “means people getting that this messenger is not as credible as their name would suggest.” His staff goes through government reports, activist press releases, policy papers and books by anyone who might stand in the way of unfettered corporate profits. They take aim by seizing on small points—a research methodology, size of a poll, minority opinion—and blow up that trifle to smear a reputation, organization or agenda. They create websites parodying the points, write and air ads attacking groups, their leadership, their funding, and even push GOP officeholders to join in the bullying.

The methodology is twisting the truth, exaggerating facts that are totally acceptable to make them sound corrupt, and fanning cliches or prejudice to evoke emotional reactions that take the public’s eye away from real scrutiny of, or accountability for, his clients’ exploitive business practices.

So Berman launches a website shouting that PETA kills animals. He accuses the Humane Society of the U.S. of giving less than 1 percent of its funds to local shelters, but he omits that HSUS runs five of its own animal care centers and sanctuaries, supports countless rescue groups, operates disaster response teams for animal victims of natural disasters, investigates animal cruelty and carries out countless other initiatives for animal welfare and protection.

Front groups traced back to Berman's office accuse ROC United of a litany of supposed sins in cities considering higher minimum wage and paid sick leave laws, while other websites mock Jayaraman’s new book while she’s on a speaking tour. Meanwhile, Berman writing on the National Restaurant Association (NRA) website, says that raising minimum wages are “a politician-made disaster” leading to “the death of the entry-level job.” On theWall Street Journalopinion page, the anti-regulator argues without a trace of hypocrisy that groups like ROC United should be regulated under federal labor law.

Marion Nestle, a longtime healthy food expert and author who also has been attacked by Berman, says she tries to ignore him. Nestle said she met Berman once, when they were on a panel at a NRA conference. That appearance gave her the chance to meet with a handful of national restaurant chain CEOs, Nestle said, where she went in armed with three demands—including one about ceasing to bankroll Berman.

“I wanted these restaurant chains to give a price break for smaller portions, to have the default meals for kids be healthy, and I wanted them to stop funding the Center for Consumer Freedom,” she said of meeting with the CEOs of Applebees and Darden, the nation’s largest restaurant group. “They just went ballistic. Absolutely ballistic. It was truly amazing. I thought they were three completely reasonable asks. And they said that Berman was the only person who understood their problems.”

Nestle’s sit-down with Berman’s sponsors reveals why he has had a four-decade run as a corporate hit man. With the backing of tobacco, booze and then Big Food, he has created industry front groups, kept his sponsors’ identities largely hidden, developed a political playbook based on smears, distortions and hate-mongering, and seen the campaign and lobbying profession embrace his poisonous and destructive methodology.

America’s political culture has become uglier and more hate-filled in recent decades, and Richard Berman has played a singular roll in that descent into the gutter.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).

[-] 0 points by WSmith (4187) from Cornelius, OR 6 months ago

Unless you're being sarcastic (ironically implying the obvious backward and erroneous nature of the statement), you are 180 degrees wrong!

Private business, having mutually beneficial exchanges with a number of parties, most definitely "should" benefit its employees (we no longer engage in slavery or indentured servitude). As it does its customers, venders or suppliers, and the community in which it resides and/or serves.

Private businesses that do a disservice to the other parties suffer ethical, business and legal ramifications. Often called predator or vulture capitalists. And people (customers, employees, suppliers) should boycott these bad businesses ~ like all Koch Bros products and businesses ~ as much as possible; as well as report employee mistreatment and OSHA violations. They should be legally banned from doing biz and/or driven out of biz by the people.

Unions should also be expanded to all forms of labor, to protect the rights of workers. Employees Free Choice Act!

Co-ops are great where they can be applied, and where they can meet the demand, or fill a niche.

[-] 2 points by LeoYo (5843) 6 months ago

Whether or not private business "should" benefit its employees is irrelevant to the fact that private business is not in business for the benefit of the workers. The purpose of starting and running a private business isn't for the benefit of others to be employed by it, it's clearly for the benefit of the one(s) to start it. That's why it's private. That will never change. Only businesses that are either public or cooperatively owned can have the express purpose of being in business for the benefit of the workers and only the workers can decide for themselves to pursue their own cooperatives and initiatives for limiting the abuses of private business.

[-] 0 points by WSmith (4187) from Cornelius, OR 6 months ago

That is Supply Side (Trickle Down), Milton Friedman, Grover Norquist, Calvinist, BULL SHIT! An economical idealistic ABERRATION! Oh, and failure.

We have a Demand Economy, no matter how much the RW-1% tries to deny it!!

[-] 1 points by LeoYo (5843) 6 months ago

No, it's simple fact.

[-] -1 points by WSmith (4187) from Cornelius, OR 6 months ago

And you are 180 degrees wrong.

[-] 1 points by LeoYo (5843) 6 months ago

Really?

Then let's test that claim by turning my statement 180 degrees and seeing what the result is.

"Private business is in business for the benefit of the workers...as it should be. If workers ever want to have fair pay and benefits for themselves, they're going to have to forego the process of forming their own cooperative businesses and forego voting on local initiatives in order to allow the abusive power of corporations to provide the fair pay and benefits for them."

If I'm 180 degrees wrong then the above reversal of my statement must be what you hold as being correct. Right?

[-] 0 points by WSmith (4187) from Cornelius, OR 6 months ago

Really!

A private business operates in cooperation with it's employees, venders and customers, or it is PUT OUT OF BUSINESS!

Right!

[-] 1 points by LeoYo (5843) 6 months ago

"A private business operates in cooperation with it's employees, venders and customers, or it is PUT OUT OF BUSINESS!"

Such a notion would imply that you consider all businesses that remain securely in business, including Walmart, McDonalds, JPMorganChase, Boeing, Exxon, etc., to be operating in cooperation with their employees, venders and customers.

In affirming the statement

"Private business is in business for the benefit of the workers...as it should be. If workers ever want to have fair pay and benefits for themselves, they're going to have to forego the process of forming their own cooperative businesses and forego voting on local initiatives in order to allow the abusive power of corporations to provide the fair pay and benefits for them."

to be "Right!"

You've affirmed holding to the notion that private business is in business for the benefit of the workers implying that you supposedly think that people, including sole proprietorships and partnerships that don't require any other workers, start businesses for the sole purpose of employing others rather than for their own benefit.

You've affirmed holding to the notion that workers should forego the process of forming their own cooperative businesses.

You've affirmed holding to the notion that workers should forego voting on local initiatives.

You've affirmed holding to the notion that workers should rely upon the abusive power of corporations to provide the fair pay and benefits that they require.

Thus you've quite plainly affirmed support for the economic control of big business and the political control of unaccountable representatives contrary to the democratic will of the People expressed through initiatives.

Seeing as how that's "Really!" what you claim as being "Right!" it's quite clear where you actually stand in regards to workers.

[-] -1 points by WSmith (4187) from Cornelius, OR 6 months ago

No, we are asleep, derelict of duty, ignorant, misinformed, obedient, terrorized and exploited. We allow and accept these tyrannies at our own detriment and demise.

Boeing, like many exploitative and criminal businesses and corporations, plays on our own self-imposed submissiveness and servitude.

We've forgotten that it's supposed to be the other way around! And we re-turn that table by exercising our democracy and Uniting!

[-] -2 points by WSmith (4187) from Cornelius, OR 6 months ago

Professor Robert Reich schools RW pundits on jobs and economy

There are Republicans that you can talk with, and some that just boil your blood. But when any of them try to claim that they are the party that stands up for the poor and working classes, like S.E. Cupp did recently, it's always nice to see a true expert - for example, Professor Robert Reich - knock them flat on their ignorant asses.

http://www.youtube.com/watch?v=8-iL2pH8emU