Dastardly Dollar Democrats

First published on ZNet, December 21, 2013

An “Unsung Triumph”

Never underestimate the dastardly state-capitalist depravity of the dollar Democrats. Take Larry Summers, the leading Wall Street Democrat and Charles W. Eliot University Professor at Harvard University. During a recent appearance on the power-worshipping Charlie Rose show, Summers hailed the rise of domestic fracking as a great and “unsung” national “triumph” and sign of “the American system working.”[1] He did do without so much as a side glance at fracking’s epic environmental problems. Neither he nor his obsequious interviewer Rose made even a passing reference to the ecological dimension.

“Fracking” is short for hydraulic fracturing, which uses the doomsday procedure of horizontal drilling to extract oil and highly methane-intensive natural gas from wide and shallow North American fields by pummeling rocks with massive amounts of toxic chemicals, water, and sand. Besides upping the ante of catastrophic global warming, fracking is a menace to diminishing U.S. water supplies and water quality. According to Al Jazeera last summer, “Extracting gas from one well through fracking takes about five million gallons of water, the equivalent of between 800 and 1,300 truckloads….. Over its lifespan, an average well produces more than 4 billion cubic feet of gas equivalent- enough energy to power about 16,000,000 homes for one day. Mixed with chemicals, much of the water ends up contaminated after being used in the fracking process. One well will often need to be fracked up to 18 times, drastically increasing water contamination.”

By Al Jazeera’s account:

“Traders in New York and wildcat drillers in Pennsylvania might be celebrating the newly minted resources, as are security hawks who relish the idea of reducing US energy dependency on the Middle East….But there is near-universal consensus among scientists and policymakers that these new resources should be left in the ground. ‘No more than one-third of proven fossil fuels can be consumed prior to 2050 if the world is to achieve the two degrees Celsius goal’ – the limit for averting catastrophic climate change – according to International Energy Agency data released in November. The IEA is hardly Greenpeace, and predictions from the IEA, an industry-backed body, should be taken seriously, environmentalist campaigners said. “[2]

“For More Pollution”

Who cares? Not Lawrence Summers, who argued in 1991 as the World Bank’s top economist that Africa was under-polluted with cancer-causing wastes and chemicals compared to other parts of the world since Africans didn’t live that long or make much money. In making his case “for [his words] more pollution in the LDCs (Less Developed Countries),” Summers advanced the cold logic of “neoliberal” (bourgeois) economics to reason that “The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”[3]

Now the leading Democrat Summers appears to have no concerns about the increased pollution of the rich nations’ lowest wage country – the United States[4] – with the epic toxic wastes generated by fracking.

Of and For the Oligarchs

Summers was the supposed “progressive” Bafrack[5] Obama’s choice as Director of the National Economic Council and the White House’s top economic advisor in 2008. It was a telling selection, consistent with the liberal filmmaker Charles Ferguson’s observation that with the election of Obama in 2008 “we got just another oligarch’s president.”[6]

Summers came into the admini$tration fresh from “earning” $20 million from top Wall Street hedge funds and investment banks. The payout was appropriate given his past service to Wall Street as a leading player in the dollar-Democratic Bill Clinton admini$tration.

Under Clinton, Summers was “the man behind nearly every disastrous policy that created the [2007-08 financial] crisis.” He helped turn the Clinton White House into “the driver of financial deregulation,” pushing (successfully) for the repeal of the Glass-Steagall Act’s strict separation between investment and commercial banking and for the fateful “banning [of] any regulation of over-the-counter (OTC) derivatives, including all the complex securities that were at the heart of the 2008 crisis.” [7]

Under Obama, Summers continued to serve his Wall Street friends and benefactors. He directed the admini$tration’s policy of bailing out and restoring the grotesque super-profits of the financial overlords who crashed the national and global economy while offering minimal assistance to the working class majority that suffered massive losses of income, net worth, and security.[8]


“Pension Reform” as the Wage Theft

Acting no doubt with Summers’ approval, the business-based Obama White House has recently added of its long record of serving elite corporate and financial interests by intervening in court to defend the bankrupting of Detroit and the raiding of that city’s workers’ retirement funds to pay off creditors. The marks a dark precedent for the destruction of public worker pensions across the country.

Here’s a thought: maybe state and federal officials can bring U.S. life-spans and senior citizen incomes down through pension-raiding in a way that can provide Summersian bourgeois-economic justification for increased fracking and other forms pollution in “the homeland”!

Dark sarcasm aside, this deepening new Obama-approved assault on public sector workers’ retirement incomes is an elaborate form of wage and salary theft at the end of the day. Listen to the following exchange between PBS Newshour host Judy Woodruff and Steven Kreisberg, Director of Collective Bargaining and Health Care at the American Federation for State, County, and Municipal Employees (AFL-CIO):

Woordruff: Steven Kreisberg…The basic question here, I think, is, should public employees who have done their time working for the government, are now retired, be subject to any kind of cuts when the city or the state they work for is facing terrible fiscal crisis and an underfunded pension fund?” 

Kreisberg: Well, the underfunding of these pension funds has nothing to do with the workers. The workers, as you have said, have served their — their city. They put in their time. They have done the services that they have been paid to provide….The pension is a form of deferred compensation. So, typically, when people do the service, they get paid. You know, becoming a deadbeat on a pension, as the city of Detroit is proposing to do, is not consistent with the values, I think, of just about anybody in America….So it’s really not a case where the workers who are now retired are seeking something to which they are not entitled. The pension isn’t provided as a gift. It’s provided in compensation for service previously provided.”[9]

“To Take the Lead” 

Dollar Democrats are very much in the vanguard of this new form of White House-approved wage-theft beyond the Beltway. Chuck Reed, the Democratic mayor of San Jose, California’s third largest city, has been traveling around his state trumpeting a measure that would target public pensions for significant reductions. The “Pension Reform Act” that he is advancing would “do what many cities have been reluctant to implement in the face of union opposition: provide ‘clear authority’ to change future benefits for existing employees.”[10]

He is not the only California Democrat looking to put public pensions in the deficit-reduction crosshairs. As the San Diego Union Tribune notes, the Pension Reform Act would take a significant new step in the assault on pensions and is being led by Democrats:

“Some writers have been trying to portray the ongoing California effort to reform the state’s pension system as a right-wing Republican effort, but Democrats dominate the list of supporters of a statewide pension initiative announced today. It is targeted for the November 2014 ballot…An outgrowth of a Sacramento-area reform confab first reported in June, the Pension Reform Act of 2014 is designed to let local governments do what they are largely forbidden from doing today: reducing pension benefits for current workers going forward…Most pension reform efforts deal with new hires only, and therefore will take years before the changes yield any cost savings. The measure leaves reform in the hands of local governments. All five of the politicians who submitted the measure to the state attorney general are mayors of cities that have struggled with ballooning pension costs….The four Democrats are Chuck Reed of San Jose, Pat Morris of San Bernardino, Miguel Pulido of Santa Ana and Bill Kampe of Pacific Grove. Anaheim’s Republican Mayor Tom Tait joins the list. Three of those cities have been Ground Zero in the pension-reform battle.”[11]

Chuck Reed thinks that Democrats have to “take the lead” in the assault on public workers pensions since “Democrats helped get us into the problem.”

“More Than a Promise Broken”

And then there’s Illinois, where the state House and Senate, both strongly controlled by the Democrats, recently passed a “pension reform” measure that will hike the retirement age for many state workers and reduce the size of and even “skip” some annual cost-of-living increases for currently employed and retiredstate workers. This is despite a provision in the Illinois state constitution saying that once someone is in a retirement system, they’ve entered into “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”[12]

In the Illinois House, the Republicans mustered just 15 votes for “pension reform.” Democrats controlled by the House Speaker and campaign finance kingpin Michael Madigan – a legendary Chicago Democrat – delivered 47 votes, permitting the measure to pass 62-53.

In the state Senate, The Republicans provided just 10 votes for Republican-style “pension reform” while the Democrats provided 20 to meet the minimum 30 votes required. One state senator who signed off on pension assault was the supposed progressive Democrat Kwame Raoul, an Obama favorite from the South Side of Chicago, who called the vote “a test of courage.”[13]

“The people have won…We have all won.” So said Illinois’ clownish Democratic governor Pat Quinn, calling the passing of the bill a “great day for the taxpayers of Illinois.”

Meanwhile, the office of Illinois Attorney General Lisa Madigan – Mike Madigan’s supposedly liberal daughter, widely considered a future gubernatorial candidate – said that her lawyers were “readying to defend the measure in court.” Those lawyers are expected to argue that “the constitutional phrase ‘contractual relationship’ allows enough wiggle room to impose retirement benefit reductions if they offer something in exchange to employees — a legal concept known as ‘consideration.’”

For state Sen. Linda Holmes (D-Aurora), it’s all about thievery. “What we are doing is quite simply wrong,” Holmes said in the state Senate chamber, adding that “This is actually no different than a thief coming into your house at night and stealing your valuables. The difference is this isn’t a thief coming in the night, this is your elected representatives coming to you, looking you straight in the eye and saying, ‘I’m going to take away your future.’ That is more than a promise broken. That is reprehensible.”[14]

The Very Same Day

For what it’s worth, Kreisberg reminded “P”BS viewers that “Detroit and Illinois are two very, very different circumstances. Illinois is the state with the fifth highest GDP, gross domestic state product. It has very high levels of income. It is not an impoverished state at all, by any stretch of the imagination…. This is a state that the very same day that it voted to take away retirees’ pension benefits and to cut those benefits adopted a multimillion-dollar tax cut for a multinational corporation within that state. So the state is not impoverished. The state is choosing priorities that are different than the citizens have chosen by adopting the constitutional protection of pension benefits.”[15]

That was very well said. If I were to add anything, it would be that if Illinois legislators really want to mess with their state’s constitution, they could start by passing an amendment eliminating that constitution’s dysfunctional prohibition of a progressive income tax in Illinois. That prohibition and other gifts from state and local government to the wealthy few (i.e., the state’s latest corporate-welfarist tax break for a multinational firm) are much bigger contributors to the state’s fiscal woes than the deferred wage and salary payments called pensions owed to currently employed and retired state workers.

In the spirit of disclosure, I am in the Illinois State retirement system (SURS) by virtue of a number of years of employment as a teaching assistant, adjunct history teacher, and a social policy researcher at Northern Illinois University. I also used to live in state Senator Raoul’s district in the neighborhood of Hyde Park. The money stolen from me by Raoul’s “test of courage” (Linda Holmes’ “thief coming in the night”) should be relatively small but real enough. It will at least remind me through my senior years never to give money or votes to another dastardly dollar Democrat as long I reside on Earth.

Street’s next book is They Rule: The 1% v. Democracy (Paradigm, 2014).

Selected Endnotes

1. Larry Summers, “Responding to Crisis,” The Charlie Rose Show, Decembe2 12, 2013,http://www.bloomberg.com/video/larry-summers-charlie-rose-12-12-wEeN1AC3RwGXY21j7aV7dA.html. “I do think that when we in the United States get down on ourselves, we do need to recognize that somehow we’ve had two pretty unsung un-sung triumphs in the last few years. We’ve bent the curve on health care costs…And we’re now on a viable path to being an energy exporter…those are two big things that American society has managed to do…really powerful things….that we’re a net energy exporter means we’re more secure. It means we’re richer. It means we’re going to have a lot more jobs…There’s an element of luck in it that fracking came together but there’s also an element of the American system working.”

2. Chris Arsenault, “U.S. Could Reclaim Role as Net Energy Exporter,” Al Jazeera, August 31, 2013,http://news.yahoo.com/us-could-reclaim-role-net-energy-exporter-155837930.html Emphasis added. “Leaving massive amounts of cheap natural gas untouched, however,” Arsenault added, “will be nearly impossible for politicians in the US and beyond who are keen to jumpstart recession-battered economies and end dependence on foreign energy sources.”

3. The leaked Summers memo is reproduced in Jim Valette, “Larry Summers’ War Against the Earth,” Counterpunch(June 15, 1999), http://www.counterpunch.org/1999/06/15/larry-summers-war-against-the-earth/ Summers would later achieve notoriety as the President of Harvard University by arguing that females were biologically unsuited for advanced intellectual and academic work in math and sciences

4. Joel Geier, “Capitalism’s Long Crisis,” International Socialist Review, Vol. 88 (March-April 2013), notes that “To carry through its restructuring, the United States is becoming the cheap labor market of the advanced industrial world.” See also Alan Nasser, “The Political Economy of Redistribution: Outsourcing Jobs, Offshoring Markets” Counterpunch (December 2-4, 2011),http://www.counterpunch.org/2011/12/02/outsourcing-jobs-offshoring-markets/Geier notes that U.S. “Manufacturing competitiveness has gotten an additional boost through cheap energy, as a result of fracking and horizontal drilling,” which he describes as “environmentally destructive,” adding that “The environmental destruction and future costs of ‘fracking’ ….are ignored. Short-term profit for capitalism always trumps self-destruction.”

5. Brad Johnson, “Obama Administration Rushes to Expand Fracking on Public Lands,” ClimateProgress (August 16, 2013), http://thinkprogress.org/climate/2013/08/16/2471231/administration-expand-fracking-public-lands/

6. Charles Ferguson, Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America (New York: Crown Business, 2012), 300.

7. Ferguson, Predator Nation, 45, 47, 301. “After serving as Clinton’s financial treasury secretary, Larry Summers became president of Harvard, while consulting for a major hedge fund, Tacinic Capital. After two no-confidence votes from his faculty, Summers was forced to resign as president of Harvard, at which point he joined another, larger hedge fund, D.E. Shaw, and began giving speeches to financial institutions that made him millions of dollars per year” (p.47).

8. A useful account of Summers’ role in the Obama White House’s regressive, arch-corporatist, Wall Street-friendly response to the economic crisis can be found in Ron Suskind, Confidence Men: Wall Street, Washington, and the Education of a President (New York: Harper Collins, 2011).

9. PBS Newshour, “States and Cities Grapple With Cuts to Pensions Workers Have Already Earned,” (December 4, 2013), http://www.pbs.org/newshour/bb/nation/july-dec13/pensions_12-04.html

10. Nick Green, “San Jose Mayor Chuck Reed among organizers plotting state pension reform ballot measure,” http://www.dailybreeze.com/government-and-politics/20131213/san-jose-mayor-chuck-reed-among-organizers-plotting-state-pension-reform-ballot-measure

11. http://www.utsandiego.com/news/2013/Oct/15/Democrats-mayors-pension-reform/

12. Monica Garcia, “Illinois Pension Reform Fight Shifting to Courtroom,” Chicago Tribune, December 4, 2013.

13. Ray Long and Monica Garcia, “Illinois Lawmakers Approve Major Pension Overhaul,” Chicago Tribune, December 4, 2013.

14. Long and Garcia, “Illinois Lawmakers;” Garcia, “Illinois Pension Reform Fight.”

15. PBS, “States and Cities Grapple.”

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By | 2013-12-21T12:11:14+00:00 December 21st, 2013|Articles|