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Words to ponder in 2005

For all the literalists and rationalists out there, before you make your New Year's resolutions:

"Man is stupid, you know, phenomenally stupid; or rather he is not at all stupid, but he is so ungrateful that you could not find another like him in all creation. I, for instance, would not be in the least surprised if all of a sudden, a propos of nothing, in the midst of general prosperity a gentleman with an ignoble, or rather with a reactionary and ironical, countenance were to arise and, putting his arms akimbo, say to us all: 'I say, gentleman, hadn't we better kick over the whole show and scatter rationalism to the winds, simply to send these logarithms to the devil, and to enable us to live once more at our own sweet foolish will!' That again would not matter, but what is annoying is that he would be sure to find followers--such is the nature of man. And all that for the most foolish reason, which, one would think, was hardly worth mentioning: that is, that man everywhere and at all times, whoever he may be, has preferred to act as he chose and not in the least as his reason and advantage dictated. And one may choose what is contrary to one's own interests, and sometimes one positively ought (that is my idea). One's own free unfettered choice, one's own caprice, however wild it may be, one's own fancy worked up at times to frenzy--is that very 'most advantageous advantage' which we have overlooked, which comes under no classification and against which all systems and theories are continually being shattered to atoms. And how do these wiseacres know that man wants a normal, a virtuous choice? What has made them conceive that man must want a rationally advantageous choice? What man wants is simply independent choice, whatever that independence may cost and wherever it may lead. And choice, of course, the devil only knows what choice."

Dostoevsky, Notes from Underground

"Reason is a whore!    

Martin Luther

"You know the direct, legitimate fruit of consciousness is inertia, that is, conscious sitting-with-the-hands-folded. I have referred to this already. I repeat, I repeat with emphasis: all 'direct' persons and men of action are active just because they are stupid and limited. How explain that? I will tell you: in consequence of their limitation they take immediate and secondary causes for primary ones, and in that way persuade themselves more quickly and easily than other people do that they have found an infallible foundation for their activity, and their minds are at ease and you know that is the chief thing. To begin to act, you know, you must first have your mind completely at ease and no trace of doubt left in it. Why, how am I, for example, to set my mind at rest? Where are the primary causes on which I am to build? Where are my foundations? Where am I to get them from? I exercise myself in reflection, and consequently with me every primary cause at once draws after itself another still more primary, and so on to infinity. That is just the essence of every sort of consciousness and reflection."

Dostoevsky, Notes from Underground

" There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy."

Shakespeare, Hamlet

" In every tradition, I was discovering, people turned to art when they tried to express or evoke a religious experience: to painting, music, architecture, dance, or poetry.  They rarely attempted to define their apprehension of the divine in logical discourse or in the scientific language of hard fact."  .............

"The one and only test of a valid religious idea, doctrinal statement, spiritual experience, or devotional practice was that it must lead directly to practical compassion.  ...  But if your notion of God made you unkind, belligerant , cruel, or self-righteous, or if it led you to kill in God's name, it was bad theology." ..........

You have to be prepared to extend your compassionate interest where there is no hope of a return.  This is probably what T.S. Eliot meant when he prayed, 'Teach us to care and not to care'-- without interjecting yourself into your concern."

Karen Armstrong,  The Spiral Staircase

The Social Security scam, Part II

Now that  some real economists are weighing in on Social Security "reform", a couple of startling truths are beginning to emerge.  Well, at least one is startling.  The other is pretty much common knowledge now, or least should be. 

First, the real eye opener.  Over a 45-year period, Social Security outperformed the Dow Jones.  Yeah, that's right.  It actually earned more money than a similar amount invested in the stock market would have earned.  So says MIT graduate Stanley Logue, who actually did the analysis:

"To his surprise, the Social Security investment won out: $261,372 versus $255,499, a difference of $5,873.

"It's an astonishing finding. The DJIA represents blue-chip stocks. Social Security invests in US Treasury bonds. Over long periods of time, stocks have consistently outperformed bonds. So, you would think that Logue's theoretical stock investments from 1950 to 1994 would have surely outpaced the return on government bonds.

"The fact that they didn't illustrates one of the hard truths about stock investing: Timing matters."

The second truth is the untruth of the privatizer's claim that Social Security is teetering on the brink of catastrophic  insolvency.  According to free lance journalist Gene Lyons,

"But here’s what Bartlett, Bush and the think-tank spokesmen actually mean when
they say Social Security’s going broke: They mean that the trust fund has been 
looted fair and square, that everybody who’s been paying those increased payroll
taxes since 1983 has been successfully swindled and that the U.S. government
need not honor those special issue Treasury bonds."

That's what economist Allen W. Smith says, too:

" 'The current Social Security crisis is the direct result of the greatest fraud ever perpetrated on the American people by their government,' " says economist Allen W. Smith, Ph.D., author of The Looting of Social Security: How the Government is Draining America's Retirement Account, (Carroll and Graf, 2004) According to Smith, who has been researching Social Security funding for the past five years, " 'The problem began with President George H. W. Bush who used Social Security money as if it were general fund revenue from day one of his presidency. The practice has continued ever since, so the $1.5 trillion in Social Security surplus revenue generated by the 1983 payroll tax increase, and earmarked specifically for funding the retirement of the baby boomers, is gone.' "

Smith explains the fraud in this short article for Dissident Voice:

" Every cent of the $1.5 trillion Social Security surplus generated by     the 1983 payroll tax increase-earmarked specifically for funding the     retirement of the baby boomers-has been spent by the government, in     violation of federal law, as if it were general-fund revenue.  The money has     been replaced with non-marketable special-issue government IOUs that, unlike     regular marketable Treasury Bonds, have no real value and are thus not real     assets.  These IOUs are nothing more than accounting entries that tell us     how much Social Security money has been taken by the government.  They are     essentially worthless until and unless the government, at some future time,     chooses to enact huge tax increases, or borrow massive additional amounts of     money from the public, to repay its debt to Social Security."

Remember the 2000 Presidential campaign and the discussion of a "lockbox" for Social Security?  Well, that's what Al Gore was talking about, preventing the outright theft of money earmarked for America's retirees.

George W. Bush agreed.  He promised to protect the "$2.6 trillion     of the Social Security surplus for Social Security, and for Social Security     alone."

    Here's what he actually did:

"     During Bush's first term, $509 billion of Social Security surplus was     generated by the payroll tax, and every dollar of it was spent for     non-Social Security purposes.  Most of it was used to fund Bush's     unaffordable income tax cuts."

 

 

Ho Ho Ho!

According to the latest business reports, evidence is building that Bushonomics is starting to work-- for the wealthy, at least, and especially for those with bulging stock portfolios.  Of course, that's what Bushonomics is designed to do-- benefit the investor class and to hell with everybody else.

Here's what the Oregonian says this morning about Christmas retail sales:

"Abruptly resurgent stock markets and steadily rising home values may have given well-off residents extra confidence to spend on luxury items, such as expensive jewelry, high-end fashion and electronics, they said. But a sluggish employment recovery and stubbornly high gasoline prices -- felt most sharply by middle- and low-income consumers -- may have left other Oregonians more cautious about gift-buying."

And what's true for Oregon is true nationally:

"But so far, the holiday shopping season in Oregon looks much like the nation's: weak."

For the lower and middle classes, that is.  Those with money are loading up on jewelry and other high end items (maybe even Time Trackers.)

"Meanwhile, a variety of observers, national as well as local, reported sales of luxury goods have been strong.

"Larry Packouz, owner of Packouz Jewelers on Southwest Broadway, predicted his store's holiday sales will be the best since 1999. Packouz said he is selling many pieces in the $30,000 to $35,000 range." ...

"Helping fuel the surge at the high end are consumers such as Bruce Foster, an insurance claims adjuster who lives in West Portland. Foster said he feels more flush this year because his wife has earned more in her international-trade work, and the value of their stock holdings has risen."

" 'Things economically are much better this year than they were the last two years,' said Foster, who bought a $236 gift for his wife at the Coach store in Pioneer Place on Thursday. 'This is a good holiday season.' "

Maybe for some people.  Yesterday in downtown Portland, amidst throngs of holiday shoppers, a mentally ill homeless man was shot dead by another partly homeless and slightly paranoid man with a .357 Magnum pistol, probably legally purchased.

********************

While we're on the subject of Bushonomics, Josh Marshall is busy identifying Democrats likely to go along with the Social Security privatization scheme.  He calls them the "Fainthearted- Faction".  Today he anoints the charismatic and politically ambitious Rep. Harold Ford of Tennessee as "Dean of the Fainthearted- Faction."

"And now Harold Ford is not only in the Faction but has actually become the Dean because of his rather lengthy history of openness to phasing out Social Security.

"I know this all gets complicated. But bear with me since Social Security really is an important program.

"Now, in addition to being the Dean of the Fainthearted Faction, another thing to note about Rep. Ford is that he's a man with big plans --- statewide office, national office, the sky's the limit. He ran against Nancy Pelosi two years ago to be the head of the Democratic caucus when he was only in his third term and thirty-two years old, for crying out loud."

Marshall maintains it's important fo all Democrats to support Social Security as a legislative maneuver:

"If President Bush is intent on destroying Social Security and replacing it with a private accounts system, let him do it with Republican votes only. Republicans in marginal districts will be far less likely to sign on to his plan if it's an exclusively Republican enterprise, if there are no Democrats along for the ride to muddle the picture and provide illusory bipartisan cover."

*********************

Doug Ireland reports that even the Democratic leadership is starting to wobble on core issues, including House Democratic Leader Nancy Pelosi:

"Some, like Nancy Pelosi, have already suggested that the privatization of Social Security is a negotiable issue--there go the seniors...At this rate, if the Democrats keep mowing down their base constituent groups in this cross-fire of post-defeat recriminations, you'll have to have a paid-up membership in the Southern Baptists to be a Democrat (indeed, right-wing Dems like Chris Matthews have already suggested that the party's next nominee for president must be a Southern Baptist)."

Merry Christmas!

Schools and demographics

First, let me correct what I said in my December 7 post on the "silliness" of issuing school report cards based on achievement test scores.

In that post I said that three years of math were required in Oregon high schools, and I implied that English was required for all four years.  Not true, apparently.  Both Oregon and Washington mandate only two years of math and three of English, so it's no wonder that test scores plummet, relatively speaking, when kids are tested in high school.

High schools are mired in a 100 year-old subject area curriculum that is stubbornly resistant to change, so simply requiring a couple more years of core classes in English and math --more of the same, in other words--probably won't accomplish miracles.  As I have argued before, high schools need to fundamentally change both the manner and substance of what they teach in order to affect student learning.  Smaller communities of learning, for example, with truly integrated (or interdisplinary) coursework built around themes that continually reinforce reading, writing, and math skills.  Studying English literature in isolation just doesn't cut it, at least for most students.

But this post isn't about pedagogical reform.  It's about our mania for testing.  And our misuse of standardized tests to judge the performance of schools.

This article from the New York Times shows just how far--off the deep end-- that mania has taken us.  The headline says it all, but the obsession with a new Time Tracker gadget should be cause for alarm among all serious educators:

"Shaped like a colorful peppermill, with a digital readout panel, lights that suggest a traffic intersection and an electronic male voice that booms "Begin" and "Time's up," the Time Tracker, which sells for a list price of $34.95, has turned into a surprise hit of the holiday season, according to some toy sellers. By using the tracker during playtime, homework or any other activity, children are supposed to develop a sense of passing time - 20 minutes, half an hour, an hour - that translates into better management during tests. Siren sounds indicate when a certain period has gone by, and the lights switch from green to yellow to red to demonstrate how close the child is to the end of the allotted time."

At $35 a pop they probably won't sell many of these gizmos in low income, minority neighborhoods, where the students who really need help on test performance mainly live:

" 'Lower-middle-class parents are concerned about their school quality and their children's grades,' Professor Carnoy said. 'The upper middle class is less concerned about the quality of the school than about the performance of their own kids on these make-or-break tests.' "

Which brings me to demographics.  And the 1966 Coleman Report:

"The first finding is that the schools are remarkably similar in the way they relate to the achievement of their pupils when the socioeconomic background of the students is taken into account. It is known that socioeconomic factors bear a strong relation to academic achievement. When these factors are statistically controlled, however, it appears that differences between schools account for only a small fraction of the difference in pupil achievement." 

Simply put, socioeconomic status--wealth and ethnicity--has a much greater effect on academic performance than the school one attends.

The Coleman Report, I think, was largely responsible for the school reform movement in this country.  How could we structure schools in such a manner as to make them matter, or to make them more effective, in the learning of students?  Could effective schools be identified?  And then could the characteristics that make them effective be enumerated and described?  The answer, of course, is yes.

Here's how Larry Lezotte, one of the original researchers into effective schools describes it:

"The first task of the effective schools researchers was to identify existing effective schools – schools that were successful in educating all students regardless of their socioeconomic status or family background. Examples of these especially effective schools were found repeatedly, in varying locations and in both large and small communities. After identifying these schools, the task remained to identify the common characteristics among these effective schools. In other words, what philosophies, policies, and practices did these schools have in common?"

Much other research has followed, especially into curricular reform and the reform of the actual structure of schools.  What has emerged is a consensus among educators that certain approaches and practices are effective, and result in greater student learning, both emotionally and academically.  They include team teaching, small learning groups, integrated or interdisciplinary instruction, project-based learning, and, perhaps most importantly, student-centered teaching.

It should be noted that nowhere in the research can be found calls for an increased reliance on standardized testing as a measure of how well restructured schools are performing.

The myth of the "Heartland"

You hear it all the time from conservative pundits and spinmeisters and other assorted propagandists on the political (and cultural) right:  True Americans live in the red state "heartland."

These heartland denizens are patriotic, unapologetically.  They have solid, family- oriented values.  They go to church.  They're safely removed, geographically and culturally, from the liberal-elitest moral cesspools in Hollywood and New York.  And they reliably vote Republican.

Never mind the data that show heartland divorce rates are higher than in the so-called "blue" states where most of the morally bankrupt Democrats live.  Never mind voter-approved legalized gambling taking hold throughout the red state Midwest.  And never mind studies showing epidemic drug use, especially methamphetamine, in the rural heartland:

"The results are shocking and are rattling the rafters of Mid West America. Per this study, 8th graders living in rural American communities are 34% more likely than their urban counterparts to smoke marijuna; 83% more likely to use crack cocaine; and 104% more likely to have used amphetamines within the last month.

  "The study also reports that drugs are as readily available in rural areas as in large urban cities. Drug Enforcement Administration (DEA) seizures of meth labs jumped from 263 in 1994 to 1,627 in 1998 - a sixfold increase, concentrated in rural areas of the Heartland."

And finally, if you're going to swallow the myth of the wholesome heartland, you'll have to ignore stories like this one about the increasingly "grisly notoriety"  of small town Skidmore, Missouri, situated in the extreme northwest corner of the state and  roughly equidistant form the heartland towns of Des Moines, Iowa, Lincoln, Nebraska, and Topeka, Kansas.

Skidmore is where Lisa Montgomery has confessed to strangling pregnant Bibbi Jo Stinnett.  And then cutting her open and "stealing" her baby.  That's not a crime consistent with an ethos of family values.  Nor one typically associated with small town America.

But Skidmore has an appalling record of criminal notoriety:

"First came the notorious "Skidmore bully," Ken Rex McElroy, whose death made national headlines. He had so terrorized the town that when somebody gunned him down in broad daylight in 1981, nobody would admit to seeing a thing.

"Then on Oct. 16, 2000, Wendy Gillenwater was stomped to death by her boyfriend. Locals take comfort in knowing the killer is serving life in prison.

"The next year, a 20-year-old resident vanished. Many think he was murdered."

Some may remember a movie that came out a few years ago called Boys Don't Cry, about the murder of a young transsexual, Brandon Teena, in Humboldt, Nebraska.  Actress Hilary Swank won an Oscar for her powerful portrayal of the title character.  The movie was not flattering in its depiction of life in the heartland.  Locals who saw the film said they didn't recognize the town they called home.

Every story (or myth), as they say, has two sides.  The media myth of the heartland reveals only one side, or facet, of a complex, multi-faceted culture.  Boys Don't Cry (a great movie) portrays another.  Where's the truth? 

Somewhere in the middle.  Or more precisely, somewhere on each of the many faces the heartland reveals to the patient, and open-minded, observer.  That's why the red states aren't truly red.  They're varying shades of purple.

The investor class vs. the people

In announcing his Social Security privatization plan, George W. Bush says that dealing with the "crisis" of Social Security would "reassure the financial markets", which tells you all you need to know about Bush and his anti-government ideology.  In Bush's muddled, and simple, mind, Social Security is "socialism."  And unfettered capitalism will solve all our problems, or at least the problems of those with virtually unlimited access to capital.  People like him, in other words.

His tentative plan to borrow $2 trillion dollars to pay for the transition to private retirement accounts proves that Paul Krugman was right in formulating his famous dictum that privatizing Social Security relies on the formula, 2 - 1 = 4:

"Mr. Bush first proposed privatizing Social Security back when people still believed that stocks only go up. Even then his proposal made no sense; as I've explained before, it was based on the claim that 2-1=4, that you can divert the payroll taxes of younger workers into personal accounts and still pay promised benefits to older workers. But now even the nonsensical promise that individual accounts would earn stock market returns looks pretty unappealing. So why does he keep pushing the idea?"

Krugman is supposed to be taking a break from his job as NY Times columnist (he's writing another economics textbook), but apparently he's so exercised about what Bush is doing that he's fired off two columns during the hiatus.  The latest  exposes the "open secrets" of retirement privatization in other countries:

"Privatization dissipates a large fraction of workers' contributions on fees to investment companies.

"It leaves many retirees in poverty.

"Decades of conservative marketing have convinced Americans that government programs always create bloated bureaucracies, while the private sector is always lean and efficient. But when it comes to retirement security, the opposite is true. More than 99 percent of Social Security's revenues go toward benefits, and less than 1 percent for overhead. In Chile's system, management fees are around 20 times as high. And that's a typical number for privatized systems."

Economist Robert Kuttner is another vociferous critic of the Bush plan (and of Bush policy in general.)  He offers a succinct defense of Social Security in this article for the American Prospect:

"Social Security is the most successful program that tangibly delivers on the core philosophy of the Democratic Party -- namely, that ordinary people depend on government for economic security that markets can’t provide. Unlike recent token programs, Social Security delivers serious money, to the middle class and the working poor alike. Without Social Security, a third of America’s seniors would be destitute."

Like his father, Bush has also ruled out tax increases to deal with projected shortfalls in Social Security sometime in the distant future.  In true Bush fashion, he prefers to borrow the money.  Never mind that the Bush Administration has run the national debt up to record levels.  George W. has been pretty much a freeloader his entire life, borrowing money from rich relatives to finance his mostly unsuccessful business ventures.  It appears he's taking the country down the same path. 

The Center on Budget and Policy Priorities compares the Social Security shortfall to the Bush tax cuts, and determines that the former is a mere fraction of the latter:

"In other words, if the tax cuts are made permanent, their cost will be three to five times larger over the next 75 years than the size of the Social Security shortfall.  Furthermore, just the cost of the tax cuts for the top one percent of the population — a group whose annual incomes average about $1 million — is roughly the same size as the Social Security shortfall (0.6 percent of GDP)."

The same report also questions whether the borrowed $2 trillion is anywhere near enough to fund private retirement accounts and pay for the $10 or $11 trillion longterm Social Security liabilities:

"In addition, the individual accounts would create a cash flow problem for Social Security because funds would be diverted from Social Security decades before a worker’s Social Security benefits would be reduced in return.  The private accounts, by themselves, consequently would push the Social Security Trust Fund back into insolvency and would permanently worsen Social Security’s financial condition."

It appears that privatizing Social Security is an actuarial impossibility, if the goal is actually to preserve the system.  If the real objective, however, is to rid the government of this vestige of socialism and divert massive amounts of money to Wall Street, then it's a perfectly workable scheme.  Devious and misleading, of course, but eminently workable.

The Bush White House is good at this sort of thing-- say one thing, but mean something entirely different.  A side bar from the NY Times strips the facade from the "testimonials" Bush is using to sell privatization:

" 'The exchange was an example of how Mr. Bush promotes his agenda with testimonials from "regular folks," ' in the words of Joshua B. Bolten, the White House budget director, who introduced Ms. Jaques.

"But Ms. Jaques is not any random single mother. She is the Iowa state director of a conservative advocacy group, FreedomWorks, whose founders are Jack F. Kemp, the former vice-presidential nominee, and Dick Armey, the former House Republican leader.

"Ms. Jaques also spent much of the past two years as a spokeswoman in Iowa for a group called For Our Grandchildren, which is mounting a nationwide campaign for private savings accounts."

"Centrism" is WAY to the right of center

David Sirota's new piece "Debunking Centrism" reminds me of what I wrote way back on November 12:

"I don't like the prospect of the Democrats morphing into Republicrats, like Joe Lieberman.  Or Simon Rosenberg of the New Democrat Network, who actually said the other day on C-SPAN that he was in favor of partially privatizing Social Security.  If the Democrats won't even defend the pillar of the New Deal, I can't imagine them taking a principled stand on any issue of importance."

Sirota juxataposes the "centrist" policies from the likes of the Democratic Leadership Council with actual data, as in public polling data.  For example:

"Let’s start with economic policy. The DLC and the press claim Democrats who attack President Bush and the Republicans for siding with the superwealthy are waging 'class warfare,' which they claim will hurt Democrats at the ballot box. Yet almost every major poll shows Americans already essentially believe Republicans are waging a class war on behalf of the rich—they are simply waiting for a national party to give voice to the issue. In March 2004, for example, a Washington Post poll found a whopping 67 percent of Americans believe the Bush Administration favors large corporations over the middle class."

The same is true of tax policy:

"Yet a September 2004 CBS News poll found that 72 percent of Americans say they have either not been affected by the Bush tax cuts or that their taxes have actually gone up."

And health care:

"On healthcare, we are led to believe that it is a 'liberal,' 'left' or 'socialist' position to support a single-payer system that would provide universal coverage to all Americans. But if you believe the Washington Post, that would mean America was some sort of hippie commune. The newspaper’s 2003 national poll found that almost two-thirds of Americans say they prefer a universal healthcare system 'that’s run by the government and financed by taxpayers' as opposed to the current private, for-profit system."

And polls show overwhelming support for the environment, for a woman's right to choose, and for gay and lesbian civil unions.

So, the question remains:  What direction will the Democratic Party take?  Will it lurch reflexively to the right?  Or will it return to the populist, and progressive, center, where apparently most Americans reside?

I guess we'll find out when the party announces its choice for Democratic National Committee chair.

Big Box with a heart

Now Portland and the Portland Deveopment Commission, the city's urban renewal agency, are embroiled in a controversy over whether redevelopment at the east end of the Burnside Bridge should be anchored by a so-called "big box" store, like Lowe's or Home Depot.  Progressives in the community, like my favorite radio talk show host Joe Uris, say "No way!"  Big out-of-state retail operations, like the two being considered, hurt local retailers, they say, and ultimately suck money out of the local economy. 

Well, probably so.  Oregonian columnist Steve Duin wrote that he found 36 different kinds of a special kitchen cabinet hinge at locally owned Winks Hardware, but Home Depot didn't even carry them.  Good hardware stores, the local and independent kind,  are increasingly hard to find.  We should do whatever we can to keep them around.  Locating a Home Depot in inner city Portland won't help.

That said, there's a big difference between a good "big box", and a lousy one, like Wal-Mart, the world's largest retail employer.   Everyone assumes that Wal-Mart is an efficient, if ruthless, business model.  It makes a fortune largely because of its size and its poverty level wages and benefits.  Consumers, and investors, benefit, while the workers suffer.

But what if the assumption is wrong?  What if Wal-Mart isn't the efficient business model that it, and Wall Street, claim it is? 

Last April, Business Week published an article comparing the performance of Costco to its rival, the Wal-Mart warehouse subsidiary, Sam's Club.  And guess what?  Costco, with its higher wages, its generous benefits, and its partially unionized workforce, won, hands down, in every significant category of business efficiency:

"Surprisingly, however, Costco's high-wage approach actually beats Wal-Mart at its own game on many measures. BusinessWeek ran through the numbers from each company to compare Costco and Sam's Club, the Wal-Mart warehouse unit that competes directly with Costco. We found that by compensating employees generously to motivate and retain good workers, one-fifth of whom are unionized, Costco gets lower turnover and higher productivity. Combined with a smart business strategy that sells a mix of higher-margin products to more affluent customers, Costco actually keeps its labor costs lower than Wal-Mart's as a percentage of sales, and its 68,000 hourly workers in the U.S. sell more per square foot. Put another way, the 102,000 Sam's employees in the U.S. generated some $35 billion in sales last year, while Costco did $34 billion with one-third fewer employees."

Now that's from Business Week, not some left-wing alternative 'zine.  The authors have this to say about a low wage strategy:

"Yet the cheap-labor model turns out to be costly in many ways. It can fuel poverty and related social ills and dump costs on other companies and taxpayers, who indirectly pick up the health-care tab for all the workers not insured by their parsimonious employers. What's more, the low-wage approach cuts into consumer spending and, potentially, economic growth. 'You can't have every company adopt a Wal-Mart strategy. It isn't sustainable,' says Rutgers University management professor Eileen Appelbaum, who in 2003 edited a vast study by 38 academics that found employers taking the high road in dozens of industries."

They conclude:

"Costco shows that with enough smarts, companies can help consumers and workers alike."

To my knowledge, the Business Week findings weren't covered in the mainstream press, at least not extensively.  I came across the article on a site named, appropriately, Inequality.org, which featured a piece originally published on Tom Paine. com, entitled "The Wal-Mart Myth."  Here's a quote:

"The authors point out that Costco recently posted a 25 percent profit gain, as well as a 14 percent sales hike. Yet Wall Street punished Costco's stock, driving it down 4 percent. What gives? As the authors report: 'One problem for Wall Street is that Costco pays its workers much better than archrival Wal-Mart Stores Inc. does, and analysts worry that Costco's operating expenses could get out of hand.' 'At Costco, it's better to be an employee or a customer than a shareholder,' says Deutsche Bank analyst Bill Dreher."

"And there it is in a nutshell. In today's economy (or, for that matter, yesterday's economy), whether a company treats its workers fairly and satisfies consumers does not matter to Wall Street. Stock analysts don't reward such a feat--preferring instead that a company conform to Wall Street standards by wringing out every cent from regular people's wallets."

So, here's to the alternative press.  Three cheers for a job well done. 

Phil Stanford's tax fantasy

Phil Stanford's last column in the Portland Tribune--a rant about the city's proposed Clean Money election reform-- is part fantasy and, perhaps, part lie.  Here's the part that may be an outright fabrication--lie-- but it's hard to tell because Stanford offers no evidence to back up his assertion:

"The point, my fellow citizens, is that while Portland ranks No. 1 west of the Mississippi in total state and municipal taxes, we can do much better."

Taxes collected?  Money spent?  Per capita tax load for residents of Portland?  Who knows?

Portland aside, all the evidence, the data, that I've come across suggests that the tax load in Oregon, especially on businesses, is light to the point of absurdity.  So says a report from Citizen's for Oregon's Future, headquartered right here in P-town:

"The most recent estimate from the Legislative Revenue Office puts us (Oregon) at 46th out of 50 states."

Now maybe Portland does have a higher tax burden than the rest of Oregon, but that's the price we pay for keeping the schools open.  Especially when the state legislature, and the Governor, are not similarly inclined.

Again, schools and taxes

The Oregonian today is brimming with stories, commentary, letters, and analysis all focusing on the obvious issue du jour, taxes, and the underfunding of local public services, especially schools.

First we have an op-ed piece written by my former principal at Evergreen in Hillsboro, Joe Rodriguez, who is all over the map in proposing ideas for funding schools, and running them more efficiently.  His ideas range from doing something about low business taxes (exactly what isn't clear, aside from tinkering with the infamous tax kicker) to consoldating school districts, eliminating ESD's, and privatizing educational services, an argument which he promptly undermines by saying:

"As we privatize, however, we need to be mindful that contracting out is accomplished on the backs of workers through reduced salaries and benefits."

Good thinking, Joe.  You suppose that funding schools on the "backs of school workers" may have something to do with the widespread opposition to privatization schemes?

As a principal, Joe was energetic and authoritarian, meaning he liked the sound of his pronouncements but not the ideas of others.  According to my sources, that's why his tenure as Superintendent of the Hillsboro School District ended somewhat abruptly last year.

A better analysis of the fiscal crisis afflicting public education comes from the folks at Stand for Children (who didn't endorse me for school board, a decision they should regret, given the silence of the board on the governor's pathetic proposed budget.)  Here's their letter to the O this morning:

Demand better for schools

Friday, December 10, 2004

Gov. Ted Kulongoski's rhetoric on school funding doesn't match reality. He's called for an "education Marshall Plan," recognizing that our economy will never rebound without a stronger education system. Yet his budget for K-12 schools will yet again force districts to raise class sizes and lop days, if not weeks, off the school year.

Unless we, the public, demand better, his budget will deliver a $36 million reduction in funding for Portland Public Schools. That's right: $36 million in Portland alone, with a similar devastating impact on other Multnomah County schools and classrooms around the state.

Our classrooms have already weathered too many cuts and too much uncertainty. It's time to take a stand and say: No more.

The Oregonian asked in a Nov. 13 editorial, "(W)ho is going to stand up and demand a full school year for every child in this state?" Stand for Children's 1,400 Oregon members are committed to answering The Oregonian's question. We are.

Join us as we prepare to lobby the Legislature for a responsible level of school funding. Call 503-235-2305 or 1-800-663-4032.

BEVERLY PERTTU

SHANNON CAMPION

JONAH EDELMAN Stand for Children Southeast Portland

The only way the $36 million hit to the Portland District can be redressed is with increased taxes. The district has already cut administration and outsourced custodial services (that move saved the district, maybe, $3 million a year, but on the "backs of school workers", as Joe Rodriguez put it.)  Stand for Children doesn't come out and say, directly, that we need higher taxes, but this next letter does:

Anti-tax groups wield power

Gov. Ted Kulongoski's "no new taxes" pledge is further indication that the far right controls debate in Oregon.

Most legislators would have supported restoring the 10-cent tax on cigarettes and raising the minimum corporate tax of $10 per year. But the successes of anti-tax groups such as Citizens for a Sound Economy have cowed Oregon's leaders into silence regarding even such obvious revenue sources.

Citizens for a Sound Economy deceitfully persuades voters that government requires diminishing amounts of revenue, even as the public appetite and the costs for services grow. Yet in truth, this group is not interested in taxpayers' rights so much as in downsizing government's role in providing education and human services.

ROB KUGLER West Linn

In the meantime, the state keeps handing our tax credits to corporations, the latest a $21 billion windfall to PGE from the Department of Environmental Quality for a for a facility that stores radioactive waste from PGE's decommisioned Trojan Nuclear Plant.  According to PGE the money "... will benefit PGE's 755,000 customers by helping offset any future rate increases."  What a deal!

Ratepayers have for years been subsidizing Enron by paying the state and federal taxes the company is supposed to pay, but never has.  The money --that's ratepayer money-- just disappears into the black hole that is Enron.  And Enron still owns PGE, don't forget.