News and Features
The biggest brand name in for-profit education is floundering.
How much does the White House stand to save from Bush's tax cut?
Thefts from other countries pale in relation to the looting of Russia, with
the indispensable assistance of the "Offshornaya Zona." The 1995 "loans for
shares" scheme transferred state ownership of privatized industries worth
billions of dollars to companies whose offshore registrations hid true owners.
More billions were stolen around the time of the August 1998 crash.
Insider banks knew about the coming devaluation and shipped billions in
assets as "loans" to offshore companies. The banks' statements show that their
loan portfolios grew after the date when they got loans from the Russian
Central Bank, which were supposed to stave off default. After the crash, it was
revealed that the top borrowers in all the big bankrupt banks were offshore.
For example, the five largest creditors of Rossiisky Credit were shell
companies registered in Nauru and in the Caribbean. As the debtors' ownerships
were secret, they could easily "disappear." Stuck with "uncollectable" loans
and "no assets," the banks announced their own bankruptcies. Swiss officials
are investigating leads that some of the $4.8 billion International Monetary
Fund tranche to Russia was moved by banks to accounts offshore before the 1998
The biggest current scam is being effected by a secretly owned Russian
company called Itera, which is using offshore shells in Curaçao and
elsewhere to gobble up the assets of Gazprom, the national gas company, which
is 38 percent owned by the government. Itera's owners are widely believed to be
Gazprom managers, their relatives and Viktor Chernomyrdin, former chairman of
Gazprom's board of directors and prime minister during much of the
privatization. Gazprom, which projected nearly $16 billion in revenues for
2000, uses Itera as its marketing agent and has been selling it gas fields at
cut-rate prices. Its 1999 annual report did not account for sales of 13 percent
of production. As its taxes supply a quarter of government revenues, this is a
devastating loss. Itera has a Florida office, which has been used to register
other Florida companies, making it a vehicle for investment in the US economy.
An activist think tank is fighting the right at the ballot box--and winning.
For the first few months of this year, it looked like Hollywood's unionized writers and actors were about to premiere a new labor strategy. As their conglomerate employers raked in record profits from expanding Internet, cable, foreign, video and DVD markets, the writers and actors guilds were talking about staging a fight to win long-deferred increases in residual payments for work that's reused and resold in different media.
With their film and TV contracts expiring back to back, the supposedly militant leadership of the Writers Guild of America (WGA) and the Screen Actors Guild (SAG) spoke of ushering in a new era of pay equity, while producers, the networks and studios braced for a historic Tinseltown strike. The AFL-CIO, meanwhile, came to town ready to advise and support the Hollywood unions in their looming titanic confrontation with the entertainment giants.
But instead of debuting a dramatic breakthrough, it now seems that this season's Hollywood labor push is ending in another dreary rerun of business-as-usual back-room deals. After weeks of on-again, off-again closed-door talks, the WGA reached a three-year agreement with employers on May 4, two days after the contract ran out. And though the deal is being presented to the membership (who must ratify it in early June) as a significant wedge of the economic pie, it is in reality a pretty thin slice. The writers won no increase in video or DVD residuals and failed to achieve the exclusive union jurisdiction over Internet production they sought. No additional residuals were won for material resold to cable. Regarding cable, they won a first-time but modest residual for premium services only. And residual increases for foreign sales will benefit only writers on the most profitable shows. Strengthened "creative rights" were won, but the economic tally is meager. On an industrywide scale, writers' residuals will increase about 2 percent.
After so much heat, why such a paltry settlement? "It was collective bargaining without the collective," says a longtime observer close to the negotiations. At a time when their employers have radically restructured themselves on the most sophisticated mega-merger global scale, the traditionally parochial and insular Hollywood guilds seemed incapable of making the transition to a modern and effective labor movement. The WGA neither mobilized nor engaged its membership in a credible campaign against the producers. How could it when it carried out its negotiations under an official "blackout" that kept not only the media but its own rank and file in the dark?
Instead of reaching out to build new alliances with "below the line" technical and craft unions, it alienated them. Instead of relying on an industrywide movement to wring concessions from the producers, the guild put forward a corporate-molded negotiating team much more experienced in managing studio employees than in representing them. Worst of all, the WGA faked itself out of a better deal. By threatening a strike it was unwilling to prepare for, it converted the possible stoppage into a lethal management weapon, with the studio execs, producers flacks and even the conservative mayor of Los Angeles enthusiastically branding any shutdown a certain economic Götterdämmerung for the strikers.
The actors union, whose contract expires July 1, began its round of talks in mid-May. It's pretty much a foregone conclusion that SAG will now settle--and settle short. The actors have formally shut down even the pretense of a membership contract campaign and have, like the WGA, imposed their own information blackout on the negotiations. That's not all the two guilds have in common. SAG's relatively new Hollywood leadership talks a tough populist line, but it has little interest or experience in doing the hard work of effective organizing and mobilization. The AFL-CIO is quietly packing up its local support operation, sensing that SAG has no stomach for a real fight.
A historic opportunity to bring Hollywood's professional and craft unions together in a powerful new alliance has thus been postponed, if not lost, and just at a time when industry restructuring makes such unity an iron imperative. Instead, there's already an incipient whisper campaign under way, with writers and actors scapegoating each other's unions for producing such disappointing results. Here it is better to quote not Spielberg but Shakespeare: "The fault, dear Brutus, is not in our stars,/ But in ourselves...."
About every thirty years for the last one hundred, a crusading journalist somewhere has gotten the same idea: Abandon the middle-class literary life (for a brief period), get a real job, gain firsthand experience in the underclass, go home and write it up.
Not surprisingly, most practitioners of the genre have been left-wing whistleblowers--notably, Jack London and George Orwell. London's 1902 book People of the Abyss chronicled the misery of urban and agricultural workers, plus the unemployed, in turn-of-the-century England. "Work as they will," he discovered, "wage-earners cannot make their future secure. It is all a matter of chance. Everything depends upon the thing happening, the thing about which they can do nothing. Precaution cannot fend it off, nor can wiles evade it."
Already a renowned writer, London entered this new world of poverty and insecurity "with an attitude of mind which I may best liken to that of an explorer." Orwell's expedition, at the time of the Great Depression, followed in London's footsteps in the same East End neighborhoods, later ending up in Paris. Published in 1933 as an autobiographical novel, Down and Out in Paris and London records the author's experiences toiling under terrible conditions as a plongeur, or restaurant dishwasher, in the bowels of a great Paris hotel. In both cities, Orwell's narrator struggles to make ends meet--just like his co-workers and fellow tenement dwellers.
A plongeur is better off than many manual workers, but still, he is no freer than if he were bought and sold. His work is servile and without art; he is paid just enough to keep him alive; his only holiday is the sack. Except by a lucky chance, he has no escape from this life, save into prison. If plongeurs thought at all, they would strike for better treatment. But they do not think; they have no leisure for it.
T hree decades later, on the eve of the civil rights revolution in the United States, journalist John Howard Griffin was down and out in Dixie. His book, Black Like Me, featured the additional twist of an author trying to cross both class and racial lines. To find out, as a white, what it was like for African-Americans to live and work in the segregated South, the author darkened his skin and traveled about in the guise of what was then called (appropriately enough for Griffin) a "colored" person. Black Like Me had a great impact at the time because of the novelty of the author's assumed identity and the book's shocking (for many whites) account of the routine indignities and monstrous injustice of apartheid in America.
It took far less makeup for Barbara Ehrenreich, the well-known socialist and feminist, author and columnist, to "pass" among the mainly white working-class people she met while researching Nickel and Dimed. Between 1998 and 2000, she took jobs as a waitress and hotel maid in Florida, a nursing-home aide and a house cleaner in Maine, and a retail sales clerk in Minnesota. Her trip across the class divide did require that she temporarily leave behind most of the accoutrements of her normal existence--home ownership, social connections, professional status, "the variety and drama of my real, Barbara Ehrenreich life."
Retaining, as her private safety net, credit cards (to be used only in emergencies) and a series of "Rent-a-Wrecks" to make job-hunting easier, she set out to determine how a person with every advantage of "ethnicity and education, health and motivation" might fare in the "economy's lower depths" in "a time of exuberant prosperity."
Her attempt to "match income to expenses" on the $6-$8 an hour wages of the working poor succeeds only briefly, though--and then just barely--in Portland, Maine, where she is able to juggle two jobs at once. Like Orwell living in Left Bank penury in Paris, she quickly becomes obsessed with counting her pennies and staying within a daily budget that does not allow for any splurges or unexpected financial adversity. Unlike the hundreds of thousands of single mothers with children who've been dumped into the job market by "welfare reform," she doesn't have to worry about finding and paying for childcare while holding down a draining, low-income job (or two). Nevertheless, she ends up being defeated by the same fundamental obstacle they face: Despite much hard work, "many people earn far less than they need to live on."
"How much is that?" she asks. "The Economic Policy Institute recently reviewed dozens of studies of what constitutes a 'living wage' and came up with the figure of $30,000 a year for a family of one adult and two children, which amounts to a wage of $14 an hour." The problem is that "the majority of American workers, about 60 percent, earn less than $14 an hour," while 30 percent, according to the EPI, made $8 an hour or less when Ehrenreich joined their ranks in 1998.
At each stop on her low-wage tour, the author tests out local support services for the working poor. Not surprisingly, the things that people need most to make their lives better--health coverage, affordable housing and access to mass transit--aren't available at the agencies she visits. (Instead, she gets the occasional bag of free groceries, plus referrals for apartment rentals she can't afford.) She finds that many of her co-workers--particularly those without family support networks--lack sufficient funds for the rental deposits and one month's advance rent needed to acquire an apartment. As a result, they are forced into overcrowded, ripoff lodging arrangements at seedy residential motels, which charge by the day or week. Even trailer-park living, which Ehrenreich tried in Key West, is now prohibitively expensive in tighter local housing markets. The nation's widespread deficiencies in public transportation also limit workers' options about where they can live--and work--if they don't own a car.
Many low-end employers don't offer health insurance, of course. Even when they do, workers in places like Wal-Mart often can't afford the payroll deductions required for family or even individual coverage when their starting pay is only $7 an hour (rising to $7.75 after two years in the Minneapolis store where Ehrenreich worked). The resulting lack of preventive medical and dental care leads to a cycle of daily discomfort and, sometimes, life-threatening deprivation. The work that Ehrenreich describes in painful detail--scrubbing floors, waiting on tables, lifting Alzheimer's patients--is hard on the body. Years of it breeds myriad aches and pains, injuries and allergic reactions, which, left untreated, become a never-ending source of misery, not to mention missed work, lost income and potentially ruinous bills. As Ehrenreich notes, she held up as well as she did in several of her jobs only because she hadn't been doing them for long; without her personal history of regular exercise, proper diet and medical care, a woman her age (late 50s) would have been struggling to stay on her feet all day as a Merry Maid or Wal-Mart sales clerk.
What makes Nickel and Dimed so engaging, however, is not its tutorial on the economics and ergonomics of low-wage life and work. Rather, it is the author's insights into the labor process in the retail and service sectors, and into workplace power relationships. If Wal-Mart had been around in Orwell's era and he, rather than Ehrenreich, had worked there, he would have written 1984 much sooner. The private empire created by Arkansas billionaire Sam Walton boasts both a Big Brother figure--the late "Mr. Sam" himself--and a work force of "proles" (now 825,000 strong) whose docility, devotion and nonunion status are major corporate preoccupations. Entering this "closed system," replete with its own "newspeak" and "doublethink," Ehrenreich discovers that all the workers, like herself, are "associates," all the customers "guests," and the store supervisors "servant leaders."
One of management's top priorities, she learns, is eradicating "time-theft"--a crime most often committed by associates who violate Wal-Mart's strictly enforced "no-talk" rule, linger on their smoke breaks or otherwise dally in the never-ending task of stocking, straightening and restocking shelves. Potential malingerers (and others with rebel tendencies) are ferreted out during the prehire process of personality screening and drug testing. Once you're on the job, close surveillance by "servant leaders" and continuing "education"--via taped messages and training videos featuring Mr. Sam--are a constant feature of company life. To leaven this atmosphere of brainwashing and intimidation, "team meetings" for associates often end with a special "Wal-Mart cheer"--a morale-boosting device personally imported from Japan by the founder himself.
Given the widespread existence of such demeaning conditions and "the dominant corporate miserliness," why don't the wretched of this low-wage world revolt? What's holding them back? Nickel and Dimed offers several explanations for the absence of collective action: high job turn-over among the unskilled, their low self-esteem, the universal fear of being fired for speaking out or challenging management authority and, in some cases, actual workeridentification with corporate values or individual bosses. Even with a background quite different from that of her fellow restaurant workers, Ehrenreich finds herself being affected by the culture of low-wage work in ways that she doesn't like:
Something new--something loathsome and servile--had infected me, along with the kitchen odors that I could still sniff on my bra when I finally undressed at night. In real life I am moderately brave, but plenty of brave people shed their courage in POW camps, and maybe something similar goes on in the infinitely more congenial milieu of the low-wage American workplace.
In the course of the book, after much buffeting by rude customers, abusive supervisors and unreliable co-workers, a kind of working-class alter ego of the author emerges--the "Barb" of her Wal-Mart ID who "is not exactly the same person as Barbara" (nor as sympathetic):
"Barb" is what I was called as a child, and still by my siblings, and I sense that at some level I'm regressing. Take away the career and the higher education, and maybe what you're left with is this original Barb, the one who might have ended up working at Wal-Mart for real if her father hadn't managed to climb out of the mines. So it's interesting, and more than a little disturbing, to see how Barb turned out--that she's meaner and slyer than I am, more cherishing of grudges, and not quite as smart as I'd hoped.
The author sounds more like her usual self when, as a house cleaner for Merry Maids--the McDonald's of its industry--she is forced "to meet the aesthetic standards of the New England bourgeoisie" down on her hands and knees, with a scrub brush. A particularly obnoxious client, the owner of a million-dollar condo on the coast of Maine, takes Ehrenreich into the master bathroom whose marble walls have been "bleeding" onto the brass fixtures--a problem she wants Ehrenreich to address by scrubbing the grouting "extra hard."
That's not your marble bleeding, I want to tell her, it's the worldwide working class--the people who quarried the marble, wove your Persian rugs until they went blind, harvested the apples in your lovely fall-themed dining room centerpiece, smelted the steel for the nails, drove the trucks, put up this building, and now bend and squat and sweat to clean it.
Unable to deliver this political tirade--lest she blow her cover--Ehrenreich instead fantasizes about exacting revenge similar to that witnessed and described so memorably by Orwell in Down and Out (i.e., the disgruntled cook who spat in the soup, the waiters who put their dirty fingers in the gravy, etc.). "All I would have to do," she muses angrily in a gorgeous country house, "is take one of the E. coli-rich rags that's been used on the toilets and use it to 'clean' the kitchen counters." No one, she concludes, should be asked to wipe out someone else's "shit-stained" bathroom bowl or gather up the pubic hairs found in their "shower stalls, bath tubs, jacuzzis, drains, and even, unaccountably, in sinks."
Ehrenreich has long been a rarity on the left--a radical writer with great wit and a highly accessible style. While often sad and grim, Nickel and Dimed is nevertheless sprinkled with the author's trademark humor. She is, for example, frequently struck by the oddity of her circumstances. Sitting alone in a cheap motel, eating takeout food after a hard day at Wal-Mart, she watches an episode of Survivor. "Who are these nutcases who would volunteer for an artificially daunting situation in order to entertain millions of strangers with their half-assed efforts to survive? Then I remember where I am and why I am here."
Half-assed as her attempts to learn unfamiliar jobs may have been--and as funny as she sometimes makes the experience seem--Ehrenreich is still engaged in a serious project. Nickel and Dimed may not be prime-time fare for millions. Yet, hopefully, it will still reach enough readers to expand public awareness of the real-world survival struggles that many Americans faced even before the current economic downturn. If anything, this book should command greater attention now because the life of the working poor--never easy in good times--is about to get harder in ways we'll never see on "reality TV."
If all goes as the GOP has planned, George W. Bush will have on his desk by Memorial Day a $1.35 trillion tax bill that is wrongheaded and an utterly inequitable pander to the privileged. Every American should be clear about what this bill is: a blueprint that will define the political and social landscape we live in for decades to come. The immense tax cuts will not only disproportionately benefit the wealthy and increase the widening gap between rich and poor, they will also severely circumscribe the government's capacity to help improve the lives of all Americans. (As if to prove the point, the Senate Finance Committee voted out this tax giveaway the same day the Senate voted against increased funding for teachers to help reduce class size.) This downsizing--indeed, emaciation--of government is of course exactly what the right is aiming for. Grover Norquist, "field marshal" of the Bush tax plan, was quoted recently in these pages saying that his goal is "to cut government in half...to get it down to the size where we can drown it in the bathtub."
Under the plan, the 400 richest multimillionaires will receive tax breaks worth an average of $1 million a year. The poorest working families will get zip, even as the nation faces a growing investment deficit measured in children without healthcare, families without housing, overcrowded airports and neglected alternative energy and conservation. Senate "moderates" claim they improved the bill, which is true. Under the original Bush plan, 26 million children in low- and moderate-income families would get no benefit from the tax plan. Under the modified bill, that drops to 10.6 million. The $58 billion a year handed to the wealthiest 1 percent could be used to lift another 2 million children out of poverty, provide health insurance to 5.1 million uninsured children, fund universal preschool and expand childcare services to more than 9 million children--two-thirds of those eligible.
Besides being unfair, the bill, which stretches the cuts over eleven years rather than Bush's original ten, is dishonest--in reality a stealth raid on the Treasury. The Senate earlier voted to cut the Bush tax plan by 25 percent. To meet this, the Finance Committee simply backloaded the bill even more than originally planned--phasing in the full tax cuts later so they don't count under the ten-year limit used to estimate its costs. The $1.35 trillion giveaway balloons to $4.2 trillion in the next decade, after all the provisions kick in. It also calls for ending popular tax breaks in a few years--like the tax credit for research and development--in the confidence that no future Congress would choose to do so. Plus the bill is designed so that 40 million taxpayers will eventually be subject to the Alternative Minimum Tax, insuring changes that will add dramatically to the total cost. And the Republican Congress is just warming up: Even now the K Street lobbyists are cooking up ways to lard a minimum-wage-increase bill with fat corporate tax cuts.
Bush has peddled this tax cut as the elixir for a good economy and a bad one, for rising gas prices and declining stock prices, for small businesses and waitress moms. The repeal of the estate tax is shamelessly presented as a way to save family farmers, even though advocates cannot locate one farm that has actually been lost because of the tax. It's all hype, lies and distortion.
Remember--in 2002 and beyond--those responsible, from Bush to the Republican majority that marched lockstep in support, to the handful of Democratic renegades who provided the margin. They must be held accountable for this travesty.
Toward a North American economic community.
Industry has been doing all it can to keep an EPA report from being published.
Unwilling to pay for a PCB cleanup, it argues that nature can do the job.