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#857 -- Explaining the News (Slow Economic Growth), 01-Jun-2006

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The national conference on precaution opens next week (June
9) in Baltimore. Not registered? No problem. Just show up
at the door. You'll be welcome.

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Rachel's Democracy & Health News #857

"Environment, health, jobs and justice--Who gets to decide?"

Thursday, June 1, 2006..................Printer-friendly version
www.rachel.org -- To make a secure donation, click here.
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Featured stories in this issue...

The Context of Our Work: Slow Economic Growth, Part 1
  As we all struggle to create a decent, peaceable world where
  everyone has enough of what they need, our work takes place within
  contexts that are often invisible. One such context is the slowed rate
  of economic growth since the 1970s. It explains much of what's in the
  news each day.
Tyranny of the Christian Right
  An article about Christian nationalism may seem far afield from
  "environmental health." That is, until you realize that the U.S. is
  now controlled by a political party that derives its electoral
  strength from an unlikely coalition of Christian nationalists and
  plutocrats (the wealthiest 2% of Americans). As Republican Kevin
  Phillips points out in his new book, American Theocracy, about 55%
  of Republicans who voted in the last presidential election believe the
  world is going to end soon in a bloody conflagration -- and if that's
  the case, why spend time worrying about the natural environment or
  human health?
Rising Rate of Twin Births May Be Tied to Bovine Growth Hormone
  Monsanto has always claimed that its bovine growth hormone (known
  variously as rBGH, rBST and bovine somatotropin), injected into cows
  to make them give more milk, would have no effect on humans drinking
  the milk. Now a study indicates that women who drink Monsanto-
  modified milk (about 1/3 of all milk in the U.S.) are five times as
  likely to give birth to twins (compared to those drinking normal
  milk). Twin births can endanger the health of both the mother and the
  babies.
The Fight to Take Back Our Water
  Multi-national corporations are busy privatizing public water
  utilities across the U.S. They now control 15% of our water. With
  concerns over price gouging and poor service, communities in Illinois
  and elsewhere are starting to fight back.
Middle Class Losing Hope for the American Dream
  Corporate profits and employment are strong. Yet the American dream
  of a steady job with benefits like healthcare and vacation pay is
  growing more elusive for many people. While corporate executives are
  taking home record paychecks, the middle and working classes are
  treading water at best.

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From: Rachel's Democracy & Health News #857, Jun. 1, 2006
[Printer-friendly version]

THE CONTEXT OF OUR WORK: SLOW ECONOMIC GROWTH, PART 1

By Peter Montague

In the U.S., what we call "the system" is beset by multiple crises.

** The end of cheap oil is coming.

** Global warming is upon us.

** Water shortages are worsening in the U.S. and globally.

** Rising inequality divides the top 2% from the rest of us.

** The rising cost of medical care and the high cost of medical
insurance weigh on the minds of most people.

** The promise of secure retirement is fading for many aging boomers
(which of course affects their children).

** The social safety net created after the Great Depression is being
shredded bit by bit year after year.

** Families and indeed the nation are deeply in debt.

** Widespread insecurity afflicts large portions of the populace (good
jobs disappearing, debt rising, the children's future uncertain).

** A serious time crunch has beset many families.

** Some ecological limits have appeared on the horizon (no place left
to throw away toxics; cost of some resources critical rising, etc.).

** The political party that controls the White House, the Congress,
and much of the judiciary now owes its electoral success to a large
group of people who believe the world is going to end soon, which may
make earthly problems seem unimportant to many of them. For the first
time in American history, a religious party now controls the
government.[1]

Perhaps the future is bright

Perhaps "the system" will navigate through all these interlocking
crises without encountering any serious economic difficulties, but
perhaps not. It seems possible that as the combined effect of all
these problems grips the nation more tightly, economic growth-rates
may slow down further, dipping below their current levels.

Unfortunately, we are already getting a preview of how "the system"
will respond to slowing growth. The rate of economic growth (measured
by GDP) has been slowing for the past 35 years,[2,3,4,5,6] and the
system's response has not been pretty. Without going into a lot of
detail, I believe much of what passes for "the news" each day can best
be explained as "system responses" to slowed growth.

For the 100 years spanning 1870 to 1970, the U.S. economy (measured by
gross domestic product, or GDP) grew at an average annual rate of 3.4%
per year. Since 1970, the U.S. economy has grown just 2.3% per
year.[5,pg.5] This may seem like a small difference, but it really
isn't because the effects are cumulative, year after year. The
difference between two percent and three percent isn't one percent --
it's fifty percent.[5,pg.7; 6,pgs.63-75]

Here's another way to look at it: if the U.S. economy had grown at
3.4% per year since 1973, instead of 2.3%, the additional wealth
created during the two decades 1973-1993 would have added up to an
extra $12 trillion (adjusted for inflation) -- enough to replace every
factory in the U.S., including all capital equipment, with a modern
new factory; or enough to pay off the entire government debt plus all
home mortgage debt plus all credit card debt.[5,pg.5]

If economic growth had maintained its historical level since 1970, the
average family in 1993 would have had an additional $5,500 to spend
each year. Over the 20 years, 1973-1993, the average family would have
had at least an additional $50,000 of income -- enough for a young
couple to buy a first home, a low-income family to maintain health
insurance, or for someone to go to college. State and local
governments would have collected an additional $900 billion in taxes
during the 20 years -- to support schools, libraries, parks, public
transit, emergency services, police and fire protection, affordable
housing, local economic development, and so on. [5,pgs.10-11]

The U.S. is not unique. The trend of declining growth-rates can be
seen in all the wealthy nations of the world, the 29 members of the
OECD [Organization for Economic Cooperation and Development]. During
each passing decade since 1970, growth in OECD countries has declined,
compared to the previous decade.[6,pg.38] The trend of slowing growth
doesn't affect just the average family. Even more importantly, it
affects the super rich -- in the U.S., the one percent of us who own
50% of all private wealth, or, more broadly, the 5% of us who own
2/3rds of all private wealth.[7]

Understandably, the wealthiest few expect a decent return when they
invest their capital, and slow growth makes decent returns hard to
find.

What is a decent return on investment? Here's one way to answer that
question. When the President's Office of Management and Budget (OMB)
considers a new regulation (for example, to control mercury emitted by
power plants) the agency asks whether the benefits justify the costs.
They say to themselves, "This regulation will cost industry X dollars
per year. How much wealth could those dollars create if they were
invested with a return of Y percent per year? In that equation, OMB
now sets Y equal to 7 percent. OMB assumes a typical business
investment should yield a 7% annual return.[8]

Of course in recent years, many investors have been looking for 20%
annual returns so 7% may seem puny by comparison. Still, 7% is twice
the long-term historical rate of return on investment (measured as
growth of GDP) and three times the average rate of return since 1973.
So modern owners of capital expect decent returns that far exceed
historical averages. Therefore they are likely to be unhappy if their
return merely meets the historical average, and doubly dissatisfied
with returns 30% below the historical average (e.g., 2.3% instead of
3.4%). They naturally believe they deserve better -- America deserves
better -- the world deserves better -- and they believe government
should help boost their returns one way or another. After all,
capitalism as we know it would stop working if capitalists stopped
investing, so providers of capital deserve a decent rate of return,
they might argue, and they would have a point.

According to the hypothesis I'm describing here, five features of
modern life have caused the downturn in economic growth in the U.S.
(and in the rest of the industrialized world):

(1) Saturation of effective consumer demand; those who can afford to
buy stuff already have about as much stuff as they need or can afford;
indeed, to pump up demand further, U.S. industry now spends $250
billion each year on advertising.

(2) A reduced demand for fixed investment (such as factories) and
working capital (money to meet business expenses and expand
operations).[3; 6,pgs.37-39] It's getting harder to find safe,
productive places to put capital to work these days, partly because of
saturated consumer demand and partly because there's a glut of
capital.[9]

(3) The proportion of people in the labor force can't increase much
beyond where it is today;[3] all the able-bodied are pretty much
already working or looking for work; the rest are children, elderly or
disabled.

(4) The rate of growth of productivity of workers (the rate at which
output per hour grows) has slowed in recent decades;[6,pgs.63-75]

(5) Some ecological limits have come into view -- for example, toxic
industrial chemicals are now found everywhere on earth, from the tops
of the tallest mountains to the bottoms of the deepest oceans and
everywhere in between, including human breast milk. We can no longer
convincingly argue that we can throw away unwanted industrial
byproducts without affecting living things, so our byproducts must now
be managed at considerable expense.[10,11]

The system has responded to these realities in the following ways:

System response No. 1: Easing Credit

No need to belabor this. Credit card debt, home mortgage debt and the
national debt have all skyrocketed in recent years.[12,13] Debt is
beneficial for those with money to lend, especially credit card debt,
which now garners doubt-digit returns. As in no previous generation,
young people now leave college (end even high school) saddled with
debt.[14] As Kevin Phillips has pointed out, we are witnessing the
"financialization" of the U.S. economy. In the year 2000, moving money
around became a larger portion of GDP (20%) than manufacturing
(14.5%).[1,pg.265; and see pgs. 265-346]

System response No. 2: Promoting International Capital Flow

This is what the corporate "globalization" project is about --
removing barriers for people with money to invest in cutting down the
rain forests in Indonesia or setting up a cyanide-leach gold mine on
native land in South America or northern Canada. Globalization is
about clearing the decks for capital to cross borders unimpeded, in
search of a decent return.

System response No. 3: Reduced Restrictions on Financial Firms

Banks, savings and loans, and brokerage firms used to be rigidly
segmented by law; now all their functions have been legally merged.
The savings and loan bailout in the '80s was the first result; the
"dot.com" bubble of the late '90s was the second; the Enron-Worldcom-
etc. debacle was the third. There is no end in sight.[6]

System response No. 5: Disinvest in Public Infrastructure (roads,
bridges, runnels, airports, wastewater treatment plants).

"Our infrastructure is sliding toward failure and the prospect for any
real improvement is grim," says William Henry, president of the
American Society of Civil Engineers, releasing the society's 2005
Report Card for America's Infrastructure at a news conference in
March.[15] Of course this is a short-sighted policy, but almost by
definition the search for decent return on investment focuses on the
next quarter, not the next decade or two.

System response No. 6: Expand the Defense Budget

Defense is the only national industrial policy that almost everyone
will agree to, or at least acquiesce to, perhaps for fear of being
labeled unpatriotic. Foreign enemies are the ultimate consumers of our
military preparations, so in the face of flagging demand for toasters
and SUVs our economy now arguably requires a growing supply of foreign
enemies.[16] As the President himself said shortly after he committed
the U.S. to a perpetual war against evil-doers world-wide, "Bring 'em
on." War is good business, with future prospects that seem to grow
brighter each passing day.

System response No. 7: Cut Taxes for the Wealthy

Cut income taxes, estate taxes, capital gains taxes, and corporate
taxes to benefit the wealthiest Americans, shifting more of the tax
burden onto the middle class and the working poor.[17]

System response No. 8: Tax Evasion and Tax Cheating.

Both are now rampant and have been the subject of several recent books
offering abundant detail. Meanwhile federal authorities turn a blind
eye.[18,19]

System response No. 9: Creation of New Industries:

Space exploration, laser-weapons-in-space, casino gambling, the
pornography industry, the recreational drug industry (and its
conjoined twin, the prison industry) -- all demonstrate America's "can
do" entrepreneurial spirit in the face of slowed growth.

System response No. 10: Diminishing Social Investments

Slowed growth requires that the economic pie be divvied up in new
ways. Therefore, all social investments have been put on the chopping
block -- veterans' benefits, Medicare, Medicaid, Social Security,
education loans, Head Start, public lands, water and air quality,
charity hospitals, Amtrak, the infrastructure of roads, tunnels,
bridges, and entire government agencies (the Internal Revenue Service,
the Department of Education, the Department of Health and Human
Services, among others) and so on and so forth. There is no end to the
proposed cuts. Nothing is sacred except of course Defense (and more
recently its domestic twin, Homeland Security) where the bipartisan
sense of entitlement to insider gains has developed over decades of
exemplary military-industrial cooperation.

Cutting the social safety net has the salutary effect of disciplining
the workforce to accept lower wages, longer hours without overtime
pay, increased workload on the job, reduced vacations, diminished
health, elimination of pensions, and so on. (See System Response No.
12, below.)

As a result of these changes, the main historical difference between
the two political parties disappeared at least two decades ago. The
Democrats now find, for the first time in living memory, that they
have no political agenda of their own. As a result, voter disaffection
has risen to historic proportions. Cynicism spreads like kudzu.
Political apathy then cements the status quo in place.

System response No. 11: Expanding and Discrediting Government

Given the need to distribute the economic pie in new ways,
discrediting government has become a necessary political goal because
government has occasionally intervened on behalf of "the little
people" against "the big people."

Traditionally, government has made modest attempts to level the
playing field for everyone, in keeping with the slogan, "With liberty
and justice for all." Without basic economic security for families and
individuals, neither liberty nor justice is possible.

To his credit, George W. Bush has provided real innovation here.
Previous Republican theorists wanted to shrink government so small you
could drown it in a bathtub. Mr. Bush recognized that a large inept
government was far more useful that a small government, from the
viewpoint of those aiming as a matter of high principle and national
necessity to transfer a larger portion of the pie from working people
and the middle class to the super rich.

The federal response to Katrina was perfect -- a huge bureaucracy that
utterly failed. What better way make people think that government is
hopeless, that taxes are a waste? Who wants more of a corrupt,
bungling bureaucracy that is indifferent to human suffering? Drowning
such a creature in a bathtub seems too kind.

Meanwhile, insiders who know how to work the system -- for example,
Halliburton, Raytheon, and Boeing -- are earning record returns, and
two important public purposes are thereby fulfilled: rates of return
on invested capital are pushed upward, at least for a well-connected
few, at the same time government is disgraced and discredited. Voters,
dismayed, stay home in droves, so the status quo is doubly secured.

Thanks to this President's extraordinary vision and leadership, it may
take decades to restore confidence in government as the leveler of
playing fields, if it can be done at all.

System response No. 12: Cut wages for workers.

Over the past 30 years, this has been accomplished in the U.S. by a
variety of creative techniques, and it must be considered the
centerpiece of the ongoing effort to redistribute the pie, to maintain
investors' portions at fair, historical levels or better.[7]

Techniques for cutting wages now include:

a. As labor productivity has increased in recent decades (meaning,
more output per person-hour of work), modern owners have simply
refused to pass the increased income on to workers in the form of wage
increases. This is a new trend of the past 30 years, but unmistakable.
Productivity has continued to rise during the past 3 decades (though
more slowly than historical average rates), but wages have stagnated
and in many cases declined. The owners are simply keeping more for
themselves.[20] This approach has both simplicity and transparency to
commend it.

b. Keep the minimum wage low, rising at a rate that fails to keep up
with inflation. The minimum wage sets the floor beneath all wages, so
if it fails to rise with inflation, all wages will tend to stagnate or
decline. This has been accomplished through exemplary bipartisan
consensus. Congress last raised the minimum wage in 1997 (to $5.15 an
hour, an annual income of $10,300).

c. Eliminate existing labor unions and prevent the formation of new
unions. Unionized workers earn, on average, 21% more per hour than
non-union workers. Perhaps more importantly, organized workers have
come to expect somewhat safe and modestly healthful working
conditions, a modicum of medical benefits, overtime pay, 2-week paid
vacations, and perhaps, in extreme cases, even retirement benefits.
When growth is slow and owners are feeling that their return on
investment is unfairly pinched, unions are seen as standing in the way
of efforts to redistribute the pie upward. So unions must go. It's now
so blatant that Human Rights Watch issued a stinging report in 2000
accusing the U.S. of repeated intentional violation of the
internationally-recognized human rights of its workers.[21]

d. Eliminate defined benefit pensions, and, in an increasing number of
instances, eliminate pensions entirely, as was done recently at United
Airlines with the good help of a Reagan-appointed federal judge.
Efforts to eliminate pensions entirely are gathering steam, as one
would expect if my hypothesis about the bipartisan response to slow
growth is correct.[22]

With the average age of the population rising, the reduction or
elimination of retirement benefits (such as Medicare, Medicaid, Social
Security, and private pensions) may at first blush seem like a
political powder keg.[22] Perhaps the thinking among the leaders of
both parties is that an elderly, destitute population will remain so
frightened and disoriented that it cannot effectively make its
political will felt. In any case, efforts to eliminate retirement
benefits seem to be proceeding apace and working well. As the man who
jumped off the skyscraper said as he fell past the 20th floor, "So far
so good."

e. Increasingly, the U.S. workforce has been put into direct
competition with low-wage workers in Third World countries. Without
strict oversight and enforcement of a kind never yet seen anywhere in
the world, this sort of competition inevitably creates a "race to the
bottom" for wages, working conditions, and environmental standards
simultaneously -- all of which are ways to "externalize" costs of
production and thus to move a larger, fairer portion of the pie into
the domain of the investor class.

f. Reduce the availability of health insurance. In 2003, 45 million
Americans had no health insurance, up 1.4 million from the year before
and up 5.1 million from the year 2000.[23]

System response No. 13: Promote rapid technical innovation

Business and government together are constantly searching for "the
next big thing," hoping to induce rapid technical innovation. It's the
star wars missile defense shield; no, it's biotechnology; no, it's
nanotechnology; no, it's really "synthetic biology" -- the creation of
entirely new life forms never previously known on planet earth. Of
course, by definition, rapid innovation and deployment are
incompatible with thoughtful consideration of likely consequences
prior to deployment. However, ill-considered deployment has been the
norm for 180 years, so it is now thought to be "business as usual" and
is easily justified as the price of progress. Rapid innovation churns
the economy and creates manifold opportunities for decent return on
investment -- particularly during the early stages of a new product or
process. It is only later that trouble becomes apparent and profits
decline, at which point government typically steps in to pick up the
pieces and shield investors from the consequences of their impetuous
zeal. (Think Superfund. Think nuclear power.)

Despite official protestations to the contrary, U.S. government
policies generally encourage industrial enterprises to "externalize"
the costs of their damage to nature and human health, and this trend
has accelerated in recent years as economic growth has slowed. The
truth is, many industrial operations simply cannot afford to
internalize their costs and at the same time provide a decent return,
so they MUST externalize their costs. They don't really have a choice,
given the pressing need for decent return on investment.

[To be continued next week.]

=============

[1] Among other sources, see Kevin Phillips, American Theocracy; The
Peril and Politics of Radical Religion, Oil, and Borrowed Money. New
York: Viking, 2006. ISBN 0-670-03486-X. According to Phillips, roughly
55% of those who voted for Mr. Bush in 2004 believe that the world
will end in the battle of Armageddon, as described in the Book of
Revelation. As Phillips says (pg. vii), "... the last two presidential
elections mark the transformation of the GOP [the Republican Party]
into the first religious party in U.S. history." Phillips is a well-
known Republican.

[2] Bernstein, Michael A., and David E. Adler. Understanding American
Economic Decline. Cambridge: Cambridge University Press, 1994. ISBN
0-521-45679-7.

[3] Bjork, Gordon C. The Way It Worked and Why It Won't; Structural
Change and the Slowdown of U.S. Economic Growth. Westport, Conn.:
Praeger, 1999. ISBN 0-275-96532-5.

[4] Cohen, Richard and Peter A. Wilson. Superpowers in Economic
Decline; U.S. Strategy in the Transcentury Era. N.Y.: Taylor and
Francis, 1990. ISBN 0-8448-1625-6.

[5] Mardick, Jeffrey. The End of Affluence; The Causes and
Consequences of America's Economic Dilemma. N.Y.: Random House, 1995.
ISBN 0-679-43623-5.

[6] Shutt, Harry. The Trouble with Capitalism; An Enquiry into the
Causes of Global Economic Failure. London: Zed Books, 1998. ISBN
1-85649-566-3.

[7] Data on our growing inequalities of wealth are available from
several sources, but my current favorite is Gar Alperovitz, America
Beyond Capitalism; Reclaiming Our wealth, Our Liberty and Our
Democracy (Hoboken, N.J.: John Wiley & Sons, Inc., 2005); see pgs.
204-206. See also 6.] Chuck Collins and Felice Yeskel, Economic
Apartheid in America (New York: New Press, 2000) with revised and
corrected data available here. See also, for example, Edward N.
Wolff, Top Heavy; the Increasing Inequality of Wealth in American and
What Can Be Done About It (New York: The New Press, 2002). Another
excellent book is Michael Zweig's, The Working Class Majority;
America's Best Kept Secret (Ithaca, N.Y.: Cornell University Press,
2000); ISBN 0-8014-3637-0.

[8] "EPA Revises Regulatory Reviews To Discount Long-Term Benefits,"
Inside EPA, October 8, 2004.

[9] Floyd Norris, "Too Much Capital: Why It Is Getting Harder to Find
a Good Investment," New York Times March 26, 2005, pg. C1.

[10] Peter M. Vitousek, and others. "Human Appropriation of the
Products of Photosynthesis," Bioscience Vol. 36 No. 6 (June, 1986),
pgs. 368- 373. Available here.

[11] Peter M. Vitousek and others, "Human Domination of Earth's
Ecosystems," Science Vol. 277 (July 25, 1997), pgs. 494-499; available
here. And see Jane Lubchenco, "Entering the Century of the
Environment: A New Social Contract for Science," Science Vol. 279
(Jan. 23, 1998), pgs. 491-497, available here.

[12] Gretchen Morgenson, "After the Debt Feast Comes the Heartburn,"
New York Times Nov. 27, 2005, pg. 3-1.

[13] See Kevin Phillips, American Theocracy; The Peril and Politics of
Radical Religion, Oil, and Borrowed Money. New York: Viking, 2006.
ISBN 0-670-03486-X. See Part III, "Borrowed Prosperity," pgs. 265-387.

[14] http://www.precaution.org/lib/06/prn_generation_of_debtors.06
0523.htm

[15] "Crumbling Infrastructure Erodes Quality of Life in U.S.,"
Environment News Service March 10, 2005.

[16] William Rivers Pitt, "The Thing We Don't Talk About,"
Truthout.org June 23, 2005.

[17] Robert Johnson, "Little Dogs Don't Pay Taxes," New York Times,
August 1, 2004, Sunday Business Section, pg. 2.

[18] Donald Barlett and James B. Steele, America: Who really Pays the
Taxes? (New York: Touchstone, 1994; ISBN 0-671-87157-9).

[19] Donald Barlett and James B. Steele, The Great American Tax Dodge;
How Spiraling Fraud and Avoidance Are Killing Fairness, Destroying the
Income Tax, and Costing You (Berkeley, Calif: University of California
Press, 2002; ISBN 0520236106).

[20] Economic Policy Institute, The State of Working America
2004/2005, September 5, 2004.

[21] Lance Compa, Unfair Advantage; Workers' Freedom of Association in
the United States Under International Human Rights Standards (New
York: Human Rights Watch, August 2000). ISBN 1-56432-251-3.

[22] See, for example, Eduardo Porter and Mary Williams Walsh,
"Benefits Go the Way of Pensions," New York Times February 9, 2006;
and see Mary Williams Walsh, "The Nation: When Your Pension is
Frozen," New York Times January 22, 2006; and Mary Williams Walsh,
"Whoops! There Goes Another Pension Plan" New York Times, September
18, 2005, pg. 3-1; and Mary Williams Walsh, "How Wall Street Wrecked
United's Pension," New York Times July 31, 2005, pg. 3-1.

[23] Robert Pear, "Health Leaders Seek Consensus Over Uninsured," New
York Times May 29, 2005, pg. A1.

Return to Table of Contents

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From: AlterNet, May 30, 2006
[Printer-friendly version]

TYRANNY OF THE CHRISTIAN RIGHT

By Michelle Goldberg

Whenever I talk about the growing power of the evangelical right with
friends, they always ask the same question: What can we do? Usually I
reply with a joke: Keep a bag packed and your passport current.

I don't really mean it, but my anxiety is genuine. It's one thing to
have a government that shows contempt for civil liberties; America has
survived such men before. It's quite another to have a mass movement
-- the largest and most powerful mass movement in the nation -- rise
up in opposition to the rights of its fellow citizens. The
Constitution protects minorities, but that protection is not absolute;
with a sufficiently sympathetic or apathetic majority, a tightly
organized faction can get around it.

The mass movement I've described aims to supplant Enlightenment
rationalism with what it calls the "Christian worldview." The phrase
is based on the conviction that true Christianity must govern every
aspect of public and private life, and that all -- government,
science, history and culture -- must be understood according to the
dictates of scripture. There are biblically correct positions on every
issue, from gay marriage to income tax rates, and only those with the
right worldview can discern them. This is Christianity as a total
ideology -- I call it Christian nationalism. It's an ideology adhered
to by millions of Americans, some of whom are very powerful. It's what
drives a great many of the fights over religion, science, sex and
pluralism now dividing communities all over the country.

I am not suggesting that religious tyranny is imminent in the United
States. Our democracy is eroding and some of our rights are
disappearing, but for most people, including those most opposed to the
Christian nationalist agenda, life will most likely go on pretty much
as normal for the foreseeable future. Thus for those who value secular
society, apprehending the threat of Christian nationalism is tricky.
It's like being a lobster in a pot, with the water heating up so
slowly that you don't notice the moment at which it starts to kill
you.

If current trends continue, we will see ever-increasing division and
acrimony in our politics. That's partly because, as Christian
nationalism spreads, secularism is spreading as well, while moderate
Christianity is in decline. According to the City University of New
York Graduate Center's comprehensive American religious identification
survey, the percentage of Americans who identify as Christians has
actually fallen in recent years, from 86 percent in 1990 to 77 percent
in 2001. The survey found that the largest growth, in both absolute
and percentage terms, was among those who don't subscribe to any
religion. Their numbers more than doubled, from 14.3 million in 1990,
when they constituted 8 percent of the population, to 29.4 million in
2001, when they made up 14 percent.

"The top three 'gainers' in America's vast religious marketplace
appear to be Evangelical Christians, those describing themselves as
Non-Denominational Christians and those who profess no religion," the
survey found. (The percentage of other religious minorities remained
small, totaling less than 4 percent of the population).

This is a recipe for polarization. As Christian nationalism becomes
more militant, secularists and religious minorities will mobilize in
opposition, ratcheting up the hostility. Thus we're likely to see a
shrinking middle ground, with both camps increasingly viewing each
other across a chasm of mutual incomprehension and contempt.

In the coming years, we will probably see the curtailment of the civil
rights that gay people, women and religious minorities have won in the
last few decades. With two Bush appointees on the Supreme Court,
abortion rights will be narrowed; if the president gets a third, it
could mean the end of Roe v. Wade. Expect increasing drives to ban gay
people from being adoptive or foster parents, as well as attempts to
fire gay schoolteachers. Evangelical leaders are encouraging their
flocks to be alert to signs of homosexuality in their kids, which will
lead to a growing number of gay teenagers forced into "reparative
therapy" designed to turn them straight. (Focus on the Family urges
parents to consider seeking help for boys as young as five if they
show a "tendency to cry easily, be less athletic, and dislike the
roughhousing that other boys enjoy.")

Christian nationalist symbolism and ideology will increasingly pervade
public life. In addition to the war on evolution, there will be
campaigns to teach Christian nationalist history in public schools. An
elective course developed by the National Council on Bible Curriculum
in Public Schools, a right-wing evangelical group, is already being
offered by more than 300 school districts in 36 states. The influence
of Christian nationalism in public schools, colleges, courts, social
services and doctors' offices will deform American life, rendering it
ever more pinched, mean, and divided.

There's still a long way, though, between this damaged version of
democracy and real theocracy. Tremendous crises would have to shred
what's left of the American consensus before religious fascism becomes
a possibility. That means that secularists and liberals shouldn't get
hysterical, but they also shouldn't be complacent.

Christian nationalism is still constrained by the Constitution, the
courts, and by a passionate democratic (and occasionally Democratic)
opposition. It's also limited by capitalism. Many corporations are
happy to see their political allies harness the rage and passion of
the Christian right's foot soldiers, but the culture industry is
averse to government censorship. Nor is homophobia good for business,
since many companies need to both recruit qualified gay employees and
market to gay customers. Biotech firms are not going to want to hire
graduates without a thorough understanding of evolution, so economic
pressure will militate against creationism's invading a critical mass
of the public schools.

Taking the land

It would take a national disaster, or several of them, for all these
bulwarks to crumble and for Christian nationalists to truly "take the
land," as Michael Farris, president of the evangelical Patrick Henry
College, put it. Historically, totalitarian movements have been able
to seize state power only when existing authorities prove unable to
deal with catastrophic challenges -- economic meltdown, security
failures, military defeat -- and people lose their faith in the
legitimacy of the system.

Such calamities are certainly conceivable in America -- Hurricane
Katrina's aftermath offered a terrifying glimpse of how quickly order
can collapse. If terrorists successfully strike again, we'd probably
see significant curtailment of liberal dissenters' free speech rights,
coupled with mounting right-wing belligerence, both religious and
secular.

The breakdown in the system could also be subtler. Many experts have
warned that America's debt is unsustainable and that economic crisis
could be on the horizon. If there is a hard landing -- due to an oil
shock, a burst housing bubble, a sharp decline in the value of the
dollar, or some other crisis -- interest rates would shoot up, leaving
many people unable to pay their floating-rate mortgages and credit
card bills. Repossessions and bankruptcies would follow. The resulting
anger could fuel radical populist movements of either the left or the
right -- more likely the right, since it has a far stronger
ideological infrastructure in place in most of America.

Military disaster may also exacerbate such disaffection. America's war
in Iraq seems nearly certain to come to an ignominious end. The real
victims of failure there will be Iraqi, but many Americans will feel
embittered, humiliated and sympathetic to the stab-in-the-back
rhetoric peddled by the right to explain how Bush's venture has gone
so horribly wrong. It was the defeat in World War I, after all, that
created the conditions for fascism to grow in Germany.

Perhaps America will be lucky, however, and muddle through its looming
problems. In that case, Christian nationalism will continue to be a
powerful and growing influence in American politics, although its
expansion will happen more fitfully and gradually.

The country's demographics are on the movement's side. Megachurch
culture is spreading. The exurbs where religious conservatism thrives
are the fastest growing parts of America; in 2004, 97 of the country's
100 fastest-growing counties voted Republican. The disconnection of
the exurbs is a large part of what makes the spread of Christian
nationalism's fictitious reality possible, because there is very
little to conflict with it.

A movement that constitutes its members' entire social world has a
grip that's hard to break. In The Origins of Totalitarianism, Hannah
Arendt put it this way: "Social atomization and extreme
individualization preceded the mass movements which, much more easily
and earlier than they did the sociable, non-individualistic members of
the traditional parties, attracted the completely unorganized, the
typical 'nonjoiners' who for individualistic reasons always had
refused to recognize social links or obligations."

America's ragged divides

Those who want to fight Christian nationalism will need a long-term
and multifaceted strategy. I see it as having three parts -- electoral
reform to give urban areas fair representation in the federal
government, grassroots organizing to help people fight Christian
nationalism on the ground and a media campaign to raise public
awareness about the movement's real agenda.

My ideas are not about reconciliation or healing. It would be good if
a leader stepped forward who could recognize the grievances of both
sides, broker some sort of truce, and mend America's ragged divides.
The anxieties that underlay Christian nationalism's appeal -- fears
about social breakdown, marital instability and cultural decline --
are real. They should be acknowledged and, whenever possible,
addressed. But as long as the movement aims at the destruction of
secular society and the political enforcement of its theology, it has
to be battled, not comforted and appeased.

And while I support liberal struggles for economic justice -- higher
wages, universal health care, affordable education, and retirement
security -- I don't think economic populism will do much to neutralize
the religious right. Cultural interests are real interests, and many
drives are stronger than material ones. As Arendt pointed out,
totalitarian movements have always confounded observers who try to
analyze them in terms of class.

Ultimately, a fight against Christian nationalist rule has to be a
fight against the anti-urban bias built into the structure of our
democracy. Because each state has two senators, the 7 percent of the
population that live in the 17 least-populous states control more than
a third of Congress's upper house. Conservative states are also
overrepresented in the Electoral College.

According to Steven Hill of the Center for Voting and Democracy, the
combined populations of Montana, Wyoming, Nevada, North and South
Dakota, Colorado, Nebraska, Kansas, Oklahoma, Arizona, and Alaska
equal that of New York and Massachusetts, but the former states have a
total of nine more votes in the Electoral College (as well as over
five times the votes in the Senate). In America, conservatives
literally count for more.

Liberals should work to abolish the Electoral College and to even out
the composition of the Senate, perhaps by splitting some of the
country's larger states.(A campaign for statehood for New York City
might be a place to start.) It will be a grueling, Herculean job. With
conservatives already indulging in fantasies of victimization at the
hands of a maniacal Northeastern elite, it will take a monumental
movement to wrest power away from them. Such a movement will come into
being only when enough people in the blue states stop internalizing
right-wing jeers about how out of touch they are with "real Americans"
and start getting angry at being ruled by reactionaries who are out of
touch with them.

After all, the heartland has no claim to moral authority. The states
whose voters are most obsessed with "moral values" have the highest
divorce and teen pregnancy rates. The country's highest murder rates
are in the South and the lowest are in New England. The five states
with the best-ranked public schools in the country -- Massachusetts,
Connecticut, Vermont, New Jersey and Wisconsin -- are all progressive
redoubts. The five states with the worst -- New Mexico, Nevada,
Arizona, Mississippi and Louisiana -- all went for Bush.

The canard that the culture wars are a fight between "elites" versus
"regular Americans" belies a profound split between different kinds of
ordinary Americans, all feeling threatened by the others' baffling and
alien values. Ironically, however, by buying into right-wing elite-
baiting, liberals start thinking like out-of-touch elites. Rather than
reflecting on what kind of policies would make their own lives better,
what kind of country they want to live in, and who they want to
represent them -- and then figuring out how to win others to their
vision -- progressives flail about for ideas and symbols that they
hope will appeal to some imaginary heartland rube. That is
condescending.

Focus on the local

One way for progressives to build a movement and fight Christian
nationalism at the same time is to focus on local politics. For
guidance, they need only look to the Christian Coalition: It wasn't
until after Bill Clinton's election exiled the evangelical right from
power in Washington that the Christian Coalition really developed its
nationwide electoral apparatus.

The Christian right developed a talent for crafting state laws and
amendments to serve as wedge issues, rallying their base, and forcing
the other side to defend seemingly extreme positions. Campaigns to
require parental consent for minors' abortions, for example, get
overwhelming public support and put the pro-choice movement on the
defensive while giving pro-lifers valuable political experience.

Liberals can use this strategy too. They can find issues to exploit
the other side's radicalism, winning a few political victories and,
just as important, marginalizing Christian nationalists in the eyes of
their fellow citizens. Progressives could work to pass local and state
laws, by ballot initiative wherever possible, denying public funds to
any organization that discriminates on the basis of religion. Because
so much faith-based funding is distributed through the states, such
laws could put an end to at least some of the taxpayer-funded bias
practiced by the Salvation Army and other religious charities. Right
now, very few people know that, thanks to Bush, a faith-based outfit
can take tax dollars and then explicitly refuse to hire Jews, Hindus,
Buddhists or Muslims. The issue needs far more publicity, and a
political fight -- or a series of them -- would provide it. Better
still, the campaign would contribute to the creation of a grassroots
infrastructure -- a network of people with political experience and a
commitment to pluralism.

Progressives could also work on passing laws to mandate that
pharmacists fill contraceptive prescriptions. (Such legislation has
already been introduced in California, Missouri, New Jersey, Nevada,
and West Virginia.) The commercials would practically write
themselves. Imagine a harried couple talking with their doctor and
deciding that they can't afford any more kids. The doctor writes a
birth control prescription, the wife takes it to her pharmacist -- and
he sends her away with a religious lecture. The campaign could use one
of the most successful slogans that abortion rights advocates ever
devised: "Who decides -- you or them?"

A new media strategy

In conjunction with local initiatives, opponents of Christian
nationalism need a new media strategy. Many people realize this.
Fenton Communications, the agency that handles public relations for
MoveOn, recently put together the Campaign to Defend the Constitution,
a MoveOn-style grassroots group devoted to raising awareness about the
religious right. With nearly 3.5 million members ready to be quickly
mobilized to donate money, write letters or lobby politicians on
behalf of progressive causes, MoveOn is the closest thing liberals
have to the Christian Coalition, but its focus tends to be on economic
justice, foreign policy and the environment rather than contentious
social issues. The Campaign to Defend the Constitution intends to
build a similar network to counter Christian nationalism wherever it
appears.

Much of what media strategists need to do simply involves public
education. Americans need to learn what Christian Reconstructionism
means so that they can decide whether they approve of their
congressmen consorting with theocrats. They need to realize that the
Republican Party has become the stronghold of men who fundamentally
oppose public education because they think women should school their
kids themselves. (In It Takes a Family, Rick Santorum calls public
education an "aberration" and predicts that home-schooling will
flourish as "one viable option among many that will open up as we
eliminate the heavy hand of the village elders' top-down control of
education and allow a thousand parent-nurtured flowers to bloom.")

When it comes to the public relations fight against Christian
nationalism, nothing is trickier than battles concerning public
religious symbolism. Fights over creches in public squares or
Christmas hymns sung by school choirs are really about which aspects
of the First Amendment should prevail -- its protection of free speech
or its ban on the establishment of religion. In general, I think it's
best to err on the side of freedom of expression. As in most First
Amendment disputes, the answer to speech (or, in this case, symbolism)
that makes religious minorities feel excluded or alienated is more
speech -- menorahs, Buddhas, Diwali lights, symbols celebrating
America's polyglot spiritualism.

There are no neat lines, no way to suck the venom out of these issues
without capitulating completely. But one obvious step civil
libertarians should take is a much more vocal stance in defense of
evangelicals' free speech rights when they are unfairly curtailed.
Although far less common than the Christian nationalists pretend, on a
few occasions lawsuit-fearing officials have gone overboard in
defending church/state separation, silencing religious speech that is
protected by the First Amendment. (In one 2005 incident that got
tremendous play in the right-wing press, a principal in Tennessee
wouldn't allow a ten-year-old student to hold a Bible study during
recess.) Such infringements should be fought for reasons both
principled, because Christians have the same right to free speech as
everyone else, and political, because these abuses generate a backlash
that ultimately harms the cause of church/state separation.

The ACLU already does this, but few hear about it, because secularists
lack the right's propaganda apparatus. Liberals need to create their
own echo chamber to refute these kind of distortions while loudly
supporting everyone's freedom of speech. Committed Christian
nationalists won't be won over, but some of their would-be
sympathizers might be inoculated against the claim that progressives
want to extirpate their faith, making it harder for the right to frame
every political dispute as part of a war against Jesus.

The challenge, finally, is to make reality matter again. If
progressives can do that, perhaps America can be saved.

Fighting fundamentalism at home

Writing just after 9/11, Salman Rushdie eviscerated those on the left
who rationalized the terrorist attacks as a regrettable explosion of
understandable third world rage: "The fundamentalist seeks to bring
down a great deal more than buildings," he wrote. "Such people are
against, to offer just a brief list, freedom of speech, a multiparty
political system, universal adult suffrage, accountable government,
Jews, homosexuals, women's rights, pluralism, secularism, short
skirts, dancing, beardlessness, evolution theory, sex."

Christian nationalists have no problem with beardlessness, but except
for that, Rushdie could have been describing them.

It makes no sense to fight religious authoritarianism abroad while
letting it take over at home. The grinding, brutal war between modern
and medieval values has spread chaos, fear, and misery across our poor
planet. Far worse than the conflicts we're experiencing today,
however, would be a world torn between competing fundamentalisms. Our
side, America's side, must be the side of freedom and Enlightenment,
of liberation from stale constricting dogmas. It must be the side that
elevates reason above the commands of holy books and human solidarity
above religious supremacism. Otherwise, God help us all.

Reprinted from Kingdom Coming: The Rise of Christian Nationalism by
Michelle Goldberg.

Copyright 2006 by Michelle Goldberg

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From: New York Times, May 30, 2006
[Printer-friendly version]

RISE IN RATE OF TWIN BIRTHS MAY BE TIED TO DAIRY CASE

By Nicholas Bakalar

American women who eat dairy products appear to be five times as
likely to give birth to fraternal twins as those who do not, according
to a new study, and one explanation may lie in dairy products from
cows injected with synthetic growth hormone.

Dr. Gary Steinman, an assistant clinical professor of obstetrics at
the Albert Einstein College of Medicine, reached that conclusion by
looking at the medical records of 1,042 mothers who were vegans
consuming no dairy products and comparing them with those of mothers
who regularly ate dairy products.

His findings appear in the May issue of The Journal of Reproductive
Medicine. Eating dairy products increases blood levels of insulinlike
growth hormone, or I.G.F., and it is this increased hormone level that
is associated with increased rates of multiple ovulation.

In a study published in 2000 and cited in the findings, vegan women
had concentrations of I.G.F. that were 13 percent lower than those in
women who regularly consumed dairy products.

Multiple births are associated with increased health risks for mothers
and infants, but Dr. Steinman said he was not prepared to use these
findings as the basis for advising women about diet before pregnancy.

"Since this is the first time diet has been implicated in an important
role for determining twinning rate," Dr. Steinman said in an e-mail
message, "it must be confirmed by others before rigid recommendations
can be made concerning health care."

Insufficient diet in general lowers the rate of twin births, but Dr.
Steinman said he had found evidence that the rate was directly related
to levels of growth hormone.

"The more I.G.F., the more the ovary is stimulated to release
additional eggs at ovulation," he said.

Animal studies, in rats and mice as well as in cattle, have
convincingly demonstrated that increased serum levels of growth
hormone are associated with increased ovulation.

All cow's milk has bovine growth hormone in it, naturally produced by
the animal's pituitary gland. Many dairy farmers inject their cattle
with recombinant bovine somatotropin, a synthetic version of the
naturally occurring hormone. This increases size and milk production,
but it has another effect: cows with higher growth hormone levels
produce more twins.

The consumption of any dairy products increases blood levels of
insulinlike growth hormone in humans, and consuming milk from cows
that have been injected with synthetic growth hormone can have a
correspondingly larger effect.

About one-third of American dairy cows are in herds where the hormone
is used, said a spokesman for Monsanto, the only manufacturer of
synthetic bovine growth hormone in the United States.

The evidence that eating dairy products increases the chances of
multiple ovulation is suggestive, but not conclusive. Many factors,
dietary and other, affect the rate of twin births. A study this month
in Lancet, for example, suggests that the B vitamin folic acid may
increase the survival of embryos in in vitro fertilization procedures,
resulting in more twin births.

Fraternal twins run in families, so genetics also plays an important
role. And the recent rise in the birth rate of twins is at least
partly attributable to delayed childbearing, as older mothers are more
likely to have twins.

The rate of twin births has also increased significantly since 1975,
when assisted reproductive technology came into wide use. But these
factors alone, Dr. Steinman said, do not explain the continuing
increase in the rates in the United States since 1994, when
recombinant bovine somatotropin was approved for sale.

In 2003, the United States had 3 sets of twins per 100 live births --
more than twice the rate of Britain, where growth hormone injection is
banned. (Triplets and higher multiple births raise this figure to
3.18.)

Dr. Steinman suggested that one significant reason for the large
difference was the recombinant bovine somatotropin.

"I am not claiming to be the first to show that variations in dietary
amounts can affect the twinning rate," Dr. Steinman said. "What is new
is specifying what in the diet may have this effect and how."

Copyright 2006 The New York Times Company

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From: Chicago Tribune, May 28, 2006
[Printer-friendly version]

PRESSURE TURNED UP IN THE WAR ON WATER

Towns push to make service public again

By E.A. Torriero

For many towns across the country, it once seemed like a good idea to
have municipal water utilities in the hands of private companies.

Now, bristling against skyrocketing rates, spotty service and foreign
ownership, a number of towns across Illinois and the U.S. are waging
fierce battles to regain control of their drinking water. A host of
them are fighting a German conglomerate that has snapped up more than
1,800 American water utilities.

The battle is intensifying in Illinois, where the German company RWE
and subsidiary Illinois American Water own the water supplies for more
than 1 million people in 125 areas of the state.

Responding to complaints, American Water held meetings last week in
Homer Glen, Orland Park and Bolingbrook hoping to mollify angry
customers. Instead, they tapped into a deep vein of frustration.

"Everything we hear is double-talk," said Debbie Litoborski of Homer
Glen, who is fighting the company over an $800 water bill. "Should we
call Germany to get the answers we need?"

In most of the country, including Chicago and many suburbs, water
service remains a public utility. About 15 percent of America's water
business, however, is in private ownership. Those ranks have tripled
in the last decade as cash-strapped cities seek ways to upgrade aging
water systems by turning to private firms.

Nevertheless, a showdown is brewing in Illinois as a half-dozen
communities are plotting to take over water systems. If they succeed,
Illinois American could lose as many as one-third of its customers.

Grass-roots groups are forming statewide to exchange battle plans,
hold rallies and plot strategies. Busloads of angry suburban residents
descended on Springfield this spring, demanding legislative help. In
April, Urbana's Mayor Laurel Prussing flew 4,327 miles to chastise RWE
executives and shareholders in Essen, Germany.

"I fired a diplomatic shot across the bow," she said. "I was there to
show the flag and to let them know that Americans are offended by
foreign intervention and corporate bullying. After all, it's our
water, not theirs."

Nationally, government and community takeover attempts against the
subsidiaries of Germany's RWE have lasted years and cost taxpayers and
consumers millions of dollars for legal challenges, referendums and
public relations campaigns.

In most instances, American Water--RWE's U.S. arm and the largest
private water company in the country--has won. In the last 15 years,
it has sold only three operations because of hostile challenges.

Bought by RWE for $7.5 billion in 2001, American Water has 1,800
operations in 29 states and three Canadian provinces, serving 18
million and generating $2.2 billion in revenues.

To the company, the threats are government piracy to thwart free
enterprise. The backlash has split towns, torn apart councils and
spawned court fights that landed in state supreme courts.

"The communities lose and the company loses," said Joe Conner, a
Tennessee attorney who has litigated the company's battles against
several communities.

In Monterey, Calif., last year, the company went on a blitzkrieg
advertising rush to defeat soundly a ballot issue calling for a public
water utility purchase. In Chattanooga, Tenn., the company spent more
than $5 million before fending off a city takeover in 2000. In
Lexington, Ky., a bitter battle is now headed toward a November
referendum.

In Illinois, in a blow to the company, state legislators passed a bill
this session that would make it easier for communities to seize local
water operations. The legislation is awaiting the governor's
signature.

The Illinois challenges come at an especially delicate juncture for
the company. Although American Water officials say none of the firm's
individual units is for sale, RWE is pursuing a public stock offering
for the whole of American Water.

If communities succeed in taking over even a few of its subsidiaries,
the value of the public offering could be seriously eroded, company
officials say.

In Illinois, the company defends its record despite two pending cases
before the Illinois Commerce Commission and an aggregate complaint
from the state attorney general over allegations of bad service and
rate gouging in three Chicago suburbs.

In the last decade, water wars in Illinois have taken psychological
and economic tolls. Seven years into its battle, Peoria decided last
year against a water takeover after an appraiser put the price tag at
a hefty $220 million. A few miles away, in Pekin, a takeover attempt
was squashed when the Illinois Commerce Commission ruled in 2004 that
Pekin was not capable of running the utility better.

Now, a half-dozen Illinois communities--Pekin, Champaign, Urbana,
Homer Glen, Orland Park and Bolingbrook--are bent on forcing Illinois
American to the bargaining table.

Consumers became riled in Champaign-Urbana last summer, when failed
pumps led to impure water on five occasions. Then, firefighters
arrived at a blaze in Champaign to find two of three hydrant covers
stuck shut. Illinois American describes them as isolated incidents,
but a backlash had begun.

On May Day, activists in Urbana staged a mock birthday party complete
with cake and balloons for Donald Correll, American Water's chief
executive. They sent Correll "greeting cards" demanding the company
sell local operations at a reasonable price.

The company has been firing back with letters to consumers in
Champaign-Urbana and telephone polls asking whether city officials'
attentions should be elsewhere. They gathered central Illinois
business leaders recently to warn that local officials were embarking
on a costly fight.

"I'm sort of perplexed why we would want to go through this," said
John Stewart, who runs an advertising business in Urbana and lives in
Champaign. "It seems likely it would be a laborious process that could
split the community, and nothing in the end would get accomplished."

- -- -- -

E.A. Torriero etorriero@tribune.com

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From: Center for American progress, May 15, 2006
[Printer-friendly version]

MIDDLE CLASS LOSING HOPE FOR THE AMERICAN DREAM

Report Suggests Correlation Between Higher CEO Compensation and
Declining Unionism

A recent report by John Burton and Christian Weller for the Center
for American Progress describes how the dreams of upward mobility for
middle-class families are plummeting due to stagnant wages and
vanishing benefits, while corporate CEOs are enjoying record levels of
compensation and corporations are reporting record profits.

The findings show compensation for CEO's is spiraling out of control:

** At the 350 largest public companies, the average CEO compensation
is $9.2 million. Compensation for oil and gas execs increased by 109
percent between 2003 and 2004.

** In 2004, the average CEO received 240 times more than the
compensation earned by the average worker. In 2002, the ratio was 145
to one.

** These levels of CEO compensation are not the norm for the
industrialized world. Typically, CEO pay in other industrialized
countries is only about one third of what American CEOs make.

** Highly-compensated CEOs are not being rewarded for performance with
the interests of shareholders in mind, the "textbook" explanation of
CEO compensation, according to an extensive body of research and
reporting.

** After-tax profits are booming and corporate America can easily
afford to offer fair wages and benefits to rank and file employees.
Unfortunately, while CEOs have enriched themselves, middle-class
families have taken hard hits to their paychecks, their health
coverage, and their pension plans.

The study suggests a couple of factors which are contributing to
excessive compensation. There is a negative correlation between
executive compensation and unionization; reducing union workers
results in higher pay for CEOs. The fraction of shares held by large
institutional investors has a direct relationship with the fraction of
executive pay in the form of stock options.

The report looks at the complexities for outsiders to assess the true
level of compensation. It discusses the difficulties in understanding
what a fair compensation package is due to the various forms of
compensations and compensatory perks outside of a firm. It also looks
at different forms of payments being made to CEOs as opposed to forms
used by other firms.

The report also discusses the executive entitlement system in which
the elite sub-culture of executives and directors are often unable to
objectively assess the individual performance of their fellow elites
and how this culture designs its own norms, hierarchies, and
behaviors.

It points out that in 2003, if a CEO would have made only $2.3 million
the average pay for worker should have been $51,148 (estimate by
Sklar, 2004.) But as CEOs got richer, more families were falling into
poverty. Median income declined by about $600 in inflation-adjusted
dollars, or 1.2 percent between 2001 and 2003, according to Census
data. In fact, from the end of 2003 through March 2005, inflation-
adjusted weekly earnings for the "production non-supervisory worker"
(this includes 80 percent of the American workforce) actually declined
by 0.9 percent (Bureau of Labor Statistics, 2005).

The report concludes, "As fair-minded people, Americans believe that
there should be a correlation between the job well done and the
reward. The trend in excessive CEO compensation reflects a culture of
greed and a growing inequality that poses a threat to the viability of
the American dream for many middle-class families. As a nation, we
must move forward with a progressive vision that restores our values
of hard work and fair play and insures that the promise of economic
opportunity is extended to all."

Click here to view a copy of the report.

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