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State Budgets And The Frog

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What the heck is going on in the US? In Wisconsin, along with other Midwestern states, there are protests galore. People are out demonstrating for rights and against the wave of austerity cuts that are hitting their state and attacking their local communities. All of this is occurring while 60% of the corporations doing business in Wisconsin pay no state income tax.

Pennsylvania has unfortunately proved to be a calm state so far despite the fact that their austerity cuts target the young(50% cut to institutions of higher education and hundreds of millions of dollars in aid to public schools) and those in need (the Department of Public Welfare will lose hundreds of current jobs and will eliminate hundreds of vacant jobs as well as a healthcare program for the poor). But Pennsylvania's new governor is also showing that he is a man of compassion. He is not only keeping the status quo for 70% of the corporations doing business in the state that do not pay state income tax, he is set on continuing the elimination of the state's Capital Stock and Franchise Tax.

Why are there no demonstrations in Pennsylvania? Perhaps it is because Governor Corbett showed that he is smarter than the average badger. Unlike the governor from Wisconsin who targeted labor unions in his state budget by eliminating collective bargaining rights for many public employees, Governor Corbett did no such thing. He merely cut funding.

Thus the temperature setting that has kept the frog in the kettle in Pennsylvania but has started it hopping in Wisconsin is the one that passes the union mark on the dial. A governor can turn the temperature dial as far as he or she wants as long as it does not reach union mark. In other words, a governor can slash the budget as long as the unions have their piece of the pie. That is not to say that the protesters do not have legitimate concerns or that they could care less about the effects the austerity cuts will have on those who will suffer from a loss of or reduction in services. But we must ask those who are organizing and leading the strikes in the Midwestern states about their intentions. Are they sincerely concerned about the suffering and injustice the new budgets will bring or are they just using the protesters' legitimate anger to garner political support? Jesse Jackson's speech to the protesters a couple of days ago, cathartically implied that the solution to the protesters' problems is voting for the other party--the Democrats.

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But the unions are not the only party that deserves to be questioned here. What is lost in all of this is an important reason why states are running deficits: that many corporations are living on free lunches. Again, 60% of the corporations in Wisconsin pay no state income taxes and neither do 70% of the corporations doing business in Pennsylvania. In terms of federal income tax, two thirds of the corporations doing business in the U.S. do not pay a cent despite the fact that many of them make a pretty penny off of federal spending. And that is not the only means by which corporations drink from the public sector's trough. What corporations get out of society is not the issue here. The issue we are examining here is what corporations are not putting back into society. 

Corporations began to not reinvest into society by failing to reward the increased productivity of the American worker with increased wages. Wages for most Americans have stagnated, in relation to inflation, in the past 30 years. In the meantime, because of machines, the American worker has been more productive than before. In addition, many jobs were moved overseas to cheaper labor markets such as China. Economist Richard Wolff has pointed out that 60% of the goods we purchase from China come from American subsidiaries. With the drop in manufacturing employment comes a hole in our consumer market. That, in conjunction with the rise of consumer markets of different countries,  eventually robs the incentive for multinational corporations to invest in our nation or even state. An indicator that this is true is what we have noted before. Corporations, while taking public money, are slashing their investments in our society as seen in politician enabled decreased tax payments. The loss in state and national tax revenues, combined with ever increasing military spending, can only result in an eventual reduction in infrastructure investment and maintenance. We have seen some of the results of this reduction in the state of our roads and bridges. We can consider education to be an essential part of our infrastructure. 

To make a long story short, Capitalism is leaving us. The first step was the moving of jobs overseas. The second step is the lack of investing in that which maintains society. A step that shows that the Capitalist boat is beginning to sink is that those planning on leaving the boat are grabbing all of the lifeboats with lifeboats being a metaphor for bailouts.The last step will be seen in a significant decline in the quality of the goods and services that will be offered to the general public. But of course with an ever increasing reduction in our purchasing power that is a result of the downturn in wages and fewer jobs, a drop in the quality of goods offered to the general public will be fitting. At that point, Capitalism will have left us and led us to serfdom. 
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The last group that must be questioned are the protesters themselves. The good news about them is their current willingness to exercise democracy now and their solidarity with each other. What these protesters must be asked is where was this solidarity when the jobs of others, such as those from manufacturing and services, were being outsourced? The answer is simple, they had no solidarity until they became the targets. They had the same attitude towards those of lower economic classes and lower paid jobs as the corporations have for them today. 

We should note here that those protesting in Wisconsin did not just become targets when Governor Walker took office. They have been targets for a while but they have been like the frog who is content to stay in the kettle of water so long as the temperature goes up only a little at a time. The economic conditions that the residents from Wisconsin are having to adjust to today is a result of a long term bipartisan effort by both Democrats and Republicans. It is only now, when those who are causing a spike in the heat, like Governor Walker, that people are beginning to recognize what is happening. So what Walker did was to put the state of Wisconsin on a quick boil.

Back East, Governor Corbett is not so willing to follow Governor Walker's example. Thus he refrained from making direct attacks on unions and, instead, settled for more accepted and tolerated attacks like cutting services. And like the protesters in Wisconsin, Pennsylvanians are too shy in showing solidarity while they are not the targets. At this rate, the frog will be too cooked to react before it recognizes its peril. A tragic irony here is that the best time to act, that is the apex of the people's power to influence our leaders, is when they have yet to become the primary target of our political-corporate governmental complex.

At the National Austerity Protests (N.A.P.) Facebook page, we suggest a 4 step. strategy to stop our present economic slide. Those 4 steps are:

    1. Participate in public demonstrations
    2. Vote for 3rd party candidates during the elections. 
    3. Go on Strike 
    4. Boycott as many products as possible produced by the Corporations whose avoidance of taxes is contributing to the deficit problem

We can justify step 2 by repeating what was said before, our current economic situation is the result of solid teamwork between the Democrats and the Republicans. We can no longer afford to think that by voting for the Democrats that we are voting for the lesser of two evils. Such a view is more concerned with rationalizing our collaboration with those who are robbing us than taking responsibility for our voting actions. When we vote for the Democrats, we are not voting for those who would represent us, we are voting against the Republicans and thus are voting against the greater of two evils.

Finally we can modify step 4 by adding to the corporations we would financially shun. We should boycott, as much as possible, the products of those corporations that not only shy away from their social responsibilities by avoiding income taxes, but the products of those corporations that practice injustice against any of its stakeholders such as its employees and their communities. In addition, we should implore our own employers to join that boycott when purchasing goods and services from vendors.

What we will soon witness in Wisconsin is whether the frog that is now agitated will be able to leap out of the kettle. Perhaps it is too late, perhaps not. The frog in Pennsylvania has yet to feel the urgency to leap. Will it make the same mistake that the protesters in Wisconsin made by waiting too long to protest? Only time will tell.

 

Curt Day is a religious flaming fundamentalist and a political extreme moderate. Curt's blogs are at http://flamingfundamentalist.blogspot.com/ and http://violenceorsurvival.blogspot.com/

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