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Climate Investigation of Exxon Can Proceed in Massachusetts, State Judge Rules

Exxon had fought state Attorney General Maura Healey's demand for documents about potential climate fraud, but a Mass. judge backs Healey's right to the probe.

By David Hasemyer. This article was first published on Inside Climate News.

Massachusetts AG Maura Healey won the latest legal round with Exxon

Massachusetts Attorney General Maura Healey had her climate investigation of Exxon upheld by a state judge. Credit: Getty Images

A Massachusetts Superior Court judge has refused to block the climate fraud investigation of ExxonMobil opened last year by state Attorney General Maura Healey.

The ruling Wednesday means Exxon must comply with Healey's civil investigative demand for company records. Healey requested the documents as part of an investigation to determine if Exxon misled consumers about the risks climate change posed to its business.

Exxon had argued Healey lacked the jurisdiction to pursue the investigation and maintained Texas was the proper venue for any legal action because the company is headquartered in Dallas.

But Judge Heidi Brieger disagreed.

"This matter involves the Massachusetts consumer protection statute and Massachusetts case law arising under it about which the Massachusetts Superior Court is certainly more familiar than would be a federal court in Texas," according to Brieger's ruling.

The parallel legal battle Exxon is waging in a federal court in Texas to derail Healey's investigation remains under way.

The Massachusetts court ruling affirms the authority of the attorney general to investigate fraud, said Chloe Gotsis, a spokeswoman for Healey.

"Exxon must now end its obstructive tactics and come clean about whether it misled Massachusetts consumers and investors about what it knew about climate change, its causes and effects," Gotsis said.

A spokesman for Exxon did not respond to a request for comment.

Healey opened the investigation in April under the state's consumer protection laws seeking documents back to 1976 related to Exxon's understanding of climate change and the effects it could have on its business.

The civil investigative demand—similar to a subpoena—included a request for documents detailing the company's decades of climate research, how it was preparing for sea-level rise and materials prepared for potential investors.

The demand also sought statements by Exxon officials, including by the company's then-chief executive, Rex Tillerson, who was questioned Wednesday about climate change during his Senate confirmation hearing to become secretary of state.

The company argued that Healey's investigation amounted to an "arbitrary and capricious" abuse of power and was politically motivated.

But the judge said that under state law Healey was empowered to open the investigation based on her belief that a person or company was engaged in unfair or deceptive business practices in the state and that she should have "broad access" to Exxon records to determine if there were any violations of law.

Brieger also rejected Exxon's contention that the company was targeted by Healey because of its views on global warming.

"The court finds that the Attorney General has assayed sufficient grounds her concerns about Exxon's possible misrepresentations to Massachusetts consumers—upon which to issue the CID," said the 14-page ruling.

"In light of these concerns, the court concludes that Exxon has not met its burden showing that the Attorney General is acting arbitrarily or capriciously toward it."

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How Donald Trump Kingmaker-Billionaires Robert and Rebekah Mercer Have Poured Millions Into Climate Science Denial

By Graham Readfearn. This article was first published on Desmoblog.

Headlines about Mercer family

When it comes to climate science denial, some names come easily and deservingly to mind.

There’s oil giant ExxonMobil — a company that contributed millions of dollars to organizations that told the public there was no risk from burning fossil fuels.

There are the oil billionaire Koch brothers — Charles and David — and their ideological zeal against government regulations that drove them to pour vast amounts into groups spreading doubt on the realities of human-caused global warming.

But a name that has not yet reached those heights of climate science denial infamy — but likely should — is the Mercer family.

Who Are the Mercers?

A DeSmog analysis of Federal Electoral Commission returns shows Robert Mercer, the reclusive hedge fund manager, has donated $30.1 million to politics since January 2015 (a further $2.3 million has come from daughter Rebekah and wife Diana).

Some $15 million of Robert Mercer’s money went into the Make America Number 1 super-PAC that was headed by Rebekah Mercer and that bankrolled the final months of Donald Trump’s campaign. One source told The Hill: “The Mercers basically own this campaign.”

But DeSmog has found the Mercers have also pumped at least $22 million into organizations that push climate science denial while blocking moves to cut greenhouse gas emissions.

Trump too refuses to accept the evidence that climate change is caused by humans and has consistently called the issue a hoax.

Before diverting to Trump, the Mercers' cash was backing Senator Ted Cruz, who made climate science denial a main feature of his speeches.

Those positions on climate change, challenged by every major scientific institution in the world, are identical to those of the groups and individuals the Mercers have been handsomely funding through their own family foundation.

Climate science denial also fits well with Robert Mercer’s reported investment in Breitbart — the hyper partisan media outfit that calls climate change a hoax. Many see Breitbart as Trump’s very own propaganda vehicle — the Trump Pravda.

Steve Bannon, Breitbart’s former chief, was picked by Trump (or, more likely, by the Mercers) to lead his campaign. The controversial figure will be Trump’s chief strategist.

Climate Denial Funded

Very little is known about what the Mercers think about climate change or, for that matter, anything else.  Both father and daughter avoid media interviews.

But Rebekah has been described as the most powerful woman in GOP politics and is a pivotal member of the Trump team. Rebekah also runs her father’s charitable foundation.

So, the best way to get a handle on what the Mercers think, is to see where they spend their millions.

DeSmog has analyzed the Mercer Family Foundation’s tax returns since 2005 and finds some $22 million has gone to groups pushing climate science denial.

Across the board, the groups funded by the Mercers have misrepresented climate science, promoted fossil fuels, denigrated renewable energy, and pushed to strip powers from the U.S. Environmental Protection Agency (EPA).

The Chicago-based Heartland Institute has received $4,988,000 from the Mercers, cashing its first $1 million check in 2008.

The Heartland Institute holds regular “international climate change conferences” where denialists, fossil fuel-funded scientists, and politicians come together to talk tactics.

In 2012, the institute famously started a billboard campaign that used a picture of terrorist Ted “Unabomber” Kaczynski next to the phrase: “I still believe in global warming. Do you?”

Despite the generosity of the Mercers, the Heartland Institute does not publicly acknowledge the funding, perhaps indicative of the Mercers' desire to stay below the radar.

The Mercer name was even left out of internal Heartland budget documents leaked in 2012. If the Mercers had asked for anonymity, then Heartland’s coyness is not unusual.

Another organization shy about getting cash from the Mercer Family Foundation is the George W. Bush Foundation, the organization set up in 2006 to look after the official archive of the George W. Bush presidency.

The George W. Bush Foundation publishes a lengthy list of its financial supporters and the Mercers are not on it. But tax records show the Mercers have given the Bush Foundation $4.1 million since 2010.

Oregon Petition

Alongside funding for Breitbart and the Heartland Institute, Robert Mercer has also spent $1.25 million supporting an obscure group known as the Oregon Institute of Science and Medicine, led by Art Robinson.

Robinson was behind a long-debunked “survey” of university graduates, known as the Oregon petition. First published in 1998, the petition claimed that 30,000 “scientists” had declared humans were not to blame for global warming.

Robinson also thinks climate change is a hoax.  His institute sells nuclear survival manuals, is currently stockpiling human urine for testing, and sells home schooling kits for parents worried about their children being exposed to socialism.

Robert Mercer also supported Art Robinson’s failed 2010 Republican run for Congress.

As well as Robert and his family donating to Robinson’s campaign committee, Robert Mercer personally gave $643,750 to a super-PAC that ran attack ads against Robinson’s Democratic opponent (that opponent, Peter DeFazio, has noted that he had co-sponsored legislation to tax hedge fund transactions).

The biggest beneficiary of Mercer Family Foundation cash is the Media Research Center (MRC), a group which claims credit for convincing Americans that most of the media has a “liberal” bias.

The MRC’s outlets regularly give favorable coverage to climate science denialism, while ridiculing credentialed climate scientists and others who place a priority on cutting greenhouse gas emissions.

MRC alumnus Marc Morano, communications manager at the Committee for a Constructive Tomorrow, recruited his former employer to help him produce the climate science denial documentary Climate Hustle. Rebekah Mercer is an MRC director.

The Manhattan Institute for Policy Research is another group on the receiving end of the Mercers' generosity, to the tune of more than $1 million since 2011.

The institute’s researchers tend to argue against renewable energy while promoting fossil fuels and underplaying or ignoring the impacts of climate change.

Rebekah Mercer recently joined the institute’s board of trustees.

The Heritage Foundation is a relative newcomer to the Mercer family’s giving, but the think tank’s positions on energy, political ideology, and climate science fit the pattern perfectly — underplay and misrepresent the science, promote fossil fuels, and push for low government regulations.

Predictably, Rebekah Mercer is a trustee at Heritage, a think tank seen as influential in the Trump camp. The Trump team is drawing heavily from Heritage Foundation staff for its transition teams.

On the EPA “landing team” is Heritage’s David Kreutzer, who claims the recent run of record-breaking hot years globally is nothing unusual.

Rebekah Mercer is also on the board of the Moving Picture Institute (MPI), a group that helps finance and distribute movies which, according to its website, “make an impact on people's understanding of individual rights, limited government, and free markets.”

MPI even has a program to support stand-up comedians who promote this “freedom” ideology in their stand-up routines.

Climate Denial’s Most Powerful Ally?

Until now, the Mercer family’s funding of climate science denial groups has gone relatively unnoticed.

Most of the attention of investigative journalists had fallen on three overlapping groups that have either influenced or funded the climate science denial movement across the United States.

The first was the network of groups funded and orchestrated by the Koch brothers, who have invested millions into creating and sustaining conservative “think tanks” that take positions protecting the Koch brothers' fossil fuel interests.

Groups like the Cato Institute (which cashed a $300,000 Mercer check last year) and Americans for Prosperity have attacked the science of human-caused climate change while challenging the legitimacy of solutions, such as renewable energy and electric vehicles.

The second key funding stream for climate science denial organizations are two linked organizations called Donors Trust and Donors Capital Fund.

Both Donors Trust and Donors Capital Fund are “donor-advised funds” and are used by rich conservatives to funnel money to “libertarian” causes while hiding the identity of the donors.

A third major supporter of the climate science denial industry are those who stand to lose most from the public fully understanding the implications of climate change — the fossil fuel industry itself.

Companies including ExxonMobil, Peabody Energy, and Koch Industries, alongside trade groups representing the fossil fuel industry, have helped fund the machinery of doubt for decades.

Now, Robert Mercer’s fortune and the political prowess of daughter Rebekah have created another wealthy and powerful ally for the climate science denial industry.

President-elect Donald Trump is the most powerful vehicle yet for those billionaires willing to spend big to misrepresent climate science and gamble on society’s future.

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Ida B. Wells-Barnett : Iola, Princess of the Press & Feminist Crusader for Equality and Justice

By Kiilu Nyasha. This article was first published on Black Agenda Report.

Ida B. Wells was the kind of black leader we don't see much of any more.  Unlike today's leaders, the heads of nonprofit organizations financed by the self-interested generosity of the one percent, Ida's career was financed by the readers of the black press, from ordinary African American people.  This gave Wells the unique ability to tell the truth without fear or favor, which is no more than the duty of every journalist.  Ida, or Iola as she called herself in some early dispatches from lynching country has been gone from us longer than she was here by now, but her spirit is still felt, wherever some of us are brave.

Ida B. Wells-Barnett : Iola, Princess of the Press & Feminist Crusader for Equality and Justice

By Kiilu Nyasha

A tireless champion of her people, Ida B. Wells was the first of eight children born to Jim and Elizabeth Wells in Mississippi in 1862, six months before chattel slavery was ended with the Emancipation Proclamation.

Her parents, who had been slaves, were able to support their children because Elizabeth was an excellent cook and Jim a skilled carpenter. But when Ida was only 16, her parents and youngest sibling died of Yellow Fever during an epidemic. In keeping with the strength and fortitude she demonstrated throughout her remarkable life, Ida took responsibility for raising her six younger siblings with her grandmother’s help. Educated at nearby Rust College, a school run by white missionaries, Ida was forced to drop out; she got a full-time teaching job by lying about her age, and spent weekends washing, ironing and cooking for her large family.

Wells eventually moved to Memphis, Tenn., where she taught school in a small town called Woodstock and continued her education by attending Fisk University and Lemoyne Institute during the summers.

Ida’s career as a writer was sparked by an incident that occurred in 1884, while riding a train back to her job in Woodstock. Wells was asked by the conductor to move from her seat in the ladies' car into the smoking car.

"I refused," she later wrote, describing how the conductor tried to drag her out of the seat: "the moment he caught hold of my arm I fastened my teeth in the back of his hand. I had braced my feet against the seat in front and was holding to the back, and as he had already been badly bitten he didn’t try it again by himself. He went forward and got the baggage man and another man to help him and of course they succeeded in dragging me out."

When Wells got back to Memphis, she brought suit against the Railroad Company. The court ruled in her favor and awarded her $500 in damages. The judge presiding over the trial stated the railroad company violated the separate but equal laws by forcing Wells to ride in a smoking car that was separate but not first class, for which she had paid.

Even though the Tennessee Supreme Court reversed the decision three years later, this was the first case of its kind in the South, and generated tremendous public interest.

Thrilled with her victory and eager to share her story, Wells wrote an article for The Living Way, a Black Memphis newspaper, using the pen name "Iola."

Her prolific writing soon earned her the position of editor for three Memphis newspapers, The Living Way, The Evening Star and Free Speech, becoming part owner of the latter.

"All of this, although gratifying surprised me very much for I had no training except what the work on The Evening Star had given me, and no literary gifts and graces. But I had observed and thought much about conditions as I had seen them in the country schools and churches. I had an instinctive feeling that the people who had little or no school training should have something coming into their homes weekly, which dealt with their problems in a simple, helpful way. So in weekly letters to The Living Way, I wrote in a plain, common sense way on the things which concerned our people. Knowing that their education was limited, I never used a word of two syllables where one would serve the purpose. I signed these articles "Iola."

On exposing the inferior facilities of Black schools around Memphis, Wells was fired from her teaching job, but was then free to devote full time to the fight for justice and equality. She quickly became a famous writer whose articles appeared in journals and newspapers throughout the nation.

One reporter noted: "Miss Ida B. Wells, Iola, has been called the Princess of the Press, and she has well earned the title. No writer, the male fraternity not excepted, has been more extensively quoted."

In her autobiography, she wrote:

"While I was thus carrying on the work of my newspaper, happy in the thought that our influence was helpful and that I was doing the work I loved and had proved that I could make a living out of it, there came the lynching in Memphis which changed the whole course of my life. I was on one of my trips away from home busily engaged in Natchez when word came of the lynching of three men in Memphis."

It was during a cold night in March 1892. Wells' close friends, Thomas Moss, Calvin McDowell and Henry Stewart, owners of

People's Grocery Co., had angered white men who considered them "uppity" and sought to eliminate the competition they posed by an armed attack on their grocery store.

But the brothers fought back, shooting one of the attackers. Shortly thereafter, all three were arrested. A mob of cursing, shouting white men broke into the jail at Memphis, dragged them away from town and brutally murdered them.

Wells responded to this atrocious act of violence by writing an editorial in the Free Speech: She noted the lynching was really "an excuse to get rid of Negroes who were acquiring wealth and property and thus keep the race terrorized and ‘keep the nigger down.’

“The city of Memphis has demonstrated that neither character nor standing avails the Negro if he dares to protect himself against the white man or become his rival. There is nothing we can do about the lynching now, as we are out-numbered and without arms. The white mob could help itself to ammunition without pay, but the order is rigidly enforced against the selling of guns to Negroes. There is therefore only one thing left to do; save our money and leave a town which will neither protect our lives and property, nor give us a fair trial in the courts, but takes us out and murders us in cold blood when accused by white persons."

Memphis Blacks took Wells' advice, and in two month's time, six thousand black people left Memphis, many relocating to the Oklahoma Territory. Those who remained organized boycotts of white owned businesses in response to the lynchings.

The very night her article appeared, a mob invaded Wells' offices and destroyed the printing equipment and all the newspapers they could find. Her very life in danger, Wells moved to Chicago where she continued her blistering attacks on racist criminality and Southern injustice.

After the demise of The Free Speech, a Black newspaper called The New York Age began printing her articles, and Wells launched a lecturing tour throughout the northeast to further spread her message on the horrors of lynching.

Later on in 1892, Wells spoke at a conference of black women's clubs, where she was given $500 to investigate lynching and publish her findings.

"I then began an investigation of every lynching I read about. By 1893, over a thousand Black men, women and children had been hanged, shot and burned to death by white mobs in America."

During the late 1800's, violence against blacks increased at alarming rates and mob rule was becoming the norm. The KuKluxKlan established a "reign of terror," murdering and lynching innocent blacks, while most southern whites looked the other way.

Ida B. Wells traveled across the country interviewing eyewitnesses and visiting the scenes of lynchings. Of the 728 murders she investigated, Wells found that only a third involved Blacks actually accused of crimes. Not only men, but women and children were victims of mob violence.

Many blacks were hung, shot and burned to death for trivial things such as not paying a debt, disrespecting whites, testifying in court, stealing hogs, and public drunkenness. At least one third of the charges against black men were for the rape of white women. The racist violence against Black men was thus "justified" as protecting "white womanhood."

Wells wrote that in many of these so-called "rape" cases there was evidence of a consensual relationship between black men and white women, evoking outrage among whites. Her findings were published in a pamphlet titled Southern Horrors: Lynch Law in All Its Phases.

Repeating an assertion she frequently made during her anti-lynching crusade, Wells said that she had but one life to give, and if she must die by violence, she would take some of her persecutors with her. She kept a pistol available in the house and dared anyone to cross her threshold to harm her or any member of her family.

While remaining diligent in her anti-lynching crusade, Wells spearheaded the development of numerous African women's organizations in Chicago and Boston. She became a tireless worker for women’s right to vote, befriending both Susan B. Anthony and Jane Adams, and becoming a familiar face at suffrage meetings.

She became the first female representative to a press convention. And in 1889, at a Washington, D.C. convention, Wells was elected secretary to the National Press Association where she met for the first time, the great Frederick Douglass.

Later on, Wells collaborated with Douglass and others, including her future husband, in writing a pamphlet titled "Reasons Why the Colored American is not in the World's Colombian Exposition" in response to the exclusion of Blacks in the 1893 Chicago World's Fair. It documented the progress of blacks since their arrival in America, and was distributed to over 20,000 people.

Wells also became an activist in the struggle to block the establishment of segregated schools, and established the first kindergarten in a Black neighborhood.

In 1893, Wells embarked on a lecture tour of England, Scotland, and Wales, inspiring international organizations to apply pressure on America to end segregation and lynching.

Two years later, she published a report titled "A Red Record: Tabulated Statistics and Alleged causes of Lynching in the United States,” which argued that the impetus behind lynching was economic.

That same year, 1895, at the age of 33, Wells married Ferdinand L. Barnett, a Chicago lawyer, activist and editor. Barnett was the owner and founder of The Conservator, the first black newspaper in Chicago. Together, they had two sons and two daughters. Although the renowned journalist then took time out to focus on her family, she remained politically active.

In 1906, she joined with W.E.B. DuBois and others to further the Niagara Movement, which eventually became the NAACP. Wells was excluded from the leadership circles of the NAACP.

She helped found the National Association of Colored Women and the NAACP. In 1910 she formed the Negro Fellowship League, which she housed in a three-story building on Chicago's south side. It served as a fellowship home for new settlers from the south and provided space for religious services, an employment office, and a homeless shelter for men.

In1913, Wells established the first Black women's suffrage club. That same year she marched in a suffrage parade in Washington DC and met with President William McKinley about a lynching in South Carolina.

In 1916, She became involved with Marcus Garvey's Universal Negro Improvement Association. And in the years following World War I, she covered various race riots in Arkansas, East St. Louis and Chicago, publishing her reports in pamphlets and newspapers nationwide.

In 1928, Wells began her autobiography, stating that "the history of this entire period which reflected glory on the race should be known. Yet most of it is buried in oblivion... and so, because our youth are entitled to the facts of race history which only the participants can give, I am thus led to set forth the facts."

By 1930, her impatience with politicians and her growing concern for Chicago's Black ghetto led Wells to run for the Illinois State Senate, which she lost to the incumbent.

Wells continued her community organizing till the end of her life, determined to change the conditions of poverty and hopelessness on Chicago's South Side.

On March 25, 1931, at the age of 69, Ida B. Wells-Barnett joined the ancestors, leaving an incredible legacy of courage, sacrifice, dedication and activism. Given the harsh, dangerous conditions of the post Civil-War context in which she struggled, her accomplishments were truly amazing. She was surely one of the 20th century's most remarkable women.

in 1990 the U.S. Postal Service issued an Ida B. Wells-Barnett postage stamp. Her autobiography, "Crusade for Justice," edited by A. Duster, was published by the University of Chicago Press in 1970.

In 1941, a 1,600 unit Chicago public housing development on the south side of Chicago, the Ida B. Wells Homes was named in her honor.   After years of deliberate neglect the federal government and city of Chicago began demolition of the Ida B. Wells Homes.  The last buildings were taken down in 2011.

Long live the spirit of Ida B. Wells-Barnett.

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By the numbers: Barack Obama’s contribution to the decline of US democracy

By John Weeks. This article was first published on Open Democracy.

How neoliberal doctrine undermined the Obama administration and ushered in the age of Trump.

Obama meets Trump. Press Association/Pablo Martinez Monsivais. All rights reserved.

Yes, we can!

The iconic slogan “Yes, we can!” inspired the wave of enthusiasm that swept up millions of Americans during the presidential election of 2008 and carried Barack Obama to the White House. If that slogan epitomized the beginning of the Obama presidency, he had an equally iconic ending: the first African-American president shaking hands with the first president-elect in at least 100 years endorsed by the Ku Klux Klan.

In November 2008 Barack Obama won the presidency with almost 53% on a voter turnout of 58%. The winning percentage was the highest since 1988 and the turnout the largest for 50 years. The first non-white president took office on a surge of enthusiasm exceeding any since Franklin Roosevelt in 1932 (by comparison John Kennedy went to the presidency with less than half of total votes and a winning margin of 0.2 percentage points).

The enthusiasm for Obama arose from fervent hope for specific changes: 1) a universal, affordable health system; 2) the end of two disastrous wars (Afghanistan and Iraq); 3) economic recovery from the worst collapse in 80 years; and 4) action against banks and bankers to prevent a recurrence of the collapse.

To fulfil these hopes, Obama had majorities in both houses of Congress, 58 of 100 Senators (largest majority of any party in 30 years) and 257 seats in the House (most since 1992). By any measure the new president enjoyed an overwhelming majority.  Under some circumstances the Republican minority in the Senate could prevent voting, but a determined and bold president could force votes within the arcane Senate rules.

No he didn’t!

It quickly became obvious that Obama would be anything but determined and bold; on the contrary, avoiding conflict through compromise would guide his presidency. In face of a solidly right wing Republican opposition, attempting to compromise was recipe for failure, a disaster foretold and fulfilled.

Despite the large House and Senate majorities a litany of failure dogged the first two Obama years, some partial and others presented as success. Extension of the popular Medicare programme offered the obvious method of achieving a national health system (confusingly dubbed “single payer” by its adherents). Obama yielded before opposition from private “health care” corporations and drug companies.

The result was an extremely complicated, expensive and inefficient system acceptable to private interests. To make a bad outcome worse, seeking a non-existent compromise, the president delayed passage of the “The Patient Protection and Affordable Care Act” for so long that no one enjoyed the limited benefits before the mid-term election in 2010 (it became law in March 2010). The Republicans would use attacks on the president’s dubious triumph to regain control of the House of Representatives and almost seize the Senate.

The quickly enacted fiscal stimulus (February 2009), American Recovery and Reinvestment Act, brought the closest thing to success. Because the president failed to challenge the Republican hysteria over the fiscal deficit that the stimulus necessarily increased, the mildly successful recovery package would also serve Republican election propaganda.

Having lost the propaganda battle on health care and recovery, Obama scored a third own goal by declining to prosecute any financial executive for the illegal dealings that helped provoke the Great Recession of 2008-2010. This failure combined with massive capital replenishment of banks handed the right wing Republicans a slogan more natural to progressives, “bailout Main Street, not Wall Street”.

Finally, far from ending the two wars began by his predecessor, Obama continued to wage them, even expanding US military operations to other countries with extensive use of military drones as the preferred killing agent. The specific promise to close the brutal detention camp on Cuban soil is unfulfilled.

Like Bill Clinton before him, Obama remained popular despite his failures. Like Clinton his eight years as president would after the initial hope decline deeper and deeper into failure.  Perhaps the most shocking of these was the failure to mount serious opposition to the Republican gutting of the law protecting the right to vote, a savage blow to his fellow African-Americans. Weakening of the Voting Rights Act was de facto endorsement of state laws throughout the country restricting the rights of citizenship.

Had Obama ended two unpopular wars, supported an effective recovery programme, quickly forced through a Medicare-based health system for all, and aggressively reformed the US financial sector, he would be hailed as the greatest president since Franklin Roosevelt. Instead, he leaves condemned, yet another Democratic president whose neoliberal economic policies fed a rising of inequalities and shrinking of the well-being of the vast majority.

New Deal to neoliberalism

Wars, a flawed health care law and high unemployment did not give Donald Trump the key to the White House. The Chief Justice of the Supreme Court will swear in the most dangerous president in American history for a different reason. Beginning with Jimmy Carter in the 1970s the leadership of the Democratic Party enthusiastically worked to make neoliberal ideology mainstream consensus and Donald Trump is the outcome.

An equitable sharing of the benefits of economic growth is the necessary condition to sustain democracy in a capitalist society.  This condition was the basis for the so-called New Deal coalition forged by Franklin Roosevelt in the depths of the Great Depression of the 1930s. It would serve as the guiding principle of the Democratic Party through the presidency of Lyndon Johnson.

The policies to achieve this equitable sharing had a common theme, restrictions on the functioning of markets, with the purpose of preventing the anti-social consequences of capitalist competition. Concretely these restrictions were 1) trade unions to limit labour market competition, 2) anti-monopoly laws and strict regulations to prevent concentration of corporate power, and 3) severe constraints on financial capital.

Neoliberalism was and remains the antithesis of the New Deal political economy. In contrast to preventing the anti-social consequences of market competition, neoliberalism celebrates that competition, attributing its excesses to public regulation. With this inversion of logic, apologists for financial capital blamed the infamous “sub-prime crisis” on public regulation not fraud and deception by bankers.

From labour to capital

As America entered the twenty-first century, four decades of increasing inequality caused falling working class incomes and stagnation for the middle classes. Loss of hope in fulfilling “the American dream” increasingly undermined faith in US democracy. In 1932 an analogous crisis brought Franklin Roosevelt to the presidency to execute economic and social reforms that arrested the growth of inequality and, facilitated working class power through trade unions. In doing so Roosevelt “saved US capitalism”.

In 2008 a similar task fell to Barack Obama, to propose and implement the reforms that would preserve popular support for globalization capitalism. America’s first African-American president chose instead to intensify the economic forces undermining that support.

When Roosevelt became president in 1933, US income inequality as measured by the most commonly used index, the “Gini coefficient”, was over 50, and dropped to 44 by the beginning of this third term in 1941 (down to 37 by his death in 1945 and not above 40 again until 1982). The chart below shows changes in that index of inequality during the George W Bush and Barack Obama presidencies, calculated compared to 2001 when the Bush was inaugurated.

During the Bush years inequality fluctuated, slightly higher at the end of the eight years than at the beginning (up to 45.0 from 44.6). In every year of the Obama presidency through 2015 inequality was greater than in every year that George W Bush occupied the White House.

Changes in the “Gini coefficient” measure of inequality compared to 2001, 2002-2015

Note: A coefficient of 100 means one person has all income, 0 is an equal distribution across population. Source: US Bureau of the Census

A second chart shows rising inequality with more familiar numbers. By the end of the Bush years the share of income going to the richest 20% rose by a modest 0.4 percentage point compared to 2001, with the share of the bottom 60% down by less than a percentage point (-0.7). Except for 2009, the share of the richest 20% during the Obama period was higher than in any year Bush was president. The bottom 60% had a lower share in every year Obama was president.

Percentage point change in incomes compared to 2001, shares of lowest 60% (red) and richest 20% (blue), 2001-2015

Source: US Bureau of the Census

The final chart, taken directly from the Monthly Labour Review of the US Bureau of Labor Statistics, shows the inequality story for all US wage earners from 2007 to 2014. The vertical axis measures percentage changes in constant dollars, while the horizontal axis shows wage earners from the lowest paid to the highest.

Only the employees in the top 15% of the distribution gained an increase in real pay. The red line that includes all wage and non-wage benefits shows less concentrated gains, but even by that measure over sixty percent of earners suffered declining income. These statistics demonstrate not only the decline of working class incomes, but also the famous “hollowing out” of the American middle class.

Percentage change in real compensation & wages, US civilian workers, 2007-14

Compensation & wages vertical axis, position in distribution horizontal axis. Source: US Bureau of Labor Statistics. “Compensation” includes all non-wage benefits.

Ushering in Trump

Fifty years of democratic capitalism was the historic accomplishment of the New Deal. Relatively low and stable inequality provided the basis for what some call the “Golden Age” of US capitalism. In 1974 under a Republican presidency (Richard Nixon, replaced in mid-year by Gerald Ford) US income inequality dropped to its lowest as measured by the Gini coefficient.

Subsequently, under presidents both Democrat (Jimmy Carter, Bill Clinton, Barack Obama) and Republican (Ronald Reagan, George H W Bush, George W Bush) inequality rose inexorably. Rising inequality revived social divisions subsumed by prosperity during the “Golden Age.” Donald Trump encouraging and exploiting those divisions is the vehicle for a transition to authoritarian capitalism.

With Donald Trump neoliberalism fulfils its logic, destroying even the illusion of a just society.

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Trump’s Economic Policies Are No Answer To Our Problems

By Marty Hart-Landsberg. This article was first published on Socialist Project.

President Trump has singled out unfair international trading relationships as a major cause of U.S. worker hardship. And he has promised to take decisive action to change those relationships by pressuring foreign governments to rework their trade agreements with the U.S. and change their economic policies. While international economic dynamics have indeed worked to the disadvantage of many U.S. workers, Trump's framing of the problem is highly misleading and his promised responses are unlikely to do much, if anything, to improve majority working and living conditions.

Labour unrest is spreading through the factories on the Mexican side of the border

Labour unrest is spreading through the factories on the Mexican side of the border, where workers say they deserve more than $6 a day.

President Trump and his main advisers have aimed their strongest words at Mexico and China, pointing out that the U.S. runs large trade deficits with each, leading to job losses in the USA. For example, Bloomberg News reports that Peter Navarro, the head of President Trump's newly formed White House National Trade Council “has blamed NAFTA and China's 2001 entry into the World Trade Organization for much, if not all, of a 15-year economic slowdown in the U.S.” In other words, poor negotiating skills on the part of past U.S. administrations has allowed Mexico and China, and their workers, to gain at the expense of the U.S. economy and its workers.

However, this nation-state framing of the origins of contemporary U.S. economic problems is seriously flawed. It also serves to direct attention away from the root cause of those problems: the profit-maximizing strategies of large, especially U.S., multinational corporations. It is the power of these corporations that must be confronted if current trends are to be reversed.

Capitalist Globalization Dynamics

Beginning in the late 1980s large multinational corporations, including those headquartered in the U.S., began a concerted effort to reverse declining profits by establishing cross border production networks (or global value chains). This process knitted together highly segmented economic processes across national borders in ways that allowed these corporations to lower their labour costs as well as reduce their tax and regulatory obligations. Their globalization strategy succeeded; corporate profits soared. It is also no longer helpful to think about international trade in simple nation-state terms.

As the United Nations Conference on Trade and Development (UNCTAD) explains:

“Global trade and foreign direct investment have grown exponentially over the last decade as firms expanded international production networks, trading inputs and outputs between affiliates and partners in GVCs [Global Value Chains].

“About 60 per cent of global trade, which today amounts to more than $20-trillion, consists of trade in intermediate goods and services that are incorporated at various stages in the production process of goods and services for final consumption. The fragmentation of production processes and the international dispersion of tasks and activities within them have led to the emergence of borderless production systems – which may be sequential chains or complex networks and which may be global, regional or span only two countries.”

UNCTAD estimates (see the figure 1 below) that some 80 per cent of world trade “is linked to the international production networks of TNCs [transnational corporations], either as intra-firm trade, through NEMs [non-equity mechanisms of control] (which include, among others, contract manufacturing, licensing, and franchising), or through arm's-length transactions involving at least one TNC.”

TNC involvement

In other words, multinational corporations have connected and reshaped national economies along lines that best maximize their profit. And that includes the U.S. economy. As we see in figure 2 below, taken from an article by Adam Hersh and Ethan Gurwitz, the share of all U.S. merchandise imports that are intra-firm, meaning are sold by one unit of a multinational corporation to another unit of the same multinational, has slowly but steadily increased, reaching 50 per cent in 2013. The percentage is considerably higher for imports of manufactures, including in key sectors like electrical, machinery, transportation, and chemicals.

U.S. imports

The percentage is lower, but still significant for U.S. exports. As we see in figure 3, approximately one-third of all merchandise exports from the U.S. are sold by one unit of a multinational corporation to another unit of the same company.

Exporting from the U.S.

The percentage of intra-firm trade is far higher for services, as illustrated in figure 4.

U.S. service exports

As Hersh and Gurwitz comment,

“The trend is clear: As offshoring practices increase, companies need to provide more wraparound services – the things needed to run businesses besides direct production – to their offshore production and research and development activities. Rather than indicating the competitive strength of U.S. services businesses to expand abroad, the growth in services exports follows the pervasive offshoring of manufacturing and commercial research activities.”

Thus, there is no simple way to change U.S. trade patterns, and by extension domestic economic processes, without directly challenging the profit maximizing strategies of leading multinational corporations. To demonstrate why this understanding is a direct challenge to President Trump's claims that political pressure on major trading partners, especially Mexico and China, can succeed in boosting the fortunes of U.S. workers, we look next at the forces shaping U.S. trade relationships with these two countries.

The U.S.-Mexican Trade Relationship

U.S. corporations, taking advantage of NAFTA and the Mexican peso crisis that followed in 1994-95, poured billions of dollars into the country (see figure 5 below). Their investment helped to dramatically expand a foreign-dominated export sector aimed at the U.S. market that functions as part of a North American region-wide production system and operates independent of the stagnating domestic Mexican economy.

U.S. and Mexican Foreign Direct Investment

Some 80 per cent of Mexico's exports are sold to the U.S. and the country runs a significant merchandise trade surplus with the U.S., as shown in figure 6 below.

U.S. trade with Mexico

Leading Mexican exports to the U.S. include motor vehicles, motor vehicle parts, computer equipment, audio and video equipment, communications equipment, and oil and gas. However, with the exception of oil and gas, these are far from truly “Mexican” exports. As a report from the U.S. Congressional Research Service describes:

“A significant portion of merchandise trade between the United States and Mexico occurs in the context of production sharing as manufacturers in each country work together to create goods. Trade expansion has resulted in the creation of vertical supply relationships, especially along the U.S.-Mexico border. The flow of intermediate inputs produced in the United States and exported to Mexico and the return flow of finished products greatly increased the importance of the U.S.- Mexico border region as a production site. U.S. manufacturing industries, including automotive, electronics, appliances, and machinery, all rely on the assistance of Mexican [based] manufacturers. One report estimates that 40% of the content of U.S. imports of goods from Mexico consists of U.S. value added content.”

Because foreign multinationals, many of which are U.S. owned, produce most of Mexico's exports of “advanced” manufactures using imported components, the country's post-NAFTA export expansion has done little for the overall health of the Mexican economy or the well-being of Mexican workers. As Mark Weisbrot points out:

“If we look at the most basic measure of economic progress, the growth of gross domestic product, or income per person, Mexico, which signed on to NAFTA in 1994, has performed the 15th-best out of 20 Latin American countries.

“Other measures show an even sadder picture. The poverty rate in 2014 was 55.1 per cent, an increase from the 52.4 per cent measurement in 1994.

“Wages tell a similar story: There's been almost no growth in real inflation-adjusted wages since 1994 – just about 4.1 per cent over 21 years.”

Representative Sander Levin and Harley Shaiken make clear that the gains have been nonexistent even for workers in the Mexican auto industry, the country's leading export center:

“Consider the auto industry, the flagship manufacturing industry across North America. The Mexican auto industry exports 80 per cent of its output of which 86 per cent is destined for the U.S. and Canada. If high productivity translated into higher wages in Mexico, the result would be a virtuous cycle of more purchasing power, stronger economic growth, and more imports from the U.S.

“In contrast, depressed pay has become the ‘comparative advantage’. Mexican autoworker compensation is 14 per cent of their unionized U.S. counterparts and auto parts workers earn even less, $2.40 an hour. Automation is not the driving force; its depressed wages and working conditions.”

In other words, U.S. workers aren't the only workers to suffer from the globalization strategies of multinational corporations. Mexican workers are also suffering, and resisting.

In sum, it is hard to square this reality with Trump's claim that because of the way NAFTA was negotiated Mexico “has made us look foolish.” The truth is that NAFTA, as designed, helped further a corporate driven globalization process that has greatly benefited U.S. corporations, as well as Mexican political and business elites, at the expense of workers on both sides of the border. Blaming Mexico serves only to distract U.S. workers from the real story.

The U.S.-Chinese Trade Relationship

The Chinese economy also went through a major transformation in the mid-1990s which paved the way for a massive inflow of export-oriented foreign investment targeting the United States. The process and outcome was different from what happened in Mexico, largely because of the legacy of Mao era policies. The Chinese Communist Party's post-1978 state-directed reform program greatly benefited from an absence of foreign debt; the existence of a broad, largely self-sufficient state-owned industrial base; little or no foreign investment or trade; and a relatively well-educated and healthy working class. This starting point allowed the Chinese state to retain considerable control over the country's economic transformation even as it took steps to marketize economic activity in the 1980s and privatize state production in the 1990s.

However, faced with growing popular resistance to privatization and balance of payments problems, the Chinese state decided, in the mid-1990s, to embrace a growing role for export-oriented foreign investment. This interest in attracting foreign capital dovetailed with the desire of multinational corporations to globalize their production. Over the decade of the 1990s and 2000s, multinational corporations built and expanded cross border production networks throughout Asia, and once China joined the WTO, the country became the region's primary final assembly and export center.

As a result of this development, foreign produced exports became one of the most important drivers, if not the most important, of Chinese growth. For example, according to Yılmaz Akyüz, former Director of UNCTAD's Division on Globalization and Development Strategies:

“despite a high import content ranging between 40 and 50 per cent, approximately one-third of Chinese growth before the global crisis [of 2008] was a result of exports, due to their phenomenal growth of some 25 per cent per annum. This figure increases to 50 per cent if spillovers to consumption and investment are allowed for. The main reason for excessive dependence on foreign markets is under consumption. This is due not so much to a high share of household savings in GDP as to a low share of household income and a high share of profits.”

The figure below illustrates the phenomenal growth in Chinese exports.

Exports of goods and sevices

The U.S. soon became the primary target of China's exports (see the trade figures below). The U.S. now imports more goods from China than from any other country, approximately $480-billion in 2015, followed by Canada and Mexico (roughly $300-billion each). The U.S. also runs its largest merchandise trade deficit with China, $367-billion in 2015, equal to 48 per cent of the overall U.S. merchandise trade deficit. In second place was Germany, at only $75-billion.

U.S.-China trade

Adding to China's high profile is the fact that it is the primary supplier of many high technology consumer goods, like cell phones and laptops. More specifically:

“(F)or 825 products, out of a total of about 5,000, adding up to nearly $300-billion, China supplies more than all our other trade partners combined. Of these products, the most important is cell phones, where $40-billion in imports from China account for more than three-quarters of the total value imported.

“There are also 83 products where 90 per cent or more of U.S. imports come from China; together these accounted for a total of $56-billion in 2015. The most important individual product in this category is laptop computers, which alone have an import value of $37-billion from China, making up 93 per cent of the total imported.”

Of course, China is also a major supplier of many low-technology, low-cost goods as well, including clothing, toys, and furniture.

Not surprisingly, exports from China have had a significant effect on U.S. labour market conditions. Economists David Autor, David Dorn and Gordon Hanson “conservatively estimate that Chinese import competition explains 16 per cent of the U.S. manufacturing employment decline between 1990 and 2000, 26 per cent of the decline between 2000 and 2007, and 21 per cent of the decline over the full period.” They also find that Chinese import competition “significantly reduces earnings in sectors outside manufacturing.”

President Trump has accused China of engaging in an undeclared trade war against the United States. However, while Trump's charges conjure up visions of a massive state-run export machine out to crush the United States economy for the benefit of Chinese workers, the reality is quite different.

First, although the Chinese state retains important levers of control over economic activity, especially the state-owned banking system, the great majority of industrial production and export activity is carried out by private firms. In 2012, state-owned enterprises accounted for only 24 per cent of Chinese industrial output and 18 per cent of urban employment. As for exports, by 2013 the share of state-owned enterprises was down to 11 per cent. Foreign-owned multinationals were responsible for 47 per cent of all Chinese exports. And, most importantly in terms of their effect on the U.S. economy, multinational corporations produce approximately 82 per cent of China's high-technology exports.

Second, although these high-tech exports come from China, for the most part they are not really “Chinese” exports. As noted above, China now functions as the primary assembly point for the region's cross border production networks. Thus, the majority of the parts and components used in Chinese-based production of high-technology goods come from firms operating in other Asian countries. In many cases China's only contribution is its low-paid labour.

A Washington Post article uses the Apple iPhone 4, a product that shows up in trade data as a Chinese export, to illustrate the country's limited participation in the production of its high technology exports:

“In a widely cited study, researchers found that Apple created most of the product's value through its product design, software development and marketing operations, most of which happen in the United States. Apple ended up keeping about 58 per cent of the iPhone 4's sales price. The gross profits of Korean companies LG and Samsung, which provided the phone's display and memory chips, captured another 5 per cent of the sales price. Less than 2 per cent of the sales price went to pay for Chinese labour.

“‘We estimate that only $10 or less in direct labour wages that go into an iPhone or iPad is paid to China workers. So while each unit sold in the U.S. adds from $229 to $275 to the U.S.-China trade deficit (the estimated factory costs of an iPhone or iPad), the portion retained in China's economy is a tiny fraction of that amount,’ the researchers wrote.”

The same situation exists with laptop computers, which are assembled by Chinese workers under the direction of Taiwanese companies using imported components and then exported as Chinese exports. Economists have estimated that the U.S.-Chinese trade balance would be reduced by some 40 per cent if the value of these imported components were subtracted from Chinese exports. Thus, it is not Chinese state enterprises, or even Chinese private enterprises, that are driving China's exports to the USA. Rather it is foreign multinationals, many of which are headquartered in the U.S., including Apple, Dell, and Walmart.

And much like in Mexico, Chinese workers enjoy few if any benefits from their work producing their country's exports. The figure below highlights the steady fall in labour compensation as a share of China's GDP.

Share of labour compensation

Approximately 80 per cent of Chinese manufacturing workers are internal migrants with a rural household registration. This means they are not entitled to access the free or subsidized public health care, education, or other social services available in the urban areas where they now work; the same is true for their children even if they are born in urban areas. Moreover, most migrants receive little protection from Chinese labour laws.

For example, as the China Labour Bulletin reports:

“In 2015, seven years after the implementation of the Labour Contract Law, only 36 per cent of migrant workers had signed a formal employment contract with their employer, as required by law. In fact the percentage of migrant workers with formal contracts actually declined last year by 1.8 per cent from 38 per cent. For short-distance migrants, the proportion was even lower, standing at just 32 per cent, suggesting that the enforcement of labour laws is even less rigid in China's inland provinces and smaller cities.

“According to the [2014] migrant worker survey ... the proportion of migrant workers with a pension or any form of social security remained at a very low level, around half the national average. In 2014, only 16.4 per cent of long-distance migrants had a pension and 18.2 per cent had medical insurance.”

In short, it is not China, or its workers, that threaten U.S. jobs and well-being. It is the logic of capitalist globalization.

Despite worker struggles, which did succeed in pushing up wages over the last 7 years, most migrant workers continue to struggle to make ends meet. Moreover, with Chinese growth rates now slipping, and the government eager to restart the export growth machine, many local governments have decided, with central government approval, to freeze minimum wages for the next two to four years.

In short, it is not China, or its workers, that threaten U.S. jobs and well-being. It is the logic of capitalist globalization. Thus, Trump's call-to-arms against China obfuscates the real cause of current U.S. economic problems and encourages working people to pursue a strategy of nationalism that can only prove counterproductive.

The Political Challenge Facing U.S. Workers

The globalization process highlighted above was strongly supported by all major governments, especially by successive U.S. administrations. In contrast to Trump claims of a weak U.S. governmental effort in support of U.S. economic interests, U.S. administrations used their considerable global power to secure the creation of the WTO and approval of a host of other multilateral and bilateral trade agreements, all of which provided an important infrastructure for capital mobility, thereby supporting the globalizing efforts of leading U.S. multinational corporations.

President Trump has posed as a critic of existing international arrangements, claiming that they have allowed other countries, such as Mexico and China, to prosper at U.S. expense. He has stated that he will pursue new bilateral agreements rather than multilateral ones because they will better serve U.S. interests and he has demanded that U.S. multinational corporations shift their investment and production back to the USA.

Such statements have led some to believe that the Trump administration is serious about challenging globalization dynamics in order to rebuild the U.S. economy in ways that will benefit working people. But there are strong reasons to doubt this. Most importantly, he seems content to threaten other governments rather than challenge the profit-maximizing logic of dominant U.S. companies, which as we have seen is what needs to happen.

One indicator: an administration serious about challenging the dynamics of globalization would have halted U.S. participation in all ongoing negotiations for new multilateral agreements, such as the Trade in Services Agreement which is designed to encourage the privatization and deregulation of services for the benefit of multinational corporations. This has not happened.

Such an administration would also renounce support for existing and future bilateral agreements that contain chapters that strengthen the ability of multinational corporations to dominate key sectors of foreign economies and sue their governments in supranational secret courts. This has not happened.

Another indicator: an administration serious about creating a healthy, sustainable, and equitable domestic economy would strengthen and expand key public services and programs; rework our tax system to make it more progressive; tighten and increase enforcement of health and safety and environmental regulations; strengthen labour laws that protect the rights of workers, including to unionize; and boost the national minimum wage. The Trump administration appears determined to do the opposite.

Such an administration would also begin to develop the state capacities necessary to redirect existing production and investment activity along lines necessary to rebuild our cities and infrastructure, modernize our public transportation system, and reduce our greenhouse gas emissions. The Trump administration appears committed to the exact opposite.

In short, if we take Trump's statements seriously, that he actually wants to shift trading relationships, then it appears that his primary strategy is to make domestic conditions so profitable for big business, that some of the most globally organized corporations will shift some of their production back to the United States. However, even if he succeeds, it is very unlikely that this will contribute to an improvement in majority living and working conditions.

The main reason is that U.S. corporations, having battered organized labour with the assistance of successive administrations, have largely stopped creating jobs that provide the basis for economic security and well-being. Economists Lawrence F. Katz and Alan B. Krueger examined the growth from 2005 to 2015 in “alternative work arrangements,” which they defined as temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers. They found that the percentage of workers employed in such arrangements rose from 10.1 per cent of all employed workers in February 2005 to 15.8 per cent in late 2015. But their most startling finding is the following:

“A striking implication of these estimates is that all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements. Total employment according to the CPS increased by 9.1 million (6.5 per cent) over the decade, from 140.4 million in February 2005 to 149.4 in November 2015. The increase in the share of workers in alternative work arrangements from 10.1 per cent in 2005 to 15.8 per cent in 2015 implies that the number of workers employed in alternative arrangement increased by 9.4 million (66.5 per cent), from 14.2 million in February 2005 to 23.6 million in November 2015. Thus, these figures imply that employment in traditional jobs (standard employment arrangements) slightly declined by 0.4 million (0.3 per cent) from 126.2 million in February 2005 to 125.8 million in November 2015.”

A further increase in employment in such “alternative work arrangements,” which means jobs with no benefits or security, during a period of Trump administration-directed attacks on our social services, labour laws, and health and safety and environmental standards is no answer to our problems. Despite what President Trump says, our problems are not caused by other governments or workers in other countries. Instead, they are the result of the logic of capitalism. The Trump administration, really no U.S. administration, is going to willingly challenge that. That is up to us. •

Martin Hart-Landsberg is Professor Emeritus of Economics at Lewis and Clark College, Portland, Oregon; Adjunct Researcher at the Institute for Social Sciences, Gyeongsang National University, South Korea; and Adjunct Professor in the Labor Studies Program at Simon Fraser University, Canada. This article first appeared on his blog Reports from the Economic Front.

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