Of the 1%, by the 1%, for the 1%

By Joseph E. Stiglitz
May 2011

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.

Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul. There are several reasons for this.

First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy. This new inequality goes on to create new distortions, undermining efficiency even further. To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy.

Third, and perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.

None of this should come as a surprise—it is simply what happens when a society’s wealth distribution becomes lopsided. The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government—one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good. The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.

Economists are not sure how to fully explain the growing inequality in America. The ordinary dynamics of supply and demand have certainly played a role: laborsaving technologies have reduced the demand for many “good” middle-class, blue-collar jobs. Globalization has created a worldwide marketplace, pitting expensive unskilled workers in America against cheap unskilled workers overseas. Social changes have also played a role—for instance, the decline of unions, which once represented a third of American workers and now represent about 12 percent.

But one big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy. Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride. Monopolies and near monopolies have always been a source of economic power—from John D. Rockefeller at the beginning of the last century to Bill Gates at the end. Lax enforcement of anti-trust laws, especially during Republican administrations, has been a godsend to the top 1 percent. Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest.

When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth. During the savings-and-loan scandal of the 1980s—a scandal whose dimensions, by today’s standards, seem almost quaint—the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. “I certainly hope so,” he replied. The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

America’s inequality distorts our society in every conceivable way. There is, for one thing, a well-documented lifestyle effect—people outside the top 1 percent increasingly live beyond their means. Trickle-down economics may be a chimera, but trickle-down behaviorism is very real. Inequality massively distorts our foreign policy. The top 1 percent rarely serve in the military—the reality is that the “all-volunteer” army does not pay enough to attract their sons and daughters, and patriotism goes only so far. Plus, the wealthiest class feels no pinch from higher taxes when the nation goes to war: borrowed money will pay for all that. Foreign policy, by definition, is about the balancing of national interests and national resources. With the top 1 percent in charge, and paying no price, the notion of balance and restraint goes out the window. There is no limit to the adventures we can undertake; corporations and contractors stand only to gain. The rules of economic globalization are likewise designed to benefit the rich: they encourage competition among countries for business, which drives down taxes on corporations, weakens health and environmental protections, and undermines what used to be viewed as the “core” labor rights, which include the right to collective bargaining. Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers. Governments would compete in providing economic security, low taxes on ordinary wage earners, good education, and a clean environment—things workers care about. But the top 1 percent don’t need to care.

Or, more accurately, they think they don’t. Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate.

In recent weeks we have watched people taking to the streets by the millions to protest political, economic, and social conditions in the oppressive societies they inhabit. Governments have been toppled in Egypt and Tunisia. Protests have erupted in Libya, Yemen, and Bahrain. The ruling families elsewhere in the region look on nervously from their air-conditioned penthouses—will they be next? They are right to worry. These are societies where a minuscule fraction of the population—less than 1 percent—controls the lion’s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general.

As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.

Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105?currentPage=all

Introducing the Permaculture Designers’ Manual, Chapter 1: Introduction to Permaculture

by Jesse Lemieux

This is the first in a series of fourteen introductory articles about permaculture — one for each chapter of Bill Mollison’s “Permaculture: A Designers’ Manual.” Through this series I will connect theory with practice, and share practical examples of permaculture in action. 

Permaculture design is a system of assembling conceptual, material and strategic components in a pattern which functions to benefit life in all its forms. It provides a sustainable and secure place for living things on earth. While each component is important, permaculture is less about the things themselves and more about how the things fit together.

Permaculture does not dwell on the negative. While we maintain a healthy awareness of present day problems, we are more focused on the positive, continually asking the question "what do we want?"

Few people would argue that our global and local environments are on the down-hill slide, but it is important that we cut clearly through the mass of misinformation and half-truths that exist. Only by getting to the heart of the matter can we reasonably design a plan to change things.

Just the other day I was reading an article in The Province, which took the position that we need to start investing in natural systems if we are going to maintain our precious existence on this planet. The article stated that 60 countries have lost nearly all their forests, and that 1/3 of all fish stocks, food for two billion people, were on the brink of collapse. Furthermore, due to soil erosion,we can no longer farm 30% of all agricultural land on the planet.

How did we get here? We rely on a system of economic and social organization that has seen us become less and less responsible for our own basic needs. By supporting and expanding this system, we have come to rely more and more on distant lands and resources.

Agriculture is particularly grim and is responsible for more deforestation, CO2 production, chemical pollution and soil erosion than any other activity on the planet. The sad part is we have been convinced that the only way to feed ourselves is through the destructive and highly centralized system of plow-based agriculture. This is just plain false.
Consider the following statistics:

• One billion people on the planet, 80% of whom are involved in agriculture, are malnourished and hungry.[1]
• US agricultural production produces $300/acre [2]
• Home gardeners produce over $42,000/acre, with an average of 5 hours work per week [3]

Just take a quick look around your neighborhood and you can see that home gardening gets far better production per acre than any other agricultural system.

The largest and most energy intensive agriculture on the planet is the lawn. It uses more fossil fuel, human energy and chemical fertilizer than most other forms of agriculture. What does it produce? Polluted watersheds, polluted oceans, health problems and lawn trimmings for the garbage dump.
By turning our lawns into food systems, we can immediately remove ourselves from two of the most destructive systems on the face of the planet: the lawn and plow-based agriculture.

This brings us to the “Prime Directive of Permaculture”: to take responsibility for our own existence and that of our children. In other words, we need to get our house and garden in order, so that they feed and shelter us.

Very few of us living in urban areas produce enough food to meet our own basic needs. We can all use permaculture to overcome this fundamental disconnect in contemporary urban life.

When making decisions within the permaculture framework, we rely on the permaculture ethic as a tool for conflict resolution and benchmarks to measure success in our design. This ethic is simple:

• Earth Care: living, growing and promoting the function of living systems. Building biomass (capturing CO2 in living systems) is good.
• People Care: providing clean water, food and shelter, and strong communities that do not enslave people.
• Return of Surplus: all surplus generated by these systems is returned back into earth care and people care, not into the generation of more surplus for the sake of surplus. Growth is not endless, since we live on a single planet with finite resources.

Permaculture is an ethical system stressing positivism and cooperation. We use this ethic in all aspects of the design process. It is a value set that guides us. It is the ethic that makes some design strategies available to us and others not, as any design we produce must fit within the ethical criteria.

Implicit in this ethic is the Life Ethic: all living organisms are not only means but ends in themselves. In addition to having value to the human species and other living organisms, they have an intrinsic worth. All life is good.

Even though the ethic is well-reasoned, it is still somewhat subjective. It’s important to be aware of my personal biases. We are all on a continuum of understanding, and it’s not my duty to pass judgement or convince anybody of how wrong they are and how right I am. My only responsibility is to take care of my needs and be sure that my activities fall within the permaculture ethic. As I move further along the road to a sustainable lifestyle I generate a surplus of resources and information that I willingly share with others who are working towards a right-livelihood themselves.
Information is often the first resource in surplus.

So, how do we design lives to become ones of net production as opposed to ones of net consumption?
A practical application:

• Earth Care: a well mulched home garden builds soil faster than any other system. This reduces our need for plow agriculture and takes kitchen waste, paper waste and all other compostable materials out of our land fills.
• People Care: the garden provides local, clean and healthy food to the gardener, as well as a source of relaxation and contemplation.
• Return of Surplus: home gardens are usually over-productive and surplus is shared with neighbors and friends, or left to compost back into the soil.

In the words of my friend and mentor, Geoff Lawton: “All the problems of the world can be solved in a garden.” It does not stop at the garden. Permaculture is such a good-sense approach to design and problem solving that it can be applied to many other facets of human life. This is not a move backwards to feudalism and peasantry, it is an evolution towards a society and planet of absolute abundance.

http://permaculture-media-download.blogspot.com/2011/04/introducing-permaculture-designers.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+PermacultureMediaDownloadBlog+%28Permaculture+Media+Download+Blog%29

The War On Child Labor Laws: Maine Republicans Want Longer Hours, Lower Pay For Kids

By Ian Millhiser on Mar 31st, 2011 at 7:35 pm

Maine State Rep. David Burns is the latest of many Republican lawmakers concerned that employers aren’t allowed to do enough to exploit child workers:

LD 1346 suggests several significant changes to Maine’s child labor law, most notably a 180-day period during which workers under age 20 would earn $5.25 an hour.

The state’s current minimum wage is $7.50 an hour.

Rep. David Burns, R-Whiting, is sponsoring the bill, which also would eliminate the maximum number of hours a minor over 16 can work during school days.

Burns’ bill is particularly insidious, because it directly encourages employers to hire children or teenagers instead of adult workers. Because workers under 20 could be paid less than adults under this GOP proposal, minimum wage workers throughout Maine would likely receive a pink slip as their twentieth birthday present so that their boss could replace them with someone younger and cheaper.

And Burns is just one of many prominent Republicans who believe that America’s robust protections against the exploitation of children are wrongheaded:

• Maine State Sen. Debra Plowman (R) introduced a separate bill that would extend the number of hours employers can require a minor to work. Maine Gov. Paul LePage (R) backs this proposal.
• Sen. Mike Lee (R-UT) delivered a lengthy lecture where he claimed that federal child labor laws violate the Constitution. His Republican colleagues in the Senate rewarded him with a seat on the Senate Judiciary Committee — the committee with jurisdiction over constitutional questions.
• Missouri State Sen. Jane Cunningham (R) introduced a bill which would “eliminate[] the prohibition on employment of children under age fourteen. Restrictions on the number of hours and restrictions on when a child may work during the day are also removed.”
• Virginia Attorney General Ken Cuccinelli’s (R) most recent brief attacking the Affordable Care Act relies heavily on a discredited Supreme Court decision striking down a federal child labor law that was overruled decades ago.
• Judges Roger Vinson and Henry Hudson, the two outlier judges who struck down the ACA, also relied heavily on this discredited anti-child labor decision in their decisions.

Republicans’ contempt for workers is hardly news. GOP governors throughout the country have declared war on collective bargaining, and the national minimum wage remained stagnant for nearly a decade the last time Republicans controlled Congress. Nevertheless, the GOP’s increasingly widespread assaults on child labor laws is a significant escalation from their longstanding war on adult workers.

http://thinkprogress.org/2011/03/31/gop-loves-child-labor/

Today's Death Threat On Fox Nation: For Rep. Jim McDermott

Reported by Ellen - April 1, 2011

It's clear, even from the little snip of a seven-second video that Fox Nation used to inflame its readers, that when Democratic Rep. Jim McDermott said he was "tired of reading the Constitution," he meant he was tired of House Republican's gimmicks, not that he was tired of the Constitution. But, predictably, Fox Nation, the website that is as "fair and balanced" as Fox News, did its best to suggest the opposite. The result? At least one reader thought it was grounds to kill McDermott. As for the moderators, it's now four hours later and they either haven't noticed or haven't cared. Screen grab after the jump.

In case you don't believe me, RealClearPolitics included the next line from McDermott: "When are we going to see anything having to do with job creation?" But given how much Fox Nation readers love to talk about killing Democrats and liberals - and how Fox Nation editors don't seem to mind that kind of talk - I guess nobody over there needed any stinking context.

http://www.newshounds.us/2011/04/01/todays_death_threat_on_fox_nation_for_rep_jim_mcdermott.php

Botox, Binging, Bullying and Breast-Ironing: We Must Stop the War on Women's Bodies

March 31, 2011
In a globalized world, we must fight toxic body culture by "becoming what we have never seen"--rewriting the paradigm of health and self-acceptance.

Photo Credit: Alejandro Hernandez on Flickr

When most people hear the words “body image,” the demographic that comes to mind is young, white, wealthy, American women with self-esteem issues. When “body image” is covered on television, it is most often positioned as solely about eating disorders, and further, the most extreme forms; Entertainment Tonight boosts ratings with their anorexic twins profile and HBO’s documentary THIN focuses almost exclusively on the upper-middle class kind of insecurity that takes root in adolescence and sends many girls down a path of self-hatred.

But the true battle against bodies in our highly toxic culture conjures a far more diverse and vast picture. Imagine this global collage: a fat, black kid in rural Mississippi is bullied for his body weight, not just by peers, but doctors, coaches, and health teachers who have been stirred up by the “obesity epidemic” coverage; a young girl in Argentina who would wear the American equivalent of a size 10, can’t find any clothes that fit because they still won’t carry a range of sizes despite legislation requiring that they do; a young Bengali woman’s belly grows swollen with an American couple’s baby as she tries to earn some extra money for her own family. 

As an international body-focused movement takes form, we must re-imagine who it is that we’re fighting for. It’s not just rich, white girls with eating disorders—though we’re fighting for them, too—it’s women worldwide who are suffering from what Susie Orbach calls “corporeal colonialism.” In our increasingly globalized world, where corporate conglomerates produce the majority of both the products we buy and the media we read, we are all stuck together in this sticky, toxic web of disembodiment.  

Those who care about real change must move forward with a common vision of who we are fighting for and, most importantly, with. We are fighting for ourselves, of course, but we are also fighting for and with the next generation. We are fighting for and with the 8-year-old girl in the UK who recently reportedly got Botox injections. We are fighting for and with the children of parents who have thrown away hard-earned money on bogus and dangerous diets to the tune of $40 billion each year; many of these kids want to break the cycle. We are fighting for and with the little girl in Cameroon whose breasts are ironed.

As Dr. Sayantani DasGupta recently wrote for Feministing.com: “Toxic body culture isn’t a white woman’s issue. It’s not even a woman’s issue—it’s all our concern. But only if a discussion of advertising happens within an understanding of consumerism, if beauty standards are discussed alongside able-ism or the oppressions of gender and sexuality binaries, if local embodiment politics is contextualized within broader global forces.” In other words, unless the movement is broad and intersectional, inclusive and genuinely diverse, we will be replicating many of the invisibilities that we are fighting so hard against. 

It is our responsibility, and our joy, really, to cut the ribbon on a new future in body image activism—one that is gloriously inclusive and messy, broad in issue and bold in agenda, one that acknowledges our international and economic interconnection. Until Western women, for example, are willing to acknowledge that our purchasing power effects the lives of women throughout the world, we will only be paying lip service to global sisterhood. As Penelope Jagessar Chaffer illustrates in her documentary film, Toxic Baby, for example, most birth control pills American woman pop were tested and manufactured in Puerto Rico, where the excess of estrogen in the water is causing girls as young as four-years-old to start menstruating. 

Inclusivity and accountability of this kind are daunting, without a doubt, but there’s simply no other moral way. Whether a privileged American college student is riding soul-deadening waves of bingeing and purging or a poor South African girl is saving her rands for skin-lightening cream or a Japanese teenager is begging her parents for plastic surgery—there is suffering. These are not necessarily equal oppressions; there is no need to set up a hierarchy. All we need to know and to grow mutually outraged by is that all of this pain exists—personally and politically. 

Shifting the public perception is crucial, which is part of why it’s imperative that the composition of the movement reflects the new visual culture we want to see in the world. And even more, it’s not just that the issues and activists need to be varied; the leaders must represent a wide range of humanity. Let’s be real: the thought leaders of the body image conversation have been too homogeneous for too long. I include myself in that pool. With great respect for my predecessors—authors and activists like Susie Orbach, Naomi Wolf, Jean Kilbourne, and so many others—I do believe that it is time to genuinely honor the voices and perspectives of a diversity of women by giving up the mic, reaching out of our comfort zones to reach beyond the “usual suspects” for collaborators, finding resources to support the work of a diversity of body advocates.

Imagination may just be the key to our liberation. Marian Wright Edeleman has said, “You can’t be what you can’t see.” I think she’s partly right. Certainly, part of what stands between us and the culture that we want to live in, the culture that respects and even celebrates the true diversity of bodies, is a failure of the imagination. We’ve never lived in that kind of place, we’ve never had the privilege of witnessing that kind of world. Everyone alive today was born at a time when the exploitation of women’s bodies globally was rampant, fat talk was obsequious, and eating disorders epidemic. It is simply what we’ve known. 

And that’s why, it’s not just about being savvier, more vocal consumers, it’s not just about protesting or online organizing, it’s not just about educating the next generation of girls in media literacy, although it is about all of those things…it’s about actually envisioning and embodying another world. 

We’ve never seen it, so as Marion Wright Edelman tells us, it’s very difficult to have faith that we might actually have it. But I think finally—with all of these new tools at our fingertips, with these demographic shifts catapulting women into positions of power and transforming the hearts and minds of boys and men, with this momentum all over the world and a new global consciousness about the range of issues we face—we just might become what we have never seen. We just might become a culture that refuses to profit off of women’s bodies, making them sick, and instead respects, cares for, and celebrates them. 

We just might become what we have never seen. How miraculous is that?

Courtney E. Martin is a writer, teacher, and speaker living in Brooklyn. She was the Summit Coordinator for the Endangered Species Summit in New York City last month and is part of an ongoing international campaign of the same name. She is also the author of Perfect Girls, Starving Daughters: How the Quest for Perfection is Harming Young Women and Do It Anyway: The New Generation of Activists. You can read more about her work at www.courtneyemartin.com.  

http://www.alternet.org/module/printversion/150453

U.S. Subsidies To Boeing Illegal, WTO Rules

Published: March 31, 2011

by The Associated Press

The World Trade Organization has ruled that Boeing Co. received at least $5.3 billion in illegal U.S. subsidies to develop and build new planes, according to a finding of a report first issued in January but made public on Thursday.

The WTO trade panel's report came in response to EU complaints, which had alleged that Boeing received almost $24 in illegal state subsidies between 1989 and 2006.

The public release of the ruling Thursday is the latest development in a six-year contest and will likely next go to a WTO appeals panel.

WTO say in its ruling that the EU has demonstrated the U.S. gave Boeing "export subsidies that are prohibited" and recommends the U.S. either withdraw them or "take steps to remove the adverse affects."

The report details findings, which were first issued in private to the EU and U.S. in January. It says Boeing received illegal subsidies such as grants and free use of technology, from NASA, the Department of Defense, and the states of Illinois, Kansas and Washington.

These include $2.6 billion in NASA research and development programs, $2.2 billion in foreign sales corporation export subsidies, and various tax breaks and other incentives from several states and cities. The Defense Department also gave Boeing an illegal subsidy, the ruling says, but "the amount of the subsidy ... is unclear."

Other subsidies, such as the $2.2 billion in export tax benefits, are essentially a moot point, the panel found, because U.S. law has changed.

The ruling says the panel estimated the subsidies were "at least $5.3 billion over the period 1989-2006."

The panel of trade judges says that $2.6 billion in NASA aid, $112 million from the Defense Department and $16 million in tax breaks from Washington state and the city of Everett, Wash., violated international trade rules.

Competing aircraft maker Airbus, a unit of European Aeronautic Defence and Space Co., estimates it has lost $45 billion in aircraft sales because of the subsidies.

The release of the ruling Thursday is the latest development in a six-year contest and will likely next go to a WTO appeals panel.

A separate WTO trade panel, ruling on U.S. complaints, last year faulted European governments for illegally supporting Airbus.

Airbus welcomed the ruling saying that WTO had "publicly condemned the United States for giving Boeing massive illegal subsidies that caused Airbus to lose $45 billion in sales."

Boeing, meanwhile, said the WTO had "shattered the longstanding European myth that illegal Airbus subsidies are necessary to fend off alleged U.S. subsidies to Boeing."

Boeing acknowledged it got $2.6 billion of illegal U.S. funding, but said that pales in comparison to $20 billion of "illegal Airbus subsidies."

That interpretation was echoed by the office of the U.S. Trade Representative, which said the subsidies the Europeans give to Airbus "dwarf anything that the U.S. government does for Boeing."

Germany was quick to welcome the WTO's ruling.

"The WTO confirms that the U.S. subsidies were considerably damaging for the European aviation industry, to Airbus in particular," Economy Minister Rainer Bruederle said in a statement Thursday.

Germany said it supports the EU effort to allow both the Boeing and Airbus cases to be judged by the WTO at the same time. As the two giant aircraft manufacturers have dueled, other nations' industries have begun muscling into the business.

"Despite the findings in the WTO's Boeing report, we have to continue working toward a political solution without preconditions," Bruederle said. "From an economic policy point of view, this is necessary for the future of the aviation industries on both sides of the Atlantic, especially in light of the changed global competition." [Copyright 2011 The Associated Press]

http://m.npr.org/news/front/135016289?page=3

Cops, firefighters turn on GOP in labor fight

By JEANNE CUMMINGS | 4/1/11 4:35 AM EDT

Many cops and firefighters have thrown their allegiance to the GOP for years – union members who frequently stray from labor’s longtime support for Democrats.

A host of new Republican governors is changing all that.

Wisconsin Gov. Scott Walker and others took aim at the GOP’s most powerful labor antagonists but ended up hitting some of the party’s best friends too — leaving public-safety unions fearful this year’s attack on teachers might easily be next year’s attack on them.

It’s a political shift that could have significant repercussions, and not just because these right-leaning union members vote for Republicans in sizable numbers. Angry cops and firefighters make for bad PR – especially after Republicans under President George W. Bush aligned themselves so successfully with the heroes of 9/11 in the years since then.

Chuck Canterbury, the national president of the Fraternal Order of Police, said his members are “shocked” by the turn of events.

“Who are these evil teachers who teach your children, these evil policemen who protect them, these evil firemen who pull them from burning buildings? When did we all become evil?” said Canterbury, whose union endorsed Bush in 2000 and 2004 and John McCain in 2008.

He is traveling the country to rally FOP members to rise up against anti-labor laws in their states or in support of their colleagues in other states. “There is going to be a backlash,” said Canterbury, a former county police officer in South Carolina. “We are going to hold them accountable.”

Already, rank-and-file police officers and firefighters who long viewed themselves as separate from the rest of the movement are carrying picket signs, signing petitions and standing side-by-side with their labor brethren.

In Wisconsin, Walker, who was endorsed by some small police and fire unions, carved out a special exemption for them in his proposal that essentially denies all other public employees the right to collective bargaining.

But when Walker ordered the Capitol police to arrest Wisconsin demonstrators who refused to obey a curfew, they refused – and instead hundreds of them lined up with the demonstrators to show solidarity.

“We know what’s right from wrong,” one officer shouted into a bullhorn in the packed Capitol building. “We will not be kicking anyone out. In fact, we will be sleeping here with you!”

In Ohio, Gov. John Kasich and his Republican allies decided against giving police and firemen special treatment, opting instead to try to appeal to their conservative instincts and win them over to the cause.

Since then, Mark Sanders, president of the Ohio Association of Professional Fire Fighters, said he’s had Republican members “apologize” for backing Kasich. “They are never voting that way again,” said Sanders, a Cincinnati fire department lieutenant.

Rep. Peter King (R-N.Y.) experienced the blowback firsthand when he attended a recent event for rising leaders in the New York fire department.

“These are down-the-line conservatives. They fully supported Bush in the Iraq war, in the war against terrorism, and on all the gut issues they were there,” King said. “Some of the guys I talked to said, ‘We stood with Bush on Queens Boulevard. Now, the Republicans have turned on us.’ ”

Democrats win their share of public-safety union endorsements, and the International Association of Fire Fighters — which calls itself “the most bipartisan union in the AFL-CIO” — was one of the first unions to endorse Democrat John Kerry in 2004, and later endorsed Barack Obama in 2008.

But for many public safety workers, the Republican party is a natural home, a comfortable fit for these overwhelmingly white, male and often culturally conservative voters. And in turn, they offer the kind of spit-and-polish endorsements that any politician would crave – allowing Republicans to peel off labor support from Democrats and boost their tough-on-crime bona fides at the same time.

Now it looks like the 2011 labor fights won’t just energize the Democratic-leaning union members but could cause some of the Republican-leaning ones to break away.

The new alliance is being driven by the stakes and rhetoric in the fight, rather than wholesale shift in the conservative leanings of the law enforcement community. Republicans want to weaken or do away with collective bargaining rights so they can slash government employees’ pensions and benefits and balance their budgets. A bonus, several have acknowledged, will be hobbling a political adversary before the 2012 elections and beyond.

Although the American Federation of State, County and Municipal Employees and the teachers unions are the first facing the chopping block, members of the police and firefighter unions have concluded that, even if exempted today, their hard-fought-for benefits and pensions would become the next target. Already Florida Gov. Rick Scott is taking heat from police and firefighters who say he’d slash their pension benefits.

The fall-out also extends to the Building and Construction Trades Department of the AFL-CIO, which is also an enclave for GOP-leaning laborers.

A coalition of building trade unions – ranging from the Teamsters to the sheet metal workers – recently held a reception on Capitol Hill for Republican members who’d voted against efforts to erode federal prevailing wage laws.

According to a November Hart Research poll, 55 percent of all union members said they were Democrats and 25 percent were Republicans. Among building trade unions, however, just 47 percent were self-described Democrats and 25 percent said they were Republicans.

But by the time the new House Republican majority arrived in Washington in January shouting a mantra of spending cuts rather than the campaign slogan of jobs, the percentage of trade union members who called themselves Democrats jumped to 63 percent while the self-described Republicans fell to 18 percent – and that was before the Wisconsin and Ohio collective bargaining fights went from rumors to the nation’s front pages.

Sheet Metal Workers International Association President Michael Sullivan is a native of Indiana who grew up in a Republican household.

He recently was in Indianapolis meeting with trade union apprentices fighting several anti-labor proposals in the state legislature, including one that would make Indiana a “right to work” state that would forbid workers from organizing.

“We’ve always had a good relationship with Republicans in these states. There aren’t any moderate Republicans who are in favor of this. These are ideologues and they want to make it an issue because in their minds it’s against unions. It’s not about working people,” said Sullivan.

“With our membership, those who are Republicans, this is the one issue I’m getting letters on and they are saying: ‘This is war’,” he added, noting that more than $200,000 in small checks have poured into the union’s political action committee in the past month without any solicitation.

Although Indiana Republican Gov. Mitch Daniels has asked the legislature to table the right-to-work bill, a couple dozen Democratic House members stayed out-of-state to stall action on other wage-related legislation they deemed anti-union.

“I think there will be a price to pay,” warned Sullivan. “Workers will take this for a while but eventually they will stand up and say, ‘No.’ Maybe that is what is happening now.”

That’s pretty much the way Ohio labor leaders describe what’s happened in their state.

Most police officers didn’t believe a restrictive collective bargaining bill would affect them even though Kasich had been captured in a You Tube video talking about it, said Ohio FOP President Jay McDonald.

When the legislation was introduced in February, not only did it include them, its chief sponsor was Republican state Sen. Shannon Jones – who was endorsed by the FOP.

“She neglected to tell us it was her plan to dismantle collective bargaining,” McDonald said ruefully. “In just a few, short months, we have had a dramatic transformation of the feelings of my membership.”

Some police officers are talking about running in Republican primaries, others are switching party labels, and all of them are now pressuring state lawmakers to kill the bill or gut it through the amendment process, said Gary Wolske, vice president of police union.

Wolske, an independent, said he won’t hold the collective bargaining fight against all Republicans. “No local Republican did anything to me,” he said. But, his state Senate representative now is a Democrat and “if a Republican candidate came along, he’d have to really knock my socks off.”

Despite their grassroots efforts, Ohio labor leaders didn’t expect to prevail in the state legislature, and the measure is well on its way to final passage. So, they are preparing to begin collecting signatures to put the issue before voters in a referendum in November.

The timing of the referendum could have national implications.

If the bill is signed into law by April 6th, the referendum would be on the 2011 Ohio ballot when a smattering of state Senate seats is on the ballot. If the measure becomes law after that, it would push the issue onto the 2012 ballot and into the presidential campaign season when a number of GOP House freshmen from Ohio who narrowly won their seats will also be up for re-election.

Labor leaders are convinced the referendum timing is the primary reason the GOP-controlled state legislature tried to race the bill to the governor’s desk.

“There is a lot of voter remorse,” said Jack Reall, a battalion chief in Columbus who estimates that roughly 47 percent of his members are Republicans. “I think both parties are aware of that and that it is going to transfer over to the federal races.”

Wisconsin labor leaders are taking a different tack, gathering signatures to recall eight state Senate Republicans who voted for the Walker bill. In two weekends, they were more than halfway toward their goal.

Although the teachers unions and others have taken the lead in that effort, they are getting strong assists from firefighters and police officers even though they are exempted from the legislation. One of the more dramatic moments in the fight came when the firefighters union marched into the Capitol in full uniform to join the other demonstrators.

Mahlon Mitchell, president of the Wisconsin Professional Firefighters Association, said his members turned against Walker when the legislation went beyond expectations to include the ban on future collective bargaining rights.

“It’s not about money any more. It’s about taking away workers’ rights to sit down with employees. We couldn’t sit idly by and let that happen,” he said.

Vic Kamber, an expert on labor politics and adviser to unions, said Republicans are betting that voters – including conservative union members – will have forgotten the fight come 2012. “So much more will have happened by then,” he said.

But Mitchell and his colleagues in Ohio doubt that will happen given the intensity of the fight, the likelihood that it will drag on through recalls and referendums and the reductions in pay and pensions that could result if Republicans prevail.

“I think this is going to be something like we haven’t seen before,” said Mitchell. “I think this has scarred enough people that it will be remembered come Election Day.”

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