View previous stories
	Sliding Back to the Victorian Age by Roberto Savio Inter Press Service   Our Planet’s Future Is in the Hands of 58 People.   In case you missed it, the Intergovernmental Panel on Climate Change (IPCC) released the third and final part of a report on Apr. 13 in which it says bluntly that we only have 15 years left to avoid exceeding the “safe” threshold of a 2°C increase in global temperatures, beyond which the consequences will be dramatic.   And only the most myopic are unaware of what these are – from an increase in sea level, through more frequent hurricanes and storms (increasingly in previously unaffected areas), to an adverse impact on food production.   Now, in a normal and participatory world, in which at least 83 percent of those living today will still be alive in 15 years, this report would have created a dramatic reaction. Instead, there has not been a single comment by any of the leaders of the 196 countries in which the planet’s 7.5 billion “consumers” reside. It’s just been business as usual.   Anthropologists, who study human beings’ similarity to and divergence from other animals, concluded a long time ago that humans are not superior in every aspect. For instance, human beings are less adaptable than many animals to survive in, for example, earthquakes, droughts, hurricanes and any other type of natural disaster. You can be sure that, by now, other animals would be showing signs of alertness and uneasiness.   The first part of the report, released in September 2013 in Stockholm, declared with a 95 percent or greater certainty that humans are the main cause of global warming, while the second part, released in Yokohama at the end of March, reported that “in recent decades, changes in climate have caused impacts on natural and human systems on all continents and across the oceans”.   The IPCC is made up of over 2,000 scientists, and this is the first time that it has come to firm and final conclusions since its creation in 1988 by the United Nations.   The main conclusion of the report is that to slow the race to a point of no return, global emissions must be cut by 40 to 70 percent by 2050, and that “only major institutional and technological changes will give a better than even chance” that global warming will not go beyond the safety threshold and that these must start at the latest in 15 years, and be completed in 35 years.   It is worth noting that roughly half of the world’s population is under the age of 30, and it is largely the young who will have to bear the enormous costs of fighting climate change.   The IPCC’s main recommendation is very simple: major economies should place a tax on carbon pollution, raising the cost of fossil fuels and thus pushing the market toward clean sources such as wind, solar or nuclear energy. It is here that “major institutional changes” are required.   Ten countries are responsible for 70 percent of the world’s total greenhouse gas pollution, with the United States and China accounting for over 55 percent of that share. Both countries are taking serious steps to fight pollution.   U.S. President Barack Obama tried in vain to obtain Senate support, and has used his authority under the 1970 Clean Air Act to cut carbon pollution from vehicles and industrial plants and encourage clean technologies. But he cannot do anything more without backing from the Senate.   The all-powerful new president of China, Xi Jinping, has made the environment a priority, also because official sources put the number of deaths in China each year from pollution at five million.   But China needs coal for its growth, and Xi’s position is: “Why should we slow down our development when it was you rich countries that created the problem by achieving your growth?” And that gives rise to a vicious circle. The countries of the South want the rich countries to finance their costs for reducing pollution, and the countries of the North want them to stop polluting.   As a result, the report’s executive summary, which is intended for political leaders, has been stripped of charts which could have been read as showing the need for the South to do more, while the rich countries put pressure on avoiding any language that could have been interpreted as the need for them to assume any financial obligations.   This should make it easier to reach an agreement at the next Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), in Lima, where a new global agreement should be reached (remember the disaster at the climate talks in Copenhagen in 2009?).   The key to any agreement is in the hands of the United States. The U.S. Congress has blocked any initiative on climate control, providing an easy escape for China, India and other polluters: why should we make commitments and sacrifices if the U.S. does not participate?   The problem is that the Republicans have made climate change denial one of their points of identity.   They have mocked and denied climate change and attacked Democrats who support carbon taxing as waging a war on coal. The American energy industry financially supports the Republican Party and it is considered political suicide to talk about climate change.   The last time a carbon tax was proposed in 2009, after a positive vote by the Democrat-controlled House of Representatives, the Republican-dominated Senate shot it down.   And in the 2010 elections, a number of politicians who voted for the carbon tax lost their seats, contributing to the Republican takeover of the House. The hope now for those who want a change is to wait for the 2016 elections, and hope that the new president will be able to change the situation – which is a good example of why the ancient Greeks said that Hope is the last Goddess.   And this brings us to a very simple reality. The U.S. Senate is made up of 100 members, and this means that you need 51 votes to kill any bill for a fossil fuels tax. In China, the situation is different, but decisions are taken, in the best of hypotheses, not by the president alone, but by the seven-member Standing Committee of the Central Committee, which holds the real power in the Communist Party.   In other words, the future of our planet is decided by 58 persons. With the current global population standing at close to 7.7 billion people, so much for a democratic world!   Sliding Back to the Victorian Age.   In this column, Roberto Savio, founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News, writes about the increasing concentration of wealth and the rise of inequality in today’s world.   A recent report by the Centre for Analysis of Social Exclusion at the London School of Economics called attention to the fact that, at the present rate of inequality, by the year 2025, the United Kingdom will have returned to the unequal society of the end of the 19th century. In other words, we are going back to the times of Queen Victoria!   In 2010, the incomes of the chief executives of the 100 largest companies in the U.K. increased by 49 percent, while the average pay rise was just 2.7 percent. According to a European Banking Authority report, in 2010 and 2011, 2,436 U.K. bankers earned more than one million euro per year, against 162 in France and 36 in the Netherlands.   Nearly 50 percent of the funding of Britain’s Conservative Party comes from the financial sector. No wonder that British Prime Minister David Cameron is obliged to choose the City over Europe.   The world trend is exactly the same. In China, there are 1.3 million millionaires. In its last report, Forbes the magazine for the rich happily informs its readers that the 2013 Forbes Billionaires list now boasts 1,426 names – including 122 in China – with an aggregate net worth of 5.4 trillion dollars, up from 4.6 trillion dollars. “We found 210 new ten-figure fortunes,” it says.   What this means is that the combined wealth of the Forbes billionaires is now larger than the U.S. budget, which is 3.8 trillion dollars for this year. Actually, they overtook the U.S budget three years ago. And if we take just the ten billionaires at the top of the Forbes list, together they hold an amount of 451.5 billion dollars.   In other words, we could fill a 300-seat plane with the 300 richest persons in the world, yet their wealth exceeds the combined wealth of three billion people: nearly half of humankind.   Nobel laureates Paul Krugman and Joseph Stiglitz have written extensively on how social injustice hampers development and creates economic crisis, and Krugman has documented the increase in inequality which accompanied the crises of 1929 and 2008. In the 1930s, huge steps were taken to tackle inequality and vested interests.   In today’s world, this should be our main reflection (a reflection not being made by U.S. President Barack Obama). We should not forget that in the era of Charles Dickens, Karl Marx was writing about the exploitation of children in British mines.   In 1848, Europe was shaken by a wave of uprisings triggered by the extreme exploitation of workers by the capitalists born out of the industrial revolution. After the unrest was put down, trade unions were created, and a progressive political movement was born.   Marx gave a scientific framework to an ongoing wave. And, when the (unsuccessful) Russian revolution of 1905 was followed by the successful Soviet revolution of 1917, a threat to capitalism was established.   During the period between the two world wars, efforts were made everywhere to prevent other countries from taking the path of Russia. Trade unions became legal and part of the establishment, the Left entered parliament, and there were a number of initiatives to accommodate the demands of the people. No right-wing party in power ever tried to scale down social conquests; at most it slowed them down.   The Second World War dramatically changed the global scenario, sowing the seeds of the Cold War. After the International Monetary Fund and World Bank were set up in 1944 as guardians of a global monetary system, the United Nations was established in 1945 in the name of world governance.   The values for world governance had a very strong social content, also contained in national constitutions: social justice, equality, participation, workers rights, human rights, advancement of women, education for all – and the list continues. But, let us pause for a second: would it be possible today to adopt the Universal Declaration of Human Rights, or the present charter of the United Nations? And have the U.S. committed to paying 25 percent of the costs?   With the collapse of the Berlin Wall, a new world was created. Capitalism, not the West, was the winner. And globalisation understood as total freedom for capital and investments (not for goods and people) would bring wealth through the trickle-down theory.   Here I have bowed to the principle of modern journalism to say in a few words what should be argued in a much lengthier and better-documented analysis. But so much has been published on fiscal paradises and tax evasion that, hopefully, no statistics are needed here; suffice it to recall that fiscal paradises host 32 trillion dollars.   The American Bankers Association has recognised that it spent 800 million dollars last year lobbying against the Dodd-Frank financial reform law (Dodd-Frank Wall Street Reform & Consumer Protection Act) passed over three years ago.   The law, passed at the height of the banking crisis, triggered a broad consensus on the need to regulate, but that is now gone. The financial system has adopted the Asian proverb: When there is a strong storm, lie down and wait until it goes away. So now, after three years, of the 398 rules under the Dodd-Frank law, 240 (60 percent) have not yet been implemented.   President Obama has called for a speedy conclusion. But, until now, Obama has only met once with the regulators and that was in mid-2011.   So the real question is: in a vastly unjust society, does democracy work? Or does it become just a formal mechanism to accommodate those inside the system, and ignore the excluded? Do those 300 sitting in the plane of extreme wealth have the same view of the world as the three billion poor left on the ground? And if not, does their view of the world counts as much as that of the 300 people on the plane?   Because we know well that in Victorian times people were not equal in that kind of democracy … and we all know how much blood and suffering it took to bring the world to the period of expansion aiming at social harmony that we had until 1989.   http://www.ipsnews.net/2013/09/sliding-back-to-the-victorian-age/ http://www.ipsnews.net/2014/05/inequality-democracy/ http://www.ipsnews.net/articletype/opinion/ Visit the related web page
	Privatizing Government Services Doesn’t Only Hurt Public Workers by In the Public Interest , In These Times USA   July 2014   The tide is turning against the scam that is privatisation, writes Seumas Milne in The Guardian.   Privatisation isn''t working. We were promised a shareholding democracy, competition, falling costs and better services. A generation on, most people''s experience has been the opposite. From energy to water, rail to public services, the reality has been private monopolies, perverse subsidies, exorbitant prices, woeful under-investment, profiteering and corporate capture.   Private cartels run rings round the regulators. Consumers and politicians are bamboozled by commercial secrecy and contractual complexity. Workforces have their pay and conditions slashed. Control of essential services has not only passed to corporate giants based overseas, but those companies are themselves often state-owned – they''re just owned by another state.   Report after report has shown privatised services to be more expensive and inefficient than their publicly owned counterparts. It''s scarcely surprising that a large majority of the public, who have never supported a single privatisation, neither trust the privateers nor want them running their services.   But regardless of the evidence, the caravan goes on. David Cameron''s government is now driving privatisation into the heart of education and health, outsourcing the probation service and selling off a chunk of Royal Mail at more than £1bn below its market price, with the government''s own City advisers cashing in their chips in short order.   No amount of disastrous failures or fraudulent wrongdoing, it seems, debars companies such as G4S, Atos and Serco from lucrative new contracts in what is already an £80bn business – and one with an increasingly powerful grip on Westminster and Whitehall.   You might think this would be an open goal for the opposition – and no case more so than the scam for siphoning off public money that is Britain''s privatised rail system. Rail has been the ultimate dysfunctional selloff. Shoehorning private markets into a natural monopoly has delivered fragmentation, rock-bottom investment, annual costs of £1.2bn, the most expensive train fares in Europe, and more than double the level of state subsidy than under British Rail.   The East Coast mainline, by contrast, has provided a far better service under public ownership and delivered £800m to the exchequer (not unlike the publicly owned Scottish Water). So naturally the coalition is going to sell it off, while Labour is in a tailspin over whether to back the highly popular demand for renationalisation.   Ed Balls, now keeper of the New Labour flame, insists public ownership would be "ideological". The rail profiteers and corporate barons, alarmed by Ed Miliband''s plans to freeze privatised energy prices, agree. So Labour is toying with a halfway house, where franchises continue but the public sector is allowed to bid to run them as well as the privateers.   That sounds like an expensive dog''s breakfast. Rail renationalisation has the advantage of being not just popular but entirely free – as each franchise can be brought back under public control as it expires. To resist it in those circumstances can only be about the power of corporate lobbies or market ideology.   But the need to break with 30 years of cash-backed dogma against public ownership goes well beyond rail. The privatised industries haven''t only failed to deliver efficiency, value for money, accountability or secure jobs. They have also sucked wealth, rentier-style, out of sitting-duck monopolies, concentrated economic decision-making in fewer and fewer hands, deepened inequality and failed to deliver the investment essential to sustainable growth.   At a time when the entire corporate sector is sitting on an uninvested cash mountain and productivity is actually falling as a result, the lack of a publicly owned economic motor to drive recovery is dire. In the case of energy, the privatised system is failing to deliver the most basic goal of investing – to keep the lights on.   The alternative of tougher regulation, seen as the acceptable political alternative, means trying to do by remote control what''s far better done directly and won''t fix the problem on its own. Experience has shown that you can''t control what you don''t own.   As the Glasgow academic Andrew Cumbers argues in a paper for the thinktank Class, it''s only by huge incentives and perverse subsidies – such as those paid to Danish and Swedish state-owned companies to meet renewable targets – that the government is able to coax the privatised monoliths to do what the public sector could have done itself far more cheaply.   The case for new forms of public ownership in the banking sector and utilities – energy, water, transport and communications infrastructure – is compelling. A core of socially owned and democratically controlled enterprises could set the pace of investment, reconstruction and the shift to a greener economy.   It''s a policy that has support from the majority of the public but is regarded as beyond the pale by the business-as-usual elite. It would be prohibitively expensive, they claim, and a throwback to a better yesterday. In reality, there need be no net cost to the public purse. Even if full market compensation is paid, that would be in the form of a government bonds-for-shares swap. Interest would have to be paid on the bonds of course, but it could be funded with a slice of these companies'' profits.   But Britain''s City-focused governing class has also failed to notice what''s happening in the rest of the world. From Latin America and the United States to western Europe, in both the global south and north, privatised public services, utilities and resources are being steadily brought back into public ownership. In the past decade, 86 cities have taken water back into social ownership. In Germany alone, more than 100 energy concessions have been returned to public ownership since the 2007-8 crisis.   Even as austerity is being used to try to breathe new life into privatisation, the tide has started to flow in the other direction. The new wave of public ownership is taking innovative, sometimes hybrid, forms, and overcoming weaknesses that hobbled earlier nationalised industries.   But in Britain the power of City and corporate vested interests engorged on the profits of privatisation is a powerful obstacle to this essential shift. Pressure for a genuinely mixed economy – something previously regarded as the commonsense mainstream – is bound to grow as the costs and failures of unbridled capitalism mount. Rail can only be the first step.   http://www.theguardian.com/commentisfree/2014/jul/09/tide-turning-against-privatisation   May 2014   Privatizing Government Services Doesn’t Only Hurt Public Workers. (In the Public Interest , In These Time)   If you want to understand how privatization of public services typically works, Grand Rapids, Michigan is as good a place as any to start.   The state operates a nursing home for veterans in the town. Until 2011, it directly employed 170 nursing assistants, but also relied on 100 assistants in the same facility provided by a private contractor. The state paid its direct employees $15 to $20 an hour and provided them with health insurance and pensions. Meanwhile, the contractor started pay for its nursing assistants at $8.50 an hour—still billing the state $14.99—and provided no benefits for employees. This led to high worker turnover, reduced quality of care, and heavy employee reliance on food stamps and other public aid.   Yet despite the evidence from this useful—albeit unplanned—experiment, which showed that any savings the state made through privatization came at the expense of workers and their clients, the new conservative Republican state government decided in 2011 to complete the privatization of the provision of nursing aides to the home.   The experience with privatization at the Grand Rapids nursing home is in many ways typical among the rapidly growing ranks of public agencies in which the staff of private contractors replace government employees. And according to a new report, “Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class,” privatization policies around the country have greatly contributed to the nation’s growing economic inequality and to a decline in the quality of public services.   The report, released on June 3 by In the Public Interest (ITPI), a resource center on privatization, concludes that in most cases, privatization policies lead directly to cutbacks in government investment in skill development and to reductions in workers’ pay and benefits. In turn, workers have less income to invest in their households, their children and their neighborhoods—leaving individuals and their communities poorly served in the present and ill prepared for the future.   Regardless of level of government, the story of privatization remains much the same. Elected leaders, often under legislative or political pressure from voters, try to reduce spending or taxes by relying on contractors for services instead. This way, politicians can attempt to avoid responsibility for the pay cuts and worker eliminations that almost inevitably result from privatization.   Government privatizers turn over huge swaths of public service work to private contractors—jobs such as corrections officers, nursing aides, teachers, school support personnel, clerks, waste haulers, food service workers and many others. Nobody knows precisely how much government work is now subcontracted, but New York University professor Paul Light estimates that there are about three times as many federal contract workers as civil service employees, with millions more at the state level.   Privatizers frequently claim that they charge governments low rates because they are especially efficient. In many cases, however, public employees are at least as efficient as private contract ones. Instead, if contractors’ operational cost is lower, the savings stem from the comparatively low salary their employees receive. For example, the median private corrections worker in the United States earns $29,000 a year compared with $38,000 to $39,000 for, respectively, the median state or local officer working in comparable positions. Furthermore, a a Demos study last year estimated that about two million federal contract or other publicly funded workers earned less than $12 an hour, more than the number of low-wage workers at Walmart and McDonald’s combined.   Even if advocates of privatization admit that the savings through contracting result from lower pay, not greater efficiency, they typically argue that governments pay above-market wages. Contracting out saves money for taxpayers by eliminating that premium, they say.   But when governments properly account for all of their costs, sub-contractors are often more expensive than public employees. For example, the nonprofit watchdog Project on Government Oversight found that using contractors cost the federal government more than civil service employment in 33 of 35 occupations, resulting in billions of dollars total.   Those costs stem from a variety of sources. Governments must frequently hire an additional layer of supervisors to make sure contractors meet legal and other requirements. In addition, poorly paid contract employees often collect public assistance from supplemental nutrition programs, Medicaid and other aid for the needy, whose costs should be attributed to the contract.   Contracting out public work also rolls back critical progress toward equality on the basis of gender, race and income. Whatever their shortcomings, public employers in recent decades have opened up more opportunities and paid fairer wages to both African Americans and women than the private sector. For several decades, the ITPI report says, direct government employment of public service workers has provided a “ladder of opportunity” for many workers. Public jobs have opened up opportunity, especially where unions have bargained for contracts and influenced public policy. They have played an especially important role for women and African Americans, who still suffer disadvantages in the job market and are most hurt by cuts in public service pay and benefits.   For example, women comprise 57 percent of all government workers. And African Americans are 30 percent more likely than all other Americans to work in the public sector. Compared with black workers in the private sector, black public employees earn 25 percent more.   Cutting public service pay, therefore, compounds the inequities of income in America, replacing the ladder of opportunity upwards with a “downward spiral.” And though this downward shift may most negatively impact African Americans and women, “it hurts all workers,” says economics professor Daphne Greenwood of the Colorado Center for Policy Studies.   Economists argue over the degree to which broad forces such as technology development or globalization account for rising inequality in the United States, says Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. But privatization, he says, is one major cause of increased inequality that “smart policy” could easily reverse.   As some first steps toward that smart policy, In the Public Interest recommends that governments require contractors to show that their cost savings come from innovation and efficiency, not wage and benefit cuts. Contractors should be required to provide a living wage, health insurance and other benefits, ITPI also suggests. Though the McNamara-O’Hara Service Contract Act is designed to guarantee that federal contract workers in service work earn close to the prevailing wage in comparable jobs, both its coverage and enforcement are inadequate. Governments should collect and share detailed information on private contractors and their performance, ITPI says, in addition to preparing social and economic impact analyses in advance of any contract.   Mary Sparrow, a former custodian at the Milwaukee County Courthouse in Wisconsin, might have benefitted from such revisions. She was laid off in 2009 in the depth of the Great Recession after a private contractor, MidAmerican Building Services, won a contract to clean the building. The company told her she could keep the job—but not the pay. They offered her $8 an hour, instead of the $14.29 she had been making, and none of her former benefits. She and her husband have scraped by since, she said at a press conference at the release of the ITPI report, her voice cracking with emotion—buying health insurance with unemployment insurance payments, exhausting life savings for their children’s college to cover myriad expenses, contending with health worsened by stress, and watching former co-workers relying on food banks.   “Only the contractors come out ahead, not the middle class, the front-line workers,” Sparrow told the assembled crowd. “Milwaukee County or any county that privatizes will not see the promised cost savings. Privatizing has a devastating effect on our communities, not only on what we earn but what we spend, even on basics like housing and medication. This has been awful for us, and I hope any city, any state, will think twice before privatizing.”   http://www.inthepublicinterest.org/RaceToTheBottom Visit the related web page
	View more stories