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Forbes and the "Self-Made" Label

by cactus

Forbes and the “Self-Made” Label

I’m kinda busy these days, but this topic is small pet peeve of mine: what the heck is up with Forbes and the “self-made” label? On occasion, I’ve gone through the Forbes 400 list of richest Americans and marveled at who Forbes manages to decide qualifies as self-made.

Case in point. Take Aubrey McClendon, head of Chesapeake Energy, the largest independent gas producer in the US. His great-uncle was a governor and a three-time senator, and also co-founded a large oil company. His father worked for the company for 35 years, and one imagines he wasn’t a janitor or nightwatchman.

McClenond himself will tell you:

I had some early financial advantages in life that probably let me take a chance or two that I wouldn’t have been able to

But to Forbes, McClendon is a self-made man.

A few spots up from McClendon is another self-made dude (according to Forbes), Paul Tudor Jones II. The “II” is not an automatic marker of wealth, but it should have been a tip-off to Forbes that perhaps it was worth visiting “teh google”, which would have been kind enough to guide them toward this interview:

I already had an appreciation for trading because my uncle, Billy Dunavant, was a very successful cotton trader. In 1976, after I finished college, I went to my uncle and asked him if he could help me get started as a trader. he sent me to Eli Tullis, a famous cotton trader, who lived in New Orleans. Eli is the best trader I know, he told me. I went down to see Eli and he offered me a job on the floor of the New York Cotton Exchange.

And the name “Dunavant” should have rung a bell to Forbes – after all, Forbes ranks Dunavant Enerprises as one of the 400 largest private firms in the US. Another thirty seconds of “research” would have told the folks at Forbes this:

His paternal grandfather, Colonel William P. Dunavant, was in the railroad business and created one of the main cotton transporting railroads of the time, a railroad that grew into the southern leg of the famous Frisco Railroad. Billy’s father, William Dunavant, began working for T. J. White and Company at the age of twenty-one. After White retired, the company was passed to William Dunavant; however, because of the untimely death of his father in 1961, Billy Dunavant took over the company at the age of twenty-nine.

I’ll concede that a stream of events where all this is true and Tudor Jones was none-the-less a penniless guy who pulled himself up by his bootstraps in a way that the rest of us were just too lazy to accomplish. It does seem unlikely, though. A more reasonable description of events is that this is another example (I’ve had a post or two on this in the past) that Forbes simply has a tendency label some very unlikely individuals as being self-made. And from what I can tell, this is a Forbes thing; most of the folks Forbes gives this label to that the rest of us might not don’t go around insisting they’re self-made. (I believe I recall one counter-example.) So what’s up with Forbes and the use of this label?
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by cactus

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Same labels, same old stuff

One Salient Oversight sends some thoughts from down under on recycling labels:

Think of the common labels thrown out against political opponents these
days. What sort of political thinking would be labelled in the following
way?

* The propagation of ideas like Darwinism, Marxism, the teachings of
Nietzche, Liberalism, Socialism, Communism and Anarchism.
* A focus on Utopianism that is actually unattainable because of the
underlying conspiracy within the group.
* A movement towards materialism.
* Supporting supranational entities notions such as World Government.
* A control of the media to promote these evil ideas, under the
guise of a “free press” (which is actually controlled by the conspiracy).
* Sexual licence.
* An opposition to Christianity and a promotion of secularism and
atheism – but with an actual evil religion under girding it.

All those descriptions can quite easily be seen as being directed by
conservatives against progressives. Consider the following:

* Conservatives often use progressive ideas as a pejorative, and
will quite easily label a progressive by a general term. Labelling them
as “communists”, for example, even though they don’t espouse Communism.
* An argument that progressive ideas are based upon a vision of a
“false utopia”.
* An argument that progressives cannot tolerate faith and are
inherently materialist.
* Complete opposition to any notion that supranational entities like
the United Nations and the European Union are useful. Such entities are
either threats to freedom or full of incompetents. Those who support
such entities are thus evil.
* That the “Mainstream Media” is inherently “liberal” and has an
agenda to promote a particular point of view under the guise of the
“free press”.
* That sexual licence promoted by progressives will end up leading
to the destruction of traditional marriage and enforced sexual
perversions (like paedophilia and bestiality).
* That a conspiracy of progressives is trying to destroy
Christianity and replace it with atheism, and that such a conspiracy
has, at its base, Satanic and pagan influences.

Sounds terrible doesn’t it? Or maybe it sounds true. Or maybe, just
maybe, someone came up with the same sort of thing during the late
nineteenth century (Protocols of the Elders of Zion) and directed it towards a societal group that they
thought was destroying the world?

In the case of the late nineteenth century, these beliefs were outright
lies that were fabricated with the intention of creating ill-will and
hatred towards their “enemy”. It therefore gives you an idea of how
these people – even those today – think.
——————–
This one by reader One Salient Oversight

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Mike sends a response to rdan on off-label drugs

It is evident that this will lead to less pressure on the Drug Companies
to get their drugs approved by the FDA. I would suggest that we consider
letting the market help. i.e.

1) If a drug is prescribed off-label, then the patient be permitted
to return it to the drug store for a full refund, no questions asked. —
Obviously many people might be helped, and others would not bother to try to
get a refund, but it would encourage the Drug Company to test the drug to be
able to sell it without the possibility of having ineffective drugs being
returned.

2) If a drug is being prescribed off-label, with the cooperation of
the Drug Company, then the patient can go to court and have a presumption
that the drug is the cause of any reasonable harm to the patient. Obviously
one would want a judge to eliminate unreasonable cases, but if it is
reasonable that the off-label use of the drug might have caused the damage,
then the encouraged off-label use would lead to an assumption of guilt until
proven by the preponderance of evidence otherwise.

Obviously the details of these can be adjusted to make them more
reasonable, but their purpose is to let the Drug Company have some reasons
for testing their drugs and for not encouraging their off-label use unless
they feel they are safe and effective.

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Off label drug pushers

FDA doesn’t just approve drugs, it approves drugs for specific uses. However, doctors can prescribe drugs for unapproved, or “off-label,” uses.

Under a law that expired in 2006, pharmaceutical reps were legally able to distribute journal articles touting the benefits of off-label uses. But, according to the Associated Press, FDA maintained some regulatory oversight: “Under the expired law, companies had to submit reprints of articles to the FDA before sending them to doctors. That way, the articles’ accuracy could be reviewed.”

If FDA chooses to finalize this policy, which it published today as “proposed guidance,” drug companies would be able to use journal articles to market off-label uses willy-nilly. The AP article continues, “Under the new proposal, drug companies don’t have to submit articles.”

Off-label use of drugs is big business. According to The Wall Street Journal, “[FDA] is stepping into a high-stakes business issue, because off-label uses of prescription drugs are a mainstay of the industry — an estimated 21% of drug use overall, according to a 2006 analysis published in the Archives of Internal Medicine.”

According to Merrill Goozner at the GoozNews blog, the pharmaceutical lobby pushed for FDA to go forward with the policy which will be a boon for the industry:

So what was in today’s proposed guidance? It pretty much gives industry everything it was looking for. It would allow drug salespersons to drop off article reprints as long as they came from a peer-reviewed journal that had a conflict-of-interest disclosure policy. Articles from industry-funded supplements would not be allowed…

Note what isn’t in the policy: It doesn’t say that the studies of unapproved uses must be from randomized controlled clinical trials, which is the gold standard of medical research.

Rep. Henry Waxman(D-CA) caught wind of this policy last November and asked FDA to refrain from going forward.

We probably will get exactly what we wish for, and then get blamed for the result. I call it sneered at..”Suckers!!”

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Thoughts on the War on Terror as a Label

I have a vague recollection of GW saying something to the effect that if we change our behavior or lifestyle, the terrorists have won. (Anyone have the quote?) As I was waiting, barefoot, for my carry-on, my flip-flops (the easiest thing to travel in these days), my laptop and my cell-phone to clear the X-ray machine, I looked over at the octogenarian lady standing next to me waiting for her belongings. Then I reflected on the fact that GW has not flown commercially since at least the year 2000.

Calling it a “War on Terror” means one day, when we win, we’ll be able to go back to the days when we weren’t fighting. Put another way… one day we’ll be able to go back to the days before our carry-on items were scrutinized this carefully. That day will never come, even if every last islamofascist is rounded up and GW has Osama’s testicles in a jar of formaldehyde sitting on the mantle. Calling it a “War on Terror” is just silly.

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NY Times Calculator Mislabels Salaries as Wealth

Dean Baker has a lot of praise for this calculator:

The NYT has a very nice feature in today’s paper, a calculator that allows you to see how wages have grown over the last four decades. You can make comparisons for a wide variety of demographic characteristics, occupations, and industries. You can even plus your own info in and see how you’re doing compared to your peers. This is nice, it’s giving people real information. That’s what newspapers are supposed to do.

I agree but I have one nitpick with the title which talks about “wealth” whereas the calculator graphs real salaries. Their instructions continue the error in terminology by calling this salary calculator a “wealth calculator”. Could someone let the New York Times know that stocks and flows are different concepts.

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Pork Barrel Spending Labeled “Fiscal Responsibility”

An AP story carried by CNN shows that the White House was paid many visits by “Republican activists Grover Norquist and Ralph Reed” over the past 6 years. White House spokeswoman Dana Perino had an odd way of excusing the visits by Mr. Norquist:

He is one of a number of individuals who worked to advance fiscal responsibility, which is one of the key aspects of the president’s agenda

I seriously doubt Mr. Norquist asked Karl Rove if the pork barrel spending for his clients could be reduced.

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Both the rich and ordinary Americans misunderstand their economic interests

by Linda Beale

Both the rich and ordinary Americans misunderstand their economic interests

There is class warfare going on, right now, all across this country.  It’s highlighted by the election gimmicks and gambits of those on the right who claim to be supporting ordinary Americans but whose real intentions show in the results. And it is ultimately a sad statement about Americans’ understanding of what is required for a sustainable economy that supports decent lifestyles for all.

Let’s start by looking at the maps resulting from studies of well-being that identify the states where people are not at all well-off, such as the 2013 survey done by Gallup Healthways, available here.  Those poor states are the reddest of the red belt in Mississippi, Tennessee, Florida and elsewhere across the Deep South–places where I grew up in a decidedly Republican household that bought the GOP economic fallacies hook, line and sinker, and places where today’s populations are worse off in terms of the various measures of economic well-being and happiness than the more progressive northeast and west.

Isn’t it likely that the anti-government, low-tax and pro-wealthy/pro-big business policies of the GOP politicos that have run these states for several decades have something to do with these negative results, and that the more progressive policies in the northeast and northwest are reflected in the much more positive results in those areas?

Yet rural, southern populations continue to proudly proclaim their allegiance, against their own economic interest,  to ill-fated Reaganomics that favors tax cuts (for the wealthy and big business) coupled with  use of  old-time, regressive consumption taxes (toll roads, sales taxes and property taxes),  privatization of public functions (e.g., charter schools managed by for-profit, nontransparent corporations), socialization of losses, militarization, and de-regulation.

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Invisible Hands: The Businessmen’s Campaign to Dismantle the Post Office

Guest Post by Steve Hutkins a literature professor who teaches “place studies” at the Gallatin School of New York University.

This is Part 1 in a series of 3 articles as written by Steve Hutkins in 2012. These articles originally appeared on the “Save The Post Office Blog”. Steve lives in a small town in New York’s Hudson Valley. He has no affiliation with the U.S. Postal Service—he doesn’t work for it, nor does anyone in his family. Like millions of Americans, he just likes his local post office, and he doesn’t want to see post offices being closed.

invisible hand The leaders of the Postal Service have made no secret of their plans for reforming the postal system. They have issued white papers, given speeches, presented “optimization” programs, and appeared before Congressional committees. The plans are clear: eliminate the layoff protections in union contracts; cut the career workforce by nearly half while tripling the number of non-career workers; reduce service standards for first-class mail; do away with Saturday delivery; give management control of workers’ benefit plans; consolidate over 250 processing plants; and close 15,000 post offices.

What we don’t see very often are the players making this all happen. We assume the Postmaster General is making the decisions, but he is merely the front man. Behind him are the USPS Board of Governors, the mail industry stakeholders, and the corporate class as a whole. These businessmen (and women) prefer to keep a low profile, so we rarely hear from them in public. They leave it their surrogates — journalists and academics, politicians and pundits — to speak for them. But it’s the businessmen who fund the think tanks, endow universities, make campaign contributions, pay lobbyists, and run the news media. Yet for the most part, they are not to be seen.

In her excellent book Invisible Hands: The Businessmen’s Crusade Against the New Deal, historian Kim Phillips-Fein paints a very revealing picture of how the corporate class operates. Her theme is the way conservative businessmen worked behind the scenes to undo the New Deal. Believing all would be right if government stayed out of the economy and left everything, in Adam’s Smith famous expression, to the “invisible hand” of the market, these businessmen have spent decades working to weaken unions, eliminate social welfare programs, minimize government regulation of their companies, and diminish public services.

attack While the U.S. Postal Service is obviously not a product of the New Deal, that same conservative agenda is behind the attack on the Postal Service we’re witnessing today. Cutting the workforce, closing post offices and plants, and moving toward privatization through outsourcing and divestiture of assets — these are all part of an effort to shape the postal system in ways that serve the interests of an elite business class rather than the good of the country as a whole. The free-market ideology and greed for profits that drove efforts to undo the New Deal are basically what’s driving the “postal reform” movement today.

Power in numbers: The stakeholder associations

As Phillips-Fein explains, one of the most common methods for the businessmen to advocate for their agenda was to bond together. Recognizing the power in numbers, they formed associations like the American Liberty League (organized by the du Ponts) and the Foundation for Economic Education (founded with help from B. F. Goodrich), as well as giving new energy to existing organizations, like the National Association of Manufacturers and other industry trade groups.

In the same way, the mail industry stakeholders — the big direct marketing firms, the pre-sort companies, the periodical publishers, and so on — have formed their own organizations to advocate for their interests.

One of the most important of these groups is one operated by the Postal Service itself. The Postmaster General’s Mailers’ Technical Advisory Committee (MTAC) consists of mailer associations and other organizations related to the mailing industry. Its goal is “to assist the USPS in determining the best course of action to improve service and postal operating efficiency.” The MTAC has a page on the USPS website (it’s part of the National Customer Support Center), and its meeting minutes are published there, albeit in a rather cursory form. But much about the MTAC is cloaked in secrecy.

The MTAC charter says, “A current list of member associations/organizations and corresponding representatives will be published at least quarterly.” Apparently there are 58 member organizations, but good luck trying to find a list of the MTAC members on the Internet. A few years ago, when the APWU asked to join the MTAC, it was denied membership and it took a lawsuit and a year and a half before the MTAC finally relented. A few months ago, word came out that attendance at its meetings would be restricted.

The Direct Marketing Association (DMA) is, according to its website, “the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques.” It’s an international organization representing dozens of industries in almost 50 countries, including nearly half of the Fortune 100 companies. If you want to know who’s in the DMA you will find that the membership directory is off limits — you have to be a member to see the member list.

Floor The National Association of Presort Mailers (NAPM) is, according to its website, “a trade association composed of firms concerned with the present and future of postal work sharing.” Its primary purpose is to represent the interest of presort mailers and to develop work share programs with USPS “to produce cost saving and service benefits to presort mailers and the USPS.” As with the DMA, if you’d like to see the membership list, you’ll need to become a member.

There are many other industry associations that are influencing the policies of the Postal Service, such as the National Alliance of Standard Mailers (NASM); DFW Mailers Association; Alliance of Non-profit mailers; Association of Priority Mail Users (APMU); Mail Systems Management Association (MSMA); Mail Order Association of America (MOAA); Parcel Shippers Association (PSA); National Newspaper Association (NNA); and Magazine Publishers of America (MPA).

The corporate stakeholders represented by these organizations are not monolithic in their views, and there’s a considerable degree of diversity and even conflict. The periodicals industry, for example, is usually more concerned about the timely delivery of their publications than the direct marketers are. And one wouldn’t want to lump the junk mail business together with newspapers and news magazines — delivering the news is one of the most important functions of the mail system.

But most big mailers are primarily interested in keeping postal rates as low as possible. They have generally supported the cost-cutting measures proposed by the Postal Service because they believe the cuts will keep rates down and their profits up. Back in August, for example, the DMA “applauded” the proposed cuts, and in the RAOI Advisory Opinion process, the direct marketing giant Val-Pak made a forceful argument for closing post offices because they lose money and consequently drive up postage rates.

Most of these stakeholders don’t care about post offices because big mailers present their mail at Bulk Mail Entry Units, and Saturday delivery is not a major concern either because ad mail would do fine with even three-day delivery (which the Postmaster General says is coming within fifteen years). The industry doesn’t care about having a blue collection box on every corner — over the past twenty years, half of them have disappeared, even as the FedEx boxes have become ubiquitous — and they don’t care how often the mail is picked up at those boxes. Their interests, in other words, are not those of the average citizen and small business. But they are one of the strongest forces shaping the future of the Postal Service.

Think tanks do the talking

One of the main themes of Phillips-Fein’s Invisible Hands is that the anti-New-Deal businessmen wanted to keep their activities hidden from the general public. Otherwise, it might look like their attack on unions and public services had selfish motives. They also wanted to give their views intellectual respectability. So they founded and funded think tanks and enlisted journalists and academics to write articles and produce studies extolling the virtues of the free market.

In 1943, Lewis H. Brown, president of the Johns-Manville manufacturing company, got several of his allies in the business community together and formed the American Enterprise Association to provide congressmen with legislative analyses that would promote private enterprise. Most of the money came from major corporations like GM, Ford, Con Edison, and du Pont, and the AEA ended up being investigated by Congress, which questioned how it could provide disinterested research with such sponsors.

The AEA eventually morphed into the American Enterprise Institute (AEI), one of the country’s leading right-wing think tanks. The AEI now publishes works like Saving the Mail: How to Solve the Problems of the U.S. Postal Service by R. Richard Geddes. Geddes advocates privatizing the Postal Service, and he shows up frequently in news articles about the plight of the Postal Service. The AEI is responsible for many other publications about the desirability of moving the Postal Service toward a more corporate model, such as this one by AEI senior fellow Kevin Hassett, encouraging the Tea Party to push for postal privatization as a means of fighting big government.

Another of the country’s well-known right-wing think tanks is the Heritage Foundation, founded in 1973 by conservative businessman Joseph Coors of brewery fame, with the help of contributions from Dow Chemical, GM, Mobile, Pfizer, Sears Roebuck, and Chase Manhattan bank. More recently, the Heritage Foundation has received generous support from the Lynde and Harry Bradley Foundation and the billionaires Koch brothers. (Harry Bradley and the Koch brothers’ father were charter members of the John Birch Society.) The Foundation has a long history of advocating privatization of government agencies, including the Postal Service. Check out its 1986 primer on privatizing federal services, and this long list of articles on its website.

Koch The Cato Institute, the nation’s first libertarian think tank, was launched by the Koch brothers, who continue to fund it generously. According to the Center for Public Integrity, between 1986 and 1993 the Koch family gave $11 million to the institute. The Cato Institute holds conferences and publishes books and papers advocating the privatization of the Postal Service, such as Restructuring the U.S. Postal Service, The Last Monopoly: Privatizing the Postal Service for the Information Age, Free the Mail: Ending the Postal Monopoly, and Mail at the Millennium: Will the Postal Service Go Private?

The Koch brothers also founded Citizens for a Sound Economy, and one of its senior fellows was James C. Miller III, a well-known advocate of privatizing the Postal Service. Miller is a member of the Board of Governors of the United States Postal Service.

Citizens for a Sound Economy eventually split into FreedomWorks and Americans for Prosperity. According to the New York Times, FreedomWorks is “the Washington advocacy group that has done more than any other organization to build the Tea Party movement.” It received $12 million from Koch family foundations. Like the other Koch-funded organizations, it advocates privatization of the Postal Service.

How to break a union

In one of Invisible Hands’ most disturbing chapters, “How to Break a Union,” Phillips-Fein examines the war against unions in the 1950s, particularly the efforts of General Electric to destroy the electrical workers union. (In 1954, GM enlisted the help of a failed movie actor named Ronald Reagan to promote its agenda.) From the point of view of the conservative businessmen, organized labor posed a serious threat, not just in terms of how higher wages might impact their bottom line, but also in terms of power and prestige. They also worried that at election time union workers would be mobilized to press for better Social Security benefits, more government spending, and expanded public services. Unions embodied everything the conservative businessmen were against.

The animosity toward unions fuels much of what’s going on with the Postal Service today. The leadership of the Postal Service wants to get rid of the no-layoff clause in union contracts so that it can cut hundreds of thousands of jobs. In a USPS white paper released last summer, the Postal Service stated explicitly that it wanted to reduce the career workforce from 580,000 to 300,000, and since there was no way that could happen through “attrition,” postal management wants Congress to change the law preventing layoffs. The Postal Service also wants to increase the number of non-career employees from 38,000 to 125,000 — yet another way to undermine the unions.

The leaders of the Postal Service aren’t trying to reduce their labor costs just to deal with the postal deficit or to keep the big mailers happy. The corporate class as a whole does not like the good wages that unions make happen. Postal clerks average $25 an hour, while the sales associates and cashiers at Walmart average $8.50 an hour. Good wages at the post office help bring wages up across the economy, while poor wages at Walmart drive them down.

Since union contracts have made it difficult for the leaders of the Postal Service to reduce the size of the workforce as drastically and rapidly as it would like, they have used other tactics. Outsourcing, for example, is a great way to shift work from postal employees to non-union workers in private industry. The Postal Service now contracts out $12 billion annually.

Koch At the top of the list of corporations enjoying a profitable relationship with the Postal Service — with $1.37 billion of business in 2010 — is FedEx, whose founder and CEO, Fred Smith, testified before Congress “closing down the USPS . . . is an option that ought to be considered seriously.” FedEx has also campaigned against legislation making it easier for its workers to unionize.

Work-share arrangements with pre-sort companies are another way to give work to private companies that could be done by postal workers. The huge discounts that these companies are given are often far in excess of what the Postal Service saves by receiving mail pre-sorted, and they end up costing the Postal Service huge amounts of money. The postal unions have been fighting these discounts for a long time, but to little avail. They are a valuable tool for downsizing the Postal Service, and they help move things further down the path to privatization. (For more on presort companies, see the excellent thesis Understanding Postal Privatization by labor historian Sarah Ryan.)

Follow the money

One of the main tactics the anti-New Deal businessmen used to help keep themselves invisible was to support pro-business politicians like Barry Goldwater and Ronald Reagan. These days, with PACs and other modes of funding and lobbying politicians totally out of control, there are very few politicians who are not being overly influenced by the corporate elite. In postal matters, the two most prominent of these politicians are Darrell Issa and Dennis Ross.

Issa is the Congressman for California’s 49th congressional district and chairman of the House Committee on Oversight and Government Reform. In 2011, his committee held hearings (videos here) and called as witnesses various individuals to testify that the Postal Service was heading toward catastrophe if radical reforms weren’t made. Issa’s Postal Reform Act would create an Authority empowered to restructure the postal system and a Commission that would recommend post office closures and consolidations to Congress. These measures would do essentially what the leaders of the Postal Service have been advocating, but the Act would put Issa and his allies in charge, effectively sidelining postal headquarters.

Koch Dennis A. Ross is the Congressman for Florida’s 12th congressional district and a member of the Tea Party Caucus. As chair of the Committee on Oversight & Government Reform, he held several hearings last year on the Postal Service, during which his witnesses attacked the postal unions, argued that the Postal Service needs to reduce “excess capacity” (i.e., post offices and plants), and called for changes in the law that will make it easier to close post offices.

Eleven of the 23 Republican representatives on Issa’s committee received financial help from Koch Industries in the last election. Issa himself was the largest recipient, with $12,500 since 2008. Not that Issa really needs the money. His net worth is about $450 million, making him the richest man in Congress. Ross received $12,000 from the Koch brothers.

It’s not just the Koch brothers who are contributing to the postal legislators. Pitney Bowes is $5.6 billion-a-year business employing 33,000 workers around the world, selling mail equipment and providing marketing through mail. It’s based in Stamford, Connecticut, so no surprise that it has contributed generously to the campaign of Connecticut Senator Joe Lieberman, chair of the Homeland Security Committee, which deals with postal legislation. In 2011, Pitney Bowes also contributed $10,000 to Darrell Issa and $10,000 to Senator Susan Collins of Maine, another key player in postal legislation. (If you’re interested in doing some detective work, Influence Explorer and Open Secrets are useful sites.)

Privatization, the Holy Grail

Phillips-Fein’s book culminates with the election of Ronald Reagan, who represented everything the conservative businessmen had worked for since the New Deal. Reagan made a stand against unions when he fired the striking air-traffic controllers, he made the tax code less progressive (remember Reaganomics?), he cut social programs like Medicaid and food stamps, and he slashed the budget of regulatory agencies like the Environmental Protection Agency.

Reagan also created a presidential Commission on Privatization. Its 1988 report Privatization: Toward More Effective Government recommended that the private express statutes, which mandate the postal monopoly, be repealed to allow competition in the provision postal services. That recommendation has not yet come to fruition, but the Commission also recommended that the Postal Service more actively pursue contracting out. Fulfilling that recommendation was facilitated by changes to the USPS Procurement Manual (also in 1988), which made it easier for management to outsource without worrying about “full and open competition.” Outsourcing has become one of the most useful tools for privatizing the postal system without an act of Congress.

Koch Reagan, however, can’t get the credit for initiating the push toward postal privatization. That goes way back, at least until the 1960s, when a Democratic president, LBJ, charged the Kappel Commission to come up with ideas for reforming the Department of the Post Office. The Commission consisted almost exclusively of corporate executives, with retired AT&T Chairman Frederick R. Kappel as its chair. Its recommendations led to the 1970 Postal Reorganization Act, which “corporatized” the Post Office into the U.S. Postal Service.

It was no secret that turning a cabinet-level department into a government corporation would be a big first step toward the ultimate goal, privatization. In testimony before Congress, Kappel testified, “If I could, I’d make [the Post Office] a private enterprise and I would create a private corporation to run the postal service and the country would be better off financially. But I can’t get from here to there.”

For the past four decades, getting from “here” to “there” has remained the Holy Grail for the conservative business elite. All the books and articles put out by the think tanks and their scholars, all the lobbying and campaign contributions, all the organizing and behind-the-scenes networking— the goal has remained constant. The free market ideologues will be satisfied with nothing less than the privatization of the postal system.

In the meantime, the mantra is the same: The Postal Service needs to act more “like a business.” If it can’t be turned into a private corporation, it should at least act like one. If a post office isn’t bringing in a profit (80 to 90 percent of them don’t, at least the way the Postal Service runs the numbers), then close it. If career employees can be replaced by part-time casuals or contract workers, replace them. If there’s “excess capacity” in the system, get rid of it. If there’s a way to undermine the unions, drive down wages, degrade benefits, do it.

As for average citizens, they just don’t seem to be very important to postal management. They are not big customers. The services they might like to see offered at the post office — like an Internet connection or low-cost banking services — aren’t very profitable. Sometimes one even gets the impression that the Postal Service is intentionally alienating its regular customers — causing long lines by reducing the staffing at the windows, not being responsive to complaints, demoralizing postal workers so it’s difficult for them to be courteous. Perhaps management thinks it’s not so bad if people are dissatisfied with the Postal Service. Maybe it will make them happy to hear about plans to privatize.

Dismantling the legacy

In 1970, when the U.S. population was about 200 million and first-class mail volumes were not quite 50 billions pieces, there were around 43,000 post offices (including contract postal units). Today the U.S. has over 300 million people, first-class mail volumes are about 78 billion pieces, and there are around 35,000 post offices. While population and mail volumes have increased by more than 50%, the number of post offices has declined by almost 20%. Yet somehow we are expected to believe that there are too many post offices.

Almost every one of the country’s post offices is a valued part of the community it serves. If you have any doubt about that, just read a few hundred of the thousands of news articles that have come out over the past few months, describing the frustration, anger, and sadness people express when they hear their post office may close.

While the focus has been on the 3,600 post offices on the Retail Access Optimization Initiative (RAOI) list, the Postal Service wants to close half the country’s post offices. The retail end of the business will continue to be moved to the “alternate retail outlets” the Postal Service claims that customers prefer — Wal-Mart, CVS, Office Depot, Costco, your local supermarket. There are already 50,000 alternative places to buy stamps — more locations than there are post offices. Though the Postal Service never labels it as such, this is yet another form of outsourcing and privatization.

The leaders of the Postal Service are committed to dismantling what they call — with considerable disdain — the “legacy” of “brick-and-mortar” post offices. The legacy hangs around their neck like an albatross, weighing them down and holding them back from progressing into a light and fluid post-office-less future. They say “brick and mortar” to make the post office seem old fashioned, passé, a nostalgic icon of a bygone era.

These leaders want the Postal Service be fashionably chic — like those European countries that are closing their village post offices as part of their privatization programs. Headquarters doesn’t like the way people get attached to their post office, or the way the workers in the post office give a face to the postal system and the government. The bonding to a place and the human connection make people care too much about what happens with the postal system as a whole, and that just gets in the way of what postal leaders are trying to do.

During the Great Depression, the federal government built over a thousand post offices, as well as many schools, libraries, and federal buildings. These buildings are usually an important place in a town, and many are on the National Register of Historic Places. Constructing these buildings put hundreds of thousands of people to work; but, they had another purpose.

Koch The New Deal wanted people to feel connected to their federal government, to have faith in its permanence, to see that it was a part of their community. Considerable attention was also given to the architectural design of the New Deal post offices, and most are adorned with beautiful murals depicting scenes from local history. They bring an element of culture to the community, and they remind people of their past.

Now the country is being told that we cannot afford to keep these post offices. Historic New Deal post offices are being closed and sold off, right and left. Recently the Postal Service has closed and/or sold the historic post offices in Westport, Connecticut; Palm Beach, Florida; Ukiah, California; and Pinehurst, North Carolina. Over the coming months, the same will happen to the post offices in Venice and La Jolla, California. The historic post offices in Northfield, Minnesota; Athens, Pennsylvania; and Camas, Washington are also threatened. Many are closed without even a public meeting because the Postal Service is relocating postal services to another location and not actually “closing” the post office.

The Postal Service says these historic post offices are too big — the mail handlers and carriers were probably moved to an annex years ago, thus creating “excess capacity” — so now it does not make any sense to hold on to them, and selling them would bring in much needed revenue. Maybe so, but, there is something else going on.

These post offices are a proud reminder of the great things our government and our postal system can do. These are indeed icons, symbolic of everything the conservative anti-government businessmen have been crusading against since the New Deal. Closing these post offices and selling them to private businesses, to be turned into real estate offices and restaurants and clothing stores, is yet another mode of privatization and sad proof the attack on the New Deal continues to this day.

The whole thing is sad, really. Depriving workers of a decent salary, job security, and the promise of a secure retirement; treating communities as insignificant and undeserving of a post office, transferring historic public buildings to private hands for private profits, putting the interests of the wealthy corporate elite above those of the country as a whole — it’s more than sad, it’s a crime. It will not be good if the nation’s lawmakers continue to permit it to happen.

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Explaining “The most important chart about the American economy you’ll see this year”

See update at bottom.

Pavlina Tcherneva’s chart has been getting a lot of play out there:

Vox/Matthew Yglesias labeled it “The most important chart about the American economy you’ll see this year.”

Scott Winship at Fortune came back at it on methodological grounds, with the headline “No, the Rich Are Not Taking All of the Economic Pie (In 8 Charts).” He ends up with what he calls the “money chart,” supporting his headline:

Yglesias responded, and Winship responded to him.

The basic contention at this point: who is actually “explaining” the situation?

Do Scott’s corrections explain the situation better? Do they paint a 1. more accurate, and/or 2. more complete picture? By those two standards, is he more honestly and fully informative? Let’s run through his changes.

1. The household method as opposed to tax-unit method is at least a useful additional measure, and is arguably more accurate and explanatory. It’s also less complete because the data only goes back to ’79. But he completes it with Tcherneva’s (by this standard less-accurate) earlier data. It’s a useful addition to understanding, but with little change in the story it tells.

2. The full-business-cycle approach (as opposed to just showing expansions) is also arguably more accurate hence informative. But it (necessarily?) ignores the post-2007 period because the current business cycle isn’t over yet. By Tcherneva’s measure this period is far and away the most egregious demonstration of the inequality trend we’re examining. Scott could have included recent years, with visual and verbal caveats explaining that the cycle is not complete, so the measure that period is not directly comparable. It has less explanatory power, but that doesn’t mean it has none. Omitting the very period that by Tcherneva’s measure are the “money proof” of the trend (and so omitting explanations of that period) arguably explains less about that trend.

3. Looking at the non-elderly population is arguably more accurate and is at least quite informative. It paints roughly the same picture, though less extreme.

4. Post-tax-and-transfer measures are arguably more accurate and informative, but again with the completeness problem. And he should explain that the pre-’79 picture would look quite different if it displayed post-T&T data; the bottom 90% would have been getting more of the pie, which would make the inequality trend look more pronounced than it does in his graph.

I do wish he’d shown a graph as he suggested, including health/medical benefits in T&T (assigning a value other than $0), while explaining the methodological difficulties he points to. I have no idea how or how much this would change the picture.

5. Omitting capital gains (because they’re hard to measure) for the final “money chart” — suggesting that it’s the most accurate, complete, informative, and definitive chart — is a massive hit to accuracy and explanation. Cap gains are the very vehicle, the primary means, by which the increasing inequality we’re trying to understand is realized. “The data might not be accurate” begs the question: Is ignoring that data more accurate? To use Scott’s own words, “assigning a value of $0 is surely not right.”

So some of Scott’s corrections help to usefully and informatively explain the situation better, or at least more. But to summarize the changes that are less informative or downright misinformative:

• The blatant inaccuracy of ignoring cap gains in #5. It completely misrepresents the situation.

• The omission of recent years in #2 — the very years where the trend is arguably most apparent and egregious. Hiding the elephant under the rug?

• The blithely dismissive headline of Scott’s first post.

With these combined, I hope Scott can understand why many see his post as an effort to pooh-pooh and obfuscate the whole subject — the very antithesis of “explaining.”

Part of that hand-waving, obfuscation, and general chaff-dispersal is the proleptic but of course you’re right” rhetorical ploy, right up front in Scott’s second paragraph:

Let’s stipulate that income inequality is at staggering levels in the U.S., and that income concentration at the top has probably risen (probably)

One really must ask: if income inequality is at “staggering” levels, how did it get there…if it hasn’t risen?

How do you square that staggering stipulated reality with Scott’s headline assertion: that “the Rich Are Not Taking All of the Economic Pie.”

I can’t see how to draw any other conclusion from this direct self-contradiction: he’s talking out of both sides of his mouth. I’ll leave it to my gentle readers to decide why.

Takeaway: obfuscation is the opposite of explanation.

Update: Scott has taken issue with my only-barely-implicit imputation of his motives. He’s right on that. I both regret that and apologize for it. I still think the import of his post (especially the “money chart” and title) — that inequality’s not that bad and not that important — contradicts his “staggering” stipulation, and is rhetorically pernicious. But that’s not the same as bad faith. I withdraw and apologize for any suggestion of the latter. 

Cross-posted at Asymptosis.

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