Headed Toward second-Class Status?

Have you signed-up to be a "Counter-Revolutionary" yet?  Yes, I know -- it's not easy.  Perhaps we need to think a bit more about where this country is headed under the elite Plutocracy it has become. 

I read one article recently by a naturalized American citizen, living currently outside the United States, who was musing over some of our social problems that seem out-of-control.  Her lament was that the U.S. is likely to become a second-rate power in the next 50 years if we don't straighten out most of these problems.  She senses the probability that those who do not take a longer and wider perspective from another point of view, may end up being the very reason we fail to see where we are headed.  Or, to be truer to the author's perspective:  if Americans keep burying their heads in the sands of our homeland, pretending that we are the country we have always been, then we will be passed over, left behind and relegated to a second-grade status, as countries of Asia, for instance, gain momentum.

The author lists ten reasons for an impending fall into second-grade status.  Since I agree fully with  fewer than that, I will concentrate on just five.

1)    Our Health system is the most expensive in the world.  In terms of the cost of procedures and machines, the cost of insurance plans, and the costs borne by the insured for the burdens placed on the system by the uninsured, I think she's absolutely right.  It is expensive, and we haven't done much about it until recently when President Obama signed the Affordable Care Act.  Granted the Law is not perfect, but it is aimed in the right direction attempting to bring down overall costs, to change the insurance system's flaws, and to bolster the benefits available to every citizen.  That's something we have needed for a good long time.  Despite the irrational opposition of the Right-wing, it is beginning to accomplish many of the things it set out to accomplish, and now that radically conservative crowd is saddled with over 6 million people who are glad they have what Obamacare provides, since they never could afford it before! 
   
    However, there is a further point to be made.  We are still shy of a system that does what so many do: cover health care as a right and not a privilege.  The rest of the industrialized world understands this; we do not.  We must eventually find our way to a single-payer system that covers health care costs for everyone who is born or naturalized into citizenship in this country.  "Medicare for all" is more than a slogan.  It is a system waiting to be be implemented.   Employer-based health insurance is totally unworkable; private-payer insurance has always left out a significant portion of our population, and when that happens, we all end up paying higher cost for everything - equipment, hospitals, tests, insurance, emergency medicine, public health -- you name it.  It is past time to get over the "socialist" epithets and join the rest of the industrialized world in providing free health care to our citizenry - so that every new citizen - born or naturalized - is given at that particular defining moment, a social security card, and a health care card so that both retirement and healthcare are insured for life.
 
2)    The U.S. Education system falls short of the rest of the developed world.  Perhaps a bit over-stated but not far from the truth when certain items like grade-level competency testing, math & science competition, drop out rates, graduation rates, college entrance and college graduation rates, plus costs of maintaining an out-moded 19th century system are figured-in.  All one has to do is look at some international rankings in these categories to understand that the United States' education system is not number One  in the world.  Nevertheless, most of our citizens probably believe otherwise (head-in-sand response), having bought the nefarious argument that everybody is trying to get here to go to our colleges!  Not any more... 
    I like what Senator Bernie Sanders says in response to the human ostriches: "From child-care and pre-school education, to elementary school, high school and college, we need major reform.  There was a time, not so many years ago, when the United States was the best-educated nation on earth.  Not today.  Now, we lag far behind many other countries in areas ranging from quality child care to the percentage of people graduating from college.  Every person in this country is entitled to high quality education, regardless of income.  In a highly competitive global economy, it is insane that we are wasting the intellectual capabilities of millions of our people." 
    If the Tea Party, and their henchmen like the Koch brothers, have their way, we will have private-for-profit schools for the rich and those who can afford  it, and left-over run-down public schools for those who can't.  We are headed there right now, and the Koch-heads are leading the charge.

3)    The American attitude of "exceptionalism" leads to arrogance, ignorance, and war.  Although not said in exactly those words, the author does excoriate the United States for it's attitudes toward foreign countries.  She asserts that the world is less safe because the US went to war in Afghanistan and Iraq.  She reminds us that war debt is a big part of our deficit problem that is affecting more economies than ours, and she points out our lack of  diplomacy and friendliness with other countries.  She blames us for not learning the lessons of history in Korea and Viet Nam. She claims that the US is a bully, telling everyone how to behave, and forcing its will on other countries.  Her conclusion: "the world is now truly global, and if the US can't play well with others, it will be the one suffering the consequences."
    It might be well to consider the author's concern about "believing that everything American is always better."  She says: "Over 80% of Americans don't even own a passport, so most of them have never left the country.  If they had, they would see that many other countries are far-advanced beyond the US in many areas -- healthcare, technology, living standards, social services, public transportation, environmental issues", etc.

4)    Racial problems.  She asserts that the US has always been a racist country and continues to be so (in spite of electing a black President).  She reminds us that studies show that by 2015, the majority of people living in major cities will be non-white, and wonders what kinds of reactions and responses this will bring, and fears more social problems will arise. 
    We are reminded that we have made some progress in race relations, but that does not release this country from an obligation to seek civil justice and equal rights for all, including women, gays and minorities.  This is a never-ending quest, because until we get it right, we cannot claim to have an exceptional nation.  The working out of a flawed beginning, with a constitution that protected slavery and demeaned as unworthy certain groups within our society, we are still on a journey to the "Promised Land."  We have not yet arrived, and we won't if certain elitist elements of our society have their way in the next few elections.  All they want is the power to reverse civil rights, to reverse governmental social programs, to reverse the extension of the right to vote and the right to non-discrimination, and the right to marry someone of the same sex, and the right to attend a quality school for education and advancement.
    We are on the brink, or at a crossroads (take your pick).  Either way, a step in the wrong direction and we will reap a whirlwind of regressive change, going back to the days of voting tests and poll taxes and intimidation.  We will revert to a nation that discriminates in every way it can.  But, at the same time, we will reap the condemnation and the disgust of much of the rest of the world for our hypocrisy and our false ideals.    We will then be the very essence of a second-rate power, unable to bring a moral foundation of justice and equality and freedom to the table of nations. We will have reduced ourselves from the beacon-on-a-hill to a dim reflection of past glory.  Racial enmity and injustice and discrimination has been our lodestone for ages.  It will finally drag us under the waves if we cannot throw it off and realize the Dream of equality and justice for ALL.

5)    Violence in our society.  In Thailand, she says, they have only had one school shooting, EVER, and that was part of a terrorist separatist movement in southern Thailand.  They don't fear gun violence.  In fact, as a country, we have made it clear in poll after poll that we don't like gun violence and we want expansion of background checks, and less ammunition in gun clips, and some attention to our mental health system.  Nonetheless, the violence goes on because a recalcitrant Congress will not act; a powerful gun lobby opposes any control of guns and ammunition, and our mental health system simply protects the confidentiality of patient records. 
    Of course, it has been said quite often that the issue of violence in our society goes far beyond the unrestricted ownership and use of guns.  It is something ingrained in the American psyche, say some.  Perhaps.  We know about the Wild West; we know we are one of the most bellicose nations on this planet; we glorify war as a means toward achieving peace and freedom, but we under-value diplomacy as being of equal value.  We have often tolerated bullying and hazing and police brutality. We can't make up our minds about other forms of violence, like sexual harassment and domestic violence or sexual assault within our armed forces.  We like to overlook more subtle forms like "act like a man" or "you're just an emotional woman" or flagrant discipline of children or the demeaning of a "Nancy boy."  We don't like to admit that violence plays a big role in our national life or in our home life.  (There's that ostrich again - head in the sand).  But others see it, and they re-coil; some have even eschewed the opportunity to come to this country because they are afraid of the violence.

     But most of all, perhaps, we have failed to understand the violence that is being done right now to our children and our grandchildren by the lack of care and attention given by our governmental entities to all of the things of which we have just spoken, and more. Their chance at a better life, a better society, a better future is fading fast under the vicious assault of the radical right-wing that has taken over the Republican Party.  This is not a game we are playing.  This is a country's heart and soul at stake.  Our American citizen author in Thailand has one last thing to say:

    "America should start to learn from other countries, where the standard of living is better, where people have more of their money left over after taxes, and where the government provides a social services net for those who are less fortunate.  Not everything about America is better.  Believe me. Instead of learning from what other countries are doing better, the U.S. continues to pretend they're not.  An attitude like that, the proverbial sticking your head in the sand, is a recipe for disaster, but Americans don't see it.  Sad."

COUNTER-REVOLUTION: turning things upside down and inside out!

Just what is a revolution?  Well, in the realm of government or politics, it has to do with the overthrow of a government, or of a social system, usually by forceful means and by the governed, with another government or system taking its place.  That’s the prime dictionary definition, of course.  And, it must be said, this is the one definition that probably scares people more than any other.  But other definitions have to do with a turning or rotation; a cycle.  Then, of course, there is an element of radical change.  It is not my purpose today to talk about a violent revolution.  I am more concerned with a "turning" or "rotation".  A turning of things upside down and inside out is more to the point.

We spoke last time of the flaws written into our Constitution.  Briefly,  our Founders managed to protect slave owners‘ property, protect a big business - the slave trade, protect obligations made under private contracts, and at the same time, deny the vote to most people who were not property owners, dehumanize American Indians and Blacks, while denying a Bill of Rights to the citizens of the new nation.  Quite a record!  And, even though many of the offensive flaws have been removed or amended, we are left with a legacy of elitism, and the concept of rule by a plutocracy, that continues to corrupt our whole system of governing.  

Therefore, let us not lose sight of the fact that the fatal flaws written into the Constitution are essentially alive and well during most Right-wing moments of resurgence.  Such moments always move us backward in time and philosophy to elitism and protection of the aristocracy plus the tendency to exclude certain groups from participation.  The built-in flawed legacy of the constitution reared its head in the 1970s with Nixon and somewhat with Ford; then again in the 1980s with the “Reagan Revolution,” and finally with George W. Bush in the 2000s and the Tea Party of the 2010s.  We have a situation on our hands politically with the Tea Party that simply does not lend itself to gradual change, to legislative reform, or even to leadership by a President who is dedicated to change.  Those same flaws originally built-in to our Constitution continue to affect and disrupt our system of government, all masked by a set of checks and balances that do not prevent the protected plutocracy from exploiting the unprotected.

Let us take a closer look at the “Reagan Revolution” as the prototype for all that we are seeing now in the Tea Party's game plan, utilizing facts and figures from a lecture at Colorado University on this very subject, an article from The Nation, and another on AlterNet.com.

1.   Protecting the Plutocracy:
    --cut taxes on the rich from 70% to 28%
    --created so many millionaires in the 1980s that the term became almost meaningless; by 1988, it was estimated there were over 100,000 deca-millionaires
    --in 1981 there were 10 billionaires in the U.S.; by 1988 there were 52.
    --the top 10% of households controlled over 68% of the wealth in the U.S
    --the elite of America reveled in their good fortune and the Reagan Revolution also made good on another fatal flaw: they de-regulated certain industries, thus giving them more control over their destinies; the S&L bank scandal was the result because government oversight was absent and fraud was rampant    
    --at the same time, Reagan began a tax break for companies that moved overseas and jobs quickly began to disappear

2.    Attacking the Underprivileged and Keeping Them in "Their Place”:
    --eliminate the remnants of the Great Society at which he partially succeeded, especially by cutting federal expenditures on education, training, social services, public works, civilian research and development -- all plunged by 40%
    --wages stagnated; income fell; credit debt was encouraged, labor unions were seriously undermined, not only by the traffic controller strike outcome but by the emergence of temporary labor replacing full-time jobs
    --By 1988, a majority of Americans could not afford to buy their own house
    --The US became the largest debtor nation, after having been the world's largest creditor nation
    --the income of white males fell in the 1980s; minimum wage was frozen at $3.35 an hour while prices rose;  number living below poverty rose from 26.1 million in 1979 to 32.7 million in 1988
    --the 1980s saw pervasive racial discrimination by banks, real estate agents and landlords
    --Reagan's indifference to urban problems was legendary: assistance to local governments was slashed by 60%; he cut jobs and job training, almost dismantled federally-funded legal services for the poor, and cut the antipoverty Community Development Block Grant program and reduced funds for public transit.  In 1980 federal dollars accounted for an average of 22% of big city budgets; by 1988 federal aid was down to 6%.  Many of our cities still haven't recovered from the "Reagan Revolution."

3.    Support for States' Rights:
    --One of his more famous lines: “Government is not the solution to our problem.  Government is the problem” could probably be said to be at the base of the ideology matching that of today’s elite – “you’re on your own!” It set the stage for "States' Rights"
    --Reagan got middle Americans fixated on the federal government as pro-higher taxes, pro-bureaucracy, pro-immigrant, pro-welfare and pro-rights of criminals.  Many whites believed that Reagan tax cuts delivered them from big government and big spending and from the special interests which came to mean blacks, the poor and women.
    --The Deep South was Reagan country where he could be heard to say: "I believe in States' Rights.  I believe that we've distorted the balance of our government by giving powers that were never intended in the Constitution to the federal government."
    --Although pretty much unspoken, there was anticipation that Reagan would return the country to pre-civil rights days when blacks, women and minorities knew their place.  It was never any secret to those around him that race played a significant part in all of this: he refused to meet with the Congressional Black Caucus; he attempted to reduce the power of the Civil Rights Commission, and he opposed the extension of the Civil Rights Act. 
    --Probably our most important domestic legacy from the Reagan years is the government’s weakened ability to actually protect families, consumers, workers, the handicapped and the environment.  There was a lasting impact when programs from the Great Society that attacked the causes of poverty became the “safety net” of disconnected, often conflicting, pieces of a puzzle aimed at nothing more than short-term relief.

So why do we need a counter-revolution?  By now, that should be obvious.  Every time a Republican Congress or President comes on-board, there is a resurgence of the flaws that undermine the best tenets of our representative democracy.

Think about it:
·    Who is in charge of Congress? Not Republicans and Democrats, but millionaires and their corporate cronies who call the shots – the wealthy
·    For that matter, who can afford to run for Congress? – those who have money because elitism is built-in
·    Who takes home certain privileges that are unavailable to anyone else? the Congress, the rich, and the powerful
·    Who gets not to suffer during a huge recession? the richest among us whose income has gone up - the 1% gained an average of $597,241 each year.
·    Who gets the biggest portion of extracted money from the federal tax code?  The biggest corporations
·    Who is protected from the usual punishments given to criminals?  The rich and powerful like the bankers and financiers on Wall Street who were never punished for their crimes.  They probably never will be.
·    Who, on the other hand, has to carry the burden of all of this, plus be unprotected in the main from exploitations of the rich and powerful?  The middle and poorer classes, of course
·    And who, after all, has to remain in “their place” as dictated by the rich and powerful: minorities, immigrants, the poor, women and the disabled or handicapped and the ill.
·    Who is setting the rules by which the rest of us must live our lives?  Not us, that’s for sure.
·    Who has lost representation?  You know who...

The Counter Revolution Begins when:
*Citizens gather together to demonstrate against their exploitation
* Voters decide to turn out in big numbers even for off-year elections
* Consumers demand protection and consideration
* Consumers boycott the products, stores or services of those who do not play by the rules, who extract privileges from the public coffers, or who exploit the vulnerability of the average consumer
* Lower and middle bracket taxpayers demand fair and judicious spending of their tax dollars by their governments
* Ordinary citizens demand a government that represents them by exerting their right to be a part of government
* All special privileges for Congressmen, the Executive and the Judiciary are removed

The Counter Revolution gets serious when:
an amendment is passed to allow for direct citizen petitioning for a constitutional convention which must be called by Congress if petitions are signed by one-third of eligible voters in one-half of the states
a constitutional amendment ends Citizens United recognition of political speech as free speech and corporations as individuals, and requires free and fair elections, including public financing
any sort of gift  (or "emolument") given to office holders and their staff or family is prohibited and subject to punishment and disbarment
a constitutional amendment re-defines and clarifies the second amendment in terms of limits on gun ownership and utilization and prohibits a  gun lobby from profiting from a constitutional right in any way
a constitutional amendment (or legislation) is offered on elections that prevents unknown 3rd party advertising and that sets guidelines for documented facts in political speech, ads, and literature, with penalties for violation
an amendment sets limits on Congress and its members in terms of rule-making, earmarks, exemptions from laws, and that closes the revolving door into lucrative positions because of insider knowledge, and broadens that concept to prevent insider knowledge being used for personal aggrandizement
an amendment demands accounting for use of tax money in any form; requires public accounting yearly, allows for private citizen auditing of government spending; calls for private citizen involvement in required advisory boards in every office of Congress and in Inspector General offices in the Executive Branch, as well as in the Attorney General's Office, and in the Office of the Head Justice of the SCOTUS; with a portion of those committee seats reserved for representatives of minorities or of those living in poverty; and for young people as well
an amendment requires the drawing of congressional districts by non-partisan Commissions made up of ordinary citizens
an amendment on Voting rights spells out clearly a complete intolerance for any legislation that attempts to limit voter rights and privileges; in other words, voter suppression of any kind will be outlawed

The Counter Revolution is Successful when:

Congressmen do not spend most of their time raising money to run for office
Office-holders seek advice from ordinary citizens on a regular basis, and follow that advice most of the time
Officeholders bring new ideas and policies to their limited terms
Congressional districts are no longer drawn according to vote-getting, but strictly according to census numbers
The President is elected by direct ballot and there is no longer a possibility of manipulating the electoral vote
Lobbyists, and corporate agents, are relegated to the dung heap of history by laws and regulations that prevent their gifts and their power from unbalanced influence over laws and regulations
Regular citizens in positions of some authority begin to advise, evaluate and audit the budgets, offices, programs, habits and expenditures of all tax-spending bureaucrats and their counterparts in the private-sector world of government contracts
Those in minority communities, and those living in or near poverty levels, as well as women, young people and those with disabilities begin to feel that they have advocates in high places; that someone is representing their views and their needs and their dreams, and corresponding laws are passed to present real possibilities for those at risk to advance themselves to the highest levels of achievement that they desire.

The Counter Revolution is not a Dream or an Ideal!  It is a reality and a necessity, for nothing short of a movement that seeks to turn the status quo inside out and upside down will suffice to fashion this society into a truly representative democracy.  The problem is that anything short of a revolution will do little in the end to change much because the flaws written into the Constitution favor the rule of the few over the many.  If you refuse to become a counter-revolutionary, you and yours will remain the dupes of the wealthy and their agents.  The Counter Revolution is not "Class Warfare"; it is the road to survival of democracy, the dignity of equality and the ascendancy of the People! 

Is Our “Representative Democracy” Fatally Flawed?

“America is not a democracy but a plutocracy that is dominated and ruled by a wealthy minority.”

So begins the Second Chapter of a book titled “Beyond Plutocracy – Direct Democracy for America” by Roger D. Rothenberger.  In my opinion, his main point is what is often ignored by textbooks and some historians:

    “While claiming to have created a government that did not unduly favor any particular faction of people, the founders, a small group of privileged white men, aristocrats of their time, created a government that in fact, both by its inclusions and its exclusions, favored themselves, others of their class, their heirs, and similar others through the generations. The constitution that they wrote protects private property, private contract, and other interests that were of particular concern to the American aristocracy while ignoring or minimizing the interests of principal concern to everyone else. For good measure, this privileged few made it nearly impossible to alter its constitution and then only by the privileged elites that overwhelmingly populate the seats of government.”

Let’s stop a moment and offer just a few examples of what we can call the protection of private interests by government:
·    Protection and promotion of gun dealers
·    By opposing national healthcare, special interests ensure the protection of the economic interest of the medical industry from drug makers to hospital administrators and everyone in between.  Part D of Medicare – a boon to drug makers; Obamacare – protection of private insurers in spite of restrictions imposed;
·    Unquestioned and unaccounted tax incentives and breaks for corporations
·    De-regulation of businesses, such as airlines; the curtailing of investigative arms of certain agencies
·    Defeat of national legislation overwhelmingly supported by ordinary people, such as expanded background checks on gun purchases or the limitation on gun clips, opposition to comprehensive immigration laws or to equality of wages for women and the raising of the minimum wage for all
·    An attempt to privatize Social Security into personal accounts despite opposition from recipients and others

In the Constitution of the United States, there are some words (and lack of same) that are clues to where we are historically in relation to development of a truly representative democracy.  They also help to explain why we are having problems with our political system today.  Allow me to bring some of them to your attention. 

• An excerpt from Wikipedia points up the importance of the protections in the Constitution for the slave trade:

 “The Constitution of the United States was drafted in 1787, and included several provisions regarding slavery. By prohibiting changes for two decades to regulation of the slave trade, Article V effectively protected the trade until 1808, giving the States 20 years to resolve this issue. During that time, planters in states of the Lower South imported tens of thousands of slaves, more than during any previous two decades in colonial history.  As further protection for slavery, the delegates approved Section 2 of Article IV, which prohibited states from freeing slaves who fled to them from another state, and required the return of chattel property to owners.  In a section negotiated by James Madison of Virginia, Section 2 of Article I designated "other persons" (slaves) to be added to the total of the state's free population, at the rate of three-fifths of their total number, to establish the state's official population for the purposes of apportionment of Congressional representation and federal taxation. This increased the power of southern states in Congress for decades, affecting national policies and legislation. The planter elite dominated the southern Congressional delegations and the United States presidency. For nearly 50 years out of the 72 years between the election of George Washington to that of Lincoln, every President was a slaveholder, and every President re-elected held slaves.
It is extremely important not to miss the point here.  The Founders made sure that governmental protection of a huge industry was written into the founding document!  By 1815, the internal slave trade had become a major economic activity in the United States, with economic links throughout.  "The internal slave trade became the largest enterprise in the South outside the plantation itself, and probably the most advanced in its employment of modern transportation, finance, and publicity.” 
We should pay close attention to the fact that, in order to protect an industry, the Founders found a way to exclude (Indians and) slaves as voting citizens, but also found a way to count 3/5s of each slave so that their states’ population would be higher and their representation in Congress enhanced.  Thus, written into the document on which we base our entire system of “representative democracy” was an exclusion of certain groups of people as citizens,  the protection of the “property” and business interests of the land-owning class of slave-owners, and the trickery of a mechanism used to enhance the representation and importance of their delegations to Congress.  Not bad, if you believe in control of the masses and freedom for the privileged!  This all sounds eerily familiar, as though it is all happening again, as the Tea Party replicates the scenario., using exclusion of undocumented immigrants, protection of corporations alongside the detrimental treatment of minorities, and the trickery of the Big Lie to protect the elite.  Welcome to the world of manipulation and control that does not go away!

• “The Senate shall have the sole power to try all impeachments;”  a 2/3rds vote required to approve treaties; 2/3rds vote to overturn a veto; 2/3rds vote to approve judges. The Senate was set up as the upper house – meant to be the place where the elite would rule and control.  Senators were appointed by state legislatures (made up of more rich land-owners), for six-year terms in order to consolidate their control
• “No…ex-post facto law shall be passed or law impairing the obligation of contracts” written into the Constitution is something that still protects Wall Street robber-barons. The inability of the federal government to protect the rest of us from rich robbers by passing a law “after the fact.”  In other words, if what Wall Street financial interests did to us in the early 2000’s was technically not against the law at the time, no law could then be proposed which would seek their punishment.  Wall Street bankers have still gone unpunished for their unsavory speculation in hedge funds and junk bonds and mortgages, without sufficient reserve funds to back up a default; the Founders are still protecting the elite!  By the way, immunity from arrest during session in either House is also included in these protections (who else but the elite enjoy such privileges?).  Let us not fail to mention that protection of contracts was very important to the rich and their enterprises, but especially to the slave owners who most often bought and sold their slave “property” by means of contractual agreements.
• “Each state shall appoint a number of electors” (and guess who in the states would be appointed? Not the poor or the working man or even the middle-class shop owner, but most often, the property-owners!)
• No Bill of Rights allowed until after ratification (although several calls and documents for this came out of the states, those who held sway prevented its adoption and gained a delay – of two years, as it turned out)
• The whole convention was conducted in secret (the rich delegates did not want the people to know what they were planning)
• Written into this document is the protection of property and person by suppression of insurrection, domestic violence, and the abhorrent fact that a slave who escaped into another state had to be returned to the “Party to whom…service or labor was due” (The slave owner, of course).  Just what was going on in the colonies that caused this particular reaction?  The elite have always feared the rebellion of the masses against the restrictions placed on them – the Founders, like the English aristocracy with their “Riot Act”, were reacting to some real unrest, like Shay’s Rebellion” in New England.
• At the apex of their class protection, there is the fact that the elite made it almost impossible for the Constitution to be easily amended.  Certainly, it would not be easy for the “people” to change things. Two-thirds of both Houses must “deem it necessary” to amend the constitution.  Or, the Legislatures of two-thirds of the states must make application to the Congress to call a constitutional convention.  Not easy to do; certainly not easy in terms of pushing an elitist Congress to arrange for an amendment or for a convention.  According to the author, all of this speaks to the attempts of the propertied elite to keep their own group in charge so they could control the machinery of government, in spite of what seemed to be an enlightened structure of governing.  Rothenberger sums it up for us:

 “In a Las Vegas gambling house, the house prospers simply by setting the gambling odds slightly in its own favor, just slightly over fifty percent. Given these odds in its favor, in the long run the house wins more than half of the time and prospers. Using the mechanisms of business and government, America’s wealthy elites set odds in their own favor much higher than just slightly over fifty percent. They do not win all of the time. They are not and need not be an absolute power (which would dissolve the illusion of freedom and democracy behind which they now hide.) The wealthy need only hold a (dominance) of power to win enough of the time generation after generation to amass in their hands a fabulous mountain of our nation’s wealth, the fruit of everyone else’s labor.
The American constitution and the resulting political-economic system are in intent and result one giant scam perpetrated against the many by the few.  The Constitution, the supporting body of law, the resulting public and private social, political, and economic institutions, and the current elite class (the American aristocracy) all work together to keep the current system in place. Rather than correcting the real cause of America’s many social ills by moving America away from plutocracy, the elite class and our elected ‘representatives’ actively sustain the status quo while appearing to attempt repair by eternally applying deliberately insufficient and ineffective patches to our unjust social system.”

Essentially, the odds are stacked against all those of us who do not qualify for the “American aristocracy.”  We may be fortunate enough to lead a comfortable life; to have a successful career, and manage to own some form of property, but we qualify only for the broad-based middle class, perhaps the “upper” middle class.  We are not part of the elite.  Their access, not only to costly amenities and opportunities, but to special privileges is far beyond what the vast majority of us can hope to attain. 

I’m moved at this point to mention something that may illustrate the stacking of the deck.  Which would you consider would have more impact on our way of life and our governing system: the sessions of the 113th Congress, or the invitation-only meeting in Las Vegas of about 46 multi-millionaires and billionaires brought together recently (and annually) by the Koch brothers?  I choose the latter in terms of their influence on the elections of 2014, and the production of negative outcomes that will have dire consequences for the middle class.

Liberal and progressive values have added to the life, liberty and happiness of many individuals and of our country as a whole.  In fact, whenever we edge ahead in civil and human rights, there seems to be a progressive movement in this country that pushes us forward, but generally it takes at least multiple decades or even a generation to arrive full-blown.  Whenever the values of the elite hold sway, we seem to stand still in the status quo, or move backward in terms of some sort of golden age in which conservatives felt more comfortable. But, if Rothenberger is right, we are essentially prevented from bringing about permanent change by the built-in elitism of the Constitution.  In other words, it is inevitable, given our constitutional foundation, that the persistent ideology - that a few elite should be in charge of most of what happens in our government and our society - manifests in the periodic emergence of major right-wing movements throughout our history.  Thus, we have to deal periodically with a political group or ideology that seeks to return this country to a conservative construct, inculcating once more the plutocratic concept, the governmental form of confederacy, and the belief that a strong central government is our enemy and our folly and should be either diminished or terminated.

And so, we arrive finally at the “Reagan Revolution” (which ultimately led to the “Bush Debacle!”).  That revolution was tied in to the conspiratorial right-wing John Birch society, and to Barry Goldwater’s concept of government which Reagan promoted. Lower the taxes on the rich, devalue and diminish central government programs, protect the rich (corporations and banks), devalue and destroy unions, promote the military and military power, de-regulate on a grand scale, devolve federal programs and accompanying money to the states where they can operate as they please, eliminate Great Society programs and those of the New Deal, and use government to promote certain social issues (religious in origin?) such as pro-life anti-abortion, family values, the primacy of free enterprise, and the promotion of large corporations. 

And here we go again with the Tea Party movement: a reiteration of all that Reagan promoted but with an interesting twist: no quarter given!  The Tea Party adherents are not concerned with how they are perceived, with compromise needed to pass legislation, with people who must suffer the loss of necessary social supports, or with Truth and facts.  They are concerned primarily with pure ideology, i.e. with the “constitutional” imperative of protection of the elite class, the primacy of states, with the devolvement of power from a central government to state governments, with the protection of the capitalist system mainly through tax incentives,  de-regulation and privatization; with the protection of certain cultural imperatives: sanctity of (heterosexual) family, the outlawing of abortion, the restriction of civil, personal and human rights for certain groups, and the restriction of opportunities for the under classes, the privatization of more and more governmental functions, the reduction of the deficit which translates to a war on the poor, and restrictions for women; the suppression of voting rights on those groups and individuals who they consider as "unworthy” voters.

One cannot ignore the not-yet-proven assertion that this will never change unless the people mount a counter-offensive.  (Do I hear “Class Warfare?”--  Well, at least we know where that started, and by whom it was started!). Assuming it is the constitution that is actually preventing our system from recognizing the people as the essential element in governance by democracy, the question becomes: what must we do to change the status quo?  I have commented in past blog postings on those elements which I think are essential to amend in our constitution.  In brief:
·    Changing the manner and process of amendment itself
·    Term limits
·    Fair and publicly-funded elections; overturn Citizens United decision
·    Restriction of unfettered rule-making in the two Houses of Congress
·    Broadening of citizen participation in government structures and processes
·    Closing of the revolving door used by former office-holders and their staff to obtain lucrative positions in private firms based on their inside knowledge of congress and its members

One of the more controversial conclusions Rothenberger puts forth for consideration is as follows:

“Our supposedly democratic, two-party political system is entirely a farce. While haggling endlessly about how to best manage it, both parties ultimately serve the same plutocracy.  Our elections are and always have been merely a show, a slight of hand, the exercise of form without any real power for the vast majority of the electorate to elect truly representative officeholders. To the extent that our government feigns democracy, it is intended to be just something to placate the majority, the common people, while the elite avoid the sharing of any real power.  Superficial political and social issues may be somewhat affected by the electorate, but the fundamental essence and structure created by the founders—the plutocratic form, governance by the wealthy—always remains in place. As a result the electorate is always powerless to affect any fundamental result or real change.  The result is an unjust society in which, despite the whining and moaning of the economic upper half to the contrary, the lives of the economic upper half are permanently subsidized by the lives of the bottom half. The upper half uses the bottom half as a beast of burden.”

HERE THEN IS THE TRUTH THAT REALLY CANNOT SEEM TO FIND ITS WAY INTO THE ELECTORATE:  WHICHEVER PARTY THE ELECTORATE DECIDES TO VOTE FOR IN AN ELECTION, THE SYSTEM IS THE WINNER, BECAUSE THE SYSTEM DICTATES IN THE FINAL ANALYSIS, HOW THE FUNDAMENTAL ISSUES OF JUSTICE, FAIRNESS, REPRESENTATION, ACCESS TO GOVERNMENT ASSISTANCE, PROTECTION/SECURITY, OPPORTUNITY AND SUCCESS IN LIFE ARE HANDLED. 

So often, a mood of indifference or perhaps that of disappointment in the ruling Party results in a wave election in which the other Party is voted into power without any consideration of what this means for these very fundamental issues.  Often the electorate finds it has made a mistake because the Party in office does not do what it says it will, or the Party elected does exactly what it said it would do, which turns out to be worse than what was done before they acquired office.  So on and on it goes, but fundamental change is nowhere to be seen, and the voter treads the eternal wheel without relief, without desired change, and certainly without the representation for which they thought they voted, and the necessary increase in wages they thought they earned.

The 2010 election was such and 2014 is shaping up the same way.  Meanwhile, the voter blames everyone in Washington for this predicament; for the lack of change that might benefit the bulk of us in some fundamental way.  On the one hand, the electorate is to blame for its utter ignorance of what is involved, but at the same time, the system is to blame for what it has fomented. 

In my opinion, a counter-revolution is our best hope, but what does that entail, and just what does it mean?  We will try to answer that question very soon.   

More About Nanotech Firms

Last week's posting laid groundwork for further discussion of the role of Corporate Responsibility to communities in which industries reside.  The intention of today's piece is to draw a slightly more detailed picture of who the companies and CEO's are who will be bringing their Nanotechnology expertise to the Utica, NY area.  Last week, we spoke about "tax incentives" and the role that they are playing in this surge of industry not only in the Utica area, but throughout this state (and other states).  Before we talk about the companies, let us remind ourselves briefly about what is involved here. 
Much has been written already, and this is simply to summarize those prior discussions.
Governor Cuomo's announcement about "Nano Utica" indicated that six leading global technology companies, with their own investment of $1.5 billion, will establish the state's second major hub of nanotechnology research and development.  The public-private partnership will be spearheaded by the SUNY College of Nanoscale Science and Engineering (SUNY CNSE in Albany) and the SUNY Institute of Technology (SUNYIT).  Cuomo said: "The new Nano Utica facility will serve as a cleanroom and research hub for Nano Utica."  What does that mean?

We must understand that all of this is fueled by an exploding market for smart phones, tablets and other mobile devices, plus 3D systems for games and for more secure computer servers.   On top of that there is the need for improved sensor technology for health care, clean energy and environmental applications. The development of smaller, faster, more powerful chips relies on the shrinking of the size of circuits and improving "packaging" technologies which simply refers to the conductors that connect the circuits.  Think of it this way:  how many angels can you put on the head of a pin?  Nanotechnology talks in terms of how many circuits and connectors they can get onto a chip.
   
The Nano Utica facility, now under construction, will encompass 253,000 square feet of space; providing more than five times the space originally planned. The building, called the Computer Chip Commercialization Center, or Quad-C, will focus on chip "packaging," the complex housing that encases a chip and includes the wiring that connects it to a computer or a smart phone.   In that space adjacent to the SUNYIT campus, there will be state-of-the-art cleanrooms, laboratories, education and work-force training facilities, and integrated offices.  The cleanroom will be the first of its kind in the nation: a 56,000square-foot cleanroom stacked on two levels.  A cleanroom is necessary in the development of computer chips because particles even smaller than dust have to be prevented from contaminating the chips.  Since the hope is to pioneer development of a 450mm chip (instead of standard 300mm chips), there is good reason for having cleanrooms that function flawlessly. 
The research and development arm at this facility will be concerned with providing answers to packaging, and to something called lithography development and commercialization.  According to one definition, Nanolithography is the branch of nanotechnology  concerned with the study and application of fabricating nanometer-scale structures used during the fabrication of leading-edge semiconductor integrated circuits (nanocircuitry)) or nanoelectromechanical systems (NEMS).  Simply put, nanolithography refers to the fabricating and structuring of nanochip circuitry.

One cannot adequately emphasize the importance of this new complex and accompanying research.  Computer chips are driving the development of almost every industry today.  This Nano Utica center will target the most cutting-edge areas of nanotechnology.  Perhaps Mohawk Valley EDGE President Steve DiMeo said it best when he commented: "What is taking place here at SUNYIT mirrors in many respects the model used in Palo Alto where physical assets at Stanford University were used to build what became known as Silicon Valley."  Whatever is said, it must be acknowledged that this is not something to sneeze at or to denigrate.  It does, however, raise some important questions, which must be pursued.

Who is Involved?

There is a consortium of six leading nanotech companies that will create Nano Utica, in a public-private partnership with SUNY CNSE and SUNYIT.  They are led by Advanced Nanotechnology Solutions, Inc., and include SEMATECH and Atotech, along with CNSE partner companies IBM, Lam Research and Tokyo Electron.

Advanced Nanotechnology Solutions, Inc.Here is what they have to say about themselves (ansiinc.com):
    "Advances in semiconductor miniaturization have revolutionized the world of electronics. Integrated circuits (ICs) today have become incredibly powerful, and this capability more than doubles every two years. Unfortunately, the interconnect between ICs (which is the ability of chips to communicate with each other) has not kept pace with the advances in ICs. Interconnect has become a bottleneck – one that increasingly limits system performance, battery life, and device size. Our goal is to enable game-changing innovation bridging the interconnect gap and resolving the performance bottleneck.
    Founded and based on a vision and strategy developed in 2010 by Dr. Hector Ruiz (the former Chairman and CEO of Advanced Micro Devices or AMD) and Dr. Bharath Rangarajan, ANS Inc. now has a team of industry veterans with over one hundred years of experience. We are dedicated to delivering breakthrough solutions in 3D and other advanced interconnect technologies. Our vision is to be the premier interconnect solutions provider enabling the continued revolutionary improvement in digital electronics integral to our lives: how we communicate, how we drive our cars, and how we sense and monitor our surroundings. Our mission is to deliver world-class high-volume interconnect, assembly and test manufacturing services.
Headquarters: The San Francisco-based company has very little information on its website about where it is headquartered.  Ruiz's current company was founded last year in Texas.
Hector Ruiz is the CEO.  Dr. Ruiz attended The University of Texas at Austin, where he earned a bachelor’s degree and a master’s degree in electrical engineering in 1968 and 1970 respectively. He completed his doctoral degree at Rice University in 1973.  Dr. Ruiz’s professional career began at Texas Instruments in the company’s research laboratories and manufacturing operations. He then spent two decades at Motorola, rising from running a microchip manufacturing facility in Scotland, to overseeing the firm’s worldwide semiconductor operations, to leading semiconductor research and development, and finally serving as President of the company’s Semiconductor Products Sector.
In 2000, Dr. Ruiz joined Advanced Micro Devices (AMD) as President and Chief Operating Officer, and in April 2002 he was named Chief Executive Officer. In 2006, he announced plans to build and operate the world’s most advanced semiconductor manufacturing facility in upstate New York, and in 2009, he led an industry transformation by spinning out AMD’s manufacturing assets to form GLOBALFOUNDRIES.  Ruiz was a popular figure in the Capital Region for years at AMD and then its spin-off, Global Foundries, but abruptly left Global Foundries in late 2009, just months after ground was broken on the $7 billion Malta facility (in Saratoga County north of Albany, NY), which is known as Fab 8 and now employs more than 2,000 people.  
Track Record:  Ruiz set the strategic direction of the company, helping guide its growth from a small, broad supplier of components to an innovative technology solutions leader in the processor space.
During his tenure at AMD, Dr. Ruiz received numerous accolades, including: the Semico Bellwether Award (2009); Executive of the Year – 2005 (EE Times); CEO of the Year – 2005 (Electronic Business); and Top 25 Business Leader – 2006 (FORTUNE Magazine), among others, such as the Distinguished Alumni Award from the University of Texas at Austin.  Dr. Ruiz currently serves as a Trustee Emeriti of Rice University and is on the Board of Trustees of the RAND Corporation. He is also a Board Advisor to EDCO Ventures, a community development corporation, and is a General Partner in Innovación Investments, a new community development venture capital fund.
Ruiz resigned from his post as chairman of the board of Global Foundries in 2009 amid reports he was an unnamed source in a Wall Street insider trading case, so there may yet be some secrets to be revealed.
Ruiz's company, which foresees creating as many as 1,000 jobs at Nano Utica, will specialize in 3-D chip packaging R&D. That would not only be a coup for the state, but for the U.S. since the center of the chip packaging industry is now in Asia.
Community-Minded?
"EDCO Ventures is a venture development organization that partners with universities, government laboratories, risk capital groups, and private individuals to discover and commercialize technologies and innovative business ideas. EDCO’s goals are to create innovative companies and thereby increase living wage jobs in economically distressed areas like Utica.  EDCO is a 501(c) (3) economic development non-profit organization.
EDCO Ventures’ work is founded on job creation, living wages, shared prosperity and mechanisms that alleviate income inequality in our society.  Beyond economic development, the companies created by EDCO Ventures help impoverished regions retain and attract its “talent pool.”  "
"We help slow the outflow of individuals that, until now, are forced to seek opportunities in other regions that match their skills and desire for self-expression. Companies we incubate accomplish this by creating jobs in industries such as Green Energy, Web 2.0, Bio Tech and Nano Tech."
Some promise lies in the fact that the following is stressed: "If distressed areas are to improve their per capita income, they must foster creation of innovative locally headquartered enterprises. These market-leading companies that generate high profit margins share their wealth with employees and the community as a whole. "
SEMATECHTheir website (sematech.org) characterizes their description and mission, as follows:
    "At SEMATECH, we work with our members and partners to reduce the time from innovation to manufacturing. Our role is to address critical challenges in advanced technology and manufacturing effectiveness, and to find ways to speed development, reduce costs, share risks and increase productivity.  Semiconductor and emerging technology research is both high cost and high risk. Our membership represents about half of the world's semiconductor production, and in addition we have built a global network of alliances with equipment and material suppliers, universities, research institutes, consortia and government partners. Because we all face many of the same constraints and long-term concerns, we work together to leverage resources and keep the industry vital and growing ever stronger."
Headquarters:
SEMATECH
257 Fuller Road
Albany, NY 12203
CEO:    Daniel Armbrust
President and CEO, SEMATECH
In an open letter on their website, the CEO says the following:
    "At SEMATECH, we feel confident the lessons we have learned from more than 25 years of successful industry collaboration will help us harness the power of cooperation in new ways as we continue to adopt new strategies to forge new common ground—spanning more broadly across regions, extending more deeply into the supply chain, cutting across technology disciplines, and optimizing the use of shared industry R&D centers.  Successful introduction of new technologies now depends on a broader and deeper industrial collaboration, aligning key stakeholders across the industry ecosystem."
Track Record:  it appears to be quite good in terms of success in bringing firms together to address manufacturing issues.  However, there is little available to draw the conclusion that Sematech is aggressive in any way about serving the communities in which they reside.
Community Responsibility:  Other than forums, seminars and conferences designed to assist other work groups in their development, I find nothing in the way of a response to the needs of the communities in which Sematech lives and works (Austin, TX and Albany, NY).  It is difficult to imagine that there is nothing to go on, given the fact that one of the people they list to contact in Albany is presumably in charge of volunteering.
As far back as May 17, 1991, a meeting took place at the offices of SEMATECH in East Austin, TX, where participants included, on one side, officials of SEMATECH, and on the other side, representatives of the community surrounding SEMATECH in East Austin, Texas, as well as representatives from environmental, occupational health and safety, professional, and trade union organizations. The subjects under discussion were the public interest character of SEMATECH's work. SEMATECH was then receiving a $100 million annual subsidy from the federal government, administered through the Department of Defense, accounting for about half of SEMATECH's annual budget.
The meeting, organized by the Campaign for Responsible Technology, was an opportunity to discuss how SEMATECH's research mission could include some measure of responsiveness to public concerns about toxic pollution, job access and the quality of work on the job in the semiconductor industry, as well as the relation between SEMATECH and the military. The fact that SEMATECH is at least partly a publicly financed research facility opened the door to citizen participation in its research agenda.  The result of the May 17 meeting, a year in the planning, was that a community-based organization was formed in East Austin that was highly informed about the mission and character of this research facility (before the meeting it existed for most community members only as a nondescript building in the largely Hispanic community). SEMATECH officials committed in 1991to developing a "good neighbor policy" that will keep the community involved in discussions about how SEMATECH is addressing problems of industrial pollution and the quality" of the workplace. There is no evidence to suggest that the policy still exists.
ATOTECH:  according to their website (atotech.com), Atotech is one of the world’s leading suppliers  (a subsidiary of the French oil and gas company Total S.A., with its main office in Berlin, Germany), of specialty chemicals, equipment, service and solutions for printed circuit board manufacturing and advanced packaging, as well as decorative and functional surface finishing (General Metal Finishing). In addition its core business units – Electronics , Semiconductor Technology and Electronics Materials play an increasingly important role in the future growth of Atotech and that of its customers.
Atotech was founded in 1993, when the Elf Atochem Group merged its M&T Harshaw operations with the Schering Electroplating Division, which had a long history in electroplating dating back to 1901. Today, Atotech is a direct subsidiary of Total, the world's fifth-largest oil and gas company, which was created from the merger of TotalFina and Elf Aquitaine in 2000.  With locations in more than 40 countries in all important industrial regions of the world, Atotech is a truly international company providing local service worldwide ,   Atotech operates in more than 40 countries  and in 2012, the company employed about 4,000 people.
CEO & Corporate Philosophy
http://www.atotech.com/corporate/about-us
CEO, Dan Armbrust, comments on his company's philosophy and mission:
"As one of the leading suppliers of specialty chemicals, equipment, service and solutions, we at Atotech shape the future of our industry. We provide our customers with high-quality products, from chemicals to complete factory planning, at the best possible price. With locations and Tech Centers all over the world, we are always available wherever our customers need us, just as our research and development activities are carefully tailored to meet their requirements. We are committed to helping our customers achieve sustainable performance within the industries we serve, placing us at the forefront of the change to greener plating technologies. Above all, it is our goal to lead in this change toward greener technologies within plating industries."
With a view to further improving individual and group performance, Atotech has adopted and applied a Code of Conduct as well as a common set of cornerstone behaviors for its Electronics and General Metal Finishing businesses
Be attentive to other people, both internally and externally (listening)
Have a daring mind based upon our core competencies and strategies (boldness)
Be loyal to one another (mutual support)
Pool our talents (cross-functionality).
In a Mar 3, 2006 posting, there is a big headline proclaiming:
Finalists named for Mayor's awards "The Mayor's International Community Awards has announced 10 finalists for its annual awards citing the philanthropy and volunteerism of foreign companies that operate here. 
In the small-company category, which includes businesses with fewer than 150 employees in the Charlotte region, the finalists are Lufthansa German Airlines, Langford de Kock and Coats North America, all of Mecklenburg County, and Atotech USA Inc. of York County.
Next, rather than take each of the three subsidiary groups individually, it makes sense to me to concentrate attention on the one best known, perhaps, to New Yorkers, and that is IBM.
IBM Philosophy
According to their website, IBM believes that a company culture based on core values not only helps business, but also defines the role that they can and should play in society:
"We identify and act upon new opportunities to apply our technology and expertise to societal problems.  We empower our employees and others to serve their communities.  We integrate corporate citizenship and social responsibility into every aspect of our company. We focus on specific societal issues, including the environment, community economic development, education, health, literacy, language and culture."
IBM is committed to environmental leadership in all of its business activities.  "Our global environmental management system ensures the company is vigilant in protecting the environment across all of its operations worldwide. "
IBM claims to pursue highest standards of social responsibility throughout the company— from how they support and empower employees, to how we work with our clients, to how we govern the corporation.
IBM Academic Initiative is a global program that offers no-charge access to resources to help faculty strengthen their educational programs so their students can compete in the job market of any industry.
IBM has a strong tradition of research collaboration with academia in universities around the world.
With its historic victory on Jeopardy!, IBM Watson ushered in breakthrough technology involving cognitive systems that can transform how organizations think, operate and decide.

We must now return to our purpose for this posting.  It was to give some deeper background on each of the companies coming to Utica, so we could get some idea of their mission and their thoughts about charitable giving to the community.  While some of their philosophy tends to point to concern for the environment, or concern for employee well-being, or an interest in best marketing of their product(s), there is little to go on in terms of an overall strategy for corporate philanthropy in their surrounding communities.  Unfortunately, this may be the general case across the country, especially in the face of the economic Recession that has plagued us for awhile.  Corporate giving probably only grew about 1.7% between 2011 and 2012. 
The greatest portion of charitable giving, $228.93 billion, was given by individuals or household donors. Gifts from individuals represented 72 percent of all contributed dollars, similar to figures for 2011. (nps.gov) Corporate giving, which is tied to corporate profits, held steady in 2012 compared with 2011, totaling $18.15 billion (1 percent higher than in 2011). Corporate giving accounted for 6 percent of all charitable giving. (Corporations do invest additional advertising dollars in cause-related marketing as a business expense.)  The Philanthropy Chronicle finds it’s about the same across the country.
What I tend to find with Sematech is that they seem much concerned with how they are perceived in terms of effect on environment.  Thus, green programs are very much part of their sphere of endeavor.  But not unlike other similar organizations that are mainly associative in nature, there is more emphasis on working together with other companies than with being deeply involved in charitable giving to nearby communities.  We have found an early 'good neighbor' concept, but I have been unable to find an on-going campaign of community giving. As much as someone may wish for them to do so, corporate charity is not high on their list of priorities.
 
Paul Piff, a social psychologist at the University of California, Berkeley, says that's consistent with what he's found in years of research on income and giving.  The more wealth you have, the more focused on your own self and your own needs you become, and the less attuned to the needs of other people you also become," he says.  Piff says it's not that rich people aren't generous. They're often just isolated. They don't see a lot of poor people in their daily lives.  “Simply reminding wealthy people of the diversity of needs that are out there is going to go a long way toward restoring the empathy or compassion deficit that we otherwise see," he says (NPR.org)
Corporate Social Responsibility (CSR) comes in several forms.  It was popular in the 1960's and has remained a term used somewhat ambiguously in our day.  It more or less describes an attitude  or perspective by which a company tries to monitor and possibly enhance its compliance with the spirit of the law, official standards and international norms, concentrating mainly on a positive impact on the environment, consumers, employees, communities, stakeholders and others in the public sphere.  In some models, it may go beyond the interests of the firm and compliance and engage in actions that appear to further some social good,   Some proponents of CSR claim that in the long term, such responsible acts result in long term profits, while critics argue that CSR distracts from the main business of companies. 
In terms of community development, there might be several components: money for local charities, supporting community volunteerism, sponsoring local events, employing people directly from a community, supporting a community's economic growth, engaging in fair trade practices.  Or, there might just be an attention to environmental sustainability centered on recycling, waste management, water management, us8ng renewable energy sources and reusable resources. 
So what does this mean for a seeker of corporate funds? One advocate says that the big bucks are still in the wealthiest neighborhoods. The key is to get those who live there to become more attuned to those in need. That means having nonprofit clients tell their stories more often, either online or in person. It also means providing more volunteer opportunities, so people can see the need firsthand (NPR.org).
It seems clear, now that we have taken a closer look at our new neighbors, that they have some tendency toward community responsibility, but certainly not in terms of establishing a "Good Neighbor Policy" which they, and New York State, should do.  Next time, we shall take a closer look at some of the largesse going to their businesses from the government, with an eye to calling for the State legislature, and the  Governor, to make some changes so that our communities might be able to recoup some of their tax dollars in the form of services, grants, training and jobs, and particularly for the enhancement of our educational systems.

“Incentivized” or “Marginalized”?

Have you ever been the victim of a Pick-Pocket? 

Before you say “no”, let me point out the equivalent invasion of our pockets when earmarks are added to legislation in the Congress; or, when a corporation like GE pays no taxes for a year; or, when a contractor finds something that needs repair after starting a job that is under a contract, and it costs as much or more than the original contract; or when a retailer jacks a price on certain items and then puts those items “on sale”, bringing then back to the original price.  I could go on, of course, but THE POINT HAS BEEN MADE:  every day, in many different ways, individuals, small businesses, corporations, and governments are reaching into our pockets and picking money right out of our wallets. Now, that isn’t to say that some of these schemes aren’t temptingly helpful to some.  They are, in the sense that a few will surely benefit, but not necessarily a large percentage of the citizenry.  With those thoughts in mind, let us turn our attention to what is happening in the State of New York.

The Empire State, under the leadership of Governor Andrew Cuomo, has embarked upon some innovative schemes which may seem quite beneficial to a good number of citizens or a few corporations, but outcomes may prove limited and limiting for others.  To set the stage, let me quote a description of the situation provided by goodjobsfirst.org.

    “New York is the tale of two economies, upstate and New York City, but both are characterized by a subsidy system run by the state’s dysfunctional network of Industrial Development Agencies (IDAs) with their powers to bundle large state and local tax breaks, and a centralized quasi-public agency, the Empire State Development Corporation, which awards lavish subsidies with little accountability.  The Fiscal Policy Institute estimates that combined state and local business tax expenditures in New York total about $8 billion annually.”

The following summary of what IDAs are meant to do is from the NYS Economic Development Council which has organizational oversight and responsibility for these entities.

Industrial Development Agencies
The purposes of Industrial Development Agencies (IDAs) are to promote, develop, encourage and assist in the acquiring, constructing, reconstructing, improving, maintaining, equipping and furnishing industrial, manufacturing, (civic facilities), warehousing, commercial, research and recreation facilities including industrial pollution control facilities, educational or cultural facilities, railroad facilities, horse racing facilities ... and continuing care retirement communities, and thereby advance the job opportunities, health, general prosperity and economic welfare of the people of the state of New York and to improve their recreation opportunities, prosperity and standard of living.

It is important to understand that the Council and the IDAs themselves are private entities with State involvement mostly through cooperation and consultation, although there is legislation that gives them decision-making power in terms of economic development in certain municipalities.  The Empire State Development Corporation is a quasi-state office which defines its mission in a similar vein to the IDA structure:  "Empire State Development (ESD) is New York’s chief economic development agency. The mission of Empire State Development is to promote a vigorous and growing economy, encourage the creation of new job and economic opportunities, increase revenues to the State and its municipalities, and achieve stable and diversified local economies. Through the use of loans, grants, tax credits and other forms of financial assistance, Empire State Development strives to enhance private business investment and growth to spur job creation and support prosperous communities across New York State."

IDAs can assist economic development projects by:
Issuing tax exempt and taxable bonds for qualifying projects
Conveying real property tax abatements, typically through a PILOT or straight lease transaction 
Abating sales taxes for construction materials and equipment
Abating mortgage recording taxes
Eminent domain (Except NYC IDA)

The types of projects that IDAs can assist include:
Industrial
Commercial
Retail under very limited circumstances
Industrial Parks
Horse racing facilities
Railroad facilities
Life care communities
Waste disposal facilities
Low-income rental housing units
Not-for-profits (Private 501(c)(3) entities: For example, YMCAs, CP Centers, private secondary schools, habilitation centers, and museums, College dormitories, Senior living facilities, and Hospital projects involving the delivery of medical services

An example of IDA benefits
Project "X" builds 50,000 sq. ft. building for $5,000,000, and has $4,000,000 mortgage. Tax benefits would include:
Mortgage recording tax savings (1% of mortgage) = $40,000.
Real Property Tax abatement = $275,000 over 10 years (average annual savings of 27.5%.)
Sales tax savings on construction materials and non-manufacturing equipment = $120,000 + $54,000 = $174,000
Total savings over 10 years = $489,000.

New York State has endured considerable criticism, including from the State Comptroller, in connection with its major subsidy programs, for overly-generous tax benefits, lax eligibility, poor performance standards and a lack of recipient transparency; some companies have even walked out on their deals with the state and left local communities devastated.

Advanced Micro Devices was given a $1.2 billion package to build a semiconductor fabrication plant north of Albany in Malta.  Three years after the deal was sealed, the company finally broke ground but wanted additional subsidies of $1 billion as the cost of the building had risen to $4.2 billion.  When ownership resisted a unionized workforce, Gov. David Paterson pressured them to accept unionized labor and it came out sometime later that another $15 million had led to the union labor contract.  In October of 2011, the Albany Times-Union reported the results of an investigation that the expanded company had been reimbursed by the state for one-half billion dollars for expenses, some of which were not related to chip production.  The Pataki administration also arranged for IBM to receive a subsidy package worth $660 million for a $2.5 billion computer chip plant in Dutchess County.  The rest of the deal came from local taxes.  A few years later, IBM got another subsidy deal worth $140 million toward a $1.5 billion project which was expected to bring 325 jobs to the chip plant.  With the announcement a month later of a 10% pay reduction for workers in order to be “competitive,” IBM failed to receive another $475 million because its overall workforce in the state declined. 

Downstate has had its own “fun and games.”  According to one report (Accountable USA), NYC has for decades been hit-up by high-profile companies of one kind or another for certain "retention deals" , essentially engaging in "job blackmail" by threatening to move their headquarters to New Jersey or Connecticut.  Although less severe under Mayor Bloomberg, some companies have continued this tactic.  In 2005, Goldman Sachs got $1.7 billion in Liberty Bond financing and other subsidies for a new headquarters building near Ground Zero (those "other subsidies" consisted of a $25 million Community Development Block Grant and up to $150 million in new city and state tax credits).  In recent years, the New York Yankees and the NY Mets have together totaled $1.7 billion in similar subsidies for new ballparks in Queens and the Bronx.  On the other hand, the NY Nets have not done as well since their "request" for subsidizing a new arena has gone nowhere in the midst of a weakened economy.

No matter how you look at it, this use of tax breaks, subsidies, bonds, or tax credits has become something of a standard business practice throughout the United States.  For example, Pennsylvania utilized tax incentive zones as a lure trying to convince Shell Oil Company to locate a petrochemical plant there. Pennsylvania was competing with West Virginia and Ohio for the plant, which extracts ethane from the Shale gas. Ethane is one of the key building blocks needed to make plastics and other synthetics.

Gov. Jay Nixon (D) of Missouri called a special legislative session back in November of 2013 to ask legislators to approve a $150 million incentive package that included extensions of several existing economic development programs with the hope that the package would attract the thousands of jobs attached to Boeing's 777X program, newly up for grabs after a Machinists union in Washington State rejected Boeing's long-term contract proposal.  California, South Carolina and Utah, all home to major Boeing outposts, were in the running, and Alabama, Arizona, Pennsylvania and Texas, were probably also in the running because Boeing had over 2,000 employees there. Washington state was not out of the picture either.  Before the union turned down the contract extension, the Washington legislature passed a package of incentives that included the largest tax breaks any state had ever offered to a corporation!  In the shadow of the Oscar awards, let us not forget the sunny state of California since they are somewhat unique in their jealous guardianship of the film industry.  In that state, there is even a film industry tax credit which, under current extension, is good until the end of 2014.

So there you have it.  New York State is not alone in the use of tax incentives.  Around the country, "states use their tax codes to incentivize certain behaviors or industries in order to achieve a desired result. Colloquially referred to as "tax breaks," these incentives use taxpayer funds to subsidize businesses and corporations with the intent of generating long-term benefits, usually higher tax income in the future" (Reason Foundation, January 30, 2013)

There are basically, three types of Tax incentives – tax credits, deductions, and reduction or forgiveness.  These incentives are used by communities, states, or the federal government to obtain desirable economic, aesthetic, and social ends. They can help convince developers to build affordable housing or restore historic buildings for new uses, persuade corporations to move operations into depressed areas, or encourage businesses and individuals to conserve energy and protect the environment.  Let's take a brief look at each of these incentives (based on the helpful summary from Community Tool Box, University of Kansas):

 What are tax incentives?
Tax incentives are ways of reducing taxes for businesses and individuals in exchange for specific desirable actions or investments on their parts.

Perhaps the most familiar tax incentive to tax-paying Americans is the deduction for charitable contributions: the deduction exists to help persuade people to contribute to charity.  Tax incentives can be offered by any level of government that levies taxes: federal, state or province, county, or municipality. They can be aimed at businesses, organizations, individuals – any entity that pays taxes. In general, they take one of three forms:

Tax deductions.  Tax deductions allow you to subtract some or all of your expenses for certain things from your taxable income (the amount that you pay taxes on). Your taxes are lower because you’re taxed on a smaller amount.

Your business had income of $200,000.00 last year. You spent $20,000.00 on equipment to clean the industrial waste from your operation. Since your state offers a 100% tax deduction to businesses on spending for environmental improvements, you can deduct that $20,000.00 from your income when you figure your taxes. Thus, you’ll only pay taxes on $180,000.00. In practice, that would save you up to about $8,000.00.

Tax credits.  A tax credit allows you to subtract some or all of your expenses for certain things from the amount of taxes you have to pay. Your taxes are lower because you’re actually paying less, even though you’re taxed on the full amount of your income.

Your business has spent $20,000.00 on anti-pollution equipment. The state allows you a 100% tax credit on spending for environmental improvement. As a result, you can subtract $20,000.00 from your total tax bill.  Business tax rates vary, depending on the nature of the business and its amount of income. The highest rate approaches 40%. Therefore, a tax credit of more than 40% of the amount you spend will usually be more valuable than a tax deduction.

Tax reduction or forgiveness.  In return for particular actions or investments, you don’t have to pay part or all of your taxes – usually for a given amount of time. Your taxes are lower because they simply don’t have to be paid. The example below concerns state business taxes, but municipalities might also forgive property taxes (which, for an industrial facility, can represent a great deal of money) on a similar schedule for similar reasons.

You build a factory in a designated enterprise zone (low-income area marked for economic development), and provide 75 jobs for area residents. As a result, the state forgives your state taxes for the first three years of operation, and then taxes you at 33.33% for the next three years, 66.66% for the next four, and only then – after ten years – at 100%. An arrangement like this usually holds only if you continue to operate in the same place and maintain the number of jobs for area residents for those first ten years.

Utica is, some say, the recipient of some very important economic boosts coming into this area.  First, there is the North-South Arterial infrastructure project with a potential of creating 600 jobs over the fiscal years of 2012-2014.  Second, we are about to be part of what some call a "regional re-vitalization, " with a Nano-tech "revolution" as its centerpiece, but which also includes specialized training programs and assistance for other existing industries.  A third element of the re-vitalization could be a test center for the innovative use of drone aircraft.  Many believe these incentivized enterprises will be of inestimable value to this region, and they speculate that we will see a resurgence of Utica and environs because of them.  It is difficult to argue against perceived progress on this scale, and it is not my purpose to do so.  But can we truly say, without equivocation, that all this is to the good of this community and area? 

Say what you will, there may very well be some missing elements that raise certain questions:  who are the main recipients, what are they getting, and what is the community getting (or not getting) in return?  These are questions related to transparency, accountability and benefits.  Let me outline for you the main ingredients of this inquiry, which we shall approach in future postings.

1)    Who are they?  What is their track record in other states?  How community-minded have they been?  How transparent have they been with other communities?  Do they have any secrets that might become a problem for this area?  What residential areas can we expect to grow?  What satellite industries and services might appear?

2)    What are they getting?  what are the incentives?  How much taxpayer money is going to them?  What will a ten-year tax forgiveness mean to your area? What do NYS and municipalities expect in return for the incentives?   Who will be evaluating and auditing the books and the records of these companies to see what they do with what they receive?  In other words, to whom are these groups accountable, and can they be held accountable to the people of this area?

3)    What is the community getting in return for its largesse?  What benefits can we expect?  How open are these companies to suggestions from the community for certain projects like greening of the environment or subsidizing of educational and extra-educational programming, or taking leadership to produce specialized training programs?  Will these companies care at all about Utica?  Do they think their mere presence is sufficient, or will they invest some of their tax incentives and profits back into the community?  Do they plan on being "good neighbors" or is that concept foreign to their mode of operation?

  Stay tuned....