Category Archives: Deficit

Remembering The Greatest Economic Crash In History.

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Looking back at the market crash of 2008, it’s difficult to believe that it represented a greater loss of stock and home equity than any previous crash in American history. Though we may be impatient for a full recovery of jobs and middle class incomes, we should take a few moments to recognize that the quick action by Congress and the Federal Reserve did, in fact, work. The same can be said for President Obama’s automotive bailouts and economic stimulus which were opposed and derided by Teapublicans.

So you have not yet been able to find the job you want? Or you feel that you are being undervalued and underpaid? Your frustration is understandable. But, when compared to the aftermath of lesser crashes, it could have been a whole lot worse. We were not relegated to soup lines and work camps as our parents and grandparents were following the stock market crash of 1929. But had President Obama not ignored the Teapublicans’ call for austerity measures, we well might have been.

To fully appreciate what I mean, you need to look at the extent of the losses in 2008.

The Dow Jones Industrials lost 778 points in one day – the greatest single day loss in history. It’s estimated that the market crash resulted in a $1.2 trillion loss of market equity. Looking at it another way, the Dow lost 33.8 percent for the full year – surpassed only by the bear markets of 1907 and 1931. Further, GDP contracted for more than a year. Unemployment rose from 5 percent to 10 percent before it began to drop. According to Zillow.com, $3.3 trillion in home equity was stripped from homeowners in 2008 as home values fell by 30 percent. Income levels fell, causing the net worth of households and non-profit organizations to fall by roughly $15 trillion. And the impact of the crash on retirement funds is virtually immeasurable. Indeed, those who were nearing retirement may never fully recover the money lost in their IRAs, 401ks and their defined benefit pension funds.

Despite all of that, our economy recovered remarkably quickly. If you don’t believe me, just look at the economies of many other advanced nations that are struggling with stagnation who mistakenly followed the advice of conservatives. By contrast, the GDP of the US is growing, our deficits have fallen at a dramatic rate and our national debt is now less than 3 percent of our GDP – and it would be much lower if Teapublicans hadn’t fought to give more tax breaks to corporations and the one percent. Certainly, income inequality is skyrocketing, but it was expanding long before the crash as a result of the Bush tax cuts. Yet rather than do something to address the issue, the GOP-led Congress has, instead, voted to eliminate estate taxes for the wealthiest 5,000 families in America!

Remember that the next time you hear someone claim that the GOP is the party of fiscal responsibility. It was GOP policies that led to the Great Recession. And, once again, it was Democratic leadership that led us out of it.

The Balanced Budget Fraud.

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It may sound like a good idea to require the federal government to balance the budget, but it’s nothing more than a thinly-disguised way for Teapublicans to shrink government and give corporations free reign to exploit people and resources.

Make no mistake, as soon as a balanced budget amendment is passed, if it ever is, Teapublicans will cut taxes at the first opportunity. That will result in less revenue, which, in turn, will result in large budget cuts. Of course, those cuts will not affect corporate welfare or the military-industrial complex. Instead, there will be cuts to regulatory agencies and safety nets. Already we’ve seen the GOP propose the repeal of the Affordable Care Act which will deny affordable health insurance to more than 16 million Americans. We’ve seen GOP-sponsored budgets that propose cuts to Medicaid, Medicare, Social Security and Supplemental Nutrition programs. We’ve seen Teapublican initiatives to defund the Department of Education, the Environmental Protection Agency, the IRS, and the Department of Labor.

All of this will be made much easier if Teapublicans can muster enough votes to pass a balanced budget amendment.

The truth is, our federal government has often operated at a deficit. Not because of bad management or negligence. But out of necessity. Indeed, the Constitution was created to replace the failed Articles of Confederation over federal deficits. The fledgling government had run up substantial debts during the Revolutionary War and, without a central government, it had no way of collecting the funds to repay those debts. And that’s but one example: Had FDR not expanded government programs to put people back to work, we likely would have never emerged from the Great Depression. Had the US not operated at a deficit, we would not have been able to conduct military operations for WWII and most of our other all-too-frequent wars.

The Reagan administration operated at massive deficits in an attempt to outspend the Soviet Union. The Bush administration operated at enormous deficits in order to create the Homeland Security Department and to prosecute the Afghan and Iraq Wars. And the Obama administration has operated at deficits (albeit steadily decreasing deficits) in order to wind down operations in Iraq and Afghanistan and to dig our economy out of the trench created by Bush.

Since 1975, only two administrations have produced surpluses, and both of them were Democrats! Taking it a step further, in the past 100 years, there have been eight Democratic presidents and nine Republicans. Five of the eight Democrats oversaw deficits smaller than they inherited, while seven of the nine Republicans oversaw deficits larger than they inherited.

Given their history, do you really think Teapublicans are pushing a balanced budget amendment out of a sense of fiscal responsibility?

Moreover, balanced budget requirements are no guarantee of fiscal responsibility. In Arizona, for example, once the legislature passed a balanced budget requirement, Teapublicans set about starving the state with tax cuts. Of course, those tax cuts have not been shared equally. The state not only cut taxes for the wealthy. It has cut corporate taxes for 24 of the past 25 years. Meanwhile, it has raised sales taxes to push the costs of government onto those who can least afford it. The resulting lack of revenue has, in turn, led to catastrophic cuts to education and other services.

Since no Teapublican will ever again agree to raise taxes, the state is caught in a downward spiral fueled by ideologues, greedy corporations, self-serving politicians, dark money donations to lapdog candidates, and a series of “studies” and propaganda from conservative “think tanks.” It’s a death spiral from which the state may never recover.

What’s The Matter With Kansas Now?

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In 2004, Thomas Frank wrote the book “What’s The Matter With Kansas?” which looked into the state’s religious and political extremism. It was a fascinating read. But it’s time for him to write a sequel because the answer to that question is now more clear. What’s wrong with Kansas is Governor Sam Brownback and his version of Horse and Sparrow economics (feed the horse enough oats and a few will pass through to fall on the road for the sparrows to eat), aka Trickle Down economics, aka Supply Side economics, aka Reaganomics, aka Voodoo economics.

Most economists have known for years that this economic policy doesn’t work. Even the architects of Reaganomics now repudiate the philosophy. But Brownback is certain that he knows better. So, since he was elected governor, he has implemented Reaganomics on steroids. He cut taxes for the wealthy and eliminated taxes for thousands of corporations, promising that businesses would flock to the state bringing thousands of new jobs with them.

It hasn’t quite worked that way.

There have been no businesses flocking to Kansas from neighboring states. And the resulting loss in tax revenue ($333 million in 2014 alone) has not only caused the state to burn through the $700 million reserve fund that existed before Brownback took office, it has led to cuts for public schools, community colleges and state universities. But Brownback steadfastly refuses to return taxes to their previous levels or to raise taxes even a little bit. So the governor and the state’s Republican legislature are hoping to meet this year’s $710 million deficit by cutting funding to pensions for public employees and by cutting the budget for roads and infrastructure.

And Kansas isn’t alone in this right wing-fueled misery. After more than 20 years of corporate tax cuts and, with almost nothing left to cut, the Arizona Republican-led government is facing a $1 billion annual deficit. After the failed policies of a Republican governor, Pennsylvania’s new Democratic governor is facing a $2.3 billion deficit. And, after Gov. Scott Walker’s $541 million tax cuts in 2014, Wisconsin is now facing a two-year deficit of $2.2 billion. In all, there are 16 states facing deficits…most of them controlled by tax-cutting Republicans. Meanwhile, Democratic-controlled states like California and Minnesota have some of the nation’s lowest unemployment figures, the nation’s best job creation and…wait for it…budget surpluses!

So tax cuts combined with budget cuts equals few new jobs, reduced revenue and even larger deficits, while reasonable taxes, reasonable spending on education and other services equals more jobs, more revenue and thriving economies.

It can’t be any more clear than that.

The Sad State Of Arizona (2015 Edition)

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Before the GOP-created Great Recession, Arizona’s state economy was based on the fantasy that construction could continue until the entire Sonora Desert was covered by homes, shopping malls and golf courses. So since the housing market crashed, Arizona’s economy has languished.

While other states were trying to mend their losses by diversifying, stimulating their economies and raising taxes, Jan Brewer and the GOP-dominated legislature chose, instead, to make cuts. Deep, desperate budget cuts. Yet, despite facing a large deficit, they chose to further reduce revenue by cutting taxes for corporations. At the same time, they put teachers out of work by cutting the funding of public schools. Indeed, since 2009, only Oklahoma has cut more from student funding than Arizona. As a result, the state’s per student funding is now just 69 percent of the national average and its student performance stands at 47th out of 50 states and the District of Columbia. Only 1 in 18 students who enter an Arizona high school will receive a degree from a college or technical school, and those who do earn a degree will likely be buried in student loan debt.

Not content with destroying schools and jobs, the GOP also did what it could to destroy tourism, the state’s 2nd-largest industry, by closing state parks and highway rest stops. And to make the state even less appealing to tourists, they passed the anti-Latino law, SB1070, which made tourists and conventions spurn the state costing us tens of millions of dollars in lost revenue.

It was as if the GOP was intent on pushing our citizens into its ideological clown car and driving us off a fiscal cliff.

Now along comes the new GOP governor, Doug Ducey, who must have frozen his brain while peddling questionable franchises for Cold Stone Creamery. During the campaign, he and his supporters ran millions of dollars in misleading attack ads accusing his Democratic opponent of raising tuition to the state’s universities. But, now that Ducey has been sworn into office, he has presented a budget that would cut $75 million in funding for post-secondary education. And, though he pledged to increase K-12 education funding during the campaign, he is attempting a shell game in which he proposes to take as much from the already stressed school administration and operations budgets as he would add for classrooms. Moreover, his budget completely ignores the hundreds of millions of dollars a court awarded public schools as the result of previous cuts to education in violation of the state constitution.

Of course, one budget item that will increase is the money allocated to corrections. True to the GOP’s commitment to line the pockets of private prison corporations, Ducey proposes building yet another privately-operated prison at a cost of $5.3 million. But there is no money for the education and rehabilitation of prisoners, so after they serve their time, they are all too likely to commit more crimes. And since the privately-operated health care system for prisons doesn’t track or treat infectious diseases, they are also likely to spread infectious diseases into our communities.

In their obviously delusional minds, Ducey and the Teapublicans still seem to believe that, by further cutting the state’s already low corporate taxes, they will be able to attract corporations to relocate to Arizona bringing with them thousands of high-paying jobs. Anyone who has ever consulted with corporations seeking a place to expand or relocate knows that’s a fantasy.

Corporations, at least good corporations, look for places to expand that offer quality transportation, abundant resources, an abundant high-skilled and well-educated workforce, abundant and low-cost energy, a high quality of living, and affordable taxes…usually in that order. Arizona’s approach will only result in the relocation of corporations that offer low-skill, low-paying jobs or gun manufacturers who are drawn to the state by our heavily-armed population and our virtually non-existent gun laws. Even then, they will only come to Arizona if the state is willing to pay for changes in needed infrastructure, provide further tax cuts and pay for other incentives. All of which explains why, when high tax states like California and Minnesota are thriving with low unemployment and budget surpluses, Arizona has failed to emerge from recession and faces annual budget deficits of $1 billion or more.

In the competition to build a sustainable, thriving economy, it would seem that Arizona can only compete in a contest of Biggest Loser against other red states like Kansas and Mississippi. And the biggest losers of all will be our students.

Advice From A War Criminal.

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From The Department Of Who The Hell Cares, Richard “The Dick” Cheney and his unpleasant daughter, Liz (I assume that’s short for Lizard) recently announced that they have formed a Political Action Committee to “restore America.” Restore America to what? To a craven bully that interferes with other governments; that robs resources from third world countries while giving nothing in return; that encourages large agribusiness to dump excess products in other nations thus bankrupting small farmers and throwing them into abject poverty?

Or does The Dick merely want to start another war in order to direct more taxpayer billions to his former company and political allies at Halliburton? Does The Dick want to resume his position as Torturer-In-Chief to cause others to fear him? Does he still believe that we can use our military might and status as the world’s only superpower to force the rest of the world to kneel at his feet and pay tribute to our multinational corporations? Does he still want to extract money and resources from the poor to feed the insatiable appetites of his wealthy friends?

Yes, as part of the Ford, George H.W. Bush and George W. Bush administrations,The Dick has done all of that and more.

In an op-ed, The Dick and his disagreeable daughter wrote, “Rarely has a US president been so wrong about so much at the expense of so many,” to which White House Press Secretary Jay Carney rightfully replied, “Which president is he talking about?” The only president that meets that description is the one who lived in the White House while The Dick was running our nation to ruin.

Let’s review: First, Cheney and Bush stole the 2000 election through a combination of Jeb Bush denying voting rights to tens of thousands in Democratic-dominated Florida counties, by counting nearly 10,000 unsigned absentee ballots, by bullying election officials, and by appealing to a Republican-laden Supreme Court. Cheney and Bush ignored more than 40 warnings of a pending terrorist attack in the US by al-Qaeda. They then invaded an oil-rich country under false pretenses, ordering numerous atrocities. They stole our privacy. They awarded so many billions in no-bid contracts to Halliburton for rebuilding Iraq that they “misplaced” roughly $80 billion. They ignored outright gambling by our largest financial institutions costing ordinary Americans their homes and trillions of dollars. They then bailed out those same financial institutions in order that they might continue their ritual of handing out six and seven-figure bonuses. Finally, Cheney and Bush were convicted as war criminals in abstentia by an international court.

Now that is a failed presidency!

Did I mention that the Cheney/Bush fiasco included leaving the Middle East in complete turmoil giving Sunni and Shiite Muslims the opportunity to resume their near 1,400-year war over who is the rightful successor to Muhammad? Now The Dick and his spawn want the US to send troops to Iraq to intercede. They’re not worried about the lives of our soldiers, the lives of Iraqis, our national debt or our national reputation. They’re only worried about oil.

Here’s an idea. If The Dick feels so strongly about immersing our nation in another war or occupation, let him crank up his mechanical heart and enter the fray with his shotgun and his oily buddies. Give them military training and draft their children for the fight. After all, The Dick has already proven that he is dangerous to his friends with a shotgun in his hands. Imagine what he can do against his enemies. Anyway, he and his fellow executives of Big Oil are the only ones who stand to profit from another misadventure in Iraq.

Thoughts On The 70th Anniversary Of D-Day.

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I was born on the second anniversary of D-Day and I was raised near Omaha. Maybe that’s why I have always been fascinated by those men who had the courage to step off a ship into the cold waters off Normandy and storm Omaha Beach. I didn’t know anyone who actually fought on Omaha Beach, but I knew several who were involved. My uncle was in charge of maintenance of the transport planes that helped supply our troops. Later, he was charged with supplying General Patton’s tanks on their race to Berlin. Indeed, after I saw the movie Patton, he asked if I remembered the scene in which Patton was chewing out a supply officer over the radio. ‘You know who was on the other end of that conversation?” he asked. “It was me.”

It was my uncle who introduced me to the horrors of war. When I was about 12, he brought a box of photos to a family gathering. While the women and girls were in the kitchen, he pulled out photos taken in the German death camps. He wanted me to know why his generation had fought and he wanted to make sure that the horrors of those camps were never forgotten.

Most of those who fought in World War II seldom talked about their experiences.

One of our neighbors was a member of the 82nd Airborne who parachuted into a small French town in the early morning hours of D-Day. I only remember him talking about his experience once while we were working together in the field. He said that, as he floated down, his unit took fire from the German troops below. He talked about how lucky he felt to avoid being wounded after discovering holes in his parachute upon landing. When I asked how he found the courage to jump into enemy fire, he replied, “My unit was full of ex-cons. During the preparations for D-Day, there was a beating or a knifing in my camp almost every night. By the time D-Day rolled around, I was more frightened of my own unit than I was of the Germans.”

As we commemorate D-Day, we should also pay tribute to the men who fought in all of the battles of World War II, like my dad’s cousins. One received an astounding seven battle stars after fighting in North Africa, Sicily, Italy and, finally, the Battle of the Bulge. Another fought in the Pacific Theater beginning with the Battle of Attu in the Aleutian Islands and ending with the Battle of Okinawa.

Of course, they most certainly were not alone. Millions of Americans, Australians, British, Canadians, Chinese, Filipinos, French, Indians, New Zealanders, Polish, Soviets and others fought and died in the war that some like to call “the good war.” I think my uncle, my relatives and my neighbors would have hated that moniker. They put themselves in harm’s way to save others. But they hated war…any war. For that reason, more than any other, they deserve to be called the “Greatest Generation.”

Bullying On A Massive Scale.

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We have now learned that a top aide to Gov. Chris Christie ordered the closure of two access lanes to the world’s busiest bridge as political payback. Apparently, the aide was angry that the Democratic mayor of Ft. Lee failed to endorse Christie in his successful re-election campaign.

That public officials in New Jersey would use their offices to punish competitors is not surprising. Such stories are seldom even newsworthy. But given that the payback came from someone tied to one of the expected front-runners for the GOP nomination for president? That’s news!

If you think not, consider this: What would be the reaction of the media, especially the Fox Noise machine, if President Obama’s Chief of Staff had used his position to exact the same sort of revenge against a political opponent? Just think about that for a moment. How many headlines would that generate considering all the outrage and accusations against the Obama administration for merely conducting business as usual? Remember the controversy that stemmed from President Obama’s plan to address school children in a video link as previous presidents have done. Remember the “indoctrination” charges? And remember the outrage when the First Lady started the “Let’s Move” campaign and healthy foods initiative to combat childhood obesity? Right wingers were in full throat with claims of indoctrination and claims that she was “meddling” in decisions that should be reserved for the family.

If political payback by the White House was uncovered, Rush Limbaugh, Fox and most Teapublican politicians would have the tar boiling, the torches lit and their pitchforks raised.

I’m not saying that Democrats should react the same way in the wake of the Ft. Lee bridge closure. Gov. Christie may have no direct involvement or prior knowledge of the payback. A leader can’t be expected to micro-manage every aspect of the government. But a governor should be aware of actions by his (or her) senior staff members. Moreover, the bridge closure does raise questions about Christie’s leadership and his choice of those who work for him.

At minimum, this event deserves a full and timely investigation, the resignation of those involved, and an apology from Christie. At worst, it should disqualify Christie from office.

Stop Blaming Bush?

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On today’s edition of The Diane Rehm Show on NPR, a conservative asked the question, “Can we all admit that this is no longer George W. Bush’s economy?” It’s a fair question. We are, after all, about to begin the sixth year of the Obama administration. So I, for one, am more than willing to concede the point. Even though Bush’s policies crashed the economy, slashing federal revenue through tax cuts for the wealthy and leaving us mired in two unfunded wars with annual deficits in excess of $1 trillion along with massive unemployment, this is no longer Bush’s economy.

It is now quite clearly President Obama’s.

So let’s review what has happened over the past five years. To begin, President Obama signed a stimulus plan that helped stem the bleeding. He gave loans to GM and Chrysler to save the US auto industry and tens of thousands of jobs. He withdrew troops from Iraq and has promised to withdraw our troops from Afghanistan this year. He lifted American spirits by giving the order to kill or capture Osama bin Laden. He expanded health care access to millions more Americans and stemmed out-of-control inflation of health care costs.

Under President Obama, we have seen a consistent rise in GDP (Gross Domestic Product) and the stock markets. At the same time, we have seen a substantial drop in umemployment despite substantial cuts to the number of employees at all levels of government. Finally, under President Obama, we have seen the most rapid drop in the federal deficit in modern history!

And most of this has been accomplished despite a recalcitrant GOP-led House that would have us believe that the way to deal with a struggling economy is to cut federal spending and revenues. Counter to the advice of most every economist, the Teapublicans in Congress have voted against bills that would create jobs, bills that would rebuild infrastructure while interest rates are at historic lows, and programs that stimulate the economy while helping those who most need it.

So, yes indeed. This is President Obama’s economy. And it would be even better if the GOP would get out of the way!

Cutting Through The GOP’s Economic Talking Points.

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Almost from the first day President Obama took office, conservatives have howled about his economic policies. They blamed him for growing the national debt. They blamed him for record deficits. They created the Tea Party to protest taxes, even though they were at historic lows.They labeled Obama a socialist for saving the auto industry. They called him a fascist and a communist for signing the Affordable Care Act. And they campaigned on the need for government budget cuts in 2010 and 2012.

Democrats countered that the growing debt and deficits were the result of President George W. Bush’s policies. For his part, President Obama refused to place blame on the previous administration. Instead, he pointed to the irresponsible behavior of Wall Street and the resulting economic crash. And though he has cut the deficit faster than any previous president, he has repeatedly stated that unemployment is still too high and the economy too fragile for more draconian cuts.

So what’s the reality? Who’s right?

Bob Deitrick, a principal of Polaris Financial Partners, and Lew Goldfarb, a business attorney, conducted an exhaustive study of US presidencies from 1929 to 2009. That particular time period was selected because each party controlled the White House for exactly 40 years during that time. What Deitrick and Goldfarb found was that Democratic presidents have been better for the economy than Republicans! Their findings were published in the book Bulls, Bears and the Ballot Box.

Interestingly, the administration that ranked highest was the JFK/LBJ administration. (The authors combined the two due to Kennedy’s assassination.) In descending order, the next five were Clinton, FDR, Eisenhower, Truman and Reagan.

The book did not cover Obama’s performance since he had not been in office long enough to make judgments. Yet when Deitrick discussed more recent data in a Forbes interview, he declared, “By all measures, President Obama has outperformed every modern president.” That’s because Obama has reduced the deficit from 10 percent of GDP (Gross Domestic Product) at the end of the Bush presidency to just 4 percent today! This is more the result of growth than budget cuts. It’s the result of Obama’s stimulus plan combined with his decision to save the auto industry. And as the economy continues to grow, the deficit is expected to be just 2 percent of GDP by 2015.

Obviously, presidents who refuse to cut taxes for the wealthy and who refuse to start unnecessary wars are good for the economy.

Still, President Obama is facing a particularly troubling economic reality – that of income inequality. As a report by the nonpartisan Congressional Budget Office has shown, from 1979 to 2007, the share of income for the top fifth of our population has grown 10 percent. During the same period, all other households saw their share of income decline by 2-3 percent.

This can be fixed. But it will likely take more than a Democrat in the White House. It will take a Democrat-controlled Congress.

The Conservative War Against Labor.

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In the years following the Great Depression, labor unions were popular and thriving. The Wagner Act of 1935, also known as the National Labor Relations Act, guaranteed workers the right to collective bargaining and the right to strike. As a result, union workers, particularly those in mining and manufacturing, experienced dramatic gains in salaries and benefits, along with safer working conditions.

Corporations didn’t give up these things without a fight. But public sentiment was temporarily on the side of workers and World War II demanded unity between corporations and unions.

The end of World War II and the beginning of the Cold War gave corporations a new opportunity to undermine unions with the rise of Sen. Joseph McCarthy (R-WI) and his House Un-American Affairs Committee (HUAC). Likely emboldened by President Truman’s loyalty program intended to discredit Democratic rival Henry Wallace (former V.P. to FDR, nuclear disarmament advocate and pro-labor candidate) prior to the 1948 presidential election, McCarthy launched a witch hunt in search of communist sympathizers. News of the Soviet Union’s growing nuclear capability spawned a national paranoia that allowed McCarthy to portray labor unions as a communist front .

By the time McCarthy’s lies and un-Constitutional tactics were exposed, hundreds of Americans had been imprisoned, thousands more had lost their jobs and tens of thousands had been investigated. The victims included those who had supported Wallace, civil rights leaders, union leaders…even the unions’ rank and file.

The unraveling of the HUAC may have posed another setback for corporations and the wealthy, but McCarthy’s accusations left many suspicious of organized labor, even as labor unions continued to help build the middle class. Finally, in the 1980’s, anti-union forces suceeded in electing a president sympathetic to their cause – Ronald Reagan. When the Professional Air Traffic Controllers Organization (PATCO) went on strike, violating a law banning strikes by government workers, Reagan fired all 11,345 members who failed to return to work.

Reflecting on the event, former Federal Reserve Chairman Alan Greenspan commented, “His [Reagan’s] action gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers.”

The war against unions resumed in earnest.

Corporations began sending jobs offshore in search of labor willing to work for low wages and without benefits such as health insurance, disability insurance and unemployment insurance. The export of jobs also eliminated the need for worker pensions. (In the years since Reagan’s election, more than 85,000 defined benefit pension funds have been eliminated.) Many of the jobs that can’t be exported, like those at Walmart and McDonald’s, now pay so little that their employees require public assistance. And with fewer workers eligible to pay dues, many labor unions have been weakened.

Meanwhile, management compensation has soared. The savings on labor costs has resulted in million dollar annual salaries and bonuses for executives.

With money comes influence allowing corporations and industries to successfully lobby Congress for subsidies, tax write-offs and lower tax rates. In addition, many corporations have been allowed to avoid taxes by creating Post Office box “headquarters” in off-shore tax havens. The resulting drop in tax revenue led to increased deficits and greater debt. But, rather than rewrite the corporate tax code and raise taxes on those who could afford it, conservatives have seized the opportunity to cut social programs. They not only cut food stamps. They have targeted Medicaid, Medicare and Social Security, as well.

Not surprisingly, conservatives have also taken aim at the labor unions which represent government workers, such as teachers, firefighters and police. In particular, they want to eliminate government pensions. The argument is that, if private workers don’t have pensions and benefits, why should government workers? If successful, conservatives will have turned the clock back to the gilded age; the days prior to labor unions; the days of extreme wealth and extreme poverty.

Some say that we already have two Americas. I would argue three.

One is the America of the one percent; those who make lots of money and pay little to no income tax; those who can buy influence by donating to political campaigns and build new businesses with government subsidies financed with the taxes paid by others.

The second is the America of hard work, limited upward mobility and shrinking investments. In this America, you work ever longer hours in order to meet the corporate demands of increased productivity. Each year, you are forced to do more with less. For you, retirement may be little more than a dream. And for your children, college will become a financial burden they may never be able to repay.

The third America is one in which people work for so little money they can’t afford many of the necessities of life. According to the Working Poor Families Project, one in three American families are now among the working poor. One in six Americans and one in four children don’t know where the next meal is coming from, or even if there will be a next meal. In this America, more than 630,000 are chronically homeless and 3.5 million will experience homelessness in a given year. For many of these people, there is little hope that their circumstances will change. They not only lack political influence, many face new laws and obstacles intended to discourage them from voting.

Both President Obama and Pope Francis have recently called economic inequality the biggest problem we face. But President Obama can’t reduce inequality in America by himself. We will need a Congress that represents all Americans. We will need a sympathetic and unified citizenry. And we will need organized labor.

(As a footnote, I should make it clear that, having become part of middle management almost immediately following college graduation, I was ineligible for union membership. But, like most Americans, I was able to take advantage of the improved working conditions, salaries and benefits negotiated by labor unions.)