Wednesday, November 13, 2013

The Poor - Prosperity Creates Poverty! (Part 2)

Corporate Profits Soar. The Super Wealthy Reinvent American Capitalism
By Shamus Cooke
Global Research, November 10, 2013
Url of this article:
As U.S. corporate profits soar to record highs, food stamps for the neediest were quietly cut. The politicians who are demanding endless cuts to social programs — Democrats and Republicans alike — insist that the U.S. is broke, all the while conveniently ignoring the mountains of tax-free wealth piling up in the pockets of the super rich.

This newest flood of cash for the nation’s wealthiest 1% is a blatant government subsidy: the Federal Reserve continues to pump out an extra $75 billion a month, the vast majority of which fattens the already-bursting overseas bank accounts of the rich. Since Obama has been president this pro-corporate policy has helped funnel 95 percent of the nation’s new income to the wealth-soaked rich.
And while it’s true that the global super rich have an estimated $32 trillion [!] stashed away abroad in off shore tax havens, an even newer way to avoid taxes has gripped the endlessly-greedy minds of U.S.-based billionaires.
Instead of shielding themselves behind the classic ‘C’ corporation structure — and all the burdensome taxes and regulations associated with it — two-thirds of new corporations have “evolved” into pseudo-legal “partnership” structures, commonly referred to as “pass throughs,” the idea being that the corporate-partnership instantly passes the profits through to the shareholders, no corporate tax necessary.
The most common form of pass throughs are “innovative” variations of a Limited Liability Company, a tax structure created in 1975 for narrowly regulated purposes. But now rich investors are performing accounting and legalistic somersaults to exploit the tax structure, practices that were illegal before the regulators were “captured” by the big banks.
The pro-billionaire Economist magazine recently discussed the pass through fad:
“A mutation in the way companies are financed and managed will change the distribution of the wealth they create…The corporation is becoming the distorporation…More businesses are now twisting themselves into forms that allow them to qualify as pass throughs.”
So, for example, imagine that nine rich guys get together and call themselves a pass through corporation of some variety. They do this because they want to avoid personal liability in case things go awry. Their partnership only buys and sells stocks and goes on to make billions, while paying zero corporate taxes. When their risky bets go bust and the partnership is sued by hoodwinked investors, the company instantly declares bankruptcy, since all profits were quickly “passed through.” The partners (the nine guys) cheerfully go home to swim through their sea of cash.
In real life shady pass throughs make massive wealth. Richard Kinder, who co-founded the biggest pass through, named Kinder Morgan, personally received $376 million in dividends last year alone [!], according to the Economist.
The pass through fad is on track to becoming the dominant way that the super rich get together to make huge amounts of money — pass throughs were 63 percent of all corporate profits in 2008, and are likely higher now, since many of the big private-equity companies making a killing by the cheap fed dollars are organized under pass through umbrella structures.
There is a huge society-wide risk for this type of behavior, which resembles the reckless gambling that destroyed the economy in 2008. As an ever-larger share of wealth is poured into these risky, non-regulated vehicles, the potential grows for them to self-destruct and pull down the broader economy with them. Pass throughs — which include most private-equity firms — function “efficiently” when the government is handing them cheap money; when interest rates go up, the pass throughs go bust, with predictable outcomes.
“But wait,” the billionaire will protest, “we pay individual taxes, which help fund social services.” Not necessarily. If the billionaire investor paid their legal obligation of “capital gains” taxes, they’d already be paying far less than the average worker. But the pass-through billionaires excel at avoiding all taxes. The Economist again:
“For a [pass through] partner a payout can be considered merely a return of capital rather than a profit, and consequently no tax is due until the sale of the underlying security. When tied to nuances of estate law, this may mean no tax at all.”
This type of blatantly criminal behavior used to be actually illegal, but as Wall Street bought Congress, the rules were either bent or ignored.
The Economist explains:
“The limitations on becoming [a pass through] seem to be tied more to legal dexterity [!] and influence [buying politicians] than any underlying principle. Politicians want to extend the benefits of [pass through] partnerships to industries they have come to favor either on the basis of ideology [of the corporate type], or astute lobbying [bribery], or a bit of both.”
The rest of society is affected because public services are being starved of funds, while these new pass throughs face vastly less regulation than the standard C corporations, and push wealth inequality to new heights while threatening a deeper recession.
Historically, government began regulating corporations because everyone realized the profound effects these institutions were having on the rest of society; the nation was becoming more unequal, the labor force more exploited and the environment torn to shreds.
As the super wealthy organized themselves into corporations they took most of society’s wealth with them; government realized that a semi-functioning country would need to tax these institutions and regulate their behavior, since the “natural” behavior of the capitalist — greed — was capable of pushing the rest of society into the dregs.
The new pass through fad is also indicative of the current state of U.S. capitalism; instead of investing profits in a company to buy machines or hire new workers, all the cash is either sitting in overseas bank accounts, or is being instantly funneled, via pass throughs, into the hands of ever-richer billionaires, who are proving to everyone that there is no bounds to the amount of cash they can accumulate. Where there are barriers to accumulation (regulations and taxes), they will supersede them while paying politicians of both major parties to ignore it or make it legal.
This dynamic occurs, in part, because the wealthy are basically refusing to invest in the real economy, as they fear the unstable economic conditions are not safe enough to make long term investments, which they believe won’t yield long term higher rates of profits. Safer to speculate on risky stocks, pocket the money and be the first one out when things go bust, as they did in 2008.
Of course the big name C corporations are up to their eyes in fraud too. Apple made big news when it only paid 2 percenttaxes on $74 billion in profits, by “declaring” its profits in Ireland, a corporate tax haven.
This occurs while other giant companies simply use clever accounting tricks to pay zero taxes, including giants like WellsFargo, Boeing, Verizon and General Electric. In fact, General Electric even finagled a rebate.
When it comes to oversea tax havens, it’s estimated that the U.S. national budget is annually starved of $280 billion in tax revenue.
Politicians have been struggling with ways to deal with the problem, since even in their mind some amount of tax collection needs to happen, if only to fund the military, provide more subsidies to corporations, and please the public by appearing to try to reduce the billionaire’s obscene behavior.
One popular idea among the politicians is to declare a corporate “tax holiday,” where the trillions of off-shore profits can be ceremoniously brought back to the U.S. while the feds look the other way. The idea is that, once the money is actually back in the U.S., the wealthy will want to spend it on something which will eventually help the economy — trickle down economics at its finest.
What seems certain to happen is that lowering corporate taxes will be a central piece of any “grand bargain” that eventually emerges, since there is a clear bi-partisan consensus that corporations need to pay lower taxes.
Some argue that if corporate taxes are low enough — and regulations removed — the corporations will reward the nation by not stockpiling their profits abroad and not creating pass through loopholes.
Of course all of this implies that the wealthy have a stranglehold over the U.S. economy. It’s telling that politicians want to deal with corporate tax evasion by lowering the corporate tax rate, instead of actually sending the IRS after them and throwing them in jail, as they do with working and middle class people.
The above dynamics create an ever-increasing wealth inequality that claws at the thinning strings holding society together. The bankruptcy and social disintegration of Detroit is a foreshadowing event for the rest of the country, unless this dynamic is stopped.
When the next crash happens the nation will have learned its lessons: the big banks and wealthy investors who destroyed the economy in 2008 are back at it, encouraged by Obama’s pro-corporate behavior and the Federal Reserve’s money flooding.
It’s becoming increasingly obvious that breaking the power of the super wealthy is the first step towards balancing the budget, job growth, protecting the safety net, and creating a semblance of a rational society. Until then the U.S. will lurch from one crisis to another, while blaming everyone but the real culprits.
Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action ( He can be reached at [email protected]

Copyright © 2013 Global Research

US Sponsored "Democracy" in Colombia: Political Assassinations, Poverty and Neoliberalism
By José David Torrenegra
URL of this article:
Global Research, July 27, 2011
Not a week goes in Colombia without reports of assassinations and persecution of labor and political activists.
Ana Fabricia Cordoba, gender activist and leader of displaced peasants, was shot dead on June 7th inside a street bus, after she foretold her own death due to constant threats and abuses against her family.(1)
Manuel Antonio Garces, community leader, Afro-descendent activist and candidate for local office in southwestern Colombia received on July 18th a disturbing warning that read “we told you to drop the campaign, next time we’ll blow it in your house” next to an inactive hand grenade.(2)
Keyla Berrios, leader of Displaced Women’s League was murdered last July 22nd, after continuous intimidation of her organization and threats on behalf of death squads linked to Colombian authorities (3), a fact so publicly known after hundreds of former congressman, police and military personnel are either jailed or investigated for colluding with Paramilitaries to steal elections, murder and disappear dissidents, forcefully displace peasants and defraud public treasury, in a criminal network that extends all the way up to former president Alvaro Uribe and his closest aides (4).
The official explanation for these crimes is also well known; Bacrim, an acronym which stands for “Criminal Gangs”, a term created from the Colombia establishment including its omnipresent corporate media apparatus to depoliticize the constant violence unleashed against union leaders, peasants and community activists.
Human Rights defenders point to the unequal and unjust structures of power and wealth which rely heavily on repression. However, no matter how much effort is put into misleading public opinion about the nature of this violence, the crimes are so systematic and their effects always turning out for the benefit of the elite that a simple class analysis debunks the façade of these “gangs” supposedly acting on their own, and exposes the insiduous relationship between the armed thugs and seats of political power in Colombia.
What we are dealing with is the expression of present-day fascism in Latin America.
In a country overwhelmed with unemployment and poverty - nearly 70% - and 8 million people living on less than U$2 a day who daily look for their subsistence in garbage among stray dogs or selling candies at street lights and city buses, is also shockingly common and surreal to see fancy cars - Hummers, Porsches - million dollar apartments, country clubs and a whole bubble of opulence just in front of over-exploited workers, ordinary people struggling merely to make ends meet, or at worst, children, single mothers, elderly, and people with disabilities, without social security and salaries, much less higher education and decent housing.
For instance, in Cartagena, a Colombian Caribbean colonial city plagued with extreme poverty, beggars, child prostitution and U$400 a night resorts, you can pretend to feel in Miami Beach or a Mediterranean paradise, and in less than five minutes away you can also visit slums which would make devastated Haiti look like suburbia.
The same shocking contrast can be experienced in all major cities in Colombia. Thus, in order to keep vast privileges of a few amidst inhuman conditions of the majority, the elite needs to have an iron grip on political power. And once its power is contested or mildly threatened by the collective action of social movements, democratic parties and conscious individuals, a selective burst of state violence is unleashed effectively dismantling any kind of peaceful organizing by fear and demoralization.
The high levels of attrition suffered by activists raising moderate democratic banners such as the right to assembly, collective bargaining, freedom of expression and reparation from political violence, are the result of decentralized state repression carried out by death squads led by high state officers (5) who supply them with intelligence and economic resources extracted from defrauding public treasury and money laundry in the narcotics chain, where social investigators claim that most of the profit accounts for institutional economy, the banks and the state (6). This elaborated repressive strategy differs from the one perpetrated by the military juntas the ruled Argentina, Uruguay and Chile, among others, where public forces exercised directly the political violence against dissidents without pretentious democratic credentials, such as the ones constantly regurgitated by the Colombian establishment, making it more difficult to expose its deep dictatorial mechanisms that have disappeared more than 30000 Colombians (7) in the last years of US backed “counterinsurgency” policies, far surpassing Pinochet’s reign of terror.
In Colombia, where the dominant social elite prevails, thousands of bodies of the "disappeared" have been buried into mass graves, the assassination of trade union leaders is the highest in the world (on a per capita basis rate). Meanwhile, several million peasants have displaced and impoverished. In a context of brutal social repression backed by neoliberal policies, an atmosphere of generalized fear prevails.
This state of affairs raises a basic question, as James Petras puts it: “How does one pursuit equitable social policies and the defense of human rights under a terrorist state aligned with death squads and financed and advised by a foreign power, which has a public policy of physically eliminating their adversaries?”(8). Some in Colombia already found and an answer in the preamble to the Universal Declaration of Human Rights, a document that constitutes the basis for all modern states:
Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people,
Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law (9).
In the light of the exposure of the Colombian hybrid state which pits formal democracy and excessive privileges for a few against brutal repression and poverty for the majority, one must comprehend the existence of an armed conflict. This class confrontation has resulted in a “polarization of civil war proportions between the oligarchy and the military, on one side, and the guerrilla and the peasantry, on the other”, (10) and is mostly funded by US government using taxpayers money to back a rogue state and a comprador elite that prefers to wage dirty war against its own population rather than yield some political power and moderate social reforms. Modernity hasn’t arrived in Colombia, where few can enjoy excesses and vices of promised ‘civilization’ in fancy restaurants and country clubs, and most still live in 1789.
In times when president Obama justifies his “humanitarian intervention” and escalation of the Libyan civil war by having public opinion to believe NATO and US bombs are there to protect civilians, and when the International Criminal Court applies selective justice as it rushes to levy charges against Gaddafi for alleged crimes that pale in comparison to the ones daily committed by the Colombian regime, the international community is turning a blind eye to crimes against humanity in the shameful custom of double standards and insulting those truly resisting with their teeth, the savagery and abuse of power.
Jose David Torrenegra is a Lawyer specialized in Public Law and Political Activism in Colombia.
1. Euclides Montes. “Ana Fabricia Córdoba: A death foretold”. The Guardian. June 13, 2011. 
2. Red de Derechos Humanos del Suroccidente Colombiano ‘Francisco Isaias Fuentes’. “Atentado y amenaza en contra del líder comunitario Manuel Antonio Garcés Granja y detención arbitraria de dos testigos del atentado”. July 18, 2011.
3. Red Latinoamericana y del Caribe para la Democracia. “Alerta: asesinato de miembro de liga de mujeres desplazadas”. Julio 22 de 2011.
4. Simon Romero. “Death-Squad Scandal Circles Closer to Colombia’s President”. New York Times. May 16 2007.
5. Garry Leech. “Exorcising the Ghost of Paramilitary Violence: Reclaiming Liberty in Libertad. .
6. Brittain, James (2010). Revolutionary Social Change in Colombia. New York: Pluto Press. 129.
7. Kelly Nicholls. “Breaking the Silence: In search of Colombia’s Dissapeared”. The Guardian. December 9, 2010.
8. James Brittain, op cit. Foreword. By James Petras.
9. The Universal Declaration of Human Rights. United Nations. 1948. /.
10.James Brittain, op cit. 144.
Tunisia and the IMF's Diktats: How Macro-Economic Policy Triggers Worldwide Poverty and Unemployment
By Michel Chossudovsky
URL of this article:
Global Research, January 20, 2011
General Zine el Abidine Ben Ali , the defunct and deposed president of Tunisia is heralded by the Western media, in chorus, as a dictator.
The Tunisian protest movement is casually described as the consequence of an undemocratic and authoritarian regime, which defies the norms of the "international community".
But Ben Ali was not a "dictator". Dictators decide and dictate. Ben Ali was a servant of Western economic interests, a faithful political puppet who obeyed orders, with the active support of the international community.
Foreign interference in Tunisia's domestic affairs is not mentioned in the media reports. The food price hikes were not "dictated" by the Ben Ali government. They were imposed by Wall Street and the IMF.
The role of Ben Ali's government was to enforce the IMF's deadly economic medicine, which over a period of more than twenty years has served to destabilize the national economy and impoverish the Tunisian population.
Ben Ali as head of state did not decide on anything of substance. National sovereignty was foregone. In 1987, at the height of the debt crisis, the left nationalist government of Habib Bourguiba was replaced by a new regime, firmly committed to "free market" reforms.
Macroeconomic management under the helm of the IMF was in the hands of Tunisia's external creditors. Over the last 23 years, economic and social policy in Tunisia has been dictated by the Washington Consensus.
Ben Ali stayed in power because his government obeyed and effectively enforced the diktats of the IMF, while serving the interests of both the US and the European Union.
This pattern has occurred in numerous countries.
Continuity of the IMF's deadly reforms requires "regime replacement". The installation of a political puppet ensures the enforcement of the neoliberal agenda while also creating conditions for the eventual demise of a corrupt and unpopular government which has been draw upon to impoverish an entire population.
The Protest Movement
It is not Wall Street and the Washington based international financial institutions which are the direct target of the protest movement. The social implosion was directed against a government rather than against the interference of foreign powers in the conduct of government policy.
At the outset, the protests were not the result of an organized political movement directed against the imposition of the neoliberal reforms.
Moreover, there are indications that the protest movement was manipulated with a view to creating social chaos as well as ensuring political continuity. There are unconfirmed reports of armed militias conducting acts of repression and intimidation in major urban areas.
The important question is how will the crisis evolve? How will the broader issue of foreign interference be addressed by the Tunisian people?
From the standpoint of both Washington and Brussels, an unpopular authoritarian regime is slated to be replaced by a new puppet government. Elections are envisaged under the supervision of the so-called international community, in which case candidates would be pre-selected and approved.
Were this process of regime change to be carried out on behalf of foreign interests, the new proxy government would no doubt ensure the continuity of the neoliberal policy agenda which has served to impoverish the Tunisian population.
The interim government led by acting president Fouad Mebazza is currently in an impasse, with fierce opposition emanating from the trade union movement (UGTT). Mebazza has promised to "break with past", without however specifying whether this signifies a repeal of the neoliberal economic reforms.
Historical Background
The media in chorus have presented the crisis in Tunisia as an issue of domestic politics, without a historical insight. The presumption is that with the removal of "the dictator" and the instatement of a duly elected government, the social crisis will eventually be resolved.
The first "bread riots" in Tunisia date back to 1984. The January 1984 protest movement was motivated by a 100 percent hike in the price of bread. This hike had been demanded by the IMF under Tunisia's structural adjustment program (SAP). The elimination of food subsidies was a de facto condition of the loan agreement with the IMF.
President Habib Bourguiba, who played a historical role in liberating his country from French colonialism, declared a state of emergency in response to the riots:
While gunfire sounded, police and army troops in Jeeps and armored personnel carriers fanned out through the city to quell the "bread riot." The show of force finally brought an uneasy calm, but only after more than 50 demonstrators and bystanders were killed. Then, in a dramatic five-minute radio and television broadcast, Bourguiba announced that he was reversing the price hike. (Tunisia: Bourguiba Lets Them Eat Bread - TIME, January 1984)
Following president Bourguiba's retraction, the hike in the price of bread was reversed. Bourguiba fired his Minister of the Interior and refused to abide by the demands of the Washington Consensus.
The neoliberal agenda had nonetheless been instated, leading to rampant inflation and mass unemployment. Three years later, Bourguiba and his government were removed in a bloodless coup d'Etat, "on the grounds of incompetence", leading to the instatement of General Zine el Abidine Ben Ali as president in November 1987. This coup was not directed against Bourguiba, it was largely intended to permanently dismantle the nationalist political structure initially established in the mid-1950s, while also privatizing State assets.
The military coup not only marked the demise of post-colonial nationalism which had been led by Bourguiba, it also contributed to weakening the role of France. The Ben Ali government became firmly aligned with Washington rather than Paris.
Barely a few months following Ben Ali's November 1987 instatement as the country's president, a major agreement was signed with the IMF. An agreement had also been reached with Brussels pertaining to the establishment of a free trade regime with the EU. A massive privatization program under the supervision of the IMF-World Bank was also launched. With hourly wages of the order of Euro 0.75 an hour, Tunisia had also become a cheap labor haven for the European Union.
Who is the dictator?
A review of IMF documents suggests that from Ben Ali's inauguration in 1987 to the present, his government had faithfully abided by IMF-World Bank conditionalities, including the firing of public sector workers, the elimination of price controls over essential consumer goods and the implementation of a sweeping privatization program. The lifting of trade barriers ordered by the World Bank was conducive to triggering a wave of bankruptcies.
Following these dislocations of the national economy, cash remittances from Tunisian workers in the European Union became an increasingly important source of the foreign exchange earnings.
There are some 650,000 Tunisians living overseas. Total workers' remittances in 2010 were of the order of US$1.960 billion, an increase of 57 percent in relation to 2003. A large share of these remittances in foreign exchange will be used to service the country's external debt.
The Speculative Hike in World Food Prices
In September 2010, an understanding was reached between Tunis and the IMF, which recommended the removal of remaining subsidies as a means to achieving fiscal balance:
Fiscal prudence remains an overarching priority for the [Tunisian] authorities, who also see the need for maintaining a supportive fiscal policy in 2010 in the current international environment. Efforts in the last decade to bring down the public debt ratio significantly should not be jeopardized by a too lax fiscal policy. The authorities are committed to firmly control current expenditure, including subsidies,... IMF Tunisia: 2010 Article IV Consultation - Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Tunisia
It is worth noting that the IMF's insistence on fiscal austerity and the removal of subsidies coincided chronologically with a renewed upsurge in staple food prices on the London, New York and Chicago commodity exchanges. These price hikes are in large part the result of speculative trade by major financial and corporate agribusiness interests.
These hikes in food prices, which are the result of outright manipulation (rather than scarcity) have served to impoverish people Worldwide. The surge in food prices constitutes a new phase of the process of global impoverishment.
"The media has casually misled public opinion on the causes of these price hikes, focusing almost exclusively on issues of costs of production, climate and other factors which result in reduced supply and which might contribute to boosting the price of food staples. While these factors may come into play, they are of limited relevance in explaining the impressive and dramatic surge in commodity prices.
Spiralling food prices are in large part the result of market manipulation. They are largely attributable to speculative trade on the commodity markets. Grain prices are boosted artificially by large scale speculative operations on the New York and Chicago mercantile exchanges. ...
Speculative trade in wheat, rice or corn, can occur without the occurrence of real commodity transactions. The institutions speculating in the grain market are not necessarily involved in the actual selling or delivery of grain.
The transactions may use commodity index funds which are bets on the general upward or downward movement of commodity prices. A "put option" is a bet that the price will go down, a "call option" is a bet that the price will go up. Through concerted manipulation, institutional traders and financial institutions make the price go up and then place their bets on an upward movement in the price of a particular commodity.
Speculation generates market volatility. In turn, the resulting instability encourages further speculative activity.
Profits are made when the price goes up. Conversely, if the speculator is short-selling the market, money will be made when the price collapses.
This recent speculative surge in food prices has been conducive to a Worldwide process of famine formation on an unprecedented scale." (Michel Chossudovsky, Global Famine, Global Research, May 2, 2008,

From 2006 to 2008, there was a dramatic surge in the prices of all major food staples including rice, wheat and corn. The price of rice tripled over a five year period, from approximately 600$ a ton in 2003 to more than 1800$ a ton in May 2008.
(Michel Chossudovsky,, For further details, see Michel Chossudovsky, Chapter 7 Global Poverty and the Economic Crisis in Michel Chossudovsky and Andrew Gavin Marshall, editors, The Global Economic Crisis, The Great Depression of the XXI Century, Global Research, Montreal 2010, )
The recent surge in the price of grain staples is characterized by a 32 percent jump in the FAO's composite food price index recorded in the second half of 2010.
"Soaring prices of sugar, grain and oilseed drove world food prices to a record in December, surpassing the levels of 2008 when the cost of food sparked riots around the World, and prompting warnings of prices being in "danger territory".
An index compiled monthly by the United Nations surpassed its previous monthly high – June 2008 – in December to reach the highest level since records began in 1990. Published by the Rome-based Food and Agriculture Organisation (FAO), the index tracks the prices of a basket of cereals, oilseeds, dairy, meat and sugar, and has risen for six consecutive months." (Jill Treanor, World food prices enter 'danger territory' to reach record high, The Guardian, January 5, 2011)
Bitter irony: Against a background of rising food prices, the IMF recommends the removal of the subsidies with a view to reaching the goal of fiscal austerity.
Manipulating the Data on Poverty and Unemployment
An atmosphere of social despair prevails, people's lives are destroyed.
While, the protest movement in Tunisia is visibly the direct result of a process mass impoverishment, the World Bank contends that the levels of poverty have been reduced as a result of the free market reforms adopted by the Ben Ali government.
According to the World Bank's country report, the Tunisian government (with the support of the Bretton Woods institutions) was instrumental in reducing the levels of poverty to 7 percent (substantially lower than that recorded in the US and the EU).
Tunisia has made remarkable progress on equitable growth, fighting poverty and achieving good social indicators. It has sustained an average 5 percent growth rate over the past 20 years with a steady increase in per capita income and a corresponding increase in the welfare of its population that is underscored by a poverty level of 7% that is amongst the lowest in the region.
The steady increase in per capita income has been the main engine for poverty reduction. ... Rural roads have been particularly important in helping the rural poor connect to urban markets and services. Housing programs improved the living conditions of the poor and also freed up income and savings to spend on food and non-food items with resulting positive impacts on poverty alleviation. Food subsidies, which have been targeted to the poor, albeit not optimally, have also helped the urban poor. (World Bank Tunisia - Country Brief)
These poverty figures, not to mention the underlying economic and social "analysis", are outright fabrications. They present the free market as the engine of poverty alleviation. The World Bank's analytical framework is used to justify a process of "economic repression", which has been applied Worldwide in more than 150 developing countries.
With a mere 7 percent of the population living in poverty (as suggested by the World Bank "estimate") and 93 percent of the population meeting basic needs in terms of food, housing, health and education, there would be no social crisis in Tunisia.
The World Bank is actively involved in cooking the data and distorting the social plight of the Tunisian population. The official rate of unemployment is 14 percent, the actual level of unemployment is much higher. Recorded youth unemployment is of the order of 30 percent. Social services, including health and education have collapsed under the brunt of the IMF-World Bank economic austerity measures.
Tunisia and the World
What is happening in Tunisia is part of a global economic process which destroys people's lives through the deliberate manipulation of market forces.
More generally, "the harsh economic and social realities underlying IMF intervention are soaring food prices, local-level famines, massive lay-offs of urban workers and civil servants and the destruction of social programs. Internal purchasing power has collapsed, health clinics and schools have been closed down, hundreds of millions of children have been denied the right to primary education." (Michel Chossudovsky, Global Famine, op cit.)

War, Racism and the Empire of Poverty
When Empire Hits Home
Part 1
By Andrew Gavin Marshall
URL of this article:
Global Research, March 22, 2010
At a time of such great international turmoil economically and politically, it is increasingly important to identify and understand the social dynamics of crisis. A global social crisis has long preceded the economic crisis, and has only been exacerbated by it. The great shame of human civilization is the fact that over half of it lives in abysmal poverty.
Poverty is not simply a matter of ‘bad luck’; it is a result of socio-political-economic factors that allow for very few people in the world to control so much wealth and so many resources, while so many are left with so little. The capitalist world system was built upon war, race, and empire. Malcolm X once declared, “You can’t have capitalism without racism.”
The global political economy is a system that enriches the very few at the expense of the vast majority. This exploitation is organized through imperialism, war, and the social construction of race. It is vitally important to address the relationship between war, poverty and race in the context of the current global economic crisis. Western nations have plundered the rest of the world for centuries, and now the great empire is hitting home. What is done abroad comes home to roost.
The Social Construction of ‘Race’
500 years ago, the world was going through massive transformations, as the Spanish, Portuguese, French, and British colonized the ‘New World’ and in time, a new system of ‘Capitalism’ and ‘nation states’ began to emerge. The world was in a great period of transition and systemic change in which it was the Europeans that emerged as the dominant world powers. The colonies in the Americas required a massive labour force, “Between 1607 and 1783, more than 350,000 ‘white’ bond-labourers arrived in the British colonies.”[1]
The Americas had both un-free blacks and whites, with blacks being a minority, yet they “exercised basic rights in law.”[2] Problems arrived in the form of elites trying to control the labour class. Slaves were made up of Indian, black and white labourers; yet, problems arose with this “mixed” population of un-free labour. The problem with Indian labourers was that they knew the land and could escape to “undiscovered” territory, and enslavement would often instigate rebellions and war:
The social costs of trying to discipline un-free native labour had proved too high. Natives would eventually be genocidally eliminated, once population settlement and military power made victory more or less certain; for the time being, however, different sources of bond labour had to be found.[3]
Between 1607 and 1682, more than 90,000 European immigrants, “three-quarters of them chattel bond-labourers, were brought to Virginia and Maryland.” Following the “establishment of the Royal African Company in 1672, a steady supply of African slaves was secured.” Problems became paramount, however, as the lower classes tended to be very rebellious, which consisted of “an amalgam of indentured servants and slaves, of poor whites and blacks, of landless freemen and debtors.” The lower classes were united in opposition to the elites oppressing them, regardless of background.[4]
Bacon’s Rebellion of 1676 was of particular note, as bond-labourers, black and white, rebelled against the local elites and “demanded freedom from chattel servitude.” For the colonialists, “Such images of a joint uprising of black and white, slave and bondsman, proved traumatic. In the face of a united rebellion of the lower orders, the planter bourgeoisie understood that their entire system of colonial exploitation and privilege was at risk.”[5]
In response to this threat, the landed elite “relaxed the servitude of white labourers, intensified the bonds of black slavery, and introduced a new regime of racial oppression. In doing so, they effectively created the white race – and with it white supremacy.”[6] Thus, “the conditions of white and black servants began to diverge considerably after 1660.” Following this, legislation would separate white and black slavery, prevent “mixed” marriages, and seek to prevent the procreation of “mixed-race” children. Whereas before 1660, many black slaves were not indentured for life, this changed as colonial law increasingly “imposed lifetime bondage for black servants – and, especially significant, the curse of lifetime servitude for their offspring.”[7]
A central feature of the social construction of this racial divide was “the denial of the right to vote,” as most Anglo-American colonies previously allowed free blacks to vote, but this slowly changed throughout the colonies. The ruling class of America was essentially “inventing race.” Thus, “Freedom was increasingly identified with race, not class.”[8]
It is out of this that ideas of race and later, ‘race science’ emerged, as eugenics became the dominant ideology of western elites, trying to scientifically ‘prove’ the superiority of ‘whites’ and the ‘inferiority’ of ‘blacks’. This would carry a dual nature of justifying white domination, as well as providing both a justification for and excuse to oppress black people, and in fact, people of all ‘races’. This was especially clear as in the late 1800s and early 1900s the European empires undertook the ‘Scramble for Africa’ in which they colonized the entire continent (save Ethiopia). It was largely justified as a ‘civilizing’ mission; yet, it was fundamentally about gaining access to Africa’s vast resources.
Following World War II, global power rested predominantly in America, the leading hegemon, expanding the economic interests of North America and Western Europe around the world. War, empire, and racism have been central features of this expansion. In large part, poverty has been the result. Now, the empire hits home.
Global Labour
The world has almost 6.8 billion people, half of them female. The world economy has a labour force of 3.184 billion people; of all people employed in the world, 40% are women. While the world is equally male and female, 1.8 billion men are employed, compared to 1.2 billion women. The population of people in low paying jobs, long hours, and part-time work are predominantly women.[9]
Global Poverty and Wealth
In 1999, the United Nations Development Program (UNDP) reported that, “Although 200 million people saw their incomes fall between 1965 and 1980, more than 1 billion people experienced a drop from 1980 to 1993.” In 1996, “100 countries were worse off than 15 years [prior].” In the late 1960s, “the people in well-to-do countries were 30 times better off than those in countries where the poorest 20 percent of the world's people live. By 1998, this gap had widened to 82 times (up from 61 times since 1996).” As of 1998, “3 billion people live on less than $2 per day while 1.3 billion get by on less than $1 per day. Seventy percent of those living on less than $1 per day are women.”[10]
Elites and academics, as well as major social movements in western nations focus on population growth as being the driver in global poverty, picking up from where the Malthusians left off; poverty becomes the problem caused by “population growth” as opposed to a problem caused by wealth and resource distribution. In 2003, a World Bank report revealed that, “A minority of the world's population (17%) consume most of the world's resources (80%), leaving almost 5 billion people to live on the remaining 20%. As a result, billions of people are living without the very basic necessities of life - food, water, housing and sanitation.” Further:
1.2 billion (20%) of the world population now lives on less that $1/day, another 1.8 billion (30%) lives on less than $2/day, 800 million go to bed hungry every day, and 30,000 - 60,000 die each day from hunger alone. The story is the same, when it comes to other necessities like water, housing, education etc. On the flip side, we have increasing accumulation of wealth and power, where the world's 500 or so billionaires have assets of 1.9 trillion dollars, a sum greater than the income of the poorest 170 countries in the world.[11]
Other figures from the World Bank report include the fact that, “The world's 358 billionaires have assets exceeding the combined annual incomes of countries with 45 percent of the world's people,” and “The Gross Domestic Product (GDP) of the poorest 48 nations (i.e. a quarter of the world's countries) is less than the wealth of the world's three richest people combined.” Incredibly, “A few hundred millionaires now own as much wealth as the world's poorest 2.5 billion people.”[12]
In regards to poverty and hunger statistics, “Over 840 million people in the world are malnourished—799 million of them are from the developing world. Sadly, more than 153 million of them are under the age of 5 (half the entire US population).” Further, “Every day, 34,000 children under five die of hunger or other hunger-related diseases. This results in 6 million deaths a year.” That amounts to a “Hunger Holocaust” that takes place every single year. As of 2003, “Of 6.2 billion living today, 1.2 billion live on less than $1 per day. Nearly 3 billion people live on less than $2 a day.”[13]
In 2005, according to World Bank statistics, “More than one-half of the world's people live below the internationally defined poverty line of less than U.S. $2 a day,” and “Nearly one-third of rural residents worldwide lack access to safe drinking water.”[14]
In 2006, a groundbreaking and comprehensive report released by the World Institute for Development Economics Research of the United Nations University (UNU-WIDER) reported that, “The richest 2% of adults in the world own more than half of global household wealth.” An incredible startling statistic was that:
[T]he richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.[15]
This is worth repeating: the top 1% owns 40% of global assets; the top 10% owns 85% of world assets; and the bottom 50% owns 1% of global assets.
The 2009 UN Millennium Development Goals report stated that in the wake of the global economic crisis and the global food crisis that preceded and continued through the economic crisis, progress towards the goals of poverty reduction are “threatened by sluggish – or even negative – economic growth, diminished resources, fewer trade opportunities for the developing countries, and possible reductions in aid flows from donor nations.”[16]
The Millennium Development Goals (MDGs) report stated that in 2009, “an estimated 55 million to 90 million more people will be living in extreme poverty than anticipated before the crisis.” Further, “the encouraging trend in the eradication of hunger since the early 1990s was reversed in 2008, largely due to higher food prices.” Hunger in developing regions has risen to 17% in 2008, and “children bear the brunt of the burden.”[17]
In April of 2009, a major global charity, Oxfam, reported that a couple trillion dollars given to bail out banks could have been enough “to end global extreme poverty for 50 years.”[18] In September of 2009, Oxfam reported that the economic crisis “is forcing 100 people-a-minute into poverty.” Oxfam stated that, “Developing countries across the globe are struggling to respond to the global recession that continues to slash incomes, destroy jobs and has helped push the total number of hungry people in the world above 1 billion.”[19]
The financial crisis has hit the ‘developing’ world much harder than the western developed nations of the world. The UN reported in March of 2009 that, “Reduced growth in 2009 will cost the 390 million people in sub-Saharan Africa living in extreme poverty around $18 billion, or $46 per person,” and “This projected loss represents 20 per cent of the per capita income of Africa’s poor – a figure that dwarfs the losses sustained in the developed world.”[20]
While the world’s richest regions lie in North America, Europe, and Pacific Asia respectively, the vast majority of the rest of the world lives in gross poverty. This disparity is ‘colour-coded’, too; as the top, the worlds wealthy, are white, while the world’s impoverished, the vast majority of the world’s people, are people of colour. This disparity is further polarized when gender is included, as the majority of the wealthy are men, while the majority of the impoverished are women. This disparity of a global scale is carried over to a national scale in the United States.
Race and Poverty in America
In the last months of Martin Luther King’s life, he focused his attention to the struggle against poverty. Today, “Sadly, as far as the country has come regarding civil rights, more Americans live in poverty today than during King's lifetime. Forty million people, 13% of the population, currently fall below the poverty line.” In 1967, King wrote:
In the treatment of poverty nationally, one fact stands out. There are twice as many white poor as [black] poor in the United States. Therefore I will not dwell on the experiences of poverty that derive from racial discrimination, but will discuss the poverty that affects white and [black] alike.[21]
Today, “more whites than blacks do still live in poverty, but a higher proportion of minorities fall below the poverty line, including 25% of blacks and 23% of Latinos (compared to 9% of whites). Stable jobs, good housing, comprehensive education and adequate health care are still unequal, unsuitable and, in many cases, unavailable.” King wrote, “The curse of poverty has no justification in our age. The time has come for us to civilize ourselves by the total, direct, and immediate abolition of poverty.”[22]
In 1995, “Federal Reserve research found that the wealth of the top one percent of Americans is greater than that of the bottom 95 percent.” Further, “Wealth projections through 1997 suggest that 86 percent of stock market gains between 1989 and 1997 went to the top ten percent of households while 42 percent went to the most well-to-do one percent.”[23]
Wealth disparity is not colour-blind. As of 1998, “The modest net worth of white families [was] 8 times that of African-Americans and 12 times that of Hispanics. The median financial wealth of African-Americans (net worth less home equity) [was] $200 (one percent of the $18,000 for whites) while that of Hispanics [was] zero.” Further, “Household debt as a percentage of personal income rose from 58 percent in 1973 to an estimated 85 percent in 1997.”[24]
In 2000, a major university study revealed that the poor were more likely to be audited by the IRS than the rich.[25] In December of 2009, the Seattle Times ran an article in which they tell the story of Rachel Porcaro, a 32-year-old mother of two boys. She was summoned to the IRS back in 2008 where she was told she was being audited. When she asked why, she was told that, “You made eighteen thousand, and our data show a family of three needs at least thirty-six thousand to get by in Seattle.” Thus, “They thought she must have unreported income. That she was hiding something. Basically they were auditing her for not making enough money.”[26]
The reporter for the Seattle Times wrote that, “An estimated 60,000 people in Seattle live below the poverty line — meaning they make $11,000 or less for an individual or $22,000 for a family of four. Does the IRS red-flag them for scrutiny, simply because they're poor?” He contacted the local IRS office with that question; they “said they couldn't comment for privacy reasons.” What followed the initial audit was even worse:
She had a yearlong odyssey into the maw of the IRS. After being told she couldn't survive in Seattle on so little, she was notified her returns for both 2006 and 2007 had been found "deficient." She owed the government more than $16,000 — almost an entire year's pay.
[. . . ] Rachel's returns weren't all that complicated. At issue, though, was that she and her two sons, ages 10 and 8, were all living at her parents' house in Rainier Beach (she pays $400 a month rent). So the IRS concluded she wasn't providing for her children and therefore couldn't claim them as dependents.[27]
A family friend who was an accountant determined that the IRS was wrong in its interpretation of the tax law; “He sent in the necessary code citations and hoped that would be the end of it.” But the story wasn’t over; “Instead, the IRS responded by launching an audit of Rachel's parents.” Rachel said, “We're surviving as a tribe. It seems like we got punished for that.”[28]
Taxation is a major issue related to poverty. A major report issued in November of 2009 revealed that the state of “Alabama makes families living in poverty pay higher income taxes than any other state.” Thus, “At the lowest incomes, we have some of the highest taxes in the nation because our system is upside down.”[29]
In November of 2009, stunning statistics were revealed as a true test of poverty in America:
With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children.
It has grown so rapidly in places so diverse that it is becoming nearly as ordinary as the groceries it buys. More than 36 million people use inconspicuous plastic cards for staples like milk, bread and cheese, swiping them at counters in blighted cities and in suburbs pocked with foreclosure signs.
Virtually all have incomes near or below the federal poverty line, but their eclectic ranks testify to the range of people struggling with basic needs. They include single mothers and married couples, the newly jobless and the chronically poor, longtime recipients of welfare checks and workers whose reduced hours or slender wages leave pantries bare.[30]
The food stamps program is growing at the pace of 20,000 people per day, as “There are 239 counties in the United States where at least a quarter of the population receives food stamps,” and “In more than 750 counties, the program helps feed one in three blacks. In more than 800 counties, it helps feed one in three children.” Further, “food stamps reach about two-thirds of those eligible” nationwide.[31] Thus, there is potentially 18 million more Americans eligible to use food stamps, which would make the figure soar to 54 million.
In 2008, tent cities started popping up in and around cities all across the United States, as the homeless population rapidly expanded like never before.[32] The Guardian reported in March of 2009 that, “Tent cities reminiscent of the "Hoovervilles" of the Great Depression have been springing up in cities across the United States - from Reno in Nevada to Tampa in Florida - as foreclosures and redundancies force middle-class families from their homes.”[33]
An April 2009 article in the German newspaper Der Spiegel ran a report on the middle class in the US being thrown into poverty, in which the authors wrote, “The financial crisis in the US has triggered a social crisis of historic dimensions. Soup kitchens are suddenly in great demand and tent cities are popping up in the shadow of glistening office towers.” Further:
Poverty as a mass phenomenon is back. About 50 million Americans have no health insurance, and more people are added to their ranks every day. More than [36] million people receive food stamps, and 13 million are unemployed. The homeless population is growing in tandem with a rapid rise in the rate of foreclosures, which were 45 percent higher in March 2009 than they were in the same month of the previous year.
[. . . ] The crisis in the lower third of society has turned into an existential threat for some Americans. Many soup kitchens are turning away the hungry, and even hastily constructed new facilities to house the homeless are often inadequate to satisfy the rising demand.
Many private corporations across America are withdrawing their funding for social welfare projects. Ironically, their generosity is ending just as mass poverty is returning to America.[34]
Crime was also reported to be on the rise at a dramatic rate. One criminologist explained that in the face of more Americans struggling in harsh economic times, “The American dream to them is a nightmare, and the land of opportunity is but a cruel joke.” Statistics were confirming his predictions of a rise in crisis-related crime, as April 2009 was “one of the bloodier months in American criminal history.” A professor of criminology stated, “I've never seen such a large number (of killings) over such a short period of time involving so many victims.”[35]
In the midst of the euphoria over a perceived economic recovery, which has yet to “trickle down” to the people, tent cities have not vanished. In late February of 2010, it was reported that, “Just an hour outside of New York City, a thriving tent city gives a home to refugees from the economic downturn.” Many people in poverty “have become so desperate that they have had to move into the woods.” One woman in this forest tent city outside of New York had been living there for two years. She said, “I just went through a divorce. And it was a bad divorce. And I ended up here, homeless in here.”[36]
Rob, a 21-year-old who was laid off when the Great ‘Recession’ began, is the youngest homeless man living in the forest tent city. He said the worst part is the shame, “The embarrassment of walking out of here, the cars see you come by and they know who you are. The shame of walking into town and having people give you dirty looks just for the way you’re forced to live.”[37]
While many more millions are being plunged into poverty, the internal disparities of race, gender, and age still persist. In November of 2009, it was reported that the jobless rate for 16-to-24-year-old black men has reached Great Depression proportions, as 34.5% of young black men were unemployed in October of 2009, “more than three times the rate for the general U.S. population.” Further:
The jobless rate for young black men and women is 30.5 percent. For young blacks -- who experts say are more likely to grow up in impoverished racially isolated neighborhoods, attend subpar public schools and experience discrimination -- race statistically appears to be a bigger factor in their unemployment than age, income or even education. Lower-income white teens were more likely to find work than upper-income black teens, according to the Center for Labor Market Studies at Northeastern University, and even blacks who graduate from college suffer from joblessness at twice the rate of their white peers.[38]
Another startling statistic in the report was that, “Young black women have an unemployment rate of 26.5 percent, while the rate for all 16-to-24-year-old women is 15.4 percent.” The fact that these are the statistics for young people is especially concerning, as “the consequences can be long-lasting”:
This might be the first generation that does not keep up with its parents' standard of living. Jobless teens are more likely to be jobless twenty-somethings. Once forced onto the sidelines, they likely will not catch up financially for many years. That is the case even for young people of all ethnic groups who graduate from college.[39]
With poverty, food scarcity increases. While many Americans and people the world over have felt the effects of the recession on their daily meals, the race disparity persists in this facet as well, as “one in four African-American households struggles to put food on the table on a regular basis, compared with about one in seven households nationally.” Further, “90 percent of African American children will receive food stamp benefits by the time they turn 20.”[40]
In March of 2010, a truly staggering report was released by a major economic research group which concluded that, “Women of all races bring home less income and own fewer assets, on average, than men of the same race, but for single black women the disparities are so overwhelmingly great that even in their prime working years their median wealth amounts to only $5.” Let’s review that again:
[W]hile single white women in the prime of their working years (ages 36 to 49) have a median wealth of $42,600 (still only 61 percent of their single white male counterparts), the median wealth for single black women is only $5.[41]
The research organization analyzed data from the Federal Reserve’s 2007 Survey of Consumer Finances. Wealth, or net worth, in the report, is defined as:
[T]he total of one's assets -- cash in the bank, stocks, bonds and real estate; minus debts -- home mortgages, auto loans, credit cards and student loans. The most recent financial data was collected before the economic downturn, so the current numbers likely are worse now than at the time of the study.[42]
The study further revealed that, “For all working-age black women 18 to 64, the financial picture is bleak. Their median household wealth is only $100. Hispanic women in that age group have a median wealth of $120.” Black women are more likely to be hit with the responsibility of working and raising children on their own:
In a 2008 study of black women and their money, the ING Foundation found that black women -- who frequently manage the assets of their households -- financially support friends, family and their houses of worship to a much greater degree than the general population.
They also are more likely to be employed in jobs and industries -- such as service occupations -- with lower pay and less access to health insurance. And when their working days are done, they rely most heavily on Social Security because they are less likely to have personal savings, retirement accounts or company pensions. Their Social Security benefits are likely to be lower, too, because of their low earnings.[43]
The poor youth of America are also disproportionately subject to racial exacerbations of their social situations. In America, “more than half of all young adult dropouts are jobless. And dropouts are at greater risk of being incarcerated and having poorer physical and mental health than those who graduate.” Again, the racial disparity emerges, as “[p]oor and minority youths are far less likely to graduate from high school than white children.”
An October 2009 report released by the National Center for Education Statistics says 59.8 percent of blacks, 62.2 percent of Hispanics, and 61.2 percent of American Indians graduated from public high school in four years with a regular diploma in the 2006-2007 school year compared to 79.8 percent for whites and 91.2 percent for Asian and Pacific Islanders. Black and Hispanic dropout rates were more than twice those of white youths.[44]
Many youths then venture into crime to survive. It is here where another racial divide rears its head in a clear example of how Justice is not blind, but sees in technicolour. The incarceration rate, that is, the prison rate of Americans is colour-coded. Black men are incarcerated “at a rate that is over 6 times higher than that for white males.” While black Americans make up 13% of the US population, they make up 40% of the US prison population. Meanwhile, whites make up 66% of the US population, yet only 34% of the prison population. Hispanics make up 15% of the U.S. population, and account for 20% of the prison population.[45]
The poor youth are subject to further insults, as new federally funded drug research revealed a startling and bleak disparity: poor children who are dependent upon Medicaid, a government health program for low-income families, “are given powerful antipsychotic medicines at a rate four times higher than children whose parents have private insurance.” Further, these children, the poor children, “are more likely to receive the drugs for less severe conditions than their middle-class counterparts.” A research team from Rutgers and Columbia posed the question:
Do too many children from poor families receive powerful psychiatric drugs not because they actually need them — but because it is deemed the most efficient and cost-effective way to control problems that may be handled much differently for middle-class children?[46]
The effects are not simply psychological, as “Antipsychotic drugs can also have severe physical side effects, causing drastic weight gain and metabolic changes resulting in lifelong physical problems.” Ultimately, what the research concluded was that, “children with diagnoses of mental or emotional problems in low-income families are more likely to be given drugs than receive family counseling or psychotherapy.”[47]
A study published in the Canadian Journal of Psychiatry revealed that, “Children and youth on certain antipsychotic medications are more prone to getting diabetes and becoming fat,” and that, “the medication has significant and worrying side-effects.”[48] In America, the prescribing of anti-psychotic drugs to children rose five-fold between 1995 and 2002 to roughly 2.5 million.[49]
Thus, we have a situation in which the poor are treated in such a way as to dehumanize them altogether; to deprive them not simply of life’s necessities, but to then use them as guinea pigs and to punish them for their poverty. Hubert Humphrey once said, “A society is ultimately judged by how it treats its weakest and most vulnerable members.” How shall our societies be thus judged?
War and Poverty
It is to our own detriment that we fail to see the relationship between war and poverty both on a national and global level. War is the most violent and oppressive tool used by the powerful to control people and resources. The industry of war profits very few at the expense of the majority; it does not simply impoverish the nation that is attacked, but impoverishes the nation that is attacking.
In April of 1967, one year before Martin Luther King, Jr. was assassinated, he delivered a speech entitled, “Beyond Vietnam: A Time to Break Silence.” This speech is one of King’s lesser known, yet arguably, one of his most important. While reading the text of the speech does it no justice to the words spoken from King’s mouth in his magnanimous manner, they are worth reading all the same. Dr. King declared that, “A time comes when silence is betrayal. That time has come for us in relation to Vietnam.” His words are as significant today as the day they were spoken, and are worth quoting at some length:
Even when pressed by the demands of inner truth, men do not easily assume the task of opposing their government's policy, especially in time of war. Nor does the human spirit move without great difficulty against all the apathy of conformist thought within one's own bosom and in the surrounding world. [. . . ]
Over the past two years, as I have moved to break the betrayal of my own silences and to speak from the burnings of my own heart, as I have called for radical departures from the destruction of Vietnam, many persons have questioned me about the wisdom of my path. At the heart of their concerns this query has often loomed large and loud: Why are you speaking about war, Dr. King? Why are you joining the voices of dissent? Peace and civil rights don't mix, they say. Aren't you hurting the cause of your people, they ask? And when I hear them, though I often understand the source of their concern, I am nevertheless greatly saddened, for such questions mean that the inquirers have not really known me, my commitment or my calling. Indeed, their questions suggest that they do not know the world in which they live.
[. . . ] I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic destructive suction tube. So I was increasingly compelled to see the war as an enemy of the poor and to attack it as such.
Perhaps the more tragic recognition of reality took place when it became clear to me that the war was doing far more than devastating the hopes of the poor at home. It was sending their sons and their brothers and their husbands to fight and to die in extraordinarily high proportions relative to the rest of the population. We were taking the black young men who had been crippled by our society and sending them eight thousand miles away to guarantee liberties in Southeast Asia which they had not found in southwest Georgia and East Harlem. So we have been repeatedly faced with the cruel irony of watching Negro and white boys on TV screens as they kill and die together for a nation that has been unable to seat them together in the same schools. So we watch them in brutal solidarity burning the huts of a poor village, but we realize that they would never live on the same block in Detroit. I could not be silent in the face of such cruel manipulation of the poor.
My third reason moves to an even deeper level of awareness, for it grows out of my experience in the ghettoes of the North over the last three years -- especially the last three summers. As I have walked among the desperate, rejected and angry young men I have told them that Molotov cocktails and rifles would not solve their problems. I have tried to offer them my deepest compassion while maintaining my conviction that social change comes most meaningfully through nonviolent action. But they asked -- and rightly so -- what about Vietnam? They asked if our own nation wasn't using massive doses of violence to solve its problems, to bring about the changes it wanted. Their questions hit home, and I knew that I could never again raise my voice against the violence of the oppressed in the ghettos without having first spoken clearly to the greatest purveyor of violence in the world today -- my own government. For the sake of those boys, for the sake of this government, for the sake of hundreds of thousands trembling under our violence, I cannot be silent.
[. . . ] In 1957 a sensitive American official overseas said that it seemed to him that our nation was on the wrong side of a world revolution. During the past ten years we have seen emerge a pattern of suppression which now has justified the presence of U.S. military "advisors" in Venezuela. This need to maintain social stability for our investments accounts for the counter-revolutionary action of American forces in Guatemala. It tells why American helicopters are being used against guerrillas in Colombia and why American napalm and green beret forces have already been active against rebels in Peru. It is with such activity in mind that the words of the late John F. Kennedy come back to haunt us. Five years ago he said, "Those who make peaceful revolution impossible will make violent revolution inevitable."
Increasingly, by choice or by accident, this is the role our nation has taken -- the role of those who make peaceful revolution impossible by refusing to give up the privileges and the pleasures that come from the immense profits of overseas investment.
I am convinced that if we are to get on the right side of the world revolution, we as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a "thing-oriented" society to a "person-oriented" society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.
[. . . ] A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.
[. . . ] The choice is ours, and though we might prefer it otherwise we must choose in this crucial moment of human history.[50]
After delivering such a monumental speech against war and empire, King was attacked by the national media; with Life Magazine calling the speech, “demagogic slander that sounded like a script for Radio Hanoi,” and the Washington Post saying that, “King has diminished his usefulness to his cause, his country, his people.”[51]
War is inextricably linked to the impoverishment of people around the world and at home. Inherent within the system of war, racial divides and exploitation are further exacerbated.
In the midst of the economic crisis, military recruitment went up, as the newly unemployed seek job security and an education. A Pentagon official said in October of 2008 that, “We do benefit when things look less positive in civil society,” as “185,000 men and women entered active-duty military service, the highest number since 2003, according to Pentagon statistics. Another 140,000 signed up for duty in the National Guard and reserve.”[52]
In November of 2008, the British Ministry of Defence (MoD) reported that recruitment into the military had increased by over 14% as a result of the economic crisis. Interestingly, “The north of England, where the credit crunch has hit hard, is among the areas where the MoD says recruitment is at its strongest.”[53]
In 2005, it was reported that the Pentagon had developed a database of teenagers 16-18 and all college students “to help the military identify potential recruits in a time of dwindling enlistment.” Further, according to the Washington Post, “The new database will include personal information including birth dates, Social Security numbers, e-mail addresses, grade-point averages, ethnicity and what subjects the students are studying.”[54]
The American Civil Liberties Union (ACLU) released a report in 2008, which revealed that there is a dangerous trend in recruiting youth in the United States. Recruitment of youth 16 and younger is prohibited in the United States, however:
[T]he U.S. armed services regularly target children under 17 for military recruitment. The U.S. military heavily recruits on high school campuses, targeting students for recruitment as early as possible and generally without limits on the age of students they contact. Despite a lawsuit challenging its identification of eleventh-grade high school students for recruitment, the Department of Defense’s central recruitment database continues to collect information on 16-year-olds for recruitment purposes.[55]
Various Army programs and recruitment services target students as young as 11, which includes a video game used as a tool for Army recruitment “explicitly marketed to children as young as 13.” Further, “The U.S. military’s recruitment policies, practices, and strategies explicitly target students under 17 for recruitment activities on high school campuses.”[56]
In 2007, prior to the economic crisis, it was reported that, “nearly three quarters of those killed in Iraq came from towns where the per capita income was below the national average.” Further, “More than half came from towns where the percentage of people living in poverty topped the national average.” The war casualties have disproportionately affected rural American towns, which make up the majority of military recruits. Interestingly, between “1997 to 2003, 1.5 million rural workers lost their jobs due to changes in industries like manufacturing that have traditionally employed rural workers.”[57] Now, they make up the majority of war casualties. War and poverty are inherently related in this example: the most impoverished suffer the most in war.
In 2007, it was further reported that more than 30,000 foreign troops are enlisted in the US Army, being recruited to join from foreign nations such as Mexico in return for being granted US citizenship.[58] In 2005, whites made up 80% of Army recruits, while blacks made up 15% of recruits. In 2008, whites made up 79%, while blacks made up 16.5% of Army recruits. However, an interesting statistic is that between 2007 and 2008, there was a 5% increase in the recruit of whites, while over the same period there was nearly a 96% increase in the recruitment of blacks. In 2008, 52% of recruits were under the age of 21. For the fifth year in a row, as of 2008, “youth from low- to middle-income neighborhoods are over-represented among new Army recruits.”[59]
In March of 2008, The Nation published an article entitled “The War and the Working Class,” in which it explained that the American military operated under an “economic draft,” as “Members of the armed forces come mainly and disproportionately from the working class and from small-town and rural America, where opportunities are hard to come by.”[60] This was even before the economic crisis had really started to be noticed in the United States.
In January of 2009 it was reported that, “The Army and each of the other branches of the military are meeting or exceeding their goals for signing up recruits, and attracting more qualified people.”[61] In March of 2009, it was reported that, “Fresh recruits keep pouring into the U.S. military, as concerns about serving in Iraq and Afghanistan are eclipsed by the terrible civilian job market.” All branches of the armed forces “met or exceeded their active duty recruiting goals for January, continuing a trend that began with a decline in the U.S. job market.”
The military acknowledged that weakness in the U.S. economy, which lost 2.6 million jobs in 2008 and another 598,000 in January, has made the armed services more appealing to potential recruits.[62]
It was reported in October of 2009 that due to the economic crisis, “Middle-class American youth are entering the military in significant numbers,” as the Department of Defense announced “that for the first time since the draft ended and the all-volunteer force began 36 years ago, every service branch and reserve component met or exceeded its recruiting goals, both in numbers and quality.” As the economic crisis “resulted in the largest and the swiftest increase in overall unemployment that we've ever experienced,” this created a boom for military recruiting.[63]
In December of 2009 it was reported that with a record number of college graduates unable to find work, recruitment soared to record levels, even in the midst of President Obama announcing the deployment of an additional 30,000 troops to Afghanistan. As one commentator put it:
The United States is broken – school systems are deteriorating, the economy is in shambles, homelessness and poverty rates are expanding – yet we’re nation-building in Afghanistan, sending economically distressed young people over there by the tens of thousands at an annual cost of a million dollars each.[64]
In January of 2010 it was reported by the military that many Marines nearing the end of their active duty are reconsidering re-enlisting due to the severe economic situation. According to the U.S. Department of Labor in November of 2009, there were 15.4 million unemployed people in the United States, with the unemployment rate hitting 10%. “Employment fell in construction, manufacturing and information industries, while jobs in temporary help services and health care increased.” Thus, the unemployment figures are somewhat deceiving, as it doesn’t take into account all the people that only rely upon part-time jobs, as “People working part-time jobs for economic reasons numbered 9.2 million. These individuals worked part-time because their hours at another job had been cut back or they were unable to find a full-time job.” Hence, “Marines reenlist for numerous economic reasons.”[65]
In 2007, Obama campaigned on a promise to increase defense spending, and that he wanted the American military to “stay on the offense, from Djibouti to Kandahar,” from Africa to Afghanistan. Obama proclaimed his belief that “the ability to put boots on the ground will be critical in eliminating the shadowy terrorist networks we now face,” and he said that, “no president should ever hesitate to use force -- unilaterally if necessary,” not simply to “protect ourselves,” but also to protect America’s “vital interests.”[66]
Sure enough, Obama followed through on those promises. Obama increased defense spending from the previous year. Alone, the United States spends almost as much on its military as the rest of the world combined, including seven times the amount as the next largest defense spender, China.[67]
In October of 2009, Obama signed the largest-ever bill for military spending, amounting to $680 billion. At the same time, he authorized a spending bill of $44 billion for the Department of Homeland Security. A sad irony was that, “Obama signed the record Pentagon budget less than three weeks after receiving the Nobel Peace Prize.”[68]
In February of 2010, Obama asked Congress to approve a new record-setting defense budget, at $708 billion.[69] Interestingly, “the Pentagon budget increased for every year of the first decade of the 21st century, an unprecedented run that didn't even happen in the World War II era, much less during Korea or Vietnam.” Further, “if the government's current plans are carried out, there will be yearly increases in military spending for at least another decade.”[70]
As Eric Margolis wrote in February of 2010:
Obama’s total military budget is nearly $1 trillion. This includes Pentagon spending of $880 billion. Add secret black programs (about $70 billion); military aid to foreign nations like Egypt, Israel and Pakistan; 225,000 military “contractors” (mercenaries and workers); and veterans’ costs. Add $75 billion (nearly four times Canada’s total defence budget) for 16 intelligence agencies with 200,000 employees.
[. . . ] China and Russia combined spend only a paltry 10% of what the U.S. spends on defence.
There are 750 U.S. military bases in 50 nations and 255,000 service members stationed abroad, 116,000 in Europe, nearly 100,000 in Japan and South Korea.
Military spending gobbles up 19% of federal spending and at least 44% of tax revenues. During the Bush administration, the Iraq and Afghanistan wars — funded by borrowing — cost each American family more than $25,000
Like Bush, Obama is paying for America’s wars through supplemental authorizations ­— putting them on the nation’s already maxed-out credit card. Future generations will be stuck with the bill.[71]
Thus, the American Empire is in decline, spending itself into utter debt and is at the point of “imperial overreach.” As Eric Margolis wrote, “If Obama really were serious about restoring America’s economic health, he would demand military spending be slashed, quickly end the Iraq and Afghan wars and break up the nation’s giant Frankenbanks.”[72]
So, while people at home are on food stamps, welfare, living in tent cities, going to soup kitchens, getting by on debt, and losing their jobs; America sends forces abroad, conducting multiple wars in Iraq and Afghanistan, expanding the war into Pakistan, funding military operations in Yemen, Somalia, Uganda, building massive new military bases in Pakistan and Colombia and providing military aid to governments around the world. As the empire expands, the people become more impoverished.
We cannot afford to ignore the relationship between war, poverty and race. The poor are made to fight the poor; both are often disproportionately people of colour. Yet war enriches the upper class, at least powerful sects of it in industry, the military, oil and banking. In a war economy, death is good for business, poverty is good for society, and power is good for politics. Western nations, particularly the United States, spend hundreds of billions of dollars a year to murder innocent people in far-away impoverished nations, while the people at home suffer the disparities of poverty, class, gender and racial divides. We are told we fight to “spread freedom” and “democracy” around the world; yet, our freedoms and democracy erode and vanish at home. You cannot spread what you do not have. As George Orwell once wrote:
The war is not meant to be won, it is meant to be continuous. Hierarchical society is only possible on the basis of poverty and ignorance. This new version is the past and no different past can ever have existed. In principle the war effort is always planned to keep society on the brink of starvation. The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia, but to keep the very structure of society intact.
[1] David McNally, Another World is Possible: Globalization and Anti-Capitalism. Arbeiter Ring Publishing, 2006: page 149
[2] Ibid, page 150
[3] Ibid, pages 151-152
[4] Ibid, pages 152-153
[5] Ibid, page 153
[6] Ibid, pages 153-154
[7] Ibid, pages 154-155
[8] Ibid, page 155
[9] ILO, Women in labour markets: Measuring progress and identifying challenges. International Labour Organization, March 2010: pages 20-21
[10] Jeff Gates, Statistics on Poverty and Inequality. Global Policy Forum: May 1999:
[11] Social & Economic Injustice, World Centric, 2004:
[12] Ibid.
[13] Ibid.
[14] PRB, PRB's 2005 World Population Data Sheet Reveals Persisting Global Inequalities in Health and Well-Being. Population Reference Bureau, 2005:
[15] GPF, Press Release: Pioneering Study Shows Richest Own Half World Wealth. Global Policy Forum: December 5, 2006: [16] UN, The Millennium Development Goals Report 2009. United Nations, New York, 2009: page 4
[17] Ibid.
[18] G20 Summit: Bank bailout would end global poverty, says Oxfam. The Telegraph: April 1, 2009:
[19] Press Release, 100 people every minute pushed into poverty by economic crisis. Oxfam International: September 24, 2009:
[20] Press Release, Financial crisis to deepen extreme poverty, increase child mortality rates – UN report. UN News Center: March 3, 2009:
[21] Josie Raymond, MLK's Last Goal: Eradicating Poverty. Poverty in America: January 18, 2010:
[22] Ibid.[23] Jeff Gates, Statistics on Poverty and Inequality. Global Policy Forum: May 1999:
[24] Ibid.[25] David Cay Johnston, I.R.S. MORE LIKELY TO AUDIT THE POOR AND NOT THE RICH. The New York Times: April 16, 2000:
[26] Danny Westneat, $10 an hour with 2 kids? IRS pounces. Seattle Times: December 6, 2009:
[27] Ibid.
[28] Ibid.
[29] Phillip Rawls, Study: Alabama Income Tax on Working Poor Harshest. ABC news: November 4, 2009:
[30] Robert Gebeloff, Food Stamp Use Soars, and Stigma Fades. The New York Times: November 28, 2009:
[31] Ibid.[32] AP, In hard times, tent cities rise across the country. MSNBC: September 18, 2008:
[33] Oliver Burkeman, US tent cities highlight new realities as recession wears on. The Guardian: March 26, 2009:
[34] Gregor Peter Schmitz and Gabor Steingart, Crisis Plunges US Middle Class into Poverty. Der Spiegel: April 23, 2009:,1518,620754,00.html
[35] Ibid.[36] RT, Unemployed New Yorkers find a new home in the woods. Russia Today: February 24, 2010:
[37] Ibid.[38] V. Dion Haynes, Blacks hit hard by economy's punch. The New York Times: November 24, 2009:
[39] Ibid.[40] Greg Plotkin, A Quarter of All African Americans Are Hungry. Poverty in America: February 25, 2010:
[41] Time Grant, Study finds median wealth for single black women at $5. The Pittsburgh Post-Gazette: March 9, 2010:
[42] Ibid.
[43] Ibid.
[44] Marian Wright Edelman, Children Drop Out and Into Lives of Poverty and Imprisonment. Poverty in America: January 22, 2010:
[45] Bureau of Justice Statistics, Prison Inmates at Midyear 2008 – Statistical Tables, March 2009 (Revised 4/8/09):
[46] Duff Wilson, Poor Children Likelier to Get Antipsychotics. The New York Times: December 11, 2009:
[47] Ibid.
[48] Kelly Sinoski, Children on antipsychotic drugs more prone to diabetes: Canadian study. The Vancouver Sun: November 11, 2009:
[49] AP, Anti-psychotic drug use in kids skyrockets. MSNBC: March 16, 2006:
[50] Rev. Martin Luther King, Beyond Vietnam: A Time to Break Silence. Speech delivered by Dr. Martin Luther King, Jr., on April 4, 1967, at a meeting of Clergy and Laity Concerned at Riverside Church in New York City:
[51] Jeff Cohen and Norman Solomon, The Martin Luther King You Don't See on TV. FAIR: January 4, 1995:
[52] David Morgan, Financial crisis could aid military recruitment. Reuters: October 10, 2008:
[53] Simon Johnson, Armed Forces enjoy recruitment surge thanks to the credit crunch. The Telegraph: November 30, 2008:
[54] Jonathan Krim, Pentagon Creating Student Database. The Washington Post: June 23, 2005:
[55] ACLU, Soldiers of Misfortune. American Civil Liberties Union: May 13, 2008: page 8:
[56] Ibid, pages 8-9[57] AP, Rural America bears scars from Iraq war. MSNBC: February 20, 2007:
[58] Cordula Meyer, US Army Lures Foreigners with Promise of Citizenship. Der Spiegel: October 19, 2007:,1518,512384,00.html
[59] NPP, Army Recruitment in FY 2008: A Look at Age, Race, Income, and Education of New Soldiers. National Priorities Project, 2008:
[60] Michael Zweig, The War and the Working Class. The Nation: March 13, 2008:
[61] AP, Bad economy makes for more military recruits. MSNBC: January 19, 2009:
[62] Aaron Smith, Military recruitment surges as jobs disappear. CNN Money: March 16, 2009:
[63] Tom Philpott, Weak Economy Draws Middle-Class Recruits., October 22, 2009:,15240,204238,00.html
[64] Nicholas Kimbrell, US army recruitment booms as economy slumps. The National: December 4, 2009:
[65] Lance Cpl. Antwain J. Graham, U.S. economy makes Marines consider re-enlistment options more seriously. Marines in Japan: January 15, 2010:
[66] Robert Kagan, Obama the Interventionist. The Washington Post: April 29, 2007:
[67] Glen Greenwald, The "defense cut" falsehood from The Washington Post and Robert Kagan. Salon: February 3, 2009:
[68] Patrick Martin, Obama signs bills for record Pentagon, Homeland Security spending. World Socialist Web Site: October 30, 2009:
[69] Andrea Shalal-Esa, UPDATE 1-Obama seeks record $708 bln in 2011 defense budget. Reuters: February 1, 2010:
[70] William D. Hartung, Obama and the Permanent War Budget. Foreign Policy in Focus: December 22, 2009:
[71] Eric Margolis, Wars sending U.S. into ruin. The Toronto Sun: February 5, 2010:
[72] Ibid.
Andrew Gavin Marshall is a Research Associate with the Centre for Research on Globalization (CRG). He is currently studying Political Economy and History at Simon Fraser University.
Growing Poverty and Despair in America
By Stephen Lendman
URL of this article:
Global Research, August 26, 2009
In 1962, Michael Harrington's "The Other America" exposed the nation's dark underside enough for John Kennedy to ask his Council of Economic Advisor chairman, Walter Heller, to look into the problem and for Lyndon Johnson to say (on January 8, 1964) that his administration "today, here and now, declares unconditional war on poverty in America."
In fact, it was little more than a skirmish that fell way short of addressing the real problem in the world's richest nation. Today it's even greater and increasing exponentially under a president who, unlike Johnson, declared war on the poor and disadvantaged to favor privilege over growing needs and essential social change.
In his book, Harrington wrote:
"In morality and in justice every citizen should be committed to abolishing the other America, for it is intolerable that the richest nation in human history should allow such needless suffering. But more than that, if we solve the problem of the other America we will have learned how to solve the problems of all of America." Sadly, we didn't then nor have we now.
Perhaps more than anything, increasing homelessness and hunger highlight the growing problem as, in the face of deteriorating economic conditions and growing human needs, administration policies are indifferent, counterproductive, uncaring and hostile.
In December 2008, Reuters reported that "Homelessness and demand for emergency food are rising in the United States as the economy founders," according to a December 2008 US Conference of Mayor's Task Force on Hunger and Homelessness survey of 25 American cities. Chief causes cited were growing poverty, unemployment, and unaffordable housing costs with greater than ever expected challenges in 2009. At the time, it was reported that "Cities continue to develop aggressive strategies to prevent homelessness" and provide other essential services, but that was then and this is now.
An Epidemic of State Budget Shortfalls
As economic conditions deteriorate, the Center on Budget and Policy Priorities (CBPP)'s July 29 report highlighted the growing problem. Titled "New Fiscal Year Brings No Relief from Unprecedented State Budget Problems," it cited the following issues:
-- at least 48 states "addressed or still face shortfalls in (their FY 2010) budgets," the result of "the worst decline in tax receipts in decades;"
-- at issue is a $163 billion deficit or 24% of their budgets, and these numbers keep rising as conditions worsen;
-- at least 33 states "already anticipate" 2011 deficits that may exceed 2010 ones; and
-- for FYs 2010 and 2011, shortfalls of at least $350 billion are expected, and FY 2012 may bring little or no relief.
In response, deep social service cuts are being implemented, putting the burden on vulnerable Americans to cope and survive. The situation is grave and worsening with at least 21 states cutting "low-income children's or families' eligibility for health insurance or reduce their access to health care services."
Elderly and disabled persons programs are also being reduced or eliminated. So are services for home and child care, rehabilitation, and other essential needs for the poor and low-income households. The most vulnerable of all are affected, yet more cuts are expected as new budget pressures arise.
Pre-school, K-12, and higher education cuts are being made as well. Public payrolls and hours worked are being slashed, exacerbating the growing unemployment problem, worse still by cutting pay for the still-employed. Tax increases may also be considered at the worst possible time.
"Expenditure cuts and tax increases are problematic policies during an economic downturn because they reduce overall demand and can make the downturn deeper. When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals."
Demand is then reduced because households have less to spend. As a result, the economic crisis deepens. CBPP said federal assistance is crucial, yet the Obama administration declined while providing trillions to Wall Street and other corporate favorites. That's the state of governance in America today under Republican and Democrat administrations, each no different from the other.
Hunger in America
On its web site, Feeding America (formerly America's Second Harvest) said in "the land of plenty," one in eight Americans (meaning millions) face growing hunger problems, and not just the poor and unemployed. They're "often hard-working adults, children and seniors who simply cannot make ends meet" and have to forego meals at times, even for days.
Hunger and Poverty Facts
-- in (pre-crisis) 2007, 37.5 million people were impoverished; they comprised:
-- 12.5% of the population and 9.8% of families;
-- 20.3 million or 10.9% of people aged 18 - 64;
-- 13.3 million or 18% of children under age 18; and
-- 3.7 million or 9.7% of seniors aged 65 or older who benefit from Social Security and Medicare.
In addition:
-- 36.2 million Americans are food insecure, including 12.4 million children;
-- they comprise 13 million or 11.1% of households;
-- 4.7 million households experience "very low food security" meaning hunger is a persistent problem;
-- households with children have double the food insecurity as ones with none;
-- single women-headed households are worst off with 30.2% of them insecure; and
-- 53.9% of food-insecure households rely on one or more of the following federal programs - food stamps, the National School Lunch Program, and the Special Supplement Nutrition Program for Women, Infants and Children (WIC); in addition, Feeding America (in 2007) provided emergency food aid to about 25 million low-income people, 8% more than in 2001.
On August 6, the US Department of Agriculture reported a record 34.4 million Americans (one in nine) receiving food stamps in May as unemployment keeps surging. It was the sixth consecutive monthly record, and every state showed an increase as economic conditions worsen.
On September 10, the Commerce Department will release 2008 census data expected to show around another 1.5 million people added to the poverty rolls over 2007 figures - a total of nearly 39 million representing 12.7% of Americans. According to Rebecca Blank, Economic Affairs Undersecretary, final numbers aren't yet in and may be worse than expected because of how bad things are for growing numbers in the country. She believes if (U-3) unemployment hits 10% (up from 9.4% now), poverty could reach 14.8% this year and rising because of jobs and homes lost, savings exhausted, and the sharpest ever decline in personal wealth between mid-2007 and December 2008.
Worst of all, conditions for most people are deteriorating as businesses, states, and local governments shed workers and cut budgets at the worst possible time. It promises harder times ahead and potentially millions more impoverished.
Homelessness Facts
Annually, two - three million Americans, including 1.3 million children, experience homelessness and many more are at risk. Most vulnerable are those losing jobs, homes, and the millions of low-income workers paying 50% or more of their income in rent so that a missed paycheck, health emergency, or unexpected financial burden makes them vulnerable to homelessness at a time government aid is being cut.
Criminalizing the Homeless
In the face of a growing burden on society's most needy, the National Law Center on Homelessness and Poverty reported that "many cities use the criminal justice system to punish people living on the street for doing" what they must to survive. Local ordinances prohibit sleeping, camping, eating, sharing food, sitting, loitering, and/or begging in public places with criminal penalties imposed on offenders. Some cities even punish organizations and individuals for helping, and the idea always is to keep the unwanted out of sight, mind, and preferably out of cities, at least in or near more affluent areas or business districts.
As economic conditions deteriorate, the problem will grow and so will the plight of the homeless as cities crack down harder in violation of constitutional and international human rights laws.
The OECD's 2008 Report, "Growing Unequal?: Income Distribution and Poverty in OECD Countries
It states that America "is the country with the highest inequality level and poverty rate" among the 30 OECD countries, ranking only ahead of Mexico and Turkey. In addition, since 2000, inequality grew rapidly, "continuing a long-term trend (going) back to the 1970s" when inflation-adjusted household incomes began falling. Other data cited includes:
-- the gap between rich and middle and poorer income groups widened;
-- government redistribution of income "plays a relatively minor role in the United States," partly because social service spending is low and falling; in 2008 America, it was 9% of household incomes compared to 22% on average in OECD countries;
-- social mobility in America is low, and children of poor families are less likely to become rich; and
-- "wealth is distributed much more unequally than income: the top 1% controls some 25 - 33% of total net worth and the top 10% holds 71%;" other estimates place these disparities much higher and widening as social inequalities increase, high-paying jobs disappear, the middle class keeps shrinking, poverty grows, and federal and state governments cut essential services in the face of increasing need among greater numbers of people.
The Working Poor Keep Getting Poorer
The Working Poor Families Project October 2008 study highlighted similar problems from 2002 through 2006. Titled "Still Working Hard, Still Falling Short: New Findings on the Challenges Confronting America's Working Families," it reported:
-- jobs paying poverty-level wages rose by 4.7 million;
-- low-income working families (earning less than double the Census definition of poverty) increased by 350,000;
-- below poverty-level jobs rose to 29.4 million and comprise 22% of all jobs compared to 19% in 2002;
-- most disturbing is that this happened during a period of economic growth, but at the same time wages haven't kept pace with the cost of living;
-- low income family numbers rose to nearly 9.6 million or 28% of the population;
-- children in them number 21 million;
-- 72% of low-income families with working adults in them performed the equivalent of one and one-quarter jobs - a far greater burden than in other OECD countries; and
-- income inequality is highest in New York; California is fourth, but all states are in a race to the bottom as conditions deteriorate everywhere, so all rankings are disturbing compared to the late 1990s.
The US Labor Department's latest productivity report highlights the plight of workers even more. It rose 6.4% in Q 2, the largest gain since 2003, while workers' compensation fell sharply, 2.2% on an annualized basis. According to Mark Vitner of Wells Fargo Bank, the productivity increase "is almost entirely the result of cost-cutting, not improved ways of producing goods and providing services." It also shows how powerless workers are at a time of massive job cuts, so staying employed takes precedence over wages paid and benefits. The result is profits up, pay down, benefits disappearing, and American workers transitioning to serfs.
More confirmation comes from the latest Internal Revenue Service statistics for 2007 showing that the income disparity between the top 10% and bottom 90% reached "a higher level than any other year since 1917 and even surpasses 1928, the peak of the stock market bubble in the 'roaring' 1920s," according to data from University of California economist Emmanuel Saez. He noted that "2007 was an incredibly good year for the super rich" and added:
"Based on the US historical record, falls in income concentration due to recessions are temporary unless drastic policy changes such as financial regulation or significantly more progressive taxation are implemented and prevent income concentration from coming back."
But these are no ordinary times as the US sinks slowly into depression. The super-rich are exploiting it to their advantage, while millions of working Americans are losing jobs, homes, benefits, savings, futures, and safety net protections. The 2007 data reflected the peak of the current cycle. What's ahead will be far more grim, disturbing, and reflective of an America that is no more.
The Economic Policy Institute's (EPI) State of Working America - 2008/2009
As the economy contracted in 2008, job losses and unemployment accelerated, but EPI's report missed the worst of it from early 2009 to the present. It cited:
-- wages losing ground to inflation;
-- high energy costs;
-- the burst housing bubble;
-- millions of defaults on home loans followed by foreclosures;
-- declining financial markets and frozen credit;
-- less health care coverage and fewer higher-paying jobs with good benefits; and
-- "for the first time since the mid-1940s, the real incomes of middle-class families are lower at the end of this business cycle than they were when it started;" as a result, "prosperity is eluding working families" as they fall further behind, now more than ever as depression takes hold.
EPI calls family income "the core building block of American living standards." Yet during the last business cycle, significant productivity growth was accompanied by stagnant or falling real incomes. "That has never happened before." The latest economic recovery bypassed the middle class and created greater income inequality. The Bush administration's tax cuts exacerbated the problem by helping the top 1% mostly, the middle class marginally, and low-income families not at all.
Clear racial disparities show whites consistently better off than blacks and Hispanics, men doing better than women, huge class distinctions, and mobility up the income ladder bypasses most at lower levels. One study showed that about 60% of families starting out in the bottom fifth stratum were still there a decade later. At the same time, over half the top income ones kept their position.
EPI concludes that "where you start out in the income scale has a strong influence (over) where you end up (so) the rate of economic mobility is low" in the richest country in the world where the select few alone benefit. All others lose out as their incomes don't keep pace with inflation and their living standards erode.
Another study implies that a poor family of four with two children needs nine to 10 generations to reach middle-income status. It means where you're born is where you'll stay. So-called rags-to-riches tales are just folklore, and stagnant or downward mobility today is more serious than ever.
Wages and salaries comprise three-fourths of family income, and for the middle class, it's even higher. Yet since 2002, they didn't grow at all despite historically high productivity, meaning business benefitted, not workers who fell further behind. Women and minorities fare worst plus everyone in lower income categories. During the 2002 - 07 recovery, no progress was made "in reducing the share of workers with low earnings (in) all race/ethnic groups and for both genders....The very highest earners have done considerably better than other workers for at least (the past) 30 years, but they (did) extraordinarily well over the last 10 years."
In addition, eroding "employer-provided benefits, most notably pensions and health insurance, is an important aspect of the deterioration in job quality (and economic security) for many workers." Most harmed are young workers facing bleak prospects, older ones losing jobs and not wanted, and the erosion of unionization since the 1950s, especially since the late 1970s.
Overall, 2002 - 07 growth was a jobless recovery followed by the subsequent wiping out of five years of modest gains. From 2000 - 2007, average annual job growth was an anemic 0.6%, well below the 1990s 1.8% figure. In addition, the unemployment rate rose 0.7% from March 2001 (the last business cycle's peak) to December 2007 even though average workers age increased and the labor force participation rate shrank - "both of which should have put downward pressure on the" unemployment rate. The great American job creation machine faltered badly in the new millennium and now has collapsed.
Net family wealth also determines household well-being, particularly from income and financial assets, including real estate. Yet in America, the top 1% controls more than the bottom 90% combined and the disparity is growing. In 1962, the bottom 80%'s share was 19.1%. In 2004, it was 15.3%, the difference shifting to the top 5%.
In addition, until the current downturn, average household debt grew much faster than income, fueled by increases in mortgages, home equity loans, and high credit card balances. Since the housing bubble burst and home prices collapsed, the damage done has been enormous with still more to come.
The result is growing poverty levels as discussed above with numbers increasing as economic conditions weaken. "The backsliding against poverty in the 2000s is most notable among the least advantaged," especially blacks, Hispanics, mother-only families, and the poor unable to keep pace.
It shows up in inequality in health security in the form of inadequate or no insurance, lower life expectancies for poor and lower income households, and an eroding safety net for the most needy. Rising health care costs, lost or no benefits, and an economic crisis have increased the plight of millions of the country's least advantaged.
EPI's report highlights a nation of growing inequality, lower wages, fewer benefits, diminished worker bargaining power, and disempowered unions v. market fundamentalists, complicit government officials, and their "You're-on-Your-Own" (YOYO) ideology against which they're powerless.
They believe markets know best so let them, arguing that alternatives "will create the wrong incentives." Recent decades reveal the folly of this approach on American workers' living standards. Exposing the "ownership society" myth, all household security measures, including net worth, have fallen despite a few years of late 1990s progress.
Today, "The macro-economy is in serious disrepair, beset by the spillovers from the bursting....housing bubble, high energy prices, and unsustainable levels of household indebtedness" causing economic collapse and the possibility of a deep, protracted depression. So far, remedial measures have been patchwork and counterproductive as growing millions face greater uncertainties with no imminent signs of relief and federal and state governments not caring or helping.
In 2009, the State of Working America is dire and worsening enough for millions of households to face greater than ever challenges on their own with government indifferent to their plight.
Concluding an early 1980s edition of his book, Michael Harrington sensed what "Other Americans" were up against in writing:
"I end this review, then, on an ambivalent note. There was progress; there could have been more progress; the poor need not always be with us. But it will take political movements much more imaginative and militant than those in existence in 1980 to bring that progress about. Until that happens, the poor will be with us." And today, in exponentially growing far greater numbers because nothing is being done to reverse them.
Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at
Also visit his blog site at and listen to The Global Research News Hour on Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

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