LBO News from Doug Henwood

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September 23, 2021 Algernon Austin on the plight of black men in the job market (with an excerpt from a 2005 BtN interview with Devah Pager on discrimination) • Susie Bright on pegging the patriarchy

Corporate tax deadbeats

Biden and Congressional Democrats are talking about raising the corporate tax rate. The latest proposal looks to be boosting it from 21.0% to 26.5%, marked down from the 28.0% level that the administration circulated in April.  While that would be a step in the right direction, it only begins to address the seven-decade erosion in what business pays.

Graphed below is the effective tax rate for nonfinancial corporations, drawn from the national income accounts. “Effective” means the rate actually paid—taxes paid divided by profits—not the rate on the books before clever lawyers and accountants do their evasive magic.

Corporate tax rate

In the 1950s, firms turned over about 50% of their profits to federal, state, and local tax authorities. That fell to 40% in the 1960s and 1970s. The Reagan revolution took the rate down to near-25% in the mid-1980s. It rose a bit off those lows, but began declining again, hitting a post-World War II low of 15% following the Trump tax cuts of 2017. Yet Corporate America is whining about the possibility of taking the rate back to where it was roughly ten years ago, when capital was hardly suffering from confiscatory taxation.

Lobbyists and publicists claim that cutting corporate taxes spurs investment, and with it innovation and employment. In fact, investment has been declining at a rate similar to the tax rate. Graphed below is net private fixed investment—net, that is, of depreciation, an estimate of the effects of wear and obsolescence on the existing capital stock. If new investment is only keeping up with the rot of the old, net investment would be 0. We’ve been doing somewhat better than that, but not much.

Net fixed investment

The two lines of the graph show total investment in buildings, machinery, and intellectual property (IP) as a percent of GDP, and that with IP taken out. A lot of IP consists of pointless patents designed to maximize economically pointless things like brand value and to limit competition from new entrants, so it’s not obvious how much of an economic good IP investment really is. Note that both lines have traced a steady downtrend. There were strong bursts of investment in the 1960s and late 1970s, and a less dramatic rise in the late 1990s—but it’s been mostly downhill since. Recent peaks around 2015 and 2018 are in the same neighborhood as the recession-induced lows of the mid-1970s and early 2000s. So far this year, net business investment is 1.5% of GDP, up from the pandemic-induced low of 1.2% last year, but still one of the lowest on record. It means that corporations are barely keeping ahead of decay.

It’s not like firms are short of cash; there’s no evidence of a declining rate of profit in the national income accounts. It’s just that corporate managers would rather stuff their shareholders’ pockets with cash rather than investing in buildings and machines. They’ve spent $8.6 trillion on buying their own stock to boost its price since 2000, well over half of it since 2012. Add to that $6.0 trillion in traditional dividends and we’re talking some serious money—almost $15 trillion since 2000. That’s over twice what the entire corporate sector has paid in taxes over the same period. How nice for their shareholders and their top execs, who are largely paid in stock now. It’s not so nice for the rest of us though.

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September 16, 2021 Dave Zirin, author of The Kaepernick Effect, on how taking a knee spread across the country (and why leftists shouldn’t hate sports) • Dwayne Monroe, cloud data architect and author of this piece, disassembles the hype around artificial intelligence

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September 9, 2021 Clyde Barrow on how Texas, a diverse, urbanized, sophisticated state, is run by a bunch of reactionary white would-be cowboys • Anatol Lieven, author of this article, on the US–China rivalry and the meaning of the US withdrawal from Afghanistan

Work from home: mostly for the high end

Judging from the media coverage of the work from home (WFH) phenomenon, you’d think it’s become near universal. It’s not. In July, only about one in eight workers were teleworking—the Bureau of Labor Statistics’ (BLS) preferred term—and those are heavily concentrated in a few sectors and occupations, and among the highly credentialed.

According to BLS stats, in July 2021, just 13% of workers are doing so remotely because of the pandemic, down from 35% in May 2020, the first month the numbers were collected. (See graph below.) And that initial 35% number was inflated by the fact that so many workers who couldn’t work from home, like those in retail and hospitality, had been laid off. Since that peak, the share has declined in twelve of the subsequent fourteen months.

Teleworking share over time

And, as the paired bar graphs below show, WFH is heavily concentrated in a few demographics. Asians account for 15% of teleworkers, well over twice their share of the employed, no doubt reflecting their strong presence in tech; Hispanics/Latinos, just 11%, well under their share of employment. By education, workers with less high school diplomas or less barely register—but those with advanced degrees are heavily over-represented.

Teleworking by demo

If we define the heavily teleworking segments as those with an intensity (share of teleworkers divided by share of employment) of over 150%, just eight occupations out of twenty-two (computer and mathematical, business and financial operations; legal; life, physical, and social science; architecture and engineering; arts, design, entertainment, sports, and media; management; and community and social services) accounted for 69% of teleworkers in July, over twice their share of employment (30%). The concentration by industry is even sharper: just five sectors out of twenty-three (finance and insurance, professional and technical services, information, public administration, and utilities), pass the 150% intensity test. Together, they account for 70% of teleworkers, but just 21% of employment. (These aren’t graphed because they’d be too big for a little blog post.)

Telework was somewhat more democratic in the early days of the pandemic. In May 2020, 46% of those working from home had less than a bachelor’s degree, somewhat less than their 55% share of total employment. In July, that share was down to 15%. In May 2020, 57% of those in managerial and professional occupations were working from home; in July 25% were. Over the same period, the share of those teleworking outside the professional and managerial occupations went from 17% to 5%.

On the left, you often hear its said that we should just pay people to stay home. Of course, if people can’t find work, they need generous support. It’s cruel to cut off expanded unemployment insurance benefits.

But most jobs just can’t be done remotely. Those who can work remotely have to be served by the majority of lower-status, lower-paid workers who make things and move them around. If they were paid not to work, money would quickly become worthless because there’d be nothing to buy with it—no food, no electricity, no appliances, no medical equipment, nothing.

Telework is common among high-paid, high-visibility fields, but it’s just not the “new normal” for most workers. And it’s hard to see how it could be otherwise.

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September 2, 2021 Paul Passavant, author of Policing Protest, on the change in how cops treat protesters since the 1960s • Marisol Cantú and Shiva Mishek (co-author of this article) on how activists won a shift of public funding from cops to social services in Richmond, California

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August 26, 2021 Helen Yaffe, author of We Are Cuba!, on the country’s economic history since the 1959 revolution generally, and on the recent “pro-democracy” demonstrations specifically

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August 12, 2021 Mia Jankowicz, author of this article, on anti-vaxxers, notably Sherri Tenpenny • Sanford Jacoby, author of Labor in the Age of Finance, on unions’ weird alliance with Wall Street during the shareholder revolution

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August 5, 2021 Sean Jacobs and William Shoki of Africa Is a Country on riots in South Africa and the long trajectory of the ANC • Max Krahé, author of this report for the Belgian sovereign wealth fund, on the need for central planning to cope with the climate crisis (FT article here)

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July 29, 2021 Rupa Marya and Raj Patel, authors of Inflamed, on the social and ecological causes of disease • Robert Pollin, co-author of this article, on the role of giant bailouts in neoliberalism and the greatness of Hyman Minsky

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July 22, 2021 Robert Fatton, author of The Guise of Exceptionalism, on the assassination of Haiti’s president and the long history that led to this sorry pass

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July 15, 2021 Christian Parenti, author of a chapter in this book, on carbon dioxide removal • Kareem Rabie, author of Palestine Is Throwing a Party and the Whole World Is Invited, on real estate development and the Palestinian national project

Gayatri Spivak on privilege etc.

I’ve been meaning to post this for a long time and never got around to it. This is Gayatri Chakravorty Spivak speaking at the Gramsci Monument in The Bronx on August 24, 2013. The monument, a grandiose name for a structure built out of 2×4’s and plywood, to the Italian political philosopher Antonio Gramsci was conceived by the Swiss artist Thomas Hirschorn as a temporary installation and erected on the grounds of the Forest Houses, a public housing project in the only one of the five boroughs of New York City that’s on the American mainland. The idea is profoundly moving—bringing the ideas and personality of an Italian Marxist imprisoned by Mussolini to a part of the world where revolutionary politics and art can be in short supply. Spivak’s talk was part of a series of events at the monument.

durability

“If one only works to end the misery of the poor, the minorities, the racialized, the gender oppressed…without…looking towards everyone, nothing will last. Nothing will last if a collectivity looks only at itself…. Remember the Occupiers, the Arab Spring. Gramsci’s word here was, and I quote, “political passion even if fiery (“incandescent” in Italian), cannot lead to permanent political structures.”

privilege

“Before I started working—this work [teaching among the Indian poor]—I would say, ‘unlearn your privilege.’ I think that’s a remarkably stupid thing to say. Because it’s very narcissistic, you just keep thinking, ‘oh my privilege.’ You cannot unlearn your privilege. It’s a historical thing. History is larger than personal goodwill. After I started working I realized I should use my bloody privilege. First of all, it makes my work suspicious for all the do-gooders. They’d say, ‘oh she’s behaving like a Brahmin upper class.’ Of course I am. I have certain kinds of power. I’m a Columbia professor. I have certain kinds of power. I’m using it….”

identity

“Let’s not forget that identity is involved in the democratic, but if one thinks of what democracy can be, of what citizenship can be, then one must be aware that at the end of the line is a position without identity. It’s abstract, it’s not fuzzy. Fuzzy is identity. Struggle doesn’t always have to begin with identity [as a questioner suggested]. Struggle can also begin with things like class, which is not identity. Class itself is very mobile…. If the other side opposes us by identity, if we begin to believe that we are completely determined by that identity, if we can’t be critical of the bad things within that identity, we are giving into them. That’s why I said democracy has no ethnicity and no gender…. To an extent we can’t live without identity, but the political cannot be led by our identity. It is a cruel master, identity….”

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July 8, 2021 Isabella Weber, author of How China Escaped Shock Therapy, on Chinese economic reform debates and how they dodged post-Soviet-style collapse

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July 1, 2021 Joseph Darda, author of How White Men Won the Culture Wars, on the role of the Vietnam vet in establishing white identity • Joshua Adams, author of this article, on the critical race theory controversy

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