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A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.

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Entries since October 2011

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Do We Need 'Student Loans' for Billionaires?

October 18, 2011 ·

Polly Toynbee, a commentator for Britain’s Guardian newspaper, plays a role quite similar to Paul Krugman, the Nobel Prize-winning economist who doubles as a New York Times columnist. Both regularly advance well-reasoned — and even inspirational — attacks on the concentration of income and wealth that have left the United States and the UK the world’s two most unequal developed nations.

Both also rate as eminently pragmatic. They champion the politically possible. But we live today in tumultuous times, and that may be why Toynbee last week found herself celebrating a proposal for taxing the rich that rather boldly stretches most anybody’s sense of political practicality.

Guardian columnist Polly Toynbee visits last year's occupation of University College London. Photo by ucloccupation.Why not levy, Toynbee asked, a one-time 20 percent tax on the total wealth of Britain’s richest tenth, a tax “graduated” to ensure that the richest 1 percent pay at a higher rate than households at the bottom of this top 10 percent?

This one-time “windfall taking” tax, Toynbee suggested, could help “save services, save jobs, expunge the national debt, kick-start growth, and set the economy on the road to recovery.”

“The worst ever crisis,” she added, “needs better solutions than any currently on offer for the grim decade ahead.”

The United States, of course, faces that same grim decade. And that makes Toynbee's proposal a matter of more than idle interest. Could a one-time 20 percent levy on the wealth of the rich really make an appreciable difference?

The source of Polly Toynbee’s wealth tax proposal, Glasgow University’s Greg Philo, certainly thinks so. Philo first laid out the proposal last year and even had a national poll commissioned to gauge public reaction. That survey found 74 percent of the UK population approving.

Britain’s richest 10 percent currently hold £4 trillion — about $6.3 trillion — of the UK’s £9 trillion in personal wealth. A 20 percent tax on that £4 trillion would raise £800 billion, enough, says Philo, to “pay off the national debt” and “avoid the need for deep and harmful cuts” in public services.

Philo’s plan anticipates one major objection. Few affluent households have 20 percent of their wealth in readily available cash. They have much of their wealth in property of various sorts that would have to be sold, perhaps at a great loss if all the wealthy had to sell at once.

Not a problem. The wealth tax, under Philo's plan, would not have to be paid all at once. But if a wealthy household wanted to delay payment, that household would have to pay interest on its outstanding wealth tax liability.

“It would be akin,” says Philo, “to a student loan for the rich.”

A 20 percent tax on the wealth of Britain’s richest 10 percent, points out the Guardian’s Polly Toynbee, would essentially “push back downwards the money hoovered upwards in the last decade.”

The billions “hoovered upwards,” Glasgow University’s Philo adds, have largely “been directed into inflated property values.” A wealth tax could recirculate this “dead money” into government expenditures that could stimulate growth.

A one-time 20 percent wealth tax, Philo sums up, “offers a real alternative” that would “move debt off the government's books, using money that is largely trapped in the housing market, from people who will not miss it.”

Could such a wealth tax have a similar impact on the United States? The U.S. numbers — on wealth distribution — make that question a natural. Our richest actually hold a far greater wealth share than Britain’s.

In the UK, the top 10 percent hold 44 percent of their nation’s personal wealth. In the United States, notes an analysis from the Economic Policy Institute released earlier this year, just the top 5 percent held 63.5 percent of the nation’s wealth in 2009. The top 1 percent alone held 35.6 percent.

As of April 2011, NYU economist Nouriel Roubini and two colleagues reported last week, total U.S. household net worth amounted to $56.8 trillion. If we assume that the distribution of U.S. wealth has not changed since 2009, our latest year with distributional figures available, then the top 10 percent today hold 75.1 percent of the nation’s current wealth, or $42.7 trillion.

A 20 percent tax on this wealth would raise over $8.5 trillion, a sum that equals about 85 percent of America's publicly held national debt.

And America’s richest 1 percent? How would they be faring if they had to pay a one-time 20 percent wealth levy? Their average remaining net worth would actually be higher, after adjusting for inflation, than the net worth of America’s richest 1 percent in 1983. Indeed, the top 1 percenters could pay a 25 percent wealth tax and still hold more wealth than their 1983 total.

Our next decade need not be grim. Our next decade does need to be more equal.

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Why Women? Why Now? Looking at Gender and Immigration

October 17, 2011 ·

One need only consider the story of Roxana Santos  mentioned in Break the Chain’s previous blog post to understand the very real implications of strict immigration enforcement laws in this country and what that looks like for a woman.  Roxana lives in Maryland.  She is the mother of a one-year old little boy and she was scheduled to be deported to her native El Salvador at the end of last month.  Her crime?  Eating her lunch outside her place of employment. On Thursday, September 29th, one day before the scheduled deportation, Ms. Santos was granted a one year stay while allegations of discrimination and overzealous enforcement of immigration laws are investigated.

Roxana Santos and other immigrant women demand justice. She is the victim of unjust laws that are determined to deport and dehumanize women (and men) who are contributing members of our society.

The debate around immigration reform in our nation right now is centered around nativist fears, ideological differences about what an American should look like, and the idea that immigrants are “taking” jobs from U.S. citizens who have been hit hard by the recent economic recession.  Immigrants are not taking our jobs but the fear and hate speak permeates everyday discussions.  There is, however, little talk about the relationship between gender, immigration and exploitation.  Immigration is no longer a male dominated phenomenom- women comprise 49% of the world’s 214 million international migrants.  This trend has been called the “feminization of migration.”  According to statistics compiled by Reuters for International Woman’s Day 2011, of the 1.2 billion people living in poverty worldwide, 70% are women.  If opportunities do not exist for women at home, they will leave. This is a basic survival instinct that has kept our species alive since the beginning of humankind.

Although access to paid work can definitely have very positive effects on a woman’s ability to provide for her own (and her family’s) physical and psychological needs, migration in search of such employment can also have equally devastating consequences.  It is no secret that undocumented workers are particularly prone to being exploited.  

Women are subjected to being targeted in transit and when they arrive in the host country.  According to the film The Invisibles, highlighted by this year’s Letelier-Moffit Human Rights Awards international honoree Padre Pedro Pantoja, six out of ten migrant women are sexually assaulted during their journey north through Mexico.  

A lack of a support system can make a woman more vulnerable to gender-based violence and intimidation upon arrival as well.  There is a triple threat of exploitation (based on gender, race, and legal status) that today’s state based deportation-focused laws are not addressing.  Being unable to access extended family through family reunification programs also prevents some women from accessing the public work sphere.  In this scenario a mother’s only option may be domestic work. 

A gendered analysis may determine that it would be beneficial for society if the legal definition of family was widened to include parents of adult children.  If a woman’s parents had a legal remedy to migrate to be with her this could mean the difference between her being able to work to support her family or not.  This is particularly true for cultures that highly value extended family kinship and/or have no other childcare options available.  Immigrants do not want to be a burden to existing social welfare mechanisms; they simply need legal mechanisms that respect their right to migrate, work, and live the life they want to live.

We have a habit of seeing things as gender neutral.  This means that we are taught to “be objective” and analyze information from this neutral perspective.  The only problem is the “neutral” most typically refers to the White, property owning, male’s perspective.  Immigration policy and reform is a great example of an area where a gender lens needs to be applied.  According to the International Organization for Migration “women and men migrate for different reasons, use different channels, and have different experiences.”  Women will continue to migrate to ensure their livelihood and the livelihood of their families, and they face different challenges and need laws that adequately respond to these challenges. Comprehensive, gender sensitive reform is needed to halt the trend of states targeting women and families for deportation.  We cannot “add and stir” gender into immigration reform legislation post enactment; now is the time to discuss and elevate these concerns.

Celia Garcia Perez is an advocacy intern for the Break the Chain Campaign.

Poem: Before Grey Filtered Light

October 17, 2011 ·

I have begun to
Slip into that night
Good dark dying light
I call upon euphemisms

To disguise the senses
Dismiss the morning ache
I carry them to
Breakfast and to court

Racketball where shadows judge
The game not wooing
Of the ladies when
Shrinkage defines the day

Prolonged Summer heat an
Excuse for sleepless hours
Fears of fragile bladders
Victims of lazy prostates

A whiskey soaked poet
Pleaded for rage rage
Watching love memory blood
Against fading falling twilight

I call up visions
Snow on glacial streets
Winds curling under my
Trousers climbing my spine

Thrills chills challenges mutate
To dread sloth shrugs
Of shoulders to tackle
Sexy stimulants glorious ordeals

The known dead outnumber
The living that newspaper
Page beckons with morning tea
Habitual coffee long faded

With greasy dishes batting
Balls eye feasts before
cataracts filtered light sapped
fury lowered beams – Night

This poem by IPS fellow Saul Landau originally appeard in Counterpunch.

The Lineup: Week of Oct. 17-23, 2011

October 17, 2011 ·

In this week's OtherWords editorial package, Salvatore Babones says that without a steady decline in earnings, American households wouldn't be so saddled with debt. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

  1. What I've Learned Occupying Wall Street and DC / Lacy MacAuley
  2. Shortchanging Our Paychecks / Salvatore Babones
  3. Obama: Reject the Tar Sands Pipeline / Andrew Korfhage
  4. Missouri's Troy Davis / Brian Evans
  5. Newspaper Nostalgia / Donald Kaul
  6. The GOP Loves the Federal Spending it Hates / Jim Hightower
  7. Veterans, the Human Rubble of Our Wars / William A. Collins
  8. Tar Sands / Khalil Bendib

Tar Sands, an OtherWords cartoon by Khalil Bendib

A Dagger Pointed at Maryland's Peace Movement

October 17, 2011 ·

It's "a dagger pointed directly at the heart of Montgomery County," warned County Executive Ike Leggett.

Huh? Was there a do-it-yourself bomb shop in Bethesda? An open sewer in Silver Spring? An organization dedicated to teaching kids in Chevy Chase to smoke cigarettes? No, Leggett was fretting about a local, non-binding peace resolution.

The measure, that just a week earlier had appeared sure to pass the Montgomery County Council, would urge Congress to reallocate funds from spending on wars and weapons toward starved local services and community needs.

Lockheed Martin feels threatened by a peace resolution. Photo by ryry9379.When I first saw this quote in a Washington Examiner article, I thought I must've misread it. I located those darned reading glasses and read it again. OK, he really said that. "Leggett asked the council to table the resolution because it is a 'dagger pointed directly at the heart of Montgomery County,'" wrote reporter Rachel Baye.

Whoa. A dagger pointed directly at the heart of Maryland's Montgomery County? Nearly 1 million people live in the county, which blends Washington suburbs, medical research facilities, assorted government installations, and zoning-protected farmland.

I live in neighboring Prince George's County but have many friends and colleagues living there. I go to the movies in Bethesda. I sometimes buy food at the Takoma Park Co-op or the Trader Joe's in Sliver Spring. I would hate to see it all destroyed. And Montgomery, which happens to be one of the nation's 10 most affluent counties, has a pretty big heart. All that blood should the dagger, I mean the resolution, actually pass?

Leggett's outburst surprised me, in part because I recently participated in a town hall meeting where this topic was discussed with hundreds of Montgomery County residents, as well as some elected officials, and experts. I even said a word or two about the $2.5 trillion U.S. taxpayers have squandered on endless wars in the last decade and how Montgomery County's taxpayers will hand the Pentagon $2.5 billion next year. I think we'd all be better off if we spent that money on things that actually make our lives better.

The sentiment that excessive, inefficient, unnecessary military spending came at the expense of critical health, education, infrastructure needs of county residents seemed reasonable and unanimous. I didn't sense fear of imminent danger in the room. Plus, remember that this is a non-binding resolution. As Baye explained, "it had no chance to actually end wars or starve the Pentagon."

So, what's got Leggett so upset?

The military contractor Lockheed Martin is located in Montgomery County and employs 5,200 people in the county. We're all scared about jobs. Surely the resolution doesn’t want to cut jobs. I looked at the resolution again. Nope. There's nothing in there about firing Lockheed's employees or tossing any corporations into the Potomac River.

But we want plentiful and good jobs. As the hundreds of participants in that town hall meeting discussed, and the squelched resolution declares, the least economically beneficial way to spend a federal dollar is through military spending. Analysts have demonstrated that more and better jobs, which spur greater economic benefits for our local, state, and national economies, arise through federal spending on jobs in non-military fields such as infrastructure, transportation, healthcare, and education.

In other words, the government can create more jobs by hiring more teachers and doctors than soldiers. Economically, building bridges beats making bombers.

Montgomery County, like most other U.S. counties, has suffered significant cutbacks to these critical areas of community and human needs in recent years. The Pentagon's budget has not.

Lockheed may be particularly nervous because military spending cuts are on their way, thanks to the drive to shrink the budget deficit. The defense industry is already beginning to shift some operations away from military production more and more into non-military related activities. Lockheed Martin, like its competitors, employs thousands of people in areas of technology services that have nothing to do with the military.

Finally, shifting resources in that direction by cutting war spending won't only bring dollars home, but will push companies like Lockheed Martin further in the direction of non-defense jobs, thus creating more and better jobs for the county. This resolution puts Montgomery County residents on the side of progress and urges the state to move in the right direction sooner rather than later.

When deficit reduction is the goal of federal policy, the more money we spend on unnecessary weapons programs, costly ineffective wars, and unnecessary military bases, the less money there will be for teachers, police officers, firefighters, bridges, and roads in Maryland's Montgomery County and the rest of the nation.

Mr. Leggett, the dagger threatening our life's blood is the unnecessary suffering brought on by underinvestment in the vital services that provide our children with a good education, our families with good health, and our communities with green infrastructure improvements and jobs.

While many defense-industry jobs can't be immediately transitioned to the more economically beneficial jobs, many can and must be in the near future. This isn't only good economics, it's good for Maryland.

Every county in the nation should have similar resolutions urging the same thing. Thank you, Montgomery County, for leading the way.

Karen Dolan is an Institute for Policy Studies fellow and a member of the New Priorities Network coordinating committee.

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