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CHINESE STEEL AND EXECUTIVE PAY WATCH (PART III)

June 7, 2013

CHINESE STEEL AND EXECUTIVE PAY WATCH (PART III)

Earlier parts one and two of this blog dealt with (1) the effects and aftereffects on the American economy and thousands of American workers (still in progress) of a seven BILLION dollar purchase of Chinese steel for reconstruction of the Bay Bridge in California, and (2) the stratospheric jump in executive compensation in this country (while median family wages have either been stagnant or declining for decades). Next on my list for discussion are ALEC and a few other labor-management issues, such as right to work laws passed in the industrial states of Indiana and Michigan over the past few years, laws passed by Republican legislatures and signed by Republican governors who professed concern for democracy within labor’s ranks as an excuse to further tilt the labor – capital mismatch in favor of an even greater mismatch on the side of capital where the states pick winners instead of playing referee. These areas for commentary are so intertwined that I will discuss them together.

The American Legislative Exchange Council (ALEC) is a partnership between business and political leaders dedicated to promoting a pro-corporate, anti-union agenda and lobbying for the passage of such an agenda on a state to state level. It was founded in 1975. A partial list of members includes some of the usual suspects and some who do not trumpet their membership for fear of public reprisal (indeed some have withdrawn their membership when publicly identified because of the potential for consumer backlash). Some of the funding members are Koch Industries (of course), ExxonMobil, Shell, Chevron and other such huge corporations. Members meet behind closed doors at junkets bankrolled by corporate sponsors, concoct their anti-labor and anti-tax model legislation, and take such completed projects back to their home states for introduction by captive Republican legislators. House Speaker Boehner, Republican from Ohio, has called ALEC “a wonderful organization,” because it is a partnership between government and business. To say that I disagree would be putting it mildly, very mildly.

ALEC boasts that about one thousand of its model bills are introduced each year and that about 200 of them become law. Steelworkers’ president Leo W. Girard correctly identifies their real intent as follows: “ALEC’s goal is to create a government of the wealthy, by the wealthy and for the wealthy. The group promotes laws that make it easier to keep huge amounts of money in a few hands and take money out of the pockets of hard-working Americans.”

With Wisconsin Governor Scott Walker’s success in stripping union rights away from his state’s public workers (inspired by ALEC ideas that spread to other states), Indiana and Michigan ALEC-armed Republicans went even further when they passed right to work laws under the pretense that they were preserving democracy within union ranks. That, of course, was ALEC propaganda designed to put a happy face on what the legislation really did – it effectively stripped union rights away from union workers in BOTH public and private employment – the result removed rather than saved democracy of union members. The states who adopted so-called right to work laws essentially and effectively barged into private labor agreements between employees and employers in uninvited fashion, set out the new rules of the game to be followed (all adverse to labor’s legitimate interests), and then such Republican legislators perchance went back to the office and billed their ALEC-funding corporations for “campaign contributions” for the next round of elections. The mismatch must be preserved – and even more so!

One can only wonder how those represented by ALEC would like it if every contract and internal board decision they made were subject to legislative edict or the threat of one. If such were ever attempted, Fox News would doubtless discuss the freedom to contract day and night as a right constitutionally guaranteed and not subject to state interference and, for a change, Fox would be right. However, you will not hear a peep from Fox in re invasive right to work laws because such statutes favor their constituents in the rich and corporate class in a “Trash labor good – trash capital bad” exercise in propaganda, an exercise in which Fox excels.

Some Republicans use different tactics to obtain the same result. Pennsylvania, which now has a Republican governor and majorities in both houses, has cut funding for education and health care programs while backing a series of ALEC-inspired measures, proposing privatization of the state-run lottery, liquor stores and prisons, moves that would cost union workers their jobs. Such ALEC-inspired measures, in addition to getting rid of union members altogether, puts money into the pockets of corporations (and ALEC members) that stand to reap profits at the expense of taxpayers when public services are converted to private businesses. There is more than one way to skin (a union) cat!

ALEC has overstepped its bounds in some cases. Fresh from it right to work victories along with success in destroying union jobs via privatization of activities and industries that states control, the group has ventured into attempts of make over the society as well. ALEC has pushed laws that make it harder for citizens to vote, that cut taxes for the rich and limit the rights of individuals to sue corporations. It pushed the “Stand your Ground” law in the wake of the shooting of an unarmed Florida teenager not long ago, and the public outrage that followed that incident led some corporations, notably General Motors, Coca-Cola and Wal-Mart, to sever ties with ALEC .Nevertheless, ALEC still claims more than 2,000 business and political leaders as members. The group bills itself as “non-partisan,” but of the 24 board members it lists on its website, only one is a Democrat.

I have saved the worst for the end, and here it is. ALEC is classified by the IRS as a 501(c) (3) tax-exempt, nonprofit organization. Contributions from wealthy donors and corporations are therefore considered tax deductible “charitable gifts.” What this means is that the rich and corporate class can fund ALEC and take a tax deduction for their gifts to “charity.” Can you believe the audacity of such a political lobbying machine to pretend that it is a “charity?” Believe it!

I greatly resent such an ongoing “classification” for another good reason, and it is this: When the rich and corporate class deducts such political lobbying “gifts” to ALEC from their income under such a pretense, you and I have to make up what they did not pay into our treasury, and thus, in effect, you and I are paying for our own brain washing, and union members (however indirectly) are paying to fund policies that lead to losing their jobs, and all in the name of “charity.” If ALEC is a “charity,” then I am the king of Siam, just recently brought back to life.

Funding a political pressure group is one thing, but deducting such contributions from taxes on grounds that it is a “charity” is quite another (since that brings you and me into the equation as unwilling but coerced participants in such funding, however indirectly). The IRS, which has taken a beating lately for “targeting” right wing applicants for exempt tax status, should revoke ALEC’s exempt tax status forthwith, and let the House Speaker explain to the American people why ALEC is a “charity” whose funders’ contributions should be tax exempt. That is a speech I want to hear.  GERALD  E

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