Newsflash:
Elizabeth Warren End Mass Criminalization How Wall Street Turned America Into Incarceration Nation
Tuesday, 26 November 2013 21:17

How Wall Street Turned America Into Incarceration Nation

Written by  Les Leopold | AlterNet

Transforming poorer neighborhoods into desirable real estate for the new elites often requires getting rid of the poor: jail becomes the new home for many.

The U.S. leads the world in prisoners with 2.27 million in jail and more than 4.8 million on parole. Minorities have been especially hard hit, forming 39.4% of the prison population, with one in three black men expected to serve time during their lifetimes.

How is it that our land, supposedly the beacon of freedom and democracy for the rest of the world, puts so many of its own people into prison?

We usually attribute the prisoner increase to a combination of overt racism and Nixon's war on drugs, followed by Rockefeller's "three strikes" legislation in New York, and then the 1984 Sentencing Reform Act with its mandatory sentences. While racism and these laws certainly provide ample opportunity to incarcerate millions for violating senseless prohibition laws, they do not tell the whole story.

Racism was just as virulent, if not more so, long before the dramatic rise in prisoners set in during the 1980s and 1990s. Just because there are draconian laws on the books, it doesn't explain why they are so dutifully enforced. It also doesn't explain why so many are willing to risk prison, knowing the increasing odds of getting caught.  

If we dig deeper, we'll see that the rise in incarceration corresponds with the rise of financialization and the dramatic increase in Wall Street incomes. Of course, just because trend lines on charts rise and fall together doesn't mean one causes the other. But this correspondence is much more than coincidence.

In fact, we could show you a dozen other trends lines about financialization, wealth and the rising incomes of America's elites that follow the same patterns over similar years as the incarceration rate. What is the connection?

'Unleashing' Wall Street destroys manufacturing, older urban areas and black America's upward mobility
By the end of the 1970s, our policy establishment embarked upon a new experiment to shock the nation out of stagflation (the crushing combination of high unemployment and high inflation). To do so, neo-liberal economists successfully argued that Wall Street should be deregulated and that taxes on the wealthy should be cut to spur new entrepreneurial activity that would enrich us all.

Entrepreneurial activity certainly increased, and with a vengeance. Rather than create new jobs and industries that would promote shared prosperity, a new and invigorated Wall Street set about to devastate American manufacturing. Its goal was, and still is, to make money from money, not to make money by producing tangible goods and services. Wall Street's main product for America is debt. And its profits derive from loading up the country with it, and then collecting compound interest.

Wave after wave of financial corporate raiders (now politely called private equity firms) swooped in to suck the cash flow out of healthy manufacturing facilities. Wall Street, freed from its New Deal shackles, loaded companies up with debt, cut R&D, raided pension funds, slashed wages and benefits, and decimated well-paying jobs in the U.S. while shipping many abroad. The released cash flow was used to pay back the financiers, buy up stock to drive up its price, and pay out dividends. Nearly half the raided companies failed as America's heartland in a few short years turned into the Rust Belt.

But Wall Street prospered as its profits rose to account for nearly 40% of all corporate profits by 2003, up from less than 10 percent in 1982  (It would take more space than we have here to explain why this had little to do with "unfair" foreign competition. We could also show that so called free-trade agreements were designed by financiers to promote their interests, not ours.)

The catastrophic collapse in manufacturing jobs was particularly tragic for black Americans who during the first two decades after WWII had seen their standard of living rise as they entered higher paying industries. As the Wall Street vultures sucked the life out of these industries, black Americans found themselves in dying urban areas where the next best jobs paid less than half what manufacturing once paid. If lucky, young minority men and women could find work in the public sector which still was unionized. More typically, scarce jobs might be found in fast-food chains, box stores, warehouses, and in the lower ranks of the healthcare system. Overall, however, unemployment rates soared, especially for minority youth. Participation in the underground economy often became the only means of survival.

Financialization, gentrification and the removal of low-income residents
Not only does financialization destroy middle-income manufacturing jobs in urban areas, but the process also removes low-income neighborhoods through gentrification. The rise of high-income financiers (and the desire of banks to loan more money to them) creates upward pressure on housing prices in urban areas that cater to elites, like New York, Chicago and San Francisco. As land values rise rapidly, lower-income residents are squeezed out of their neighborhoods, which are revamped into fashionable townhouses and apartments for the wealthy. (Typically, the children of the well-to-do unconsciously serve as forward troops as they flock into lower-income areas in major cities, seeking to support themselves as artists and young professionals.)

As hundreds of neighborhoods are transformed, higher income residents require more protection from the alternative low-income economy, called "crime in the streets." As mayors cater to these new elites, police patrols increase and incarceration rises through "stop and frisk" programs which invariably target minorities.  

Simply put, for financial interests to transform poorer neighborhoods into desirable real estate for the new elites, it is necessary to get rid of the poor. Jail becomes the new home for many.

The housing bubble and bust further destroyed lower income neighborhoods and decent-paying public sector jobs. Not only did financial interests feast upon productive firms, but they thrived on consumer debt (yet another chart that mirrors the incarceration rate).

The housing bubble, which was entirely engineered by Wall Street, created enormous demand for junk mortgages to package into securities which then turned toxic. When the bubble burst, the biggest losers were lower-income homeowners who thought they had finally gotten a piece of the American dream. With declining housing prices they found themselves underwater and/or living in neighborhoods with hundreds of abandoned homes. Their debts, remained, while, as we all know, the richest of the rich were bailed out.  

Because of the Wall Street crash, revenue-starved urban areas in the Rust Belt were hit once again. With unemployment higher than anytime since the Great Depression, business and worker tax revenues fell, leading to cuts in public employee jobs and benefits—the very jobs middle-income minorities were fortunate to find as manufacturing declined over the previous decades.  

Detroit became the poster child for the ravages brought about by financialization. First corporate raiders and private equity firms squeezed the life out of manufacturing all over Michigan. Then the Wall Street crash destroyed more jobs and undermined the tax base, leading to urban bankruptcy and more job loss in the public sector.   

Wall Street's Jobs Program: Incarceration
What will happen to all those unemployed, given the massive shortfall in jobs? What will happen to those trapped in neighborhoods crammed with foreclosed homes? Where is the jobs program for the millions who need it?

High finance has the answer that is now the de-facto government policy—put the dislocated, the unemployed, the "surplus" youth in jail.

That's because financial interests and their crony politicians have no interest at all in traditional jobs programs that could put millions of young people to work. Instead, they are doing all they can to bring austerity policies to America. The less government spends on public services and safety net programs, the more money it has to support Wall Street. As government services are cut, state and local governments must turn even more to Wall Street in order to finance infrastructure projects (where the total cost including interest payments is usually several times the initial costs of construction).

Wall Street's super-profits can only continue if public and consumer funds are transferred to high finance via interest payments on loans. So public jobs programs are out of the question, and both parties have been "convinced" (with campaign contributions) that we can't afford them.

So that leaves us with one and only one jobs program—incarceration—which is also a growth opportunity for Wall Street. As public revenues falter, pressure will mount to privatize more and more correctional facilities and law enforcement functions, opening up lucrative opportunities for more privatization and more Wall Street loans to make it happen.

So by all means, let's legalize drugs, get rid of mandatory sentencing and prohibit "stop and frisk." But until we tackle financialization and its destruction of neighborhoods and jobs, we will channel another generation into the underground economy—and into jail.

These four graphs tell the tale visually -- click to enlarge each:

1. The soaring American prison population since 1920:

Click to enlarge.

2. Where the money is going: financial sector vs. non-financial sector yearly compensation:

Click to enlarge.

3. The total collapse of manufacturing jobs in America since 1960: 

Click to enlarge.

4. Unemployment levels since 2007:

Click to enlarge.

5. The staggering rise of household debt -- home mortgages and credit debt:  

Click to enlarge.

Link to original article from AlterNet

Read 5076 times

ERA Legislation in your State

Unratified states Gold - Ratified States Purple

Latest News from the Warren Campaign

  • Will new senators push Democrats to the left?
    Will new senators push Democrats to the left?

    When Massachusetts Democrat Elizabeth Warren and the rest of the 2013 class of liberal senators start work this month, they'll have to do more than figure out the byzantine ways of getting things done in Washington.

    They'll also have to decide how seriously to engage a progressive movement that sees their assent a historic opportunity to shift the Democratic Party to the left.

    Written on Saturday, 05 January 2013 19:11 Read more...
  • Elizabeth Warren Wins Senate Banking Committee Seat: Sources
    Elizabeth Warren Wins Senate Banking Committee Seat: Sources

    WASHINGTON -- Nearly two years after Wall Street waged a successful campaign to keep consumer advocate Elizabeth Warren from running the Consumer Financial Protection Bureau, the incoming senator will be tapped to serve on the Banking Committee, according to four sources familiar with the situation. 

    Written on Tuesday, 04 December 2012 19:22 Read more...
  • Elizabeth Warren Redefines "Balanced Approach"
    Elizabeth Warren Redefines "Balanced Approach"

    Politico recently declared, "The Senate is about to become a liberal lion’s den." 

    In 2012, groups like the Progressive Change Campaign Committee, MoveOn.org, CREDO Action, and Democracy for America worked hard to build progressive power in Congress. This week's iconic photo of Senators-elect Elizabeth Warren (D-MA) and Tammy Baldwin (D-WI) walking together down the corridors of power is symbolic of the rising progressive tide. 

    Written on Sunday, 18 November 2012 14:20 Read more...
  • Elizabeth Warren Wins the "Which Side Are You On?" Debate
    Elizabeth Warren Wins the "Which Side Are You On?" Debate

    An overbearing and at times ridiculously aggressive Massachusetts Senator Scott Brown came across as a desperate man Thursday night, as he attempted to gain the upper hand in the first debateof this year's most closely-watched U.S. Senate race and, by extension, in a reelection contest that seems to be slipping away from him.

    Written on Sunday, 23 September 2012 16:27 Read more...
  • Mayor Menino to endorse Elizabeth Warren in Senate race at Roslindale Square rally on Friday
    Mayor Menino to endorse Elizabeth Warren in Senate race at Roslindale Square rally on Friday

    Mayor Thomas M. Menino is expected to endorse Democrat Elizabeth Warren on Friday in her bid to unseat Republican US Senator Scott Brown, according to two people with knowledge of the plan.

    Written on Thursday, 20 September 2012 19:47 Read more...
  • Elizabeth Warren's DNC Speech: "Corporations Are Not People"
    Elizabeth Warren's DNC Speech: "Corporations Are Not People"

    Bill Clinton may have stolen the show at the DNC last night with his 45-minute, half-ad-libbed barn-burner of a speech, but there were a few other noteworthy speakers as well. After dragging for an hour or two, the night's program picked up when Massachusetts Senate candidate, CFPB creator, and economic realtalker extraordinaire Elizabeth Warren took the stage.

    Written on Thursday, 06 September 2012 18:54 Read more...
  • Elizabeth Warren: Yes She Can?
    Elizabeth Warren: Yes She Can?

    It was a grim, sleety day in Chicopee, a gritty postindustrial town in western Massachusetts, where paint flakes off worn-out bridges and boarded-up factories. At a community relations luncheon, kind security guards were opening back doors and holding out umbrellas for the few willing to brave the freezing slush.

    Written on Wednesday, 16 May 2012 04:54 Read more...
  • Jonathan Klate: A candidate's connection
    Jonathan Klate: A candidate's connection

    Retired Amherst gentleman John Kick is not known as a political activist. In the Springfield union hall where he ventured last October to hear Democratic senatorial candidate Elizabeth Warren, he might have seemed a world-weary citizen with vague curiosity about the professor turned politician.

    But John's sorrowful demeanor and disconsolate eyes betrayed a woefully wounded heart. His son, Gabe, took his own life just a month earlier, at the age of 28. John keeps moving, somehow, in the dreadful private agony understood only by parents who persist in such an aftermath.

    Written on Monday, 26 March 2012 17:09 Read more...
  • The Ascendance of Elizabeth Warren
    The Ascendance of Elizabeth Warren

    If you’re reading this, you probably already know how you feel about Elizabeth Warren. Warren is currently running for Senate in Massachusetts, in the hopes of knocking out Republican incumbent Scott Brown. Very few first-time candidates are so well-known, or so passionately beloved.

    Written on Monday, 26 March 2012 00:00 Read more...
  • NOW PAC Endorses Elizabeth Warren
    NOW PAC Endorses Elizabeth Warren

    NOW/PAC is thrilled to announce its endorsement of Democratic candidate Elizabeth Warren for the U. S. Senate from the state of Massachusetts. Warren is the most prominent of the three Democrats vying to run against incumbent Sen. Scott Brown (R) in the general election. Recent polls show Warren neck and neck with Brown.

    Written on Monday, 05 March 2012 19:48 Read more...
  • Elizabeth Warren Says Washington Must Act Now To Help Stem The Tide Of Foreclosure
    Elizabeth Warren Says Washington Must Act Now To Help Stem The Tide Of Foreclosure

    Backs MA Congressmen, Attorney General Coakley Calling on Federal Housing Finance Agency to Take Action To Prevent Unnecessary Foreclosures

    BOSTON – It is past time for the Federal Housing Finance Agency (FHFA) to step up and help prevent unnecessary foreclosures in Massachusetts, said Consumer Advocate Elizabeth Warren, reinforcing calls from members of the Massachusetts Congressional delegation and Attorney General Martha Coakley.

    Written on Wednesday, 22 February 2012 07:54 Read more...
  • U.S. Rep. Jim McGovern this week endorsed Democratic candidate Elizabeth Warren for the United States Senate.

    U.S. Rep. Jim McGovern this week endorsed Democratic candidate Elizabeth Warren for the United States Senate.

    Written on Friday, 27 January 2012 20:35 Read more...
  • The Woman Who Knew Too Much
    The Woman Who Knew Too Much

    Millions of Americans hoped President Obama would nominate Elizabeth Warren to head the consumer financial watchdog agency she had created. Instead, she was pushed aside. As Warren kicks off her run for Scott Brown’s Senate seat in Massachusetts, Suzanna Andrews charts the Harvard professor’s emergence as a champion of the beleaguered middle class, and her fight against a powerful alliance of bankers, lobbyists, and politicians.

    Written on Wednesday, 16 November 2011 00:00 Read more...
  • Elizabeth Warren's Appeal
    Elizabeth Warren's Appeal

    For a few years now, politicians straining against all of the antigovernment demagogy have been searching for a way to energize public interest and remind voters of the essential government services and protections they rely on and all too often take for granted.

    Written on Sunday, 16 October 2011 00:00 Read more...
  • Berkshire Democrats Want Elizabeth to Run, Run, Run
    Berkshire Democrats Want Elizabeth to Run, Run, Run

    PITTSFIELD, Mass. —  More than a few local Democrats would be ecstatic if Elizabeth Warren decides to run against Scott Brown for the U.S. Senate. Warren is kicking around the idea of running and stopped in Pittsfield on Friday to meet with party members to gauge their support as part of a listening tour across the state.

    Written on Friday, 19 August 2011 00:00 Read more...

Sign the Petition - Sen. Sanders Run as a Democrat in 2016

Button-SandersPetition

Like Elizabeth Warren

Lori Wallach on the TPP from PDA Progressive Roundtable

Progressive Roundtable with Reps. Ellison and Pocan and Lori Wallach on TPP

TPP: The Biggest Threat to the Internet You've Probably Never Heard Of