Newsflash:
Issues End Corporate Rule 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 5097 times

End Corporate Rule

  • Democrats Introduce Bill that Could Lead to Impeachment for Justices Thomas and Scalia
    Democrats Introduce Bill that Could Lead to Impeachment for Justices Thomas and Scalia

    On Thursday, a group of Democratic lawmakers proposed a law to establish a Code of Conduct  for the Supreme Court.

    It’s surely to have Supreme Court Justices Thomas and Scalia quaking in their Tea Party boots because it would mean they would actually have to be independent of political and other influences. They would also have to have the appearance of independence.  They would have to stay away from political activity. That part would be really hard.

    Written on Sunday, 06 July 2014 14:47 Read more...
  • California makes an official call for a U.S. Constitutional Convention to overturn Citizens United
    California makes an official call for a U.S. Constitutional Convention to overturn Citizens United

    On June 23rd the State Senate passed AJR 1, making California the second state in the union to officially call for an Article V constitutional convention for the sole purpose of passing a United States constitutional amendment that would effectively overturn Citizens United v. FEC and limit the corrupting influence of money in our electoral process.

    Written on Thursday, 26 June 2014 13:29 Read more...
  • New Organization Hangs Sign: 'Whistleblowers Welcome'
    New Organization Hangs Sign: 'Whistleblowers Welcome'

    A new organization called ExposeFacts—backed by well-known source of The Pentagon Papers Daniel Ellsberg—is debuting itself in Washington, DC on Wednesday as a new place where government and corporate employees aware of wrongdoing can more safely and securely report their concerns.

    Written on Sunday, 08 June 2014 13:54 Read more...
  • 'Astroturf' Groups Leading Drive to Kill Open Internet
    'Astroturf' Groups Leading Drive to Kill Open Internet

    The telecommunications industry is creating and funding front groups which pose as consumer organizations and aggressively lobby to kill net neutrality, journalist Lee Fang revealed in an article published in Vice on Friday.

    Written on Sunday, 08 June 2014 13:39 Read more...
  • John Oliver Calls on Angry Internet Trolls to Save Net Neutrality (video)
    John Oliver Calls on Angry Internet Trolls to Save Net Neutrality (video)

    It’s a sad state of affairs when a country that touts freedom of the press depends upon cable TV comedy shows to hear the real news.

    Written on Friday, 06 June 2014 04:19 Read more...
  • Oligarchy Enshrined
    Oligarchy Enshrined

    Why the Supreme Court’s McCutcheon ruling is good news for the super-rich and bad news for progressive Democrats.

    At the 2012 Conservative Political Action Conference, a conservative election lawyer and a baby-faced electrical engineer from Alabama with a made-for-TV Southern drawl began plotting how to unravel federal campaign finance regulations.

    Written on Tuesday, 20 May 2014 01:21 Read more...
  • Lincoln Didn't Fight the Civil War to Free the Corporations - Video
    Lincoln Didn't Fight the Civil War to Free the Corporations - Video

    This is an idea worth spreading - so - please watch & share with 5 or 10 friends. It’s important to get money out of politics and the average person back in. Also - leave a message on the YouTube and let TED know - this is one of the most important issues of the day."

    Written on Thursday, 15 May 2014 17:16 Read more...
  • Out of the Shadows: The U.S. Chamber of Commerce
    Out of the Shadows: The U.S. Chamber of Commerce

    The U.S. Chamber of Commerce is, as they boast on its website, the world's largest business organization, as well as the nation's largest corporate lobbying group. It is also a recipient of some of the largest amounts of so-called "dark" money in the country, refusing to disclose to the public its donors or even the amounts it receives. 

    Written on Tuesday, 29 April 2014 15:56 Read more...
  • Bernie Sanders Raises Battle Cry Against Citizens United: "I Vote for Democracy!"
    Bernie Sanders Raises Battle Cry Against Citizens United: "I Vote for Democracy!"

    Citizens United is not just the default reference for US Supreme Court decisions—including the 2010 Citizens United v. Federal Election Commission ruling—that have ushered in a new era of corporate dominance of American elections. It’s the name of the conservative group that encouraged Chief Justice John Roberts and the most activist Court majority in American history to tear the heart out of what were already weak campaign finance laws.

    Written on Sunday, 13 April 2014 04:24 Read more...
  • Local protests held in response to Supreme Court donation ruling
    Local protests held in response to Supreme Court donation ruling

    PITTSFIELD -- Their signs read "Get Big Money Out of Politics," "Democracy Is Not For Sale" and "This Is What Plutocracy Looks Like." About a dozen of them stood in Park Square on Wednesday evening, one of 130 "rapid response events" coordinated nationwide to protest that morning's Supreme Court decision in McCutcheon v. FEC.    

    Written on Friday, 04 April 2014 14:38 Read more...
  • With McCutcheon Ruling, An Activist Court Opts for Full-On Plutocracy
    With McCutcheon Ruling, An Activist Court Opts for Full-On Plutocracy

    Any doubts about the determination of an activist United States Supreme Court to rewrite election rules so that the dollar matters more than the vote were removed Wednesday, when McCutcheon v. Federal Election Commission was decided in favor of the dollar.

    Written on Wednesday, 02 April 2014 22:24 Read more...
  • TPM Interview: The Brown Grad Student Who Chased The NRA Out Of Rhode Island
    TPM Interview: The Brown Grad Student Who Chased The NRA Out Of Rhode Island

    Sam Bell is in the third year of a PhD program in geology at Brown University. Geology as in rocks. But Bell also moonlights as the the state coordinator of The Rhode Island Progressive Democrats, the state affiliate of the 10-year-old Progressive Democrats of America. And in his work with The Rhode Island Progressive Democrats, Bell was instrumental to the investigation that ultimately led to the National Rifle Association paying the second largest campaign finance fine in the state's history.

    Written on Thursday, 27 February 2014 22:13 Read more...
  • Thank a Postal Worker This Holiday Season
    Thank a Postal Worker This Holiday Season

    Postal workers are giving it their all this holiday season, as cards and packages and returns must be collected and delivered amidst ice storms, snowstorms and wild temperature drops.

    They deserve our thanks in 2013.

    And our support in 2014.

    Written on Thursday, 26 December 2013 23:49 Read more...
  • Fast Food Giants Gorge on Subsidies
    Fast Food Giants Gorge on Subsidies

    Thanks to a loophole that subsidizes CEO pay, McDonald's, Yum Brands, Wendy's, Burger King, Domino's, and Dunkin' Brands trimmed $64 million from their tax bills in 2011 and 2012.

    The fast food industry is notorious for handing out lean paychecks to their burger flippers and fat ones to their CEOs. What’s less well-known is that taxpayers are actually subsidizing fast food incomes at both the bottom — and top — of the industry.

    Written on Monday, 02 December 2013 23:07 Read more...
  • This Thanksgiving, Let's Celebrate AgriCULTURE, Not AgriBUSINESS
    This Thanksgiving, Let's Celebrate AgriCULTURE, Not AgriBUSINESS

    In December 1972, I was part of a nationwide campaign that came tantalizingly close to getting the U.S. Senate to reject Earl Butz, Richard Nixon's choice for secretary of agriculture. A coalition of grass-roots farmers, consumers and scrappy public interest organizations (like the Agribusiness Accountability Project that Susan DeMarco and I then headed) teamed up with some gutsy, unabashedly progressive senators to undertake the almost impossible challenge of defeating the cabinet nominee of a president who'd just been elected in a landslide.

    Written on Friday, 29 November 2013 00:06 Read more...
  • Arizona Democratic Party Shows Its Progressive Side at State Committee Meeting
    Arizona Democratic Party Shows Its Progressive Side at State Committee Meeting

    Progressive voices were heard loud and clear at Saturday’s Arizona Democratic Party (ADP) State Committee Meeting in Maricopa, Arizona.

    Unlike some past ADP meetings where progressives were ignored or where progressive resolutions were tabled and not heard by the full ADP membership, the Maricopa meeting was dominated by progressives.

    Written on Monday, 18 November 2013 20:09 Read more...
  • Can Public Banking Spur Economic Growth in Southern Arizona?
    Can Public Banking Spur Economic Growth in Southern Arizona?

    Tucson is one of the most impoverished cities in the country—for many reasons. The Arizona Legislature—driven by the American Legislative Exchange Council (ALEC) and short-sighted, “small government” ideology—has routinely swept funds earmarked for counties and cities to “balance” the state’s budget or fund pet projects like lower corporate taxes. Beyond the Legislature’s negative impact on Baja Arizona, the Tucson economy is not diversified enough. Manufacturing is nearly non-existent in Southern Arizona. There is an over-reliance on defense spending, University of Arizona spin-offs, tourism, low-wage service jobs, and growth/development. 

    Written on Friday, 15 November 2013 15:56 Read more...

Sign the TPP Fast Track Petitions

MoveOn.org Petition - Congress Don't Renew Fast Track

Public Citizen Petition - Congress Must Reject Fast Track Authority

MoveOn.org Petition - Stop the Trans Pacific Partnership

CREDO Petition - Stop the Massive Corporate Power Grab

 

Find Your Elected Officials for Issues

Enter your zip+4 and find your elected officials. This link provides name, address and phone number

ButtonFindElectedOfficials

 

Progressive Central Panel on Ending Corporate Rule

Ask Bill Moyers How to Overturn Citizens United