The New Class Warfare: California’s superwealthy progressives seem intent on destroying middle-class jobs
May 12, 2012
“…The list of companies leaving the state or shifting jobs elsewhere is extensive. It includes low-tech companies, such as Dunn Edwards Paints and fast-food operator CKE Restaurants, and high-tech ones, such as Acacia Research, Biocentric Energy Holdings, and eBay, which plans to create 1,000 new positions in Austin, Texas. Computer-security giant McAfee estimates that it saves 30 to 40 percent every time it hires outside California. Only 14 percent of the firm’s 6,500 employees remain in Silicon Valley, says CEO David DeWalt. The state’s small businesses, which account for the majority of employment, are harder to track, but a recent survey found that one in five didn’t expect to remain in business in California within the next three years…”
Few states have offered the class warriors of Occupy Wall Street more enthusiastic support than California has. Before they overstayed their welcome and police began dispersing their camps, the Occupiers won official endorsements from city councils and mayors in Los Angeles, San Francisco, Oakland, Richmond, Irvine, Santa Rosa, and Santa Ana. Such is the extent to which modern-day “progressives” control the state’s politics.
But if those progressives really wanted to find the culprits responsible for the state’s widening class divide, they should have looked in a mirror. Over the past decade, as California consolidated itself as a bastion of modern progressivism, the state’s class chasm has widened considerably. To close the gap, California needs to embrace pro-growth policies, especially in the critical energy and industrial sectors—but it’s exactly those policies that the progressives most strongly oppose.
Even before the economic downturn, California was moving toward greater class inequality, but the Great Recession exacerbated the trend. From 2007 to 2010, according to a recent study by the liberal-leaning Public Policy Institute of California, income among families in the 10th percentile of earners plunged 21 percent. Nationwide, the figure was 14 percent. In the much wealthier 90th percentile of California earners, income fell far less sharply: 5 percent, only slightly more than the national 4 percent drop. Further, by 2010, the families in the 90th percentile had incomes 12 times higher than the incomes of families in the 10th—the highest ratio ever recorded in the state, and significantly higher than the national ratio.
It’s also worth noting that in 2010, the California 10th-percentile families were earning less than their counterparts in the rest of the United States—$15,000 versus $16,300—even though California’s cost of living was substantially higher. A more familiar statistic signaling California’s problems is its unemployment rate, which is now the nation’s second-highest, right after Nevada’s. Of the eight American metropolitan areas where the joblessness rate exceeds 15 percent, seven are in California, and most of them have substantial minority and working-class populations.
When California’s housing bubble popped, real-estate prices fell far more steeply than in less regulated markets, such as Texas. The drop hurt the working class in two ways: it took away a major part of their assets; and it destroyed the construction jobs important to many working-class, particularly Latino, families. The reliably left-leaning Center for the Continuing Study of the California Economy found that between 2005 and 2009, the state lost fully one-third of its construction jobs, compared with a 24 percent drop nationwide. California has also suffered disproportionate losses in its most productive blue-collar industries. Over the past ten years, more than 125,000 industrial jobs have evaporated, even as industrial growth has helped spark a recovery in many other states. The San Francisco metropolitan area lost 40 percent of its industrial positions during this period, the worst record of any large metro area in the country. In 2011, while the country was gaining 227,000 industrial jobs, California’s manufacturers were still stuck in reverse, losing 4,000.
Yet while the working and middle classes struggle, California’s most elite entrepreneurs and venture capitalists are thriving as never before. “We live in a bubble, and I don’t mean a tech bubble or a valuation bubble. I mean a bubble as in our own little world,” Google CEO Eric Schmidt recently told the San Francisco Chronicle. “And what a world it is. Companies can’t hire people fast enough. Young people can work hard and make a fortune. Homes hold their value.” Meanwhile, in nearby Oakland, the metropolitan region ranks dead last in job growth among the nation’s largest metro areas, according to a recent Forbes survey, and one in three children lives in poverty.
One reason for California’s widening class divide is that, for a decade or longer, the state’s progressives have fostered a tax environment that slows job creation, particularly for the middle and working classes. In 1994, California placed 35th in the Tax Foundation’s ranking of states with the lightest tax burdens on business; today, it has plummeted to 48th. Only New York and New Jersey have more onerous business-tax burdens. Local taxes and fees have made five California cities—San Francisco, Los Angeles, Beverly Hills, Santa Monica, and Culver City—among the nation’s 20 most expensive business environments, according to the Kosmont–Rose Institute Cost of Doing Business Survey.
Still more troubling to California employers is the state’s regulatory environment. California labor laws, a recent U.S. Chamber of Commerce study revealed, are among the most complex in the nation. The state has strict rules against noncompetition agreements, as well as an overtime regime that reduces flexibility: unlike other states, where overtime kicks in after 40 hours in a given week, California requires businesses to pay overtime to employees who have clocked more than eight hours a day (see “Cali to Business: Get Out!,” Autumn 2011). Rules for record-keeping and rest breaks are likewise more stringent than in other states. The labor code contains tough provisions on everything from discrimination to employee screening, the Chamber of Commerce study notes, and has created “a cottage industry of class actions” in the state. California’s legal climate is the fifth-worst in the nation, according to the Institute for Legal Reform; firms face far higher risks of nuisance and other lawsuits from employees than in most other places. In addition to these measures, California has imposed some of the most draconian environmental laws in the country, as we will see in a moment.
The impact of these regulations is not lost on business executives, including those considering new investments or expansions in California. A survey of 500 top CEOs by Chief Executive found that California had the worst business climate in the country, and the U.S. Chamber of Commerce calls California “a difficult environment for job creation.” Small wonder, then, that since 2001, California has accounted for just 1.9 percent of the country’s new investment in industrial facilities; in better times, between 1977 and 2000, it had grabbed 5.6 percent.
Officials, including Governor Jerry Brown, argue that California’s economy is so huge that it can afford to lose companies to other states. But for the local economy to be hurt, firms don’t have to leave entirely. Business consultant Joe Vranich, who maintains a website that tracks businesses that leave the state, points out that when California companies decide to expand, often they do so in other parts of the U.S. and abroad, not in their home environment. Further, Brown is too cavalier about the effects of businesses’ departure. As Vranich notes, many businesses leave California “quietly in the night,” generating few headlines but real job losses. He cites the low-key departure in 2010 of Thomas Brothers Maps, a century-old California firm, which transferred dozens of employees from its Irvine headquarters to Skokie, Illinois, and outsourced the rest of its jobs to Bangalore.
The list of companies leaving the state or shifting jobs elsewhere is extensive. It includes low-tech companies, such as Dunn Edwards Paints and fast-food operator CKE Restaurants, and high-tech ones, such as Acacia Research, Biocentric Energy Holdings, and eBay, which plans to create 1,000 new positions in Austin, Texas. Computer-security giant McAfee estimates that it saves 30 to 40 percent every time it hires outside California. Only 14 percent of the firm’s 6,500 employees remain in Silicon Valley, says CEO David DeWalt. The state’s small businesses, which account for the majority of employment, are harder to track, but a recent survey found that one in five didn’t expect to remain in business in California within the next three years…
May 12, 2012
With a solution to the conflict between Israel and the Palestinians as far away as ever, James Barker looks back to Britain’s occupation of the region and the efforts made by the future Viscount Montgomery to impose peace on its warring peoples.
Israel’s recent attempt to bludgeon Hamas into submission recalls events 70 years ago when the British, who ruled Palestine under the terms of a League of Nations Mandate, committed over 20,000 professional soldiers to destroy another Palestinian Arab guerrilla army. Ever since the Balfour Declaration in November 1917 committed Britain to support the establishment of a Jewish homeland in Palestine, the majority of its population regarded the creation of an alien state as an outrage to be resisted. After spasmodic outbursts of violence directed against established Jewish communities in Palestine, in April 1936 the Arabs rose up against the British, who until then had escaped their wrath.
In late October 1938, with the rebellion at its height, a small, pointy-featured British army officer recently promoted to the rank of major-general arrived in Palestine. For the 51-year-old Bernard Law Montgomery, still mourning the death of his wife, the responsibility of commanding a division of 10,000 men for the first time was both a welcome distraction and a big step up. His presence in Palestine was proof that Whitehall, preoccupied by the crisis over Czechoslovakia in the summer of 1938, was at last serious about crushing the Arab Revolt.
Montgomery was a dedicated professional soldier with few interests outside of his calling. His only previous experience of dealing with an armed rebellion had been in Ireland in 1920-21 where the army was, technically speaking, assisting the civil power in re-imposing the authority of the Crown. Posted to 17th Infantry Brigade to serve as its senior staff officer in Cork, Major Montgomery was effectively in charge of running the army’s pacification campaign against Sinn Fein in a part of Ireland where British rule had virtually collapsed. The war became a byword for viciousness on both sides, especially for atrocities committed by the ‘Black and Tans’, a force of ex-British soldiers recruited by the War Office to reinforce the Royal Irish Constabulary (RIC). In his 1957 memoirs, Montgomery had few good words to say about his Irish experience:
In many ways this war was far worse than the Great War which had ended in 1918. It developed into a murder campaign in which, in the end, the [British] soldiers became very skilful and more than held their own. But such a war is thoroughly bad for officers and men; it tends to lower their standards of decency and chivalry, and I was glad when it was over.
Perhaps the most distressing aspect of the Irish war for Montgomery was the way that it ended. Discouraged by Sinn Fein’s continued resistance, and uneasy over the repressive measures employed by the army and the RIC to defeat it, David Lloyd George’s coalition government negotiated a treaty with Sinn Fein in 1922 that saw Ireland partitioned, leaving the British Crown in possession of just six of its 32 counties. In a letter he wrote in 1923 to a fellow officer, Montgomery summed up his view of the army’s failure to crush ‘the Shinners’:
My own view is that to win a war of that sort you must be ruthless; Oliver Cromwell, or the Germans, would have settled it in a very short time. Now-a-days [sic] public opinion precludes such methods; the nation would never allow it, and the politicians would lose their jobs if they sanctioned it.
It was a highly pertinent observation. In the unrest that swept through other parts of the British Empire after the First World War, the question of how much force the Crown could justifiably use in order to quell unrest by its colonial subjects would frequently arise. The most notorious example of the excessive use of force during civil disturbances took place in the Indian city of Amritsar in April 1919 when troops opened fire without warning on protestors, killing at least 379 people. The officer who gave the order to fire, Brigadier-General Dyer, paid for his actions that day with his career.
Nevertheless, the army remained convinced that unrest whenever it occurred – be it urban riots or rural uprisings – had to be nipped in the bud. The only issue worth discussing, therefore, was the level of force required to achieve this end. This was an opinion expressed with persuasive clarity by retired Major-General Sir Charles Gwynn in his book Imperial Policing. Published in 1934 with case studies of a dozen minor wars and colonial police actions that the British had fought since 1918, the book blamed indecision by colonial administrators at times of unrest for preventing an early restoration of law and order.
This view was shared by the army throughout the 1936-39 Arab Revolt. It had wanted martial law as soon as it took charge of military operations in Palestine from the Royal Air Force in September 1936 but High Commissioner Sir Arthur Wauchope, a retired general himself, disagreed. For more than two years, the army’s frustration with the civil administration festered like an open wound. ‘The defeatist spirit needs overcoming,’ fumed Lieutenant-General Robert Haining, General Officer Commanding (GOC) in Palestine and Transjordan, in a June 1938 letter to Sir Charles Tegart, the Colonial Office’s police adviser:
The spirit ‘Oh, it’s all very well for you to want active measures, we have to live with them afterwards’ [is indicative of] the failure of members of the Administration to realize how weakness is regarded by the Arab and Mohammedan world. I do feel that the fact so many of the Administration here have been in this one colony or Mandated area for so many years has blinded their eyes to what is done elsewhere and what should be done here
Three months later, Haining succeeded in wresting control for public security from Wauchope’s successor Sir Harold MacMichael. To mollify ‘Mic-Mac’ the Colonial Office and the War Office agreed to call the new arrangement in Palestine ‘military control’, a formula devoid as far as the civil administration was concerned of the unwelcome connotations of martial law. But, with the police now under army command and with two divisions and three RAF squadrons in Palestine by the end of October 1938, there was little doubt who was in charge. In his first order to his troops, Montgomery declared:
I consider that the campaign against law and order is being waged by gangs of professional bandits and terrorists … Our first and primary task, therefore, is to hunt down and destroy these armed gangs. They must be hunted down relentlessly; when engaged in battle … we must shoot to kill…
A Nation of Spies and Snitches: The United States is pretty darn good at infiltrating terrorist groups these days. But should we be worried about the social costs?
May 12, 2012
In the aftermath of the 9/11 attacks, one of the most stinging criticisms leveled at the CIA was that it had utterly failed to penetrate al Qaeda with a human source.
That worm turned this week when headlines erupted with the story of how a Saudi spy, working in conjunction with the CIA, penetrated al Qaeda in the Arabian Peninsula (AQAP), preventing an attack on a U.S.-bound airliner, providing critical intelligence to guide a drone strike against a sought-after AQAP commander, and delivering an intact bomb design for U.S. intelligence to dissect.
It was, by any measure, a spectacular intelligence coup going to the heart of the al Qaeda branch believed to be most actively conspiring to kill Americans. But as plaudits began to traverse one vector of the press and the blogosphere, a backlash emerged in another. One of the more prominent expressions of the latter came in a typically overwrought posting by Salon‘s Glenn Greenwald:
So just as virtually every “domestic Terror plot” is one conceived, directed, funded and controlled by the FBI, this new Al Qaeda plot from Yemen was directed by some combination of the CIA and its Saudi partners. So this wasn’t merely a failed, nascent plot which is causing this fear-mongering media orgy: it was one controlled at all times by the U.S. and Saudi Governments.
Greenwald was not alone in making this questionable assessment. Dozens, if not hundreds, of bloggers and pundits of various stripes were right behind him, ranging along the edges of mainstream politics and spreading enthusiastically in more aggressive anti-establishment circles.
Infiltration and other spy games hold a particular fascination for the American psyche. When a terrorist attack succeeds, Americans demand to know where their intelligence services were and how they could have missed the warning signs. When all’s quiet, however, Americans are generally happy enough to look the other way — so long as the dirty work of keeping the country safe stays out of sight.
But a growing number of “foiled cases” — from Rezwan Ferdaus’s plan to fly a remote-controlled model plane into the U.S. Capitol as a member of an FBI-provided terrorist cell to this week’s double-agent revelation — has voices expressing dismay over just how far those services are willing to go.
The penetration of a well-established foreign organization like AQAP is a far cry from most domestic infiltration programs. To be clear, none of the reporting currently on the table even vaguely suggests the CIA “conceived, directed, or funded” this attempted bombing, which is nearly identical to the one AQAP tried on Christmas Day 2009 without even being detected by U.S. intelligence. But the aggressive approach to intelligence and prevention that evolved after 9/11 in response to perceived failures is increasingly counterweighted by a new perception that the U.S. government has gone too far, a perception that is now spilling over to taint what seems on the face of it to be an unqualified success story.
Since 9/11, more than 300 U.S. residents have been prosecuted for crimes related to homegrown terrorism. About half were targeted by law enforcement using infiltration techniques — confidential informants, undercover operations, or in some cases both. Claims about the breadth of infiltration run from the foot-soldier level to nearly the top. In a posthumous article published last week, Anwar al-Awlaki, the notorious American who played an important role in AQAP, claimed that both the CIA and the FBI tried to coerce him into becoming a mole.
These tactics have become increasingly controversial for a number of reasons, including a perception that they target Muslims exclusively and do so by means of entrapment (which, it should be remembered, is a legal claim that rarely succeeds in court).
But infiltration — including the use of undercover agents and paid informants — was employed extensively long before 9/11. And it isn’t just about Muslims, or even terrorism. In recent months, informants and undercover agents have played a key role in criminal cases involving anarchists in Ohio associated with the Occupy movement and right-wing extremists in Georgia, Arizona, and Michigan (where a rare terrorism acquittal was recorded after charges the government had overstated its case)…