Beaver County Reds – 4/4/11

This page was last updated on April 7, 2011.

USW Pres. Gerard Message to “We Are One” Rallies; Leo W. Gerard – International President; United Steelworkers; April 4, 2011.

The internal title is “Greedy Corporations and the Wealthy Fatten Themselves on the Rest of Us — Join ‘We Are One’ Rallies to Stop the Freeloaders.”

The leadership of Progressive Democrats of America – PA 4th CD Chapter consists of Tina Shannon (chairperson), Randy Shannon (treasurer), Robert Schmetzer (vice president), Peter Deutsch (secretary), and Carl Davidson (webmaster and perhaps unofficial leader), a self-described Marxist who once “tr[ied] to create a new communist party.”  They also appear to be the leaders of Beaver County Peace Links.  Of this group, one was a leader of the now-defunct Communist Party (Marxist-Leninist) and, according to KeyWiki, two are (or at least were in 1993) members of the Communist Party USA.  The Shannons were also leaders of the apparently-defunct Beaver County Coalition for Social Justice.  In the Committees of Correspondence for Democracy and Socialism (CCDS) [originally a splinter group of the Communist Party USA (CPUSA)], Mr. Davidson is a co-chair and the Shannons are members of the CCDS national coordinating committee.  Robert Schmetzer is Democrat party local town chair for South Heights.

You can save yourself a lot of time is you only read the first paragraph: “The nation’s greedy corporations and insatiable wealthy are fattening themselves on workers.  There’s no trickle down.  It’s the opposite; the rich have been sucking the economic lifeblood from the middle class for decades.”  It doesn’t take a lot of imagination to figure out the rest of Mr. Gerard’s rant is more of the same old lefty talking points based on business bashing, class warfare, demonizing, and envy.

Before I proceed, there are a few things I want to note.

First, according to its 2010 LM-2 report (revised on 3/30/11) for the U.S. Department of Labor, USW membership at the end of 2010 was 604,938. 

Monthly taxes (dues) are 1.45% of an employee’s earnings (the same as Medicare) up to a maximum of 2.8 times his hourly rate.  This is interesting on two points.  The “tax” rate is flat, not progressively greater as your pay increases.  Next, the “tax” has a cap (2.8 times employee’s hourly rate).  When it comes to government taxes, however, labor union management consistently opposes flat income tax rates and caps on taxable earnings, as with Socialist Security.  Labor management describes both practices as “regressive,” placing a greater burden on lower-income employees than on higher-income employees.  This is a case of “do as I say, not as I do” by USW management.

Second, there’s too much here for me to check every “fact” Mr. Gerard threw out, so if there’s one you’re interested in I don’t address, check it out yourself.  Do not assume anything in Mr. Gerard’s piece is correct without verification.  That goes for anything I write as well.

Third, there are some language issues to address.  Mr. Gerard treats “business” and “corporation” as synonyms.  As we learned in grade or high school, the corporation is only one way to organize a business and even a “mom & pop” store can be incorporated.  Lefties probably did some polling and found “corporation” sounds more nefarious than “business.”  Therefore, when you hear a lefty say “corporation,” substitute “business” and you’ll get the right message.

Now let’s look at “loopholes.”  The Merriam-Webster Dictionary definition of loophole in this context is “an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded.”  That is not Mr. Gerard’s definition, though he wants us to believe it is.  The best way to illustrate Mr. Gerard’s definition of “loopholes” is by example.  For those whom Mr. Gerard would group into lower and middle classes, the mortgage interest deduction would be a “civil right.”  For “the rich,” that same provision would be a “loophole” or “tax break.”  For businesses, any deduction from gross receipts would be a “loophole.”

Mr. Gerard refers to “workers” throughout the piece.  Again, Mr. Gerard’s definition probably differs from yours.  For example, a comrade of Mr. Gerard, Carl Davidson, once described his definition of “working-class” thusly: “If someone else [signs your paycheck], you’re in the working class.”  Most business owners - large or small - (who pay SS and Medicare taxes just as the rest of us) would be surprised to learn they aren’t “working class.”  Other lefties define “workers” even more restrictively, including only those who pay dues/fees/taxes levied by labor union management.

Finally, Mr. Gerard appears to believe there’s something wrong with “tax avoidance,” at least for “greedy corporations and the wealthy.”  Care to guess Mr. Gerard’s position regarding “tax avoidance” by his constituency?  This is the “loopholes” discussion using different terminology.  In any case, tax avoidance is legal, tax evasion is not.

Mr. Gerard wrote, “The middle class doesn’t get those big time special deals and loopholes.”

[RWC] Not true.  This is what I meant above when I wrote Mr. Gerard is probably all for credits, deductions, and exemptions for those whom he would group into lower and middle classes, but considers the same provisions for the evil “rich” to be “special deals and loopholes.”

Mr. Gerard wrote, “It’s time to stop right-wing attempts to terminate democratic rights like collective bargaining and voting without harassment.”

[RWC] First, collective bargaining is a privilege, not a right.  Lefties like to claim banning collective bargaining for public employees is a violation of the right to free association.  They hope we ignore closed-shop laws violate the free association rights of both the employer and the employee by forcing both to do business with labor union management.  Forcing free associations would seem to be an oxymoron.

Second, Mr. Gerard fails to acknowledge the recent moves to terminate collective bargaining are only for public employees.

Third, the idea of not allowing collective bargaining for public employees is so “right-wing” it was also the position of FDR and George Meany (first president of the AFL-CIO, 1955-1979).

As for “voting without harassment,” I don’t what Mr. Gerard is referring to.  If Mr. Gerard is referring to public elections, he’s probably talking about the silly notion that voters should have to provide proof they are who they say they are when they cast a ballot.  If Mr. Gerard is referring to union certification elections, I suspect he doesn’t like employers making their pitch to the employees.  Let’s remember the employer is the guy providing the jobs and will pay the bill for whatever choice the employees make, yet labor union management believes the employer should have no input in the certification process.  Is it asking too much to allow the employer to request an election with secret ballots?  After all, closed-shop laws already greatly diminish the employer’s right to choose his employees.  As I’ve written before, labor union management won’t admit it, but the employer’s current right to call for an election protects both the employer and the employee.  Currently, an employee who feels intimidated (whether by the employer or labor union management) knows that regardless of what he does with the organizing petition, he can vote his true position in secret.  If a person is afraid of an election with secret ballots, he’s hiding something.

Keep in mind the secret ballot was one of the big things labor unions wanted back in their infancy and used the same reasons as above.  Indeed, it’s one of the demands U.S. labor union management still makes of foreign governments.  The alleged reason is to minimize the effect of intimidation by anti-union organizations.  Today, however, labor union management now claims a non-secret ballot (checking/not checking a card provided and collected by a union organizer) is needed in the U.S. to minimize the effect of alleged intimidation by employers.

Mr. Gerard writes of “country club conservatives cut[ting] off college loans.”

[RWC] Mr. Gerard appears to have forgotten part of the Obamacare was a government takeover of the student loan business.  So, unless the Obama administration is full of “country club conservatives,” I don’t know what he’s talking about.  That said, the government has no business being involved in student loans no more than it should fund home loans.  We saw how well Fannie Mae and Freddie Mac worked out, didn’t we?

Mr. Gerard tells us of “Greedy corporations, the insatiable wealthy and their purchased politicians.”

[RWC] Mr. Gerard failed to note labor union management’s activity in this area.  There’s a reason 93% of labor union management PAC contributions to federal candidates (over $62 million) went to Democrat candidates in 2010.  Since 1998 in constant 2010 dollars, these contributions ranged from $61.1 million in 1998 to a peak of $67.2 million in 2008.  Since at least 1998, only twice (2004 at 86% and 2006 at 87%) did less than 90% of labor union federal campaign contributions go to Democrat candidates.  I’ll go out on a limb and guess a similar trend at the state level.  Of the top ten contributors to 527s for the 2010 election, six were labor unions and three others were Democrat/leftist-affiliated.  Number one was Service Employees International Union at $17.6 million, more than four times number two (United Food & Commercial Workers Union) on the list and more than five times the largest business-related contributor (Pharmaceutical Product Development, Inc.) at number four.

Mr. Gerard refers to “the economic crisis caused by reckless gambling by Wall Street bankster corporations.”

[RWC] It’s funny Mr. Gerard failed to note the central, underlying role of leftist policies, programs, and government-sponsored entities.

Mr. Gerard tells his followers, “March to end tax breaks for the wealthiest one percent who have now acquired more wealth than all the workers in the bottom 90 percent.”

[RWC] At the federal level and based on 2008 income tax data, the top 1% of filers paid 38% of the total and the top 5% paid 59%.  I don’t know the figures for PA taxes.  How much more does Mr. Gerard want?

Mr. Gerard said, “The nation’s largest corporation, General Electric, earns tens of billions in profits from the labor of its workers but refuses to share the benefits with them.”

[RWC] Wow, so GE employees work for free?!  If I knew so many people would work for free, I would have started a business a long time ago.

Mr. Gerard wrote, “GE is expected to demand that its 15,000 unionized U.S. workers accept benefit cuts.  So they’ll pay more for their retirement and health care and have less money to live and to pay taxes.”

[RWC] I’ll go out on another limb and assert “less money … to pay taxes” is the central part of that thought.  Also, I suspect Mr. Gerard is worried these folks may begin to question the value of their unions and become reluctant to pay union management their dues.  Remember, only 6.9% of all private-sector employees belong to a labor union, and that includes employees forced to join a labor union by closed-shop laws.

Mr. Gerard wrote, “Under Dwight D. Eisenhower, the president in the 1950s, the nation’s richest paid an effective tax rate of 70 percent after loopholes.  Today, it’s 16 percent – significantly lower than the 25 percent forked over through payroll deductions by individual workers earning between $34,500 and $83,600 a year.”

[RWC] Actually, there were two presidents in the 1950s, Messrs. Truman and Eisenhower.  Here’s another factoid; from 1951 through 1963, the top marginal rate was 91% for income over $400,000 (except for 1952 and 1953 when it was 92%)!

Anyway, I couldn’t find anything to support the assertion “the nation’s richest paid an effective tax rate of 70 percent after loopholes.”  Logically, though, it makes no sense.  Maybe it’s just me, but who’s going to put themselves in a position where 70% of the fruit of their labor goes to the government?

I couldn’t verify the other figures either, but I did find a table of “Historical Effective Federal Tax Rates for All Households” for 1979 – 2007.  According to that table, though they varied up and down over the years, the effective tax rates for everyone were lower in 2007 than in 1979.  For the top 1% the effective tax rate was 29.5% in 2007 and between 10.6% and 17.4% for Mr. Gerard’s “middle class.”  According to 2008 federal income tax data, the top 1% effective tax rate was 23.3%, 6.8% for the top 25% to 50%, and 2.6% for the bottom 50%.

Mr. Gerard opined, “Compounding that is corporate influence, which worsened last year when the U.S. Supreme Court enabled corporations to donate unlimited money in secret.”

[RWC] I’m sure it was an honest oversight, but Mr. Gerard “forgot” to mention the same ruling applied to labor union management.  Citizens United v. FEC was about the ability of anyone to take out their own ads, commercials, etc. expressing their position regarding candidates and issues.  Direct contributions to federal candidates remain illegal for corporations and labor unions.

The way Mr. Gerard writes of “influence” and “lobbyists” you’d think labor union management doesn’t lobby and try to exert influence.

Mr. Gerard wrote, “GE spent $200 million to lobby for loopholes in the federal income tax code over the past decade, made $26 billion in American profits over the past five years, and not only paid absolutely no federal income taxes, but got itself a $4.1 billion rebate from the IRS.”

[RWC] In fairness to Mr. Gerard, trusting a New York Times article was his mistake.  An article in Fortune debunked the NY Times story.  That said, since the article told a story that suited his agenda, I’ll guess Mr. Gerard didn’t feel a need to do any fact-checking.  Even so, Mr. Gerard did “gild the lily” when he asserted GE “got itself a $4.1 billion rebate from the IRS.”  The NY Times story said “tax benefit,” not “rebate.”  That’s a big difference, and Mr. Gerard knows it.

Mr. Gerard said, “Two out of every three U.S. corporations paid no federal income taxes from 1998 through 2005, according to a report by the Government Accountability Office.”

[RWC] Stating what should be obvious, businesses pay income tax only when they make a profit.  Since the government doesn’t pay businesses when they lose money, up to a limit losses in one year can be used to reduce taxable income when filing future returns.

Mr. Gerard asserted, “Bank of America got a $1.9 billion tax refund from the IRS last year, even though it made $4.4 billion.”

[RWC] Nope.  First, BoA “had an overall tax benefit of $1.9 billion, counting federal, state, local and foreign taxes, because of losses that year,” not a “$1.9 billion tax refund from the IRS.”

Second, the $4.4 billion was pre-tax income, not profit.  When you add the $1.9 billion tax benefit and subtract required preferred stock dividends and paying back its TARP loan, BoA lost $2.2 billion.

Mr. Gerard wrote, “Right now, right wingers are trying to cut $51.5 billion from the federal budget … But if the wealthy paid their share, then those cuts would be unnecessary because the federal government would have an extra $69.5 billion in revenue.”

[RWC] In January, the CBO estimated the FY 2011 deficit would be about $1.5 trillion ($1,480 billion).  When we’re $1,480 billion short, exactly how would “an extra $69.5 billion in revenue” make spending cuts unnecessary?  Is that new math?

Mr. Gerard wrote, “Forty-three years ago on April 4 Martin Luther King was assassinated after standing up for the right of public sector workers in Memphis, Tenn. to negotiate for better lives.”

[RWC] The idea is to convince us Mr. King was assassinated because of his support of collective bargaining for public sector unions, something FDR and George Meany (first president of the AFL-CIO, 1955-1979) opposed.  A racist assassinated Mr. King because he opposed Mr. King’s position on constitutional rights for black Americans.  Had Mr. King been in Memphis only to attend a wedding that day, he would still be dead.  Mr. Gerard and the rest of the left are simply trying to wrap themselves in MLK in an attempt to convince us the collective bargaining privilege is really a constitutional right.

Another example of lefties trying to hijack the MLK “brand” is in the BCR article immediately preceding this one.  The Pittsburgh Post-Gazette’s Andrew Rush shot the video.  The video’s title on the PG website was “Protesters target budget cuts, natural gas drilling.”  By the time “CCDSNational” (probably Mr. Davidson or one of the Shannons) copied the PG video and uploaded it to YouTube (with no apparent attribution), the title changed to “Pittsburgh April 4 - 500 march to honor King, back natural gas.mp4.”  Granted the video is only two minutes long, but not once did anyone mention MLK, let alone “honor” him.  Further, amid the hundreds of signs in the video, there’s only a flash of a single MLK sign appearing to say something about jobs for all being a right.

BCR gave us yet another example.  In his article entitled “Fighting for Our Future & Honoring Martin Luther King With Solidarity,”, Carl Davidson wrote, “The occasion commemorated the anniversary of the April 4, 1968 assassination of Dr. Martin Luther King, Jr. during his effort to help striking sanitation workers in Memphis, Tennessee win union recognition.”  There are three photos embedded in the article as I’m writing.  While the photos show some signs with an arm raised in a clenched-fist salute, in none of the three embedded photos do you see a single MLK sign.  The real clincher?  The internal title of the article is “April 4 ‘We Are One’ Events: Uniting Labor and Community For an Upsurge in Class War.”  FYI, the clenched-fist salute is part of the logo for The International Socialist Organization (ISO), so unless all these folks are coordinating with a group claiming it “stands in the tradition of revolutionary socialists Karl Marx, V.I. Lenin and Leon Trotsky,” I think ISO may have a copyright or trademark infringement lawsuit to pursue.

After the Tucson shootings in January, I thought we weren’t supposed to use words of violence in our political discourse, yet signs and/or speakers/writers talk about “fighting,” “fight back,” “attacks on workers,” “war,” et cetera with images of a clenched-fist salute.  I thought this also applied to demonization, yet Mr. Gerard’s piece is demonization (“freeloaders,” “greedy,” “insatiable”) from beginning to end.

Finally, Mr. Gerard wraps up with “The promise of America democracy is equality.  Equal rights, equal treatment under the law, equal opportunity.  Freeloading by greedy corporations and the insatiable wealthy is denying those promises to the vast majority of citizens.  Americans must unify and march to wrest back those rights and secure the American Dream for all.”

[RWC] Regarding “America democracy,” the U.S. is a representative republic, but maybe that’s nitpicking.

“Equal treatment under the law?”  Seriously?  Does Mr. Gerard consider 1% of taxpayers paying 38% of federal income taxes while the bottom 50% pays only 2.7% to be “equal treatment?”

Providing goods, services, and jobs is “freeloading?”  Who is the one requiring employees to pay him tribute (dues) just to get/keep their jobs?  Further, though they themselves are businesses, albeit “nonprofit,” labor unions pay no income/revenue taxes ever.  How’s that for a “loophole” and “freeloading?”

In case you haven’t noticed, Mr. Gerard and his ilk try to sell people on the idea life is a zero-sum game such that when one person succeeds, another must fail.  That means “the insatiable wealthy” had to get their wealth by taking it from someone, and labor union management wants the power that comes from robbing Peter to pay Paul.  The way to prosperity for the most people is not to redistribute the existing pie, but to make the pie grow.

As for the reference to “the American Dream,” we have another language issue.  When lefties at Mr. Gerard’s level refer to “the American Dream,” their goal is a country in which government and political party leaders control the citizens instead of the other way around.  They hope to accomplish this goal by convincing us “the American Dream” is about entitlement and the government providing for all our needs.  I don’t know about you, but that’s not what I was taught.

For an interesting contrast to Mr. Gerard, consider some quotes of Samuel Gompers.  Mr. Gompers was a father of the American labor movement, founder of the American Federation of Labor (AFL), and AFL president for 38 years until his death.

Finally, did you note how little of Mr. Gerard’s piece had anything to do with what’s supposed to be a labor union’s job, representing members in negotiations with their employers?  Instead, this whole piece is about labor union management using union members to further a leftist agenda.  For today’s “labor movement,” union members are simply a source of revenue and free manpower to be used for promoting and implementing leftist ideology in government.  If you believe in that whole oppressor/oppressed nonsense, all that’s changed is the oppressor.  “Meet the new boss … Same as the old boss.”

In Peace, Friendship, Community, Cooperation, and Solidarity. <g>

PS: When I originally posted this critique, I decided not to mention Mr. Gerard is not a U.S. citizen.  I wanted people to focus on what Mr. Gerard said and stands for, not his non-U.S. citizenship.  I changed my mind, however, after one of my brothers mentioned the issue in a Facebook comment.  Though Mr. Gerard cannot vote in federal and Pennsylvania elections or run for office, otherwise he can legally participate in our political system just as a citizen.  For example, Mr. Gerard may make campaign contributions and has at least once ($500 in 2008 to the Democrat Congressional Campaign Committee).

Mr. Gerard is a foreign national running a political advocacy business with over 600,000 members, 2010 revenue of $277 million, and that spent over $6 million in 2010 on “Political Activities and Lobbying.”  The citizenship issue is not important because of what Mr. Gerard preaches; it’s important because of his position and the power of that position to affect local, state, and federal policies.

The above data is from USW LM-2 reports on the U.S. Department of Labor website.

FYI, prior to 2005, labor union management was not required to break out how much it spent on “Political Activities and Lobbying.”  Prior to 2005, it appears these expenditures were in the line item euphemistically named “Educational and Publicity Expense.”  As far as I can tell, USW PAC revenue/spending is on top of that raised/spent by the USW proper because current law prohibits contributions to federal election campaigns by corporations and unions.

Remember, the above figures don’t include the “volunteer” labor union member manpower used for in-kind contributions (knocking on doors, manning phone banks, generating and distributing collateral, rallies, etc.) to support leftist policies/programs/politicians.

© 2004-2011 Robert W. Cox, all rights reserved.