Don’t Lie to Poor Kids About Why They’re Poor


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Work hard and you’ll get ahead — that’s the mantra driven into young people across the country.

But what happens when children born into poverty run face first into the crushing reality that the society they live in really isn’t that fair at all?

As new research shows, they break down.

A just released study published in the journal Child Development tracked the middle school experience of a group of diverse, low-income students in Arizona. The study found that the kids who believed society was generally fair typically had high self-esteem, good classroom behavior, and less delinquent behavior outside of school when they showed up in the sixth grade.

When those same kids left in the eighth grade, though, each of those criteria had degraded — they showed lower self-esteem and worse behavior.

What caused this downward slide?

In short, belief in a fair and just system of returns ran head-on into reality for marginalized kids. When they see people that look like them struggling despite working hard, they’re forced to reckon with the cognitive dissonance.

This problem doesn’t afflict the well-off, who can comfortably imagine their success is the result of their hard work and not their inherited advantage.

Erin Godfrey, a psychology professor at New York University and the study’s lead author, explains that for marginalized kids who behave badly, “there’s this element of people think of me this way anyway, so this must be who I am.” She points out that middle school is the time when many young people begin to notice personal discrimination, identify as a member of a marginalized group, and recognize the existence of systemic discrimination.

The existence of a permanent and rigid system of inequality can be hard to grapple with at any age. The United States leads the world in overall wealth yet is also near the top in childhood poverty, with one in five kids born into poverty.

Despite an often-repeated myth about social mobility — the ability of the poor to become rich — the United States lags behind in this category. Canada now has three times the social mobility of the United States.

The gap between the rich and poor starts early. A 2016 study by the United Nations Children’s Emergency Fund reports: “From as early as the age of 3, children from more affluent backgrounds tend to do better in cognitive tests.” By age 5, children from poor families are three times more likely to be in the bottom 10 percent in cognitive ability.

It’s a complex problem. But the solutions to this deep structural inequality are actually fairly straightforward.

In short, we need major investments in universal public programs to rebuild the social safety net, ensure early childhood education as well as debt-free higher education, and good-paying jobs.

In other words, we need to help those born without inherited assets to get the same shot at education and employment as everyone else — and also reassure them that if they fail, they won’t end up homeless.

Those who claim the country can’t afford such programs should look at the massive subsidies lavished out to the ultra-wealthy. In 2016, half a trillion dollars were doled out in tax subsidies, overwhelmingly to the already rich.

But before we do all that, we simply have to tell the truth: Our economic system is far from fair. It’s tilted heavily against marginalized communities.

Teaching that to kids, rather than perpetuating a myth about “fairness,” is an important step forward.


How Wealth Managers Undermine Society and What We Can Do About It


It’s Time for Trump to Do Something About High CEO Pay


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The House is expected to vote Thursday on a Wall Street deregulation plan that would roll back several Obama-era CEO pay reforms, including a ban on banker bonuses that encourage excessive risk, and a new regulation that requires publicly held corporations to report the ratio between their CEO and median worker pay. But instead of rolling back modest pay reforms already on the books, lawmakers should be pushing for bolder solutions, such as using tax and government contracting policies that reward firms with reasonable CEO pay levels.

While President Donald Trump bashed high CEO pay on the campaign trail, since taking office, he hasn’t raised the slightest concern about his fellow Republicans’ crusade to repeal Obama-era executive compensation reforms.

If Trump truly wants to “make America great again,” one of his primary goals should be to restore CEO pay to the more rational levels of decades past. In 1980, the gap between average pay for the heads of large U.S. corporations and typical workers ran about 42 to 1. Today, this pay ratio stands at 347 to 1.

These extreme disparities are not only unfair, but they’re bad for business.

Company culture
The mega-millions that flow directly into executives’ pockets every year are just a small fraction of the total cost to American companies. But the effects on employee morale carry a much higher price. When the boss makes 347 times more than you, it’s difficult to swallow the canard that “there is no ‘I’ in team.” A 2016 Glassdoor survey of 1.2 million people bears this out statistically, finding a strong correlation between high CEO pay and low employee approval ratings for their bosses.

A Brookings Institution analysis reached a similar conclusion, finding that “large differences in status” within companies can inhibit participation. And in a study published in Administrative Science Quarterly, four researchers agreed that “extreme wage differentials between workers and management discourage trust and prevent employees from seeing themselves as stakeholders.”

Read the full article on Fortune’s website. 


There Was Nothing Moderate About Trump’s Speech

Climate of Fear

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Donald Trump began his recent speech to Congress with a line seemingly designed to appease his critics. “As we mark the conclusion of our celebration of Black History Month,” he said, “we are reminded of our nation’s path toward civil rights and the work that still remains.”

He went on to condemn “recent threats targeting Jewish Community Centers and vandalism of Jewish cemeteries, as well as last week’s shooting in Kansas City” — and, why not, “hate and evil in all its forms.”

Some pundits, who apparently set a very low bar, applauded Trump for this “presidential” moment. Washington Post blogger Chris Cillizza, whom Trump himself once called “one of the dumber” pundits, praised Trump on Twitter for his “VERY nice grace note about our shared humanity.”

Was it, though?

For context, Trump was referring to a wave of over 100 recent bomb threats that have been called into Jewish schools and community centers all over the country, as well as the vandalism of hundreds of Jewish graves at cemeteries in St. Louis and Philadelphia.

Meanwhile, in Kansas City, a drunken bar patron shouting “get out of my country!” recently shot two Indian immigrants, killing one. The shooter reportedly thought the men were Iranian, which would have put them on the list of banned migrants under Trump’s seven-country “Muslim ban.”

Investigations are ongoing, but many suspect that racist white nationalists are behind each of these incidents. Yet Trump never named those perpetrators. In the Kansas City case, in fact, he didn’t even name the victims.

Worse still, when talking about the anti-Semitic incidents before his speech to Congress, he even implied they might’ve been a false flag operation — carried out by his opponents “to make others look bad.”

You can be sure this was no accident. Because when Trump talked about other so-called threats, he was extremely explicit.

He gestured for emphasis on every word as he promised to defend the country from “Radical Islamic Terror,” which is capitalized in the speech’s official transcript. And he falsely blamed “the vast majority” of “terrorism-related offenses since 9/11” on immigrants.

(Some factual asides: According to the New America Foundation, virtually all perpetrators were citizens or legal residents, and half of them were born here. And no Americans have ever been killed by refugees from any of the seven Muslim countries Trump has sought to ban.)

Moving on, Trump twice called out “vicious” crimes by “illegal gang members” before announcing the creation of a special agency to document alleged crimes by undocumented people. Yet numerous studies have confirmed that both documented and undocumented immigrants are less likely to commit crimes than native-born Americans.

Make no mistake, Trump’s lies are carefully told to generate hostility toward Muslims and immigrants. Worse still, they conceal a growing threat the man obsessed with calling out “Radical Islamic Terror” won’t even name.

Last month, the Southern Poverty Law Center counted over 1,000 active far-right and white nationalist groups in the United States. Groups like these, Foreign Policy magazine recently reported, “plan and carry out domestic attacks at a greater frequency than foreign terrorist groups.”

Since 9/11, it adds, “anti-government groups have racked up a death toll on par with that of Islamist extremists.”

No wonder authorities polled in a 2015 survey of 400 state, local, and federal law enforcement agencies listed far-right groups — not Muslims — as “the most severe threat of political violence that they face.”

You don’t have to read far between the lines to figure out that this speech was no “softer side” of a more “presidential” Trump. It was a barely coded message to the president’s far-right followers that the administration’s going to continue covering for their hate.

And it was a not-so-subtle threat to everyone else.

Peter Certo is the editorial manager at the Institute for Policy Studies.


The Worst Thing About Sessions? Everything We Already Knew.


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Attorney General Jeff Sessions is in hot water following revelations that he met twice with Russia’s U.S. ambassador when he was a surrogate for the Trump campaign — and then lied about it to Congress. Many of his critics are now calling for his resignation.

The contents of Sessions’ talks with the Russians aren’t known. But it’s worth taking a look at other highlights from his biography that are perfectly well known — but weren’t enough to keep him from getting the top law enforcement job in the country.

For example, Sessions was barred from a federal judgeship in the 1980s due to concern about his racist attitudes.

As a senator, he voted to undermine the Voting Rights Act of 1964 and racked up a 20-plus year track record of opposing LGBTQ rights. He even voted against the reauthorization of the Violence Against Women Act, and opposed adding crimes against gay people to the list of hate crimes.

Unsurprisingly, Sessions has a miserable 7 percent rating from the NAACP on affirmative action, and scores just 20 percent from the ACLU with regard to upholding civil rights.

As attorney general, he’s given clear indications that he’ll turn a blind eye to police brutality. And  in his first hours in office, he rushed to rescind the Obama-era guidance that clarified that school children couldn’t be discriminated against based on their gender.

None of this seems to disqualify him, in the eyes of his party loyalists and the Trump administration, as the arbiter-in-chief of justice and civil rights in the United States of America.

Now though, some Republicans are calling on Sessions to recuse himself from overseeing the investigation of Russian hacking into our elections because — well, he himself may just prove to be a Russian hack. Sessions reluctantly agreed, but many on the left are still demanding his resignation.

We don’t know if Sessions was party to this Russian scheming or no. Though, if it walks like a duck and quacks like a duck… well, you know the rest.

Whatever the case, the contents of Sessions’ contacts with the Russian ambassador would have to be pretty egregious to even hold a candle to his lifetime record of reaction on civil rights. But if the taint of being associated with Russian hacking is enough to spur the eventual resignation of a guy — or a duck, as the case may be — who appears to hold justice and civil rights to be repugnant ideas, we say: Let the Grand Old Party descend and send him quacking.

Karen Dolan directs the Criminalization of Race and Poverty project at the Institute for Policy Studies. Peter Certo is the IPS editorial manager.


The Trade Debate Isn’t About the U.S. vs. the World, It’s Corporations vs. the Rest of Us

Media Contacts:
John Cavanagh,, 202 297 4823
Domenica Ghanem,, 202 787 5205

In an executive order yesterday, Donald Trump scrapped the Trans Pacific Partnership under the guise of bringing jobs back on American soil and promised to renegotiate the North American Free Trade Agreement.

This is the response of Institute for Policy Studies Director John Cavanagh, who has been analyzing U.S. trade policies since the 1994 launch of NAFTA:

“IPS has worked for many years with the broad array of labor, environmental, consumer, and other civil society groups in many countries that are primarily responsible for the death of the TPP agreement. The pact was designed in the interest of large corporations – circumventing labor and environmental standards, offshoring jobs, and granting excessive investor rights that would let tribunals sue governments against the public interest.

But we cannot allow the trade policies that replace it to put the interests of multinational corporations first, as the renegotiation of NAFTA under a Trump administration teeming with corporate interests is positioned to do. Trump has promised that the NAFTA renegotiation will create jobs in the United States, but if corporate elites are allowed to dictate the renegotiation, Trump’s false economic populism will result in Americans facing job loss, wage stagnation, and eroding working conditions, especially for low-income workers and workers of color.

We need an internationalist approach to trade that lifts up labor rights, environmental standards, and human rights for people in all of the nations involved in the agreement, and provides good jobs for workers in the U.S. Trump wants to allow corporations to pit American workers against other working communities in a global race to the bottom. IPS will fight with broad civil society networks for a trade policy that lifts up all working families and the environment.

We support the recent trinational declaration that brings together Canada, Mexico, and the United States to make a transparent, internationalist approach to trade a reality.”

For more information:

John Cavanagh,, 202 297 4823

The post The Trade Debate Isn’t About the U.S. vs. the World, It’s Corporations vs. the Rest of Us appeared first on Institute for Policy Studies.

John Cavanagh is the director of the Institute for Policy Studies.


Why We Need to Worry about Wilbur Ross


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Billionaire Wilbur Ross, the Donald Trump adviser who may well become our next U.S. secretary of commerce, loudly opposes NAFTA and other trade pacts that ship U.S. jobs abroad.

Does that opposition make Wilbur Ross a corporate good guy?

Not quite. Wilbur Ross has made his private equity billions the old-fashioned way — by exploiting American workers right here in the US of A.

Those profits typically come right out of the hides of workers. Ross has been working the financial industry’s bankruptcy beat since the mid 1970s. His specialty: scouring America’s economic landscape for failing companies in down-and-out industries, buying them up cheap, and then “flipping” them for big profits.

Ross has never shown much interest in the difficult details of turning mismanaged enterprises into companies that can operate efficiently and effectively over the long haul. His private equity empire focuses instead on cutting costs.

And that cost cutting comes easy with companies in bankruptcy or about to fall into it.

Bankrupt companies can dump their liabilities — like mandates to fund pension plans — off the corporate balance sheet and onto somebody else’s shoulders. They can, as the economists like to say, “externalize” their costs.

Ross started externalizing his way to billionaire status with the steel industry. He waited until two steel giants — LTV and Bethlehem Steel — hit the bankruptcy skids, then picked up the two companies for a song, after going bankrupt had enabled the companies to shift their pension obligations onto the government-run Pension Benefit Guaranty Corporation.

In no time at all, the International Steel Group that Ross created in 2002 to house his steel company collection would become the nation’s largest steel producer. He then sold it, late in October 2004, for 14 times his original investment.

By that time, Ross had also branched out big-time into textiles, where he followed the same basic M.O. as in steel. He created an International Textile Group and packed it with bankrupt textile companies that had successfully sidestepped their pension obligations and squeezed various other concessions out of workers. Ross would squeeze some more and even move some jobs overseas.

Ross next moved into coal. Early in fall 2004, he spent over three-quarters of a billion dollars to buy up a Kentucky-based coal-mining company, Horizon Natural Resources, and created the International Coal Group to host it.

“Ross’ buy-in,” the Chicago Tribune would later report, “came only after a bankruptcy court judge released Horizon from its promise to pay health-care benefits to its retirees.”

The Ross-run International Coal Group then added another bankrupt rust-belt operation, the Anker Coal Group, to its portfolio. Anker made a fitting takeover target. The company was already busy slashing costs — by playing fast and loose with mine safety regulations.

That compromising with safety would continue under the watch of Wilbur Ross, right up until the second day of January in 2006 when an explosion at one of the company’s mines in Sago, West Virginia, left 12 miners dead.

Wilbur Ross, now 78, is still fishing for potential bargains. He’s been “scouting for distressed companies in marine shipping,” Bloomberg reported earlier this fall. But that scouting around, complains Ross, is getting ever more difficult.

“It’s harder and harder and harder to find value,” he’s complaining, “even if you look in the dustbin.”

Ross himself may one day end up in history’s proverbial dustbin. But for the moment, with Donald Trump about to occupy the White House, Wilbur is riding higher than ever.

The post Why We Need to Worry about Wilbur Ross appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.


Ballot Initiatives to Watch if You Care About Inequality


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During the Gilded Age of the late 19th century, when levels of inequality were as sky-high as they are today, progressive reformers fought for the right to use citizen-led petition campaigns to circumvent the power of economic elites.

This right is now available in 24 states and Washington, D.C. through ballot initiatives. And in a year in which Bernie Sanders pushed inequality into the center of the primary debates, it’s not surprising that many of the 2016 initiatives reflect the public’s growing outrage over our return to Gilded Age-level divides.

Of course corporate-backed groups are putting up big money to undercut this form of direct democracy. But North Dakota voters already notched one victory for the little guy in their June primary when they voted 3-to-1 to uphold rules prohibiting corporate farming. Here are some of the other key inequality-related state ballot initiatives we’ll be watching on election night.

1. Tax increases on the wealthy and corporations (California, Oregon, Maine)

In 2012, California temporarily raised state income taxes on millionaires to the highest in the country, with a rate of 13.3 percent on incomes over $ 1 million. In the years following, the Golden State economy has flourished, disproving conservative economists’ predictions that calamity would ensue. Voters will decide on Tuesday whether to extend this tax increase, and the $ 4 billion-$ 95 billion in annual revenue that would come with it, for another dozen years.

Oregon’s corporate taxes on large and profitable corporations are the lowest in the country. The group A Better Oregon is working to change that through Measure 97, which would raises rates on corporations with over $ 25 million in sales in the state, with revenue earmarked to fund education, health care, and senior services.

Question 2 on Maine’s ballot would add a 3 percent tax on the incomes of households earning more than $ 200,000 a year. The initiative would further reduce inequality by channeling revenue towards closing the gap between rich and poor school districts.

2. Minimum wage increases (Maine, Colorado, Arizona, Washington)

In 2014, minimum wage measures won in all of the five states where they were on the ballots, including in the four red states of Alaska, Arkansas, Nebraska, and South Dakota. This year, voters in four states — Maine, Colorado, Arizona, and Washington — will have the chance to lift up the bottom of the wage scale.

Maine’s Question 4 is of particular interest because it would phase out the subminimum wage for restaurant servers and other tipped workers by no later than 2024. The Maine, Arizona, and Colorado initiatives each tick up the wage to $ 12 per hour by 2020, while Washington goes up to $ 13.50. Arizona and Washington also include earned sick leave protections.

In South Dakota, living wage advocates are in defense mode. After winning a raise in the minimum wage from $ 7.50 to $ 8.50 in the last election, they’re now fighting an initiative that would claw back that raise for workers under 18 years old. MIT’s Living Wage Calculator shows the hourly living wage for an individual with no dependents in South Dakota is $ 9.54 for a full-time worker. It jumps to $ 19.87 for a single parent.

3. Protection against drug price gouging (California)

Proposition 61 prohibits the state of California from paying more than U.S. Department of Veterans Affairs does for the same pharmaceuticals. This would include medicine purchased for state employees and retirees, university students, prison inmates, uninsured people with HIV/AIDS, and residents covered by the state’s public insurance program.

Big Pharma has spent nearly $ 90 million to defeat the proposal with plans to spend over $ 100 million before Election Day, making this initiative the most expensive in 2016. These corporate giants have good reason to worry. With a win in California, this campaign could spread to other states and to the federal level where Senator Bernie Sanders aims to make drug cost control a top priority for the coming Congress.

4. Protection against predatory lending (South Dakota)

South Dakota’s Initiated Measure 21 would set a cap of 36 percent on short-term payday loan interest rates, which currently average an astounding 650 percent in the state. According to Public Citizen, corporate-backed opponents of this initiative have outspent supporters by 16-to-1. This predatory industry has also funded a competing measure (Constitutional Amendment U) that would cap rates at 18 percent, but with a huge loophole that would allow unlimited interest rates as long as the borrower agrees to the rate in writing. The industry’s proposal would place the provision in the state constitution, effectively tying the hands of state legislators to crack down on sky-high interest rates.

5.Limits on corporate rights and money in politics (California, Missouri, South Dakota, Washington)

Initiative 735 in Washington and Proposition 59 in California encourage each state’s congressional delegation to work to overturn Citizens United. These efforts keep the issue of big money in politics in the spotlight, but won’t do much to break through Washington gridlock.

In Missouri and South Dakota, voters have the opportunity to pass campaign finance initiatives with a bit more bite. Missouri’s Amendment 2 would place a hard limit on contributions for state and judicial candidates. In 1994, voters in that state overwhelming approved a similar ballot initiative, but a Republican governor and GOP-led legislature repealed it in 2008.

In South Dakota, initiated Measure 22 would establish a publicly funded campaign finance program and an ethics commission. This bold initiative is the work of Represent.Us a national anti-corruption group spawned in the wake of Citizens United.

6. Right to work for less (Alabama, Virginia)

The 26 mostly southern states with so-called “right to work” laws that undercut labor unions tend to have lower wages, less health care coverage, and an overall lower quality of life. Nevertheless, ant-union ideologues want to see these laws cemented in their state’s constitutions with the Right to Work amendment in Virginia andAmendment 8 in Alabama.

7. Charter Schools (Massachusetts, Georgia)

Billionaires including Michael Bloomberg to the Walton family have pumped more than $ 11 million into Massachusetts in support of Question 2, an initiative to lift the cap on charter schools, which would take away up to $ 100 million in much-needed funding from public schools. Meanwhile Republican Georgia Governor Nathan Deal is supporting Amendment 1, an initiative that would allow that state to give absolute power over public schools to a hand-picked appointee and allow for-profit corporations to run Georgia’s education system.

The post Ballot Initiatives to Watch if You Care About Inequality appeared first on Institute for Policy Studies.

Sarah Anderson is director of the Global Economy project at the Institute for Policy Studies.

Josh Hoxie is director of the Project on Opportunity and Taxation at the Institute for Policy Studies.


The Bad News about Good Census Numbers


(Photo: Unarmed Civilian / flickr)

Poverty is down, median income is up and health coverage expanded last year. These gains are felt across all racial, ethnic, gender and age groups in the U.S. The gender pay gap, income inequality, unemployment rates – all decreasing. Both the poor and those with middle incomes saw economic gains in 2015, according to new U.S. Census data. And the economy even added more than 2.6 million jobs last year.

Sounds like cause for celebration, doesn’t it? But don’t break out the bubbly just yet. Although these figures are heartening, especially after so many years of increasing hardship in the wake of the 2008 financial collapse, the news appears much better than it really is.

Forty-three million people still live in poverty in the U.S., including 14.5 million children.According to an analysis of the U.S. Census data, black women still take home just 63 cents compared to a white man’s dollar, and Latinas make a measly 54 cents per dollar.

In 2015, according to a new study by the Economic Policy Institute, the gap in hourly wage pay between white and black workers widened to nearly 27 percent, the widest racial pay gap in 40 years. Further, the racial wealth gap is the highest it’s been in 30 years. Meanwhile, the richest Americans’ wealth has grown by an average of 736 percent. That’s 10 times the rate of wealth growth for the Latinos, and nearly 30 times the rate of growth for the black population, says a report by the Institute for Policy Studies. IPS’ analysis further finds that by the year 2043, that huge chasm in wealth between white people and black and Latino people will double if we don’t do something to change it. And to squeeze the last bit of helium out of that quickly deflating balloon celebrating new census data – median income for all but the richest 5 percent of Americans is still below pre-recession rates.


The post The Bad News about Good Census Numbers appeared first on Institute for Policy Studies.

Karen Dolan is the director of the Criminalization of Poverty project at the Institute for Policy Studies.


?What the Democratic Party Platform Tells Us About Where We Are on War


(Photo: Flickr / Bradley Siefert)

On July 1 the Democratic Party released its draft platform, which went before the full platform committee on July 8-9, and will debated at the Democratic Party Convention in Philadelphia at the end of this month.

The 35-page draft reminds us of two crucial realities: the limits of party politics while corporate and military interests dominate both parties, and, crucially, the necessity of social movements to challenge those limits and—sometimes—to win.

The 2016 draft includes some significant progressive positions which were the targets of strong social movements: on immigrant rights, taxing the rich, abortion rights, raising the federal minimum wage to $ 15, ending the death penalty, and more. The platform doesn’t reflect real policy commitments, of course, or rejection of the powerful economic forces behind the Democratic Party.

Bill Clinton’s Labor Secretary Robert Reich described the platform draft as providing “a relatively easy way for so-called mainstream and centrist Democrats to make progressive Democrats feel included without really changing the status quo or ruffling feathers on Wall Street.” Platform language, he said, is “still just rhetoric… It reveals the current limits of what is acceptable political discourse inside the party.”

But it does show that committed and strategic movements can have impact. The sections of the platform on Wall Street and tax reforms, in particular, are much bolder than those in the 2012 draft. For example, the new draft expresses support for “a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets.” This idea of a small tax to curb financial speculation while generating funds for job creation, climate programs, and other social needs was still on the political margins in 2012.

And yet on other key issues—most notably the Trans-Pacific Partnership—even a strong and militant trade-union-led opposition, backed by a host of civil-society organizations and even key Democratic Party figures, was unable to achieve its goal. While Bernie Sanders strongly opposes the corporate-empowering TPP, and even longtime “free trade” backer Hillary Clinton moved to reluctantly and tentatively oppose the agreement, the Democratic leadership was unwilling to directly challenge President Obama in the platform. The language instead is limited to the acknowledgment that there is a “diversity of opinion” in the party on the TPP.

But it is on the platform’s dealing with issues of war and peace, militarism and diplomacy, Palestine and Israel, that both the potential and the limitations of social movements are most clear. Discussion of today’s U.S. wars—with thousands of ground troops, warplanes and pilots, drone bombers, special forces, CIA paramilitaries, and so many more now actively at war in Afghanistan, Iraq, Syria, Yemen, Libya, and beyond; with thousands dying and millions displaced; with hundreds of billions of dollars squandered on these wars—was virtually absent during the platform debates.

Read the full article on the Nation’s website.

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Phyllis Bennis directs the New Internationalism project at the Institute for Policy Studies.