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Class, Race, Gender & Crime: Social Realities of Justice in America

A 2nd edition (2007) is available - substantially reorganized, expanded and cheaper

Ch 2, Class

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PUNISHING REPEAT OFFENDERS

In 1964, William Rummel received three years in prison after being convicted of a felony involving the fraudulent use of a credit card to obtain $80 worth of goods.  Five years later, he passed a forged check in the amount of $28.36 and received four years.  In 1973, Rummel was convicted of a third felony -- obtaining $120.75 by false pretenses for accepting payment to fix an air conditioner that he never returned to repair.  Rummel received a mandatory life sentence under Texas' recidivist statute.  He challenged this sentence on the grounds that it violated the 8th Amendment’s prohibition of cruel and unusual punishment by being grossly disproportionate to the crime.

In Rummel v Estelle (1980) the Supreme Court affirmed Rummel’s life sentence for the theft of less than $230 that never involved force or the threat of force.  Justice Louis Powell’s dissent noted that “it is difficult to imagine felonies that pose less danger to the peace and good order of a civilized society than the three crimes committed by the petitioner” (445 US 263, 295).  However, Justice William Rehnquist’s majority opinion stated there was an “interest, expressed in all recidivist statutes, in dealing in a harsher manner with those who by repeated criminal acts have shown that they are simply incapable of conforming to the norms of society as established by its criminal law” (445 US at 263).  After “having twice imprisoned him for felonies, Texas was entitled to place upon Rummel the onus of one who is simply unable to bring his conduct within the social norms prescribed by the criminal law” ( 445 US at 284).                   

Now consider the case of General Electric, which is not considered an habitual criminal offender after committing diverse crimes over many decades. In the 1950s, GE and several companies agreed in advance on the sealed bids they submitted for heavy electrical equipment.  This price-fixing defeated the purpose of competitive bidding, costing taxpayers and consumers as much as a billion dollars.  GE was fined $437,000 – a tax-deductible business expense – the equivalent of a person earning $175,000 a year getting a $3 ticket.  Two executives spent only 30 days in jail, even though one defendant had commented that the price-fixing “had become so common and gone on for so many years that we lost sight of the fact that it was illegal”. 

In the 1970s, GE made illegal campaign contributions to Richard Nixon’s Presidential campaign.  Widespread illegal discrimination against minorities and women resulted in a $32 million settlement. Also during this time, three former GE nuclear engineers – including one who worked for the company for 23 years and managed the nuclear complaint department – resigned to draw attention to serious design defects in the plans for the Mark III nuclear reactor because the standard practice was “sell first, test later”. 

In 1981, GE was convicted of paying a $1.25 million bribe to a Puerto Rican official to obtain a power plant contract.  GE has plead guilty to felonies involving the illegal procurement of highly classified defense documents.  In 1985, it plead guilty to 108 counts of felony fraud involving defense contracts related to the Minuteman missile.  In spite of a new code of ethics, GE would be convicted in three more criminal cases over the next years, plus paying $3.5 million to settle cases involving retaliation against four whistle-blowers who helped reveal the defense fraud.  (They subsequently lobbied Congress to weaken the False Claims Act.)  In 1988, the government returned another 317 indictments against GE for fraud in a $21 million computer contract. 

In 1989, GE’s stock brokerage firm would pay a $275,000 civil fine for discriminating against low income consumers, which was the largest fine ever under the Equal Credit Opportunity Act.  A 1990 jury convicted GE of fraud for cheating on a $254 million contract for battlefield computers and journalist William Greider reports that the $27.2 million fine included money to “settle government complaints that it had padded bids on two hundred other military and space contracts”.

Because of tax changes they lobbied for and the Reagan tax cuts generally, GE paid no taxes between 1981 and 1983 when their net profits were $6.5 billion.  In fact, in a classic example of corporate welfare, they received a tax rebate of $283 million during a time of high national deficits even though they eliminated 50,000 jobs in the United States by closing 73 plants and offices. Further, “Citizen GE” is one of the prime environmental polluters and is identified as responsible for contributing to the damage of forty-seven sites in need of environmental cleanup. 

Currently, GE advertises that it ‘brings good things to life’ and owns NBC television.  Even though felons usually loose political rights, GE’s political action committee contributes hundreds of thousands to Congress each year.  In spite of having been convicted of defrauding every branch of the military multiple times, GE frequently is invited to testify before Congress.  If their revenue were compared to the Gross Domestic Product of countries, they would be the 53rd largest economy in the world.  In 1997, GE’s CEO Jack Welch Jr. made $8,800,797 in salary, bonus, and other compensations  He had an additional $18,783,000 in stock options for a total yearly pay package of $27,583,797.  Jack Welch Jr. also has $182,243,818 in unexercised stock options from previous years (Executive Paywatch http://www.paywatch.org). ‘Three strikes and you’re out’ does not apply to GE, which is still at bat after hundreds of felony convictions.

March 2003 - life sentence for stealing three golf clubs worth $400 each because of prior burglaries upheld by Supreme Court in Ewing v California. Meanwhile, Ken Lay and other corrupt CEOs don't have any criminal charges filed against them. 

RESOURCES ON SOCIAL CLASS

Companion website for The Rich Get Richer & the Poor Get Prison

Marxist Internet Archive

NeedCom: for panhandlers & potential customers

Worker.org

Elite Deviance resources of PaulsJusticePage

Microsoft & Bill Gates' Worth

Institute for Research on Poverty

Federal Poverty Guidelines & Research


Yahoo

Poverty

Social Class & Stratification

Marxism


Class War

Homelessness Resources

Society for Cinema Studies - Caucus on Class awesome links

Marxist criminology information from the Red Feather Journal (T.R. Young)

May 2002, Washington Post: Study: Contracts Given To Repeat Violators - Large Firms Benefit Despite Infractions In fiscal 1999, the latest year for which data was available, 43 of the largest contractors won $185 billion in government business; over the last 12 years, 30 of them paid $3.4 billion in fines, settlements and restitution, according to the Project on Government Oversight (POGO). Over the last 12 years, the report said, only one contractor, General Electric's aircraft division, was suspended from bidding -- for five days. POGO found that 16 of the 43 contractors examined had been convicted of 28 criminal violations; four of the top 10 have at least two criminal convictions.

ADDITIONAL RESOURCES: 

Bibliography on class in film and media studies

Is Bill Cosby Right or Is the Black Middle Class Out of Touch? (NPR interview with Dyson + book excerpt)

NY Times series on class - many topics like health, marriage, religion, etc

Census Bureau - current info on Poverty, Poverty Guidelines and Income. The Global Rich List places income figures in a global perspective and is good for understanding the privilege from living in the developed ('1st' world). 

Wealth inequality charts and CEO pay charts (faireconomy.org); more on CEO Compensation (Forbes magazine)

Bush Has A Cabinet Full of Wealth: One-Third Top $10 Million Mark by Thomas B. Edsall (Washington Post) - When Vice President Cheney and the 14 other statutory members of President Bush's Cabinet meet, 10 of them have one thing in common: They are millionaires. In fact, one-third of the Cabinet members, according to their financial disclosure statements, are in the $10 million-plus range, while another third are in the $1 million to $5 million range. The heaviest hitter is former Alcoa chief executive Paul H. O'Neill, now the treasury secretary. He is worth between $67 million and $253 million. Disclosure forms do not give specific price valuations for holdings, but instead require officials to state whether an asset is worth from, for example, $100,000 to $250,000, or $5 million to $25 million. 

Gap Between Rich and Poor Grows: Fed Report Details Families' Income Situations By Albert B. Crenshaw (Washington Post, 23 January 2003; Page E01): The rising economic tide of the late 1990s lifted the boats of almost all American families but also sharply increased the wealth gap between the rich and the rest of society, according to a survey released yesterday by the Federal Reserve. The net worth of most families -- the value of their assets minus their debts -- also rose strongly, with the median climbing 10.4 percent, to $86,100, over the three-year survey period. Among blacks it rose 13.1 percent, to $19,000 from $16,800. But the net worth of the wealthiest families climbed even more. The median among those in the top 10 percent leapt to $833,600 from $492,400, while the mean soared to $2.26 million, from $1.68 million three years before. These families' median income leapt 19.3 percent, to $169,600, during the same period. The median is the midpoint for a group; the mean is the arithmetical average. 

Jared Bernstein of the Economic Policy Institute noted that in 1992, the net worth of the families in the top 10 percent was 13 times that of the families in the next-to-lowest 20 percent. That ratio was about the same in 1998, he said, but by 2001 it had climbed to 22.4. 

Number of millionaires hits record: The ranks of Americans worth $1 million grew 21% in 2004; the $5 million club grew even faster. By Les Christie (CNN.com/Money 25 May 2005)

Federal Reserve's Survey of Consumer Finances - detailed statistical look at income, wealth & assets of households - I'd highly recommend Kennickell, Rolling Tide: Changes in the Distribution of Wealth in the U.S. 1989-2001 (51 page/.pdf) - which contains some analysis of Black-White wealth differences. Also, Aizcorbe, Kennickell, and . Moore, Recent Changes in U.S. Family Finances: Evidence from the 1998 and 2001 Survey of Consumer Finances. (32 page/.pdf)

See also The Wealth of Hispanic Households, 1996 - 2002 by the Pew Hispanic Center (Click on 'Complete Report'). Note that the Pew Center uses a slightly different data set than the Federal Reserve Board, so the reports are not completely comparable. The survey used in the Pew Center analsysis over-sample low income and says that it may miss of the wealthiest people (whites) and thus show a more equal distribution of white wealth than really exists. 

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