NEW YORK - November 18 - NOW with Bill Moyers: "A Question of Fairness"
PBS Airdate: November 21, 2003 at 9PM on PBS
(check local listings at http://www.pbs.org/now/sched.html)

In the United States, the idea that anyone can succeed is a vital part of our national identity. But today, the middle class is shrinking, the gap between the rich and poor is widening, and the American dream is at risk. What's behind the growing disparity that's creating a two-class society?

On Friday, November 21, 2003 at 9 P.M. on PBS (check local listings), "A Question of Fairness," a special edition of NOW with Bill Moyers, analyzes how the politics of the privileged is jeopardizing America's economic future. The program traces the roots of the growing economic inequality in the U.S. and illustrates the sometimes forgotten human toll of government policies that favor corporations over individuals. The 60-minute broadcast, produced by award-winning producer Peter Bull has three parts: (1) a look at NAFTA's role in the impending extinction of a cherished American way of life in the story of a once-thriving Pennsylvania mill town and the hardworking residents plunged into the desperate ranks of the working poor; (2) a window into the tangible human costs of financial deregulation laws passed in the late 1990s by corporate-friendly politicians and the WorldCom collapse that stole the future away from so many individual investors; (3) a tale of the best intentions derailed by corporate greed in a profile of a Republican governor's thwarted bid to reform the nation's most regressive tax system and level the playing field for Alabama's poor.

"Essential to the soul of democracy is the question of fairness. Absolute equality is impossible, but can a country with great extremes between rich and poor be fair? This is an extraordinarily complicated story, and in this hour we analyze some of the examples of how real people are affected when the see-saw of economics tilts so far in one direction," says Bill Moyers. "We live in a political economy, and viewers of this report will see how what happens to America on the economic front can often be traced through what happens out of sight, behind a closed door in some political corridor of power."

Part 1
In Tamaqua, Pennsylvania, a way of life is coming to an end. Workers who once took pride and made a decent living from a lifetime of hard work at a local knitting mill are now struggling to survive. One of those workers is Carol Moyer. "I often thought in the back of my mind, 'How could someone be on public assistance?' I look at those people differently now," she says.

NOW travels to this former coal town, where a knitting mill sustained the local economy and provided living wages for generations, until it was recently acquired the multinational conglomerate Sara Lee. Three years after purchasing the plant, the company announced that it would be converted into a distribution center with a much smaller labor force. Hundreds of employees were told their jobs were going to workers in Honduras and China, where wages are a fraction of what they were paid.

Critics blame government policies like the North American Free Trade Agreement (NAFTA), which was signed into law in 1993, and the granting of permanent trade privileges to China in 2000.

Supporters of free trade contend that corporations compete more efficiently when trade barriers and tariffs are lowered or removed, creating prosperous companies and generating jobs. But opponents say the policies have instead served to aggravate inequality in the country -- undermining America's middle class -- because the policies are skewed in favor of employers at the expense of workers and consumers.

"Companies are firing their own customers," says Thea Lee, the chief international economist for the AFL-CIO. "They're taking a good job with good pay...they're putting that person on the unemployment rolls, they're moving the production to a place where a worker is paid maybe a tenth of what the American worker had been paid...and then they bring the goods back in."

"The poor always can get help. The middle class--it's like you make just a little over and you can't get any type of...financial help, medical help," says Liz Mihalick, who was laid-off by Sara Lee. "The rich--they have them money to take care of themselves. The middle class is...left out."

Part 2
Verbalee Watts is a casualty of corporate greed. She was one of thousands of investors whose financial futures were jeopardized when in the summer of 2002, telecom giant WorldCom collapsed under revelations of the most massive accounting fraud in corporate history. But how could fraud happen on such a large scale without triggering alarm bells for the accounting auditors, the company's board of directors, or the government watchdogs of the Securities and Exchange Commission?

Watts, an accountant who was careful making her investment decisions, places the blame for the scandal not just on the company, but on the government regulations that let it happen. "I looked at the track record, and had the track record been correct I wouldn't have put my money in," she tells NOW. "They should be regulated, because if you don't regulate them, do you think they're going to do it willfully? I don't think so."

NOW goes in search of some of the overlooked contributing factors behind the recent stock market crash, which has added substantially to the inequality gap and left many struggling. The segment examines how federal securities laws passed in 1933 and 1934, in the wake of the 1929 stock market collapse, were watered down in the 1990s by the Litigation Reform Act, which was aimed at reducing securities fraud lawsuits. The legislation passed just as the dot-com bubble was starting to inflate and helped further erode investor protections put in place 60 years ago.

"Getting rid of frivolous lawsuits is a very good idea, but that's not what the legislation was all about," says attorney Pamela Gilbert, who has long fought for investors' rights. "The legislation was going to protect criminals and swindlers, and white-collar defrauders." The Litigation Reform Act was promoted by lobbyists for Wall Street firms and the Big Five accounting firms that sought relief from investor lawsuits that cost them hundreds of millions. This combined with other legislation passed in Washington during the same period created a climate of conflict of interest that was the perfect environment in which scandals like WorldCom and Enron could rage out of control.

Part 3
In Alabama some believe that the vast gap between rich and the poor has been institutionalized by the most regressive tax system in the nation. But this year there was some hope for change, after some 70 years living with a system which allowed the lowest earners pay over 11% of their income in taxes, while the state's wealthiest 1% pay less than 4%. In this state where more than 40% of families make less than $35,000 a year and one-fifth of its children live in poverty, Governor Bob Riley, a conservative Republican, set his mind on reform and designed the biggest tax hike in Alabama's history. NOW analyzes Alabama's fiscal crisis and profiles Governor Riley's proposal to close the inequality gap by redistributing the wealth through a progressive tax plan.

"I don't think this is liberal or conservative policy," says Riley. "I think it's just a matter of basic fairness."

In September, the plan was taken to the voters of Alabama, and a two-thirds majority rejected the tax reform package. Exit polls showed that those who would have benefited the most under the tax package had voted against it. But how could Riley's plan been so roundly defeated by the voters who had the most to gain?

Riley's plan was met with resistance from his own conservative base. "It's one of the tenets of our organization to ease the tax burden on all families," says John Giles of the Christian Coalition of Alabama. "Therefore you find us very much applauding and embracing the concept of giving tax relief to the poor. But we feel like that's a separate issue." Giles and other conservatives resolutely opposed the governor's plan to raise Alabama's state taxes to a record $1.2 billion a year -- an amount Riley insisted was necessary to both fill the state's budget shortfall and to reform the state government and Alabama's crippled school system.

A media blitz was funded by those who opposed Riley's plan, including large landholders such as the Alabama Farmers Association and the Weyerhaeuser Paper Company who would have seen increases in their property taxes. The ad campaign appeared to be designed to alarm the working poor about the plan's tax hikes on services, but it avoided also pointing out that nearly half the state's population would pay substantially less income tax--or none at all--under Riley's plan. "I feel a sense of hopelessness more so than I've ever seen in this state," says Jefferson County Commissioner Sheila Smoot. "There just don't feel like there's any hope."