Why Income Inequality Is Going to Get Catastrophically Worse

[boutons_deux]

http://www.alternet.org/files/styles/story_image/public/story_images/clevin_gsachs.jpg


There’s been a lot of discussion about the historically high levels of income and wealth inequality lately — mostly from people on the shorter end of that stick — with good reason: There’s no end in sight.

In his new book, “Capital in the Twenty-First Century,” economist Thomas Piketty argues that worsening inequality is inevitable in a mature capitalist system, based on his analysis of 200 years of data. But inequality isn’t just an evolving condition like a crippling allergy that comes and goes, or just grows, enumerated by horrifying statistics. Nor is it just the result of a capitalist-utopian idea of free markets in which everyone gets a fair shot armed with equal information (which simply don’t exist in the real world, where markets are routinely gamed by the biggest players).

Inequality is endemic to the core structure of an America that operates more as a plutocracy than a democracy. It is an inherent result of the consolidation of a substantial amount of both financial power and political influence in the hands of a few families.

In my upcoming book (http://www.amazon.com/All-Presidents-Bankers-Alliances-American/dp/156858749X/ref=sr_1_fkmr0_1?ie=UTF8&qid=1394568317&sr=8-1-fkmr0&keywords=all+the+presidents%27+bankers+Nomi+Prins) [3], “All the Presidents’ Bankers,” I trace the lineage of the banking and political families and their associates who have had the most combined influence on American policy. Inequality of income or wealth is a byproduct of the predisposition and genealogy of this coterie of America’s power elite.

True, being born into wealth means having a greater chance of accumulating more of it — but take it a step further. Expanding on the adage of “it takes money to make money,” we get a much better idea of why inequality is so rampant: Because aside from income and wealth issues, it takes power to keep power.

By nature of the construct and self-reinforcing behavior of a small circle of American families and their enterprises — particularly over the past century since financial capitalism replaced productive capitalism as the means to expand power, wealth and influence — a comparative handful of families and their connections run Wall Street and Washington collectively. They run America as two sides of one political-financial coin, not as divided factions but as co-influencers of policy through public and private office.

There have been times during the past century when the specific individuals commanding this joint effort paid credence to the public interest, or were imbued with more humility. During those times, levels of inequality happened to decrease. At other times, the power elite solely promoted private gain, as from WWI through the crash of 1929, and since the 1970s, particularly since the 2008 crisis. At those times, inequality happened to grow. This is not to imply that the moods of the elite were the sole arbiters of the direction of inequality, but that whatever the direction of these levels,

general economic health is more dependent on the actions of this long-term, tightknit and concentrated few than on the ideal of a democracy. In this environment of such power inequality, economic inequality is unavoidable — and unsolvable.

Today, the focus of this power structure is so skewed that any notion of “public good” is mere campaign fodder for presidents or presidential hopefuls, and nonexistent for the banking elite. That’s why inequality for the rest of the population has leapt back up to 1928 levels and will continue to rise from there. That’s why Jeb Bush or Hillary Clinton or both may run for president, while JPMorgan Chase, J.P. Morgan’s legacy, remains the most powerful bank in the world, as it was designed to be more than a century ago.

In the Economic Policy Institute’s February 2014 report (http://www.epi.org/publication/unequal-states/) [4] “The Increasingly Unequal States of America,” authors Estelle Sommeiller and Mark Price chronicle income inequality on a state-by-state basis from 1917 to 2011. Starting in 1979 until 2011, as the average income of the bottom 99 percent of U.S. taxpayers rose by 18.9 percent, the average income of the top 1 percent rose by 10 times more, or 200.5 percent. Conversely, between 1928 and 1979, the share of income held by the top 1 percent fell in every state but one.

More recently, their results show that between 2009 and 2011, not only did income inequality grow in all 50 states, but all income growth went to the top 1 percent in 26 states. New York and Connecticut led the pack in terms of income inequality by virtue of their disproportionate share of financial industry millionaires and billionaires, whose fortunes were in turn bolstered by federal and Fed policies that championed the banks that had first access to cheap money and a place to dump their toxic assets. In these states, the average income gap in 2011 had the top 1 percent making 40 times more than the bottom 99 percent. (The gap in California was 26.8 times, confirming that on average Wall Street money trumps tech and entertainment money. The smallest average gap was in Hawaii at 12.1 times.)

Not only are current income inequality levels near the 1928 peak, but the systemic risk posed by this inequality is worse now.

There is no counterbalance to the banking elite who possess no imbedded public spirit underlying their political influence and command more instruments of leverage capital than ever before.

There’s no strong labor force, no large swaths of the population demanding reform by any means necessary, no revolution. Instead, we have an overhang of debt, stagnant wages and inferior jobs, all exacerbating income inequality.

Risk inequality means that those who have less to begin with have more to lose in adverse circumstances, whereas those with more have less to lose. This extra inequality dynamic is as dangerous to individuals as it is to the greater economy. It is particularly damaging in the wake of the epic Wall Street bailouts and ongoing zero-interest rate monetary policy and quantitative easing of the Federal Reserve policy, which helps the same banks whose family legacies worked with the Washington leaders who were their friends to create the Fed to back their bets and preserve their wealth a century ago.

Inequality has been given nothing but pithy lip service by the political-financial elite, elected or selected, or those aspiring to more of it. Last fall, Hillary Clinton was paid $400,000 to tell two Goldman Sachs gatherings that the financial crisis was a shared responsibility, implying that Wall Street had been unfairly demonized in its wake.

The Economic Policy Institute report authors conclude, “In the next decade, something must give.

Either Americans must accept that the American dream of widespread mobility is dead or new policies must emerge that will restore broadly shared prosperity.”

But the cards have already been dealt — and the verdict is in. Not only will the American dream remain dead, but also income and wealth and risk inequality will escalate by virtue of the government-supported consolidation of banking family and firm power.

http://www.alternet.org/economy/inevitability-income-inequality?paging=off&current_page=1#bookmark

iow, America is fucked and unfuckable.

[DarrinS]

If you really want to know what boutons thinks, just visit these sites:

http://thinkprogress.org/
http://www.alternet.org/
http://rawstory.com/
http://thinkprogress.org/
https://www.dailykos.com/


etc. etc. etc.

[boutons_deux]

If you really want to know what boutons thinks, just visit these sites:

http://thinkprogress.org/
http://www.alternet.org/
http://rawstory.com/
http://thinkprogress.org/
https://www.dailykos.com/


etc. etc. etc.

Another brilliant Darrin post, addressing the inequality of intelligence and information between The Great Boutons and The Redneck Darrin

[TSA]

I appreciate the bolding of certain parts boutons, makes it much easier to skim the bullshit from the garbage from alternet.

[boutons_deux]

I appreciate the bolding of certain parts boutons, makes it much easier to skim the bullshit from the garbage from alternet.

garbage? takes one to know one

[TeyshaBlue]

I appreciate the bolding of certain parts boutons, makes it much easier to skim the bullshit from the garbage from alternet.

Like there's any delineation.:lol

lol alternet

[boutons_deux]

I appreciate the bolding of certain parts boutons, makes it much easier to skim the bullshit from the garbage from alternet.

garbage? takes one to know one

[boutons_deux]

Where is the article wrong? on the current fact of inequality? on its prediction that it will get worse?

[FuzzyLumpkins]

Grandiose claims like the title should have gotten better supporting proof than alternet.

Its pretty obvious that boutox doesn't care that no one takes his bullshit seriously.

[TSA]

Its pretty obvious that boutox doesn't care that no one takes his bullshit seriously.
I think he does care though, who takes the time to bold everything if not?

[DUNCANownsKOBE]

Income inequality simply can't get much worse than it already it. The bottom 50% of America essentially has a net worth of nothing.

[Nbadan]

Income inequality simply can't get much worse than it already it. The bottom 50% of America essentially has a net worth of nothing.

Yes, it can...can you say flat tax....

[Nbadan]

Hillary Clinton was paid $400,000 to tell two Goldman Sachs gatherings that the financial crisis was a shared responsibility, implying that Wall Street had been unfairly demonized in its wake

:lol at the board conservatives wanting more proof that we have a earning inequality problem in the US...

Even the Egyptians see less de-nile....

[Nbadan]

I think he does care though, who takes the time to bold everything if not?

Probably for the same reason you post articles from wing-nut sites nobody reads...everybody loves them some confirmation bias.....but that doesn't mean Boutons is wrong on this issue...

[TSA]

Probably for the same reason you post articles from wing-nut sites nobody reads...everybody loves them some confirmation bias.....but that doesn't mean Boutons is wrong on this issue...
Links please and fuck yourself slowly while searching.

[Nbadan]

Links please and fuck yourself slowly while searching.

:lol

[Jacob1983]

Income inequality will always exist because greed and being able to make a lot of money aren't illegal.

[spurraider21]

Income inequality will always exist because there is also inequality in drive, ambition, and ability.

[boutons_deux]

Income inequality simply can't get much worse than it already it. The bottom 50% of America essentially has a net worth of nothing.

Even if nothing is done, the income inequality will keep increasing, up and up quickly on the high end, and down more slowly on the low end.

If the Repugs get control, the inequality will worsen "catastrophically", 1% wealth and 99% poverty will increase faster, as seen in every one of Ryan's budgets, approved by the Repug House several times.

[boutons_deux]

Income inequality will always exist because there is also inequality in drive, ambition, and ability.

agreed, but government's role, society's role is to organize itself so the bottom is not enslaved to poverty, degradation, disease, and early death, generation after generation.

[boutons_deux]

Income inequality will always exist because greed and being able to make a lot of money aren't illegal.

The MAJOR drivers of USA's current inequality are the VRWC's GOVT policies of no/low taxes on the 1% and corps, deregulation of financial operations, and privatization.

[spurraider21]

agreed, but government's role, society's role is to organize itself so the bottom is not enslaved to poverty, degradation, disease, and early death, generation after generation.
i see those as two different entities. the government's only responsibility is to set a level playing field, and it is members of society that should be responsible with how they choose to take advantage of said opportunities.

to me the biggest issue is generally education/access to education. a high school dropout coming from a low income family is not likely to escape the "low income" class, whereas a college graduate from a high income family is relatively likely to continue to live in the "high income" bracket.

however, we see dropout rates vary by race. 14% of hispanics are high school dropouts, yet that number is only 5% for whites. is it the government's responsibility to "fix" this issue? this is probably where you and i disagree.

[boutons_deux]

"the government's only responsibility is to set a level playing field"

... which it hasn't done since the mid-70s, and esp after the St Ronnie was elected.

The wealthy and corps have obtained the govt policies and politicians THEY BOUGHT to rig the game in their favor, which doesn't mean just rigged FOR themselves, but also aggressively AGAINST the rest of us.

[spurraider21]

"the government's only responsibility is to set a level playing field"

... which it hasn't done since the mid-70s, and esp after the St Ronnie was elected.

The wealthy and corps have obtained the govt policies and politicians THEY BOUGHT to rig the game in their favor, which doesn't mean just rigged FOR themselves, but also aggressively AGAINST the rest of us.



who is "us"

[boutons_deux]

who is "us"

the non-1%, even the non-5%, the non-UCA

[Winehole23]

via Forbes (http://www.forbes.com/sites/bruceupbin/2011/10/22/the-147-companies-that-control-everything/): http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

if there is a vast, transnational conspiracy to indebt nations and suborn their political processes, it might look something like this.

[Winehole23]

skeptical posters have yet to address Piketty's book, fwiw. carping about the alternet coverage doesn't quite get anyone across the finish line and scoffing at boutons is more or less a commonplace.

[TeyshaBlue]

skeptical posters have yet to address Piketty's book, fwiw. carping about the alternet coverage doesn't quite get anyone across the finish line and scoffing at boutons is more or less a commonplace.

I havent read the book nor am I likely to. The synopsis offered by alternet doesnt offer any insight that cant be gleaned by a minimal amount of rational thought. The notion that a realtively small subset of families holds an inordinate amount of power in America has been around for, oh...a hundred years or so.

[Winehole23]

fair enough. the re-consolidation of capital (to take one example, one difference between now and 100 years ago is that the Standard Oil trust has essentially merged back together; to take another, the consolidation of banking is startling compared with even 20 years ago) might bode ill for a rising tide that lifts all boats. gross inequality and collusive/monopolistic business practices led to disruptive social movements 100 years ago. it could happen again.

[TeyshaBlue]

I think its likely already started...see OWS et al.

Cyclical is the word that comes to mind.

[Winehole23]

combined with the influence of essentially unlimited, untraceable political contributions by "social welfare" nonprofits, there is the bare chance special interests can suborn politics, but twas ever so, I suppose.

[TeyshaBlue]

I agree...SCOTUS ruling adds an additional level of leverage above what has been at their disposal...ye olde graft.

[boutons_deux]

Looming SCOTUS Decision Could Deal Another Blow to Campaign Finance Regulations

A progressive attorney and expert on campaign finance laws is warning that a pending decision by the Supreme Court could deal a huge blow to efforts to keep the rich from disproportionately influencing elections. Citizen’s United was one step on that path. The new decision, says Demos counsel Adam Lioz, could mean more disaster, he told Salon’s Josh Eidelson. (http://www.salon.com/2014/03/18/scalias_looming_fiasco_obscure_new_scotus_case_may _be_worse_than_citizens_united/)

The case at hand is McCutcheon v. Federal Election Commission. It concerns a Republican National Committee objection to laws that restrict how much one person can donate to a candidate or a political committee in one election cycle.

“The worst-case scenario would be that the Court not only strikes down the aggregate limits, but does so in a way that calls into question contribution limits more generally, and puts them in the crosshairs,” Lioz told Eidelson. (http://www.salon.com/2014/03/18/scalias_looming_fiasco_obscure_new_scotus_case_may _be_worse_than_citizens_united/)

http://www.alternet.org/news-amp-politics/looming-scotus-decision-could-deal-another-blow-campaign-finance-regulations?akid=11611.187590.zSjimU&rd=1&src=newsletter971759&t=6

[boutons_deux]

wealth at the top increasing while poverty/income stagnation for everybody else is increasing. That situation will continue indefinitely.

Depends on what the definition of catastrophe in this context, but for 10Ms of Americans enslaved in poverty with tiny to no opportunity to escape, the catastrophe is already here.

And if the Repugs get control of the federal govt, the catastrophe will be worsened and spread to many more Ms.

Vote Repug and fuck yourself.

[Winehole23]

according to this reviewer, slowing population growth is key:


I have just read a very interesting piece in the Economist (http://www.economist.com/blogs/buttonwood/2014/03/demography-and-inequality) about a book by Thomas Piketty, Capital in the 21st Century (http://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X/ref=sr_1_1?ie=UTF8&qid=1394503525&sr=8-1&keywords=capital+in+the+twenty-first+century). This book looks at the links between demography, growth and inequality. Essentially, demographic growth feeds into economic growth, along with productivity growth. To increase economic growth, one must either increase the number of workers or the output that each worker is producing. According to Piketty, the world’s economic growth since the birth of Christ has been roughly equally due to an increasing population and increasing productivity. Thus, in the century ending in the year 2012, the world economy grew at roughly 3% a year. Population growth was 1.4% and per capita output grew at 1.6%.

Now however we are facing a century of slowing population growth. As the Economist argues:

“Projections from the UN indicate that global growth will average 0.7% a year between 2012 and 2050, and then slow to 0.2% between 2050 and 2100. By the second half of the current century, the only area to show a population rise will be Africa. Asia's population will be falling, along with that of Europe where a decline is expected for the first half of the century as well.”

This means that economic growth will slow along with this slowing population growth. To assume that productivity growth will rise to pick up the slack in the years ahead is, according to the Economist, “an act of the purest optimism”. It quotes Piketty:
“ ‘there is no historical example of a country at the world technological frontier whose growth in per capita output exceeded 1.5% over a lengthy period of time’

By the "world technological frontier", he simply means advanced nations. Countries can grow per capita output faster when they are catching up with the others, like China. But when they have caught up, they slow.”

This means that the years of relatively high economic growth that those living now have grown up with, particularly in the 1950 and 1960s, will not be repeated. It was a golden age it seems. Piketty argues that both logic and history show that dreams of economic growth of 3-4% a year in the future will be “illusory”.

Of course, many argue that this is not a bad thing; we can’t continue to rely of economic growth and should get used to a world where growth is much more anaemic. However, according to Piketty, rapid growth reduces economic inequality, whereas economic stagnation increases inequality. He argues:

“in a society where output per capita grows tenfold every generation, it is better to count on what one can earn and save from one's own labour; the income of previous generations is so small compared with current income that the wealth accumulated by one's parents and grandparents doesn't amount to much.

Conversely, a stagnant, or worse, decreasing population increases the influence of capital accumulated in previous generations. The same is true of economic stagnation.”

During the twentieth century there was a rapid reduction in economic inequality, also known as the “Great Compression”. Piketty argues that this was due to world wars, high taxes, high inflation which destroyed private wealth. Compare that to the nineteenth century when, by contrast, the Economist states that “many upper class people lived quite comfortably off the income from government bonds”.

Therefore, according to Piketty:

“in a quasi-stagnant society, wealth accumulated in the past will inevitably acquire disproportionate importance. The return to a structurally high capital/income ratio in the twenty-first century, close to the levels observed in the eighteenth century, can therefore be explained by a the return to a slow-growth regime. Decreased growth - especially demographic growth - is thus responsible for capital's comeback.”

Does this mean that we may be heading toward a century of low demographic growth, low economic growth, widening inequalities? Pickett would say yes we are. The Economist is not sanguine about the future if that is the case:

“But if economic power has gone back to the rich, we may be sliding back into plutocracy, where government is controlled by the rich; look at the expense of US political campaigns or Larry Bartels's work on the correlation between congressional votes and the views of their better-off constituents. Silvio Berlusconi's long career in Italy indicates the way that economic wealth can translate into power in a more direct fashion. We may indeed being going back even further than the 19th century to the Roman republic where rich men bought their way into the Senate and placated the populace with bread and circuses - junk food and reality TV, perhaps?”

And that’s just with population slowdown on a global scale. What will happen to those countries where population will (and is already in some cases) decline absolutely for a sustained period in peacetime? We are entering unchartered territory in those cases, we simply do not know what happens to countries and civilisations which decide to not replace themselves for any long stretch of time…
- See more at: http://www.mercatornet.com/demography/view/13705#sthash.9dx6vet1.dpuf

[boutons_deux]

"But if economic power has gone back to the rich"

it has

"we may be sliding back into plutocracy, where government is controlled by the rich"

may? :lol

[Nbadan]

Wall Street Bonuses vs the Minimum Wage
Raising the minimum wage would give our economy much more bang for the buck than we get from the financial industry's yearly windfalls.
By Sarah Anderson



Purveyors of Ferraris and high-end Swiss watches keep their fingers crossed toward the end of each calendar year, hoping that the big Wall Street banks will be generous with their annual cash bonuses.

New figures show that the bonus bonanza of 2013 didn’t disappoint. According to the New York State Comptroller’s office, Wall Street firms handed out $26.7 billion in bonuses to their 165,200 employees last year, up 15 percent over the previous year. That’s their third-largest haul on record.

http://otherwords.org/wall-street-bonuses-vs-minimum-wage/

The $26.7 billion Wall Streeters pocketed in bonuses would cover the cost of more than doubling the paychecks for all of the 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per h

[boutons_deux]

"studies have shown" the main cause of wealth inequality is tax policy purchased by the 1% and corps

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=323

With no change in tax policy, income inequality will continue its catastrophic trajectory.

[Winehole23]

In more technical terms, the central argument of Capital in the Twenty-First Century is that as long as the rate of return on capital, r, exceeds the rate of broad growth in national income, g—that is, r > g—capital will concentrate. It is an empirical fact that the rate of return on capital—income in the form of profits, dividends, rents, and the like, divided by the value of the assets that produce the income—has averaged 4–5 percent over the last two centuries or so. It is also an empirical fact that the growth rate in GDP per capita has averaged 1–2 percent. There are periods and places where growth is faster, of course: the United States in younger days, Japan from the 1950s through the 1980s, China over the last thirty years. But these are exceptions—and the two earlier examples have reverted to the mean. So if that 4–5 percent return is largely saved rather than being bombed, taxed, or dissipated away, it will accumulate into an ever-greater mass relative to average incomes. That may seem like common sense to anyone who’s lived through the last few decades, but it’s always nice to have evidence back up common sense, which isn’t always reliable.


There’s another trend that intensifies the upward concentration of wealth: Fortunes themselves are ratcheting upward; within the proverbial 1 percent, the 0.1 percent are doing better than the remaining 0.9 percent, and the 0.01 percent are doing better than the remaining 0.09 percent, and so on. The bigger the fortune, the higher the return. Piketty makes this point by looking not only at individual portfolios but also (and ingeniously) at US university endowments, for which decades of good data exist. The average American university endowment enjoyed an average real return—after accounting for management costs—of 8.2 percent a year between 1980 and 2010. Harvard, Yale, and Princeton, in a class by themselves (with endowments in the $15–$30 billion range), got a return of 10.2 percent a year. From that lofty peak, the average return descends with every size class, from 8.8 percent for endowments of more than $1 billion down to 6.2 percent for those under $100 million. In short: Money breeds money, and the more money there is, the more prolific the breeding.


It was once believed, during the decades immediately following the Great Depression and World War II, that vast disparities in wealth were features of youthful capitalism that had been left behind now that the thing was reaching maturity. This theory was first enunciated formally in a 1955 paper by the economist Simon Kuznets, who plotted a curve representing the historical course of inequality that looked like an upside-down U: Kuznets’s chart showed that disparities in wealth rose dramatically during the early years of growth and then reversed once a mature capitalist economy reached a certain (though none-too-specific) stage of development.



Kuznets’s curve fit nicely with the actual experiences of the rich economies in what the French call the Trente Glorieuses, the “thirty glorious years” between 1945 and 1975, when economic growth was broadly shared and income differentials narrowed. In the United States, according to the Census Bureau’s numbers (which have their problems—more on that in a moment), the share of income claimed by the top 20 percent—and within that group, the top 5 percent—declined during the glorious years. At the same time, the income of the remaining 80 percent gained.
But in the United States, the thirty glorious years were actually twenty-odd years; depending on how you measure it, the equalization process ended sometime between 1968 and 1974, again according to the census figures. Still, quibbles aside, the process of relative equalization went on for long enough that it felt like Kuznets was on to something with his curve. I say “relative” because these are still not small numbers: The richest 5 percent of families had incomes about eleven times those of the poorest 20 percent in 1974, the most equal year by this measure since the census figures started in 1947. But that number looks small now compared with the most recent ratio, almost twenty-three times in 2012.

http://www.bookforum.com/inprint/021_01/12987

[Winehole23]

But the major frustration of the book is political. Piketty clearly shows that short of depression and war, the only possible way to tame the beast of endless concentration is concerted political action. The high upper-bracket tax rates of the immediate postwar decades couldn’t have happened without serious fears among elites—fresh memories of the Depression, threats from strong domestic unions, competition on a global scale with the USSR, which, for all its problems, was living proof that an alternative economic system was possible. As those things waned, upper-bracket taxes were lowered, wages and benefits were cut, and capital’s increased mobility led to increased competition among jurisdictions to offer a “favorable investment climate”—meaning weak regulations, low wages, and minimal taxes. All these trends have contributed to the concentration of capital over the last thirty years, as wealth and power have shifted upward on an enormous scale. None of these features will be reversed spontaneously. Nor will they be altered through “democratic deliberation”—several times Piketty notes the hefty political power of the owning class—or improved educational access, as Piketty actually urges at one unfortunate point. Brushing up the working class’s skill set is no match for the power of r > g.

Starting with the title, the eternally recurrent specter of Marx hangs over this book. Early into the first page of the introduction, Piketty asks, “Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands, as Karl Marx believed in the nineteenth century?” Phrasing the question as something grounded in the past is a nice distancing technique, as the psychoanalysts say, but the answer is clearly yes. Several times, Piketty disavows Marx—just a few lines later he credits “economic growth and the diffusion of knowledge” for allowing us to avoid “the Marxist apocalypse”—but he also concedes that those prophylactics have not changed capitalism’s deep structures and the tendency for wealth to concentrate. It seems, in other words, that Piketty’s own research shows that the old nineteenth-century gloomster had a point.

same

[Winehole23]

Piketty calls the tendency for inequality to rise during periods when the rate of return on capital is higher than the economy’s rate of growth “the central contradiction of capitalism.” Of course, the logic can also run in reverse. If the rate of growth exceeds the rate of return, wages and salaries will grow more rapidly than income from capital, and inequality will fall. That’s what happened in much of the twentieth century. The problem, Piketty argues, is that this state of affairs is unlikely to be maintained. “A concatenation of circumstances . . . created a historically unprecedented situation, which lasted for nearly a century,” he writes. “All signs are, however, that it is about to end.”

How convincing is all this? The standard account of economic development—often attributed to Simon Kuznets, a Harvard economist who popularized it during the nineteen-fifties—has inequality rising during the early stages of industrialization but then falling steadily as incomes converge and over-all living standards rise. Piketty is certainly right to emphasize that there was nothing natural or inevitable about the income compression that occurred in the middle of the twentieth century. It was the product of global conflict and domestic political struggles. In Europe, two World Wars and the progressive tax policies that were needed to finance them did enormous damage to the old estates and great fortunes: many rich people, after paying their income and inheritance taxes, didn’t have enough money left to replenish their capital. During the postwar era, inflation ate away at their savings. Meanwhile, labor-friendly laws enabled workers to bargain for higher wages, which raised the proportion of income that labor received. And the task of rebuilding after the wartime destruction made for the rapid expansion of G.D.P. This helped to keep the growth rate above the rate of return on capital, fending off the forces of divergence.


In the United States, the story was less dramatic but broadly similar. The Great Depression wiped out a lot of dynastic wealth, and it also led to a policy revolution. During the nineteen-thirties and forties, Piketty reminds us, Roosevelt raised the top rate of income tax to more than ninety per cent and the tax on large estates to more than seventy per cent. The federal government set minimum wages in many industries, and it encouraged the growth of trade unions. In the decades after the war, it spent heavily on infrastructure, such as interstate highways, which boosted G.D.P. growth. Fearful of spurring public outrage, firms kept the pay of their senior executives in check. Inequality started to rise again only when Margaret Thatcher and Ronald Reagan led a conservative counter-revolution that slashed tax rates on the rich, decimated the unions, and sought to restrain the growth of government expenditures. Politics and income distribution are two sides of the same coin.


Piketty takes some well-aimed shots at economists who seek to obfuscate this reality. “In studying the eighteenth and nineteenth centuries it is possible to think that the evolution of prices and wages, or incomes and wealth, obeys an autonomous economic logic having little or nothing to do with the logic of politics or culture,” he writes. “When one studies the twentieth century, however, such an illusion falls apart immediately. A quick glance at the curves describing income and wealth inequality or the capital/income ratio is enough to show that politics is ubiquitous and that economic and political changes are inextricably intertwined and must be studied together.”

http://www.newyorker.com/arts/critics/books/2014/03/31/140331crbo_books_cassidy?currentPage=all

[boutons_deux]

"Politics and income distribution are two sides of the same coin."

and the politics in the USA ain't gonna change, the "compounded" accumulation of wealth from US tax cuts, avoidance, evasion will continue to worsen inequality.

Aux Barricades, Les Enfants de la Patrie

[Winehole23]

a roundup of reviews: http://equitablegrowth.org/2014/03/25/2366/dialogue-ten-so-far-worthwhile-reviews-of-and-reflections-on-thomas-pikettys-capital-in-the-twenty-first-century-wednesday-focus-march-26-2014

[Winehole23]

six charts: http://www.newyorker.com/online/blogs/johncassidy/2014/03/piketty-looks-at-inequality-in-six-charts.html

[boutons_deux]

"Piketty has relatively little to say about how—

with organized labor weakened,

moneyed interests strengthened, and

anti-government forces emboldened

—the kind of political movement necessary for a fairer future will emerge"

iow, see the this thread's title.

[Winehole23]

absent political adjustment, war and depression do the main work of redistribution.

[Winehole23]

facing its own catastrophic moment in the 1930s, the US guaranteed wages, raised taxes and supported trade unions. at a bare minimum, there's historical precedence for political solutions to extreme inequality.

[Wild Cobra]

facing its own catastrophic moment in the 1930s, the US guaranteed wages, raised taxes and supported trade unions. at a bare minimum, there's historical precedence for political solutions to extreme inequality.
You have to remember. We didn't have "free trade" back then.

[Winehole23]

we don't now either

[Winehole23]

but even if we did, what's your point?

[boutons_deux]

absent political adjustment, war and depression do the main work of redistribution.

"absent political adjustment" yes, it's absent and will stay absent

anecdote: NPR had a great one.

Some group sent identical letters to Congressman, except for one difference. Some letters were from "constituents" and other from "donors". Guess which letters got the overwhelming response?

"war" After the US explosion of wealth after WWII, then VN, Iraq, Afghanistan were relatively cheap for USA, not disruptive.

"depression" the recent worst depression in 80 years, still in progress, INCREASED inequality.

[Winehole23]

"absent political adjustment" yes, it's absent and will stay absentit's present in US history. how you explain the New Deal?

hard to see how you can rule something similar happening again. you don't know the future, you're just wedded to being a Cassandra.

[boutons_deux]

it's present in US history. how you explain the New Deal?

hard to see how you can rule something similar happening again. you don't know the future, you're just wedded to being a Cassandra.

The New Deal had the very unusual combination of an atypical 1%er in the WH and a compliant Congress, although the Repugs fought hard to stop FDR and are still fighting to destroy everything he did, as they are fighting hard to destroy the PROGRESS of the 1960s as well as the 1930s.

So FDR was able to create a middle class with Social Security, unions, tax rates, and extensive Keynesian spending/invesment which America is STILL benefitting from.

"The New Deal produced a political realignment, making the Democratic Party (http://en.wikipedia.org/wiki/History_of_the_Democratic_Party_(United_States)) the majority (as well as the party that held the White House for seven out of nine Presidential terms from 1933 to 1969), with its base in liberal ideas,

the white South,

traditional Democrats,

big city machines,

and the newly empowered labor unions and ethnic minorities.

The Republicans (http://en.wikipedia.org/wiki/History_of_the_Republican_Party_(United_States)) were split, with conservatives opposing the entire New Deal as an enemy of business and growth, and liberals accepting some of it and promising to make it more efficient.

The realignment crystallized into the New Deal Coalition (http://en.wikipedia.org/wiki/New_Deal_Coalition) that dominated most presidential elections into the 1960s, while the opposition Conservative Coalition (http://en.wikipedia.org/wiki/Conservative_Coalition) largely controlled Congress from 1937 to 1963.

By 1936 the term "liberal" (http://en.wikipedia.org/wiki/Modern_liberalism_in_the_United_States) typically was used for supporters of the New Deal, and "conservative (http://en.wikipedia.org/wiki/Conservatism_in_the_United_States)" for its opponents.

From 1934 to 1938, Roosevelt was assisted in his endeavours by a "pro-spender" majority in Congress (drawn from two-party, competitive, non-machine, Progressive, and Left party districts).

As noted by Alexander Hicks, "Roosevelt, backed by rare, non-Southern Democrat majorities—270 non-Southern Democrat representatives and 71 non-Southern Democrat senators—spelled Second New Deal reform."[2] (http://en.wikipedia.org/wiki/New_Deal#cite_note-2)"

http://en.wikipedia.org/wiki/New_Deal

There's no effective split on the Repug side now as there was in the 1930s, as those (poor) racist Southern Dems converted to Repugs in response to the 1960s.

Kock Bros tea baggers intimidate any moderate Repugs who might want to go along with Dems. The polarization driven by the Repugs is effectively impregnable for decades out.

Cassandra? give me HARD REASONS, EVIDENCE, DATA why I'm wrong, or GFY.

Voter suppression, gerrymandering, and $Ts from the VRWC will keep the Repugs in power in red states, and in the House. The Senate will be dangerously in play.

[Winehole23]

you don't need a crystal ball to see the present, but it's absurd to think the current political situation extends indefinitely into the future.

[boutons_deux]

you don't need a crystal ball to see the present, but it's absurd to think the current political situation extends indefinitely into the future.

absurd?

what's absurd is you imagining, looking at the present impregnable power of the VRWC/1%/UnitedCorporationsOfAmerica and the pro-wealthy/pro-business extreme right wing SCOTUS majority, a future where the status quo will disappear or just change for the better.

[Th'Pusher]

you don't need a crystal ball to see the present, but it's absurd to think the current political situation extends indefinitely into the future.

While bd may be Cassandra, you're outlook is a bit Pollyanna considering current realities.

[Winehole23]

While bd may be Cassandra, you're outlook is a bit Pollyanna considering current realities.how so? please be specific, if you can.

[Winehole23]

linking examples from this thread would be nice

[Winehole23]

and bearing in mind, I hope, the detailed context I've given the OP

[Winehole23]

which you probably haven't read through

[SnakeBoy]

facing its own catastrophic moment in the 1930s, the US guaranteed wages, raised taxes and supported trade unions. at a bare minimum, there's historical precedence for political solutions to extreme inequality.

We just faced our own catastrophic moment, the solution was to feed the rich not eat the rich. Embraced by both parties and the American people.

I don't see any political solution until once again it all crashes down for the rich and the so called middle class. Then we can look at a graph showing how equal things are and proclaim that because we are more equal, we must all be better off. JMO

[boutons_deux]

"Embraced by both parties and the American people."

Where did the American people become informed about the bailing out the financial sector? Where did they vote for it?

"until once again it all crashes down for the rich"

won't happen. Fed will bail out the financial sector indefinitely, printing $Ts, buying/eating toxic shit from the financial sector(aka QE), etc, etc.

[SnakeBoy]

[COLOR=#000000]"Embraced by both parties and the American people."

Where did the American people become informed about the bailing out the financial sector? Where did they vote for it?


They vote for it in every election.


[COLOR=#000000]
won't happen. Fed will bail out the financial sector indefinitely, printing $Ts, buying/eating toxic shit from the financial sector(aka QE), etc, etc.

The financial sector is continues to create toxic shit globally. The Feds power is not infinite.


http://3.bp.blogspot.com/-Fmemvw4mGgM/Urhr6_wnknI/AAAAAAAAdV8/i065Mgy4yKE/s1600/Personal+savings+rate.PNG

Stick it to them till they squeal. When they squeal back off and comfort them. When they feel comforted, stick it to them again.

[baseline bum]

They vote for it in every election.


That doesn't make any sense. Obama and McCain were both whores for the Paulson bailout, and were the only two choices thanks to our constitution (since a strong third candidate would mean congress picks the president).

[SnakeBoy]

That doesn't make any sense. Obama and McCain were both whores for the Paulson bailout, and were the only two choices thanks to our constitution (since a strong third candidate would mean congress picks the president).

You can come up with any number of excuses...they're still voting for it. I'm glad they do.

[baseline bum]

You can come up with any number of excuses...they're still voting for it. I'm glad they do.

What excuse?

[SnakeBoy]

What excuse?

I don't feel like going around in circles today. I think the American people are getting exactly what they are voting for and you disagree..that's fine by me.

[boutons_deux]

I don't feel like going around in circles today. I think the American people are getting exactly what they are voting for and you disagree..that's fine by me.

the candidates they vote for are mostly chosen by the political power brokers, or intimidated by the well-financed howling mob of Christians, rednecks, etc, who of course want to maintain the current system, no disruption.

[Th'Pusher]

I don't feel like going around in circles today. I think the American people are getting exactly what they are voting for and you disagree..that's fine by me.
You don't feel like going around in circles because you do not have the knowledge or the ability to back up your argument.

[SnakeBoy]

You don't feel like going around in circles because you do not have the knowledge or the ability to back up your argument.

I thought it was because I didn't much sleep last night but your smarter than everyone else so you could be right.

Did you give up on trying to insult me for making money without much effort and having a wife that makes money too? I enjoyed that.

[Th'Pusher]

I thought it was because I didn't much sleep last night but your smarter than everyone else so you could be right.

Did you give up on trying to insult me for making money without much effort and having a wife that makes money too? I enjoyed that.

No. And the insult is not that you're wife makes money...it's that she's the primary bread winner. The fact that you make a a few scraps off her earned income by playing in the wallstreet casino all day is just a side bar.

[SnakeBoy]

No. And the insult is not that you're wife makes money...it's that she's the primary bread winner. The fact that you make a a few scraps off her earned income by playing in the wallstreet casino all day is just a side bar.

Oh that's the insult. Man, that's harsh. I feel like less of a man now. Fuck it, I'm divorcing this physician and finding me a good cashier or maybe a hairdresser to pump up my ego.

http://www.quickmeme.com/img/40/40c85081e4edcc4c9975a7f05a993274ccf01e8a82209f2735 f91ff083c34551.jpg


You should have bought 25k shares of UPIP around the middle of last week. Few clicks of the mouse...pretty nice scraps tbh.

[Th'Pusher]

Oh that's the insult. Man, that's harsh. I feel like less of a man now. Fuck it, I'm divorcing this physician and finding me a good cashier or maybe a hairdresser to pump up my ego.

http://www.quickmeme.com/img/40/40c85081e4edcc4c9975a7f05a993274ccf01e8a82209f2735 f91ff083c34551.jpg


You should have bought 25k shares of UPIP around the middle of last week. Few clicks of the mouse...pretty nice scraps tbh.

Meh. I know your type. You were gainfully employed then got laid off at some point along the way. Initially you tried to get back up on that horse and find a job, but eventually just dropped out of the labor force. Some dudes start "their own business" that barely breaks even...since you're wife makes a decent living you play in the casinos all day.

So which bloated firm laid you off initially? Had to have been the .com bubble based on your age.

[SnakeBoy]

Meh. I know your type. You were gainfully employed then got laid off at some point along the way. Initially you tried to get back up on that horse and find a job, but eventually just dropped out of the labor force. Some dudes start "their own business" that barely breaks even...since you're wife makes a decent living you play in the casinos all day.

So which bloated firm laid you off initially? Had to have been the .com bubble based on your age.

lol you got me all figured out.

Revealed a bit about yourself though. How unsuccessful does a woman have to be before you can overcome your insecurity and feel like man around her?

[Th'Pusher]

lol you got me all figured out.

Revealed a bit about yourself though. How unsuccessful does a woman have to be before you can overcome your insecurity and feel like man around her?

My wife is very successful. She actually makes more money than me :)

[DarrinS]

My wife is very successful. She actually makes more money than me :)

No one is shocked

[Th'Pusher]

No one is shocked

Birds of a feather...

[Nbadan]

Darrin has a job?

[Nbadan]

That doesn't make any sense. Obama and McCain were both whores for the Paulson bailout, and were the only two choices thanks to our constitution (since a strong third candidate would mean congress picks the president).

Just because the average joe hasn't done his part to make sure that his representative is really working for his best interest doesn't mean the system is broken...you don't want fringe parties and fringe candidates like Sarah Palin, Paul, Kucininch or Rush Limbaugh or Alex Jones in the white house...reform the parties we have....take your party back.....

[Winehole23]

We just faced our own catastrophic moment, the solution was to feed the rich not eat the rich. Embraced by both parties and the American people.

I don't see any political solution until once again it all crashes down for the rich and the so called middle class. Yep.

[boutons_deux]

"so called middle class."

... has already been severely reduced, household income essentially flat since St Ronnie and the Repugs came to power in 1980.

[Winehole23]

hence the scare quotes, hence "so-called." you're not the sharpest knife in the drawer.

[boutons_deux]

hence the scare quotes, hence "so-called." you're not the sharpest knife in the drawer.

"so called" means what FOR YOU in that context?

[Winehole23]

that the middle class ain't what it used to be. what does it mean for you?

[boutons_deux]

crashing down for the "so called middle class" is stupid joined to "the rich".

The middle class has long ago crashed down, and it responded by doing nothing but bending over.

[Winehole23]

that's what SnakeBoy said

[boutons_deux]

Plutocracy without end: Why the 1 percent always defeats the middle class

There are more of us than them. But income inequality keeps getting worse -- and there is sadly no end in sight

http://media.salon.com/2014/03/laughing_pigs-620x412.jpg

What hit me that day was the possibility that my happy, postwar middle-class world was the exception, and that the plutocracy we were gradually becoming was the norm. Maybe what was happening to us was a colossal reversion to a pre-Rooseveltian mean, and all the trappings of ordinary life that had seemed so solid and so permanent when I was young—the vast suburbs and the anchorman’s reassuring baritone and the nice appliances that filled the houses of the working class—were aberrations made possible by an unusual balance of political forces maintained only by the enormous political efforts of its beneficiaries.

How much fatter can the fat cats get before they hit some kind of natural limit? Before the invisible thumb of history presses down on the other side of the scale and restores balance?
That we are very close to such a limit—that the contradictions inherent in the system will automatically be its undoing—is an idea much in the air of late. Not many still subscribe to Marx’s dialectical vision of history, in which inevitable worker immiseration would be followed, also inevitably, by a revolutionary explosion, but there are other inevitabilities that seem equally persuasive today. We hear much, for example, about how inequality contributed (http://www.nationaljournal.com/next-economy/essay-the-growing-income-gap-in-the-u-s-harms-the-economy-20120927)to the housing bubble and the financial crisis, how it has brought us an imbalanced economy that cannot survive (http://onlinelibrary.wiley.com/enhanced/doi/10.1111/j.1467-923X.2012.02357.x/).

It is an attractive fantasy, this faith that some kind of built-in restraint will stop all this from going too far.

But the cosmic cavalry never shows up. No deus ex machina will arrive to rescue the middle-class society, either. The economic system is always in some sort of crisis or another; somehow it always manages to survive.

According to an important recent paper (http://asr.sagepub.com/content/78/5/727.abstract)by the sociologists Clem Brooks and Jeff Manza, the orthodox poli-sci theory of economic downturn holds that voters “turn away from unregulated markets and demand more government in times of economic downturn and rising unemployment.”

But in the downturn of the last few years, people reacted differently: “Rather than the recession stimulating new public demands for governent, Americans gravitated toward lower support for government responsibility for social and economic problems.”

A second irony, worth noting in passing, is that the right-wing offensive against public pensions, which began as soon as the Republican wave landed, has been carried on under the banner of historical determinism, with everyone agreeing that the rich are going to get their way with the unions and that no alternative exists.

The ugly fact that we must face is that this thing can go much farther still. Plutocracy shocks us every day with its viciousness, but that doesn’t mean God will strike it down. The middle-class model worked much better for about ninety-nine percent of the population, but that doesn’t make it some kind of dialectic inevitability. You can build a plutocratic model that will stumble along just fine, like it did in the nineteenth century.

http://www.salon.com/2014/03/30/plutocracy_without_end_why_the_1_percent_always_de feats_the_middle_class/

[Winehole23]

Piketty's clear concern is that we're on the cusp of a reversion to the patrimonial, rentier capitalism of the 19th century:


Among many things I learned reading Piketty’s book was how to understand the class dynamics of 19th century literature. The characters are always talking about their incomes, but never seem to be doing any work. Turns out that “in the novels of Jane Austen and Honoré de Balzac, the fact that land (like government bonds) yields roughly 5 percent of the amount of capital invested is so taken for granted that it often goes unmentioned. Contemporary readers were well aware that it took capital on the order of 1 million francs to produce an annual rent of 50,000 francs.”






One reason that they could be so certain about these numbers is because inflation wasn’t really part of the picture. Monetary stability lasted from the 18th century through World War I, when massive government borrowing combined with massive physical destruction to upend economic affairs. That’s the reason, Piketty says, that novelists aren’t specific about money any more: He cites the Turkish author Orhan Pamuk, whose novelist protagonist in Snow says “there is nothing more tiresome for a novelist than to speak about money or discuss last year’s prices and incomes.”





Piketty’s fear is that this about to change.

Le Père Goriot


The Balzac novel that Piketty draws on most is the tale of an entrepreneur who makes a fortune in the lucrative pasta business in revolutionary France, before cashing out—”much in the manner of a twenty-first-century startup founder exercising his stock options”—to invest his wealth and give his daughters a substantial enough inheritance that they can marry well.






Was this obsession with inherited wealth just a byproduct of writerly envy from from Balzac, who was perpetually in debt from failed business ventures? Not necessarily—Piketty’s data shows that inherited wealth was about 20% of national income in the France of that time. This created a nasty situation where it was impossible to work enough to match what one could earn with inheritance. In Le Père Goriot, this is made explicit through an ambitious young man, Rastignac, who comes to understand that no matter how long he works as a lawyer, he will never have the fortune he could gain by marrying a wealthy heiress.






What does that mean in practice? A society where the main standard of success is earning 20, 50, or even 100 times the average annual income. Similar standards are found in the pages of Britain’s Jane Austen, but also in the US: In Henry James’s 1880 novel Washington Square, a key plot point revolves around an engagement broken off when the dowry is only 20 times the average income, rather than 60. “It was perfectly obvious,” Piketty writes, “that without a fortune it was impossible to live a dignified life.” http://qz.com/193098/everything-wrong-with-capitalism-as-explained-by-balzac-house-and-the-aristocats/

[boutons_deux]

"on the cusp of a reversion to the patrimonial, rentier capitalism of the 19th century"

he's late. USA is already there, 100% rentier capitalism.

Look at how the shadow banking sector created the housing bubble, then swept in when the prices crashed to buy up 100Ks homes to be RENTED.

We don't own our MS software, it's rented.

etc, etc, etc.

Look at how TWC and other network operators BLOCKED states from allowing municipalities to build their own broadband networks, to force us to RENT access to Internet through them.

[Winehole23]

100%? you exaggerate. maximalist claims tend to be self-undermining.

[boutons_deux]

100%. you exaggerate.

effectively 100%, and getting worse.

[Winehole23]

well then it can't get much worse, can it?

[boutons_deux]

“The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” and follow that statement with a call for “a graduated inheritance tax on big fortunes ... increasing rapidly in amount with the size of the estate.”

In 1919, the great economist Irving Fisher — whose theory of “debt deflation,” (http://www.voxeu.org/article/debt-deleveraging-and-liquidity-trap-new-model) by the way, is essential in understanding our current economic troubles — devoted his presidential address to the American Economic Association (http://piketty.pse.ens.fr/files/Fisher1919.pdf) largely to warning against the effects of “an undemocratic distribution of wealth.” And he spoke favorably of proposals to limit inherited wealth through heavy taxation of estates.

Capital in the Twenty-First Century,” the economist Thomas Piketty points out (http://www.hup.harvard.edu/catalog.php?isbn=9780674430006) that America, which introduced an income tax in 1913 and an inheritance tax in 1916, led the way in the rise of progressive taxation, that it was “far out in front” of Europe. Mr. Piketty goes so far as to say that “confiscatory taxation of excessive incomes” — that is, taxation whose goal was to reduce income and wealth disparities, rather than to raise money — was an “American invention.”

America was in danger of turning into a society dominated by hereditary wealth — that the New World was at risk of turning into Old Europe. And they were forthright in arguing that public policy should seek to limit inequality for political as well as economic reasons, that great wealth posed a danger to democracy.

the share of wealth held at the very top — the richest 0.1 percent of the population — has doubled since the 1980s, and is now as high as it was when Teddy Roosevelt and Irving Fisher issued their warnings.

We don’t know how much of that wealth is inherited. But it’s interesting to look at the Forbes list of the wealthiest Americans (http://www.forbes.com/forbes-400/list/).

By my rough count, about a third of the top 50 inherited large fortunes.

Another third are 65 or older, so they will probably be leaving large fortunes to their heirs.

We aren’t yet a society with a hereditary aristocracy of wealth, but, if nothing changes, we’ll become that kind of society over the next couple of decades.

In short, the demonization of anyone who talks about the dangers of concentrated wealth is based on a misreading of both the past and the present.

Such talk isn’t un-American; it’s very much in the American tradition. And it’s not at all irrelevant to the modern world. So who will be this generation’s Teddy Roosevelt?

http://www.nytimes.com/2014/03/28/opinion/krugman-americas-taxation-tradition.html?_r=1

The US govt created the middle class and a broad, comfortable level of wealth, but the VRWC got organized in the 1970s and destroyed it all, while demonizing FDR and Teddy R R and all the did to help America prosper broadly.

[Winehole23]

you're repeating the foregoing. you obviously don't read through.

[Winehole23]

One reason the U.S. economy is still weak is that big American companies are "maximizing profits" instead of investing in their people and future projects.

This behavior is contributing to record income inequality in the country and starving the primary engine of U.S. economic growth — the vast American middle class — of purchasing power. (See charts below).


If average Americans don't get paid living wages, they can't spend much money buying products and services. And when average Americans can't buy products and services, companies that sell products and services can't grow. So the profit obsession of America's big companies is, ironically, hurting their ability to grow.


One solution is for big companies to pay their people more — to share more of the vast wealth that they create with the people who create it.


http://static1.businessinsider.com/image/5311f93beab8ea5711f07865-906-680/screen%20shot%202014-02-28%20at%209.45.15%20am.pngBusiness Insider, St. Louis Fed
(http://www.research.stlouisfed.org/fred2/)Profits as a percent of the economy.




Big American companies have record profit margins, so they can certainly afford to do this.

But, unfortunately, over the past three decades, what began as a healthy and necessary effort to make our companies more efficient has evolved into a warped consensus that the only purpose of a corporation is to "maximize earnings."


This view is an insult to anyone who has ever dreamed of having a job or company that is about more than money. And it is a short-sighted and destructive view of capitalism, an economic system that sustains not just this country but most countries in the world.
Read more: http://www.businessinsider.com/companies-need-to-pay-people-more-2014-3#ixzz2xYtp3WiL

[boutons_deux]

"a warped consensus that the only purpose of a corporation is to "maximize earnings."

This view is an insult to anyone who has ever dreamed of having a job or company that is about more than money. And it is a short-sighted and destructive view of capitalism, an economic system that sustains not just this country but most countries in the world."

under-regulated, under-taxed capitalism/financialism IS destructive, and the capitalists don't give a shit.

[boutons_deux]

7 Things You Need to Know About America’s Coming Inheritance Explosion

But according to French economist Thomas Piketty, a leading expert on inequality, there is every reason to expect we’re going to see an explosion in inherited wealth rather soon in the industrialized world, and it’s certainly not going to be equal.

In the U.S., most people will not see a windfall as the Baby Boomers retire, but the children of the rich will enjoy an enormous transfer of wealth. America may soon look a lot more like Downton Abbey than the Land of Opportunity. Here are seven things you need to know about the coming inheritance boom.

According to Accenture’s research, once the Baby Boomer transfer gets going, we can expect 10 percent of America’s wealth to change hands every five years through inheritances, gifts and so on. The transfer will be highly unbalanced:

Those households with less than $500,000 in net worth will transfer about $3 trillion to their heirs, while those with more than $500,000 will transfer $12 trillion.

“Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy, it is all but inevitable that inheritance (of fortunes accumulated in the past) predominates over saving (wealth accumulated in the present).... Wealth originating in the past automatically grows more rapidly, even without labour, than wealth stemming from work, which can be saved.”

http://www.alternet.org/economy/7-things-you-need-know-about-americas-coming-inheritance-explosion?akid=11662.187590.JVGLsf&rd=1&src=newsletter977049&t=7&paging=off&current_page=1#bookmark

[boutons_deux]

8 Things Mainstream Media Doesn't Have the Courage to Tell You


The following are all relevant, fact-based issues, the "hard news" stories that the media has a responsibility to report. But the business-oriented press generally avoids them.

1. U.S. Wealth Up $34 Trillion Since Recession. 93% of You Got Almost None of It.

That's an average of $100,000 for every American. But the people who already own most of the stocks took almost all of it. For them, the average gain was well over a million dollars -- tax-free as long as they don't cash it in. Details available here (http://www.usagainstgreed.org/20140407_Analysis.txt) [3].

2. Eight Rich Americans Made More Than 3.6 Million Minimum Wage Workers

A recent report (http://nlihc.org/oor/2014) [4] stated that no full-time minimum wage worker in the U.S. can afford a one-bedroom or two-bedroom rental at fair market rent. There are 3.6 million (http://www.bls.gov/opub/ted/2013/ted_20130325.htm) [5] such workers, and their total (combined) 2013 earnings is less than the 2013 stock market gains of just eight Americans (http://www.usagainstgreed.org/Forbes400_2011-13.xls) [6], all of whom take (http://www.alternet.org/economy/20-richest-americans-are-greedy-takers-not-inspirational-makers) [7] more than their share from society: the four Waltons, the two Kochs, Bill Gates, and Warren Buffett.

3. News Sources Speak for the 5%

It would be refreshing to read an honest editorial: "We dearly value the 5 to 7 percent of our readers who make a lot of money and believe that their growing riches are helping everyone else."

Instead, the business media seems unable to differentiate between the top 5 percent and the rest of society. The Wall Street Journal (http://online.wsj.com/article/SB10001424127887323468604578249723138161566.html) [8]exclaimed, "Middle-class Americans have more buying power than ever before," and then went on to sputter (http://online.wsj.com/news/articles/SB10001424127887324880504578300291357105904) [9]: "What Recession?...The economy has bounced back from recession, unemployment has declined.."

The Chicago Tribune (http://articles.chicagotribune.com/2012-02-09/opinion/ct-edit-superpacs-20120209_1_romney-super-pac-gop-groups-priorities-usa-action) [10] may be even further out of touch with its less privileged readers, asking them: "What's so terrible about the infusion of so much money into the presidential campaign?"

4. TV News Dumbed Down for American Viewers

A 2009 survey by the European Journal of Communication (http://www.sagepub.com/mcquail6/Online%20readings/19a%20Curran%20et%20al.pdf) [11] compared the U.S. to Denmark, Finland, and the UK in the awareness and reporting of domestic vs. international news, and of 'hard' news (politics, public administration, the economy, science, technology) vs. 'soft' news (celebrities, human interest, sport and entertainment). The results:

-- Americans [are] especially uninformed about international public affairs.

-- American respondents also underperformed in relation to domestic-related hard news stories.

-- American television reports much less international news than Finnish, Danish and British television;

-- American television network newscasts also report much less hard news than Finnish and Danish television.

Surprisingly, the report states that "our sample of American newspapers was more oriented towards hard news than their counterparts in the European countries." Too bad Americans are reading less newspapers.

5. News Execs among White Male Boomers Who Owe Trillions to Society

The hype about the "self-made man" is fantasy. In the early 1970s, we privileged white males were spirited out of college to waiting jobs in management and finance, technology was inventing new ways for us to make money, tax rates were about to tumble, and visions of bonuses and capital gains danced in our heads.

While we were in school the Defense Department had been preparing the Internet for Microsoft and Apple, the National Science Foundation was funding the Digital Library Initiative (http://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100660) [12] research that would be adopted as the Google model, and the National Institute of Health (http://www.nih.gov/about/budget.htm) [13] was doing the early laboratory testing for companies like Merck and Pfizer. Government research labs and public universities trained thousands of chemists, physicists, chip designers, programmers, engineers, production line workers, market analysts, testers, troubleshooters, etc., etc.

All we created on our own was a disdainful attitude, like that of Steve Jobs (http://www.youtube.com/watch?v=CW0DUg63lqU) [14]: "We have always been shameless about stealing great ideas."

6. Funding Plummets for Schools and Pensions as Corporations Stop Paying Taxes

Three (http://www.ctj.org/corporatetaxdodgers50states) [15] separate (http://www.payupnow.org/TaxPercents2011-12_StateSumm.htm) [16] studies (http://npa-us.org/files/thedisappearingcorptaxbase_report.pdf) [17] have shown that corporations pay less than half of their required state taxes, which are the main source of K-12 educational funding and a significant part of pension funding. Most recently, the report (http://npa-us.org/files/thedisappearingcorptaxbase_report.pdf) [17] "The Disappearing Corporate Tax Base" found that the percentage of corporate profits paid as state income taxes has dropped from 7 percent in 1980 to about 3 percent today.

7. Companies Based in the U.S. Paying Most of their Taxes Overseas

Citigroup (http://www.sec.gov/Archives/edgar/data/831001/000110465914015152/a14-3681_610k.htm) [18] had 42% of its 2011-13 revenue in North America (almost all U.S.) and made $32 billion in profits, but received a U.S. current income tax benefit all three years.

Pfizer (http://www.sec.gov/Archives/edgar/data/78003/000007800314000018/pfe-12312013xex13.htm) [19] had 40% of its 2011-13 revenues and nearly half of its physical assets in the U.S., but declared almost $10 billion in U.S. losses to go along with nearly $50 billion in foreign profits.

In 2013 Exxon (http://www.sec.gov/Archives/edgar/data/34088/000003408813000011/xom10k2012.htm) [20] had about 43% of management (http://corporate.exxonmobil.com/en/company/careers/employment-policies/employee-programs) [21], 36% of sales, 40% of long-lived assets, and 70-90% of its productive oil and gas wells in the U.S., yet only paid about 2 percent of its total income in U.S. income taxes, and most of that was something called a "theoretical" tax.

8. Restaurant Servers Go Without Raise for 30 Years

An evaluation by Michelle Chen (http://www.commondreams.org/view/2014/04/02-1) [22] showed that the minimum wage for tipped workers has been approximately $2 an hour since the 1980s. She also notes that about 40 percent of these workers are people of color, and about two-thirds are women.


http://www.alternet.org/media/8-things-mainstream-media-doesnt-have-courage-tell-you?akid=11691.187590.SR4ivs&rd=1&src=newsletter978935&t=3&paging=off&current_page=1#bookmark

[boutons_deux]

The Richest Rich Are in a Class by Themselves


The richest 0.1 percent of the American population has rebuilt its share of wealth back to where it was in the Roaring Twenties. And the richest 0.01 percent’s share has grown even more rapidly, quadrupling since the eve of the Reagan Revolution.

The message for strivers is that if you want to be very, very rich, start out very rich.

The threshold for being in the top 0.1 percent of tax filers in 2012 was wealth of about $20 million. To be in the top 0.01 percent—that’s the 1 Percent club’s 1 Percent club—required net worth of $100 million.

http://images.bwbx.io/cms/2014-04-03/econ_onepercentchart15_630.jpg

http://www.businessweek.com/printer/articles/192871-the-richest-rich-are-in-a-class-by-themselves

[Th'Pusher]

http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

[boutons_deux]

http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

There's been a huge amount of discussion on that book, but I think the most damning is that Piketty doesn't pursue the corrupt politics (govt policies) that created a new gilded age. The corollary is that govt policies are the only power available to halt the catastrophic, relentlessly increasing inequality, and perhaps even reverse it with a tax on simply holding wealth.

[TeyshaBlue]

There's been a huge amount of discussion on that book, but I think the most damning is that Piketty doesn't pursue the corrupt politics (govt policies) that created a new gilded age. The corollary is that govt policies are the only power available to halt the catastrophic, relentlessly increasing inequality, and perhaps even reverse it with a tax on simply holding wealth.
Serious question...and I agree with the concept of taxing held wealth...how would this be accomplished (velocity?) and what would an operational definition look like?

[Winehole23]

related to political inequality?


A forthcoming article (http://www.princeton.edu/%7Emgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf) in Perspectives on Politics (http://journals.cambridge.org/action/displayJournal?jid=PPS) by (my former colleague) Martin Gilens and (my sometime collaborator) Benjamin Page marks a notable step in that process. Drawing on the same extensive evidence employed by Gilens in his landmark book “Affluence and Influence (http://press.princeton.edu/titles/9836.html),” Gilens and Page analyze 1,779 policy outcomes over a period of more than 20 years. They conclude that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”


Average citizens have “little or no independent influence” on the policy-making process? This must be an overstatement of Gilens’s and Page’s findings, no?


Alas, no. In their primary statistical analysis, the collective preferences of ordinary citizens had only a negligible estimated effect on policy outcomes, while the collective preferences of “economic elites” (roughly proxied by citizens at the 90th percentile of the income distribution) were 15 times as important. “Mass-based interest groups” mattered, too, but only about half as much as business interest groups — and the preferences of those public interest groups were only weakly correlated (.12) with the preferences of the public as measured in opinion surveys.

http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/04/08/rich-people-rule/

[boutons_deux]

Serious question...and I agree with the concept of taxing held wealth...how would this be accomplished (velocity?) and what would an operational definition look like?

I am not tax expert, so I can't get into technicalities, but I think POLITICALLY, a tax on acquired wealth will NEVER pass any Congress.

Even your dirt poor red neck buddies think every man has the right to keep his extreme riches (even if he predatorily "rented" them out of the dirt poor red neck hides, and/or acquired through other unethical, immoral, illegal, unfair means). In USA, having wealth gets you automatic respect from most people, separate from how you acquired the wealth.

So I'm for what we had before: a highly progressive tax on income, but both earned and unearned, plus "sales" tax on every single financial buy/sell/transaction. The idea is to reduce the return on liquid capital (financial casino speculation,etc) so the return on investment in The Real Economy is more attractive.

Also, rollback increase the estate taxes THE REPUGS killed.

I don't think we can tax down the accumulated wealth, but we can, with taxes, slow down, even stop further accumulation so govts at all levels can invest the taxes in physical infrastructure and human resources (eg, free college and post-grad education).

[boutons_deux]

Global Rankings Study Depicts an America in Warp Speed Decline

If America needed a reminder that it is fast becoming a second-rate nation, and that every economic policy of the Republican Party is wrongheaded, it got one this week with the release of the Social Progress Index (http://www.socialprogressimperative.org/) [3] (SPI).

Harvard business professor Michael E. Porter, who earlier developed the Global Competitiveness Report, designed the SPI. A new way to look at the success of countries, the SPI studies 132 nations and evaluates 54 social and environmental indicators for each country that matter to real people.

Rather than measuring a country’s success by its per capita GDP, the index is based on an array of data reflecting suicide, ecosystem sustainability, property rights, access to healthcare and education, gender equality, attitudes toward immigrants and minorities, religious freedom, nutrition, infrastructure and more.
The index measures the livability of each country. People everywhere depend on and care about similar things. “We all need clean water. We all want to feel safe and live without fear. People everywhere want to get an education and improve their lives,” says Porter. But economic growth alone doesn’t guarantee these things.

While the U.S. enjoys the second highest per capita GDP of $45,336, it ranks in an underperforming 16th place overall. It gets worse. The U.S. ranks 70th in health, 69th in ecosystem sustainability, 39th in basic education, 34th in access to water and sanitation and 31st in personal safety.

More surprising is the fact that despite being the home country of global tech heavyweights Microsoft, Cisco, IBM, Oracle, and so on, the U.S. ranks a disappointing 23rd in access to the Internet. “It’s astonishing that for a country that has Silicon Valley, lack of access to information is a red flag,” notes Michael Green, executive director of the Social Progress Imperative (http://www.socialprogressimperative.org/) [3], which oversees the index.

If this index is an affront to your jingoistic sensibilities, the U.S. remains in first place for the number of incarcerated citizens per capita, adult onset diabetes and for believing in angels. :lol ;lol

New Zealand is ranked in first place in social progress. Interestingly, it ranks only 25th on GDP per capita, which means the island of the long white cloud is doing a far better job than America when it comes to meeting the need of its people. In order, the top 10 is rounded out by Switzerland, Iceland, the Netherlands, Norway, Sweden, Canada, Finland, Denmark and Australia. SOCIAL DEMOCRATIC COUNTRIES! what shitty places to live! :lol

Unsurprisingly these nations all happen to rank highly in the 2013 U.N. World Happiness Report with Denmark, Norway, Switzerland, the Netherlands and Sweden among the top five.

So, what of the U.S? In terms of happiness, we rank 17th, trailing neighboring Mexico.

We find ourselves languishing for the very fact we have allowed corporate America to hijack the entire Republican Party, and some parts of the Democratic Party.

This influence has bought corporations and the rich a rigged tax code that has redistributed wealth from the middle class to the rich over the course of the past three decades.

This lack of shared prosperity and opportunity has retarded our social progress.

America’s rapid descent into impoverished nation status is the inevitable result of unchecked corporate capitalism.

By every measure, we look like a broken banana republic. Not a single U.S. city is included in the world’s top 10 most livable cities. Only one U.S. airport makes the list of the top 100 in the world. Our roads, schools and bridges are falling apart, and our trains — none of them high-speed — are running off their tracks.

With 95 percent of all economic gains funneled to the richest 1 percent over the course of the last decade, and a tax code that has starved the federal government of revenues to invest in public infrastructure, America will be a country divided by those who have and those who have not.

In The World As It Is, Chris Hedges writes,

“Our anemic democracy will be replaced with a robust national police state.

The elite will withdraw into heavily guarded gated communities where they will have access to security, goods, and services that cannot be afforded by the rest of us.

Tens of millions of people, brutally controlled, will live in perpetual poverty.”

This week the Republican Party rolled out its 2014 Ryan budget. Robert Greenstein, president of the Center on Budget and Policy Priorities, noted that under the Ryan budget, "[affluent] Americans would do quite well. But for tens of millions of others, the Ryan plan is a path to more adversity." Greenstein pointed out that the plan would leave millions without health insurance through repeal of the Affordable Care Act and changes to Medicaid funding.

Greenstein also criticized the budget for its impact on anti-poverty programs, estimating that it would slash basic food aid provided by SNAP by at least $135 billion and convert the program to a block grant, make it harder for low-income students to attend college and make massive unspecified cuts to domestic non-military spending, which means cuts to social welfare programs.

The countries ranked highest in social progress are doing the complete opposite. They’re investing in schools rather than drones. They’re expanding collective bargaining laws rather than busting unions. They’re providing their citizens with universal healthcare and education rather than selling these basic human rights to the highest bidder.

“Those who care about the plight of the working class and the poor must begin to mobilize quickly, or we will lose our last opportunity to save our embattled democracy. The most important struggle will be to wrest the organs of communication from corporations that use mass media to demonize movements of social change and empower protofascist movements such as the Christian Right,” observes Hedges.

It’s your move, America.

http://www.alternet.org/news-amp-politics/global-rankings-study-depicts-america-warp-speed-decline

iow, America is being fucked by the oligarchy, UCA/VRWC, plutocratic politicians, whose untouchable, unjailable powers and capture of government make America unfuckable.

[boutons_deux]

The Deadly Consequences Of Income Inequality


http://s.wsj.net/public/resources/images/BN-CK784_men041_G_20140417175153.jpg

http://s.wsj.net/public/resources/images/BN-CK783_women0_G_20140417175058.jpg

http://s.wsj.net/public/resources/images/BN-CK785_income_G_20140417175313.jpg

http://talkingpointsmemo.com/dc/income-inequality-and-death-charts?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tpm-news+%28TPMNews%29

And of course, Repug DEATH PANELS refuse to expand Medicaid, enabling avoidable, curable diseases and enabling the unnecessary deaths thousands of their citizens.

[Will Hunting]

A wealth tax wouldn't be needed if this country actually went back to having an actual estate tax that's capable of chopping someone's fortune in half when they die.

The effective estate tax rate for 2012 was 1%-3%.

[velik_m]

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?smid=tw-upshotnyt&_r=1

[boutons_deux]

"The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true."

and what happened 35 years ago? The VRWC shitball, planned since the early 1970s, got rolling with useful idiot St Ronnie.

[Winehole23]

Jamie Galbreath calls Piketty a garden variety New Dealer and chips away at the "monumental" reception of his book: http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-century

[boutons_deux]

Jamie Galbreath calls Piketty a garden variety New Dealer and chips away at the "monumental" reception of his book: http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-century

"Thomas Piketty is a garden-variety social welfare democrat in the mold, largely, of the American New Deal."

FDR, New Deal policies aka govt, created the middle class.

Capitalists/Repugs were vehemently against FDR/ND then, and now, after decades of relentless effort to purchase govt policies, to rig the game, have mostly destroyed the middle class, to the VRWC/capitalist enormous profit, of course.

They still have ND' SS $Ts in their gun sights, and of course want to destroy Medicare and Medicaid. the capitalists WANT EVERYTHING, and they're well on their way to getting it.

What are JG's policies to reduce inequality, if he even thinks it needs reducing? or does he relax in the academic ivory tower and play sterilely with his number crunching, sniping at, in typical academic fashion, and ridiculing as "garden variety" his fellow economists. Krugman is also a "quant" but he also make policy recommendations.

[Winehole23]

What are JG's policies to reduce inequality, if he even thinks it needs reducing? Try reading. Galbreath's policy suggestions are in the last few grafs of his review.

[CosmicCowboy]

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?smid=tw-upshotnyt&_r=1

Am I reading that graph right that 60K income is 95 percentile?

[boutons_deux]

Try reading. Galbreath's policy suggestions are in the last few grafs of his review.

"introducing more competition." :lol

"there is the estate and gift tax ... if the law were tightened up ... with a high threshold" :lol

very weak shit, of course.

[boutons_deux]

Am I reading that graph right that 60K income is 95 percentile?

http://www.whatsmypercent.com/

http://2.bp.blogspot.com/-bmIbrwZpxFk/UjtqZooHoAI/AAAAAAAAI9I/DcVBitB8TXw/s1600/a-cumulative-income-distribution-us-individuals-2012.png

http://finance.townhall.com/columnists/politicalcalculations/2013/09/29/what-is-your-us-income-percentile-ranking-n1712430/page/full

[boutons_deux]

Robert Reich: The 4 Biggest Right-Wing Lies About Inequality

Even though French economist Thomas Piketty has made an air-tight case that we’re heading toward levels of inequality not seen since the days of the nineteenth-century robber barons, right-wing conservatives haven’t stopped lying about what’s happening and what to do about it.

Herewith, the four biggest right-wing lies about inequality, followed by the truth.

Lie number one: The rich and CEOs are America’s job creators. So we dare not tax them.

The truth is the middle class and poor are the job-creators through their purchases of goods and services. If they don’t have enough purchasing power because they’re not paid enough, companies won’t create more jobs and economy won’t grow.

We’ve endured the most anemic recovery on record because most Americans don’t have enough money to get the economy out of first gear. The economy is barely growing and real wages continue to drop.

We keep having false dawns (http://www.nytimes.com/2014/05/03/business/economy/april-jobs-data-released-by-labor-department.html). An average of 200,000 jobs were created in the United States over the last three months, but huge numbers of Americans continue to drop out of the labor force.

Lie number two: People are paid what they’re worth in the market. So we shouldn’t tamper with pay.

The facts contradict this. CEOs who got 30 times the pay of typical workers forty years ago now get 300 times their pay not because they’ve done such a great job but because they control their compensation committees and their stock options have ballooned.

Meanwhile, most American workers earn less today than they did forty years ago, adjusted for inflation, not because they’re working less hard now but because they don’t have strong unions bargaining for them.

More than a third of all workers in the private sector were unionized forty years ago; now, fewer than 7 percent (http://www.bls.gov/news.release/union2.nr0.htm) belong to a union.

Lie number three: Anyone can make it in America with enough guts, gumption, and intelligence. So we don’t need to do anything for poor and lower-middle class kids.

The truth is we do less than nothing for poor and lower-middle class kids. Their schools don’t have enough teachers or staff, their textbooks are outdated, they lack science labs, their school buildings are falling apart.

We’re the only rich nation to spend less educating poor kids than we do educating kids from wealthy families.

All told, 42 percent (http://www.nytimes.com/2012/01/05/us/harder-for-americans-to-rise-from-lower-rungs.html?pagewanted=all&_r=0) of children born to poor families will still be in poverty as adults – a higher percent than in any other advanced nation.

Lie number four: Increasing the minimum wage will result in fewer jobs. So we shouldn’t raise it.

In fact, studies show that increases in the minimum wage put more money in the pockets of people who will spend it – resulting in more jobs, and counteracting any negative employment effects of an increase in the minimum.

Three of my colleagues here at the University of California at Berkeley — Arindrajit Dube, T. William Lester, and Michael Reich – have compared adjacent counties and communities across the United
States, some with higher minimum wages than others but similar in every other way.

They found (http://www.irle.berkeley.edu/workingpapers/) no loss of jobs in those with the higher minimums.

The truth is, America’s lurch toward widening inequality can be reversed. But doing so will require bold political steps.

At the least, the rich must pay higher taxes in order to pay for better-quality education for kids from poor and middle-class families. Labor unions must be strengthened, especially in lower-wage occupations, in order to give workers the bargaining power they need to get better pay. And the minimum wage must be raised.

Don’t listen to the right-wing lies about inequality. Know the truth, and act on it.

http://www.alternet.org/economy/robert-reich-4-biggest-right-wing-lies-about-inequality?akid=11776.187590.EGTpo7&rd=1&src=newsletter989173&t=7&paging=off&current_page=1#bookmark

[boutons_deux]

CNBC: Millionaires Support Raising the Minimum Wage And Higher Taxes On The Rich (http://thinkprogress.org/economy/2014/05/06/3434751/millionaires-minimum-wage-taxes/)

Half of the country’s millionaires view income inequality as a major problem (http://www.cnbc.com/id/101634240), and nearly two-thirds support increasing taxes on the rich and raising the minimum wage as solutions for addressing it, according to a new survey by CNBC.

The survey polled 514 people with assets of more than $1 million, or the top 8 percent of households. While 83 percent felt that the best way to reduce inequality is to improve educational opportunities for the less well off, 64 percent cited higher taxes for the wealthy and 63 percent backed increasing the minimum wage.

They still believe in economic mobility, however. More than 90 percent said the American dream, or upward mobility from hard work, is achievable, and more than half feel that any American can become rich by working hard. :lol

They also cited hard work as the number one factor in building their own wealth and 81 percent said they aren’t embarrassed by it. Only 1 percent picked luck as a top reason.


http://thinkprogress.org/economy/2014/05/06/3434751/millionaires-minimum-wage-taxes/

[boutons_deux]

very probably none of this willl happen, but it's a good list

The Six Principles of the New Populism

More Americans than ever believe the economy is rigged in favor of Wall Street and big business and their enablers in Washington. We’re five years into a so-called recovery that’s been a bonanza for the rich but a bust for the middle class. “The game is rigged and the American people know that. They get it right down to their toes,” says (http://www.senseoncents.com/2014/04/elizabeth-warren-exposes-larry-summers-the-game-is-rigged/#sthash.whT7C6fF.dpuf) Senator Elizabeth Warren.

Which is fueling a new populism on both the left and the right. While still far apart, neo-populists on both sides are bending toward one another and against the establishment.

Who made the following comments? (Hint: Not Warren, and not Bernie Sanders.)

A. We “cannot be the party of fat cats, rich people, and Wall Street.”

B. “The rich and powerful, those who walk the corridors of power, are getting fat and happy…”

C. “If you come to Washington and serve in Congress, there should be a lifetime ban on lobbying.”

D. “Washington promoted moral hazard by protecting Fannie Mae and Freddie Mac, which privatized profits and socialized losses.”

E. “When you had the chance to stand up for Americans’ privacy, did you?”

F. “The people who wake up at night thinking of which new country they want to bomb, which new country they want to be involved in, they don’t like restraint. They don’t like reluctance to go to war.”

(Answers: A. Rand Paul (http://youtu.be/OwnnSubbSvg), B. Ted Cruz (http://respriv.org/tea-partys-new-koch-flavored-populism-2/), C. Ted Cruz (http://thehill.com/blogs/ballot-box/presidential-races/200080-cruz-kicks-off-cpac-with-populist-pitch), D. House Republican Joe Hensarling (http://neweconomicperspectives.org/2014/02/key-house-republicans-almost-get-accounting-control-fraud.html), E. House Republican Justin Amash (http://www.politico.com/story/2013/07/justin-amash-nsa-amendment-94722.html), F. Rand Paul (https://rare.us/story/rand-paul-blasts-republicans-who-wake-up-thinking-of-which-new-country-to-bomb/) )

You might doubt the sincerity behind some of these statements, but they wouldn’t have been uttered if the crowds didn’t respond enthusiastically – and that’s the point. Republican populism is growing, as is the Democratic version, because the public wants it.

And it’s not only the rhetoric that’s converging. Populists on the right and left are also coming together around six principles:

1. Cut the biggest Wall Street banks down to a size where they’re no longer too big to fail.

Left populists have been advocating this since the Street’s bailout now they’re being joined by populists on the right. David Camp, House Ways and Means Committee chair, recently proposed an extra 3.5 percent quarterly tax on the assets of the biggest Wall Street banks (giving them an incentive to trim down). Louisiana Republican Senator David Vitter wants to break up the big banks, as does conservative pundit George Will. “There is nothing conservative about bailing out Wall Street,” says Rand Paul.

2. Resurrect the Glass-Steagall Act,

separating investment from commercial banking and thereby preventing companies from gambling with their depositors’ money. Elizabeth Warren has introduced such legislation, and John McCain co-sponsored it. Tea Partiers are strongly supportive, and critical of establishment Republicans for not getting behind it. “It is disappointing that progressive collectivists are leading the effort for a return to a law that served well for decades,” writes the Tea Party Tribune. (http://www.teapartytribune.com/2014/04/23/repeal-of-glass-steagall-and-the-too-big-to-fail-culture/%20system) “Of course, the establishment political class would never admit that their financial donors and patrons must hinder their unbridled trading strategies.”

3. End corporate welfare –

including subsidies to big oil, big agribusiness, big pharma, Wall Street, and the Ex-Im Bank. Populists on the left have long been urging this; right-wing populists are joining in. Republican David Camp’s proposed tax reforms would kill dozens of targeted tax breaks. Says (http://thehill.com/blogs/ballot-box/presidential-races/200080-cruz-kicks-off-cpac-with-populist-pitch) Ted Cruz: “We need to eliminate corporate welfare and crony capitalism.”
4. Stop the National Security Agency from spying on Americans.

Bernie Sanders and other populists on the left have led this charge but right-wing populists are close behind. House Republican Justin Amash’s amendment (http://www.politico.com/story/2013/07/justin-amash-nsa-amendment-94722.html#ixzz30thxTK4o), that would have defunded NSA programs engaging in bulk-data collection, garnered 111 Democrats and 94 Republicans last year, highlighting the new populist divide in both parties. Rand Paul could be channeling Sanders when he warns: “Your rights, especially your right to privacy, is under assault… if you own a cellphone, you’re under surveillance.”

5. Scale back American interventions overseas.

Populists on the left have long been uncomfortable with American forays overseas. Rand Paul is leaning in the same direction. Paul also tends toward conspiratorial views about American interventionism. Shortly before he took office he was caught on video claiming that former vice president Dick Cheney pushed the Iraq War because of his ties to Halliburton.

6. Oppose trade agreements crafted by big corporations.

Two decades ago Democrats and Republicans enacted the North American Free Trade Agreement. Since then populists in both parties have mounted increasing opposition to such agreements. The Trans-Pacific Partnership, drafted in secret by a handful of major corporations, is facing so strong a backlash from both Democrats and tea party Republicans that it’s nearly dead. “The Tea Party movement does not support the Trans-Pacific Partnership,” says Judson Philips, president of Tea Party Nation. “Special interest and big corporations are being given a seat at the table” while average Americans are excluded.

Left and right-wing populists remain deeply divided over the role of government. Even so, the major fault line in American politics seems to be shifting, from Democrat versus Republican, to populist versus establishment — those who think the game is rigged versus those who do the rigging.

In this month’s Republican primaries, tea partiers continue their battle against establishment Republicans. But the major test will be 2016 when both parties pick their presidential candidates.

Ted Cruz and Rand Paul are already vying to take on Republican establishment favorites Jeb Bush or Chris Christie. Elizabeth Warren says she won’t run in the Democratic primaries, presumably against Hillary Clinton, but rumors abound. Bernie Sanders hints he might.

Wall Street and big business Republicans are already signaling they’d prefer a Democratic establishment candidate over a Republican populist.

Dozens of major GOP donors, Wall Street Republicans, and corporate lobbyists have told Politico that if Jeb Bush decides against running and Chris Christie doesn’t recover politically, they’ll support Hillary Clinton. “The darkest secret in the big money world of the Republican coastal elite is that the most palatable alternative to a nominee such as Senator Ted Cruz of Texas or Senator Rand Paul of Kentucky would be Clinton,” concludes (http://www.politico.com/story/2014/04/wall-street-republicans-hillary-clinton-2016-106070.html) Politico.

Says (http://www.politico.com/story/2014/04/wall-street-republicans-hillary-clinton-2016-106070.html) a top Republican-leaning Wall Street lawyer, “it’s Rand Paul or Ted Cruz versus someone like Elizabeth Warren that would be everybody’s worst nightmare.”

Everybody on Wall Street and in corporate suites, that is. And the “nightmare” may not occur in 2016. But if current trends continue, some similar “nightmare” is likely within the decade. If the American establishment wants to remain the establishment it will need to respond to the anxiety that’s fueling the new populism rather than fight it.

http://robertreich.org/post/84984296635

[boutons_deux]

"This was recognized centuries ago by that dangerous, anti-capitalist radical Adam Smith when he wrote:

“Laws and government may be considered in this and indeed in every case as a combination of the rich to oppress the poor, and to preserve to themselves the inequality of the goods which would otherwise be soon destroyed…”

(Lectures in Jurisprudence, IV,23)"

http://www.nakedcapitalism.com/2014/05/tpp-another-upward-transfer-wealth.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

[boutons_deux]

The Costs of Inequality to the Growth of Most Households’ Incomes

Take the average after-tax income growth (in real terms) over the period covered by CBO’s comprehensive data series (1979-2010), which happens to be 58%. Apply that value to the 1979 value of each income class—in other words, assume every household’s income grew at the average rate. That’s the same as saying inequality was constant over these years.

Then, plot the difference between that simulated rate and the actual income value in 2010. That value, shown in the bars below, represents the costs of inequality (incomes growing slower than average) to most households and the benefits to those at the top (income growth faster than average).

The lowest income households, those in the bottom fifth of the after-tax income scale, lost $1,500 over these years. Middle-income households lost $9,500. Households in the top 1%, whose incomes grew 3.5 times faster than average, gained a cool $482,000.

Occasionally I run into people who want to argue that the increase in inequality is just the benign outcome of “just desserts” as economist Greg Mankiw frames it. It may boost those at the top, but not at the expense of others. By this metric, not so. The growth of unequal outcomes has been and will continue to be costly to those on the wrong side of the divide.

http://jaredbernsteinblog.com/wp-content/uploads/2014/06/ineq_cost.png (http://jaredbernsteinblog.com/wp-content/uploads/2014/06/ineq_cost.png)

http://jaredbernsteinblog.com/the-costs-of-inequality-to-the-growth-of-most-households-incomes/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JaredBernstein+%28Jared+Berns tein%29

[CosmicCowboy]

Smart people generally make more than stupid people. Unfortunately we are systematically breeding generations of litters of stupid people while the smart people are limiting childbirth to what they can financially and emotionally support.

[boutons_deux]

Smart people generally make more than stupid people. Unfortunately we are systematically breeding generations of litters of stupid people while the smart people are limiting childbirth to what they can financially and emotionally support.

typical bullshit from right-wing sociopath

[Wild Cobra]

Smart people generally make more than stupid people. Unfortunately we are systematically breeding generations of litters of stupid people while the smart people are limiting childbirth to what they can financially and emotionally support.
Isn't that the truth. Then these breeders expect up to pay for their children with redistribution of money.

[boutons_deux]

9 Questions Billionaires Disparagingly Ask About the People They Exploit


Last year eight (http://www.popularresistance.org/the-media-wont-tell-you-these-things-eight-reasons-to-revolt/) [4] Americans -- the four Waltons of Walmart fame, the two Koch brothers, Bill Gates, and Warren Buffett -- made more money than 3.6 million American minimum-wage workers combined. The median pay for CEOs at America's large corporations rose to $10 million (http://bigstory.ap.org/article/median-ceo-pay-crosses-10-million-2013) [5] per year, while a typical chief executive now makes about 257 times the average worker's salary, up sharply from 181 times in 2009. Overall, 1% of Americans own more than a third of the country’s wealth.

As the United States slips (http://www.washingtonpost.com/opinions/america-is-no-2-and-thats-great-news/2014/01/17/09c10f50-7c97-11e3-9556-4a4bf7bcbd84_story.html) [6] from its status as the globe's number one economic power, small numbers of Americans continue to amass staggering amounts of wealth, while simultaneously inequality trends toward historic levels. At what appears to be a critical juncture in our history and the history of inequality in this country, here are nine questions we need to ask about who we are and what will become of us. Let's start with a French economist who has emerged as an important voice on what’s happening in America today.

1) What does Thomas Piketty have to do with the 99%?

French economist Thomas Piketty’s surprise bestseller, Capital in the Twenty-First Century (http://www.amazon.com/dp/067443000X/ref=nosim/?tag=tomdispatch-20) [7], is an unlikely beach read, though it’s selling like one. A careful parsing of massive amounts of data distilled into “only” 700 pages, it outlines the economic basis for the 1%-99% divide in the United States. (Conservative critics, of course, disagree (http://www.nytimes.com/2014/06/02/opinion/krugman-on-inequality-denial.html) [8].)

Just in case you aren’t yet rock-bottom certain about the reality of that divide, here are some stats: the top 1% of Americans hold 35% (http://www2.ucsc.edu/whorulesamerica/power/wealth.html) [9] of the nation's net worth; the bottom 80%, only 11% percent. The United States has such an unequal distribution (http://www.international-adviser.com/ia/media/Media/Credit-Suisse-Global-Wealth-Databook-2013.pdf) [10] of wealth that, in global rankings, it falls among the planet’s kleptocracies, not the developed nations that were once its peers. The mathematical measure of wealth-inequality is called "Gini (http://en.wikipedia.org/wiki/Gini_coefficient) [11]," and the higher it is, the more extreme a nation's wealth-inequality. The Gini (http://www.international-adviser.com/ia/media/Media/Credit-Suisse-Global-Wealth-Databook-2013.pdf) [10] for the U.S. is 85; for Germany, 77; Canada, 72; and Bangladesh, 64. Nations more unequal than the U.S. include Kazakhstan at 86 and the Ukraine at 90. The African continent tips in at just under 85. Odd company for the self-proclaimed “indispensable nation.”

Piketty shows that such inequality is driven by two complementary forces. By owning more of everything (capital), rich people have a mechanism for getting ever richer than the rest of us, because the rate of return on investment is higher than the rate of economic growth. In other words, money made from investments grows faster than money made from wages. Piketty claims the wealth of the wealthiest Americans is rising at 6%-7% a year, more than three times as fast as the economy the rest of us live in.

At the same time, wages for middle and lower income Americans are sinking, driven by factors also largely under the control of the wealthy. These include the application of new technology to eliminate human jobs, the crushing of unions, and a decline in the inflation-adjusted minimum wage that more and more Americans depend on for survival.

The short version (http://www.dailykos.com/story/2010/10/01/906881/--A-rising-tide-lifts-all-yachts) [12]: A rising tide lifts all yachts.

2) So why don't the unemployed/underemployed simply find better jobs?

Another way of phrasing this question is: Why don't we just blame the poor for their plight? Mention unemployment or underemployment and someone will inevitably invoke the old "pull yourself up by your bootstraps" line. If workers don't like retail or minimum-wage jobs, or if they can't find good paying jobs in their area, why don’t they just move (http://culture.squidoo.com/why-homeless-people-dont-just-get-a-job) [13]? Quit retail or quit Pittsburgh (Detroit, Cleveland, St. Louis) and...

Move to where to do what? Our country lost one-third of all decent factory jobs -- almost six million of them -- between 2000 and 2009, and wherever "there" is supposed to be, piles of people are already in line. In addition, many who lost their jobs don't have the means to move or a friend with a couch to sleep on when they get to Colorado. Some have lived for generations in the places where the jobs have disappeared. As for the jobs that are left, what do they pay? One out of four (http://www.mybudget360.com/low-wage-america-middle-class-incomes-and-employment-fields-income-growth-average-incomes/) [14] working Americans earn less than $10 per hour. At 25%, the U.S. has the highest percentage of low-wage workers in the developed world. (Canada and Great Britain have 20%, Japan under 15%, and France 11%.)

One in six men (http://gawker.com/men-talk-about-being-unemployed-in-their-prime-1517479368?utm_source=recirculation&utm_medium=recirculation&utm_campaign=thursdayPM) [15], 10.4 million Americans aged 25 to 64, the prime working years, don't have jobs at all, a portion of the male population that has almost tripled in the past four decades. They are neither all lazy nor all unskilled, and at present they await news of the uncharted places in the U.S. where those 10 million unfilled jobs are hidden.
Moving “there” to find better work isn't an option.

3) But aren't there small-scale versions of economic “rebirths” occurring all over America?

Travel (http://www.tomdispatch.com/blog/175838/tomgram:_peter_van_buren,_regime_change_in_america/) [16] through some of the old Rust Belt towns of this country and you’ll quickly notice that “economic rebirth” seems to mean repurposing buildings that once housed factories and shipping depots as bars and boutiques. Abandoned warehouses are now trendy restaurants; a former radiator factory is an artisanal coffee shop. In other words, in a place where a manufacturing plant once employed hundreds of skilled workers at union wages, a handful of part-timers are now serving tapas at minimum wage plus tips.

In Maryland, an ice cream plant (http://www.washingtonpost.com/local/hagerstown-ice-cream-plant-revival-attracts-hundreds-of-desperate-job-seekers/2014/01/05/8cc26fec-74a0-11e3-8b3f-b1666705ca3b_story.html) [17] that once employed 400 people with benefits and salaries pegged at around $40,000 a year closed its doors in 2012. Under a "rebirth" program, a smaller ice cream packer reopened the place with only 16 jobs at low wages and without benefits. The new operation had 1,600 applicants for those 16 jobs. The area around the ice cream plant once produced airplanes, pipe organs, and leather car seats. No more. There were roughly 14,000 factory jobs in the area in 2000; today, there are 8,000.

General Electric’s Appliance Park (http://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/) [18], in Louisville, Kentucky, employed 23,000 union workers at its peak in 1973. By 2011, the sputtering plant held onto only about 1,800 workers. What was left of the union there agreed to a two-tier wage scale, and today 70% of the jobs are on the lower tier -- at $13.50 an hour, almost $8 less than what the starting wage used to be. A full-time worker makes about $28,000 a year before taxes and deductions. The poverty line (http://aspe.hhs.gov/poverty/13poverty.cfm) [19] for a family of four in Kentucky is $23,000. Food stamp benefits are available to people who earn up to 130% of the poverty line, so a full-timer in Kentucky with a family still qualifies. Even if a worker moved to Kentucky and lucked out by landing a job at the plant, standing on your tiptoes with your lips just above sea level is not much of a step up.

Low paying jobs are not a rebirth.

4) Can't people just get off their couches and get back to work?

There are 3.8 million (http://www.slate.com/blogs/moneybox/2014/03/21/krueger_on_long_term_unemployment_the_most_importa nt_argument_about_the.html) [20] Americans who have been out of work for 27 weeks or more. These are the country’s long-term unemployed, as defined by the Department of Labor. Statistically, the longer you are unemployed, the less likely it is that you'll ever find work again. Between 2008 and 2012, only 11% of those unemployed 15 months or more found a full-time job, and research shows that those who do find a job are less likely to retain it. Think of it as a snowball effect: more unemployment creates more unemployable people.

And how hard is it to land even a minimum-wage job? This year, the Ivy League college admissions acceptance rate was 8.9% (http://www.washingtonpost.com/local/education/the-ivy-league-admission-rate-8-point-something-something-percent/2014/03/28/558400de-b67e-11e3-8cc3-d4bf596577eb_story.html) [21]. Last year, when Walmart opened its first store in Washington, D.C., there were more than 23,000 (http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/28/wal-mart-has-a-lower-acceptance-rate-than-harvard/?Post+generic=?tid=sm_twitter_washingtonpost) [22]applications for 600 jobs, which resulted in an acceptance rate of 2.6%, making the big box store about twice as selective as Harvard and five times as choosy as Cornell.

Telling unemployed people to get off their couches (or out of the cars they live in or the shelters where they sleep) and get a job makes as much sense as telling them to go study at Harvard.

[boutons_deux]

5) Why can't former factory workers retrain into new jobs?

Janesville (http://www.propublica.org/article/rare-agreement-obama-romney-ryan-endorse-retraining-for-jobless-but-are-the) [23], Wisconsin, had the oldest General Motors car factory in America, one that candidate Obama visited in 2007 and insisted would be there for another 100 years. Two days before Christmas that year and just before Obama's inauguration, the plant closed forever, throwing 5,000 people out of work. This devastated the town, because you either worked in the plant or in a business that depended on people working in the plant. The new president and Congress quickly paid for a two-million-dollar Janesville retraining program, using state community colleges the way the government once used trade schools built to teach new immigrants the skills needed by that Janesville factory a century ago.

This time around, however, those who finished their retraining programs simply became trained unemployables rather than untrained ones. It turned out that having a certificate in “heating and ventilation” did not automatically lead to a job in the field. There were already plenty of people out there with such certificates, never mind actual college degrees. And those who did find work in some field saw their take-home pay drop by 36%. This, it seems, is increasingly typical in twenty-first-century America (though retraining programs have been little studied in recent years).

Manufacturing is dead and the future lies in a high-tech, information-based economy, some say. So why can't former factory workers be trained to do that? Maybe some percentage could, but the U.S. graduated 1,606,000 (https://www.naceweb.org/press/faq.aspx) [24] students with bachelor's degrees in 2014, many of whom already have such skills.

Bottom Line: Jobs create the need for training. Training does not create jobs.

6) Shouldn't we cut public assistance and force people into the job market?

At some point in any discussion of jobs, someone will drop the nuclear option: cut federal and state benefits and do away with most public assistance. That'll motivate people to find jobs -- or starve. Unemployment money and food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP (http://en.wikipedia.org/wiki/Supplemental_Nutrition_Assistance_Program) [25]) encourage people to be lazy. Why should tax dollars be used to give food to people who won't work for it? “If you’re able-bodied, you should be willing to work,” House Majority Leader Eric Cantor said (http://www.cnsnews.com/video/cnsnews/cantor-if-youre-able-bodied-you-should-be-willing-work) [26] discussing food stamp cuts.

The problem with such statements is 73% (http://laborcenter.berkeley.edu/publiccosts/fastfoodpovertywages.shtml) [27] of those enrolled in the country’s major public benefits programs are, in fact, from working families -- just in jobs whose paychecks don’t cover life’s basic necessities. McDonald’s workers alone receive $1.2 billion (http://www.nelp.org/page/-/rtmw/uploads/NELP-Super-Sizing-Public-Costs-Fast-Food-Report.pdf?nocdn=1) [28] in federal assistance per year.

Why do so many of the employed need food stamps? It’s not complicated. Workers in the minimum-wage economy often need them simply to survive. All in all, 47 million (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/23/why-are-47-million-americans-on-food-stamps-its-the-recession-mostly/) [29] people get SNAP nationwide because without it they would go hungry.

In Ohio, where I did some of the research for my book Ghosts of Tom Joad (http://www.amazon.com/dp/1935462911/ref=nosim/?tag=tomdispatch-20) [30], the state pays out benefits on the first of each month. Pay Day, Food Day, Mother’s Day, people call it. SNAP is distributed in the form of an Electronic Bank Transfer card, or EBT (http://www.gettingfoodstamps.org/faqsaboutsnap.html) [31], which, recipients will tell you, stands for “Eat Better Tonight.” EBT-friendly stores open early and stay open late on the first of the month because most people are pretty hungry come the Day.

A single person with nothing to her name in the lower 48 states would qualify for no more than $189 (http://www.fns.usda.gov/snap/how-much-could-i-receive) [32] a month in SNAP. If she works, her net monthly income is multiplied by .3, and the result is subtracted from the maximum allotment. Less than fifty bucks a week for food isn’t exactly luxury fare. Sure, she can skip a meal if she needs to, and she likely does. However, she may have kids; almost two-thirds (http://www.snaptohealth.org/snap/snap-frequently-asked-questions/) [33] of SNAP children live in single-parent households. Twenty percent (http://feedingamerica.org/hunger-in-america/hunger-facts/child-hunger-facts.aspx) [34] or more of the child population in 37 states lived in “food insecure households” in 2011, with New Mexico (30.6%) and the District of Columbia (30%) topping the list. And it's not just (http://www.snaptohealth.org/snap/snap-frequently-asked-questions/) [33] kids. Households with disabled people account for 16% of SNAP benefits, while 9% go to households with senior citizens.

Almost 22% (http://www.census.gov/prod/2013pubs/p60-245.pdf) [35] of American children under age 18 lived in poverty in 2012; for those under age five, it’s more than 25%. Almost 1 in 10 live in extreme poverty.

Our system is trending toward asking kids (and the disabled, and the elderly) to go to hell if they're hungry. Many are already there.

7) Why are Walmart and other businesses opposed to SNAP cuts?

Public benefits are now a huge part of the profits of certain major corporations. In a filing (http://stock.walmart.com/financial-reporting/sec-filings/) [36] with the Securities and Exchange Commission, Walmart was oddly blunt about what SNAP cuts could do to its bottom line:

“Our business operations are subject to numerous risks, factors, and uncertainties, domestically and internationally, which are outside our control. These factors include... changes in the amount of payments made under the Supplemental Nutrition Assistance Plan and other public assistance plans, [and] changes in the eligibility requirements of public assistance plans.”

How much profit do such businesses make from public assistance? Short answer: big bucks (http://www.eatdrinkpolitics.com/wp-content/uploads/FoodStampsFollowtheMoneySimon.pdf) [37]. In one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP dollars -- more than four times the SNAP money spent at farmers' markets nationwide. In two years, Walmart received about half of the one billion dollars in SNAP expenditures in Oklahoma. Overall, 18% (http://www.huffingtonpost.com/2013/10/31/walmart-food-stamps_n_4181862.html) [38] of all food benefits money is spent at Walmart.

Pepsi, Coke, and the grocery chain Kroger lobbied (http://www.eatdrinkpolitics.com/wp-content/uploads/FoodStampsFollowtheMoneySimon.pdf) [37] for food stamps, an indication of how much they rely on the money. The CEO of Kraft admitted (http://www.ft.com/intl/cms/s/0/7ed1db42-f932-11e1-945b-00144feabdc0.html#axzz261zpCuUt) [39]that the mac n’ cheese maker opposed food stamp cuts because users were “a big part of our audience.” One-sixth (http://www.ft.com/intl/cms/s/0/7ed1db42-f932-11e1-945b-00144feabdc0.html#axzz261zpCuUt) [39] of Kraft’s revenues come from food stamp purchases. Yum Brands, the operator of KFC, Taco Bell, and Pizza Hut, tried to convince lawmakers in several states to allow (http://www.ft.com/intl/cms/s/0/7ed1db42-f932-11e1-945b-00144feabdc0.html#axzz261zpCuUt) [39] its restaurants to accept food stamps. Products eligible for SNAP purchases are supposed to be limited to “healthy foods.” Yet lobbying by the soda industry keeps sugary drinks on the approved list, while companies like Coke and Pepsi pull in four billion dollars (http://www.naturalnews.com/039849_food_stamps_soda_subsidies_junk.html) [40] a year in revenues from SNAP money.
Poverty is big business.

8) Should We Raise the Minimum Wage?

One important reason to raise the minimum wage to a living one is that people who can afford to feed themselves will not need food stamps paid for by taxpayers. Companies who profit off their workers' labor will be forced to pay a fair price for it, and not get by on taxpayer-subsidized low wages. Just as important, people who can afford to feed themselves earn not just money, but self-respect. The connection between working and taking care of yourself and your family has increasingly gone missing in America, creating a society that no longer believes in itself. Rock bottom is a poor foundation for building anything human.

But won't higher wages cause higher prices? The way taxpayers functionally subsidize companies paying low-wages to workers -- essentially ponying up the difference between what McDonald's and its ilk pay and what those workers need to live via SNAP and other benefits -- is a hidden cost squirreled away in plain sight. You're already paying higher prices via higher taxes; you just may not know it.

Even if taxes go down, won't companies pass on their costs? Maybe, but they are unlikely to be significant. For example, if McDonald’s doubled the salaries of its employees to a semi-livable $14.50 an hour, not only would most of them go off public benefits, but so would the company -- and yet a Big Mac would cost just 68 cents (http://live.huffingtonpost.com/r/segment/doubling-mcdonald-salaries-/51f7a4c0fe344467ed000008) [41] more. In general, only about 20% (http://www.restfinance.com/Restaurant-Finance-Across-America/July-2013/That-McDonalds-Salary-Study-Gets-It-Wrong/) [42] of the money you pay for a Big Mac goes to labor costs. At Walmart, increasing wages to $12 per hour would cost the company only about one percent (http://inthesetimes.com/working/entry/7211/study_increasing_wages_at_wal-mart_would_barely_affect_shoppers) [43] of its annual sales.

Despite labor costs not being the most significant factor in the way low-wage businesses set their prices, one of the more common objections to raising the minimum wage is that companies, facing higher labor costs, will cut back on jobs. Don’t believe it.

The Los Angeles Economic Round Table concluded that raising the hourly minimum to $15 in that city would generate an additional $9.2 billion (http://www.economicrt.org/summaries/Effects_15Dollar_MinWage_LA_City.html) [44] in annual sales and create more than 50,000 jobs. A Paychex/IHS survey (https://www.paychex.com/jobs-index/) [45], which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington, which also has the highest statewide minimum wage in the nation. The area with the highest percentage of annual job growth was San Francisco, the city with the highest minimum wage in the nation. Higher wages do not automatically lead to fewer jobs. Many large grocery chains, including Safeway and Kroger, are unionized (http://www.ufcw.org/industries/retail-food/) [46] and pay well-above-minimum wage. They compete as equals against their non-union rivals, despite the higher wages.

Will employers leave a state if it raises its minimum wage independent of a nationwide hike? Unlikely. Most minimum-wage employers are service businesses that are tied to where their customers are. People are not likely to drive across state lines for a burger. A report (http://www.nytimes.com/2007/01/11/us/11minimum.html?hp&ex=1168578000&en=bf304392cdc5baf4&ei=5094&partner=homepage)[47] on businesses on the Washington-Idaho border at a time when Washington’s minimum wage was nearly three bucks higher than Idaho’s found that the ones in Washington were flourishing.

While some businesses could indeed decide to close or cut back if the minimum wage rose, the net macro gains would be significant. Even a small hike to $10.10 an hour would put some $24 billion (http://www.thenation.com/blog/178429/cbo-report-will-minimum-wage-hike-really-cost-jobs) [48] a year into workers' hands to spend and lift 900,000 Americans above the poverty line. Consumer spending drives 70% (http://www.raisetheminimumwage.com/pages/qanda) [49] of our economy. More money in the hands of consumers would likely increase the demand for goods and services, creating jobs.

Yes, raise the minimum wage. Double it or more. We can't afford not to.

9) Okay, after the minimum wage is raised, what else can we do?

To end such an article, it’s traditional to suggest reforms, changes, solutions. It is, in fact, especially American to assume that every problem has a "solution." So my instant suggestion: raise the minimum wage. Tomorrow. In a big way. And maybe appoint Thomas Piketty to the board of directors of Walmart.

But while higher wages are good, they are likely only to soften the blows still to come. What if the hyper-rich like being ever more hyper-rich and, with so many new ways to influence and control our political system and the economy, never plan to give up any of their advantages? What if they don't want to share, not even a little more, not when it comes to the minimum wage or anything else?
The striking trend lines of social and economic disparity that have developed over the last 50 years are clearly no accident; nor have disemboweled unions (http://www.bls.gov/news.release/pdf/union2.pdf) [50], a deindustrialized America, wages heading for the basement (with profits still on the rise), and the widest gap between rich and poor since the slavery era been the work of the invisible hand. It seems far more likely that a remarkably small but powerful crew wanted it that way, knowing that a nation of fast food workers isn’t heading for the barricades any time soon. Think of it all as a kind of “Game of Thrones (http://www.hbo.com/game-of-thrones#/) [51]” played out over many years. A super-wealthy few have succeeded in defeating all of their rivals -- unions, regulators, the media, honest politicians, environmentalists -- and now are free to do as they wish.

What most likely lies ahead is not a series of satisfying American-style solutions to the economic problems of the 99%, but a boiling frog’s journey into a form of twenty-first-century feudalism in which a wealthy and powerful few live well off the labors of a vast mass of the working poor. Once upon a time, the original 99% percent, the serfs, worked for whatever their feudal lords allowed them to have. Now, Walmart “associates” do the same. Then, a few artisans lived slightly better, an economic step or two up the feudal ladder. Now, a technocratic class of programmers, teachers, and engineers with shrinking possibilities for upward mobility function similarly amid the declining middle class. Absent a change in America beyond my ability to imagine, that's likely to be my future -- and yours.

http://www.alternet.org/economy/9-questions-billionaires-disparagingly-ask-about-people-they-exploit?akid=11872.187590.EtAS5-&rd=1&src=newsletter999040&t=5&paging=off&current_page=1#bookmark

[boutons_deux]

The Typical Household, Now Worth a Third Less

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline,

according to a study (http://web.stanford.edu/group/scspi/_media/working_papers/pfeffer-danziger-schoeni_wealth-levels.pdf)financed by the Russell Sage Foundation (http://www.russellsage.org/). Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 94 percent of the population had less wealth and 4 percent had more.)

It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff (http://www.nber.org/papers/w18559) at New York University, has shown even greater gains in wealth for the richest 1 percent of households.

For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets.

But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.

“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss.

http://mobile.nytimes.com/2014/07/27/business/the-typical-household-now-worth-a-third-less.html?_r=0

[Winehole23]

neo- liberal titan Larry Summers takes a populist turn:

http://www.nytimes.com/2015/03/04/opinion/establishment-populism-rising.html?_r=1

[boutons_deux]

neo- liberal titan Larry Summers takes a populist turn:

http://www.nytimes.com/2015/03/04/opinion/establishment-populism-rising.html?_r=1

The shit pile that he helped create is too big now.

Repugs love shit piles when the 99% are underneath, so Repugs will OBSTRUCT any digging out of the 99%.

[boutons_deux]

You can’t rent a one-bedroom apartment anywhere in America on a minimum-wage job

http://2d0yaz2jiom3c6vy7e7e5svk.wpengine.netdna-cdn.com/wp-content/uploads/2015/05/map-800x430.jpg

Hours needed at minimum wage to afford a one-bedroom apartment (National Low-Income Housing Coalition)

http://www.rawstory.com/2015/05/you-cant-rent-a-one-bedroom-apartment-anywhere-in-america-on-a-minimum-wage-job/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29

[boutons_deux]

5 Lies Paul Ryan Needs You To Believe About Poverty

http://www.nationalmemo.com/wp-content/uploads/2014/03/paul-ryan-668x501.jpg (http://www.nationalmemo.com/5-lies-republicans-need-you-to-believe-about-poverty/)


The prophet George Carlin said,

“Conservatives say if you don’t give the rich more money, they will lose their incentive to invest.

As for the poor, they tell us they’ve lost all incentive because we’ve given them too much money.”


1. The “War on Poverty” didn’t work.


This lie is so invidious even some conservative (http://douthat.blogs.nytimes.com/2015/05/05/two-premises-on-poverty-and-culture/) writers (http://www.aei.org/publication/heres-why-we-might-actually-be-winning-the-war-on-poverty/) have started pushing back against the idea that government spending hasn’t made a dent in poverty. But it’s the basic premise of Ryan’s attack on our safety net (http://budget.house.gov/waronpoverty/) and it’s been repeated recently by GOP presidential candidates Jeb Bush (http://www.chicagotribune.com/news/opinion/commentary/ct-jeb-bush-war-poverty-poor-educaton-reform-opportunity-perspec-0506-jm-20150506-story.html) and Mike Huckabee. (https://www.facebook.com/mikehuckabee/posts/10151919695627869)

Conservatives compulsively ignore that many measures of poverty are taken before adding government aid into the equation. A new study shows that government programs are even more effective than previously thought at keeping Americans out of poverty. In 2012 alone, we lifted 48 million of our neighbors (http://www.washingtonpost.com/blogs/plum-line/wp/2015/05/06/safety-net-does-more-to-ease-poverty-than-previously-thought-new-study-finds/) out of extreme need with the safety net.

The idea that the War on Poverty doesn’t work should be most offensive to seniors.
http://www.nationalmemo.com/wp-content/uploads/2015/05/elderlyspm.png (http://cdn.nationalmemo.com/wp-content/uploads/2015/05/elderlyspm.png)

By any measure, we’ve cut the percentage of elderly Americans living in poverty (http://www.huffingtonpost.com/jared-bernstein/poverty-in-america_b_1660171.html) by more than half since Lyndon Johnson declared the War on Poverty some 50 years ago. And they are the only group that didn’t see a spike into poverty due to the Great Recession.

Ironically, seniors are now the core of the GOP’s political power in America, and the only reason Republicans are able to pursue savage cuts to the stability we’ve created for our grandmothers and grandfathers.

2. The poor are lazy.

This is the true gospel of the right. It’s how they justify opposing every government program including Medicaid expansion, which only helps Americans who earn too much to qualify for regular Medicaid. And it’s built entirely on a misunderstanding of who the poor are.

Demos’ Matt Bruenig looked at (http://www.demos.org/blog/4/30/15/who-are-officially-poor-1987-2013) census data and found that the vast majority of the poor in America are children, the elderly, the disabled, and students.
http://www.nationalmemo.com/wp-content/uploads/2015/05/Who-Are-the-Poor_0.png (http://dwpr80flwolb1.cloudfront.net/wp-content/uploads/2015/05/Who-Are-the-Poor_0.png)

Sadly, 20 percent or so are working poor who would likely be pushed out of poverty if the minimum wage were raised.
Ah, what about the “Rest”? They sound lazy! They must be the shiftless hammock dwellers whose main goal in life is to suckle at the taxpayer teat. Yeah. Notsomuch.

http://www.nationalmemo.com/wp-content/uploads/2015/05/nonworkingpoor87.png (http://cdn.nationalmemo.com/wp-content/uploads/2015/05/nonworkingpoor87.png)


Bruenig found that (http://www.demos.org/blog/5/1/15/poverty-capitalism-creates) the vast majority of them are occupied with “Caring” for children or another loved one. That leaves fewer than 1 out of 10 poor Americans as the sort of jobless moochers conservatives would like you to believe all poor Americans long to be.

3. Government help creates dependency.

Who ends up on welfare in America? About half of us. And of the 1 out of 2 Americans who gets government help, only 5 percent end up taking that help for 10 straight years.
“The idea of welfare dependence is an utter fabrication invented by rich Republicans to gut the social safety net,”Demos’ Sean McElwee wrote (http://www.huffingtonpost.com/sean-mcelwee/how-racism-is-destroying-_b_7153240.html). “But this safety net has actually been incredibly effective. Which is why these rich Republicans want to get rid of it.”

Otherwise, we many not be able to afford the help we give to people who don’t need it so badly — like tax breaks for vacation homes, gluttonous business lunches, and private jets (http://www.washingtonpost.com/blogs/wonkblog/wp/2015/04/09/how-the-u-s-spends-more-helping-its-citizens-than-other-rich-countries-but-gets-way-less/). Too bad the poor don’t enjoy such luxuries, or those too might become “hammocks.”

4. A lack of morals is the problem, not a lack of cash.

It’s always a little freaky when conservatives who don’t believe government can fix roads think it can fix “culture.” But this is the exact argument of the right whenever there’s an event like the riots in Baltimore that unearth the horrors of what it’s truly like to be poor in this country.

Crime is way down in America, as is teenage pregnancy and most other “immoral” behaviors (http://noahpinionblog.blogspot.com/2015/03/americans-are-better-behaved-than-ever.html) that we measure, which makes you think the “morality” the right wants to see is a more theocratic and controlling government with more say in what women do with their bodies, and less of that “helping the poor” crap.

Bruenig points out (http://www.demos.org/blog/5/4/15/david-brooks-makes-basic-poverty-mistakes) that America has some of the worst povert (http://www.thenation.com/article/176242/americas-shameful-poverty-stats#)y in the industrialized world for one simple reason: We spend less than the countries — like the Nordics — that have nearly eliminated poverty. “If you want serious anti-poverty policy that targets actual poverty,” he wrote, “and not stereotypes of it, then what you want is welfare-state expansions targeted at vulnerable populations.”

5. Cutting help to the poor will help the economy.


It hurts everyone when the poor don’t have the basic essentials to live.

“The societal cost of hunger, for example, is $167.5 billion (http://cdn.americanprogress.org/wp-content/uploads/issues/2011/10/pdf/hunger_paper.pdf) per year as a result of factors such as lost economic productivity, the increased costs of poor educational outcomes, avoidable health care costs, and the increased costs of charitable assistance,” The Center for American Progress’ Joey Moes wrote (https://www.americanprogress.org/issues/poverty/news/2012/03/21/11296/if-ryan-gets-his-way-on-poverty/) in an analysis of Ryan’s 2012 budget.

Republican policies are especially bad for the poor. But they’re also bad for everyone else (http://www.nationalmemo.com/5-ways-democratic-presidents-kick-republican-butt/), except the very, very rich.

Still, Paul Ryan has done a lot to help poor people. For instance, he helped Mitt Romney lose. :lol

http://www.nationalmemo.com/5-lies-republicans-need-you-to-believe-about-poverty/?utm_source=Sailthru&utm_medium=email&utm_term=MM_frequency_six&utm_campaign=Morning%20Memo%C2%A0-%202015-05-11&utm_content=Final

[Winehole23]

992985788198645760

[boutons_deux]

992985788198645760

and Europe socio/economic mobility is higher than USA's,

where most probably:

If you're born rich, you stay rich.

If you're born poor, you stay poor.

90% + of all growth in US income goes to the top 5%.

[Winehole23]

despite the record expansion during the Obama years and the putatively stellar US economy under Trump, food insecurity remains at levels higher than ten years ago.


Food insecurity -- defined as not having enough food because of a lack of money or other resources -- is a daily problem for roughly one in eight Americans (https://www.cbsnews.com/news/where-americans-are-going-hungry/), statistics show. That rate remains higher than before the recession, when the numbers were slightly more than one in 10, according to data from the U.S. Department of Agriculture (https://www.ers.usda.gov/webdocs/publications/84973/err-237.pdf?v=42979).https://www.cbsnews.com/news/despite-stronger-economy-many-americans-still-need-help-with-food/

[FrostKing]

and Europe socio/economic mobility is higher than USA's,

where most probably:

If you're born rich, you stay rich.

If you're born poor, you stay poor.

90% + of all growth in US income goes to the top 5%.
Men born into wealth stay rich. Rich women marry rich.

Some middle class women marry "new wealth" a.k.a athletes/musicians/reality stars which just ends up bankrupt anyway. Middle class men get divorced and their wealth is divided.


Increasingly people marry "for love", exotic taboos like interracial or just straight up stay single and live with roommates all their life.



Power couple are less frequent. Poland has half the poverty percentage as America because life is more simple & family based there. In the USA people gamble and just like casinos, you usually lose.

[Winehole23]

From 1990 to 2015, the number of maternal deaths per 100,000 births in most developed nations has been flat or dropping. In the U.S., the rate has risen sharply.1990 to 2015, the number of maternal deaths per 100,000 births in most developed nations has been flat or dropping. In the U.S., the rate has risen sharply.

https://www.gannett-cdn.com/media/2018/07/13/USATODAY/USATODAY/636670951389609417-MternalHarmHTML-Online-copy.png

https://www.cbsnews.com/news/us-most-dangerous-place-to-give-birth-in-developed-world-usa-today-investigation-finds/

[Winehole23]

war, revolution or the plague:

https://www.economist.com/open-future/2018/09/10/can-inequality-only-be-fixed-by-war-revolution-or-plague

[boutons_deux]

war, revolution or the plague:

https://www.economist.com/open-future/2018/09/10/can-inequality-only-be-fixed-by-war-revolution-or-plague

revolution is out. The police/security/surveillance state is too strong.

And we see how LE and DHS Schustzstaffel will do anything they are ordered to do to Americans (job security rules,OK!), "like good Germans".

Look at the oil pipeline protests where LE from 6 states was recruited to counter, to make war on the protesters brutally, infiltrating the protestors' communications, etc.

[Winehole23]

sort of the origin story of how very rich people get away with not paying their fair share.

laws and taxes are for little people.


If the bonds had been issued in Britain, there would have been a 4% tax on them, so Fraser formally issued them at Schiphol airport in the Netherlands. If the interest were to be paid in Britain, it would have attracted another tax, so Fraser arranged for it to be paid in Luxembourg. He managed to persuade the London Stock Exchange to list the bonds, despite their not being issued or redeemed in Britain, and talked around the central banks of France, the Netherlands, Sweden, Denmark and Britain, all of which were rightly concerned about the eurobonds’ impact on currency controls. The final trick was to pretend that the borrower was Autostrade – the Italian state motorway company – when really it was IRI, a state holding company. If IRI had been the borrower, it would have had to deduct tax at source, while Autostrade did not have to.


The cumulative effect of this game of jurisdictional Twister was that Fraser created a bond paying a good rate of interest, on which no one had to pay tax of any kind, and which could be turned back into cash anywhere. These were what are known as bearer bonds. Whoever possessed the bond owned them; there was no register of ownership or any obligation to record your holding, which was not written down anywhere.
https://www.theguardian.com/news/2018/sep/07/the-real-goldfinger-the-london-banker-who-broke-the-world?src=longreads

[Winehole23]

As long as one country tolerated offshore, as Britain did, then the efforts of all the others came to nothing. If regulations stop at a country’s borders, but the money can flow wherever it wishes, its owners can outwit any regulators they choose.


The developments that began with Warburg did not stop with simple eurobonds. The basic pattern was endlessly replicable. Identify a line of business that might make you and your clients money. Look around the world for a jurisdiction with the right rules for that business – Liechtenstein, the Cook Islands, Jersey – and use it as a nominal base.

If you couldn’t find a jurisdiction with the right kind of rules, then you threatened or flattered one until it changed its rules to accommodate you

[ducks]

Smart people generally make more than stupid people. Unfortunately we are systematically breeding generations of litters of stupid people while the smart people are limiting childbirth to what they can financially and emotionally support.

[Winehole23]

workers got squeezed:

1087328176676720640

[Winehole23]

1089280524907094016

[boutons_deux]

1089280524907094016


Bezos says the only way he can possibly spend all his money is to go into space.

He seems like a total prick, and the inhumane, slave-like conditions in his warehouses says he give no fuck about his employees.

[baseline bum]

1089280524907094016

You'd also need to drop a Hamilton on a third Gofundme to outdo Bezos.

[FrostKing]

Smart people generally make more than stupid people. Unfortunately we are systematically breeding generations of litters of stupid people while the smart people are limiting childbirth to what they can financially and emotionally support.
Wealthy people also don't marry down. Notice Jews stick to their own while preaching to the White middle class on how progressive it is to have chocolate babies.

[Winehole23]

You'd also need to drop a Hamilton on a third Gofundme to outdo Bezos.You get the idea.

Dude is not a humanitarian.

[Winehole23]

:lol

There are plenty of reasons to dislike Bezos besides his ownership of WaPo.

Ever heard of Amazon?

[CosmicCowboy]

:lol

There are plenty of reasons to dislike Bezos besides his ownership of WaPo.

Ever heard of Amazon?

Why is that a reason to dislike him?

[CosmicCowboy]

:lol

There are plenty of reasons to dislike Bezos besides his ownership of WaPo.

Ever heard of Amazon?

Why is that a reason to dislike him?

[rmt]

Bezos says the only way he can possibly spend all his money is to go into space.

He seems like a total prick, and the inhumane, slave-like conditions in his warehouses says he give no fuck about his employees.

Do you use Amazon, bou? If so, protest by stop using it - don't contribute to his wealth.

[Winehole23]

"greatest bull market ever" seems to have left the upper-middle class behind:

1117098235389022209

[boutons_deux]

includes why the bilionaires want to destroy public education

From 100+ years ago ...

A Veblen Moment: Thorstein Veblen’s Lessons from the First Gilded Age Even More Relevant Today (https://www.nakedcapitalism.com/2019/04/a-veblen-moment-thorstein-veblens-lessons-from-the-first-gilded-age-even-more-relevant-today.html)

https://www.nakedcapitalism.com/2019/04/a-veblen-moment-thorstein-veblens-lessons-from-the-first-gilded-age-even-more-relevant-today.html (https://www.nakedcapitalism.com/2019/04/a-veblen-moment-thorstein-veblens-lessons-from-the-first-gilded-age-even-more-relevant-today.html)

[Winehole23]

As both an evolutionary and an institutional economist (two fields he originated), Veblen contended that our habits of thought and our institutions must necessarily “change with changing circumstances.” Unfortunately, they often seem anchored in place instead, bound by the social and psychological inertia of conservatism. But why should that be so?

Veblen had a simple answer. The leisure class is so sheltered from inevitable changes going on in the rest of society that it will adapt its views, if at all, “tardily.” Comfortably clueless (or calculating), the wealthy leisure class drags its heels (or digs them in) to retard economic and social forces that make for change. Hence the name “conservatives.” That (re)tardiness — that time lag imposed by conservative complacency — stalls and stifles the lives of everyone else and the timely economic development of the nation. (Think of our neglected infrastructure, education, housing, health care, public transport — you know the lengthening list today.)

Accepting and adjusting to social or economic change, unfortunately, requires prolonged “mental effort,” from which the leisured conservative mind quite automatically recoils. But so, too, Veblen said, do the minds of the “abjectly poor, and all those persons whose energies are entirely absorbed by the struggle for daily sustenance.” The lower classes were — and this seems a familiar reality in the age of Trump — as conservative as the upper class simply because the poor “cannot afford the effort of taking thought for the day after tomorrow,” while “the highly prosperous are conservative because they have small occasion to be discontented with the situation as it stands.” It was, of course, a situation from which they, unlike the poor, made a bundle in an age (both Veblen’s and ours) in which money flows only uphill to the 1%.

Veblen gave this analytic screw one more turn. Called a “savage” economist, in his meticulous and deceptively neutral prose, he described in the passage that follows a truly savage and deliberate process:


“It follows that the institution of a leisure class acts to make the lower classes conservative by withdrawing from them as much as it may of the means of sustenance and so reducing their consumption, and consequently their available energy, to such a point as to make them incapable of the effort required for the learning and adoption of new habits of thought. The accumulation of wealth at the upper end of the pecuniary scale implies privation at the lower end of the scale.”


And privation always stands as an obstacle to innovation and change. In this way, the industrial, technological, and social progress of the whole society is retarded or perhaps even thrown into reverse. Such are the self-perpetuating effects of the unequal distribution of wealth. And reader take note: the leisure class brings about these results on purpose.



Free online pdf of "Theory of the Leisure Class" : http://moglen.law.columbia.edu/LCS/theoryleisureclass.pdf

[Winehole23]

They spelled "evasion" wrong


Tax avoidance by the rich could top $5 trillion in next decadePUBLISHED TUE, NOV 19 20192:50 PM ESTUPDATED TUE, NOV 19 20195:50 PM EST


Robert Frank (https://www.cnbc.com/robert-frank/)@ROBTFRANK (https://twitter.com/robtfrank)





A research paper by Lawrence Summers, a former Treasury Secretary, and finance professor Natasha Sarin found that lax enforcement by the Internal Revenue Service (https://www.cnbc.com/irs/) has led to hundreds of billions of dollars a year in uncollected taxes from the wealthy, which could reach trillions over the next decade.




Summers — a vocal opponent of the wealth taxes being proposed by Democratic presidential candidates Sens. Elizabeth Warren (https://www.cnbc.com/elizabeth-warren/) and Bernie Sanders (https://www.cnbc.com/bernie-sanders/) — contends that one way to start making the tax system more fair and progressive without raising rates would be to plug the holes in collection.


The “tax gap” — the difference between the amount due to the IRS each year and the amount collected — grew to just under $400 billion in 2013, according to the IRS. Summers and Sarin estimate based on current income and IRS trends, the tax would total $7.5 trillion over a 10-year period from 2020 through 2029.


“The sheer magnitude of the tax gap suggests that there is substantial revenue-raising potential from shrinking it through well-targeted enforcement measures,” they write in the paper.
https://www.cnbc.com/2019/11/19/tax-avoidance-by-the-rich-could-top-5-trillion-in-next-decade.html

[Winehole23]

workers got squeezed:

1087328176676720640Squeezing employers and workers is the flipside of rentier capitalism as financialization hollows out the industrial base and shrinks government.


The financial sector essentially is of the 1% or the 10% that holds the rest of the economy in debt. The financial sector makes its money by getting the rest of the economy indebted to itself and making money off asset price gains. In the past, the financial sector made its money by getting interest. But now, with almost zero interest what it’s after is capital gains because capital gains basically are either untaxed or taxed at very, very low rates.

So, the financial sector essentially makes its money not by being part of the production and consumption economy but by siphoning off as much money from the production and consumption economy as it can for real estate, for insurance and for debt service and banking services. The insurance, of course, would include the health insurance.

The result is that Americans have to spend so much of their money now on housing. Up to 40% to 43% of their income goes for housing as opposed to 25% back in the 1940s,’50s and ‘60s . They have to pay huge amounts for medical insurance.
And the taxes have been shifted off real estate, off of finance onto labor and industry. So you have America really being unable to revive its industry today. Because how can you create an export industry or even compete with foreigners when you have to pay such high housing costs, such high medical insurance and healthcare costs instead of the government taking over, such high debt service. If you got all of your clothing and food and basic needs for nothing you still couldn’t compete with foreigners because of all of these FIRE sector – finance, insurance and real estate – costs.

Now the job of the government under industrial capitalism was all spelled out in the late 19th century in the United States. For instance, by Simon Patten, who was the first Professor of Economics at the first business school, the Wharton School at the University of Pennsylvania. And Patten said that public infrastructure was a fourth factor of production. And the role of the government was to provide basic needs like healthcare, education, transportation and other basic services at very low price so that you lower the cost of doing business. You lower the cost of living so that the private sector will be able to compete with foreign countries.

Now, most countries now provide free healthcare. Because if they didn’t, then the employers and the laborers would have to pay healthcare. Their cost of production would be much higher. And America has not done that. America has the highest cost of production in the world. Not because it’s technologically inefficient. The technology is all available and there.

The reason is all of these extra costs that are paid by labor and by employers that are borne by governments in other countries. So as long as essentially America’s dismantling the government, what you’re dismantling is the basic means of subsidizing industrial production and manufacturing. And that’s what’s left America in a high cost position and driven American industry abroad without any idea of how to create a national economy that makes it profitable to invest in industry here.

So most of the American cost structure has nothing to do with the cost of production and therefore nothing to do with industry or industrial capitalism. It’s a fall back into a kind of post-medieval rentier economy.
https://www.nakedcapitalism.com/2020/12/polarization-then-a-crash-michael-hudson-on-the-rentier-economy.html

[Winehole23]

The trend since 1980 has been monopolization.


Well, banks have always been called the mother of trusts. Back in the 19th century, you had the great fortunes on Wall Street being made by creating the steel trust, the copper trust. The function of banks is to lend money to companies to essentially create monopolies in the markets which can control the prices and extract super profits. Namely, economic rent over and above the actual cost of production and normal profits.

And when you have a trust, a monopoly, you can get monopoly rent over and above the normal rate of profit. Banks said: well, look, we can work with companies to let a few companies like, Carnegie takeover the steel industry. You had agriculture, agribusiness in this country, really turned into a trust with two firms sort of monopolizing all of the distribution of agricultural products. It goes all the way up. You’ve had essentially, Amazon becoming a monopoly. You have the information technology sector turning into a monopoly.

And the function of these monopolies… the reason their stock prices are going up so much is because they’re setting the price without any anti-monopoly legislation such as you had under the Sherman Antitrust Act of 1890 and then Teddy Roosevelt as a trust Buster. Essentially, since the 1980s you have not had any anti-monopoly prosecutions at all.

So, the economy has been more and more concentrated in the hands of a few large companies that have been able to get the credit from the banks to buy potential rivals. Facebook has been buying its rivals. You have the cable companies buying rivals. So people’s cable rates continue to go up and up without any actual cost increase.

You have a dissociation of price from the cost of production. Price is whatever the market will bear. There is no longer that reference to the cost of production. And hence as profit is understood under industrial capitalism as a rate of return on the cost of production and the capital investment. You have essentially prices being dictated by a financially organized trustification and monopolization of the economy most conspicuously in the United States of course.

[Winehole23]

This is the buying opportunity of a generation. You’re going to have in January, 5 million renters thrown out onto the streets. They’re not able to pay the rent. You’re going to have massive foreclosures. Venture capital companies are going to be able to come in and buy real estate just as cheaply as they were able to do when the junk mortgage crisis crashed in 2009.


And Obama did not write down the junk mortgages to the realistic value but threw out 10 million families. Well, 10 million families are going to lose again; about 5 million renters and a lot of low income families who bought houses on mortgage but have lost their jobs or lost their income are going to be defaulting.


So the Biden administration is going to begin just where the Obama administration left off with huge evictions. That’ll end as in the case of the Obama administration, most of the victims will be black and Hispanic lower income people. So you can say that Biden is going to continue the anti-black, anti-Hispanic policies that Obama pioneered so strongly.

[Winehole23]

Yellen and Biden "undecided" on a wealth tax.


Treasury Secretary Janet Yellen said Sunday that the Biden administration hasn’t decided whether to pursue a wealth tax, but will likely issue proposals to address the swelling federal budget deficit.


A group of progressive lawmakers including Sen. Elizabeth Warren (D., Mass.) proposed March 1 a so-called ultra-millionaire tax. The legislation would create a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion and an additional 1% surtax on those above $1 billion.


Asked about the idea on ABC’s “This Week with George Stephanopoulos,” Ms. Yellen said it isn’t something President Biden himself has proposed, but that the administration might consider it.
https://www.wsj.com/articles/yellen-says-biden-administration-undecided-on-wealth-tax-11615737949

[Winehole23]

IRS to probe leaks embarrassing to the .01%

1402339995264983046

[Winehole23]

https://propublica.s3.us-east-1.amazonaws.com/projects/wealth/waffle%20charts/waffle_CMS/jeff_bezos_waffle_craft_0607.png

Jeff Bezos
Amazon.com Inc.
2014-2018 Wealth Growth:
$99.0B
Total Income Reported:
$4.22B (4.26% of wealth)
Total Taxes Paid:
$973M (0.98% of wealth)

Consider Bezos’ 2007, one of the years he paid zero in federal income taxes. Amazon’s stock more than doubled. Bezos’ fortune leapt $3.8 billion, according to Forbes, whose wealth estimates are widely cited. How did a person enjoying that sort of wealth explosion end up paying no income tax?



In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of “other expenses.”


In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

[pgardn]

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

How could Bezos move all of his material without federally funded roads and runways?

problem is he does not see it like this:

Taxes are a kind of collective sacrifice. No one loves giving their hard-earned money to the government. But the system works only as long as it’s perceived to be fair.

he is using wage earner transportation for his business.

[pgardn]

And now the red team will cry but.... but.... jobs!

[Winehole23]

And now the red team will cry but.... but.... jobs!The courtiers and the lickspittles of the wealthy, supposing there be any lurking around here, have been notably MIA in this thread so far.

[pgardn]

Also, Warren Buffet was one of the guys who brought his example forward for the public to see.
So its interesting now that we get no comment.

Also this kind of wealth takes a hoarder mentality to start with imo. Then it blossoms in very creative ways.

[Winehole23]

Also, Warren Buffet was one of the guys who brought his example forward for the public to see.
So its interesting now that we get no comment.evaulation can blunt the impact of propaganda, but it has the native advantange/disadvantage of always having been preexisted by propaganda.

[boutons_deux]

"Taxes are a kind of collective sacrifice. "

taxes are collective contribution to the Commons

Capitalist propaganda and lies for decades have been that taxes are simply bad "investment", with no return, paid to horrible govt that must be defunded and destroyed (so unchallenged, neoliberal Capitalism can rape, pillage, blood-suck, impoverish, steal with no govt restraint)

[SpursforSix]

I'm certainly all for guys like Bezos paying more in taxes but using only net worth as a barometer isn't valid imo. I'm guessing his net worth is 90% tied to his stock ownership which a net gain isn't the same as a net cash gain. It's not like he can liquidate his position and realize the current value of his stock holdings. And I don't believe in taxing someone on unrealized gains. Taxing at the company level at least captures some revenue.

[CosmicCowboy]

I'm certainly all for guys like Bezos paying more in taxes but using only net worth as a barometer isn't valid imo. I'm guessing his net worth is 90% tied to his stock ownership which a net gain isn't the same as a net cash gain. It's not like he can liquidate his position and realize the current value of his stock holdings. And I don't believe in taxing someone on unrealized gains. Taxing at the company level at least captures some revenue.

Plus, Bezos may have a lot of income but up to now has been dumping most of his personal income into Blue Origin which balances out as a loss.

[spurraider21]

the propublica article spoke mostly of increases is wealth, which isnt necessarily the same as income, so i think it was missing the boat a bit. capital gains arent realized until they're sold, and it is that point which is the taxable event. just seeing the numbers go up (and accordingly, your net worth), isn't currently recognized as a taxable event, so its really weird to use that wealth increase as the basis to claim they're dodging taxes.

i mean, if they want to advocate for a wealth tax, thats their prerogative, but thats not really what the article was implying

[RandomGuy]

And now the red team will cry but.... but.... jobs!

Eyup.

Useful idiots.

[ElNono]

the propublica article spoke mostly of increases is wealth, which isnt necessarily the same as income, so i think it was missing the boat a bit. capital gains arent realized until they're sold, and it is that point which is the taxable event. just seeing the numbers go up (and accordingly, your net worth), isn't currently recognized as a taxable event, so its really weird to use that wealth increase as the basis to claim they're dodging taxes.

i mean, if they want to advocate for a wealth tax, thats their prerogative, but thats not really what the article was implying

What the article points out, which is correct, is that it does allow you to leverage that wealth in, say, loans. Which they also are able to obtain at preferred rates, due to that wealth, and they're largely much smaller than the taxation rate.

So in effect, that wealth can be turned into money, and it's done in a way where it pays less in rates than what the tax rate would've been if they cashed out those shares and had to pay taxes on them.

[spurraider21]

What the article points out, which is correct, is that it does allow you to leverage that wealth in, say, loans. Which they also are able to obtain at preferred rates, due to that wealth, and they're largely much smaller than the taxation rate.

So in effect, that wealth can be turned into money, and it's done in a way where it pays less in rates than what the tax rate would've been if they cashed out those shares and had to pay taxes on them.
well then where do they get the money to pay off those loans? taxable income? taxable capital gains?

[ElNono]

well then where do they get the money to pay off those loans? taxable income? taxable capital gains?

It's money they already have and have paid taxes on. Or money they made based on those loans at a higher rate than the loan rate. If structured as a business loan, it can be deducted as well.

The point is that if they used their own money to do it, it would've cost them more due to taxation.

[spurraider21]

It's money they already have and have paid taxes on. Or money they made based on those loans at a higher rate than the loan rate. If structured as a business loan, it can be deducted as well.

The point is that if they used their own money to do it, it would've cost them more due to taxation.
then there's no problem...

so consider a hypothetical fat cat with a net worth of 100 billion... 20 billion of which has already been realized and taxed, 80 billion of which is tied up in assets which would eventually be taxed as capital gains when there is a taxable event

if this guy leveraged his wealth to get a 50 million dollar loan, which he then paid off with a portion the 20 billion he already had... then how is getting the loan a tax advantage? any more than just spending his own money?

i thought the idea is that this guy is getting access to money via loan instead of selling off assets (and paying capital gains tax). but if he's just paying it back with money he already had, i get how he'd get favorable loans, but i dont see how thats skirting tax obligations

[ElNono]

then there's no problem...

so consider a hypothetical fat cat with a net worth of 100 billion... 20 billion of which has already been realized and taxed, 80 billion of which is tied up in assets which would eventually be taxed as capital gains when there is a taxable event

if this guy leveraged his wealth to get a 50 million dollar loan, which he then paid off with a portion the 20 billion he already had... then how is getting the loan a tax advantage? any more than just spending his own money?

i thought the idea is that this guy is getting access to money via loan instead of selling off assets (and paying capital gains tax). but if he's just paying it back with money he already had, i get how he'd get favorable loans, but i dont see how thats skirting tax obligations

It's a tax advantage because if he had to pull the 50 million from his 80 billion, he would be taxed at 20% capital gains (based on his tax bracket). So, in essence, to get the 50 million in liquidity, he would have to hand over an additional 10 million.

But, because he has the wealth to backstop the loan (even from non-realized assets) and can get a preferred rate (also largely because of wealth), this person can get the 50 million in liquidity for 5%-10% rate, meaning the sunk in cost for him is 2.5-5 million. On top of that, if the loan is structured as a business loan, this person can also deduct the interest payments.

I'm not saying this is illegal. I'm saying that having that kind of wealth does allow these people to have much more tools at their disposal to deal with sunk in costs like taxes, which is something a person without that exorbitant amount of wealth would not have.

[CosmicCowboy]

Lots of wealth envy in here. The whole secret (simple as it sounds) is to spend less money than you make, keep perfect credit, and invest the difference. Credit cards should only be used to earn tax free cash back and should be paid off every month. For most, the easiest way to initially build wealth is to buy housing (you can afford) instead of renting. With mortgage rates at 2.5% and residential appreciation at 5+% it's a no brainer. After that equity can be used to borrow money to make other investments. Then the equity from those investments can be used to borrow more to make other investments. In the current economy there is nothing wrong with "good" debt. Taxes and interest can be deducted against ordinary income while the money borrowed is turned into capital gains which can be used as collateral to borrow more money to make more money.

[pgardn]

Lots of wealth envy in here. The whole secret (simple as it sounds) is to spend less money than you make, keep perfect credit, and invest the difference. Credit cards should only be used to earn tax free cash back and should be paid off every month. For most, the easiest way to initially build wealth is to buy housing (you can afford) instead of renting. With mortgage rates at 2.5% and residential appreciation at 5+% it's a no brainer. After that equity can be used to borrow money to make other investments. Then the equity from those investments can be used to borrow more to make other investments. In the current economy there is nothing wrong with "good" debt. Taxes and interest can be deducted against ordinary income while the money borrowed is turned into capital gains which can be used as collateral to borrow more money to make more money.

you have to try really hard to hoard money and be a vicious businessman to get as rich as the people mentioned in Winehole’s article. What you have suggested above is how to get into the top 50% of US taxpayers, Not the top 0.01% in the country.
Jeff Bezos et al don’t just work hard at staying super rich,

there needs to be some change in tax laws that don’t hurt people like you.
I don’t know exactly how to go about it but it’s pretty clear people like you and I are really the backbone of our tax intake.
The bottom 50% only pay 3% of our federal taxes. you are describing how to get out of the bottom 50%.

[pgardn]

The middle class really has no meaning in this country.

[spurraider21]

It's a tax advantage because if he had to pull the 50 million from his 80 billion, he would be taxed at 20% capital gains (based on his tax bracket). So, in essence, to get the 50 million in liquidity, he would have to hand over an additional 10 million.

But, because he has the wealth to backstop the loan (even from non-realized assets) and can get a preferred rate (also largely because of wealth), this person can get the 50 million in liquidity for 5%-10% rate, meaning the sunk in cost for him is 2.5-5 million. On top of that, if the loan is structured as a business loan, this person can also deduct the interest payments.

I'm not saying this is illegal. I'm saying that having that kind of wealth does allow these people to have much more tools at their disposal to deal with sunk in costs like taxes, which is something a person without that exorbitant amount of wealth would not have.
You said they pay off the loan with money they’ve already been taxes on. In my hypo the 20 billion represents that money that’s already been taxed

[baseline bum]

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

What a joke a billionaire using tax credits for his kids. If that doesn't illustrate how much it's Bezos and other billionaires in a war against all of us I don't know what would.

[baseline bum]

The middle class really has no meaning in this country.

"Middle class" basically has a 'wealth tax' on them in the form of property taxes. But god forbid ever putting a wealth tax on billionaires.

[Winehole23]

What a joke a billionaire using tax credits for his kids. If that doesn't illustrate how much it's Bezos and other billionaires in a war against all of us I don't know what would.if most of the wealth is definitionally untaxable, that's a great gig.

[Winehole23]

What a joke a billionaire using tax credits for his kids. If that doesn't illustrate how much it's Bezos and other billionaires in a war against all of us I don't know what would.IIRC the article said a person making 56K might not pass the means test for the benefit.

[boutons_deux]

Capitalism's entire role is to amass more Capital by screwing everybody and everything out of their wealth, other Capitalists and esp non-Capitalists and the earth.

Capitalism is very soon going to install all-out fascism in USA and it's unstoppable, culminating Capitalism's strategy of 45+ years.

[Winehole23]

a wealth tax should be considered.

dragons sitting on dragon piles of gold (.01%) need to be given proper incentives to get their wealth invested more productively, rather than just amassing ever more grotesque piles of wealth for their heirs and assigns. extreme consolidation of wealth tends to queer business competition and innovation. it also makes it possible for a relatively small number of very rich people to influence elections and national politics.

[Winehole23]

right now, institutional investing is crowding out would-be individual buyers of real-estate and farmland.

equities all screwed up.

1403006831858012166

[ElNono]

You said they pay off the loan with money they’ve already been taxes on. In my hypo the 20 billion represents that money that’s already been taxed

Correct. That doesn't make a difference in what I wrote. Additionally, that money to pay off the loan can come from profit on their 50 million investment.

It doesn't change one bit the fact that they can leverage their wealth into actual cash at a lower rate than the tax they would have had to pay to obtain the same money from their unrealized assets.

[ElNono]

Lots of wealth envy in here. The whole secret (simple as it sounds) is to spend less money than you make, keep perfect credit, and invest the difference. Credit cards should only be used to earn tax free cash back and should be paid off every month. For most, the easiest way to initially build wealth is to buy housing (you can afford) instead of renting. With mortgage rates at 2.5% and residential appreciation at 5+% it's a no brainer. After that equity can be used to borrow money to make other investments. Then the equity from those investments can be used to borrow more to make other investments. In the current economy there is nothing wrong with "good" debt. Taxes and interest can be deducted against ordinary income while the money borrowed is turned into capital gains which can be used as collateral to borrow more money to make more money.

We're pointing out it's an uneven field. Not sure why you call that 'envy'. Half of Americans live paycheck to paycheck (probably worse after the pandemic), what property do you think they're going to buy with that?

The fact that you or I have a good living doesn't change that. As you point out above, it takes money to make money, and if you have lots of money, the current system gives you preferential perks.

Supposedly this comes at the cost of you and I having a higher tax rate. But if that doesn't hold, then how is it 'envy' to point it out?

[spurraider21]

a wealth tax should be considered.

dragons sitting on dragon piles of gold (.01%) need to be given proper incentives to get their wealth invested more productively, rather than just amassing ever more grotesque piles of wealth for their heirs and assigns. extreme consolidation of wealth tends to queer business competition and innovation. it also makes it possible for a relatively small number of very rich people to influence elections and national politics.
so if a guy (not a millionare) invests most of his money into a startup business which is successful and triples in value, and now the guy gets a wealth tax bill based on a valuation of the company (which is not liquid money he has access to), you're putting him into a position to sell of pieces of his company just to make the bill

i care about this kind of thing much less in the context of inheritances (aww, poor kids have to sell a house they got for free)... but for any business owner? seems a bit rough. though a wealth tax starting at people with net worths above a big threshold, in the 10s of millions, that could make sense on paper

but the assessment or appraisal of somebody's net worth is always going to be tricky and very difficult to enforce. IRS would need a lot more resources to be able to meaningfully go after that

[spurraider21]

Correct. That doesn't make a difference in what I wrote. Additionally, that money to pay off the loan can come from profit on their 50 million investment.
sure, but then in order to pay it off, that profit from their investment must first be taxed. but thats the same for anybody who gets a loan for a business. get a loan, start a business, profit off business, pay taxes on profit, pay back loan. im just not seeing how this is beating tax obligations. i definitely buy that these people get more favorable loans than the general public, but for obvious reasons (generally lower risk given their ability to leverage other assets)


It doesn't change one bit the fact that they can leverage their wealth into actual cash at a lower rate than the tax they would have had to pay to obtain the same money from their unrealized assets.
im still not seeing this, though... the money that is used to pay off these loans has to be taxed at some point, at the same rate as anybody else. now this can certainly defer or stretch out tax obligations... you can take out a 50 mil loan and pay it off with money taxed over the life of the loan, rather than just paying a lump sum of capital gains after selling off an asset, but that 50 mil you pay back is still eventually taxed.

if thats the issue, then i get it.

[SpursforSix]

so if a guy (not a millionare) invests most of his money into a startup business which is successful and triples in value, and now the guy gets a wealth tax bill based on a valuation of the company (which is not liquid money he has access to), you're putting him into a position to sell of pieces of his company just to make the bill

i care about this kind of thing much less in the context of inheritances (aww, poor kids have to sell a house they got for free)... but for any business owner? seems a bit rough. though a wealth tax starting at people with net worths above a big threshold, in the 10s of millions, that could make sense on paper

but the assessment or appraisal of somebody's net worth is always going to be tricky and very difficult to enforce. IRS would need a lot more resources to be able to meaningfully go after that

Agrees. And the bolded is exactly right. And I don't think the IRS will ever have the resources to accurately tax on this basis and incorporate true net worth (which would be hard as hell to define). It would almost have to be on a case by case basis review.

[Ef-man]

We're pointing out it's an uneven field. Not sure why you call that 'envy'. Half of Americans live paycheck to paycheck (probably worse after the pandemic), what property do you think they're going to buy with that?

The fact that you or I have a good living doesn't change that. As you point out above, it takes money to make money, and if you have lots of money, the current system gives you preferential perks.

Supposedly this comes at the cost of you and I having a higher tax rate. But if that doesn't hold, then how is it 'envy' to point it out?

Exactly, it is hard for a large percentage of US workers earning minimum wage to create wealth.

Throw in an accident, medical problems, having kids and poof goes whatever savings you had.

[CosmicCowboy]

Exactly, it is hard for a large percentage of US workers earning minimum wage to create wealth.

Throw in an accident, medical problems, having kids and poof goes whatever savings you had.

Who makes minimum wage?

[Winehole23]

damn Marxists

1403075303015010308

[Winehole23]

so if a guy (not a millionare) invests most of his money into a startup business which is successful and triples in value, and now the guy gets a wealth tax bill based on a valuation of the company (which is not liquid money he has access to), you're putting him into a position to sell of pieces of his company just to make the bill

i care about this kind of thing much less in the context of inheritances (aww, poor kids have to sell a house they got for free)... but for any business owner? seems a bit rough. though a wealth tax starting at people with net worths above a big threshold, in the 10s of millions, that could make sense on paper

but the assessment or appraisal of somebody's net worth is always going to be tricky and very difficult to enforce. IRS would need a lot more resources to be able to meaningfully go after thatI quite agree, not that it would be tricky to implement (just set a high initial threshhold, as originally was done with the income tax ) but that more study and more resources are needed. IIRC Sleepy Joe upped the request for the IRS this year.

[Will Hunting]

so if a guy (not a millionare) invests most of his money into a startup business which is successful and triples in value, and now the guy gets a wealth tax bill based on a valuation of the company (which is not liquid money he has access to), you're putting him into a position to sell of pieces of his company just to make the bill

i care about this kind of thing much less in the context of inheritances (aww, poor kids have to sell a house they got for free)... but for any business owner? seems a bit rough. though a wealth tax starting at people with net worths above a big threshold, in the 10s of millions, that could make sense on paper

but the assessment or appraisal of somebody's net worth is always going to be tricky and very difficult to enforce. IRS would need a lot more resources to be able to meaningfully go after that
That's the concern I have with a wealth tax. Appraising real estate for property taxes is somewhat simple because you have straight forward valuation methods and sales comparables. Valuing someone's illiquid, closely held business that's unique and doesn't really have any comparables is almost guaranteed to end up in court every time.

IMO fixing the estate tax, raising the cap gains tax and implementing a VAT would accomplish what a wealth tax does only in a more reliable way.

[Will Hunting]

And yes, any kind of a wealth tax should only be on people worth well into the 8 figures. Imposing a wealth tax on small business owners with a net worth in the 7 figures would be counterproductive. Small business owners worth <$10 million really aren't the problem that's driving wealth inequality.

[ElNono]

sure, but then in order to pay it off, that profit from their investment must first be taxed. but thats the same for anybody who gets a loan for a business. get a loan, start a business, profit off business, pay taxes on profit, pay back loan. im just not seeing how this is beating tax obligations. i definitely buy that these people get more favorable loans than the general public, but for obvious reasons (generally lower risk given their ability to leverage other assets)

I don't disagree with any of that, but it's immaterial to the point. This person can leverage his wealth/net-worth into actual cash at a lower rate than it would cost him to obtain the same cash by selling out part of his assets and paying the tax on them.

The point being that wealth isn't some abstract indicator. It can be leveraged into actual money, at rates that are generally lower than capital gains.


im still not seeing this, though... the money that is used to pay off these loans has to be taxed at some point, at the same rate as anybody else. now this can certainly defer or stretch out tax obligations... you can take out a 50 mil loan and pay it off with money taxed over the life of the loan, rather than just paying a lump sum of capital gains after selling off an asset, but that 50 mil you pay back is still eventually taxed.

if thats the issue, then i get it.

It's not just stretching and deferring. You can deduct the loan interest from your taxes. You can also deduct "excess business losses" if you were to incur in a loss. While this isn't different than some other business owner, it's actually convenient for this particular person that didn't actually need a loan to begin with.

[ElNono]

And yes, any kind of a wealth tax should only be on people worth well into the 8 figures. Imposing a wealth tax on small business owners with a net worth in the 7 figures would be counterproductive. Small business owners worth <$10 million really aren't the problem that's driving wealth inequality.

Correct. This has to do with the whales.

[spurraider21]

I don't disagree with any of that, but it's immaterial to the point. This person can leverage his wealth/net-worth into actual cash at a lower rate than it would cost him to obtain the same cash by selling out part of his assets and paying the tax on them.

The point being that wealth isn't some abstract indicator. It can be leveraged into actual money, at rates that are generally lower than capital gains.
but i guess the disconnect i'm having is that in order to pay off those loans, they are going to need actual cash anyway, for which they have to pay the same income tax/capital gains anyway. so sure, you can borrow X at a lower rate than if you sold X amount of assets... but to repay the loan for X, you are going to need X amount of cash + interest (presumably thru income or capital gains)


It's not just stretching and deferring. You can deduct the loan interest from your taxes. You can also deduct "excess business losses" if you were to incur in a loss. While this isn't different than some other business owner, it's actually convenient for this particular person that didn't actually need a loan to begin with.
i thought that was just for mortgages or student loans

[ElNono]

but i guess the disconnect i'm having is that in order to pay off those loans, they are going to need actual cash anyway, for which they have to pay the same income tax/capital gains anyway. so sure, you can borrow X at a lower rate than if you sold X amount of assets... but to repay the loan for X, you are going to need X amount of cash + interest (presumably thru income or capital gains)

What they do with those 50 million later is somewhat immaterial, that's sort of what I'm pointing out. If they make money with the 50 million, sure, they'll have to pay some taxes, and the difference between the loan and their money is that they get to pocket the money in the latter case, vs using it to repay the loan. If they lose money, they can either opt to use the loss as a deduction, or close down the LLC and file chapter 11. If they used their own capital, then they lost the money out of their pocket as well.

That doesn't really have much to do with what's cheaper for that person in order to get those $50 mill to begin with.


i thought that was just for mortgages or student loans

https://www.nerdwallet.com/article/small-business/business-loan-interest-tax-deduction

[spurraider21]

What they do with those 50 million later is somewhat immaterial, that's sort of what I'm pointing out. If they make money with the 50 million, sure, they'll have to pay some taxes, and the difference between the loan and their money is that they get to pocket the money in the latter case, vs using it to repay the loan. If they lose money, they can either opt to use the loss as a deduction, or close down the LLC and file chapter 11. If they used their own capital, then they lost the money out of their pocket as well.

That doesn't really have much to do with what's cheaper for that person in order to get those $50 mill to begin with.
i'm not talking about what they do with the loan money. i'm talking about what funds they use to pay back the loan money. its going to be cash that they have paid taxes on


https://www.nerdwallet.com/article/small-business/business-loan-interest-tax-deduction
but thats a business loan not a personal loan. the propublica article is talking about individuals like bezos, buffett, etc, not berkshire hathaway or amazon. i thought the accusation is that billionaires are able to acquire cash (for personal use) without paying what would otherwise be income or capital gains taxes

[CosmicCowboy]

but i guess the disconnect i'm having is that in order to pay off those loans, they are going to need actual cash anyway, for which they have to pay the same income tax/capital gains anyway. so sure, you can borrow X at a lower rate than if you sold X amount of assets... but to repay the loan for X, you are going to need X amount of cash + interest (presumably thru income or capital gains)


i thought that was just for mortgages or student loans

I will give you an example. Spring 2020 I bought 3 acres of commercial property at $3 a foot. I used other property I own as collateral and borrowed 400K with zero down @ 4.5%. Payments were around $3500 a month and was mostly deductible interest so my effective rate was more like 3%. I also had to pay about 8k in property tax which was also deductible so my effective tax was a little over 5k. So I'm out of pocket about 30k for one year. Flipped it last spring (held it 13 months) for 500k. Paid the loan off at closing and after closing costs cleared about 70K. Of course I will still have to pay cap gains on that. Of course there is risk but it was an easy 50k, all legal and local taxes and fed taxes all get paid. Win/Win.

[ElNono]

i'm not talking about what they do with the loan money. i'm talking about what funds they use to pay back the loan money. its going to be cash that they have paid taxes on

I know what you're talking about, and I don't dispute that, but I don't understand is how it's really germane to the point.


but thats a business loan not a personal loan. the propublica article is talking about individuals like bezos, buffett, etc, not berkshire hathaway or amazon. i thought the accusation is that billionaires are able to acquire cash (for personal use) without paying what would otherwise be income or capital gains taxes

I don't know a single millionaire, let alone a billionaire that will not shield itself behind a LLC or similar to do any kind of significant money movement. What they reap eventually comes from those businesses.

[spurraider21]

I will give you an example. Spring 2020 I bought 3 acres of commercial property at $3 a foot. I used other property I own as collateral and borrowed 400K with zero down @ 4.5%. Payments were around $3500 a month and was mostly deductible interest so my effective rate was more like 3%. I also had to pay about 8k in property tax which was also deductible so my effective tax was a little over 5k. So I'm out of pocket about 30k for one year. Flipped it last spring (held it 13 months) for 500k. Paid the loan off at closing and after closing costs cleared about 70K. Of course I will still have to pay cap gains on that. Of course there is risk but it was an easy 50k, all legal and local taxes and fed taxes all get paid. Win/Win.
sure, but the same could be said of anybody who does a cash out refi of their home. being able to leverage assets to get loans isn't unique to the uber rich... and ultimately during the life of the loan you were making payments with after-tax money, and you ultimately paid capital gains on the profit from the transaction. so i guess my point is im not seeing how this is being characterized as a tax dodge... other than saying you should have sold another asset for 400k (instead of getting a loan using it as collateral) and paid all those cap gains on THAT asset up front

[Winehole23]

https://pbs.twimg.com/card_img/1402315109783855105/8Y8puU9J?format=png&name=900x900

[Winehole23]

another great Cory Doctorow post


Private equity's playbook is to borrow giant sums by putting up other peoples' companies as collateral (yes, really). Then they use that money to buy the company they mortgaged, and pay themselves a huge dividend.

Then they sell off the company's assets and pay themselves even more money. That leaves the company in a state of precarity – assets they once owned, like their buildings, they now rent. If the rent goes up, they have to find the money to cover it.

All of this forms a pretense for mass layoffs, defaulting on pension obligations, lowering product quality, stiffing suppliers and borrowing more money. If the company doesn't go bust, the PE looters can flip it to another PE company, that does it again.

Whenever you see something really terrible happening to a business that once offered useful products and services and paid decent wages, it's a safe bet that PE is behind it. Toys R Us, Sears, your local hospital – and that memestock favorite, AMC.
https://pluralistic.net/2020/04/12/mammon-worshippers/#silver-lake-partners

Private equity goons make their money in two ways: the first is by pocketing 20% of these special dividends and other extractive policies that hollow out business.

This is money at PE managers get paid for spending their investors' money. It's a wage, in other words.

But thanks to the "carried interest" loophole (a hangover from 16th-century sea captains that has nothing to do with "interest" on loans), they get to treat these wages as "capital gains" and pay far less tax on them.

The fact that we give preferential tax treatment to capital gains (money derived from gambling), while taxing wages (money derived from doing useful work) at higher rates really tells you everything you need to know about our economic priorities.
https://pluralistic.net/2021/04/29/writers-must-be-paid/#carried-interest

The carried interest loophole lets PE crooks treat their salaries as capital gains, are taxed at a much lower rate than the wages of the workers whose lives they're destroying.

On top of the 20% profit-share that PE bosses get every year, they also pocket a 2% "management fee" for all the "value" they add to the companies they've taken over.

This is definitely a wage. The 20% profit-share at least has an element of risk, but that 2% is guaranteed.

But PE bosses have spent more than a decade booking that 2% wage as a capital gain, using a tax-fraud tactic called "fee waivers." The details of how a fee waiver don't matter because it's all bullshit, like the tale of the needful Greyhound ticket.

All that matters is that a legal fiction allows people earning eight- or nine-figure salaries to treat all of those wages as capital gains and pay lower rates of tax on them than the janitors who clean their toilets or the workers whose jobs they will annihilate.

Now, the IRS knows all about this. Whistleblowers came forward in 2011 to warn them about it. The Treasury even struck a committee to come up with new rules to fix it.

But Obama failed to make those rules stick, and then Trump put a former tax-cheat enabler in charge of redrafting them. The cheater-friendly rules became law on Jan 5, and handed PE bosses hundreds of millions in savings every year.
https://www.nytimes.com/2021/06/12/business/private-equity-taxes.html

The New York Times report on "fee waivers" goes through the rulemaking history, the technical details of the scam, and the gutting of the IRS, which can no longer afford to audit rich people and now makes its quotas by preferentially auditing low earners who can't afford lawyers.

But former securities lawyer Jerri-Lynn Scofield's breakdown of the Times piece on Naked Capitalism really connects the dots:
https://www.nakedcapitalism.com/2021/06/private-inequity-nyt-examines-how-the-private-equity-industry-avoids-taxes.html

As Scofield and Yves Smith point out, if Biden wanted to do one thing for tax justice, he could abolish preferential treatment for capital gains. If we want a society of makers and doers instead of owners and gamblers, we shouldn't penalize wages and reward rents.
https://pluralistic.net/2021/06/15/guillotines-and-taxes/#carried-interest

[rmt]

reward rents

Rent from my rental house is taxed at ordinary income tax rate - it is not rewarded with some special rate. And what exactly is wrong with owners? Don't they want high home ownership? This article needs to use correct terms: real estate investor instead of owners and "capital gains" instead of rent.

[Winehole23]

reward rents

Rent from my rental house is taxed at ordinary income tax rate - it is not rewarded with some special rate. And what exactly is wrong with owners? Don't they want high home ownership? This article needs to use correct terms: real estate investor instead of owners and "capital gains" instead of rent.PE involvement in the real estate market hasn't conduced to higher rates if individual home ownership, but the opposite. PE is overbidding individual buyers with straight cash upfront.

[pgardn]

reward rents

Rent from my rental house is taxed at ordinary income tax rate - it is not rewarded with some special rate. And what exactly is wrong with owners? Don't they want high home ownership? This article needs to use correct terms: real estate investor instead of owners and "capital gains" instead of rent. Please add:

so one big landlord should do it... Wait, is this communism? Or just benevolent feudalism because Im all in on that.

[Winehole23]

the equities of the system are screwed up

https://pbs.twimg.com/media/E4TDKqpX0AEKniH?format=png&name=medium

[Winehole23]

In the fall of 2020, a consortium of journalists reported out the Jersey Offshore leaks, a collection of 350,000 docs from an especially dirty trust company called La Hougue, on the British Channel Isle of Jersey, a notorious tax-haven.

https://globalreportingcentre.org/jersey-offshore/



The Jersey Offshore leaks had the misfortune to be published amid a pandemic, a once-in-a-generation antiracist uprising, a string of armed far-right assaults on US state-houses and a critical election, so the reporting barely registered, despite its significance.

But it's worth revisiting those leaks, especially in light of the debate that the Secret IRS Files has provoked about the morality and legality of dynastic wealth preservation and the bizarre, complicated and hard-to-understand tactics deployed by tax evasion experts.

Last January, Mother Jones published an analysis of a key memo from La Hougue, in which Calyn Shaw and Sam Eifling worked with tax experts to analyze 11 tactics La Hougue advised their clients to employ.

https://www.motherjones.com/politics/2021/01/memo-how-to-hide-money-offshore/

These "11 ways" are definitely in the "complicated so they'll be hard to understand" category, but at root, they all have a simple, common mechanism: La Hougue opens a secret account in a tax-haven for you and funnels money into it.

That's it.

But like the conjuror who has 11 tricks that all rely on the same sleight, La Hogue has 11 different pretenses that are used to obscure the fraud and slide it under the noses of underfunded, overworked tax officials.
https://i2.wp.com/craphound.com/images/excerpt-1-consultancy.jpg?w=840&ssl=1
I. Consultancy: secretly incorporate a fake offshore "consultancy." Bill your onshore business for "consulting" and write it off as a "business expense." The money goes into your consultancy's offshore, tax-free bank account, which you secretly control.
https://craphound.com/images/excerpt-2-various.jpg
II. Expenses: Secretly create an offshore account. Pay money into it that you record as a "travel expense" or "gift" or "misc expense." Keep the payments under the $10,000 threshold for formal reporting.
https://i1.wp.com/craphound.com/images/excerpt-3-metro.jpg?w=840&ssl=1
III. Metrocab: Buy stock options in a money-losing British taxi company called Metrocab that La Hougue secretly controls. La Hougue secretly funnels the money into your secret offshore account.
https://i1.wp.com/craphound.com/images/excerpt-4-cabos.jpg?w=840&ssl=1
IV. Los Cabos: Fake an investment in a 65-acre property in Baja California that La Hougue secretly owns. They send you fake docs claiming you lost all your money. The money you send them actually goes into your secret offshore account.
https://i2.wp.com/craphound.com/images/excerpt-5-danehill.jpg?w=840&ssl=1
V. Danehill Currency Fund: Borrow money from a company that La Hougue secretly owns and invest it in a "currency fund" La Hougue secretly runs. They fix it so your "investment" loses money (on paper) but actually all the money goes into your secret offshore account.
https://i2.wp.com/craphound.com/images/excerpt-6-loans.jpg?w=840&ssl=1
VI. Bad loans: Make "loans" to businesses secretly controlled by La Hougue. These loans are not repaid so you can write them off, but actually La Hougue just shovels the money into your offshore account.
https://i0.wp.com/craphound.com/images/excerpt-7-mortgage.jpg?w=840&ssl=1
VII. Mortgage default: Remortgage a property you own to a lender secretly controlled by La Hougue, then default and let La Hougue foreclose. La Hougue secretly transfers title to your offshore company.
https://i0.wp.com/craphound.com/images/excerpt-8-property.jpg?w=840&ssl=1
VIII. Offshore property: Sell a property at a discount to an offshore buyer (really your offshore company). The discount is due to a contract that requires you be allowed to occupy the property for a month/year. You pay lower tax on the sale and the title is moved offshore.
https://i2.wp.com/craphound.com/images/excerpt-9-parties.jpg?w=840&ssl=1
IX. Redirecting money: If someone owes you money, get them to send it to your offshore company and just don't declare the income.
https://i0.wp.com/craphound.com/images/excerpt-10-directing.jpg?w=840&ssl=1
X. Made-up penalty: When you sell a property, La Hougue forges a contract with your offshore company giving it the right to buy the property, with a penalty if you don't sell it to them. You send some of the sale money to your company as a penalty and don't pay taxes on it.
https://i1.wp.com/craphound.com/images/excerpt-11-client.jpg?w=840&ssl=1
XI. Fake offshore investment: Sell 49% of your onshore business to an offshore company you secretly own or control. You don't pay taxes on 49% of your onshore earnings or the eventual sale of the business.

Those are the 11 ways, and as you can see, once you cut through all the performative complexity, they're all just obvious frauds. In fact, it seems the La Hougue partner who came up with these got bored and started repeating themself.

Parts of this read like a lazy D&D module, where you enter a series of nearly identical rooms and fight nearly identical monsters for nearly identical rewards – it's a kind of soporific wickedness, what Dana Claire calls the "shield of boringness."

La Hougue was never prosecuted for any of this and never will be. They shut down in 2007.

But that doesn't mean that these scams were consigned to the dustbin of fraud history – far from it! La Hougue's principles decamped to Panama and formed a new "consultancy" there.

The tissue-thin lies of the tax fraud and money-laundering industries are themselves very dull, but what is incredibly interesting is how hard it seems to be for the world's tax authorities to pierce them.

The amount of political pressure not to look to hard at this stuff must be prodigious indeed.
https://pluralistic.net/2021/06/20/la-hougue/#complexity

[Winehole23]

https://pbs.twimg.com/media/D5_HGp-XkAEzyXn?format=jpg&name=small

[CosmicCowboy]

the equities of the system are screwed up

https://pbs.twimg.com/media/E4TDKqpX0AEKniH?format=png&name=medium

Still confusing increasing net worth ( "wealth" due to stock he owns in the company he created that he never sold) with income...money he actually converted and spent. That stock will eventually be sold and the government will get its money.

[Winehole23]

Still confusing increasing net worth ( "wealth" due to stock he owns in the company he created that he never sold) with income...money he actually converted and spent. That stock will eventually be sold and the government will get its money.so what, the equities will still be screwed up

[DarrinS]

so what, the equities will still be screwed up

Better get on your fainting couch with your n95.

[Winehole23]

Better get on your fainting couch with your n95.Nursing a grudge?

Bless your heart.

[DarrinS]

Nursing a grudge?

Bless your heart.

A grudge for what?

[Winehole23]

A grudge for what?no idea, feel free to share

[DarrinS]

no idea, feel free to share

You brought up the "grudge".

[Winehole23]

offers the needle, then feigns indifference :lol

[DarrinS]

offers the needle, then feigns indifference :lol

Its strange that you think you're witty.

[Winehole23]

Its strange that you think you're witty.I was laughing at you

[DarrinS]

Its strange that you think you're witty.


I was laughing at you

I know

[Frenchfred]

https://pbs.twimg.com/media/D5_HGp-XkAEzyXn?format=jpg&name=small

and maga supporters who belong to the bottom99% and probably lower are still voting republican. This is mind blowing. I guess that they are hoping to be rich one day, which will never happen for 99.999999% of them, to avoid paying high taxes.

[Thread]

and maga supporters who belong to the bottom99% and probably lower are still voting republican. This is mind blowing. I guess that they are hoping to be rich one day, which will never happen for 99.999999% of them, to avoid paying high taxes.

Nazi's!!!

[Ef-man]

and maga supporters who belong to the bottom99% and probably lower are still voting republican. This is mind blowing. I guess that they are hoping to be rich one day, which will never happen for 99.999999% of them, to avoid paying high taxes.

Yup, one day, they may catch up to reality, as the truth always comes out.

Ain’t that right FWT?

https://media.giphy.com/media/3o7TKSDQpiflUdtahi/giphy.gif

[Winehole23]

1412838767082180608

[Frenchfred]

1412838767082180608

Biden just needs to say that if the companies are not paying their taxes in the US, they won't be able to operate in the US. That'll solve the problem really quickly, companies won't cut the most profitable market from their revenues.

[Thread]

Biden just needs to say that if the companies are not paying their taxes in the US, they won't be able to operate in the US. That'll solve the problem really quickly, companies won't cut the most profitable market from their revenues.

Nazi's!!!

[Winehole23]

trend seems to have accelerated


https://pbs.twimg.com/card_img/1420075667299790849/N9iGzUXP?format=png&name=900x900

[Winehole23]

not good


Homes Earned More for Owners Than Their Jobs Last Year
Increase in value of typical U.S. home exceeded median worker income for first time, Zillow sayshttps://www.wsj.com/articles/homes-earned-more-for-owners-than-their-jobs-last-year-11647518400

[BackHome]

The Feds raising rates is not good but needs to be done and inflation is really probably around 14% not good you add what is happening in Europe and you got a perfect storm for a huge recession heading our way.

[SnakeBoy]

The Feds raising rates is not good but needs to be done and inflation is really probably around 14% not good you add what is happening in Europe and you got a perfect storm for a huge recession heading our way.

Huge global recession is looking likely

If the USA participates it will be a fairly shallow recession for us imo. Not pleasant but not that bad and a good opportunity to increase wealth inequality.

[DMX7]

Huge global recession is looking likely

If the USA participates it will be a fairly shallow recession for us imo. Not pleasant but not that bad and a good opportunity to increase wealth inequality.

It's hard to imagine much of a recession for us because their is still so much liquidity flowing around the economy even with the small rate increases coming.

[SnakeBoy]

It's hard to imagine much of a recession for us because their is still so much liquidity flowing around the economy even with the small rate increases coming.

Also there's a lot of capitol flight occurring from Europe and Asia, add to that the reindustrialization that is occurring here, and I think our recession (if there is one) will be a hiccup/buy the dip type of thing. That's why I'm just trying to stay nimble with short term investments so I can take advantage of the opportunities as they occur.

[Th'Pusher]

Huge global recession is looking likely

If the USA participates it will be a fairly shallow recession for us imo. Not pleasant but not that bad and a good opportunity to increase wealth inequality.

Hey everyone! Check it out. Snakeboi thinks income inequality is good. Edgy AF!

[SnakeBoy]

Hey everyone! Check it out. Snakeboi thinks income inequality is good. Edgy AF!

Unbunch your panties pusher. I said wealth inequality not income inequality silly

Wage inflation will narrow the income inequality gap (offset by inflation but that's a different topic)

[ElNono]

Also there's a lot of capitol flight occurring from Europe and Asia, add to that the reindustrialization that is occurring here, and I think our recession (if there is one) will be a hiccup/buy the dip type of thing. That's why I'm just trying to stay nimble with short term investments so I can take advantage of the opportunities as they occur.

uh? what reindustrialization is that? we're just a services economy now.

That said, strengthening the dollar only helps the US and fucks Russia some more, so considering the geopolitic background, it makes sense to go that route.

[SnakeBoy]

uh? what reindustrialization is that? we're just a services economy now.


The process of reshoring and nearshoring takes time. It has already begun and will only increase as China labor becomes less and less attractive due to both labor cost and political risk.

How old are you El? The way you argue against and deny a changing world makes you sound like some old nihilistic boomer.

[ElNono]

The process of reshoring and nearshoring takes time. It has already begun and will only increase as China labor becomes less and less attractive due to both labor cost and political risk.

The only thing that takes time is to move from China to Malaysia, Vietnam, Honduras, and the long list of countries that have a substantially cheaper standard a living than the US. We've already seen some of that when Trump attempted tariffs on China.

But that would actually be the worst case scenario. China is a great trade partner that is on a mutually beneficial relationship, loaded up with US treasuries and dollars, they have every incentive to keep that gravy train going and would be, by far, the one with the most to lose if they opt not to continue.


How old are you El? The way you argue against and deny a changing world makes you sound like some old nihilistic boomer.

:lol This is a pretty ironic comment. I'm not old enough to have seen mass US manufacturing. I'm very sure I'm not going to see it in my lifetime as well.

You sound exactly like the boomers that never adjusted to the fact that we're a global economy now and long for the return of US manufacturing. Pure nostalgic nonsense that makes no economic sense.

[spurraider21]

I will give you an example. Spring 2020 I bought 3 acres of commercial property at $3 a foot. I used other property I own as collateral and borrowed 400K with zero down @ 4.5%. Payments were around $3500 a month and was mostly deductible interest so my effective rate was more like 3%. I also had to pay about 8k in property tax which was also deductible so my effective tax was a little over 5k. So I'm out of pocket about 30k for one year. Flipped it last spring (held it 13 months) for 500k. Paid the loan off at closing and after closing costs cleared about 70K. Of course I will still have to pay cap gains on that. Of course there is risk but it was an easy 50k, all legal and local taxes and fed taxes all get paid. Win/Win.
saw this clip going around and immediately remembered this convo about leveraging unrealized gains.

1522924711004442626

[DMC]

Will Hunting probably rolled over in his grave.

[DMC]

The only thing that takes time is to move from China to Malaysia, Vietnam, Honduras, and the long list of countries that have a substantially cheaper standard a living than the US. We've already seen some of that when Trump attempted tariffs on China.

But that would actually be the worst case scenario. China is a great trade partner that is on a mutually beneficial relationship, loaded up with US treasuries and dollars, they have every incentive to keep that gravy train going and would be, by far, the one with the most to lose if they opt not to continue.



:lol This is a pretty ironic comment. I'm not old enough to have seen mass US manufacturing. I'm very sure I'm not going to see it in my lifetime as well.

You sound exactly like the boomers that never adjusted to the fact that we're a global economy now and long for the return of US manufacturing. Pure nostalgic nonsense that makes no economic sense.

Without US manufacturing, what do we have besides consumers and intellectual capital? A constitution?

[ChumpDumper]

Guns?

Fear?

[Winehole23]

The petrodollar and US Treasury notes, so long as others place confidence in them.

[Winehole23]

The world's biggest military.

[Winehole23]

A ruthlessly democidal two party system bought and paid for by political donors.

[Winehole23]

there's a good chance a private equity company is your landlord and is ripping you off.

if you have a state pension, there's a great chance private equity is ripping you off right now.

1523666771315548162

[Winehole23]

https://pbs.twimg.com/media/FSWjp4XXIAIR-8q?format=jpg&name=small