• Poor People, Don’t You Know You Have Jobs?

    January 6, 2017 // 59 Comments »



    It’s not Trump you have to worry about. You’re thinking short-term.

    As people struggle to find third-parties to blame for Hillary Clinton’s defeat (pick one or more: Putin, Bernie Bros, Comey, The Media, Electoral Collegians, the Racist/Misogynist Hordes), an amorphous group has emerged as a popular domestic target: stupid poor white people who do not understand how much better they have had it over the last eight years.

    These slack-jawed yokels just can’t seem to grasp that they have great jobs in a growing economy. The numbers prove it: the U.S stock market is at record highs and unemployment at its lowest level since the Great Recession.

    “Anyone claiming America’s economy is in decline is peddling fiction,” Obama said in his 2016 State of the Union address. He said his team has created a “more durable, growing economy” with “15 million new private-sector jobs since early 2010.” Tim Kaine also used the 15 million jobs talking point in the vice presidential debate.

    But the problem isn’t jobs per se, it is income inequality.

    This is the basis of the sense of economic disenfranchisement that drove many voters to seek change this past election, even if after seeing Sanders pushed out of the race that change meant overlooking Candidate Trump’s many shortcomings.

    A big part of this inequality is while more Americans are working, more are working part time without benefits. Since 2007, the number of Americans involuntarily working part time has increased by nearly 45 percent.

    Coupled with that is what many of those workers see as the failure of the Affordable Care Act (ACA; Obamacare) to live up to its promises. ACA was supposed to be the government supplying a key benefit employers refused to offer to part-timers. People may indeed now have access to insurance, but with high deductibles, they may not have access to healthcare. These are not people with ideological problems with Obamacare. They need help for their families and want the ACA changed.

    In addition, because larger employers have to start paying into the ACA fund for each employee who works more than 29 hours a week, employers who offer the most jobs, retail, hospitality, and fast food, have cut most part-timers to 29 hours a week, down from the once-standard 39 hours a week that kept them outside of overtime.

    Wages saw their biggest jump this year since 2008 — 2.9%. However, most of that increase came only in states that chose to raise their minimum wages independent of the stagnant federal minimum wage. And with inflation running about 2%, most of any increase was washed away. And what is .9% of minimum wage anyway? Pretty close to not a helluva lot.

    Higher costs and less money. And of course for part-timers, vacation days, sick leave, pensions, child care, and other benefits remain elusive at best. The result is a workforce making up the gaps with multiple jobs, food benefits, and opioids. And they voted against the candidate that made a talking point out of saying she would maintain the status quo that was killing them.

    Trump, of course, is unlikely to change much, but he represents change and that apparently was enough for a very large number of voters who still believe government may yet help them.

    Their inevitable disappointment is likely to lead one of two ways: a complete giving up, a sad resignation they should be happy they get anything at all, or a rage that will seek out a true demagogue.

    For despite all of the apocalyptic prose spewing out of cranky Clinton supporters and all the newly-minted, New York-based, Midwestern blue collar experts, Trump is not the antiChrist of American politics. He is a minor celebrity who stumbled into a stream of history, a classic case of being in the right place at the right time.

    But keep an eye out in eight years for the next guy. That’s the one to fear.



    BONUS: Here’s another opinion on all this, titled “It was the racism, stupid: White working-class ‘economic anxiety’ is a zombie idea that needs to die.”

    And if Dems, progressives, liberals, whoever, keeps insisting poor whites are racist-sexists who voted for Trump primarily because he encourages their hate vibe, then the next Democratic candidate will lose their votes again. Given the drift of the economy, there will be more of them next time, too. This election was a pay-attention-notice to the Democratic party, and it is so far not just ignoring it, it is saying the whole notion is wrong.




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    Posted in #99Percent, Economy, Minimum Wage, Trump

    Let’s Understand Why We’re So Finished Economically

    August 3, 2016 // 26 Comments »

    krugman

    How ya’ doing? I mean money-wise. Too much? Maybe not enough?


    So let’s listen to economist Paul Krugman explain why we are so screwed. Not we will be screwed, or maybe things will go that way, or we will in the future. Nope, it already happened, though most of us haven’t yet figured it out.

    Krugman, and the economist he discusses, Thomas Piketty, paid attention in math class, and the other classes, too. That’s why they understand this stuff and I’m still trying to suss out why no matter how many hours I stay on the job and how much I save, it is never enough.

    In case you’re reading this on your 15 minute break at Target, I’ll try to summarize.



    The American Dream (Patrimonial Capitalism)

    The myth of the American Dream is the dominating factor in keeping people mostly complacent in the United States. You know it — work hard, and your life will improve. Well, maybe not your life, but your kids’, or at least your grandkids’. If that doesn’t work, it is the fault of the Irish immigrants, or the darn Chinese, or those welfare freeloaders. Ask Donald Trump how it all works.

    The thing that makes the myth so powerful is that the tiny percent that is true sounds better than the 99 percent which is a lie. As long as near-constant growth could be assured, enough pieces would fall to the the lower and middle classes to make the Dream seem real. It helped that a kindly media would promote the heck out of every exception, whether it was the shoeshine boy in the late 19th century who went to college, or the plucky guys who invented some new tech in their garage and became billionaires. See, you can do it too, just like if we run hard enough, everyone can be in the Olympics. It’s just a matter of wanting it, believing in yourself, having passion and grit, right?



    The Undeniable Reality of the Now

    The bulk of the industrial jobs are gone and never coming back; ask Detroit, or the people in Youngstown and Weirton. People have been talked out of most union jobs, convinced somehow that organizing was not in their own interest, and now they find themselves accepting whatever minimum of a wage they can get. Food stamps and other need-based programs are finding more and more middle class users, as suburban people who once donated to charities are now lining up out front of them. Health care paid for by our own taxes is seen as a give away to lazy people. This is the stuff Bernie Sanders talked about.

    Like with gravity, the universe doesn’t care if you “believe” it or not; it is just true, independent of what you “think.” That you have been taught this all is something you can choose to believe or not is the weight that holds us all down.



    Drilling Down Into Our Miserable Lives

    In case you have a few more minutes on your break, or if you’ve been laid off since starting this article, here are some more things happening out there whether you believe in them or not. You can read more about all of this in Thomas Piketty’s book, Capital in the Twentieth Century.

    — Our income inequality rate is higher than it ever has been in our own history, is growing, and is higher than in countries in Western Europe and Canada.

    — The inequality is driven by two complementary forces. By owning more and more of everything (capital) rich people have a mechanism to keep getting richer, because the rate of return on investment is a higher percentage than the rate of economic growth. This is expressed in Piketty’s now-famous equation R > G. The author claims wealth is growing at six-to-seven percent a year, more than three times faster than the size of the economy.

    — Wages are largely stagnant, or sinking, driven by factors in control of the wealthy, such as automation that eliminates human jobs and the not-adjusted-for-inflation minimum wage more and more Americans now depend on for their survival.

    — All of this is exacerbated by America’s lower tax rate on capital gains (how the rich make their money) versus wages (how the 99 percent make their money.)

    — Because rich people pass on their wealth to their relatives, the children of rich people are born rich and unless they get really into fast women and cocaine, will inevitably get richer. They can’t help it. The gap between the one percent and the 99 percent must grow.

    — Social reforms, such as increased education opportunities and low-cost health care, are incapable without tax changes significantly affecting income equality. The only people who can change society are those who profit from it not changing. That’s the big reveal on why we are in so much trouble.

    FUN FACT: Until slavery was ended in the United States, human beings were also considered capital, just like owning stocks and bonds today.



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    Another Way the Rich Get Richer: Their Parents Give Them Obscene Amounts of Money Nearly Tax-Free

    May 13, 2016 // 14 Comments »

    money


    It’d be great if we were all self-made men, like Citizen Trump.

    Of course, his self-making, like that of many wealthy people, is based in large part on a wealthy parent giving him a ton of money. Why work for a living when you can just hang around drinking single malt until daddy dies and leaves you his money?

    Trump’s papa left an estate valued at between $100 and $300 million in 1999. A nice start for a career in real estate for Don and his siblings.



    Getting All the Monies

    Now the idea that parents should be able to leave their money to their kids is all A-OK. That the hyper-wealthy can do it with little or no significant tax is not OK. It is one of the prime drivers of future economic inequality in the U.S. Absent a change in the law that will happen when pigs fly into a snowy hell, rich kids will only get richer, and then pass on their buckaroos to their heirs. They’ll have all the monies.

    In the words of one economist, even though the American dream is pulling yourself up by your bootstraps, we’ve made ample room in it for people whose boots are handed down.



    How Estate Taxes Work

    The first $5.43 million per heir is fully exempt from any tax. Spread the money around to siblings, spouses, kids and grandkids, and you can shield a bundle from tax easily. In fact, that system means 99.8 percent of all estates owe no estate tax at all. There is no reason the exemption has to be $5.43 million except to favor the wealthy, and there should be an overall cap on how much can be shielded from tax to prevent fake families from splitting things all up.

    For the small number of estates actually subject to some taxes, those taxes of course are due only on the portion of an estate’s value that exceeds the exemption level. So, a $6 million estate would owe estate taxes on only $570,000. Except that heirs can often shield a larger portion of the estate from taxation through deductions, loopholes and discounts written into the tax code. So, while the on-paper tax rate for estates is 40 percent, most pay about 16 percent in reality.



    It’s Complicated

    As an example of the complexity of estate planning-tax avoiding available to the rich, consider the grantor retained annuity trust. The estate owner puts money into a trust designed to repay the estate the initial amount plus interest at a rate set by the Treasury, typically over two years. If the investment — typically stock — rises in value any more than the Treasury rate, the gain goes to an heir tax-free. If the investment doesn’t rise in value, the full amount still goes back to the estate. Such techniques have been described as a “heads I win, tails we tie” bet.



    A Reasonable Idea

    If inheritances could be taxed reasonably, enough money would trickle down the legs of the rich that some societal benefits would accrue.

    Unfortunately, all three Republicans in the presidential race promise to abolish the estate tax altogether. Hillary and Bernie offer only weak promises of reform, focused on rolling the tax back to its (higher) 2009 levels. But they’ll need Congressional approval for that, so, no.

    It will be no surprise that American estate taxes are well below average among the countries in the Organization for Economic Co-Operation and Development.

    I know, I know, math and numbers are hard. So here it is in very simple words: by not fairly taxing the estates of the wealthy, we are locking in our staggering economic inequality for future generations.


    FUN FACT: The wealthiest ten percent of Americans takes home about half of all income. The richest 0.1 percent holds 22 percent of the country’s wealth.




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    Posted in #99Percent, Economy, Minimum Wage, Trump

    Poor People Should Just Go Die

    April 9, 2016 // 17 Comments »

    Poorich

    Despite advances in medicine, technology and education, the longevity gap between high-income and low-income Americans has widened sharply. You want to talk inequality? Talk about this.


    The poor are losing ground not only in income, but also in years of life, the most basic measure of well-being. In the early 1970s, a 60-year-old man in the top half of the earnings ladder could expect to live 1.2 years longer than a man of the same age in the bottom half, according to an analysis by the Social Security Administration. By 2001, and he could expect to live 5.8 years longer than his poorer counterpart.

    New research offers even more horrifying numbers. Economists found for men born in 1920, there was a six-year difference in life expectancy between the top 10 percent of earners and the bottom 10 percent. For men born in 1950, that difference had more than doubled, to 14 years.

    The serfs are dying. The castle-owners are buying themselves more years.

    Poor health outcomes for low-income Americans have dragged the United States down to some of the lowest rankings of life expectancy among industrialized nations. The Social Security Administration found, for example, that life expectancy for the wealthiest American men at age 60 was just below the rates in Iceland and Japan, two countries where people live the longest. However, for Americans in the bottom quarter of the wage scale, their life expectancy is closer to that in Poland and the Czech Republic.

    The gap in life spans started widening about 40 years ago, when income inequality began to grow.

    Earlier in the 20th century, trends in life spans were of declining disparities, because improvements in public health, such as the invention of the polio vaccine and improved sanitation, benefited rich and poor alike. The broad adoption of medication for high blood pressure in the 1950s led to a major improvement for black men, erasing a big part of the gap with whites. But medical improvements can also drive disparity when they disproportionately benefit affluent Americans; for example, cutting-edge cancer treatments.


    Imagine that — in one of the world’s richest countries, people die simply because we can’t find a way to provide them good healthcare as does the rest of the civilized world.


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    Posted in #99Percent, Economy, Minimum Wage, Trump

    Does Income Inequality Matter to the Richest Americans?

    June 24, 2015 // 8 Comments »

    Scrooge McDuck



    Does income inequality matter to the richest Americans? Not very much. Here’s why. And it’s more than just greed-is-good; the rich will just get richer.

    A study by economists at Washington University in St. Louis tells us stagnant income for the bottom 95 percent of wage earners makes it impossible for them to consume as they did in the years before the downturn. Consumer spending, some say, drives the U.S. economy, and is likely to continue to continue to dominate, as the decomposition of America’s industrial base dilutes old economy sales of appliances, cars, steel and the like. That should be bad news for the super-wealthy, us buying less stuff?

    But that same study shows that while rising inequality reduced income growth for the bottom 95 percent of beginning around 1980, the group’s consumption growth did not fall proportionally at first. Instead, lower savings and hyper-available credit (remember Countrywide mortgages and usurous re-fi’s?) put the middle and bottom portions of our society on an unsustainable financial path which increased spending until it triggered the Great Recession. So, without surprise, consumption fell sharply in the recession, consistent with tighter borrowing constraints. Meanwhile, America’s the top earners’ wealth grew. The recession represented the largest redistribution of wealth in this century.

    The gap between most Americans and those few who sit atop our economy continues to grow. For two decades after 1960, real incomes of the top five percent and the remaining 95 percent increased at almost the same rate, about four percent a year. But incomes diverged between 1980 and 2007, with those at the bottom seeing annual increases only half of that of those at the top.

    This leaves the very real issue for the rich of who will buy all the stuff their big corporations make? But don’t worry. They’ve got it handled.

    Taxpayer Subsidies to Big Corporations

    Don’t worry about the big guys; they have figured out how to profit off poverty. Wal-Mart, Target and Kroger have made profits of $75.2 billion off food stamp purchases, even setting a new record in 2012.

    And never mind how food stamps and other benefits are used by those same retailers to subsidize the low wages they pay their workers. Meanwhile, the same bill in Congress that would cut food stamps pays out farm subsidies to America’s billionaires, including Microsoft co-founder Paul Allen, Charles Schwab and S. Truett Cathy of Chick-fil-A.

    The American Beverage Association, a lobby group that includes Coca-Cola, strongly opposes restricting soda purchases by food stamp recipients. Why? Recipients spend from $1.7 to $2.1 billion annually for sugar-sweetened beverages. While alcohol and other unhealthy items are restricted for purchase with stamps, soda stands available.

    Government Defense Spending

    About the only manufacturing-industrial sector of the American economy left prevailing over all foreign competition is defense. America buys its military hardware almost exclusively from domestic corporations (with a few crumbs tossed to allies like the UK and Israel) and fills the job ranks of the industry, contractors, and military with Americans.

    In 2011, the U.S. government spent about $718 billion on defense, including arms sales and transfers to foreign governments. Hardware alone accounted for $128 billion. The total figure does not veterans benefits of $127 billion in 2011, or about 3.5 percent of the federal budget. America’s newest aircraft carrier cost $13 billion, not including development costs.

    The Stock Market

    The stock market (which set record highs in 2013) is a significant source of wealth in America. Indeed, what could be easier than placing money into an investment and, with no sweat or effort of one’s own, seeing it grow. A rising market lifts the national economy, and a rising tide lifts all boats.

    The truth is closer to a rising tide lifts all yachts, as historian Morris Berman observed. Less than half of Americans own any stock at all. The wealthiest five percent of Americans meanwhile hold some 70 percent of all stock.

    Bump the “top” group to the wealthiest ten percent of Americans and they own over 80 percent of all stock. At the same time, the lowest 90 percent own the leftover 20 percent.

    So Don’t Worry about the Rich

    These examples– and there are more– see tax write-offs, use of trusts to limit inheritance tax, offshore banking, large scale real estate (the top ten percent own about 40 percent of America’s land) show that income inequality is not a problem for the rich, and it is not a problem for America’s “economy” per se. The huge concentration of wealth in a small number of hands, and the methods by which those few acquire and maintain their wealth, means that the 99 percent of us edge closer and closer to playing no significant role in the economy anyway. We are becoming merely the collateral damage of income inequality.



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    America! 80 Percent of Adults Face Near-Poverty

    May 6, 2015 // 8 Comments »

    tulsa_man

    As the handful of multi-millionaires running for president threaten to pretend to make “economic disparity” a campaign meme, and then forget they ever heard of it once in power, four out of five adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives. Here’s the new American dream.



    The Numbers

    Survey data exclusive to The Associated Press points to a widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

    The survey defines “economic insecurity” as a year or more of periodic joblessness, reliance on government aid such as food stamps, or income below 150 percent of the poverty line. Measured across all races, the risk of economic insecurity rises to 79 percent.

    The findings come even as Obama is claiming in recent speeches his highest priority (it has only been seven years+ so no hurry) is to “rebuild ladders of opportunity” and reverse income inequality.



    No Longer a Race Thing

    Poverty is often defined — by many whites — as a minority problem.

    While minorities are still more likely to live in poverty, race disparities have narrowed substantially since the 1970s. Economic insecurity among whites also is more pervasive than is shown in the government’s poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press. Pessimism among whites about their families’ economic futures has climbed to the highest point since at least 1987.

    More than 19 million whites now fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation’s destitute, nearly double the number of poor blacks.

    Sometimes termed “the invisible poor,” lower-income whites generally are dispersed in suburbs and small rural towns, instead of being concentrated in urban areas more common to people of color. As an example, Buchanan County, in southwest Virginia, is among the nation’s most destitute based on median income, with poverty at 24 percent. The county is 99 percent white.

    America is indeed becoming a more equal place, but through a gross process of leveling down, not growing up.

    Boiling Frogs

    The issue of denial is the key to a tiny one percent of Americans getting away with this in what, overall, is still a very wealthy society.

    People think because they and their neighbors have a TV, they are fine. Or they are divided into antagonistic groups by race, with one believing the other has all the money and power, while the other sees their urban neighbors as lazy welfare cheats. It does work well to keep people divided, fighting with one another, and thus ignoring that narrow band of upper, upper class folks who really do hold all the cards.

    Inside that 80 percent of America slipping into poverty, people pay little attention to the quality of the food they can afford, the (lack of) healthcare, their poor schools and potted roads, the lack of forward opportunities for them and their kids and so forth. Short-sighted viewpoints, coupled with clever politicians who make each election about guns, gays and abortion, mask the obvious, even from the people boiling like froggies.




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    Posted in #99Percent, Economy, Minimum Wage, Trump

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