The Great Recession came and went, and so did salaries and other compensation for people graduating with four year college degrees. The corporate news media continues to shower us with propaganda about why this has occurred.
Bloomberg news claims “technology and automation” have caused this decline. Only in the United States does there appear to be a problem with automation. It is strange how there is an overabundance of US manufacturing jobs in China, Vietnam and elsewhere. Those factories employ accountants, bookkeepers, managers, attorneys, and many more white collar employees. Those factories also purchase things from other local businesses that supply materials and designs and other things that employ white collar workers. Those factories used to be in the United States. And now they’re not. See https://www.bloomberg.com/news/articles/2017-03-30/u-s-college-grads-see-slim-to-nothing-wage-gains-since-recession
Those H1-B visa’s are also putting downward pressure on wages, as well as exporting high tech jobs to India and other nations.
Exporting jobs overseas by the tens of millions is why wages have declined on average for new college graduates, and why compensation has stagnated for older workers, and why wages have declined over the last thirty-six years. There are other reasons, but automation is not one of them. See Jobs: The Largest US Export Product–JohnHively.wordpress.com
As for those declining wages for new college graduates, what you study matters for your salary, the data show. Chemical and computer engineering majors have held down some of the best earnings of at least $60,000 a year for entry level positions since the recession, while business and science graduates’s paychecks have fallen. A biology major at the start of their career earned $31,000 on an annual average in 2015, down $4,000 from five years earlier. Some majors, such as petroleum engineers, have seen a bump in earnings for those just coming into the job market.
On the other hand, people with graduate degrees are still getting a bump in their salaries upon graduation.
How badly are US citizens financially struggling this late in an economic expansion?
In early January 2016, the US Department of Education announced the rate of people defaulting on their student loans had dropped from 11.8 percent in 2015 to 11.2 percent in 2016. Back in 2013, the default rate had nearly hit 15 percent.
In 2015, the Obama white house issued a report which stated, “The cohort default rate published by the Education Department is “‘susceptible to artificial manipulation.’” The report stated that the share of student borrowers paying down their loans more accurately reflects what is occurring than default rates alone. The report noted that a rising number of students are unable to make payments on their loans, but manage to avoid defaulting. Because of this, the report stated the actual default rate plus those former student loan borrowers out of school who are not paying down the balances on their loans stood at 25 percent.
However, it turns out the White House report understated the numbers by quite a lot. Leaked documents in early January 2016 showed only 46 percent of students out of school three years or more are paying down their student loan principal. This means 54 percent are not paying down their loans.
However, on closer inspection, something else is terribly amiss, as well. To be among the 46 percent, you cannot be in default, and you must have paid down the principal of your loan by at least one dollar. So if somebody who has owed $30,000 in student loans since they graduated from college ten years ago paid a dollar on the principal of their loan eight years ago, they have officially paid down their loan and are among the 46 percent. If somebody borrowed $16,000 twenty-five years ago, paid off a dollar on their balance, and haven’t paid a dime since, and have incurred tens of thousands of dollars of penalties and late fees, they, too, are among the 46 percent.
The bar for those who have not defaulted and are paying down their loans are about as low as one can get. The actual crisis, therefore, is even greater than we have been led to believe. This suggests a number of things.
One is that the number of people failing to pay on their student loan balances is significantly less than 46 percent if we raise the bar to $2 or higher. Second, the US economy is historically weak enough that tens of millions of student loan borrowers are unable to pay down their balances (There are roughly 42 million people who have student loan balances).
This suggests the economy is historically weak, and the consequences of this weakness will spread throughout the United States when the economy begins to tank this summer. This suggests defaults will be historically high on home mortgages, car loans, credit card debt, and much more. All of which, strongly suggests this next recession will be worst for the 99 percent than the Great Recession of 2007-09.
US Supreme Court nominee Neil Gorsuch is either too stupid, too politically corrupt, or too ideologically corrupt to be the next member of the United States Supreme Court. This guy actually believes that an idea has the same rights, responsibilities and legal protections as any person in the United States. Gorsuch is no dummy, so he must be financially or ideologically corrupt.
Gorsuch believes business corporations are people. That’s been the slogan repeated by conservatives for over a hundred years, and yet, corporations are purely and only an idea of a business structure that sprang forth from somebody’s mind and not from a woman’s womb. Conservatives faked not figuring out the difference between a mind and a womb a long time ago, and in particular they faked they didn’t understand the legal difference between an “idea” from a human mind and a person from a “woman’s womb.” This concept does not befuddle them. Far from it, but the concept that corporations are persons has been used to twist the law in the favor of the rich and against the 99 percent. That is the sole purpose of using this lie in legal matters.
Government enacted legislation that provided a legal framework for business corporations to exist, and within the legal framework were the words “artificial person.” As any honest judge who looks to the US Constitution for original intent can determine, the word “artificial” does not appear in the great document, and therefore anybody with half a brain can determine that ideas called business corporations have no legal rights via the US Constitution. But this is a game to rig the law in favor of the rich and powerful. Besides, if somebody calls a dog a human being, does that make the dog a human being? Of course not. Gorsuch is no dummy. He knows all this, but his agenda has always been to increase the wealth and prosperity and political power of the rich at the expense of the 99 percent, and so he will maintain this lie of an idea being legally equal and having the same legal protections as real people.
Corporations are the principal conduit through which income and wealth are redistributed from the 99 to the 1 percent. For example, Wall Street would not exist in its present parasitic form if corporations did not exist. Conservatives, and I should point out certainly not all of them, pushed the legal idea that corporations are persons simply to twist the laws in their favor. They’ve done a great job.
United States Senator Elizabeth Warren said it best about Wall Street Supreme Court candidate Neil Gorsuch;
“On the bench (Gorsuch), his judicial decisions show a remarkable ability to shape and re-shape legal arguments in ways that benefit large corporations and disadvantage ordinary people seeking justice. In the Burwell v. Hobby Lobby Stores case, when he had to choose between the “rights” of corporations and the rights of women, Gorsuch sided with corporations. In consumer protection cases, when he had to choose between the “rights” of corporations and the rights of swindled consumers, Gorsuch sided with corporations. In discrimination cases, when he had to choose between the “rights” of corporations and the rights of employees to be free from harassment and abuse, Gorsuch sided with corporations.
Gorsuch has taken positions that are even more extreme than his extremely conservative colleagues. When it comes to the rules that protect public health and safety, Gorsuch is more radical than Scalia was. Gorsuch believes that courts should not be required to defer to expert agency interpretations of their governing laws. If he had his way, he’d make it even easier for corporations to challenge health and safety rules that prevent them from polluting our air and water, poisoning our food, undermining public safety, or cheating people out of their hard-earned savings.
Big companies and rich right-wing billionaires are spending top dollar to help a judge like Gorsuch get over the finish line. But that’s not how our court system is supposed to work. Our courts are supposed to be neutral arbiters, dispensing justice based on the facts and the law — not the party with the most money or political power.” (Click here for Warren’s complete op-ed on Gorsuch)
If the Democrats gave a rat’s ass at all about the 99 percent, and most don’t because they primarily represent their billionaire benefactors, they would fight tooth and nail and nuclear bomb against Gorsuch, who is nothing more than a corrupt legal assassin of the bottom 99 percent.
A month ago, I wrote the Democrats would do anything to prevent the Republicans from using the nuclear option, and so too would the Republican Party leadership. See President Trump, Neil Gorsuch and the Nuclear Option That Won’t Happen–JohnHively.Wordpress.com. Right now, it takes sixty votes to pass anything through the senate, otherwise the opposition will filibuster whatever it is. However, the senate can vote to end the filibuster, which means a simple majority vote is all it will take to pass anything through the senate, such as legislation or Neil Gorsuch’s nomination to be the next US Supreme Court justice.
Politico now reports the Democrats are negotiating with Republicans to allow Gorsuch to become the next Supreme Court Justice in exchange for not eliminating the nuclear option on a future US supreme court nominee. See Democrats Weigh In On Deal–Politico.com.
This would allow Gorsuch to become a US Supreme Court justice on a simple party line up and down vote. Forty-eight Democrats will vote against him, and fifty-two Republicans will vote for him, and the deal will be done.
Quite naturally, the corporate media will not mention the last thing the Republican leadership wants to do is use the nuclear option, just like the corporate wing of the Democratic Party doesn’t want to use it.
If the Republicans use the nuclear option for Gorsuch’s nomination, the Republican grassroots would then insist the Republican Party leadership use the nuclear option to pass anti-abortion legislation, thereby ending the Republican leadership’s best wedge issue uniting the billionaire corporate wing of the party with middle and working class evangelical Christians, many of whom might then decide to vote on bread and butter issues during the next presidential race with such progressive Democrats as Bernie Sanders and Elizabeth Warren. No, the billionaires don’t want that.
With control of the US house, senate and presidency, this is a golden opportunity for the Republican leadership to pass strong anti-abortion legislation, if they really wanted to, and no, they don’t want to. The Democrats couldn’t stop them if they tried to, provided an old fashioned up and down vote can take place in the senate. That won’t happen.
The other billionaires who control the Democratic Party don’t want to use the nuclear option as well, and for simple financial reasons. One day the Democrats will have control of all three branches of the US government, and the Democratic grassroots will want the Party to pass stronger labor union legislation, a higher minimum wage, renegotiate the trade treaties that allow the billionaires to export US jobs so they cannot do so (Grassroots Republicans also want that), pass a single payer health care bill, and on and on. None of these, of course, would be in the interests of the billionaires who control both parties.
The Republican and Democratic grassroots are being played by the billionaires and their politicians in high places. We’ve been played for decades. The nuclear option has not been used precisely because doing so would end the legislative gridlock that has stopped the above issues from being determined. The billionaires win with gridlock, and all at the expense of the rest of us. The rest of us win when the nuclear option is used.
So expect a deal will be made between the Democrats and the Republicans that will allow Neil Gorush to become the next US Supreme Court Justice without the use of the dreaded nuclear option. Of course, it’s the billionaires who dread it.
A new report from the United Nations shows that Norway has overtaken Denmark as the world’s happiest nation. The study was performed by the Sustainable Development Solutions Network (SDSN), which was launched by the United Nations in 2012.
“Happy countries are the ones that have a healthy balance of prosperity, as conventionally measured, and social capital, meaning a high degree of trust in a society, low inequality and confidence in government,” Jeffrey Sachs, the director of the SDSN and a special advisor to the United Nations Secretary-General, said in an interview.
The United States dropped to 14th this year from 13th last year. Sachs said the United States is falling in the ranking due to inequality, distrust and corruption. Economic measures that the administration of President Donald Trump is trying to pursue, he added, will make things worse.
US Senator Bernie Sanders had a lot to say about these issues.
“Norway,” he wrote, “is now the happiest country on earth followed by Denmark, Iceland, Switzerland, Finland, Netherlands, Canada, New Zealand, Australia and Sweden, according to the United Nations. Meanwhile, the United States has moved down to 14th on the list. Why are the people in Norway so much happier than the U.S.? It’s not that complicated.
While hundreds of thousands of bright, young Americans don’t go to college because they cannot afford the cost, public college is tuition-free in Norway.
While the U.S. is the only major country on earth that does not guarantee health care as a right, Norway has a single-payer health care system that provides high-quality health care to all of its citizens at a far lower cost.
While the U.S. is the only major country that does not guarantee workers some type of paid sick leave, Norway guarantees 50 paid sick days.
The U.S. has the highest childhood poverty rate of nearly any major country on earth, while Norway has one of the lowest followed by Denmark and Finland.
As we strive to be a more just society, we must follow the examples of our brothers and sisters in other countries who have made better progress. What do you think?”
In 2012, news that wasn’t published hardly at all included the fact that Costco’s CEO Craig Jelinek decided that redistributing income from his employees to his shareholders by cutting wages was not good for the employees or for the shareholders. Wall Street was pressuring him to do exactly that (Click here for the story from http://www.zdnet.com). This was in spite of the fact that Costco’s closing share price hovered slightly below $39 a share in March 2009 and had risen to over $90 a share in March 2012.
That higher wage strategy seems to have worked beautifully. Costco’s share price has been steadily rising, and it closed at $177 on March 2 2017. Wall Street was proven wrong–again.
The truth is simple. When you have a massive income redistribution from the 99 to the 1 percent via federal legislation, as in the last thirty-seven years, you have a government and an economy that are sick with massive corruption. Costco has opted out of that business model. Thirty-six years ago, the 1 percent took home about 8 percent of the nation’s income, now it’s over 30 percent and growing, and it’s been stolen from the rest of us. Thirty-six years ago, the 1 percent owned 7 percent of the nation’s wealth, now they own over 40 percent, and it’s growing at the expense of us all. However, when the latest stock market bubble bursts, and it will, much of that wealth will evaporate.
This is why the current economic expansion is long, but historically weak by virtually all measurements, despite a bigger gross domestic product, greater worker productivity and larger population than in years past. Demand should be robust compared to decades ago, but it instead remains comparatively lackluster. That is because the income of the 99 percent has been redistributed to the 1 percent, leaving the rest of us insufficient money to boost this economy in the manner of the past.
It’s time to put a little more balance in the economy by following the Costco model. The government has redistributed income from the 99 to the 1 percent via free trade treaties, privatization scams, corporate welfare and other means. It’s time for the government to move in the opposite direction on behalf of all of us, not just the rich.
The Republican Party is about to determine whether or not it will become the biggest death panel since Adolf Hitler and the Nazi Party tried to exterminate the Jews of Europe.
US House of Representatives leader Paul Ryan pulled out his new American Health Care Act last week, which he is hoping will be used to replace the Affordable Care Act. According to the Congressional Budget Office (CBO) yesterday, within a decade as many as 24 million US citizens will lose their health care coverage and premiums will go up for the rest of us if Ryan’s plan is passed, and especially for low income people and the elderly. Many grandmas and grandpas will have to chose between starving to death, or not paying their overpriced healthcare premiums, thanks to the Ryan plan.
Obamacare has only added slightly more than 19 million people to the rolls of the health insured. That means another 4 million US citizens beyond Obamacare may lose their coverage with Ryan’s carefully thought out health care bill. And it has been carefully thought out.
March 8, 2017
The primary purpose of this bill by all appearances is to provide tax cuts to the rich, the only people who have been the beneficiary of thirty-six years of economic expansions, and deliberately so. Currently, there is a 0.9 percent tax on income over $200,000 a year to help fund Obamacare. There is also a 3.5 percent tax on capital gains for the same purpose, such as the profits from the sale of stocks and bonds. This is why Wall Street hedge funds and big investment firms want Obamacare gone.
Many Republicans are prepared to make the Republican Party and all it stands for into a giant death panel in order to make its billionaire masters richer. Herr Ryan is one of these. Yet, other Republicans want to get reelected.
Florida Republican Rep. Ileana Ros-Lehtinen, for example, said Tuesday that she wouldn’t be able to support Ryan’s health care legislation after the CBO score revealed the high number of people who would lose insurance.
“I plan to vote NO on the current #AHCA bill. As written the plan leaves too many from my #SoFla district uninsured,” the Florida congresswoman wrote in two consecutive tweets. “As #AHCA stands, it will cut much needed help for #SoFla’s poor + elderly populations. Need a plan that will do more to protect them.”
This shows several things. The legislation is not likely going to pass. The Republicans are going to find it difficult to give their billionaire masters tax cuts by replacing Obamacare. So they will likely try a different tack.
The most likely scenario is simply keeping Obamacare largely intact, but shifting the tax burden from the rich to the middle and lower classes, and then marketing this plan as replacing Obamacare. One thing is certain; replacing Obamacare and taking health insurance from tens of millions of people in the process is not going to be politically palatable.
The Economic Policy Institute (EPI) reports that US wages grew in real terms (wage growth minus inflation) during 2016. While good news for the people who actually do the work of producing the goods and services necessary to keep the economy humming, this is also bad news.
EPI reports that income inequality continues to rise. “Rising inequality,” the report states, “means that although we are finally seeing broad-based wage growth, ordinary workers are just making up lost ground, rather than getting ahead. The way rising inequality has directly affected most Americans is through sluggish hourly wage growth in recent decades, despite an expanding and increasingly productive economy. For example, had all workers’ wages risen in line with productivity, as they did in the three decades following World War II, an American earning around $40,000 today would instead be making close to $61,000 (EPI 2017c).” That income difference has been redistributed to the very rich since 1981.
The report went on, “A hugely disproportionate share of economic gains from rising productivity is going to the top 1 percent and to corporate profits, instead of to ordinary workers—who are more productive and more educated than ever. This rising inequality is happening largely because big corporations and the wealthy have been rewriting the rules of the economy, particularly the job market, to stack the deck in their favor. This has prevented the benefits of productivity growth from “trickling down” to reach most households.” In other words, trickle down economics was a complete farce.
Now for the bad news. The economy is heading on a crash course with the worst and most prolonged recession since the Great Depression sometime around June of this year, give or take a month or two. The severity of this recession is due to the income and wealth inequality the US and the world has experienced since 1981, the year it pretty much began. I have been watching this current business expansion unravel since before November 2015. See The Coming Recession is Going to Be a Big One-JohnHively.wordpress.com There are always certain variables that precede a recession. Many of those began a year and a half ago.
Typically, the last variables to happen before an economy tanks is that wages rise and the Federal Reserve raises interest rates. Now those variables have officially happened. The Fed will likely raise interest rates again this month.
Somebody might point out that the economy is humming along with wage growth, low unemployment, etc…. How can we go into recession?
The growth of any business expansion has much in common with hiking up a mountain. Once you step on the highest point of any mountain, the next step is down. And so it is with any economic expansion; once it hits a peak, the very next step is down into recession. This month, March 2017, is the 93rd month of this economic expansion, making it the third longest in history. Compared to every economic expansion lasting six or more years, the current is the weakest by almost every measurement. So don’t expect it to go on much longer.
Click here for the entire EPI report on wage growth in 2016.
The rich are about to win politically again through their corruption of the federal government.
President Trump has wasted no time in taking aim at the Affordable Care Act (ACA), otherwise known as Obamacare. Joint research from the Urban Institute and the Robert Wood Johnson Foundation show up to 30 million Americans may lose their healthcare coverage if the ACA is repealed. For high-income investors, however, the end of Obamacare could bring a financial windfall.
Rebecca Lake of Investopedia.com points out that individuals earning over $200,000 and couples filing jointly and earning over $250,000 a year pay an additional 0.9 percent Medicare tax helping to fund the ACA. In addition, another “provision is the 3.8% net investment income tax. This tax applies to capital gains on investments and it follows the same income thresholds as the additional Medicare tax.” Capital gains is money earned through the sale of assets, such as stocks and bonds.
Repealing Obamacare would put significant amounts of money back into the pockets of the rich, who would then use their newly created windfall to pump more money into the current stock market bubble, blowing it up even more and blowing away the economy much more severely when it explodes, as well as use the funds to corrupt government even more in their favor. The rich already own the entire Republican Party, and most of the Democratic Party.
“An analysis by the Center on Budget and Policy Priorities has found that millionaires would stand to get an 80% tax cut if the additional Medicare tax and the tax on net investment income were to disappear. The average tax break for those earning more than $1 million annually would total just over $49,000.” The 400 biggest income earners would receive a tax cut of over $7 million each. That would be a tax cut every year for infinity for the folks who have corrupted both major political parties and rigged the economic and political game in their favor.
No doubt, any replacement for the ACA will be written to shift the tax burden from those who have political and economic power to those who do not. In other words, the Republicans and President Trump are redistributing income and wealth from the 99 to the 1 percent via repeal of the ACA. The Republicans are likely setting up some form of death panels by simply repealing the ACA and replacing it with something that will be underfunded.
California is on the verge of being the first state to adopt single payer health coverage. The state legislature is considering a plan in which payroll taxes replace premiums, deductibles and co-pays as a funding mechanism for health insurance. This is how almost all other developed countries succeed in providing affordable coverage for everyone — and for about half as much as what Americans pay.
When this latest legislation is passed California will still have a few more legislative steps to take. This legislation declares the Legislature’s “intent” to pass a law that would “establish a comprehensive universal single-payer healthcare coverage program and a healthcare cost control system for the benefit of all residents of the state.”
During the last few weeks, hundreds of California nurses and community activists rallied in favor of a bill that could make the state the first to launch a single-payer health care system.
They see this as a chance for the large state to show how a single-payer system can work and illustrate the necessity of providing universal health care coverage, according to Bonnie Castillo, the director of the Registered Nurse Response Network, a project of the union National Nurses United.
“We believe [health care is] a right and not a privilege,” she told ABC News. “We know at the federal level there is debate and quandary about what to do, and we know that this provides an opportunity in California to set a standard and a model for the nation.”
Supporters of the plan say the timing is right for this kind of legislation in the state, which has enormous influence, with a population of nearly 40 million people and the sixth-largest economy in the world. Health care coverage has been under added scrutiny as Republican leaders in Washington, D.C., have pledged to repeal and replace the Affordable Care Act, leaving many questions about the public’s options for health insurance.
The Rigged Game: Corporate America and A People Betrayed
The Rigged Game: Corporate America and a People Betrayed
Wall Street is up to no good, and has been since 1980, when it took over the Republican Party, and then the Democratic Party in 1994. Income has been massively redistributed from the 99 to the 1 percent via legislative scam after scam, from tax cuts for the rich to international income redistribution schemes falsely labeled as trade agreements. In The Rigged Game, John Hively exposes how this has all come about starting with a revolutionary, but simple reality, all recessions begin in the financial markets.
John Hively's Blog: News and Analysis of the War Against the Middle Class 