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Posts Tagged ‘corporate welfare’

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A new study by the Wall Street rating agency called Standard and Poor’s reveals what many already know. High income inequality suppresses the demand for goods and services, depressing GNP growth, and leading to more severe economic crashes than would otherwise be the case.

Here’s what the report won’t tell you. The rich invest their money in the political markets and in other investment areas such as stocks and bonds.

The money going into the political markets is used to convince politicians to pass legislation that redistributes income and wealth from the 99 to the 1 percent, such as free trade treaties. In other words, government corruption is far greater during times of inequality, and also because of it.

The investment money that goes into corporate stocks push up the value of those assets. It’s just a bidding process. So when more people purchase shares of any corporations than those who are selling their shares, the value of those shares go up. The same thing is true of bonds. None of these purchases add to GNP growth, and all of these purchases can result in redistributing income from the 99 to the 1 percent.

When corporate shares head down in value, CEO’s typically cut jobs or employee compensation, or ship jobs overseas to lower wage nations, which pushes profits higher, resulting in rising share and bond prices. The result is nothing more than income redistribution.

And so when inequality rises, it snowballs via the methods above, until such time as somebody decides such inequality is a bad thing. That only happens during the most severe economic crisis’s, such as during the Great Depression when there’s less money to go around to corrupt government.

Check out the story by clicking on the link below.

Wall Street Analysts Research: High Inequality Makes US Vulnerable to Crashes–Billmoyers.com

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On July 18, thousands of people marched in Detroit to stop water shutoffs by a private company that manages the city’s water system.

The city of Detroit went bankrupt many months ago, thanks to the federal (and state government of Michigan) enacting legislation championed by Wall Street Senator Ron Wyden and many other class warriors of the 1 percent ensconced in congress.

The result has been a massive shipment of jobs overseas via free trade treaties. When jobs are shipped overseas, and Wyden is not the dumb dumb he pretends to be on this issue, the difference between the old higher US wages and the new lower overseas wages is redistributed to the 1 percent via higher corporate profits, rising dividends and surging share prices. It also redistributes the tax dollars those shipped jobs once supported in the USA straight into the pockets of the rich, leaving schools, fire, police, road maintenance and other government services crippled, which is why Detroit went bankrupt. Thank you Wall Street Senator Wyden!

These legislative policies have left the people of Detroit poor, and let’s face it, Detroit was once one of the great manufacturing cities of the world until Wyden and others in congress shipped the jobs overseas. However, Wyden’s actions have generated massive income and wealth inequality via his income redistribution actions.

That’s the ultimate reason why many people in Detroit can’t pay their water bills, why the city went bankrupt, and why the Dow Jones and other financial markets are surging. It’s a rigged economic and political game. The problem with the people in Detroit is that all, or almost all, the democracy in the state and federal governments have already been purchased in the political markets.

For more on this story, click the link below.

thirsting-for-democracy-in-detroit-activists-resist-water-service-shutoffs-wall-street-and-privatization-Truthout.org

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“Embattled WikiLeaks publisher Julian Assange announced Wednesday from London the publication of a secret draft text of the Trade in Services Agreement (TISA), a controversial global trade agreement said to make it easier for corporations to make profits and operate with impunity across borders.” The TISA is another of President Obama’s plan to redistribute more and more income from the 99 to the 1 percent.

http://truth-out.org/news/item/24486-wikileaks-tisa-global-trade-deal-kept-more-secret-than-the-trans-pacific-partnership

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The average US household pays $6,000 a year in subsidies to big business, which is pretty much the same thing as saying the families of the 99 percent are paying $6,000 a year in subsidies to the families of the 1 percent. Pretty much, and not quite, but close enough.

$6,000 in subsidies? It’s also an understatement.

The Cato Institute estimates the US federal government spends $100 billion a year on corporate welfare. That’s an average of $870 for each one of America’s 115 million families.

The International Monetary Fund (IMF) reports US oil subsidies of $502 billion. That’s almost $4,400 per US family by taking into account “the effects of energy consumption on global warming [and] on public health through the adverse effects on local pollution.”

Of course, the Cato Institute didn’t consider war, such as US military expenditures, as well as US mercenaries. Remember, at the height of the occupation of Iraq, when the fighting was the worst, the US employed more mercenaries than it had military personnel in that nation. Those guys were a ton more expensive than US GI’s. At the low end of the pay scale, they cost about $120,000 per. That shows how much money privatization costs, rather than saves the US government since the yearly cost of a GI hovers around $45,000 a year.

As for other subsidies, a New York Times investigation revealed that $696 per family went for business incentives at the state, county and city levels. There is also $722 per family for interest rate subsidies for banks, $350 for retirement fund bank fees, $1,268 for overpriced medications, $870 for corporate tax subsidies, and $1,231 for revenue losses from corporate tax havens, such as the Caymen Islands.

Every family below the 1 percent is paying about $6,000 a year to help corporations push their profits to record levels, year after year, during a time when the middle class can hardly afford these subsidies. This has raised stock prices to record levels, along with dividend payments to the 1 percent. This is called an income redistribution scam, or rather, a series of them. These scams only exist because of the massive corruption of government at all levels in the US, through massive infusions of cash.

Check out the link below for more on the story.

Average American Family Pays $6,000 A Year in Subsidies to Big Business-BIll Moyers.com

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