Feeds:
Posts
Comments

Posts Tagged ‘income inequality’

You can see the effects of the Coronavirus in the nearly empty restaurants, coffee shops, health clubs, etc…. throughout the United States. The U.S. should have gone into recession sometime in 2016 to 2018 after corporate profits peaked during the third quarter of 2014 and annually during that year. The U.S. always follows a decline in total corporate profits with a recession unless corporate earnings pick up. However, something kept this business expansion going far beyond what it historically should have since corporate earnings have been down for almost six years.

The Fed’s $26 trillion bailout of billionaires and multi-millionaires during the last economic crisis, as well as record corporate debt, helped to prolong the record economic expansion and the stock market bubble far beyond what economic fundamentals would normally have allowed. Record corporate share buybacks have helped the bubble and expansion along, although share buybacks had long been considered market manipulation.

Apple, for example, purchased $320 billion of its own shares over the last seven years pushing its stock price after a seven-way split in 2014 from $92 a share to over $320 until January 2020. The shares have lost $50 so far and are likely to lose a lot more. $320 billion are heading down the drain.

President Donald Trump’s tax cuts which largely went to the rich and their corporations should be given plenty of credit for extending this expansion and stock market bubble. Most corporations used the tax savings for share buybacks. All that did was inflate perhaps the largest US stock market bubble in history. As the number of people filing for unemployment insurance rises, the bubble will have further to fall, and it is likely the business contraction will be worse because of it, and the president should be given plenty of credit for that too.

Income and wealth inequality has continued to grow over the last forty years to historic proportions. Consumer debt is at record levels, as is corporate debt. Gross domestic product growth has been much lower over the last decade than under President’s Carter, Reagan, Bush 41, and Clinton. The same is true with job growth. Wages have been stagnant for forty years. Home prices have fallen 8 percent since and including the fourth quarter of 2017. Rich investors are pouring out of the mortgage bond markets.

All of this suggests a recession of historic magnitude, among the worst ever. I am not the only one who thinks this way. The Fed over the last ten days has lowered interest rates, and will likely lower them even further this week. Normally that does not happen until after a recession has officially begun. In addition, the president has declared a national emergency and the Democrats and Republicans have a relief package all set for the Senate to vote on this coming week.

None of the share buybacks, federal stimulus packages, and interest rate decreases will likely defeat the impact of the Coronavirus unless they come with a vaccine. Many months from now expect the folks at the National Bureau of Economic Research to get together and determine the recession began in March 2020, maybe April.

President Trump will not be at fault, though his tax cuts for the rich and their corporations will have played a negative role in the coming debacle.

There is a reason why income and wealth inequality has gotten so bad in the United States that three men own more wealth than the bottom 50 percent of the population.

You can blame the Democrats and the Republicans and the billionaires who pull their strings. For tax cuts for the rich blame Republicans; for exporting millions of jobs and redistributing trillions of dollars of income from the 99 to the 1 percent blame the Democrats, especially the Clinton’s and Joe Biden. For deregulation of Wall Street blame Ronald Reagan and Bill Clinton and Joe Biden. The list goes on but the leaders of the two parties work together behind closed doors to ensure all this stuff occurs.  This is precisely why the two parties have acted so quickly together to fight the Coronavirus and the ensuing economic debacle they have created.

**An hour after I wrote and posted this story the United States Federal Reserve Bank dropped interest rates a full percent down to virtually zero and announced it would purchase $700 billion of U.S. Treasury Notes and Mortgage-Backed Bonds. The recession has not even begun and everybody in power is acting as if the next Great Depression began a year ago. The folks in power know a disaster coming when they see it. Hell, they created it by redistributing trillions of dollars from the 99 to the 1 percent during the last forty+ years. Now the chickens may be coming home to roost.

 

Read Full Post »

Income inequality continues to rise, according to a September 2019 study from the United States Census Bureau. However, it is terribly understated. In Oregon, income inequality continues to grow. This reflects what is happening nationally, as well as internationally.

According to the Oregon Center for Public Policy (OCPP), “Oregonians are facing a scary reality: the income gap separating those Oregonians in the middle of the income ladder and those at the very top has never been wider. In 1980, it took 26 typical (median income) Oregonians to equal the average income of the highest-earning taxpayers — the top one-tenth of 1 percent. By 2017, this had grown to 131 typical Oregonians. That is nearly a five-fold increase.”

“As frightening as income inequality is, inequality by wealth is even scarier. Income refers to how much money you earn in a year, while wealth is the sum total of all of your assets minus all of your debts. No good sources for wealth inequality at the state level exist, but national figures show that wealth is even more concentrated at the top than income. In 2018, the wealthiest 10 percent of Americans together held 70 percent of the nation’s wealth, while the bottom half of Americans together owned only 1 percent of the nation’s wealth.” In addition, three Americans (Jeff Bezos, Bill Gates and Warren Buffett) hold more wealth than the bottom 50 percent of Americans, and these figures are from two years ago, meaning these figures are most likely understated as of 2020.

With rising inequality, our faith in the “American Dream” is fading, being replaced instead with an American Nightmare. Research from the Center for American Progress found that as income inequality has increased, it has contributed to Americans becoming more pessimistic and less trusting of one another and our political leaders.

Federal policy, and the policy of both major political parties, is to redistribute income and wealth from the 99.5 percent to the 0.5 percent, the multi-millionaires and billionaires.

Quite naturally, the corporate media have now undertaken a campaign of disinformation, questioning what is obvious to the vast majority of Americans, seeking to instill doubt about the extent of income and wealth inequality.

However, both inequalities are far more significant than have been accepted. For example, three economists have examined U.S. income tax returns from the last several decades. These three have determined the top 1 percent receive 22-23 percent of all income produced in the United States nowadays compared to 8 percent in 1979. The Census Bureau’s study shows the top five percent took 23.2 percent of all income in 2018, compared to 22.3 percent in 2017.

On the other hand, there is unreported income, income hidden in Panamanian and Swiss banks, as well as elsewhere. The reality is that the top 1 percent steal closer to 38 percent of all income made in the USA. No doubt their accumulation of wealth mirrors that since you need income to generate wealth.

The results of these growing inequalities have not been kind to the 99 percent. Suicide rates, alcoholism, rates of depression and other maladies have all increased for the 99 percent during this era of inequality and political corruption. The corporate news media has been supportive of the growing inequalities by sowing the seeds of discord, pitting a variety of sectors of the 99 percent against each other in order to divert our eyes from income and wealth inequality. People trust each other less than in decades past because of the media.

In the meantime, the corporate news media, the billionaires who control both major political parties, have waged war against the only two presidential candidates of the people, while supporting the candidates of the billionaires, such as Joe Biden and Pete Buttigieg. Buttigieg’s recent attacks on Sanders and Warren suggest the billionaires who control him have unleashed him in order to stop veteran billionaire brown-noser Joe Biden from having to do so and alienating Warren and Sanders voters in the process, which might not be a good thing to do with the general election coming up.

Do not fall for this con if you are tired of working more and earning less so that billionaires can have more of what you earned.

US Census Bureau on Income Inequality

See https://www.ocpp.org/2019/10/30/scary-facts-economic-inequality/

Read Full Post »


Donald Trump just secured the votes of millions of American citizens by renegotiating NAFTA. However, it has yet to pass congress and may never, just because it is a big-time body blow to the desires of Wall Street and the billionaires in their efforts to redistribute more income from working Americans to the rich by exporting jobs, thereby creating greater income and wealth inequality using U.S. taxpayer dollars in the process.

The millions of U.S. jobs currently occupied by Mexico’s $3 dollar per hour labor will almost certainly see some jobs returning to the United States, or more than likely, they may be exported from Mexico to Pakistan, China or Vietnam.

Regardless, Richard Trumpka, president of the AFL-CIO wrote of the renegotiated treaty, “The United States Mexico Canada trade agreement is a huge win for working people. After a quarter-century of suffering under the failed North American Free Trade Agreement (NAFTA) and 18 months of hard-fought negotiations, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is now proud to endorse a better deal for working people: the United States Mexico Canada Agreement (USCMA)…The USMCA isn’t perfect — no deal ever is. But it’s a far cry from the original NAFTA, and that is a huge win for working people in North America. While it won’t bring back every job lost under NAFTA, it will help stop the bleeding and add important new protections for workers across the continent.”

A few things need to be said about the agreement. It will slow the pace of income and wealth inequality that has occurred over the last forty years, but only a little bit. Nowadays, three men own more wealth than the bottom half of the U.S. population and the 1 percent now steal somewhere between 22 to 38 percent of all the income produced each year in the United States, up from 8 percent in 1980; much of this can be attributed to international trade agreements negotiated to export U.S. jobs by the tens of millions.

The difference between the old higher wages and the new third world wages goes directly into the bank accounts of the rich via higher corporate profits, dividends and share prices.

The USCMA passed through the Democratic Party-controlled U.S. House of Representatives last week. However, it now has to pass through the RepubliCon controlled U.S. Senate early in 2020. The RepubliCons and their Wall Street and other corporate masters are dead set against it.

U.S. RepubliCon Senator Pat Toomey, who represents Wall Street and some billionaires, wrote in the Wall Street Journal that he will vote against the trade agreement. Here are a few of his objections;

1. Car manufacturers will need to… “pay wages far above prevailing Mexican rates.” In other words, Mexican auto workers do not deserve to earn more than $3 an hour.

2. “First are the laws to facilitate unionization of Mexican factory workers.” Apparently, Toomey thinks that organized billionaires (shareholders in corporations) is something that has God’s blessing, but organized labor is evil. This is class warfare at its worse.

3. “Another flaw is the drastic reduction of the Investor-State Dispute Settlement mechanism. U.S. investors don’t always get a fair adjudication of their business disputes in foreign courts, even in Canada and Mexico.”

These were secret tribunals that were highly unconstitutional. The U.S. Constitution allows the rules of treaties to override U.S. laws. However, a treaty requires 67 percent of the U.S. Senate to approve of treaties. That was not the case for the North American Free Trade Agreement (NAFTA), which was, and notice this, called an “agreement.”

NAFTA only required a majority vote since it was an “agreement.” Consequently, the always secretly held tribunals of the Investor-State clause of NAFTA has always been unconstitutional. Representatives of local government, citizen groups, labor groups, and others, were never allowed into the tribunals. Only lawyers for the governments of Canada, the U.S., and Mexico, as well as corporate lawyers, were allowed in. Local and state laws were overturned by this unconstitutional tribunal, but Senator Toomey thinks it unfair the power of the tribunals is no more.

Expect Wall Street and the entire RepubliCon party to reject this agreement in the United States Senate, but expect Donald Trump to benefit politically nonetheless.

Read Full Post »

Eight billionaires possess the same amount of wealth, and probably more, as the lower half of the world’s population, according to an analysis from the charity Oxfam released last Sunday.

Six of these billionaires, from Forbes’ list of the world’s richest people, are American entrepreneurs: Microsoft co-founder Bill Gates, Berkshire Hathaway chairman and CEO Warren Buffett, Amazon founder and CEO Jeff Bezos, Oracle co-founder Larry Ellison, former New York Mayor Michael Bloomberg and Facebook founder and CEO Mark Zuckerberg. Rounding out the list are Carlos Slim, the Mexican tycoon, and Amancio Ortega, the Spanish founder of a retail conglomerate that includes clothing chain Zara. Together their net wealth ― assets minus debts ― amounts to $426 billion.

“Left unchecked, growing inequality threatens to pull our societies apart,” Oxfam writes in its report, citing Brexit, the rise of President Donald Trump and a rise in the widespread disillusionment with the absolute corruption of mainstream politics, which has been provided by, and benefitted, the rich at the expense of everybody else.

In 2016, the richest 1 percent of the world held slightly more than half of the wealth of the entire planet, Oxfam noted. While the 1,810 billionaires on Forbes’s list, 89 percent male, hold $6.5 trillion, as much wealth as 70 percent of humanity.

In other words, 70 percent of the world’s population is fighting among themselves over crumbs the rich have yet to scoop up.

All of the corruption is used to tilt the economic game in favor of the billionaires allowing them via the government to redistribute income and wealth from the 99 percent to themselves. Some of the corruption in the United States have included the successful negotiation of trade agreements with an eye toward lowering wages worldwide, suppression of federal minimum wage increases, Supreme Court decisions that have nearly eliminated 100+ years of campaign finance laws, the war against labor unions waged by the rich via their helpful federal government and their corrupt United States Supreme Court, lowering the tax rates of the rich to the point where billionaires now pay a lower rate than middle-class income earners. and the privatization of public services.

Last year, when Oxfam did its report, it took 62 billionaires to equal the bottom half of the world. The change this year seems drastic because of improvements in the quality of the data Credit Suisse was able to get. If Oxfam had used that improved data last year, it would’ve taken just 9 billionaires to reach parity with the world’s bottom half, Kripke said.

Rising inequality causes more than a sense of moral outrage and the election of reality TV stars. There’s a wide body of research that shows inequality adversely affects the health of those at the bottom, raising the risk of cardiovascular disease, increasing suicide rates and shortening lifespans. Some attribute the rise in the death rate of white people and the heroin epidemic to inequality.

Read Full Post »


I paid my wealth tax of almost $3000 earlier this month. Doing so left me broke for a couple of weeks. This wealth tax is called a property tax, but the land you own is part of your wealth and my property tax could just as easily be called a wealth tax since it taxes part of my wealth.

Until recently, progressive taxation had been part of the fabric of American democracy for over a century. The idea the rich can pay more is quite biblical, just ask Jesus. Somebody who has $100 billion in wealth is going to pay $3 billion or so in tax, and some of them are acting as though the taxman is going to swing an ax into their billion-dollar genitals if the tax legislation is enacted.
These billionaires have rigged the economy in their favor by using their billions to corrupt both major political parties and the federal government in the process. They have used corruption to redistribute trillions of dollars from working folks to themselves in the process. This is why three people (Bill Gates, Warren Buffett and Jeff Bezos) own more wealth than the bottom half of the U.S. population. This is why the 1 percent have gained $21 trillion since 1989 and the bottom half of U.S. citizens have lost $900 billion (See  the-corrupting-billionaires-have-gotten-richer-by-21-trillion-since-1989)

Exporting millions of jobs via trade agreements alone sent trillions of dollars from working people to the billionaires over the last forty years. The difference between the old higher US pay and the new lower third world pay goes straight into the pockets of the billionaires via higher corporate profits, rising dividends, and surging share prices.

Corruption and class warfare against the 99 percent are running wild in all three branches of government, and that tiny progressive tax is a step in the right direction that might help put an end to it and restore U.S. democracy in the process.

I do not agree with everything Elizabeth Warren and Bernie Sanders propose. However, I agree with former President Barack Obama when he said: “Income inequality is the defining challenge of our time.” He said it one time. Then somebody likely took him to the side, told him never to say it again, and he never did. Now he makes $400,000 a speech, which is $150,000 more than Bill and Hillary Clinton make.

We can put an end to this type of revolving-door corruption and other forms of political corruption. The wealth tax is just a tiny step in the right direction.

Read Full Post »

Democratic presidential candidate Elizabeth Warren understands economics and political power. She understands democracy, and she understands we no longer have a democracy. We have a plutocracy, which is a government for the rich and by the rich. The rich and their corporations have their power over all three branches of government, and they have used that power to redistribute tens of trillions of dollars from working people to themselves over the last forty years.

This week hedge fund CEO Leon Cooperman sent her a five-page letter complaining that she doesn’t know anything about billionaires, or him in particular. Leon apparently does not know that when you export millions of jobs, the difference between the old higher U.S. compensation and the new low, that is very low, third-world wages with no benefits goes straight into the pockets of the rich while the job losers get unemployment insurance.

This is why three people own more wealth than the bottom half of the U.S. population, This is why the six richest people in the world own more wealth than the bottom half of humanity. This is why 38+ percent of all income in the U.S. goes into the pockets of the 1 percent every year compared to roughly 8 percent as late as 1979. The billionaires have created massive amounts of political corruption and the destruction of United States democracy in the process. Warren understands this.

Leon Cooperman is facing a tax hike if Warren becomes president. Apparently, many billionaires are assuming this is the end of life as they know it.

Warren’s tax agenda has become a lightning rod for criticism by the ultrawealthy, including some, like Cooperman, who identify as political moderates. “What is wrong with billionaires?” Cooperman complained to Politico in a story that appeared last week. “You can become a billionaire by developing products and services that people will pay for.” Warren is not against billionaires who do this. She is against those who have rigged the economy and destroyed U.S. democracy in the process.

Read Full Post »

Adding to the mountain of statistical evidence showing the severity of U.S. inequality, an analysis by of the United States Federal Reserve Bank showed that the top one percent of Americans have gained, or rather stolen using political and media corruption, $21 trillion in wealth since 1989 while the bottom 50 percent lost $900 billion.

Matt Bruenig, founder of the left-wing think tank People’s Policy Project, broke down the Federal Reserve’s newly released “Distributive Financial Accounts” data series and found that, overall, “the top one percent owns nearly $30 trillion of assets while the bottom half owns less than nothing, meaning they have more debts than they have assets.”

Wealth is made up of assets, such as stocks, bonds, and houses. Income is the money that comes to you either via government programs, your jobs, or from your assets, such as dividends.

The growth of wealth inequality over the past 30 years, Bruenig found, is “eye-popping.” This income and wealth inequality has been brought about by the political corruption of all three branches of the United States government by the 1 percent using their control of both major political parties.

“Between 1989 and 2018, the top one percent increased its total net worth by $21 trillion,” Bruenig wrote. “The bottom 50 percent actually saw its net worth decrease by $900 billion over the same period.”

Much of the increase in inequality is due to international trade agreements, which have allowed U.S. corporations to export millions of American jobs to third world nations. The difference between the old higher US pay and other compensation goes straight into the pockets of the 1 percent via higher corporate profits, dividends and share prices.

This suggests you ought to vote for Bernie Sanders or Elizabeth Warren for presidents.

Wall Street executives already have Joe Biden and Donald Trump, along with the corrupt corporate wing of the United States Supreme Court, and such US Senators as Ron Wyden and Mitch McConnell tucked away in their back pockets. These folks do not represent you.

Read Full Post »

Older Posts »

%d bloggers like this: