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Posts Tagged ‘income inequality’

Source: Economic Policy Institute, http://www.epi.org/publication/charting-wage-stagnation/

More than 40 million US workers would get a raise if the US minimum wage was raised to $15 an hour. Doing so would do five important things to help the US economy.

1. It would increase the demand for goods and services and create jobs in the process. Currently, we are in the worst post World War II economic expansion in US history, except for the last one, you know, that negative job growth under the economic policies of the worst president in US history, George W. Bush! Outside of that expansion, the current expansion is the worst, with the lowest job growth, the least GNP growth, and lots more historically weak statistics.

2. Every US economic expansion since 1981 has been caused by artificial bubbles which have created artificial stock market bubbles, which have almost completely benefited only the rich, and mostly the super rich, at the expense of everyone else. The Bill Clinton presidency saw the creation of 22 million jobs, which came about because of simultaneous housing, tech, stock and telecommunications bubbles. The tech and telecommunication bubbles were created by Clinton’s signature on legislation. The current economic bubble has been created by an illegal housing bubble created by the big banks. See The fix is In! The Banksters are Manipulating the rise in housing prices: Mortgage applications are down for home sales–Johnhively.wordpress.com Raising the minimum wage would create more demand, possibly creating the first demand inspired economic expansion since the Great President Jimmy Carter.

3. Raising the minimum wage to $15 an hour would steer money away from the stock market bubble because it would decrease corporate profits, and perhaps gently deflate the current bubble that is due to burst in a few months anyway. The other option is to allow the bubble to run its course and essentially ruin the US economy like what occurred from 2007 to 2012 and from 1929-1933. The next recession will be worst than the last one, and it’s just around the bend.

4. Income inequality is at an all-time US high with the 1 percent stealing about 37 percent of all income produced in the USA every year compared with only 8 percent in 1980. That means the 99 means we have less money to buy things, while the rich primarily purchase things like stock options, stock, bonds and politicians. This inequality is stifling the demand sector and weakening the economy which is why the US economic expansions since 2000 are the weakest in history. This is, of course, unless, the creation and functioning of the US and worldwide economies are solely for the benefit of the 1 percent, and always at the expense of the 99 percent. You can see from the graph above the rich are stealing $17,867 from every working American, and they do this year after year after year. I think it’s time we get a little of our money back.

5. Wealth inequality is also near an all time high in the USA, and this means (along with income inequality) the rich can afford to buy the services of more politicians, which has already effectively turned our democracy into both an illusion and a myth, and this occurred perhaps as early as 1981. Raising the minimum wage would cut away a bit of the economic cancers known as wealth and income inequality.

The corporate talking heads will also insist raising the minimum wage will result in lost jobs, but there are plenty of studies showing not a whole lot on this issue. Most studies on this subject during the last twenty years show a rise in the minimum wage has a negligible impact on job loss, or jobs experience slight growth. On the other hand, most minimum wage increases that have been studied have been minimal and very local.

However, all of this is irrelevant because there is one gigantic study that shows that when the real wages of the 99 percent go up, so too does the US economy, and not just for the benefit of the few. This study is called the history of the US economy. Notice in the graph below real wages grew in the US economy from 1948 to 1978. In reality, you can go back to 1938 and see the same stuff. Inflation was low and job growth was high during the years 1938 to 1980. The middle class was strongest then, and demand for US goods was incredibly strong, especially the demand from US citizens. Even the rich got richer, although the percentage of income and wealth they could steal from the rest of us was small compared to today.

Source: Economic Policy Institute, http://www.epi.org/publication/charting-wage-stagnation/

Corporate talking heads will always lie and say raising the minimum wage will increase inflation. In reality, allowing the financial markets to rise in bubbles creates inflation, as I pointed out in my book, The Rigged Game.

Now some people will say inflation was fairly high during the 1970s, and yes that is kind of true, and then kind of not. That’s because the US government has changed the way it measures inflation twenty times since 1981, and every change has the intended effect of lowering the rate of inflation. In other words, if inflation is 1.5 percent nowadays, using the methodology of 1975, today’s inflation would be about 6 percent. Average yearly inflation during the 1970s was 7 percent, and so using today’s inflation methodology, inflation during the 1970s would have averaged about 2.5 percent, which isn’t all that much.

You can also see from the graph above how real hourly wages have stagnated since 1978, but of course, that’s a lie since real wage increases are measured against inflation, and we know inflation is no longer measured like it used to be. If inflation over the last 35 years was measured with the methodology used by the US government in 1975, US inflation would be significantly higher each of those years, and real US wage growth during this period would be negative, year after year after year for the last thirty or more years. This means real wages are significantly lower nowadays than the available statistics will allow us to measure, and this, of course, is one of the reasons why the government changed the way it measured inflation: it stops us from seeing how much we of the 99 percent are getting screwed by our corrupt government in redistributing our income and wealth to the 1 percent.

I don’t know about you, but I want my money back! Raise the minimum wage!

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USA Today reported in last weekend’s edition that “Low-wage jobs are expected to grow the fastest over the next five years while occupations that support a middle-class living will lag.” The newspaper cited a survey by CareerBuilder.

“Globalization” is the culprit according to the survey. In other words, factory and office jobs will continue to be exported, and the difference between the higher US wages and benefits and the new third world wages with no benefits will go straight into the pockets of the richest via higher corporate profits, rising dividends, and surging share prices. Neither the study nor USA today mentioned this part. Reporter Paul Davidson only mentioned “globalization,” and deliberately so to keep you ignorant.

Just as important, trade treaties also establish the rules by which US corporations can also create jobs overseas, rather than in the USA. This redistributes income from the 99 to the 1 percent, as well.

So expect income and wealth inequality to grow throughout the USA, as well as the rest of the world. And, contrary to the lying corporate press and the World Bank, poverty throughout the world has grown during the last thirty-seven years.

The report clearly shows that more of the middle class will be disappearing as those middle-class jobs are exported and the wages and benefits transformed into dividends and higher share prices for the rich. In other words, the rich are eating the middle class.

When those factory jobs operating machines that sustain a middle-class life style are exported, jobs in accounting, bookkeeping, management, law, computer technology, and more are exported. These are all middle-class jobs.

It doesn’t need to be this way. Globalization is not inevitable. It never has been inevitable. But the policy of globalization enriches the wealthy at the expense of the everybody else throughout the world, and this is the inevitable result of globalization, as well as its purpose as US public and economic policy. And this is why the corporate news media keeps pounding this idea into our heads, and we meekly accept this bull shit lie.

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Research by the Insured Retirement Institute suggests trouble for retiring Boomers. The study shows 24% of Baby Boomers have no retirement savings. Only 55% of Baby Boomers have some retirement savings and, of those, 42% have less than $100,000. Thus, approximately half of retirees are, or will be, living off of their Social Security benefits.

The corporate news media wants you to believe the reason for this situation includes “poor preparation.” Other reasons given include the stock market crash of 2008-09, which was caused by the criminal activities of the big banks and government corruption. Many 401Ks haven’t recovered from this debacle. The disaster allegedly scared some older adults out of the markets, causing them to miss the subsequent rebound.

What the corporate news (really propaganda) media doesn’t want to tell you is that most of the retirements of the baby boom generation have been redistributed to the uber wealthy over the last thirty-five years.

* Most pensions are gone, and even government employees now have weakened pensions or less lucrative 401Ks that have replaced pensions, due to the political and news media power of the billionaires. Most corporate pensions have been reduced or eliminated, with the difference between the old former pensions and the new little or nothing pensions placed directly into the pockets of hedge fund managers and other big investors through rising corporate profits, the newest stock market bubble, and surging dividends.

* Average real wages and benefits have been reduced over the last thirty-five years due to tens of millions of jobs being exported, union busting, and hyper-immigration, all of which have placed downward pressure on wages, salaries, and benefits. Think H1-B visas, among other programs.

* More baby boomer money goes toward paying housing as rents and home prices have rapidly risen due to the illegal collaboration of the big banks in holding over 50 percent of the vacant housing off the market beginning in 2008. This is called a conspiracy in restraint of trade, and it is illegal, but the corrupt US government won’t do anything about it.

There are more reasons why baby boomers are less prepared than their parents for retirement, but ultimately it all comes down to the US government policy of redistributing income and wealth from the 99 to the 1 percent, which, not so coincidentally, is also the same policy embraced by the leadership of both major political parties. Nowadays, the 1 percent steals around 37 of all income produced in the United States, compared to 8 percent in 1980.

In other words, the baby boomer retirements have been stolen by the 1 percent using their corruption of government, and those stolen retirement benefits are part of the difference between the 8 percent in 1980 and the 37 percent the rich are stealing today. By the way, that 37 percent is growing daily.

 

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The Economic Policy Institute (EPI) reports that CEO compensation at major US corporations dropped a bit to 271  times the average annual pay of the average worker. EPI reports that, “While the 2016 CEO-to-worker compensation ratio of 271-to-1 is down from 299-to-1 in 2014 and 286-to-1 in 2015, it is still light years beyond the 20-to-1 ratio in 1965 and the 59-to-1 ratio in 1989.”

Much of CEO compensation is based on stock options. Boards of Directors offer CEOs stocks at certain prices. So, for example, if a CEO is offered stock at $5 a share, and the price rises to $25, the CEO can purchase a high number of shares at $5 and turnaround and sell them at $25 a share. So who signed the legislation that brought this about? Why, none other than Wall Street President Bill Clinton. See Bill Clinton Created Terrible Corporate Loop Hole–New Republic.

Naturally, stock options have led CEOs to outsource and export jobs at higher rates than they normally would, which in turn, has led to much of the income inequality we experience today. Depending on whose figures you use, the 1 percent now steal anywhere from 23 to 37 percent of all income produced in the USA, up from 8 percent in 1980. This inequality of income, and also of wealth, continues to grow. Thank you Bill!

According to the report, “Over the last several decades CEO pay has grown a lot faster than profits, than the pay of the top 0.1 percent of wage earners, and than the wages of college graduates. This means that CEOs are getting more because of their power to set pay, not because they are more productive or have special talent or have more education. If CEOs earned less or were taxed more, there would be no adverse impact on output or employment. Policy solutions that would limit and reduce incentives for CEOs to extract economic concessions without hurting the economy include:

  • Reinstate higher marginal income tax rates at the very top.
  • Remove the tax break for executive performance pay.
  • Set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation.
  • Allow greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation.

Click here for the complete EPI report.

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The corporate news pounced on the latest report issued by the Board of Trustees of the Social Security Trust Fund. CNBC News interviewed Michael Tanner of the Koch Brothers funded Cato Institute. Tanner was dumb enough or dishonest enough to say, “Every bond redeemed from the Social Security Trust Fund has to come out of the general revenue, so we’re actually increasing the federal deficit in order to pay off social security.” What a lie, and in many ways.

20046712_10211899706460813_3970402639122158449_n.jpg

The Social Security Trust Fund has a $2.6 trillion surplus. The Trust Fund purchased US Treasury bonds and collects about $160 billion in interest a year. Bonds are loans. The US government borrowed the $2.6 trillion from the Trust Fund, and it will soon be time to pay that money back to the Trust Fund. That will not add to the deficit at all since the Trust Fund did not need to invest in the bonds, but it was a prudent thing to do to collect the interest. But lets get to Tanner’s lie; the US government issues and sells new bonds to pay for any bonds coming due. Only interest is paid from the general funds unless there is a budget surplus that allows for paying down the total deficit. The folks at CNBC News made certain not to question Tanner’s lie. That’s because they want to keep us ignorant.

Second, the Chinese government has trillions of dollars invested in US treasury bonds, as does Wall Street. When the US treasury bonds held by the Chinese or Goldman Sachs, or US hedge funds come due, nobody says that by paying its debt, the US government is adding to the deficit. Why is a different standard applied to Wall Street and Chinese investors on the one hand, and the Social Security Trust Fund on the other hand? The answer, of course, is CNBC wants to keep us ignorant. The Social Security Trust Fund has not contributed a penny to the US deficit, but they don’t want us to know that.

The Trustee report mentioned the coming of a deficit for the Trust Fund in 2034, which will result in payment reductions for retirees of approximately 16 percent, unless something is done to plug the gap. Ethan Wolff-Mann, reporting for Yahoo News, claimed “A root cause for the financial woes for Medicare and Social Security is the aging baby boomer population.”

That’s another lie meant to distract you from reality. Tens of millions of US jobs that paid into the social security trust fund have been exported to low wage nations such as China. The difference between the old US wages and the new Chinese, Vietnamese, Pakistani, and Mexican wages have all gone into the pockets of the rich via higher corporate earnings, rising dividends, and surging share prices. Capital gains from the sale of assets (such as corporate stocks and bonds), and dividends are exempt from social security taxation. The rich, in other words, are not paying social security taxes on the trillions of dollars they have stolen from the rest of us. That’s why there is an impending deficit in the Trust Fund.

So the easiest way, and morally Jesus Christ way, to offset these government policies that have stolen from the Trust Fund is to have a graduated Social Security tax on dividends, as well as on capital gains derived from the sale of stocks and bonds. Of course, a Social Security tax on stock and bond transactions could also achieve the desired effect.

In either case, or in both cases should they be legislatively enacted, the Social Security Trust Fund would be solvent into infinity and most likely a significant raise can be provided to beneficiaries, which would then strengthen the US economy by increasing the demand for goods and services.

Steve Ruis has pointed out, “Note that the SS Trust Fund didn’t choose to buy US Treasuries, it is required to invest all excess funds in US Treasuries by an act of Congress! Some critics have referred to those treasuries as “worthless paper” when trying to undermine the SS system. Amazing!”

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On behalf of the Wall Street Democratic Party, hundreds of thousands of people have called for the impeachment of President Donald Trump, and some of them called for impeachment even before he was sworn into office. Here’s what I think of them; Sore losers and misguided Wall Street pawns being used by the Wall Street Democratic Gold Plated Leadership.

The Democratic Party abandoned working people decades ago.

Several thousand of us fought on the front lines in the battles against the massive income redistribution scam promoted by a Democratic president and called the Trans-Pacific Partnership. This scam would have exported millions of jobs and redistributed trillions of dollars of income from the 99 to the 1 percent while most of those now calling for Trump’s impeachment stood on the sidelines and shouted hooray for their team on social issues.

For the past 40 years, the Democratic Party as a national organization has systematically abandoned its historic representation of the working class in favor of a wholesale embrace of Wall Street’s and other corporate principles that squash workers’ representation at all levels of political and workplace engagement, and enhance the power of the wealthy few to govern all aspects of our lives.

It was a Democratic president supported by the Republican Party who unleashed Wall Street by signing legislation repealing Glass-Steagal, legislation which had forced a separation of commercial and investment banking and had protected the US economy for sixty years.

It was a Democratic president supported by the Republican Party who signed the Telecommunications Act which allowed the monopolization of the supposed news you receive. Nowadays, six major corporations control 90 percent of the supposed news we absorb, and much of it is Republican and Democratic Party propaganda.

It was a Democratic president who signed a free trade pact that allowed Mexico to officially swallow almost two million US jobs, and most likely much more. The difference between the old US wages and the new lower Mexican wages goes straight into the pockets of the already super-rich via higher corporate profits, surging dividends, and rising share prices. This is called income redistribution. Thank you, Bill and Hillary!

It was a Wall Street Democratic president (with Republican support) who acquiesced to demands to gut welfare programs that had for decades helped workers build their lives without an ax of abject poverty constantly hanging over their heads.

Wall Street Democrats watched (and frequently voted for) the gutting of pensions, the wars we were lied into which resulted in the deaths of hundreds of thousands of human beings, the ability of the executive branch to assassinate US citizens without trial, the militarization of police, the fall of worker wages and skyrocketing compensation for the wealthy, the deregulation of Wall Street, and the ongoing privatization of public education. In effect, Wall Street Democrats such as Ron Wyden, Bill and Hillary Clinton, and Barack Obama led the charge to create the still growing massive income and wealth inequality we experience today, as well as override the US Constitution in the process.

Eric Ethington, writing the Salt Lake City Tribune, perhaps said it best.

“The idea that Trump is somehow unique, or distinctly worse than other conservatives in his policies is laughable. If Trump were to be impeached today, the same agenda would continue rolling forward without a moment’s pause, because for all the posturing of House Speaker Paul Ryan, or Sen. Orrin Hatch or Rep. Mia Love, the ideas Trump is pushing is exactly what they have been advocating for years — albeit with much more disguised and sophisticated rhetoric. The only difference seems to be the more overtly authoritarian, racist and sexist rhetoric Trump uses and the boneheaded clumsiness of his incompetent staff.”

“What good is getting rid of one bombastic fool if there’s no legitimate voice of the workers to step in? Pretending everything was fine before Trump is lunacy.”

Stop allowing yourself to be mad at Trump. We all know the Republican Party is the party of the rich folks, and nothing has changed with Trump at its helm. The real enemy of the people is the Democratic leadership which fought tooth and nail to ensure Bernie Sanders, the people’s representative, did not get the Democratic Party presidential nomination in 2016, so that the Wall Street representative named Hillary Clinton would.

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The entire Republican Party (Think John Boehner, Mitch McConnell, Donald Trump) and nine-tenths of the Democratic Party (Think Hillary and Bill and Ron Wyden) managing the US federal government have been committed to redistributing trillions of dollars of income and wealth from the 99 to the 1 percent. The result has been wonderful for people who are already rich, and pretty much own the politicians of both major political parties as they do dogs on leashes. This has been devastating to those whose incomes and wealth have been redistributed to the rich and powerful leash holders.

According to AARP Bulletin, “Older Americans are selling their prescription painkillers to drug dealers to raise needed cash.”

Written by Joe Eaton, the story begins with “Over a span of about two years, Ajellon Dedeaux, a 29-year-old drug dealer, sold thousands of prescription painkillers on the illicit drug market near Sacramento, California. Finding customers was easy. The hard part was finding a supply of pills. A reliable source?

“Older people,” Dedeaux said in an email sent from a federal prison in Arizona. Dedeaux is serving twelve years for drug dealing.

According to Eaton, “Some (Retired Americans) sell their pills due to a financial crisis or to make ends meet.”

Retired Americans are forced to do this due to poverty and they also find it easy to gain prescriptions from doctors. Of course, if their insurance covers most of the cost of the pills, they can and are forced to illegally sell the painkillers to drug dealers.

“If they discover they can make $20 a pill on the street, then it becomes a temptation to supplement their income,” said Charlie Chichon, executive director of the Ntional Association of Drug Diversion Investigators.

According to convicted drug dealer Austin Serb, “A patient who is prescribed three pills a day can make up to $3600 a month,” which may be far more than many retired people receive from Social Security, 401Ks, IRAs, and pensions.

Of course, this is one of the side effects of ensuring that 36 percent of the yearly income produced in the United States goes to the 1 percent, up from 8 percent in 1980. Wall Street Senator Ron Wyden is most likely the biggest scam artist in Washington D.C. Wyden pretends to support seniors while voting to exports tens of millions of jobs overseas, including pensions.

When Social Security can easily be strengthened with expanded payments to seniors, simply by eliminating the cap currently at $127,200, Wall Street Senator Ron Wyden continues his cozy relationship with rich Wall Street folks, which is why he has always made certain to do nothing but keep exporting our tax paying jobs overseas. Wyden’s Wall Street masters do not want the cap eliminated. One of Wyden’s favorite ploys is to pretend he cares about seniors while gutting programs that help them, like exporting jobs overseas by the millions and thereby redistributing payments to social security by the millions to the uber rich whom he supports.

Click here for the story from Eaton.

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