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Posts Tagged ‘income redistribution’

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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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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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 Senate’s bill to repeal the Affordable Care Act with the American Health Care Act (AHCA) is not a healthcare bill. It’s a tax cut for the wealthiest Americans, paid for by a dramatic reduction in healthcare funding for approximately 23 million poor, disabled, working and middle-class Americans.

America’s wealthiest taxpayers (earning more than $200,000 a year, $250,000 for couples) would get a tax cut totaling $346bn over 10 years, representing what they save from no longer financing healthcare for lower-income Americans.

That’s not all. The bill would save an additional $400bn on Medicaid, which Mitch McConnell, Paul Ryan, and Donald Trump are intent on shrinking in order to cut even more taxes for the wealthy and for big corporations.

If enacted, it would be the largest single transfer of wealth to the rich from the middle class and poor in American history.

This disgrace is being proposed at a time when the country’s rich receive the highest percentage of America’s income since the era of the robber barons of the late nineteenth century. They have received virtually all income growth since 1981 because of their massive financial and political power.

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According to the Economic Policy Institute, “As Medicaid is slashed, households’ premium costs (will) skyrocket, and protections for people with preexisting conditions are eliminated, 23 million Americans will lose their health insurance by 2026. The majority would lose it to breathtakingly large cuts to the vital Medicaid program (almost $900 billion over the next decade). Further, millions more would lose the coverage they get through their employer if AHCA passes.”

In other words, the AHCA is a massive income redistribution program from the 99 to the 1 percent.

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Supporters of the H1-B Visa program continuously tell us of the need for it because of a severe shortage of high-tech employees in the United States. This, of course, is not and has never been true. The program has been used by US corporations to lower the wages and benefits they pay to their employees by switching out US workers for foreign labor. That’s it in a nutshell.

Lowes Home Improvement provides us with the latest example of how the visa scam works. On June 7, 2017, the Charlotte Observer reported that Lowes was laying off 125 of its US high-tech workers, and is sending those jobs to Bangalore India. That means we have another 125 skilled and experienced US high-tech workers to fill jobs anyplace in the states. See Lowes Lays of High-Tech Workers–Charlotte Observer

Actually, the US has hundreds of thousands of highly skilled US high-tech workers who cannot find jobs because corporations have outsourced hundreds of thousands of high-tech jobs using H1-B visa workers, or simply brought in hundreds of thousands of H1-B workers. That’s because US companies can bring in 85,000 foreign workers every year under the subterfuge of the H1-B visa.

“Bangalore has been described as the “Silicon Valley of India.” Other major corporations have a growing presence in the IT hub, including Oracle, Dell, IBM and GE, according to a recent Wired story. Another is Wipro, an outsourcing firm used by Observer parent McClatchy,” according to the Observer.

US high-tech workers have experienced numerous layoffs over the last several years because their jobs were exported, or taken by H1-B Visa workers. Some of the employers exporting high-tech jobs include Disney, Intel, Nike, Oracle, Microsoft, Google, Dell, IBM, General Electric, the University of California at San Francisco, Eversource Energy, Abbott Laboratories, PG and E, and many more. That’s thousands of US high-tech workers who have been replaced. Where is this shortage of US high-tech workers? It isn’t in the USA.

The typical American high-tech worker earns considerably more than foreign H1-B workers. According to the New York Times, US businesses only need to pay the minimum of $60,000 a year to its H1-B workers, and they often don’t get any sort of benefits package.

The H1-B visa scam works like this. A US company will hire H1-B Visa folks through a third party. Then American high-tech workers will train their H1-B replacements. Then the H1-B visa worker will either stay in the US or work in say, India, meaning the job has been exported via the H1-B program. The H1-B Visa is only good for three years, so if US jobs are exported using H1-B workers, after three years, the job is no longer governed by H1-B Visa rules. Then the foreign employee can work for quite a bit less than the $60,000 minimum in India or wherever.

The difference in pay and other compensation between the higher compensated US workers and the lower paid foreign and H1-B visa workers is redistributed to the super rich via higher corporate earnings, rising share prices, and surging dividends. The H1-B visa is an income transfer scam, plain and simple. It is time to eliminate this disaster for US high-tech workers.

The Trump Administration claims it is preparing to propose changes to the system that will benefit US workers over Wall Street investors, but we will see.

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More than 200,000 people took to the streets in Washington, DC, Saturday April 29th for the People’s Climate March. Tens of thousands more joined via sister marches across the globe, including Japan, the Philippines, New Zealand, Uganda, Kenya, Germany, Greece, United Kingdom, Brazil, Mexico, Costa Rica and more.

In the U.S., more than 370 marches in nearly all 50 states took place, from the town of Dutch Harbor in Alaska’s Aleutian Islands to the streets of Miami, Denver, Los Angeles, Chicago and other major American cities.

A coalition of communities, faith leaders, labor activists, civil rights champions and climate justice advocates led the march while demanding commonsense protections for the air we breathe, the water we drink and the health of the vulnerable communities who have the most to lose under President Trump’s administration.

The battle over climate change is a sticky one. The fossil fuel industry which own plenty of politicians in both major political parties spends millions of dollars a year denying it’s happening, but my rhododendron is now blooming in early December. Twenty-five years ago, it began blooming in late March and early April. Fifteen years ago, it began blooming in January. I also have roses blooming in snowy December, and that is something that never happened in the forty years I’ve lived in this house.

Quite naturally, the war over climate change is a battle over ever increasing profits and share prices. Major corporations and their shareholders, as well as Wall Street (which controls the Democratic Establishment like puppets), want ever increasing profits because this produces ever increasing share prices and dividends. Getting rid of fossil fuels will force the oil corporations out of business, and cut into the profits and share prices of other manufacturers.

This means the battle over climate change is a battle between ultra rich shareholders and millionaire and billionaire CEO’s on the one hand, and the rest of the world’s people on the other. Naturally, the rich and their corporations fund bogus studies showing global warming in not real in order to influence the voters of the 99 percent to believe climate change is a communist plot to destroy the American way of life, when it is really the rich destroying the US middle class way of life. My roses and rhododendron tell me climate change is real, but then, so is the class warfare the rich are waging on the rest of us.

I should point out that the folks at Exxon now admit fossil fuels are causing global warming. The company denied it for decades, but knew as early as the middle of the 1970s that it was happening.

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President Donald Trump is proposing more tax cuts for the rich. He claims there will be no loss of federal revenue with his tax cuts. This is the standard Republican Party Establishment lie.

Given that Trump’s plan is similar to what Trump proposed on the campaign trail, the Committee for a Responsible Federal Budget (CRFB) did a rough cost estimate of his latest ideas and concluded they could cost $5.5 trillion in lost revenue during the first decade.

CRFB estimates the overall cost could go as high as $7 trillion if limits on tax breaks that the plan suggests apply only to high earners. Or the cost could fall to $3 trillion “assuming credits and exclusions are eliminated as well as deductions.”

This means sharp cuts to programs the middle class and poor need, while, no doubt, keeping welfare programs for the rich, such spending more on the military than the next 25 nations combined, 24 of whom are US allies. Corporate subsidies are also welfare for the rich since they help keep corporate profits and the stock market bubble growing, all of which mostly redounds to the rich.

Oh, and we can’t forget the next biggest lie; tax cuts for the rich trickles down the the 99 percent in the form of jobs. There is not one shred of evidence that giving tax cuts to the rich has created a single net job. There is plenty of evidence, on the other hand, that tax cuts for the wealthy have destroyed millions of US jobs.

That’s because the rich usually invest their tax cuts gains in the stock, bond and political markets. They buy up politicians by the barrel full and then have their politicians pass legislation that will keep inflating their stock, bond and housing bubbles, which means exporting millions of jobs overseas and then redistributing the difference between the old higher US pay and the new lower third world slave labor pay to the rich via higher corporate profits, surging stock and bond markets, and rising dividends.

In the meantime, due to the reduced tax revenue, our roads and bridges will continue to crumble, our public schools will continue to be financially gutted, the cost of entering a public park will continue to rise, the unemployment rate will rise, and so on and so forth.

Don’t be fooled by the same lies President Ronald Reagan and Dick Cheney and Arthur Laffer fed us. Tax cuts for the rich will not pay for themselves, nor will they create jobs, but they will corrupt your government more, and it is already the most corrupt in the developed world. Both major political parties are corrupted to the core.

 

This suggests that any working class concerns addressed by Trump during the campaign has been rendered moot. Trump, in other words, is now completely owned and 100 percent influenced by Wall Street and the Republican National Committee and their corporate owners.

By the way, a story in Newsweek puts it a little less scary than I. “‘…while major tax cuts have been enormously beneficial to the wealthy by reducing their taxes and increasing their incomes the most, the distribution of benefit for working people has been comparatively negligible. That is not the argument of some liberal politician—it was the finding of Martin Feldstein, the chief economic adviser to President Ronald Reagan, in his analysis of the Tax Reform Act of 1986.'”

Feldstein, in other words, said the creation of jobs by tax cuts for the rich “has been comparatively negligible.”

Click here for the full Newsweek story.

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