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Posts Tagged ‘income redistribution’

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On February 17 2017, the US senate will resume its duties; one of which will be to confirm or reject Neil Gorsuch as President Donald Trump’s choice to be the next US Supreme Court Justice.

Several days ago, the Guardian reported Trump had urged Wall Street Senate Majority Leader Mitch McConnell to eliminate Democrats potential use of the filibuster to stop Gorsuch, which is the so-called nuclear option.

Gorsuch needs sixty out of 100 possible senate votes in order to be confirmed to the post. The nuclear option would eliminate the sixty vote threshold, by instituting a fifty-one vote threshold. The Republicans hold fifty-two seats in the US senate, while the Democrats hold forty-eight. That means eight Democrats must vote to sustain Gorsuch’s nomination, or the candidate will fail. If Gorsuch fails to get sixty votes, the Democrats can filibuster his nomination, putting an end to it, unless the so-called nuclear option is used by Republicans. That’s not going to happen.

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The nuclear option would mean the end of the filibuster in the US senate. The filibuster has been used to ensure a sixty vote majority is always needed to pass any legislation. The result has been years of gridlock. Politicians of both major political parties have abused the filibuster over the years, so as to ensure they can fail to solve the problems that have perplexed the nation, and have a ready made excuse for the folks back home.

Once the sixty vote threshold is eliminated, however temporarily, a simple up and down vote for Gorsuch can take place. However, Republican voters might get a bit angry the nuclear option isn’t being used for their issues. The Republican Party establishment, with control over the white house and both houses of congress, could easily end legalized abortion. That’s what their base wants them to do.

However, doing so would eliminate abortion rights as a wedge issue with which to manipulate the emotions of grassroots Republicans, and divert their attention from other things, such as passing trade treaties that make it easy for US corporations to export US jobs overseas, and redistribute the difference between the older higher US pay and the new lower foreign wages to the 1 percent via higher corporate profits, share prices and surging dividends.

Likewise, the Democratic establishment will not want the nuclear option used. Then they’d need to please the grassroots of their base for a simple up and down vote can occur over numerous issues that conveniently cannot reach the sixty vote threshold. This includes a vote for amnesty of undocumented immigrants. A vote for the Dream Act can occur. A vote for a renegotiated NAFTA can take place. A vote to raise tariffs on US goods manufactured overseas and exported to the United States can occur. A vote to raise the minimum wage would be a great opportunity. A vote to rein in the excesses of Wall Street can be had. A vote to tie CEO compensation to corporate crimes can take place, such as corporate money laundering of Mexican drug cartel money.

The Republican and Democratic establishments, which are the major corporations, Wall Street executives, and billionaire investors who control the politicians of both political parties, will not want to see an aroused Republican base demanding simple majority votes on issues dear to their hearts, and which have been carefully cultivated by the corporate media. That would be against the financial interests of the establishment members. So, too, would the nuclear option be against their interests.

Like the conservative news media outlets, these issues are things the Guardian editors dare not mention. The Guardian is regarded as a liberal newspaper, and so the aim of the story is to raise the interest of liberal readers. However, the first duty of any editor is to edit and omit all news stories with a view to what the news ought to be, and that is closely related to the second duty of an editor, which is to never offend advertisers. The advertisers in major media news outlets are largely politically and financially powerful corporations. The loss of their advertising dollars would be a sharp blow to any news media outlet, such as the Guardian. The Guardian editors must walk a tightrope; keep liberals reading, while pleasing major corporate advertisers.

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So expect the Democratic establishment to come up with at least eight Wall Street senators willing to vote for Gorsuch to avoid the nuclear option. Expect Wall Street Senator Ron Wyden to be the first to cross the aisle on behalf of Gorsuch to avoid raising the hopes of Democratic and Republican voters everywhere once the nuclear option appears.

 

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President Donald Trump has attacked the H1B Visa program, and high tech executives are after his hide for it.

The H1-B visa is supposed to allow US companies to import foreign workers for up to three years if there are insufficient US workers to fill positions. However, that’s not how it has worked.

US corporations regularly import guest workers via the H1-B program to replace their US workers, and they pay their foreign workers less than their US workers. In effect, the US government is allowing the H1-B program to lower US wages, which increases profits and share prices. We all know Wall Street and several billionaires call the shots of both major political parties.

The US high tech workers at Southern Edison, Toys R Us, Disneyland, Intel, the University of California and hundreds of other companies have seen their jobs vanish as foreigners have taken their place. Click Computerworld for another article on this. In many cases, the US workers have been forced to train their replacements.

Once Trump declared his opposition to the H1-B Visa program, high tech spokespeople all over the US declared there was a shortage of US high tech workers. This, of course, was a lie. But the US news media, both conservative and liberal, gleefully went along with the lie.

According to the Economic Policy Institute,

1 “The flow of U.S. students (citizens and permanent residents) into STEM fields has been strong over the past decade, and the number of U.S. graduates with STEM majors appears to be responsive to changes in employment levels and wages.
2 For every two students that U.S. colleges graduate with STEM degrees, only one is hired into a STEM job.
3. In computer and information science and in engineering, U.S. colleges graduate 50 percent more students than are hired into those fields each year; of the computer science graduates not entering the IT workforce, 32 percent say it is because IT jobs are unavailable, and 53 percent say they found better job opportunities outside of IT occupations. These responses suggest that the supply of graduates is substantially larger than the demand for them in industry.” Economic Policy Institute–Guest Workers high skill labor market analysis

The H1-B visa program has been used to keep US high tech workers unemployed and high tech wages down. They’ve been kept down since the “inception of the program.” The program is likely why wages for US high tech workers have been stagnant in real terms since 1990.

Even if you don’t side with President Trump on any other issue, even if you absolutely hate his guts, side with him on this issue.

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Finland is several heads above the United States in public education. They used to be about the same in terms of student testing. Then in the early 1970s, the Finns decided to undergo a massive reconstruction of their educational system. They took off, leaving the US in the dust.

Finland has the highest test scores in the Western world. How’d they do that?

Finland’s students have the western world’s shortest school days and shortest school years. That’s to give kids time to be kids. They’re in school no more than 20 hours a week, and that includes lunch. They’re also among the least tested students in the world. Finland provides a vast social safety net for all families.  Finnish students get almost three times as much recess as US students. All of this is because Finland has a student centered education system. The success of students is the most important thing in the Finnish system.

In the United States, increasing the corporate profits of the publishing industry is the most important thing the US educational system is supposed to do. So most everything in the US K-12 educational system is geared toward testing.

Corporate profits are had with every test a child takes. This is precisely why US students are the most tested in the world, and by a wide margin. However, it gets worse than that. Standards are continuously raised, even if most of the students, or a significant segment of them, fail the current standards. That’s because the higher the standards, the more students fail and need to retake the tests, over and over again, until they pass the tests, or they move up in grade. Every test students are forced to take provides the testing industry with greater profits. But when a sufficient number of students begin to pass the tests, the standards are raised, or the tests are changed, to make them more difficult to pass.

The movement to tie teacher pay to the success of student testing forces teachers to teach to the test. Recess has been massively cut at many public schools. Recess has been eliminated in some. US education is about massive test preparation, and much of the preparation materials comes from the US publishing industry, which increases their profits.

The last thing the people behind US educational reforms want, as well as the corrupt politicians behind them, is an educational system that prepares students to be better citizens and gives them enhanced job skills, although many educators try to do this in what spare time they have to teach this stuff.

The testing industry keeps this farce going by giving campaign contributions and other perks to US politicians, which is precisely why the US educational system typically ranks about thirtieth in the world, and never moves up, and why Finland typically rates in the top five, and is often number one in the world.

In the US, educational reform means redistributing local and state tax dollars to the rich shareholders of the testing industry. Local control of public education means the testing industry might not be able to get away with this theft throughout the US, and this is why the Feds have become more involved in K-12 public education.

In other words, financial corruption guides US government K-12 educational reform, while the needs of students guide educational reforms in Finland.

 

 

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The Federal Reserve raised its key interest rate by 0.25% on Wednesday. The corporate news media, both liberal and conservative, claimed this signified the Fed’s confidence in the improving U.S. economy. There may be some truth to this, but maybe not.

Anybody with any knowledge of US business cycles can see our current business expansion is nearly over, which makes this a poor time to raise borrowing rates. See The Coming Recession Is Going to be a Big One–Johnhively.Wordpress.com. The current expansion is 91 months old this month, which makes it the fourth longest on record. In February 2017 it will become the third longest in US history. All the variables indicate we’ll be hitting a recession sometime before or by June 2017.

Maybe Fed officials decided to deflate the stock market and housing bubbles the US economy is in the thrall of. The US economy has been powered by a series of federally created or federally condoned bubbles since the 1980s, which is radically different from the US economy of 1933-1981. The US economy will be suffering from a massive hangover when this next recession hits, which is why it will in many ways be far worse than the last recession.

Rising rates will affect millions of Americans, including home buyers, savers and investors by increasing the cost of which they borrow. In other words, trillions of dollars are going to be redistributed from the 99 percent to rich bank shareholders and bondholders. It’ll cost you more to borrow, and the difference between the old rate and the new rate goes straight into the pockets of the rich.

Income and wealth have been massively redistributed from the 99 to the 1 percent by a series of deliberate federal government actions over the last thirty-five years. This is why interest rates have been historically low over the last eight years, and had been getting progressively lower since 1981. The demand for goods and services by the 99 percent is largely dependent on the ability to borrow to a much greater extent than earlier decades.

This is also means the Fed will have to enact negative interest rates to help bolster the economy during the next recession, which is currently the case in Europe.

Change in the form of a shift of political power from the billionaires to the middle class will finally come because of this next recession as millions more people vote via their wallets and take to the streets.

Fed officials raised its target for short-term interest rates by 0.25 percentage points to a range of 0.50% and 0.75%.

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The US government has been redistributing income from the 99 to the 1 percent for the last thirty-five years. The result of this government created income and wealth inequality has been an economy far weaker in virtually all measurements than any of the last century. That’s because the underlying economic factors have been weakened.

According to a study by the Pew Charitable Trust,

“Although income and earnings have increased over the past 30 years, they have changed little in the past decade. The typical worker had wage growth of 22 percent between 1979 and 1999 but just 2 percent from 1999 to 2009. (This is not in inflation adjusted wages, in which case, wages would’ve been stagnant or declining over the last thirty-five years).

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• The Great Recession eroded 20 years of consumption growth, pushing spending back to 1990 levels. Over the 22 years before the start of the downturn, household expenditures grew by 16 percent. But households tightened their purse strings after the start of the recession in 2007, and spending has yet to recover. As a result, the net increase in average annual household spending is just 2 percent since 1990. That’s despite twenty-six years of inflation growth.

• The majority of American households (55 percent) are savings-limited, meaning they can replace less than one month of their income through liquid savings. Low-income families are particularly unprepared for emergencies: The typical household at the bottom of the income ladder has the equivalent of less than two weeks’ worth of income in checking and savings accounts and cash at home.

• Even when pooling all of its resources—including from accounts that are potentially costly to access, such as retirement accounts and investments—the typical middle-income household can replace only about four months of lost income.

• Most families face financial strain across all balance sheet elements: income, expenditures, and wealth. In addition to being savings-limited, households face other financial challenges; just under half of families are “income-constrained,” reporting household spending greater than or equal to their income; and 8 percent are “debt-challenged,” with payments equal to 41 percent or more of their gross monthly income. Fully 70 percent of households face at least one of these problems, with many confronting two or even all three.

http://www.pewtrusts.org/~/media/assets/2015/01/fsm_balance_sheet_report.pdf

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As you can see from the graph via the Federal Reserve Bank, real family income is still down below the level of 2007 eighty-eight months into the newest economic expansion. The median is the number of families in the middle of any series of numbers.

The top 1 percent received 99 percent of all income growth from 2010 to 2014, which was an historic record. Although incomes rose in 2015, the typical household is still worse off today than it was in 2000, adjusted for inflation. The assets of the typical family today are worth 14 percent less than the assets of the typical family in 1984. And the typical job is less secure than at any time since the Great Depression.

That’s all because the 1 percent has used its financial control over both major political parties to wage war against the 99 percent. Waging war in this case means redistributing income and wealth from the 99 to the 1 percent via the actions of the federal government.

We are now fast approaching the newest recession, which should hit by June 2017. It’ll be worse than the Great Recession in any number of ways. This will be because trillions of dollars have been redistributed to the wealthy over the last thirty-five years. This epoch is about to end.

Enough people will finally be aroused for working folks to take back control over both major political parties as the reality of the severity of the next financial crisis takes hold. Then real middle class incomes can grow again.

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WASHINGTON, DC - FEBRUARY 03: Activists hold a rally to protest the Trans-Pacific Partnership (TPP) in front of the White house on February 3, 2016 in Washington, DC. The TPP trade pact is expected to be signed in New Zealand on February 4. (Photo by Olivier Douliery/Getty Images)

White House officials conceded on Friday that the president’s hard-fought-for Trans-Pacific Partnership (TPP) trade deal would not pass Congress.

Earlier this week, congressional leaders in both parties said they would not bring the trade deal forward during a lame-duck session of Congress, before the formal transition of power on 20 January.

The Democratic senator Chuck Schumer, who will be minority leader in the next Congress, told union leaders the trade deal would not pass. Senator Mitch McConnell, the chamber’s Republican majority leader, told reporters “no” when asked if Congress would consider the TPP.

The deal has supporters in both parties but became a campaign symbol for lost manufacturing jobs, especially in the rust belt states. The TPP would’ve cost the US millions of jobs, and redistributed trillions of dollars from working folks to the rich billionaires who control both major political parties.

The TPP was negotiated to redistribute income and political power from the 99 to the 1 percent.

Over the last three years, a variety of labor, progressive, environmental, human rights groups have organized and pushed back hard against the TPP, and quite successfully.

The TPP would have included the US and 11 countries in Asia, South America and the south Pacific, and was designed in large part to curb the growing economic influence of China.

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